Plain-text annual report
INTEGRATED REPORT AND
ANNUAL ACCOUNTS 2021-22
COMMUNITIES
PLANET
WORKPLACE
TRANSFORMING
FOR GOOD
Transforming for Good
COMMUNITIES. PLANET. WORKPLACE.
For businesses across the world,
transformation is no longer a choice.
It is a necessity in the face of market
instability, unprecedented disruptions,
and growing human aspirations. As
a natural resources company that
operates globally, we are cognisant of
this world in flux. We understand the
need to transform in order to create
more value, build new efficiencies and
chart new pathways of growth. But for
any transformation to be meaningful,
a rethink is necessary on how we
are creating value and how we can
sustain this ability in the face of future
disruptions.
To answer the question, we have gone back to our
transformation ambition. We realise that for transformation
to hold good for the long-term, it has to be broad-based,
and it has to be for the greater good. Nothing ensures this
more than the promotion of social equity and environmental
justice. For a people-driven organisation like us, sustained
by the wealth of our natural capital, and drawing our social
licence to operate from our communities, environmental
stewardship, ensuring social fairness, instituting best
people practices, and guaranteeing all of this through good
governance have always been an imperative. Our mission
statement, which clearly lays down our new transformation
ambition, reposits these environmental, social and
governance (ESG) aspects at the fulcrum of our business
strategy more firmly.
We will be striving to promote greater good by transforming
our communities, our workplace and our planet. And we
will be zealously monitoring and tracking the value we
create through this transformation by measuring our
progress against set targets. We will be working towards
reducing our carbon emissions by 25% and emerging
water positive by 2030, and achieving net zero by 2050.
At the same time, we will strive to empower millions
among our communities and our people by imparting
relevant skills, opening up new growth opportunities and
guaranteeing their health, safety and well-being. Through
responsible business decisions and actions that safeguard
the best interests of our stakeholders and promote social
good, we will be future‑proofing our business against
unanticipated changes.
Magnet for transformation
and refined methods
of working
About the Report
FY2022 marks half a decade of integrated reporting,
aligned to the content elements and guiding principles of
the International Integrated Reporting Framework
outlined by the International Integrated Reporting Council
(IIRC), now the Value Reporting Foundation (VRF).
We commenced our integrated reporting journey in
FY2018, 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 disclosing relevant information 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 2021-22
covers the reporting period from 1 April 2021 to 31 March
2022 and provides holistic information on Vedanta Limited
(Vedanta, VEDL), a subsidiary of Vedanta Resources limited.
It provides an overview of operations across our business
units, namely, zinc-lead-silver, oil & gas, aluminium, power,
iron ore, steel, nickel and copper. Our assets are spread
across 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 VEDL’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 are those individuals or organisations
who have an interest in, and/or whose actions impact our
ability to execute our 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 around matters that can impact our ability to
create value over the short, medium and long term.
Annual accounts
This report should be read in conjunction with the annual
accounts (page 304 to 548) to gain a complete picture
of VEDL’s financial performance. The consolidated and
standalone financial statements in this report have been
prepared in accordance with the Indian Accounting
Standards (Ind AS) notified under the Companies (Indian
Accounting Standards) Rules, 2015 (as amended from
time to time) and have been independently audited by S.R.
Batliboi & Co. LLP. The Independent Auditors’ Report for
both consolidated and standalone financials can be found
on page 304 and 414 respectively.
Board and management assurance
The Board of Directors and the Company’s management
acknowledge their responsibility to ensure the integrity of
information covered in this report. They believe, to the best
of their knowledge, that this report addresses all material
issues and presents the integrated performance of VEDL
and its impact in a fair and accurate manner. This report
has therefore been authorised for release on 28 April 2022.
VEDL reporting suite
About Vedanta Limited
Vedanta Limited (VEDL), a subsidiary of
Vedanta Resources Limited, is one of the
world’s leading natural resources companies
with interests in zinc-lead-silver, oil &
gas, aluminium, power, iron ore, steel and
copper, operating across India, South Africa
and Namibia. We believe that large‑scale
environment conservation and community
empowerment make our business
intrinsically strong and future ready.
Vedanta Limited
Sustainability Report
(SR) 2020-21
Vedanta Limited Tax
Transparency Report
(TTR) 2020-21
Information coverage:
Disclosures on triple
bottom line performance
Standards/guidelines
used: Global Reporting
Initiative (GRI) Standards
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)
Vedanta Limited TCFD
Report 2020
Information coverage:
Climate-related
financial disclosures
Standards/guidelines
used: Approach to
climate action, climate
strategy and climate risk
management
Vedanta Limited
Integrated Report (IR)
and Annual Accounts
2020-21
Information coverage:
Holistic disclosure
of performance
and strategy
Standards/guidelines
used: International
Integrated Reporting
Framework, Indian
Accounting Standards
(Ind AS), Indian
Secretarial Standards
Contents
1
Integrated thinking at Vedanta
2 Highlights FY2022
INTRODUCING VEDANTA
4 Vedanta at a glance
7 Operating structure
8 Asset overview
12 Our investment case
16 Case studies
PERFORMANCE REVIEW
24 Message from the Chairman
28 Message from the CEO
32 Key performance indicators
36 Value-creation model
38 Opportunities
42 Strategic priorities
50 Risk management
OUR BOARD
AND MANAGEMENT
58 Board of Directors
62 Management Committee
64 Executive Committee
SUSTAINABILITY REVIEW
70 Our ESG strategy
96 Governance
98
Business Responsibility &
Sustainability Report
107 Awards
MANAGEMENT DISCUSSION
AND ANALYSIS
110 Market review
118 Segment review
125 Finance review
128 Operational review
STATUTORY REPORTS
164 Directors’ Report
244 Report on Corporate Governance
FINANCIAL STATEMENTS
304 Standalone Financials
414 Consolidated Financials
Empowering over
2.5 million families
with enhanced skill sets;
and uplifting over 100
million women and children
through education, nutrition,
healthcare and welfare.
Anil Agarwal
Chairman
Progressing on our
low-carbon journey with
‘green’ aluminuim
Digitalisation to
usher in the next
PG 16
PG 18
ABH technology serves
in unlocking resources
of the Barmer Hills
Formation
Innovation for
waste-to-value
PG 20
PG 22
Integrated Report
Statutory Reports
Financial Statements
Integrated thinking at Vedanta
At Vedanta, our integrated thinking process informs our decision-making,
powers our business and ESG strategy, and enables us to deliver consistent value
for all our stakeholders. Our integrated thinking process also forms the base for
our ‘Transforming for Good’ mission.
WE ARE
LED BY
Mission
Values
To create a leading global natural
resource Company
Trust · Entrepreneurship · Innovation
Excellence · Integrity · Care · Respect
BUILDING
ON
Capitals
FOCUSING
ON
ENABLED
BY
WITH A
CONSTANT
EYE ON
CREATING
CONSISTENT
VALUE
Financial
capital
Natural
capital
Intellectual
capital
Manufactured
capital
Social and
Relationship
capital
Human
capital
Material issues
M1
M2
M3
M4
M5
M6
M7
M8
M9
M10
M11
M12
M13
M14
PG 74
Strategic focus areas
Continue to focus on world‑class
ESG performance
Augment our reserves and
resource base
Operational excellence
Optimise capital allocation and
maintain strong balance sheet
Delivering on
growth opportunities
PG 42
Top risks
Megatrends and opportunities
R1
R2
R3
R4
R5
R6
R7
T1
T2
T3
T4
R8
R9
R10
R11
R12
R13
T5
T6
T7
PG 50
PG 38
For shareholders, investors
and lenders
For local communities
For employees
For industry
For governments
For civil societies
1
Integrated Report and Annual Accounts 2021-22 Highlights FY2022
FINANCIAL CAPITAL
MANUFACTURED CAPITAL
We are focused on optimising capital allocation and
maintaining a robust 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
maximising returns to shareholders.
We invest in best‑in‑class equipment and machinery, both
at our current operations and in our expansion projects
to ensure we operate as efficiently and safely as possible.
This also supports our strong and sustainable cash
flow generation.
Key FY2022 outcomes
`1,31,192 crore
Revenues
51%
`45,319 crore
EBITDA
66%
~30%
ROCE
`21,715 crore
Free cash flow (FCF)
post-capex
`53,109 crore
Gross debt
`32,130 crore
Cash and cash equivalents
~`54,165 crore
Contribution to the
national exchequer
39%
EBITDA margin1
`24,299 crore
Profit attributable to
equity holders (before
exceptional and one
time gain)
95%
`20,979 crore
Net debt
0.5x
Net debt/EBITDA
lowest in 5 years
AA
Credit ratings with stable
outlook, CRISIL and
India Ratings
(revised from AA-)
1. Excluding customs smelting at Copper India
Key FY2022 outcomes
Highest ever production in zinc and aluminium
Zinc International
170 kt
Record mined metal
production at Gamsberg
18% y-o-y
BMM Magnetite project
progressing well. First
production on track for Q2
FY2023
Zinc India
16.3 million tonnes
Record ore production
6% y-o-y
1,017 kt
Highest ever annual mined
metal production
5% y-o-y
967 kt
Highest ever annual refined
zinc-lead production
4% y-o-y
Aluminium
Power
2.03 million tonnes
Highest ever import
substitute allocation at
TSPL from CIL amongst
all IPPs across India
TSPL is the first Vedanta
site to become SUP
(Single Use Plastic) free
Uninterrupted Unit#3
Operation at TSPL
for 160 days after
capital overhauling
2,268 kt
Record annual
aluminium production
Continue to be the largest
primary aluminium
producer in the country
1,968 kt
Record annual
alumina production from
Lanjigarh refinery
7% y-o-y
US$1,858 per tonne
Hot metal cost
of production
38% y-o-y
Oil & Gas
161 kboepd
Average gross
operated production
2
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
MANUFACTURED CAPITAL
HUMAN CAPITAL
Oil & Gas (Contd.)
Key growth projects update
•
Infill drilling commenced to sustain
volumes in Mangala, Tight Oil (ABH), Tight Gas (RDG),
Satellite Field (NI) and Offshore (Cambay)
• 38 wells drilled and 52 wells hooked up during FY2022
• OALP & DSF ‑ Drilling ongoing across basins.
Hydrocarbon discovery notified
for Durga ‑1 in Rajasthan and Jaya‑1 in Cambay during
the year. Till date three hydrocarbon discoveries have
been notified under the OALP portfolio.
Iron Ore
Steel
5.7 million tonnes
Highest ever sales at
Karnataka
30% y-o-y
790 kt
Record annual
production at Value
Added Business (VAB)
33% YoY
US$111 per tonne
EBITDA margin at VAB
Goa operations remained
suspended during the
year due to state-wide
directive from the
Hon’ble Supreme Court,
continuous engagement
with the stakeholders
for a resumption of
mining operations
1.4 million tonnes
Record annual
hot metal production
(post acquisition)
5% y-o-y
1.3 million tonnes
Record annual
saleable production
(post acquisition)
6% y-o-y
FACOR
250 kt
Highest ever
chrome ore production
(since acquisition)
70% y-o-y
75 kt
Record ferro
chrome production
(post acquisition)
10% y-o-y
77 kt
Ferro Chrome sales
8% y-o-y
We have employees from across the world, and their diverse
skills and experience enrich our organisation. The mining
and plant operations require specialised skills for which
we employ qualified technical, engineering and geology
experts. In addition, we create a culture which nurtures
safety, innovation, creativity and diversity, which helps us
meet our business goals while also enabling our employees
to grow personally and professionally.
11.54%
Women employees
3,743
Employees covered
under mentoring and
support programs
10.66%
Attrition rate
1.4
TRIFR
SOCIAL AND RELATIONSHIP CAPITAL
We aim to forge strong partnerships by engaging with
our key stakeholders, including shareholders and lenders,
suppliers and contractors, employees, governments,
communities and civil societies. These relationships help
maintain and strengthen our licence to operate.
3,200+
Nand Ghars built
4.64 million
CSR beneficiaries*
1,268
Total villages reached
Copper India
Human Rights self-assessment
conducted across all BUs
• Due legal process being followed to achieve a
* Including only direct beneficiaries
sustainable restart of the operations
• Phase 1 technological innovation through Multi Effect
Evaporator Plant for better nickel recovery.
3
Integrated Report and Annual Accounts 2021-22 Vedanta at a glance
Largest natural
resources
company in India
76,000+
TOTAL EMPLOYMENT
GENERATION
~13.75 million TCO2e
IN AVOIDED EMISSIONS
FROM 2012 BASELINE
US$5 billion
COMMITMENT OVER THE NEXT 10 YEARS TOWARDS
NET CARBON ZERO TRANSITION BY OR BEFORE 2050
Overview of the Mangala Processing Terminal
4
Vedanta Limited
Integrated Report
Integrated Report
Integrated Report
Statutory Reports
Financial Statements
Vedanta Limited, a subsidiary of Vedanta Resources Limited,
is one of the world’s foremost natural resources conglomerates,
with primary interests in zinc-lead-silver, iron ore, steel, copper, aluminium,
power, nickel, & oil and gas. We are leaders in most of the segments
we operate in, and we cater to domestic and international primary materials
demand, playing a key role in enabling resource sufficiency at scale.
With strategic assets in India, South Africa and Namibia, we are committed
to creating long-term value, with an unwavering focus on business,
social and environmental sustainability.
Our core values shape our approach to business and value creation
TRUST
ENTREPRENEURSHIP
INNOVATION
E XCELLENCE
INTEGRIT Y
CARE
RESPECT
Integrated Report and Annual Accounts 2021-22
Integrated Report and Annual Accounts 2021-22
5
5
Vedanta at a glance
We operate an end‑to‑end value chain in the natural resources sector
Exploration
Asset development
Extraction
Processing
Value addition
We have
consistently
added more to
our Reserves and
Resources (‘R&R’)
through brownfield
and greenfield
activities. This
helps us extend the
lives of our existing
mines and oilfields.
We have a strong
track record of
executing projects
on time and within
budget. We take
special care to
develop the
resource base to
optimise production
and increase the life
of the resource. We
also strategically
develop processing
facilities.
Our operations
are focused on
exploring and
producing metals,
extracting oil & gas
and generating
power. We extract
zinc-lead-silver, iron
ore, steel, copper
and aluminium.
We have three
operating blocks in
India producing oil
and gas.
We meet market
requirements by
converting the
primary metals
produced into
value-added
products such as
sheets, rods, bars,
rolled products,
etc. at our zinc,
aluminium and
copper businesses.
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.
For this purpose,
we generate captive
power as a best
practice measure
and sell any
surplus power.
OUR ESG PURPOSE AND MISSION
Vedanta remains committed to sectoral leadership in Environmental, Social
and Governance (ESG) aspects. In 2021, we unveiled our new ESG purpose and reframed
our mission as ‘Transforming for Good.’ It is underlined by specific aims, targets
and investments that will take our ESG agenda forward and enhance focus on sustainability.
ESG Purpose
Transforming for Good
Commitments and targets
TRANSFORMING
COMMUNITIES
TRANSFORMING
THE PLANET
TRANSFORMING
THE WORKPLACE
Aim 1
Keep community welfare at the
core of business decisions
Aim 4
Net-carbon neutrality by 2050
or sooner
Aim 7
Prioritising safety and health of
all employees
Aim 2
Empowering over 2.5 million
families with enhanced skillsets
Aim 5
Achieving net water positivity
by 2030
Aim 3
Uplifting over 100 million
women and children through
Education, Nutrition,
Healthcare and Welfare
Aim 6
Innovating for a greener
business model
Aim 8
Promote gender parity,
diversity and inclusivity
Aim 9
Adhere to global
business standards of
corporate governance
6
6
Vedanta Limited
Vedanta Limited Operating structure
Integrated Report
Statutory Reports
Financial Statements
VEDANTA RESOURCES LTD
KONKOLA COPPER MINES (KCM)
79.4%
VEDANTA LTD
69.7 %
Zinc India (HZL)
64.9%
Bharat
Aluminium
(BALCO)
51%
Subsidiaries of Vedanta Ltd
Zinc
International
Talwadi
Sabo Power
(Skorpion: 100%,
BMM &
Gamsberg: 74%)
(1,980 MW)
100%
100%
Listed entities
Unlisted entities
Note: Shareholding as on March 31, 2022
* 50% of the share in the RJ Block is held by a subsidiary of Vedanta Ltd
Divisions of Vedanta Limited
• Sesa Iron Ore
• Sterlite Copper
• Power (600 MW Jharsuguda)
• Aluminium (Odisha
aluminium and power assets)
• Cairn Oil & Gas*
ESL Steel
Limited
95.5%
FACOR
100%
An evening view of the
Lanjigarh facility
Integrated Report and Annual Accounts 2021-22
7
Asset overview
Leader in key
business segments
ZINC-LEAD-SILVER
80% market share in India’s
primary zinc market
(Hindustan Zinc Limited)
ALUMINIUM
Largest primary aluminium
producer in India
Business
Business
ZINC INDIA (HZL), ZINC INTERNATIONAL
Asset highlights
• World’s largest fully integrated zinc‑lead producer
• World’s largest underground zinc‑lead mine at
Rampura Agucha, India
• 6th largest silver producer in the world
• Zinc India has R&R of 448 million tonnes with mine life
of 25+ years
• Zinc International has R&R of more than 671 million
tonnes, supporting mine life in excess of 30 years
• HZL‑ Low‑cost zinc producer, which lies in the first
quartile of the global zinc cost curve (2021)
Application areas
• Galvanising for infrastructure and construction sectors
• Die‑casting alloys, brass, oxides and chemicals
ALUMINIUM SMELTERS AT
JHARSUGUDA & KORBA (BALCO)
ALUMINA REFINERY AT LANJIGARH
Asset highlights
• Largest aluminium installed capacity in India at 2.3 mtpa
•
Integrated 5.7 GW Power and 2 mtpa Alumina refinery
• c.47% market share in India among primary
aluminium producers
• Diverse product portfolio – ingots, wire rods, primary
foundry alloy, rolled products, billet and slab
Application areas
• Power systems, automotive sector, aerospace, building &
construction, packaging
EBITDA
`17,694 crore
`16,161 crore
ZINC INDIA
(HZL)
Production Volume
Zinc India (HZL)
`1,533 crore
ZINC
INTERNATIONAL
776 kt
ZINC
191 kt
LEAD
647 t
SILVER
223 kt
ZINC INTERNATIONAL
8
`17,337 crore
EBITDA
Production volume
2,268 kt
ALUMINIUM
1,968 kt
ALUMINA
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
POWER
c.9 GW power portfolio
OIL & GAS
Operates c.25% of India’s
crude oil production
Business
POWER ASSETS AT TALWANDI
SABO, JHARSUGUDA, KORBA &
LANJIGARH
Asset highlights
• One of the largest power producers in the
country in the private sector*
• Energy efficient, super critical 1,980 MW
power plant at Talwandi Sabo
Application areas
• 16% commercial power backed by Power
Purchase Agreements
• 84% captive use
*including captive power generation
`1,082 crore
EBITDA
Production volume
11,872 million units
POWER SALES
Business
CAIRN INDIA
Asset highlights
• Largest private sector oil & gas producer in India
• Footprint over a total acreage of c.65,000 square kilometres
• Gross proved and probable R&R of 1,151 mmboe
• World’s longest continuously heated pipeline from Barmer to
Gujarat coast (~670 kms)
• Executed one of the largest polymers EOR projects in the world
• To deliver the capex project, 294 wells have been drilled and
•
201 wells hooked up till FY2022
Infill drilling in Rajasthan (Mangala, Tight Oil (ABH), Tight Gas
(RDG), Satellite Field (NI) and Offshore (Cambay)) to augment
reserves and mitigate natural decline
• OALP ‑ Notified hydrocarbon discovery in Durga ‑1 in Rajasthan
and Jaya‑1 in CB with resource addition of > 50 mmboe
• Strategic alliances with global players like Halliburton,
Schlumberger and Baker Hughes with the aim of increasing
R&R across the portfolio
• Shale studies commenced to unlock the potential in
Barmer basin
• Key contract for end-to-end management of Operations and
Maintenance (O&M) across assets awarded
Application areas
• Crude oil is used by hydrocarbon refineries
• Natural gas is mainly used by the fertiliser sector
`5,992 crore
EBITDA
Production volume
161 kboepd
AVERAGE DAILY GROSS OPERATED
PRODUCTION
9
Integrated Report and Annual Accounts 2021-22 Asset overview
IRON ORE
One of the largest merchant
iron ore miners in India and
one of the largest producers
and exporters of merchant
pig iron in India
STEEL
3 mtpa design capacity
Business
IRON ORE INDIA
Asset highlights
• Karnataka iron ore mine with reserves of 67 million
tonnes, and life of 10 years
• Value added business: 3 blast furnaces (0.9 mtpa),
2 coke oven batteries (0.5 mtpa) and 2 power plants
(60 MW) and one merchant coke plant of capacity
0.1 mtpa
Application areas
• Essential for steel making
• Used in construction, infrastructure and automotive
sectors
Business
ELECTROSTEEL INDIA
Asset highlights
• Design capacity of 3 mtpa
• Largely long steel products
Application areas
• Construction, infrastructure, transport, energy, packaging,
appliances and industry
• Product portfolio includes pig iron, billets, TMT bars, wire rods
and ductile iron pipes
`2,280 crore
EBITDA
Production volume
5.4 million dmt
IRON ORE
790 kt
PIG IRON
`701 crore
EBITDA
Production volume
1,260 kt
STEEL
10
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
FACOR
80 ktpa charge chrome
/ ferro chrome capacity
with 100 MW power plant;
250 ktpa chrome ore
mining capacity
COPPER
One of the largest copper
production capacity
in India
Business
FERRO ALLOYS CORPORATION LTD
Business
COPPER INDIA
Asset highlights
• Ostapal and Kalarangiatta Mines with 250 ktpa
mining capacity
• Charge chrome plant of 80 ktpa and captive power plant
of 100 MW
Application areas
• Used for making stainless steel, carbon steel, ball-bearing
steels, tool steels as well as other alloy steels
Asset highlights
• Tuticorin smelter and refinery currently not operational
Application areas
• Used for making cables, transformers, castings, motors
and alloy-based products
`325 crore
EBITDA
Production volume
75 kt
FERRO CHROME
`(115) crore
EBITDA
Production volume
125 kt
CATHODE
11
Integrated Report and Annual Accounts 2021-22 Our investment case
Capitalising on
inherent advantages to
deliver long-term value
India’s natural resources industry is likely
to contribute substantially to the country’s
economy and have a significant impact on
the international commodity markets. As
India’s largest and most diversified natural
resources company, we are poised to play
a major role in supporting India’s economic
growth. We are making the right investments
to grow exponentially, and working with
the government to promote inclusive
development, raise environmental standards
and build public support for the critical
minerals and mining sector.
1
World-class natural resources
powerhouse with low cost, long-life and
diversified asset base
Our large, diversified asset portfolio, with an attractive
cost position in many of its core businesses, enables us
to deliver strong margins and free cash flows through the
commodity cycle. We have an attractive commodity mix,
with strong fundamentals and leading demand growth
and remain keenly focused on base metals and oil. We
also maintained our 1st quartile cost positioning globally
across key segments such as Zinc and Aluminium, led
by our resolute focus on structural cost reduction and
operational efficiencies.
Vedanta continued its strong growth momentum
and witnessed steady volume performance across
all businesses, with aluminum and zinc delivering
record performance.
DEMAND 2021-2030 CAGR (%)
Copper
Lead
Met Coal
Aluminium
Zinc
Iron Ore
Nickel
Oil 1
11.8
2.2
4.8
1.7
3.7
2.2
4.5
2.0
6.7
2.1
4.6
(0.5)
5.1
5.2
2.4
(0.0)
Lanjigarh
refinery
12
Vedanta Limited Commodity Presence
India demand
Global demand
Source: Wood Mackenzie
1 Oil demand CAGR shown for 2018-2030 period
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
2
Well placed to contribute to and capitalise on India’s growth and benefit
through the cycle with attractive commodity mix
India is our core market and it has a huge growth potential, given that the current per capita metal consumption is
significantly lower than the global average. Also India’s GDP, showing strong signs of recovery from 2020, registered
a growth of 10.4% over the course of 2021 and is expected to grow 8.2% in the current financial year (IMF; April 2022
estimate) . Urbanisation and industrialisation, supported by government initiatives on infrastructure and housing, a strong
response to COVID‑19, as well as increase in capital outlay announced in the Union Budget 2022‑23, will continue to drive
strong economic growth and generate demand for natural resources.
Vedanta’s unique advantages
• Operating a wide and scalable portfolio of
commodities that grow the nation
• A strong market position as India’s largest base
metals producer and largest private sector
oil producer
• An operating team with an extensive track record
of executing projects and achieving growth in the
Indian geography
Cairn
offshore facility
CONSUMPTION
INDIA GROWTH POTENTIAL
Aluminium (kg/capita)
Copper (kg/capita)
Zinc (kg/capita)
Oil (boe/capita)
1.6
8.8
27.2
0.4
3.1
8.8
0.5
1.8
4.9
1.4
4.8
4.0
India
Global
China
Source: Wood Mackenzie, IMF, IHS Markit BMI, BP
Energy Outlook 2021
Note: All commodities demand correspond to primary
demand; figures are for 2021
GDP ($ tr)
(nominal at US$PPP)
Per capita income ($)
(nominal at US$PPP)
Population (bn)
Urbanisation (%)
8.4 %
10.3
21.2
7.4 %
7,387
14,093
0.8 %
1.4 %
1.5
40
1.4
35
Source: IHS Markit
2021
2030
CAGR
India Mineral Reserves Ranking Globally
8th Zinc
Reserves: 9.1m tonnes
Crude Oil
Reserves: 4.6 bn bbl
7th Iron ore
Reserves: 5.5bn tonnes
8th Bauxite
Reserves: 660m tonnes
Source: USGS Mineral Commodity Summaries, OPEC Annual Statistical Bulletin 2021
13
Integrated Report and Annual Accounts 2021-22
Our investment case
3
Proven track record of operational
excellence with high productivity and
consistent utilisation rates
• Our management team has diverse and extensive
sectoral and global experience. Drawing from this
deep insight, the team ensures that operations are run
efficiently and responsibly
• Disciplined approach to development; growing our
production steadily across our operations with focus on
operational efficiency and cost savings
• Since our listing in 2004, our assets have delivered a
phenomenal production growth
TOTAL PRODUCTION COPPER EQUIVALENT
(KT)
n
o
i
t
c
u
d
o
r
P
l
a
t
o
T
)
t
k
(
t
n
e
l
a
v
i
u
q
E
r
e
p
p
o
C
2,000 -
1,800 -
1,600 -
1,400 -
1,200 -
1,000 -
800 -
600 -
400 -
200 -
0 -
n
t i o
f 5
- 7 %
c
u
d
o
d i a ’ s G D P o
A G R P r
4 % C
n
t I
s
a i n
r ~ 1
g
h a
1
x o
0
o w t
G r
-
4
0
0
2
Y
F
-
-
-
-
-
5
0
0
2
Y
F
6
0
0
2
Y
F
7
0
0
2
Y
F
8
0
0
2
Y
F
9
0
0
2
Y
F
-
0
1
0
2
Y
F
-
1
1
0
2
Y
F
-
-
-
-
-
-
-
-
-
-
2
1
0
2
Y
F
3
1
0
2
Y
F
4
1
0
2
Y
F
5
1
0
2
Y
F
6
1
0
2
Y
F
7
1
0
2
Y
F
8
1
0
2
Y
F
9
1
0
2
Y
F
0
2
0
2
Y
F
1
2
0
2
Y
F
-
2
2
0
2
Y
F
Zinc-Lead
Steel
Silver
Power
Copper
Iron Ore
Aluminium
Oil & Gas
*All commodity and power capacities rebased to Copper equivalent capacity (defined as production x commodity price / copper price) using
average commodity prices for FY2022. Power rebased using FY2022 realisations, Copper custom smelting production rebased at TC/RC for
FY2022, Iron ore volumes refers to sales with prices rebased at realized prices for FY2022
Disciplined capital allocation framework
with emphasis on superior and
consistent shareholder returns
We have unveiled a structured capital allocation policy
that prioritises growth and shareholder returns. The
policy aligns to three streams across capital expenditure,
dividend policy and selective inorganic growth. It will be
driven by a consistent, disciplined, and balanced allocation
of capital with long-term balance sheet management,
optimal leverage management and maximisation of total
shareholder returns.
Capital allocation
Capital
expenditure
Dividend
Mergers
and Acquisitions
4
Focused on digitalisation and innovation
to drive efficiency and resilience
5
To optimise efficiency and ensure future‑readiness in
everything we do, we are actively investing in Industry 4.0
technologies and mainstreaming a digital‑first culture
throughout the organisation. This has helped achieve a
100% digitally literate workforce, consistent eye on tech-led
innovation, strong collaboration with start-ups and partners
and a continued unlocking of efficiency potential across our
integrated value chain.
Our key initiative in this direction has been the Disha
programme, which aims to transform Vedanta into a
data-driven organisation by developing digital dashboards
and applying analytics for different verticals, helping the
senior management track progress, gather insights, identify
issues and bottlenecks proactively. This results in better
planning, mitigation and closing the decision loop faster,
also enabling regular production monitoring, tracking of
KPIs in terms of maintenance and HSE, and in bettering
overall predictability.
Another initiative in this direction is Project Pratham, which
focuses on significantly improving volume, cost and ease
of doing business. This is implemented through global
partners by bringing new emerging technologies across
the value chain of Vedanta Industry 4.0 framework. Key
objectives of this project include EBITDA improvement,
gains on intangibles and reducing overall carbon footprint.
Apart from our internal digital transformation initiative, we
are also leveraging the latest in technology by integrating
the start-up culture through the Spark programme.
Zinc International
Gamsberg Plant
14
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
6
Robust financial profile with improving ROCE, increasing cash flow
and a stronger balance sheet
Our operating performance, coupled with optimisation of capital allocation, has helped strengthen our financials.
• Revenues of `131,192 crore and EBITDA of `45,319 crore
• Strong ROCE of ~30%
• Deleveraging and extension of our debt maturities
through proactive liability management exercises
• Strong and robust FCF of `21,715 crore
• Cash and liquid investments of `32,130 crore
• A strong balance sheet, with respect to Net Debt/
EBITDA (0.5x) and gearing, compared to our global
diversified peers
Interim dividend of ~`16,728 crore paid in FY2022
•
RETURN ON CAPITAL EMPLOYED
(%)
FY2022
FY2021
FY2020
30
19
11
7
Committed to ESG leadership in the
natural resources sector
• Committed to being the lowest cost producer in a
sustainable manner
• Committed to incorporating global best practices
to transform communities, planet and workplace in
alignment to our Group objective of ‘Zero Harm, Zero
Waste and Zero Discharge’
Implemented critical risk management across the
business to improve workplace safety
•
• Committed to promoting diversity in all forms at the
workplace and building an inclusive work culture
• Committed to attaining Net Carbon neutrality by 2050
and reducing absolute emissions by 25% by 2030 from
2021 baseline. Decarbonise 100% of our Light Motor
Vehicle (LMV) fleet by 2030 and 75% of our mining fleet
by 2035.
• Promoting operational efficiency, changing fuel mix,
switching to renewable exploring greener businesses
opportunities and developing low carbon product
portfolio are the levers used.
• Committed to water efficiency and achieving net water
positivity by 2030
• Committed to keeping community welfare at the core of
decision making by implementing global best practices
and becoming a developer of choice
• Committed to positively impacting the lives of 100
million women and children through skilling and
education, nutrition and healthcare initiatives
• Committed to improving transparency and
completeness of disclosure in alignment with
international best practices like GRI, TCFD etc.
Actions taken in FY2022
• Electric mobility: Jharsuguda partners with
GEAR India to supply 23 e-forklifts; deployed
50+ EVs at HZL and ESL together
• 10-year MoU signed with TERI to develop
implementation programs to further our
ESG vision
• Signed PDA for 580 MW RE ‑ a significant step
towards 2.5 GW RE commitment
• Launched green Aluminium under the brands
‘Restora’ and ‘Restora Ultra’ to usher new era
of green metals
• Collaboration with TUV‑SUD to develop
roadmap for our ‘Net Water Positive’ initiative
• 1st fly ash rake from Jharsuguda dispatched to
cement plant
• Commenced Ash backfilling in one of Coal
India’s open‑cast mine in March 2022
• Used 17 kt biomass in HZL; committed to
using 5% biomass in our thermal power plants
We have adopted the Incident Cause Analysis
Method (ICAM) for incident investigation to avoid
repeat accidents and promote higher reporting
for all incidents.
15
Integrated Report and Annual Accounts 2021-22
Progressing on
our low-carbon
journey with
‘green’ aluminium
16
Employee in
Balco facility
Vedanta Limited Progressing on
our low-carbon
journey with
‘green’ aluminium
Integrated Report
Statutory Reports
Financial Statements
In FY2022, we created history by becoming the first Indian aluminium
producer to manufacture low-carbon aluminium products under the
‘Restora’ brand. As the name signifies, Restora is part of our efforts to
restore the environmental balance and contribute to the transition towards
a low-carbon future. Metals and minerals will play a crucial role in this
transition. Aluminium, for example, will find critical application in clean
power technologies.
We are offering two product lines under brand Restora
– Restora (low carbon aluminium) and Restora Ultra
(ultra-low carbon aluminium) – both of which can be
manufactured in the form of ingots, billets and other value-
added products to suit customer requirements.
With Restora, we have joined the
exclusive global club of low-carbon
aluminium producers.
Manufactured using renewable energy, Restora’s GHG
emission intensity is almost half the global threshold
of 4 tonnes of CO2 equivalent per tonne of aluminium
manufactured. Restora Ultra, manufactured with aluminium
recovered from dross, a byproduct of the aluminium
smelting process, has a near-zero carbon footprint. To
produce the first batch of Restora, our Aluminium business
consumed nearly 2 billion units of renewable energy in 2021,
making it India’s largest industrial consumer of renewables.
The launch of Restora marks a proud moment for us. It
validates our commitment to decarbonise our operations
and provide our customers, more conscious than ever of the
provenance of products they use, unmatched competitive
advantage with sustainable aluminium products. For the
manufacture of Restora Ultra, we have partnered with
Runaya Refining, one of India’s fast‑growing manufacturing
start-ups focused on creating innovative solutions for the
resources sector.
To fulfil its agenda of lowering its carbon footprint, Vedanta
Aluminium is working on a three-fold agenda – highest
operational efficiency, more renewables in the energy mix,
and transition to cleaner fuels.
As a result of this unwavering focus, in 2021, Vedanta
Aluminium broke into the prestigious Dow Jones
Sustainability Index (DJSI) world rankings at #4,
amongst global aluminium producers.
17
Integrated Report and Annual Accounts 2021-22 Digitalisation to
usher in the next
Asset Performance Management
at Vedanta Aluminium in Jharsuguda
Asset Performance Management (APM) is an approach
to managing all critical power plant assets of Boiler
Turbine Generator (BTG) area. APM has become a
primary enabler of digital transformation for power plant
critical asset management among heavy industries. It
focuses on achieving business objectives, improving
asset reliability and availability, and minimising risks
and operating costs.
The commissioning of APM leads to a range of new
possibilities with immediate benefits, such as:
• Reducing ecological footprint
• Reducing asset downtime
• Enhancing revenue and profitability, together with
on-time delivery and consistent quality
• Maximising production efficiency, when deployed with
Industry 4.0 technologies such as big data, Artificial
Intelligence (AI) and Machine Learning (ML)
• Funneling multiple silos and systems such as Open
System Interconnection (OSI), Process Intelligence
(PI) and SAP into a single view and enabling working
as part of a larger ecosystem. It also enables better
collaboration across the asset ecosystem and enhances
effectiveness through data-led applications
The commissioning of APM leads to
several benefits, including reduced
ecological footprint and decreased
asset’s downtime
ASSET PERFORMANCE MANAGEMENT (APM)
Business
Goals
Data &
Analysis
Asset
Performance
Digital
Tools
Asset
Ecosystem
Practices
& Apps
APM can improve maintenance practices and asset life with
the combination of visualisation tools, simulation modeling
and real-time data acquisition.
At Vedanta Aluminium in Jharsuguda, APM implementation
has resulted in:
• Collection and centralising asset health data from SAP
and plant Operational Technology (OT) system
• Asset health monitoring and failure prediction for power
critical assets
• Optimising asset maintenance planning by integrating
with SAP system
• Achieving visual analysis using CAD or 3‑D model for
plant critical assets in BTG area
APM
implementation
helps in increasing
workforce effectiveness
by 25%, asset availability
by ~15% and reducing
maintenance and inspection
costs by 50%
18
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Robotic Process Automation
RPA is a process where critical but redundant tasks
are automated with the help of technology. It enables
system-level efficiency and helps in releasing bandwidth
of resourceful personnel.
At Vedanta’s ESL business, RPA has been used in the
processing of Bank Reconciliation Statements, including
downloading of bank statements from various banks,
segregating them based on predefined filters, downloading
the corresponding files and transferring them to respective
stakeholders. Through this, we have achieved significant
reduction of individual dependencies, improvement in
turnaround time and a 100% accuracy with more than 90%
reduction in pre-automation time.
Central Historian at Electrosteel Steels
Limited (ESL)
For any manufacturing operation, real-time data
accessibility and availability are a critical success
factor. These are imperative in aiding effective,
informed and timely decision making. For Vedanta, the
installation of Central Historian at ESL blast furnace is a
step in this direction.
Using the Historian OSIPI portal, nearly 1,700 critical data
points can be accessed instantly with a whopping 19x
data storage enhancement. It has also helped automate
generation of several reports, triggered to personnel
concerned. This has significantly bolstered internal
efficiency, while eliminating manual interventions and
room for error, and re-deployment of man-hours into
productive work.
The real-time capturing of all data points also enables
detection of any deviations observed in critical equipment/
process parameters from their acceptable standards, and
auto‑triggering of notifications via SMS and e‑mail.
This has already been recognised as the preventive
mechanism for identifying any trips/alarms and thus
resulting in significant savings in repairs and replacement
costs. The system is highly user-friendly and provides users
with functionalities to explore the system at their individual
pace. Further, a central dashboard screen has also been
developed providing real-time data visibility into critical
process parameters.
Leveraging digital technology
19
Integrated Report and Annual Accounts 2021-22 ABH technology
helps unlock
resources of
the Barmer Hills
Formation
Cairn Facility
20
Vedanta Limited
Integrated Report
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Financial Statements
Recent technological advances have
helped unlock vast sources of oil trapped
in the Barmer Hill Formation. The ability
to develop these reservoirs could prove to
be a gamechanger, paving the way for the
development of similar other reservoirs.
Aishwariya Barmer Hill (ABH) is the first
tight oil project to monetise the Barmer Hill
Formation potential. At ABH, all 39 wells have
been drilled, and they are being progressively
hooked up to ramp up volumes. Intelligent
artificial well design (hydraulically lifted
pumps) was key to developing this field with
minimal surface footprint and maximum
operational flexibility.
Advanced analysis and modelling techniques were used
during longitudinal and transverse frac stages while
optimising the lateral length of the wells and distance
between each of the stages. The procedure integrated
multiple technologies and techniques such as hydraulic
fracture analysis, minifrac analysis with diagnostic fracture
injection tests, petrophysical analysis and log evaluation,
etc.
Petrophysical analysis and log evaluation are used to
determine rock and reservoir characteristics to estimate
pay, while step rate and minifrac analysis help define stress,
net pressure and fluid efficiency.
More than 450 stages of fracs have been pumped
with continuous improvement in fracturing design and
methodology. Coil actuated cemented sliding sleeves were
used to maximise frac efficiency.
Given the way technology has helped fracing of ABH, it
comes as no surprise that there is increasing demand for
hydraulic fracturing services.
Results from
efficient fracing
at ABH wells:
5 frac stages
in a single day
4 million+ pounds
of proppant in one well
360k pound
proppant in one stage
Up to 17 frac stages
in a single well
21
Integrated Report and Annual Accounts 2021-22 Innovation for
Waste‑to‑value
Magnetite Project
at BMM
In 2021, Vedanta Zinc International (VZI) piloted a new waste-to-value
project at Black Mountain Mine (BMM) operations in Aggeneys, Northern
Cape, South Africa. This is a project to recover iron ore (magnetite) from
the BMM tailings. Through the new iron ore product line, BMM is advancing
towards developing world-class, sustainable operations.
This innovative project will assist in
transforming our existing VZI BMM operations
to being competitive, globally cost-efficient,
and sustainable. It will also enhance the
longevity of the mine and will further validate
our commitment to being an innovative and
responsible natural resources player across
our Southern African operations.
Conventionally, tailings originating from the mine were
diverted to its tailings storage facility or the underground.
However, with the commissioning of the iron ore project, the
tailings will be now used to develop value-added products
with varied utility. More importantly, this project will help us
in minimising our environmental footprint, while creating
employment opportunities for ~250 people in the Northern
Cape area.
Phase 1 of the project will produce between 0.7‑1 mtpa
of iron ore, comprising sinter grade and dense media
seperation (DMS) grade iron ores. In order to consistently
produce a high-quality product, BMM worked with
global industry experts and partners to design a
standardised process.
The first part of the project will utilise feed from existing
BMM operations and produce high-grade iron ore (68%+),
which can be utilised as feedstock for steel and coal
industries. The project is progressing well with major
earthworks completed and construction in progress. The
first production of high‑quality iron ore at Fe grade >68%, is
expected around September 2023.
22
Vedanta Limited
Integrated Report
Integrated Report
Statutory Reports
Financial Statements
Phase 1 of the project
expects to produce
~1 mtpa of iron ore.
The first production
of high-quality iron ore
at Fe grade >68% is expected
around September 2023.
Moving towards
waste to value
Integrated Report and Annual Accounts 2021-22
23
Message from the Chairman
Living a new purpose
Anil Agarwal
Chairman
Dear Stakeholders,
At Vedanta, the pandemic challenged us to think differently and
act swiftly, both from the perspective of business continuity
and social responsibility. With decisive actions and a strong
stakeholder focus, we could mount the imminent challenges and
continue to deliver value for everyone.
Even as the pandemic tested our collective mettle, we have many
takeaways in our quiver both for business and life that will stay
with us. I would like to take this opportunity to thank my fellow
Board members, all employees of Vedanta, our supplier partners,
our investor fraternity and all other stakeholders, who have stood
in solidarity with us as we navigated the COVID crisis.
24
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Rebound, revival and opportunities
Strengthening our performance and position
FY2022 witnessed a notable rebound in the commodity
markets with the release of pent-up demand and buoyant
prices. The demand was further accelerated by the global
energy transition, with OEMs and other players sourcing
metals and minerals at scale for deployment in renewable
energy infrastructure.
In this scenario, Vedanta reaffirmed its position as a
strong natural resources player that contributes to national
and industrial growth and to the global priority of carbon
neutrality. We saw substantial growth across all our
businesses, in terms of throughput and volumes, and in
improved financial results. Our strong liquidity position and
deleveraging focus peg our debt at a very comfortable level.
Reflecting this, both CRISIL and India Ratings upgraded our
credit rating to ‘AA’ with a stable outlook.
During the year, our individual businesses received several
accolades in recognised forums such as World Finance,
SABERA Awards, World HRD Congress and others. At the
Group level, we were awarded for our corporate reporting
practices and others. Our sustainability efforts were also
recognised with improved ratings and rankings in the MSCI
and CDP platforms.
In March 2022, we conducted focused interactions with
more than 100 investors and analysts. The engagements
were very successful as we conveyed to them our unique
position to create long-term sustainable shareholder value
through our growth plans across commodities, execution
capability, disciplined capital allocation, strong dividend
distribution policy and commitment to deleveraging.
Post the pandemic, the world has nearly returned to
normalcy in terms of restored economic and business
activity, unrestricted mobility of people and re-opening
of spaces for work. This has enabled the International
Monetary Fund (IMF) to forecast a global growth rate of
4.4% in 2022. However, there are downside risks, which are
weighing upon optimism, in the form of the Russia-Ukraine
conflict and the COVID‑19 outbreak in China. These have
caused a ripple effect across the globe including disruptions
to already battling supply chains, and in turn, muted
manufacturing activity in Europe and the United States.
In India, economic growth bounced back last year, with the
National Statistical Office (NSO) pegging GDP growth at a
strong 8.9% in its second advance estimates. Government
expenditure and domestic spending have shored up the
economy well, complemented by a long-term growth-
focused budget. The initiatives by the government in the
recent past, such as the commodity-intensive National
Infrastructure Pipeline (NIP) and Production Linked
Incentive (PLI) scheme to boost local manufacturing, are
also progressing well. This is encouraging, as such bold
and scalable programmes are instrumental in realising the
vision of a self-reliant India.
On the policy front, the Mines and Minerals (Development
and Regulation) Amendment Act, 2021 is also an
encouraging move, which calls for private participation in
the exploration of key resources such as coal and gold.
This paves the way for better utilisation of India’s natural
resources potential and in ensuring better trade balance in
India’s favour. That said, there is significant space for import
substitution of minerals such as Zinc and Oil & Gas, where
India freely allows imports for domestic consumption.
In line with India’s Net Zero ambition, we
can foresee a strong demand for renewable
energy infrastructure and transition to
material intensive growth. This will lead to an
automatic increase in demand for materials
such as aluminium and zinc, which form part
of Vedanta’s core portfolio.
Becoming developer
of choice
25
Integrated Report and Annual Accounts 2021-22 A new mantra to live by: Transforming
for Good
In recent years, we can clearly see an accelerated inclusion
of environmental, social and governance (ESG) aspects in
businesses and investments globally as well as in India.
While sustainability has always been a strategic priority
for Vedanta, we have now made ESG a central focus in
everything that we do.
With the renewed ESG purpose of ‘Transforming for
Good’, we are making substantial investments in our
business on ESG initiatives. The ESG purpose is taken
forward by the three pillars of transforming communities,
planet and the workplace. Each pillar further has nine
specific aims with quantifiable targets for the medium to
long term, helping us map tangible progress every year.
Further, the purpose also propagates a culture of ESG
within the organisation, across levels and businesses.
Transforming communities
Vedanta has always stood by the communities in and
around our areas of operations. We staunchly believe
that their trust is our social licence to operate, and it’s our
fiduciary duty to operate responsibly and empower them
with opportunities and support. The three aims that anchor
our community transformation agenda include ‘Responsible
business decisions based around community welfare’
‘Empowering over 2.5 million families with enhanced
skillsets’ and ‘Uplifting over 100 million women and children
through Education, Nutrition, Healthcare and Welfare’.
Message from the Chairman
Working for a
better tomorrow
Prudent capital allocation for
strategic growth
In November 2021, we convened to review and unveil
our capital allocation policy, which establishes specific
guidelines under which we will allocate funds. The policy
focusces on rapid but responsible growth and maximising
shareholder returns, and is charted under three streams
as below:
• Capital expenditure, with a focus on volume
augmentation, cost reduction, ESG and moving to
value added products; growth projects with a minimum
expected IRR of 18%; and sustaining capex on per
tonne basis
• Dividend policy, which lays down that a minimum 30% of
Attributable Profit after Tax (before exceptional items) of
the Company will be distributed as dividends (excluding
profits of HZL, dividends of which will pass through in six
months). This will be subjected to the Board’s evaluation
of various factors, such as robustness of cash flows,
economic situation, commodity price cycles, natural
calamities, etc. for overall optimal cash management
Inorganic growth, where we will selectively invest in
acquisitions which are accretive to existing businesses
or that have synergies with our core businesses
•
Empowering over
2.5 million families
with enhanced skill sets;
and uplifting over 100 million women
and children through education,
nutrition, healthcare and welfare.
26
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Sustainable
environment footprint
Transforming the planet
We are a natural resources company, and everything
we do is closely tied to the availability of natural capital.
We are also aware that our operations and value chain
can leave behind substantial environmental footprint.
Towards this end, we are investing in climate action and
decarbonisation, circular economy, water stewardship and
several environment-focused interventions. The planet
transformation agenda is propelled by our aim of ‘Net-
carbon neutrality by 2050 or sooner‘ ‘Achieving net water
positivity by 2030’ and ‘Innovations for greener business
model’.
Transforming the workplace
Our people and their collective skills and abilities give
us unparalleled competitive advantage. At Vedanta, our
policies and processes are oriented towards inclusivity,
equity, meritocracy and satisfaction. Similarly, the health
and safety of our people continue to assume the highest
priority and we continue to put in world-class safety
standards in our operations. ‘Prioritising safety and health
of all employees’ and ‘Promote gender parity, diversity and
inclusivity’ form key aims of this pillar.
We are also mindful of the way our organisation is governed.
With strict policies and frameworks in place, we ensure
that good governance is practised across the organisation
and we are continuously striving to raise the bar. ‘Adhere to
global business standards of corporate governance’ is thus
the final aim under this pillar.
The future is bright
We are operating in a highly dynamic environment which
is flush with opportunities, especially in India. With large‑
scale infrastructure and energy transition plans, efforts
towards self‑sufficiency, and a booming consumer
economy, the avenues that lie ahead of us are endless. At
Vedanta, our hard work and strategic focus over the years
have helped position us perfectly to make the best of this
environment, and our future plans are focused on achieving
accelerated growth. More importantly, we are fully equipped
to achieve our potential with tenets of responsibility and
sustainability at the core. As we put our best foot forward to
do the right things and to do things rightly, we expect your
continued support.
Best regards,
Anil Agarwal
Chairman
A culture of
best practices
27
Integrated Report and Annual Accounts 2021-22 Message from the CEO
Setting new standards
of responsible growth
Dear Stakeholders,
It’s refreshing to write to you at a time of
rebound and cautious optimism, post the
peak of the pandemic that plagued us for
the past two years. At Vedanta, we are proud
to have weathered the COVID‑19 situation
with prudence and empathy and are even
more confident of taking on challenges and
exceeding expectations.
I’m delighted to share that in FY2022,
we achieved yet another best-ever year,
with strong performance across all our
businesses and strategic priorities. It’s
noteworthy that we achieved this feat during
the recovery period from COVID‑19, and
amid significant volatilities in the commodity
space. We also continued to undertake
value-accretive projects and improved our
operational excellence and overall efficiency.
28
Sunil Duggal
Chief Executive Officer
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
A new ESG purpose
Record growth and margins
This was the year in which we unveiled our renewed
Environmental, Social and Governance (ESG) Purpose,
‘Transforming for Good’, built on the three pillars of
‘Transforming Communities’, ‘Transforming the Planet’
and ‘Transforming the Workplace’. These pillars are further
indicative of Vedanta’s steadfast commitment to become
best-in-its-class, while ensuring that the communities
and the larger society also benefit from our existence.
These pillars are supported by nine aims that will serve as
guideposts and milestones in our journey, including our Net
Zero Carbon Vision 2050. Going forward, this purpose will
be the bedrock of our ESG strategy.
Safety, our fundamental priority
Across the organisation, we continue to instill safe work
behaviours. However, it’s with extreme regret that I report
12 fatalities during the year. Such incidents indicate that
our efforts towards safety requires continuous monitoring
and upgradation. We are cognisant of this and have taken
several novel steps to minimise incidents and improve
overall safety performance, starting from the senior
management. For example, at our respective businesses,
CEOs are driving critical risks. We have also initiated the
implementation of fatality learnings across businesses,
led by CEOs, together with increased leadership time on
field through Visible Felt Leadership (VFL) and personal
safety programmes. Further, we have onboarded DuPont
Sustainability Solutions for the implementation of Critical
Risk Management.
Continuous focus
on safety
Overall, in FY2022, we continued to improve our performance
each quarter and closed the year with record performance
in most of our businesses. Strong volumes, supported
by a buoyant pricing scenario, primarily determined our
performance during the year. Even as input costs increased
due to commodity inflation, our focus on operational
excellence, digitalisation and innovation held us in good
stead, improving overall agility and efficiency.
At the close of the year, we recorded all time high revenue of
`131,192 crore, 51% higher than the previous fiscal. We also
registered our highest-ever EBITDA, which stood at `45,319
crore, with continued industry leading EBITDA margin of 39%.
Concomitant with our performance, we were also able to
distribute record dividends to our shareholders, to the tune of
`16,728 crore, delivered in three tranches through the fiscal.
Strong financial profile
Strong uptick in business performance and progress on
deleveraging have allowed us to deliver an RoCE of ~30%,
1.6x y‑o‑y. Our underlying liquidity position remained robust,
with a total cash and cash equivalents of `32,130 crore in our
books. We could also reduce our net debt by `3,435 crore to
`20,979 crore by the end of the year. This has helped bring
down our leverage ratio to 0.5x, one of the lowest in our
peer group.
Digital first. Future ready.
We continue to foster a digital‑first approach across
businesses, establishing it as a culture that cuts through
levels and functions. We have established a digital Centre of
Excellence (CoE), automated 100% of enabling functions, and
achieved 100% digital literacy across the organisation.
We have also launched a Group‑wide programme ‘Vedanta
Spark’ with the objective of scaling up the partnership
with innovative start-ups, to leverage their technological
capabilities and speed of execution. This will enable us in
achieving strategic goals under operational excellence,
new product development and 360-degree sustainability.
Through this programme, we aim to reimagine the role
of entrepreneurship in catalysing innovation by enabling
technology, talent, and entrepreneurial ambitions of
India’s youth by seeding world‑class technology ventures.
The ventures will benefit from co‑creation opportunities
with the Vedanta Group companies; access to massive
capacities and resources of the Group; availability of global
and expert mentorship; and opportunity to solicit funding
and investments.
29
Integrated Report and Annual Accounts 2021-22 Message from the CEO
Operational and strategic review
Aluminium
In FY2022, we continued to produce record volumes in our
Aluminium, Zinc India and International businesses. We also
ramped up production in all other business segments while
sustaining our production in Oil & Gas business. During
the year, our businesses also helped move the needle on
our strategic priority of environmental sustainability. The
launch of Restora, India’s first low carbon aluminium brand,
was a landmark moment for Vedanta and our customers
worldwide. In the process, Vedanta Aluminium also became
India’s largest industrial consumer of renewable energy – a
testimony to our delivery on our Net Zero commitments.
We were also able to further diversify our asset
portfolio with the acquisition of Nicomet, which
has made us the sole producer of Nickel in India.
It also acts as a significant step in Vedanta’s
mission towards making India self-reliant in key
critical minerals.
One of our subsidiaries, AvanStrate Inc, is a pioneering
manufacturer of LCD glass substrates using the world’s
leading technology. One of the major global producers of
LCD glass, it stands to benefit from the large‑scale market
demand in this space. We expect an investment of up to
US$500 million in this line of business over a period of
2-3 years.
During the year, we yet again demonstrated record
performance with the highest ever annual aluminium
production of 2,268 million tonnes and alumina production
of 1,968 million tonnes. This has been achieved through
continued focus on operational excellence and ramp up at
the Jharsuguda Smelter. Our initiatives, with a key focus on
volume growth and value-chain integration, prepares our
Aluminium business to be among the top 3 players globally
(ex‑China), delivering superior value for all its stakeholders.
Zinc
At Zinc India, we recorded the highest ever mined metal
production, crossed the 1.0 million mark to reach 1,017 kt
production, and improved our metal production to 967 kt.
Our cost of production witnessed an uptick, driven by input
commodity inflation. However, this was partially offset
by higher volume and operational efficiencies. During the
year, we also received Environmental Authorisations (EA)
for expansion of Zawar mines from 4.8 mtpa to 6.5 mtpa.
Equipped with best-in-class technology, our mines are
future-ready with a possibility of upgrading our total R&R to
550 million tonnes.
At Zinc International, Gamsberg’s long‑term potential holds
us in good stead with highest ever production of 170 kt in
FY2022, and 220 kt annualised production run rate in the
month of March. Gamsberg also demonstrated notable hike
in crushing throughput from 767 tph in FY2021 to 827 tph
in FY2022.
Oil & Gas
In the Oil & Gas segment, our efforts were focused on
sustaining production levels and increasing resources
through exploration across the portfolio. We have initiated
infill projects across fields to add to reserves and mitigate
natural field decline. Our exploration efforts resulted in two
hydrocarbon discoveries (Durga-1 in Rajasthan and Jaya-1
in Cambay).
In addition, we have announced strategic partnerships with
leading Oil & Gas service companies to add R&R across our
portfolio of PSC and OALP blocks.
Highest ever
aluminium and zinc
production in
FY2022.
30
Vedanta Limited We are investing in exploration and appraisal to add
resources, establish shale potential through pilot wells, and
add reserves through development projects such as ASP
and infill wells across the fields.
Iron ore
Our iron ore business has completed the successful
integration of the recently acquired coke plant with
environmental clearance of 0.9 mtpa at Gujarat (Gujarat
NRE Coke Limited). This positions the Vedanta Iron Ore
business as one of the largest merchant coke players in
the country. We are also pursuing expansion at Bokaro
and planning a greenfield project in Bellary. Further, we
are starting our mines in Liberia, and achieving R&R
augmentation through exploration. The VAP portfolio will
continue to expand as part of our future strategy.
From an output standpoint, the Karnataka iron ore mine
production increased by 8% y-o-y and pig iron production
also increased to 790 kt, up 33% y-o-y.
Steel
At ESL, our performance was powered by increased
value‑added mix in our portfolio, mitigating the pressure of
increasing input commodity prices. FY2022 also saw our
highest ever saleable production post acquisition of ESL.
We improved our furnace performance post a planned
shutdown during the period. From a strategic perspective,
we won two iron ore mines in Odisha (Nadidih BICO and
Nadidi FEEGRADE) which increase our raw material security
and price stability.
FACOR
We achieved our highest Fe Chrome production and
highest EBITDA margin in FY2022 since acquisition. The
turnaround ore production performance from the Ostapal
and Kalarangiatta mines is outstanding, with 70% growth in
ore production on a y-o-y basis.
Integrated Report
Statutory Reports
Financial Statements
Employees at Cairn,
Oil & Gas
Delivering value for everyone
Vedanta remains steadfast in its commitment towards
sustained value creation for all our stakeholders. The year
saw us focus on eight key areas for value delivery during
the year:
• ESG, with a resolute focus on sustainable ways
of working
• Setting up centres of excellence for R&D, Asset health,
Innovation and Quality
• Digital transformation with industry 4.0 technology,
to increase overall efficiency, safety, predictability
and serviceability
• Business potential mapping to chart out opportunity
areas for growth
• Government partnerships
• Brownfield expansion at sites to increase overall output
and service demand
• People focus, inculcating a performance culture
rewarding merit and initiative
• Augmenting R&R through advanced technology
I am pleased to say that we have progressed actively on
the above priorities and have delivered tangible results on
them. Our stakeholders have played a key role in enabling
this through their relentless support and faith in us. As we
rebound and leap forward with a larger, diversified portfolio,
a stronger financial profile, and a renewed ESG purpose, I
solicit your continued cooperation.
Best regards,
Sunil Duggal
Chief Executive Officer
Offshore facility of
Cairn Oil & Gas
31
Integrated Report and Annual Accounts 2021-22 Key performance indicators
Testament to sustained
value creation
GROWTH
REVENUE
(` crore)
FY2022
FY2021
FY2020
RETURN ON CAPITAL EMPLOYED (ROCE)
(%)
1,31,192
86,863
83,545
FY2022
FY2021
FY2020
30
19
11
Description: Revenue represents the value of goods sold and
services provided to third parties during the year.
Commentary: In FY2022, consolidated revenue was highest ever
at `131,192 crore compared with `86,863 crore in FY2021. This
was primarily driven by higher commodity prices, higher volumes
at Aluminium, Copper, TSPL, IOB and FACOR, increased premium
at Aluminium and HZL, rupee depreciation, partially offset by lower
power sales at VAL and BALCO.
EBITDA
(` crore)
FY2022
FY2021
FY2020
45,319
27,341
21,061
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 depreciation and amortisation.
Commentary: Historical high EBITDA for FY2022 at `45,319 crore,
66% higher y-o-y. This was mainly driven by higher commodity prices
at Aluminium, Zinc, Cairn and Iron & Steel and higher sales realisation
from Iron ore & Steel business, increased volumes at Aluminium, Zinc
International and Iron Ore business, partially offset by headwinds in
input commodity prices.
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: Strong ROCE of c.30% in FY2022 (FY2021: 19%),
primarily due to strong operating and financial performance coupled
with higher cash flow from operations.
NET DEBT /EBITDA (CONSOLIDATED)
FY2022
FY2021
FY2020
0.5
0.9
1.0
Description: This ratio represents the level of leverage of the
Company. It represents the strength of the balance sheet of Vedanta
Limited. Net debt is calculated in the manner as defined in Note 18 of
the consolidated financial statements.
Commentary: Net debt/EBITDA ratio as at 31 March, 2022 was at
0.5x (lowest in 5 years), compared to 0.9x as at 31 March, 2021.
ADJUSTED EBITDA MARGIN
(%)
INTEREST COVER
FY2022
FY2021
FY2020
39
36
29
FY2022
FY2021
FY2020
18.1
13.0
5.6
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. 18.1x,
higher y-o-y on account of higher EBITDA.
Description: Calculated as EBITDA margin excluding EBITDA and turnover
from custom smelting of Copper India and Zinc India businesses.
Commentary: Adjusted EBITDA margin for FY2022 was 39% (FY2021: 36%).
FCF POST-CAPEX
(` crore)
FY2022
FY2021
FY2020
21,715
13,821
7,130
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 record high FCF of `21,715 crore in
FY2022, driven by strong cash flow from operations, partially offset
by higher sustaining and project capital expenditure.
32
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
OTHER KEY FINANCIAL RATIOS
DEBTORS TURNOVER RATIO*
DEBT EQUITY RATIO
FY2022
FY2021
FY2020
32.5
33.9
30.5
FY2022
FY2021
FY2020
0.6
0.7
0.8
Description: The debtors’ turnover ratio is an accounting measure
used to quantify a company’s effectiveness in collecting its
receivables. This is calculated as a ratio of revenue from operation to
average trade receivables.
Commentary: The debtors turnover ratio was at 32.5x.
*Excluding Power business
Description: It is a financial ratio indicating the relative proportion of
shareholders’ equity and debt used to finance a Company’s assets.
This is calculated as a ratio of total external borrowing to total equity
(share capital + reserves + minority).
Commentary: The ratio has decreased to 0.6x in FY2022 primarily
because of decrease in gross debt due to the repayment of debt at
HZL, BALCO and CIHL partially offset by increase in borrowing at
Vedanta Standalone.
INVENTORY TURNOVER RATIO
OPERATING PROFIT MARGIN
(%)
FY2022
FY2021
FY2020
7.1
5.6
5.1
FY2022
FY2021
FY2020
28
23
14
Description: The inventory turnover ratio is an efficiency ratio that
shows how effectively inventory is managed. This is calculated as a
ratio of cost of goods sold to average inventory.
Commentary: The inventory turnover ratio for the Company was
at 7.1x in FY2022 as compared to 5.6x in FY2021.
Description: Operating profit margin is a profitability or performance
ratio used to calculate the percentage of profit a company produces
from its operations. This is calculated as a ratio of operating profit
(EBITDA less depreciation) to revenue from operations.
Commentary: The operating profit margin was higher in FY2022 as
compared to FY2021, primarily due to higher EBITDA, partially offset
by higher depreciation in the current year.
CURRENT RATIO
FY2022
FY2021
FY2020
NET PROFIT MARGIN
(%)
1.0
1.0
0.9
FY2022
FY2021
FY2020
17
19
7
Description: The current ratio is a liquidity ratio that measures
a Company’s ability to pay short‑term obligations or those due
within one year. This is calculated as a ratio of Current Assets to
Current Liabilities.
Commentary: The current ratio of the Company remained flat
at c.1.0x.
Description: It is a measure of the profitability of the company. This
is calculated as a ratio of net profit (before exceptional items) to
revenue from operations.
Commentary: The net profit margin was at 17% in FY2022 as
compared to 19% in FY2021.
RETURN ON NET WORTH
(%)
FY2022
FY2021
FY2020
31
22
8
Description: It is a measure of the profitability of the company. This
is calculated as a ratio of net profit (before exceptional items) to
average net worth (share capital + reserves + minority).
Commentary: The return on net worth has increased, mainly on
account of increase in EBITDA during the year.
33
Integrated Report and Annual Accounts 2021-22 Key performance indicators
LONG-TERM VALUE
GROWTH CAPEX
(` crore)
FY2022
FY2021
FY2020
5,659
2,578
6,385
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. Expansion capital expenditure
during the year stood at ₹5,659 crore.
EPS (BEFORE EXCEPTIONAL ITEMS)
(`)
FY2022
FY2021
FY2020
52.02
32.80
10.79
Description: This represents the net profit attributable to equity
shareholders and is stated before exceptional items and dividend
distribution tax (net of tax and minority interest impacts).
Commentary: In FY2022, EPS before exceptional items was
at `52.02 per share. This mainly reflects the impact of lower
depreciation charges and higher EBITDA.
RESERVES AND RESOURCES (R&R)
Description: Reserves and resources are based on specified
guidelines for each commodity and region.
ZINC INDIA
(million mt)
FY2022
FY2021
FY2020
448
448
403
Commentary
Zinc India: During the year, combined R&R was estimated to be 448
million tonnes, containing 31.1 million tonnes of zinc-lead metal and
874.7 million ounces of silver. Overall mine life continues to be more
than 25 years.
ZINC INTERNATIONAL
(million mt)
FY2022
FY2021
FY2020
671
566
509
Commentary
Zinc International: During the year, combined mineral resources and
ore reserves estimated at 671 million tonnes, containing 35.0 million
tonnes of metal.
DIVIDEND
(`/ share)
FY2022
FY2021
FY2020
OIL & GAS
(mmboe)
FY2022
FY2021
FY2020
45.00
9.50
3.90
1,151
1,229
1,194
Description: Dividend per share is the total of the final dividend
recommended by the Board in relation to the year, and the interim
dividend paid out during the year.
Commentary
Oil & Gas: During FY2022, gross proved and probable R&R stood at of
1,151 mmboe.
Commentary: The Board has recommended a total interim dividend
of ₹45 per share this year compared with ₹ 9.50 per share in the
previous year.
34
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
SUSTAINABLE DEVELOPMENT
GHG EMISSIONS
(tons of CO2e)
SCOPE 1
FY2022
FY2021
FY2020
59
3
59
1
57
2
Description: Vedanta used Scope 1 and Scope 2 GHG emissions,
measured in Tons of CO2e to track its carbon footprint.
Commentary: We calculate and report Greenhouse Gas (GHG)
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 Protocol.
CSR FOOTPRINT
(million beneficiaries)
FY2022
FY2021
FY2020
4.64
42*
3.26
Description: The total number of beneficiaries through our
community development programmes across all our operations.
Commentary: We benefited 4.64 million people this year through our
community development projects comprising community health,
nutrition, education, water and sanitation, sustainable livelihood,
women empowerment and bio-investment. This year our large-scale
COVID‑19 outreach programme further augmented the metric.
*Out of 42 million 39 million are from the e-shiksha program
TRIFR
FY2022
FY2021
FY2020
GENDER DIVERSITY
(%)
1.4
1.5
1.6
FY2022
FY2021
FY2020
11.54
11.23
10.9
Description: The total recordable injury frequency rate (TRIFR), is
the number of fatalities, lost time injuries, and other injuries requiring
treatment by a medical professional per million hours worked.
Commentary: This year, the TRIFR was 1.40. Safety remains the key
focus across businesses.
Description: The percentage of women in the total permanent
employee workforce.
Commentary: We provide equal opportunities to men
and women. During the year, female employees made up 11.54%
of the total workforce.
WASTE RECYCLING (High Volume Low Toxicity)
(mMT)
WATER CONSUMED AND RECYCLED
(million m3)
FY2022
FY2021
FY2020
Generation
Recycled
19
19
18
17
15
13
FY2022
FY2021
FY2020
277
86
270
83
250
71
Description: High Volume Low Toxicity (HVLT) are waste present in
large quantities and are usually stored in tailings dams/ash-dyes or
other secure landfill structures before being sent to other industries
as raw materials. HVLT includes fly ash, bottom ash, slag, jarosite,
red mud.
Commentary: In FY2022, we achieved ~100% recycling of our
HVLT waste.
Consumed
Recycled
Description: Water consumed is the portion of water use that is not
returned to the original source after being withdrawn. Recycled water
or reclaimed water means treated or recycled wastewater commonly
used for non-potable (not for drinking) purposes, such as agriculture,
landscape, public parks, and golf course irrigation (million m3)
Commentary: In FY2022, we recycled 85.8 million m3 of water,
equivalent to around 30.6% of consumed water.
35
Integrated Report and Annual Accounts 2021-22 Value creation model
Transforming for better outcomes
INPUTS
Financial capital
We are focused 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
maximising returns to shareholders.
• Equity ₹372 crore
• Gross Debt ₹53,109 crore
• Net Worth ₹82,704 crore
• Retained Earnings ₹65,011 crore
• Cash and Cash Equivalent ₹32,130 crore
• Capex ₹5,659 crore
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.
• Plant and Equipment ₹109,345 crore
• Capital Work in Progress (WIP) ₹14,230 crore
Intellectual capital
As a relatively young company, we are keen to embrace
technological developments and encourage innovation.
We encourage our people to nurture and implement
innovative ideas, which will lead to operational improvements
across our operations.
Human capital
We have employees drawn from across the world, and their
diverse skills and experience contribute to our operations.
The mining and plant operations require specialised skills
for which we employ qualified technical, engineering and
geology experts. In addition, we create a culture which
nurtures safety, innovation, creativity and diversity, which
helps us to meet our business goals while also enabling our
employees to grow personally and professionally.
• No. of employees incl contactors 76,185
• No. of hours of training 14,04,324
• No. of Man Hours of safety training 13,31,357
• HSE workforce incl contractors 1,208
• No. of geologists including contractors 207
• Employees covered under mentoring &
support programs 3,743
Social and relationship capital
We aim to forge strong partnerships by engaging with
our key stakeholders, including shareholders and lenders,
suppliers and contractors, employees, governments,
communities and civil societies. These relationships help
maintain and strengthen our licence to operate.
• Community investment ₹399.57 crore
• Rated by two domestic rating agencies
Crisil & India Rating
• Strong network of global and domestic relationship banks
30+
Independent Directors: 4
•
Natural capital
India and Africa have favourable geology and mineral
potential. These regions provide us with world-class
mining assets and extensive R&R. Additionally, operating
our mines requires a range of resources including
water and energy which we aim to use prudently
and sustainably.
• Energy Consumption 564.02 million GJ
• Water consumed 280 million GJ
• Coal used 36.8 million MT
• HVLT waste generated 19 million MT
• HVLT waste recycled 18.6 million MT
• Fly ash generated 14.5 million MT
• Fly ash used 16.67 million MT
• R&R Zinc India 448 million tonnes, containing 31.1 million tonnes
of zinc-lead metal and 874.7 million ounces of silver
• R&R Zinc International 671 million tonnes, containing 35.0 million
tonnes of metal
• R&R Oil & Gas 1,151 mmboe gross proved, and probable reserves
and resources
36
Vedanta Limited CREATING VALUE FOR
STAKEHOLDERS
Shareholders, investors
and lenders
A return on investment
Employees
Governments
Local community and
civil society
Industry
(suppliers, customers,
peers, media)
A safe and inclusive
working environment
Generating economic
value for society
and delivering
sustainable growth
Investment in health,
education and
local businesses
Building long-
term partnerships
ACTIVITIES
We operate across the mining value chain focusing on long‑
term and low-cost assets in India and Africa
Explore
We invest selectively in
exploration and appraisal to
extend mine and reservoir life.
Develop
We develop world‑class assets,
using the latest technology to
optimise productivity.
Extract
We operate low‑cost mines and
oil fields, with a clear focus on
safety and efficiency.
Process
We focus on operational
excellence and high asset
utilisation to deliver top quartile
cost performance and strong
cash flow.
Market
We supply our commodities
to customers in a wide range
of industry sectors, from
automotive to construction, from
energy to consumer goods.
Restore
We manage our long‑life assets
as effectively as possible and
return them to a natural state at
the end of their useful life.
Integrated Report
Statutory Reports
Financial Statements
OUTPUTS AND OUTCOMES
• Turnover ₹1,31,192 crore
• EBIDTA ₹45,319 crore
• Total exchequer contribution ₹54,165 crore
• Attributable PAT (Before exceptional items)
₹19,279 crore
• Earnings per share (EPS) (Before exceptional
items) ₹52.02 per share
• Dividends paid ₹16,728 crore
• FCF post‑capex ₹21,715 crore
• RoCE c. 30%
• Net Debt to EBITDA 0.5x
• Zinc India Mined Metal-1.1 mtpa
Integrated Metal-1.0 mtpa
• Oil & Gas 161 kboepd
• Power 11.9 bn kWh
• Aluminium Alumina: 2.0 mtpa,
Aluminium 2.3 mtpa
• Pig Iron 790 kt
• Zinc International 223 kt
• Steel 1,260 kt
• Copper 125 kt
• Attrition Rate 10.66%
• Diversity Ratio 11.54%
• Total Recordable Injury Frequency Rate
(TRIFR): 1.40
• CSR programme beneficiaries 4.64 million
• Operational Nand Ghars 2,833
•
• Contribution to the Exchequer
Interim dividends paid ₹45 per share
c. ₹54,165 crore
• Youth benefited from Employment based
skills training 5,133
• Nand Ghars Built till FY2022 3,261
• Water Recycled % 30.6%
• GHG emitted 62.83 million TCO2e
• High Volume Low Toxicity (HVLT) Effect
Waste recycled 98%
• Fly Ash utilisation rate 115%
• Water recycled 85.8 million MT
• GHG Emissions:
Scope 1: 59.49 million TCO2e
• GHG Emissions:
Scope 2: 3.34 million TCO2e
37
Integrated Report and Annual Accounts 2021-22
Opportunities
Transformation through
responsiveness
The natural resources sector operates amid a dynamic external environment. Several
megatrends shape the industry, which are broadly led by aspects of ESG, digitalisation, value
chain management, social stewardship, and others. These key trends are discussed below.
T1
T2
Aligning capital allocation to ESG
commitments
Embedding ESG into operations
Environmental, Social and Governance (ESG) has become
an essential part of the guiding strategy of organisations
operating in the natural resources sector. Given the
fast‑evolving expectations from the markets and their
stakeholders with regard to ESG alignment, the need of
the hour is to think holistically and reflect capital allocation
according to their ESG commitments.
While most mining companies have been under the radar
for environmental and social compliance, led by global
norms and regional regulations, voluntary compliance
to ESG has been on the rise. The opportunities arising
from mainstreaming ESG in operations present a host
of business benefits for companies, while helping them
manage their upside and downside risks.
Vedanta’s response
Vedanta’s response
As part of Vedanta’s larger ESG vision, the
Company has charted a clear plan to achieve
Net Carbon Zero status by or before 2050.
A US$5 billion investment has been pledged over
the next decade to accelerate this transition.
Similarly, a significant component of the capital
allocation has been earmarked for social
interventions in the near future.
Vedanta has formulated its new ESG purpose –
Transforming for Good – which maps specific
aims under the pillars of communities, planet and
workplace. The new purpose is adopted across
the organisation with a view to make Vedanta an
ESG‑first organisation.
38
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
.
T3
Playing an enabling role for a
low-carbon future
T4
A new super-cycle for commodities
The metals and mining sector has a key role in enabling the
global energy transition. Several of the materials used in
renewable technology, for example, are naturally occurring
in nature, and the extraction, processing and marketing of
such material is essential for an accelerated, global shift
towards green energy adoption.
Post the global pandemic, the metals and mining
industry has soared with the release of pent-up demand,
accompanied by buoyant pricing. The opportunity space is
clear for large-scale commodity players such as Vedanta
to hedge against possible risks and serve the demand
with prudence.
Vedanta’s response
Vedanta’s response
Vedanta’s deeply integrated value chain ensures
that necessary minerals for all renewable energy
infrastructure are made available. Some of the
key minerals that Vedanta extracts, processes
and markets, such as Zinc, Aluminium, and
Silver, are core to enabling the RE transition.
To this effect, we have launched several pilot
programmes including the introduction of
low-carbon green aluminium under the Restora
franchise. We are also exploring the development
of green copper with a scalable plan in
the pipeline.
We have committed to becoming a Net Zero
Carbon company by 2050 or before and achieve
25% absolute GHG reduction by 2030. We plan
to achieve this by deploying renewable power to
the tune of 2.5 GW RE RTC equivalent by 2030.
We will also switch our fuels to more sustainable
energy sources such as biomass and natural gas
and deploy electric vehicles as part of our fleet.
Significant progress has been made on this front
with businesses such as HZL, ESL and BALCO
leading from the front.
Vedanta is well positioned to deliver superior
performance operationally and financially. In
Oil & Gas, Vedanta is the largest private sector
producer of crude oil in India and ranks among
the world’s lowest cost producers with a pipeline
of assets in production, development, and
exploration. In Zinc, the Company is the world’s
largest fully integrated zinc-lead producer. In
Aluminium, it is India’s largest primary aluminium
producer supported by its own captive power
generation. With the successful acquisition of
a Nickel and Cobalt plant at Goa, Vedanta has
become the sole producer of Nickel in India. We
continue to deliver strong performance across
our business verticals, driven by our asset
quality and strength of business model. We
have achieved record production across Zinc
International and Aluminium businesses and
have a strong pipeline of development for other
businesses such as Oil & Gas. Together with our
underlying strengths and a conducive market
scenario, we are well placed to achieve continued
growth across our businesses.
39
Integrated Report and Annual Accounts 2021-22 Opportunities
T5
T6
The need for competitive employer value
propositions
The world over, the labour market has evolved during and
post the pandemic. ‘The Great Resignation’ has seen waves
of employees quit their jobs in pursuit of opportunities that
are better aligned to their interests. Work from home has
nearly become a well received alternative to traditional
modes of office. Social purpose, reimagining work, and
building an inclusive leadership culture have become core to
maintaining an attractive employer value proposition.
It is harder for core industries such as mining, where
physical presence and conventional ways of working have
ruled the roost for long.
Corporate citizenship as a key value enabler
Indigenous communities around the world are now
distancing themselves from conventional transactional-
style relationships with corporates. They are keen to
establish novel ways of connecting and understanding
entities that operate in their backyard and assigning
responsibilities to them in exchange of continued social
licence to operate. This puts the onus on companies,
especially in the natural resources sector to look for and
pursue opportunities that align with local communities’ own
goals and priorities.
Vedanta’s response
Vedanta’s response
Increased efforts on employee engagement and
retention; an emphasis on diversity, equity and
inclusion; and a razor-sharp health and safety
focus are key to attracting industry-best talent
to Vedanta.
Vedanta strives to be the preferred developer of
choice in most of its core regions of operations.
We enable this by establishing long‑lasting
community relationships, adhering to globally
accepted human rights practices, and by actively
investing in the communities through our
operational and philanthropic interventions.
40
Vedanta Limited
T7
Integrated and data-led decision making for
winning the future
To ensure agility and responsiveness, mining companies
must empower the workforce across all levels to take
informed, data-driven decisions. Digitalisation has proven
its utility in ways more than one in the natural resources
sector across the value chain. However, investments in
technology must be met with proportionate interventions
to create people-system interactions that can multiply the
benefits of digitalisation.
Integrated Report
Statutory Reports
Financial Statements
Vedanta’s response
With our Disha programme, we aim to transform
Vedanta into a data-driven organisation by
developing digital dashboards and applying
analytics for different verticals and business
functions. These analytical dashboards enable
the management to track progress, get insights,
identify issues and bottlenecks proactively.
This is achieved through reliable monitoring
of KPIs across operations and HSE, critical
process parameters for equipment and data-
led predictability. This results in better planning,
mitigation and closing the decision loop faster.
Apart from this, we are also building a start-up
culture through the Spark program and
implementing Group-wide digital transformation
through project “Pratham”, which focuses on
significantly improving volume, cost and ease
of doing business. This is implemented through
global partners by bringing new emerging
technologies across the value chain of Vedanta
Industry 4.0 framework. This is expected to result
in a 15% increase in EBITDA, contribute to our
zero-harm goal and reduce our carbon footprint.
To sustain our digital transformation, a
roadmap has been drawn up for redesigning the
organisation and augmenting digital capabilities,
complete with in-house data analysts and
data scientists.
Focusing on a
digital environment
41
Integrated Report and Annual Accounts 2021-22 Strategic priorities
Areas we focus on
to deliver sustained value
Our five strategic focus areas reflect our integrated thinking that connects our
purpose with our performance. They help us leverage our strengths, take advantage
of opportunities, manage risks and navigate business cycles while taking into
consideration the material concerns of our heterogeneous stakeholders. Here we
map the progress we have made against each focus area and the way forward.
Cairn facility
42
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
S1
CONTINUE FOCUS ON WORLD-CLASS ESG PERFORMANCE
We operate as a responsible business committed to Zero harm, Zero Discharge
and Zero Waste. Our revised vision is ‘Transforming for Good’ around three focus
areas - transforming communities, transforming the planet, and transforming the
workplace. Through these focus areas we work towards generating positive values
for our stakeholders and minimising the impacts on the environment. We promote
social inclusion across our operations to promote inclusive growth.
Objectives for FY2025
• Zero fatality, with 2 fatality-free years
• Stack emissions to be 25% of 2018 levels; all tailing facilities to be
audited and actions closed with real-time monitoring
• All performance standards to be developed, implemented and
made part of VSAP
• Employee and community exposure monitoring
• Mental health programme to be initiated
•
Achieve zero social non-compliances; become signatories to and
participants in VPSHR; set up an external SP advisory body
• Achieve 20% reduction in GHG emission intensity from a
2012 baseline
• Ensure that 40% of all new projects have a carbon rating of 4-star
and above
• 29,000 Nand Ghars to be constructed by 2025
FY2022 update
• 12 fatalities occurred in the fiscal year; each of these
fatalities was investigated by ICAM methodology
with oversight from the Group leadership. Various
programmes are in place to avoid repeat incidents
• Critical risk management is under implementation
across the Group to improve workplace safety
• Climate risk assessment and scenario analysis are
• Skilling and employment creation for 60,000 youths
carried out for all the businesses
• Decarbonisation roadmap developed to achieve net
carbon neutrality by 2050
• We have launched Restora, and Restora Ultra India’s
first low‑carbon aluminium
• Tailings dam review by an independent third party was
completed, and an action plan was created to close
the gaps
• 3,200+ Nand Ghars established
Vision
Transforming Communities
Aim 1 Responsible business decisions based around
community welfare
Aim 2 Empowering over 2.5 million families with enhanced skillsets
Aim 3 Uplifting over 100 million women and children through
Education, Nutrition, Healthcare, and Welfare
Transforming the Planet
Aim 4
Net-carbon neutrality by 2050 or sooner
Aim 5 Achieving net water positivity by 2030
Aim 6
Innovating for a greener business model
Transforming the Workplace
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
KPIs
• Fatalities
• TRIFR
• No. of Category 5 social incidents
• GHG emission intensity
• No. of carbon star rated projects
• Compliance tracking
• Source emissions tracking
• Personal exposure monitoring
• CSR footprint
• Gender diversity
Risk
R1
Safety and health of our employees, BPs
and communities
R2 Managing positive community relationships
43
Integrated Report and Annual Accounts 2021-22
Strategic priorities
S2
AUGMENT OUR RESERVES & RESOURCES (R&R) BASE
We look at ways to expand our R&R base through targeted and disciplined
exploration programmes. Our exploration teams aim to discover mineral and
oil deposits in a safe and responsible manner and replenish the resources
that support our future growth ambitions.
Zinc International
• Execution of 88 km of drilling across greenfield and brownfield
projects in RSA and Namibia
• Addition of 11.5 mt of ore (1.08 mt metal) and upgradation of 26.5
mt of ore (2.3 mt metal)
Oil & Gas
• Exploration and appraisal drilling across the portfolio in Rajasthan,
Cambay, Northeast and Offshore blocks
• Drilling pilot wells for shale to establish potential
• New opportunities basket for execution based on evaluation by
global players as part of the strategic alliance
• Alkaline Surfactant Polymer (ASP) pilot project in Bhagyam and
Aishwariya fields
•
Infill wells across operating fields to augment reserve base
Objectives for FY2025
Zinc India
• Securing SK north/SK south PL and other new tenements for
R&R growth
• Target generation through application of AI & ML along with
advance geophysics
• Enhancement of the mineral resource by 40 mt ore with contained
metal of 2.0 mt and upgrade ore reserves to 42 mt, which will lead
to total R&R of 500+ mt with ~35 mt metal
Zinc International
• Execution of 100 km of drilling across greenfield and brownfield
projects in RSA and Namibia
• Addition of 25.0 mt of ore (2.2 mt of metal) and upgradation of
27.0 mt of ore (1.9 mt metal)
Oil & Gas
• Establish the resource pool around OALP blocks to have
incremental development opportunities in the portfolio
• Establish commercial potential of shale
• Establish the full potential of ASP in Bhagyam and Aishwariya for
FY2022 update
Zinc India (HZL)
• Total ore reserves stand at 161.2 million tonnes (net
depletion of FY2022 production of 16.3 million tonnes)
at the end of FY2022 (150.3 million tonnes at the end
of FY2021) due to heightened focus on resource to
reserve conversion during the year. Exclusive Mineral
Resource totalled 286.73 million tonnes
• Combined R&R was estimated to be 448 million
tonnes, containing 31.1 million tonnes of zinc-lead
metal and 874.7 million ounces of silver
• Overall mine life continues to be more than 25 years
Zinc International
• Combined mineral resources and ore reserves
estimated at 671 million tonnes, containing
35.0 million tonnes of metal
Oil & Gas
• Seismic acquisition in Assam, Cambay, and Rajasthan
for OALP blocks
• Exploration and appraisal wells drilled across PSC and
OALP blocks
• Two hydrocarbon discoveries in Rajasthan (KW‑2
Updip and Durga ‑1) and one in Cambay (Jaya‑1) have
been notified as Oil & Gas discovery
• Strategic alliances with global players like Halliburton,
Schlumberger, and Baker Hughes with the aim to
increase R&R across the portfolio
• Shale studies to unlock the potential in Barmer basin
commercial development
• Gross proved and probable R&R of 1,151 mmboe
Objectives for FY2023
Zinc India
• Target generation at Kayad and RA by integrating application of AI
& ML with existing geological data
• Exploration plan to enhance the mineral resource by 20 mt ore with
contained metal of 1.0 mt
• Ore reserves upgradation of 28 mt will lead to total R&R of 470 mt
• Application of advance geophysics techniques for target
generation in strike/down dip extension of mineralisation.
KPIs
• Total R&R in Zinc India and ZI
• Total 2P+2C R&R in O&G
Risk
R1 Health, safety and environment (HSE)
R5 Discovery risk
R9 Regulatory and legal risk
44
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
S3
OPTIMISE CAPITAL ALLOCATION AND MAINTAIN
A STRONG BALANCE SHEET
Our focus is on generating strong business cashflows and maintaining stringent capital
discipline in investing in profitable high IRR projects. Our aim is to maintain a strong balance
sheet through proactive liability management. We also review all investments (organic and
acquisitions) based on our stringent capital allocation framework to maximise shareholder
returns.
FY2022 update
• Free cashflow (FCF) improvement from `13,821 crore
to `21,715 crore, up 57% y-o-y
• Net Debt (ND) decreased from `24,414 crore to
`20,979 crore.
• Net Debt/EBITDA at 0.5x on a consolidated basis
• Dividend worth `16,728 crore, `45/share distributed
in VEDL .
Objectives for FY2023
• Generate healthy free cash flow from our operations
• Disciplined capex across projects to generate healthy ROCE
•
Improve credit ratings
• Reduce working capital
KPIs
• FCF post‑capex
• Net Debt/EBITDA (Consolidated basis)
• EPS (before exceptional items)
•
Interest cover ratio
• Dividend
Risk
R9 Regulatory and legal risk
R10 Tax related matters
R11
Fluctuation in commodity prices (including oil) and
currency exchange rates
R13 Access to capital
Cairn offshore facility
45
Integrated Report and Annual Accounts 2021-22 Strategic priorities
S4
DELIVERING ON GROWTH OPPORTUNITIES
We are focused on growing our operations organically by developing brownfield
opportunities in our existing portfolio. Our large, well‑diversified, low‑cost and long‑life
asset portfolio offers us attractive expansion opportunities, which are evaluated based on
our return criteria for long-term value creation for all stakeholders
Objectives for FY2023
Zinc India
• Ramp up of underground mines towards their design capacity of
1.2 mn mtpa
• Combined paste‑fill and dry tailing plant at Rajpura Dariba, which
will help increase ore production from 1.2 mtpa to 2 mtpa
• New beneficiation plant to start at RDM to increase treatment
capacity from 1.1 mtpa to 1.5 mtpa
• Addition of new production centre from from Purvanchal in
Zawar mines
• 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
• With the supporting MIC flow, smelters are geared to touch
approximately 1,000‑1,025 kt
• Capacity expansion plans awaiting Board approval to include one
more roaster in our smelting operations and expand our leeching
and cell house capacity subsequently
FY2022 update
Zinc India
• Total mine development increased by 10% to 107 km in FY2022
• Successfully conducted public hearing at Zawar to obtain EC
for 6.5 mt capacity
• Hoisting capacity increased at Rajpura Dariba from 0.9 to
1.3 mtpa
• Crusher 2 commissioned at Rampura Agucha
• Highest ever mined metal production at 1,017 kt in FY2022
• Commissioning of Fumer to be completed during the year
• Highest ever refined metal production at 967 kt in FY2022
• Completed all turbine modifications in the CPP plants, thus
increasing power generation capacity by 35 MW while reducing
specific coke consumption
Zinc International
• Significant ramp up in Gamsberg production with 170 kt zinc
MIC in FY2022
Oil & Gas
• Exploration drilling ongoing across basins. Hydrocarbon
discovery notified for Durga ‑1 in Rajasthan and Jaya‑1
in Cambay during the year. Till date, three hydrocarbon
discoveries have been notified under the OALP portfolio
•
Infill drilling in Mangala, Tight Oil (ABH), Tight Gas (RDG),
Satellite Field (NI) and Offshore (Cambay) to augment reserves
and mitigate natural decline
• 38 wells drilled across all assets
Aluminium
• Ramp up of Jharsuguda facility
• Debottlenecking of JSG Billet facility from 400 ktpa to 460 ktpa
ESL
• Record annual hot metal production of 1.3 mt since acquisition,
up 6% y-o-y
Facor
• Highest ever annual chrome ore production at 250 kt since
acquisition, up 70% y-o-y
• Highest ever annual ferro chrome production of 75 kt, up
10%y-o-y
46
Zinc International
• Gamsberg Phase 2 project approved by the Board includes
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 to be 200 ktpa, taking the total South Africa
production to >500 ktpa. Target date of completion of project is
18 months
• Skorpion Refinery conversion – awaiting confirmation of power
tariff before beginning onground execution in FY2023
• Black Mountain Iron Ore project to recover iron ore (magnetite)
from the BMM tailings on track. Best quality iron ore will be
produced from the new plant with Fe grade >68%. First production
is expected in August 2022, 76 kt planned for Q2 and full
production from Q3
Dariba smelting
complex cell house
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Night view of the Mangala Processing
Terminal, Barmer
Oil & Gas
• Exploration and appraisal drilling in OALP and PSC blocks to
Zinc International
• Full ramp up of Gamsberg Phase 2 project in FY2025
unlock resource potential
• Completion of Skorpion refinery conversion project expected
• Monetisation of discoveries notified in OALP blocks
by FY2025
• Partner with global technology leaders to unlock the potential of
• Gergarub mining and concentrator plant planned to be in
unconventional resources like shale
production by FY2025, delivering MIC of 100 ktpa
• Commence Alkaline Surfactant Polymer (ASP) project execution in
• Gamsberg Smelter to treat all zinc concentrate from current
the Mangala field to monetise reserves
•
Infill well projects across producing fields to add reserves and
mitigate natural decline
Aluminium
• Lanjigarh expansion from 2 mtpa to 5 mtpa
• JSG VAP expansion to 1.6 MTPA and Balco VAP expansion to 1.1
MTPA. To be completed by Q2 FY2024
• Operationalise 2 of 3 coal blocks
ESL
• Embark on the expansion journey from 1.5 to 3.0 mtpa
• To be a steelmaker amongst the top quadrant EBIDTA
percentile group
Facor
• Expansion of mines from current capacity of 250 kt to 390 kt
operation; first production planned in FY2026. First phase planned
to produce 300 ktpa
•
Iron ore phase 2 – construction of additional plant to treat 2 mtpa
of current tailings storage facility with opportunity to construct a
pig iron plant
Oil & Gas
• Complete the execution of ASP project at Mangala to deliver
incremental volume
• Monetisation of discoveries from OALP and PSC blocks
• Commence ASP project execution in the Bhagyam and Aishwariya
field to monetise reserves
• Commence shale monetisation
Aluminium
• BALCO 414+ ktpa
• DBNK Lanjigarh Refinery expansion from 5 mtpa to 6 mtpa
• Metal capacity addition of 60 ktpa through new 33 MVA furnace
• 100% value-added product portfolio
Objectives for FY2025
Zinc India
• Ramp up of underground mines to reach 1.3 mtpa capacity
• Commissioning of second open pit portal at RAM
• Commissioning of vertical conveyor at SKM to mine high‑grade
shaft pillar area
• Transition to 50% BEV deployment at RA and SK mines
• Completion of Mill 3 at Zawar to increase beneficiation capacity
• Establishment of new tailing dam at Zawar mines
• Commissioning of 150 kt new zinc smelter to achieve 1.25 mn mt
metal capacity and 1,000 mt silver production
• Commissioning of second Fumer
• Waste management through Jarosite utilisation in cement industry
by modification in present circuits
• Establishment of 200 MW green power to reduce cost of
production and meet our ESG and Net Zero goals
• Operationalisation of all 3 coal blocks
KPIs
• Revenue
• ROCE
• FCF post‑capex
• Growth capex
Risk
R8 Cairn‑related challenges
R9 Regulatory and legal risk
R12 Major project delivery
47
Integrated Report and Annual Accounts 2021-22 Strategic priorities
S5
OPERATIONAL EXCELLENCE AND COST LEADERSHIP
We strive for all‑round operational excellence to achieve benchmark performance
across our businesses by debottlenecking our assets to enhance production,
supported by improved digital and technology solutions. Our efforts are focused on
enhancing profitability by optimising our cost and improving realisations through
prudent marketing strategies.
FY2022 Update
Zinc India
• Record ore production of 16.3 mt, despite disruptions on
account of COVID‑19
Aluminium & Power
• Record aluminium production at 2,268 kt,
up 15% y-o-y driven by ongoing JSG ramp-up
• Mined metal production of 1,017 kt and refined zinc‑lead
• Highest ever VAP sales at 911 kt, 21% increase y‑o‑y
production of 967 kt
• First in India to manufacture low-carbon aluminium under the
• APC commissioned at beneficiation plants of Rampura Agucha
brand name Restora with two product lines
and Sindesar Khurd mines
• Record alumina production at Lanjigarh refinery at 1,968 kt, up
• HIghest ever production from Dariba Zinc (DSCZ) with current
7% y-o-y
efficiency at 92%
• Alumina COP up by 24% y‑o‑y due to input
• Cell house revamp at Zinc Smelter Debari (ZSD) completed and
commodity headwinds
production increased from 240 mt/day to 270 mt/day
• FY2022 COP for aluminium US$1,858 per tonne, up by
• We have also and are continuing zinc oxide treatment at Fumer
Circuit CLZS for additional FG production of approx. 15‑20 kt
38% y-o-y, due to input commodity headwinds mainly coal
and carbon
Zinc International
• BMM achieved production 52kt production in FY2022
• Gamsberg ramped up significantly with 170 kt production
in FY2022 and best performances in ore milled tonnes, mill
throughput and plant availability. About 81% recovery achieved
during March 2022 with a 600 t-650 t/day production to
establish run rate of 18 kt-20 kt
• Skorpion remained under care and maintenance following
geotechnical instabilities in the open pit
Oil & Gas
• Average gross operated production of 161 kboepd for FY2022,
down 1% y‑o‑y, owing to natural field decline
•
Injection of a more efficient and thermally stable polymer –
Acrylamide Tertiary Butyl Sulfonic (ATBS) acid commenced in
Mangala field
• Commenced engagement of partners for end‑to‑end
management of Operations and Maintenance (O&M) across
assets to leverage expertise, introduce best‑in‑class practices
and adopt digitalisation
• Booked 15.3 mt of coal in Tranche V at competitive price for
the next 5 years
Steel
•
Increased net sales realisation from US$488 per tonne in
FY2021 to US$660 per tonne in FY2022
Facor
•
Increased EBITDA margin by three-fold to US$534 per tonne
for FY2022 against US$176 per tonne in FY2021
Copper and Iron Ore
• Produced 5.4 million tonnes of saleable ore in Karnataka, up
8% y-o-y
• Revenue increased to `6,332 crore, 40% higher y-o-y mainly
due to increase in sales volume and higher realisations at
Karnataka & VAB during the year
• EBITDA increased to `2,279 crore compared to `1,804 crore
in FY2021, mainly due to improved margin at Karnataka and
higher volume at Karnataka & VAB
• Continued engagement with the government and local
communities to restart operations at Goa and Tuticorin
48
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Objectives for FY2023
Objectives for FY2025
Zinc India
• Sustain COP at low level through efficient ore hauling, higher
volume and grades and higher productivity through ongoing
efforts in automation and digitalisation
Zinc India
• Sustain COP at low level through efficient ore hauling, higher
volume and grades and higher productivity through ongoing
efforts in automation and digitalisation
• All cellhouse operations at 92% current efficiency without any
• Automation of Debari cell house to reduce cost and increase
interruption of MIC
efficiency and recovery
• Pyro to be run on lead mode to reduce the zinc COP and improve
• Mechanisation of Dariba Lead Cellhouse to reduce cost and
lead and silver production
increase efficiency and recovery
Zinc International
• Ramp up Gamsberg to design capacity of 250 ktpa in H1 FY23
• BMM debottlenecking plant 2 mt resulted in similar production
levels despite low grades
• Restart Skorpion post completion of geotechnical studies and
feasibility completion of imported zinc oxides
Oil & Gas
• Manage natural decline through near infill well program
across fields
• Establish the full potential of ATBS in the field to generate
incremental value
• Stabilise end-to-end O&M across assets with partners and deliver
value accretion
• Continue to operate at a low cost‑base and generate free cash flow
post‑capex
Aluminium
• Production at Lanjigarh refinery of around 2.0‑2.1 mt, with
aluminium production at smelters around 2.2-2.3 mt
Zinc International
• >500 ktpa production from South Africa at a low cost
of production
• 150 ktpa metal production from Skorpion
Oil & Gas
•
Increase production from existing assets through use of leading‑
edge technologies, large‑scale artificial intelligence and machine
learning (AI-ML) enabled base.
• End-to-end output-based O&M model
• Continue to operate at a low cost‑base and generate free cash flow
post‑capex
Aluminium
• 100% backward and forward integration: 3 mtpa aluminium, 6
mtpa alumina, 100% VAP, 100% coal (captive + linkage)
• Hot Metal COP at lower level
• Continued focus on quality, asset reliability and optimisation,
digitalisation, innovation and R&D
• Hot Metal COP at low level
•
Improve raw material security and materialisation locally (bauxite
& coal); start Jamkhani and Radhikapur (West), acquire bauxite
mines through competitive bidding
Increased focus on asset integrity and optimisation, quality and
innovation and digitalisation through Centre of Excellence
•
Copper & Iron ore
• Continue engagement with the government and relevant
•
authorities to enable restart of operations in Goa and Tuticorin
Increase footprint in iron ore by continuing to participate in
auctions across the country, including Jharkhand.
• Advocacy for removal of E-auction/trade barrier in Karnataka
Steel
• Ensure business continuity with greater focus on reliability
centred maintenance
• Obtain clean, Consent to Operate, and environmental clearance
• Raw material securitisation through long-term contracts;
approaching FTA countries for coking coal
Facor
•
Installation of Waste Heat Recovery system and refractory relining
in 45 MVA furnace.
• 100 MW power generation and sale of additional power.
• New COB plant commissioning with enhanced capacity of 50 TPH.
KPIs
• EBITDA
• Adjusted EBITDA margin
• FCF post‑capex
• ROCE
Risk
R1 Health, safety and environment (HSE)
R3 Tailings dam stability
R7 Loss of assets or profit due to natural calamities
R11
Fluctuation in commodity prices (including oil) and
currency exchange rates
Mill at Gamsberg
49
Integrated Report and Annual Accounts 2021-22 Risk management
Risk management
Managing risks
and opportunities amidst
a dynamic external
environment
Our businesses are exposed to a variety of risks given that we operate
globally. We have a multi‑layered risk management system and robust
governance framework that align the Company’s operating controls
with the Group’s overarching vision and mission and help it deliver on
its strategic objectives.
50
Employees at
Cairn facility
Vedanta Limited Risk Governance Framework
BOARD
OF
DIRECTORS
AUDIT
COMMITTEE
GRMC
EXCO
BUSINESS UNIT MANAGEMENT
TEAMS
Enterprise risk management
We identify risks at the individual business‑level for existing
operations as well as for ongoing projects through a well-
crafted methodology. Business-level review meetings,
undertaken at least once every quarter, formally discuss
risk management. Every business division of the Group
has evolved its own risk matrix, which is reviewed by the
Business Management Committee. In addition, business
divisions have developed their own risk registers.
Respective businesses review the risks, changes in the
nature and extent of major risks since the last assessment,
control measures and decide on further action. 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.
The role of Risk Officers at each business‑level and
at the Group level is to create awareness on the risks
among the senior management, and to develop and
nurture a risk management culture within the businesses.
The Company’s risk mitigation plans are integral to the
KRAs/KPIs of process owners. Leadership teams of the
businesses are responsible for the governance of the risk
management framework.
The Audit & Risk Management Committee aids the
Board in the risk management process by identifying and
assessing any changes in risk exposure, reviewing risk‑
control measures and approving remedial actions wherever
appropriate. The Committee is, in turn, 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.
Integrated Report
Statutory Reports
Financial Statements
External
E V A LUATE
Strategic
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Financial
Operational
The Risk Management Committee meets at least four times
annually to discuss risks and mitigation measures, review
the robustness of our framework at the level of individual
businesses and map the progress against actions planned
for key risks.
The GRMC comprises the Group Chief Executive Officer,
Group Chief Financial Officer and Director‑Management
Assurance. The Group Head-Health, Safety, Environment
& Sustainability is invited to attend these meetings. The
GRMC discusses key events impacting the risk profile,
relevant risks and uncertainties, emerging risks and
progress against planned actions.
Our risk management framework is simple and consistent
and provides clarity on managing and reporting risks to the
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.
The Board shoulders the ultimate responsibility for the
management of risks and for ensuring the effectiveness
of internal control systems. This includes review of the
Audit & Risk Management Committee’s report on the
risk matrix, significant risks, and mitigating actions. Any
systemic weaknesses identified by the review is addressed
by enhanced procedures to strengthen the relevant controls,
which are reviewed regularly.
51
Integrated Report and Annual Accounts 2021-22
Risk management
Since it is critical to deliver on the Group’s strategic
objectives, risk management is embedded in business-
critical activities, functions, and processes. The risk
management framework is designed to manage rather than
eliminate 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.
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:
• The Committee of Directors (COD) comprising Vice
Chairman and Group CFO supports the Board by
considering, reviewing and approving all borrowing and
investment-related proposals within the overall limits
approved by the Board. Invitees to these committee
meetings are the CEO, business CFOs, Group Head
Treasury and BU Treasury Heads, depending upon
the agenda
• The ESG Committee reviews sustainability related risks
• There are also various Group-level Management
Committees (ManComs), such as Procurement
ManCom, Sustainability‑HSE ManCom, CSR ManCom,
and so on which work on identifying risks in specific
areas and mitigating them
Each business has developed its own risk matrix, which
is reviewed by its respective management committee/
executive committee, chaired by its CEO. In addition, each
business has developed its own risk register depending on
the size of its operations and number of SBUs/ locations.
Risks across these risk registers are aggregated and
evaluated and the Group’s principal risks are identified, and
a response mechanism is formulated.
This element is an important component of the overall
internal control process from which the Board obtains
assurance. 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.
52
Despite COVID‑induced disruptions, Vedanta’s business
units dealt with its impact extremely well, resulting in an
effective response. This was made possible owing to
the following:
• Our safety‑first culture that prioritised people’s health
and well-being
• Our collaboration with communities, governments,
and health experts, which ensures that best practices
are followed
• Focusing on what is critical to operations and
communities, while continuing to build long-
term resilience
• Consistent response to the pandemic across the Group
• Establishment of COVID‑19 taskforces under
•
seasoned leaders
Investments in new processes, procedures, protocols,
health-testing equipment and support for the workforce
As a result, despite the challenges, our
facilities remained largely operational during
the pandemic. Rather, the disruption created
an opportunity for us to identify and work
on certain transformational aspects for the
future. We continue to remain committed to
achieving our objectives of zero harm, zero
wastage and zero discharge, thus creating
sustainable stakeholder value.
The order in which the risks appear in the section that
follows 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,
changes in business environment and regulatory changes
during the year.
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.
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Decrease in risk profile Same as last year Increase in risk profile
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.
Sustainability risks
R1 Health, safety and environment (HSE)
Impact
Mitigation
Direction
The resources sector is subject
to extensive health, safety and
environmental laws, regulations
and standards. Evolving
requirements and stakeholder
expectations could result in
increased cost or litigation or
threaten the viability of operations
in extreme cases. Human
Environmental damage is amongst
top 10 risks as per World Economic
Forum’s Global risk report 2022, for
next 2 to 5 years, which can lead to
global policy changes.
Emissions and climate change
Climate action failure is amongst
top 3 risks as per World Economic
Forum’s Global risk report 2022.
Our global presence exposes us
to a number of jurisdictions in
which regulations or laws have
been, or are being considered to
limit or reduce emissions. The
likely effect of these changes
could be increased cost of fossil
fuels, imposition of levies for
emissions in excess of certain
permitted levels and increase in
administrative costs for monitoring
and reporting. Increasing
regulation of greenhouse gas
(GHG) emissions, including the
progressive introduction of carbon
emissions trading mechanisms
and tighter emission reduction
targets, is likely to raise costs and
reduce demand growth.
• HSE is a high priority area for Vedanta. Compliance with international and
local regulations and standards, protecting our people, communities and the
environment from harm, and our operations from business interruptions, are
key focus areas
• Policies and standards are in place to mitigate and minimise any HSE-
related occurrences. Safety standards are issued/continue to be issued
to reduce the risk level in high-risk areas. Structured monitoring, a review
mechanism and system of positive compliance reporting are in place
• BU leadership continues to emphasise on three focus areas: visible felt
leadership, safety critical tasks and managing business partners
• The process to improve learning from incidents is currently being improved
to reduce re-occurrence of similar incidents
• A Vedanta Critical Risk Management programme will be launched to
identify critical risk controls and to measure, monitor and report control
effectiveness
• We have implemented a set of standards to align our sustainability
framework with international practice. A structured sustainability assurance
programme continues to operate in the business divisions covering
environment, health, safety, community relations and human rights aspects.
This is designed to embed our commitment at the operational level
• All businesses have appropriate policies in place for occupational health-
related matters, supported by structured processes, controls and technology
• To provide incentives for safe behaviour and effective risk management,
safety KPIs have been built into performance management of all employees
• The Carbon Forum has been re-constituted with updated terms of reference
and representation from all businesses. Its mandate is to develop and
recommend to the ExCo and Board the carbon agenda for the Group
• Enhanced focus on renewable power obligations
• The Group companies are actively working on reducing the intensity of GHG
emissions of our operations
• A task force team has been formulated to assess end-to-end operational
requirement for Flue gas desulfurisation (FGD) plant. We continue to engage
with various stakeholders on the matter
R2 Managing relationship with stakeholders
Impact
Mitigation
Direction
The continued success of our
existing operations and future
projects are in part dependent
on the broad support and healthy
relationship with our local
communities. Failure to identify
and manage local concerns and
expectations can have a negative
impact on relations and, therefore,
affect the organisation’s reputation
and social licence to operate and
grow.
• Our CSR approach to community programmes is governed by consideration
of the needs of the local people and the development plan is in line with
the new Companies Act in India; CSR guidelines; CSR National Voluntary
Guidelines of the Ministry of Corporate Affairs, Government of India; and the
UN’s Sustainable Development Goals (SDGs)
• Our BU teams are proactively engaging with communities and stakeholders
through a proper and structured engagement plan, with the objective of
working with them as partners
• Business ExCos factor in these inputs, and then decide upon the focus areas
of CSR and budgets while also aligning with the strategic business priorities
• All BUs follow well-laid processes for recording and resolving all community
grievances
• Every business has a dedicated Community Development Manager, who is
part of the BU ExCo. They are supported by dedicated teams of community
professionals
53
Integrated Report and Annual Accounts 2021-22 Risk management
R2 Managing relationship with stakeholders
Impact
Mitigation
Direction
• Our business leadership teams have periodic engagements with the
local communities to build relations based on trust and mutual benefit.
Our businesses seek to identify and minimise any potentially negative
operational impact and risks through responsible behaviour – that is,
acting transparently and ethically, promoting dialogue and complying with
commitments to stakeholders
• Stakeholder engagement is driven basis stakeholder engagement plan
at each BU by the CSR and cross functional teams. Regular social and
environment risk assessment discussions happen at the BU-level
• Strategic CSR communication is being worked upon for visibility. Efforts
continue to meet with key stakeholders, showcase our state-of the art
technology, increase the number of organic followers and enhance
engagement through social media
• CSR communication and engagement with all stakeholders – within and
outside communities
R3 Tailings dam stability
Impact
Mitigation
Direction
The release of waste material
can lead to loss of life, injuries,
environmental damage,
reputational damage, financial
costs and production impacts. A
tailings dam failure is considered
to be a catastrophic risk – i.e.,
a very high severity but very
low frequency event and is a
continuous risk. Hence, that must
be given the highest priority.
• The Risk Management Committee has included tailings dams on the Group
risk register with a requirement for annual internal review and a three-yearly
external review
• Operation of tailings dams is executed by suitably experienced personnel
within the businesses
• A third party has been engaged to review tailings dam operations, including
improvement/remedial works required and the application of Operational
Maintenance and Surveillance (OMS) manuals in all operations. This is an
oversight role in addition to the technical design and guidance arranged by
respective BUs. Technical guidelines are also being developed
• Vedanta Tailings Management Standard has been reviewed, augmented
and reissued, including an annual, independent review of every dam and
half-yearly CEO sign-off that dams continue to be managed within the design
parameters and in accordance with the last surveillance audit. Move towards
dry tailings facilities has commenced
• Those responsible for dam management receive training from the third
party and will receive on-going support and coaching from international
consultants
• Management standards implemented with business involvement
• BUs are expected to ensure ongoing management of all tailings facilities
with ExCo oversight with independent third-party assessment on the y-o-y
implementation status of Golder recommendations
• Digitalisation of tailings monitoring facilities is being carried out at the BUs
• Tailing management standard is updated to include the latest best practices
in tailing management. The UNEP/ICMM Global Tailings Standard was
incorporated into Vedanta Standard during FY2021
Operational risks
R4
Challenges in Aluminium and Power business
Impact
Mitigation
Direction
Our projects have been
completed and may be subject
to a number of challenges during
operationalisation. These may also
include challenges around sourcing
raw materials and infrastructure-
related aspects and concerns
around ash utilisation/evacuation.
• Improved LME and improved aluminium demand have led to recovery from
the fall which happened last year
• Alumina refinery expansion from 2 mtpa to 5 mtpa is being pursued
• Continue to pursue new coal linkages to ensure coal security
• Inbound and outbound supply chain across rail, road and ocean including
manpower are functioning well, with no major risks foreseen
• Local sourcing of bauxite and alumina from Odisha
• Jharsuguda facilities ramped up satisfactorily
• Project teams in place for ash pond, red mud, railway infrastructure and FGD
• Dedicated teams working towards addressing the issue of new emission
norms for power plants
• Global technical experts inducted to strengthen operational excellence
54
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Decrease in risk profile Same as last year Increase in risk profile
R4 Challenges in Aluminium and Power business
Impact
Mitigation
Direction
• Continuous focus on plant operating efficiency improvement to achieve
design parameters, manpower rationalisation, logistics and cost
reduction initiatives
• Continuous augmentation of power security and infrastructure
• Strong management team continues to work towards sustainable low-cost
of production, operational excellence and securing key raw material linkages
• Talwandi Saboo (TSPL) power plant matters are being addressed structurally
by a competent team
R5 Discovery risk
Impact
Mitigation
Direction
• Dedicated exploration cell with continuous focus on enhancing exploration
capabilities
• Appropriate organisation and adequate financial allocation in place for
exploration
• Strategic priority is to add to our R&R by extending resources at a faster rate
than we deplete them, through continuous focus on drilling and exploration
programme. Exploration ExCo has been established to develop and
implement strategy and review projects across the Group
• Continue to make applications for new exploration tenements in countries in
which we operate under their respective legislative regimes
• Exploration-related systems being strengthened, and standardised across
the Group, and new technologies being utilised wherever appropriate
• International technical experts and agencies are working closely with our
exploration teams to enhance our capabilities
Increased production rates from
our growth-oriented operations
create demand for exploration
and prospecting initiatives so
that reserves and resources can
be replaced at a pace faster than
depletion. Failure in our ability to
discover new reserves, enhance
existing reserves or develop new
operations in sufficient quantities
to maintain or grow the current
level of our reserves could
negatively affect our prospects.
Uncertainties inherent in estimating
ore and Oil & Gas reserves, and
geological, technical, and economic
assumptions that are valid at the
time of estimation. These may
change significantly when new
information becomes available.
R6 Breaches in IT / cybersecurity
Impact
Mitigation
Direction
Like many global organisations,
our reliance on computers and
network technology is increasing.
These systems could be subject
to security breaches resulting in
theft, disclosure, or corruption
of key/strategic information.
Security breaches could also
result in misappropriation of funds
or disruptions to our business
operations. A cybersecurity breach
could impact business operations.
• Group-level focus on formulating necessary frameworks, policies, and
procedures in line with best practices and international standards
• Implementation and adoption of various best-in-class tools and technologies
for information security to create a robust security posture
• Special focus to strengthen the security landscape of plant technical
systems (PTS) through various initiatives
• Adoption 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
• Work towards ensuring strict adherence to IT-related SOPs to improve
operating effectiveness, continuous focus on mandatory employee training
on cybersecurity awareness
• Periodic assessment of entire IT system landscapes and governance
framework, from vulnerability and penetration perspective, undertaken by
reputed expert agencies and addressing the identified observations in a
time-bound manner
R7 Loss of assets or profit due to natural calamities
Impact
Mitigation
Direction
Our operations may be subject
to a number of circumstances
not wholly within the Group’s
control. These include damage
to or breakdown of equipment
or infrastructure, unexpected
geological variations or technical
issues, extreme weather conditions
and natural disasters – any of
which could adversely affect
production and/or costs.
• Vedanta has taken appropriate Group insurance cover to mitigate this risk
and an Insurance Council is in place to monitor adequacy of coverage and
status of claims
• An external agency reviews the risk portfolio and adequacy of this cover and
assists us in our insurance portfolio
• Engage reputed institutions to underwrite our risk
• Established mechanism of periodic insurance review in place at all entities.
However, any occurrence not fully covered by insurance could have an
adverse effect on the Group’s business
• Continuous monitoring and periodic review of security function
• Continue to focus on capability building within the Group
55
Integrated Report and Annual Accounts 2021-22 Risk management
R8 Cairn-related challenges
Impact
Mitigation
Direction
Cairn India has 70% participating
interest in Rajasthan Block, the
production sharing contract
(PSC) of which was till 2020. The
Government of India has granted its
approval for a 10-year extension at
less favourable terms, pursuant to
its policy for extension of Pre-New
Exploration and Licensing Policy
(NELP) Exploration Blocks, subject
to certain conditions. Ramp up of
production compared to what was
envisaged may impact profitability.
• RJ PSC 2020 extension was issued by the Directorate General of
Hydrocarbons (DGH) subject to certain conditions. Ongoing dialogue and
communication with the government and relevant stakeholders to address
the conditions
• The applicability of the Pre-NELP Extension Policy to the RJ Block is
currently sub judice
• Discussions within teams as well as with partners initiated with the objective
to optimise cost across all spheres of operations
• Constant engagement with vendors/partners to ensure minimal project
delay based on the current situation and plan to ramp up
• Growth projects being implemented through an integrated contracting
approach. Contracts have built-in mechanism for risk and reward. Rigorous
project reviews with execution partners/contractors to deliver volumes and
returns
• Project Management Committee and Project Operating Committee set up
to provide support to the outsourcing partner and address issues on time to
enable better quality control as well as timely execution of growth projects
Compliance risks
R9
Regulatory and legal risk
Impact
Mitigation
Direction
We have operations in many
countries around the globe. These
may be impacted because of legal
and regulatory changes in the
countries in which we operate,
resulting in higher operating
costs and restrictions such as the
imposition or increase in royalties
or taxation rates, export duty,
impacts on mining rights/bans, and
change in legislation.
• The Group and its business divisions monitor regulatory developments on an
ongoing basis
• Business-level teams identify and meet regulatory obligations and respond
to emerging requirements
• Focus on communicating our responsible mining credentials through
representations to government and industry associations
• Continue to demonstrate the Group’s commitment to sustainability by
proactive environmental, safety and CSR practices. Ongoing engagement
with local community/media/NGOs
• SOx-compliant subsidiaries
• Common compliance monitoring system being implemented in Group
companies. Legal requirements and a responsible person for compliance
have been mapped in the system
• Legal counsels within the Group continue to work on strengthening the
compliance and governance framework and the resolution of legal disputes
• Competent in-house legal organisation is in place at all the businesses;
these legal teams have been strengthened with induction of senior legal
professionals across all Group companies
• SOPs implemented across our businesses for compliance monitoring
• Greater focus for timely closure of key non-compliances
• Contract management framework strengthened with the issue of boiler
plate clauses across the Group which will form part of all contracts. All key
contract types have also been standardised
• Framework for monitoring performance against anti-bribery and corruption
guidelines is in place
R10 Tax related matters
Impact
Mitigation
Our businesses are in a tax regime
and changes in any tax structure,
or any tax-related litigation may
impact our profitability.
• Tax Council reviews all key tax litigations and provides advice to the Group
• Continue to engage with authorities concerned on tax matters
• Robust organisation in place at the business and Group-level to handle tax-
related matters
• Continue to consult and obtain opinion from reputable tax consulting firms
on major tax matters to mitigate tax risks on the Group and its subsidiaries
56
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Decrease in risk profile Same as last year Increase in risk profile
Financial risks
R11
Fluctuation in commodity prices (including oil) and currency exchange rates
Impact
Mitigation
Direction
Prices and demand for the Group’s
products may remain volatile/
uncertain and could be influenced
by global economic conditions,
natural disasters, weather,
pandemics, such as the COVID-19
outbreak, political instability, and
so on. Volatility in commodity
prices and demand may adversely
affect our earnings, cash flow and
reserves.
Our assets, earnings and cash
flow are influenced by a variety
of currencies due to our multi-
geographic operations. Fluctuations
in exchange rates of those
currencies may have an impact on
our financials.
R12 Major project delivery
• The Group’s well-diversified portfolio acts as a hedge against fluctuations in
commodities and delivers cash flow through the cycle
• Pursue low-cost production, allowing profitable supply throughout the
commodity price cycle
• We consider exposure to commodity price fluctuations to be integral to the
Group’s business and our usual policy is to sell our products at prevailing
market prices. Our policy is not to enter into price hedging arrangements
other than for businesses of custom smelting and purchased alumina, where
back-to-back hedging is used to mitigate pricing risks. Strategic hedge, if
any, is taken after appropriate deliberations and due approval from ExCo
• Our forex policy prohibits forex speculation
• Robust controls in forex management to hedge currency risk liabilities on a
back-to-back basis
• Finance Standing Committee reviews all forex and commodity-related risks
and suggests necessary course of action to business divisions
• We seek to mitigate the impact of short-term currency movements on the
businesses by hedging short-term exposures progressively, based on their
maturity. However, large, or prolonged movements in exchange rates may
have a material adverse effect on the Group’s businesses, operating results,
financial condition and/or prospects
• Notes to the financial statements in the Integrated Report provide details
of the accounting policy followed in calculating the impact of currency
translation
Impact
Mitigation
Direction
Shortfall in achievement of stated
objectives of expansion projects,
leading to challenges in achieving
stated business milestones –
existing and new growth projects.
• Empowered organisation structure in place to drive growth projects; project
management systems streamlined to ensure full accountability and value
stream mapping
• Strong focus on safety aspects in the project
• Geo-technical audits conducted by independent agencies
• Engaged global engineering partner to do complete life of mine planning and
capital efficiency analysis to ensure that the project objectives are in sync
with the business plan and growth targets
• Standard specifications and SOPs developed for all operations to avoid
variability; reputed contractors engaged to ensure the completion of the
project on indicated timelines
• Use of best-in-class technology and equipment to develop mines, ensuring
the highest level of productivity and safety. Digitalisation and analytics help
improve productivity and recovery
• Stage gate process to review risks and remedy at multiple stages on the way
• Robust quality control procedures implemented to check safety and quality
of services/design/actual physical work
• Use of reputed international agency for Geotech modelling and technical
support, wherever required
R13 Access to capital
Impact
Mitigation
Direction
The Group may not be able to meet
its payment obligations when due
or may be unable to borrow funds
in the market at an acceptable
price to fund actual or proposed
commitments. A sustained
adverse economic downturn and/
or suspension of its operation in
any business, affecting revenue
and free cash flow generation, may
cause stress on the Company’s
ability to raise financing at
competitive terms.
• Focused team continues to work on proactive refinancing initiatives with an
objective to contain cost and extend tenor
• Team is actively building the pipeline for long-term funds for near to medium
term requirements both for refinancing and growth capex
• Track record of good relations with banks, and of raising borrowings in the
last few years
• Regular discussions with rating agencies to build confidence in operating
performance
• Business teams ensure continued compliance with the Group’s treasury
policies that govern our financial risk management practices
• CRISIL and India Ratings have revised the rating to AA from AA- with stable
outlook
57
Integrated Report and Annual Accounts 2021-22
Our Board and Management
Anil Agarwal
Non-Executive Chairman
Navin Agarwal
Executive Vice Chairman
Mr. Agarwal is the Non‑Executive Chairman of Vedanta
Limited. He has been the Executive Chairman of Vedanta
Resources since March 2005. He founded the Vedanta
Group in 1976 and has over four decades of entrepreneurial
and mining experience. He has helped shape the strategic
vision of the Company to contribute to the larger purpose of
uplifting communities.
Under his leadership, Vedanta has grown from an Indian
domestic miner to a global natural resources group, with a
world‑class portfolio of large, diversified assets in Oil & Gas,
zinc, silver, aluminium, copper, iron & steel and power that are
capable of generating strong cash flows.
Mr. Agarwal’s vision is to empower the nation by achieving
self‑sufficiency in the natural resources sector. Over the years,
he has invested over US$35 billion for the development of the
metal and mining sector in India. He has also been a strong
advocate for the growth of the MSME sector. Partnering with
the government, the Vedanta Saathi programme has been
created to provide a bouquet of services to MSMEs so that they
can truly become employment generators for the economy.
He has also been playing a pivotal role in the development of
start-ups.
Mr. Agarwal believes that businesses must give back to the
society and help them prosper. He has pledged 75% of his
wealth for social good. He has signed The Giving Pledge, a
movement of global philanthropists who have committed to
giving away the majority of their wealth towards philanthropic
and charitable causes. Mr. Agarwal is committed to promoting
the well-being of the communities with a focus on women and
child development. His dream project, Nand Ghar, is developing
model anganwadis that are focused on eradicating child
malnutrition, providing education, healthcare, and empowering
women with skill development.
The Anil Agarwal Foundation is committed towards
empowering communities, transforming lives and facilitating
nation building through sustainable and inclusive growth.
The Foundation has teamed up with the Bill & Melinda Gates
Foundation to improve health and nutritional outcomes.
58
Mr. Navin Agarwal has been associated with the
Vedanta Group since its inception and has four
decades of strategic executive experience. Under
his stewardship, Vedanta has achieved leadership
position in all the major sectors it operates in.
Over the years, he has been instrumental in building
a highly successful meritocratic organisation.
He has been spearheading the Company’s
strategy through a mix of organic growth and
value‑accretive acquisitions, leading to Vedanta’s
transformation into a globally diversified natural
resources company.
He is passionate about developing leadership talent
and has been responsible for creating a culture of
excellence at Vedanta through the application of
advanced technologies, digitalisation and global
best practices. He drives Vedanta’s unwavering
commitment to upholding the highest standards
of corporate governance. His vision is to gradually
unlock the enormous potential of the natural
resources sector and make it an engine of growth
for India.
In recognition of his exceptional service in the fields
of business and entrepreneurship and contribution
to the natural resources sector, he was conferred
the ’Industrialist of the Year’ Award by the Bombay
Management Association in 2018. He is a fervent
advocate of sustainable development and is
committed to advancing the inclusive growth of
communities and the promotion of culture and
sports at all levels.
A graduate in commerce from Sydenham College,
Mumbai, Mr. Agarwal has completed the President
Management Program from Harvard University.
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Dindayal Jalan
Non-Executive Independent Director
Padmini Sekhsaria
Non-Executive Independent Director
Ms. Sekhsaria is a Principal at the Narotam
Sekhsaria Family Office, where she leads several
investment and philanthropic activities. She
oversees businesses in technology, education,
FMCG, agriculture, construction materials,
commodities, and financial services, that directly
employ over 3,600 employees. Her experience in
youth education, health and vocational skilling spans
over 20 years.
She started the Salaam Bombay Foundation in 2002,
one of the largest school-based preventive health
programmes in India. She also heads the Narotam
Sekhsaria Foundation, a family philanthropy that
is engaged in health, education, and livelihood
programmes, with interventions in rural and urban
areas focused on community health, preventive
and promotive healthcare, capacity building, policy
advocacy and systemic change. She serves on
the Boards of various non‑profit organisations,
including Ambuja Cement Foundation, Prince
Aly Khan Hospital, Harvard T.H. Chan School of
Public Health‑India Center, Sherborne Foundation
in UK, Vassar College and the India Youth Fund in
New York. She is an alumnus of London School
of Economics and holds a postgraduate degree in
Financial Economics.
Mr. Jalan is a Chartered Accountant and has over 40 years
of extensive experience in managing business and finance
in large metal and mining companies.
He is currently an entrepreneur and an Independent Director
on the Boards of some prominent companies. In his
previous role, before superannuation in 2016, he was the
Group CFO of London listed Vedanta Resources Plc., and an
Executive Director and CFO of Vedanta Ltd.
Mr. Jalan started his corporate journey in 1978 with
Aditya Birla Group’s Hindustan Gas & Industries Ltd. as
a management trainee, rising to the rank of Finance &
Commercial Head. He was instrumental in transforming the
iron ore business and setting up a greenfield SME business
for Essel Mining, an associate company.
In 1996, he moved to Birla Copper to lead the Finance &
Commercial function. He was part of the core team and
was instrumental in setting up and operationalising the
greenfield Copper Smelting project as a robust operating
business. He was responsible for raising finance, building
the finance team, putting in place strong business
processes and systems, negotiating stable sources for
long-term raw material supplies, setting up the commodity
hedging desk and building a robust marketing organisation.
In 2001, he moved to Sterlite Industries (now Vedanta
Ltd.) as CEO of its copper mining business in Australia for
~5 years. He led the turnaround of the business, working
in a multicultural environment. In 2003, he was appointed
the CFO of Sterlite Industries. In 2005, he was elevated to
the position of CFO of Vedanta Resources Plc., an FTSE
250, London listed company. In this role, he provided
strategic leadership to the Finance function with a clear
focus on enhancing shareholders’ value by improving
capital management, governance framework, systems
and processes, and developing a robust Finance team. He
closely worked with the CEO to drive business performance.
59
Integrated Report and Annual Accounts 2021-22 Our Board and Management
Sunil Duggal
Whole-Time Director & Chief Executive Officer
Upendra Kumar Sinha
Non-Executive Independent Director
Mr. Sinha served as the Chairman of the Securities
and Exchange Board of India (SEBI) from February
2011 to March 2017. He was instrumental in
bringing about key capital market reforms. Under his
leadership, SEBI introduced significant regulatory
amendments to various Acts, enhancing corporate
governance and disclosure norms. Prior to his role
in SEBI, he was the Chairman & MD of UTI Asset
Management Company Pvt. Ltd. He has also worked
for the Department of Economic Affairs under the
Ministry of Finance, Government of India.
Mr. Sunil Duggal was appointed as the Interim CEO of
Vedanta Limited, effective April 6, 2020, subsequently CEO,
effective August 1, 2020 and Whole‑Time Director from
April 25, 2021. Prior to this, he was the CEO & Whole‑Time
Director of Hindustan Zinc Limited (HZL), a subsidiary
of the Company from 2015 to July 2020. He had been
associated with HZL since 2010 as Executive Director
and thereafter became the Chief Operating Officer in the
year 2012 and Deputy CEO in 2014. He is a result‑oriented
professional with over 37 years of experience of leading
high‐performance teams and more than 20+ years in
leadership positions.
He is known for his ability to calmly navigate through
tough and challenging times, nurture and grow a business,
evaluate opportunities and risks and successfully
drive efficiency and productivity whilst reducing costs
and inefficiencies and deliver innovative solutions to
challenges. His thrust on adopting best‐in‐class mining
and smelting techniques, state‐of‐the‐art, environment‐
friendly technologies and mechanisation, automation
and digitalisation of operational activities has enhanced
Vedanta’s industry leadership.
Born and brought up in Amritsar, he has an Electrical
Engineering degree from Thapar Institute of Engineering
& Technology, Patiala. He is an Alumnus of IMD, Lausanne
‐ Switzerland and IIM Calcutta and has worked in Ambuja
Cement before joining Vedanta Ltd. He is serving as Vice
Chairman‑International Zinc Association and President –
Indian Lead Zinc Development Association. Recently, he
has been appointed as the Chair – Confederation of Indian
Industry (CII) National Committee on Mining, Chair – FIMI
Non‑Ferrous Metals Committee, Co‑Chair – FICCI Non‑
Ferrous Metals Committee ‑2018 and Chairman – Skill
Council for Mining Sector, India.
60
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Akhilesh Joshi
Non-Executive Independent Director
Priya Agarwal Hebbar
Non-Executive Non-Independent Director
Mr. Joshi was appointed on the Board with effect from July
01, 2021. He completed his Bachelor’s in Mining from MBM
Engineering College, Jodhpur. He holds a Diploma in Economic
Evaluation of Mining Projects from the Paris School of Mines.
Mr. Joshi has over 44 years of professional experience in
mining and has an exemplary track record of nurturing one of
the world’s largest integrated zinc, lead and silver producing
organisation. His emphasis on a high-performance culture
brings out the best in employees, propelling meticulous
execution and delivering extraordinary results.
Mr. Joshi served as Chief of Mining Operations at Rampura
Agucha Mines and successfully executed mine planning and
production ramp up, which positioned it as the world’s #1 zinc‑
lead mine for eight consecutive years since 2009.
He was the CEO of Hindustan Zinc Limited (HZL) from 2012
to 2015 and was also appointed the President of the Global
Zinc Business. He provided guidance to gold mines in Armenia
between 2004-2006, engaged and worked closely with
companies such as SRK/AMC etc. for benchmarking and
mining methodology evaluations. Currently, he serves on the
Boards of HZL, Rajasthan State Mines & Minerals Ltd., Ferro
Alloys Corporation Limited and FACOR Power Limited.
Mr. Joshi is a senior executive of global repute with a proven
track record. In his long global career, he has been recognised
with numerous awards including the National Mineral Award
by the Government of India for his outstanding contribution to
mining technology in 2006, Business Today CEO Award, HZL
Gold Medal Award by the Indian Institute of Metals. In 2012,
he was also felicitated by the then Hon’ble Finance Minister,
Pranab Mukherjee, for his excellent contribution to the mining
sector. He is also a member of the Institution of Engineers
(India), Mining Engineers Association of India (MEAI), Mining
Geological & Metallurgical Institute of India (MGMI) and Indian
Institute of Mineral Engineers (IIME).
He is the co-author of a book titled ‘Blast Design Theory and
Practice’ and has written various technical papers in relation to
exploration and mining since 1995.
Ms. Priya Agarwal Hebbar is the Non‑Executive
Director at Vedanta. She is deeply passionate about
the environment and sustainability and has been
playing a crucial role in strengthening Vedanta’s ESG
practices. Under her leadership, Vedanta has put in
place a comprehensive framework to be the ESG
leader in the natural resources sector.
Ms. Hebbar is passionate about child nutrition and
gender neutrality and is leading a variety of CSR
initiatives under the Anil Agarwal Foundation, which
impacts the lives of more than 4.23 crore people at
the grassroots level. The Foundation has pledged
`5,000 crore over the next five years on various
social impact programmes.
Under her leadership, Vedanta has modernised over
3,300 anganwadis across the country through its
flagship project, “Nand Ghar”, which aims to ensure
that women and children get the right opportunities
even in the remotest parts of the country.
She is also leading a state-of-the-art animal
welfare project – The Animal Care Organisation
(TACO) of Vedanta. This project will bring leading
academicians, veterinarians and communities
together to create a holistic ecosystem for animal
care in India. She is the founder of YODA – an animal
welfare organisation.
Ms. Hebbar has experience in Public Relations
with Ogilvy & Mather and in Rediffusion Y&R. She
has completed B.Sc. in Psychology and Business
Management from the University of Warwick in
the UK.
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Integrated Report and Annual Accounts 2021-22 Management Committee
Sunil Duggal
Whole-Time Director & Chief Executive Officer
Ajay Goel
Group Acting Chief Financial Officer
Mr. Ajay Goel is acting Chief Financial Officer of
the Company with effect from 22 October, 2021.
He was appointed as Deputy Chief Financial
Officer of Vedanta Limited from 23 March 2021,
based at Delhi. In this role, Mr. Goel is responsible
for Financial Planning & Analysis, Accounting
and Consolidation, Controllership, Audit, Tax,
Secretarial & Compliance and Risk Management.
He has been driving the Company’s business
performance monitoring and reporting with a
focus on benchmarking and analytics. Mr. Goel is a
national rank holder, both as a Chartered Accountant
and Company Secretary. He brings 22 years of rich
experience, having operated in a variety of roles in
global multinational companies such as General
Electric (GE), Nestle, Coca Cola and Diageo.
Mr. Sunil Duggal was appointed as the Interim CEO of Vedanta
Limited, effective April 6, 2020, subsequently CEO, effective
August 1, 2020 and Whole‑Time Director from April 25,
2021. Prior to this, he was the CEO & Whole‑Time Director of
Hindustan Zinc Limited (HZL), a subsidiary of the Company
from 2015 to July 2020. He had been associated with HZL
since 2010 as Executive Director and thereafter became the
Chief Operating Officer in the year 2012 and Deputy CEO
in 2014.
He is a result-oriented professional with over 37 years of
experience of leading high‐performance teams and more
than 20+ years in leadership positions. He is known for his
ability to calmly navigate through tough and challenging
times, nurture and grow a business, evaluate opportunities
and risks and successfully drive efficiency and productivity
whilst reducing costs and inefficiencies and deliver innovative
solutions to challenges. His thrust on adopting best‐in‐class
mining and smelting techniques, state‐of‐the‐art, environment‐
friendly technologies and mechanisation, automation and
digitalisation of operational activities has enhanced Vedanta’s
industry leadership.
Born and brought up in Amritsar, he has an Electrical
Engineering degree from Thapar Institute of Engineering
& Technology, Patiala. He is an Alumnus of IMD, Lausanne
‐ Switzerland and IIM Calcutta and has worked in Ambuja
Cement before joining Vedanta Ltd. He is serving as Vice
Chairman‑International Zinc Association and President –
Indian Lead Zinc Development Association. Recently, he has
been appointed as the Chair – Confederation of Indian Industry
(CII) National Committee on Mining, Chair – FIMI Non‑Ferrous
Metals Committee, Co‑Chair – FICCI Non‑Ferrous Metals
Committee ‑2018 and Chairman – Skill Council for Mining
Sector, India.
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Sharad Gargiya
Group Chief Commercial Officer
Madhu Srivastava
Group Chief Human Resources Officer
Mr. Sharad Kumar Gargiya was appointed as the
Chief Commercial Officer of Vedanta with effect
from April 2020. He has been associated with the
Group since October 1998 and has held key senior
leadership roles as Chief Financial Officer and Chief
Commercial Officer across the Group companies.
He is an integral part of the Vedanta Group Executive
Committee and Group Management Committee. He
has been a member of the Group Ethics Committee
since 2016 and is an active member of the Group
Insurance Council for over five years.
Mr. Gargiya is a versatile leader and has over 23
years of experience in leading high‑performance
teams, developing and executing strategic
initiatives, driving business excellence, and cultural
transformation. He has contributed significantly
towards unlocking business value through his
leadership and strategic roles at the Telecom Cable,
Copper, Aluminum, Power And Zinc business of
the Company. He has a proven track record of
adopting best-in-class technologies and processes
to increase efficiencies and optimise cost with a
focus on promoting automation and digitalisation of
operational activities.
Ms. Madhu Srivastava was appointed as the Chief
Human Resources Officer of Vedanta in December
2018. She has been associated with Vedanta for
more than nine years. In her earlier role, she was
the Chief Human Resources Officer of Cairn‑Oil and
Gas business for close to three years, during which
she also led the Talent Acquisition and Diversity and
Inclusion functions for Vedanta.
Under her leadership, the Vedanta Group has put in
place progressive and globally benchmarked people
practices and frameworks for talent acquisition,
talent management, performance management,
and rewards and recognition. She has 23 years
of experience across Human Resources as well
as Sales, Marketing and Operations, spanning
FMCG, Telecom, IT/ITES, banking and natural
resources industries.
Ms. Srivastava started her professional journey in
1999 with Godrej, where she handled sales in Gujarat
and Maharashtra and later moved to the Corporate
Sales & Marketing role. Following her work with
companies such as GE Capital and Reliance in
operations and marketing profiles, she began her
journey in HR in 2006 as Assistant Vice President,
Talent Acquisition at Genpact, where she led middle
management hiring. She then went on to lead
recruitment for Citibank’s India operations as Vice
President, Human Resources before joining Vedanta
in 2012. She holds a Post Graduate Diploma in
Management in Marketing and Sales from the Indian
Institute of Management Ahmedabad.
63
Integrated Report and Annual Accounts 2021-22 Executive Committee
Arun Misra
Rahul Sharma
Sauvick Mazumdar
Arun Misra
Chief Executive Officer – Hindustan Zinc Limited
Mr. Misra was appointed as Chief Executive Officer, HZL,
effective from 1 August 2020. He was priorly Deputy Chief
Executive Officer, HZL since joining the company on 20
November 2019. In his previous role, he was associated with
TATA Steel Limited as Vice President of the Mining Division.
He has 34 years of rich and diverse experience, having
held various strategic positions at TATA Steel. Mr. Misra
has a Bachelor’s degree in Electrical Engineering from IIT
Kharagpur, a diploma in mining and beneficiation from the
University of New South Wales, Sydney, and a Diploma in
General Management from CEDEP, France. He was elected
as Chairman of International Zinc Association in January
2022, the first ever Indian and Asian to hold this position.
Rahul Sharma
Deputy Chief Executive Officer – Aluminum Business
Mr. Sharma is the Deputy Chief Executive Officer of
Vedanta’s aluminium business since 24 November 2020.
Prior to his current role, he was the Chief Executive Officer
of the Alumina business (from April 2019) and Director-
Corporate Strategy (Aluminium and Power). Mr. Sharma
has diverse experience of over 25 years and has been
with the Group since 1998. He has held key leadership
positions at Vedanta Limited and Sterlite Technologies
Ltd., where he was Chief Marketing Officer (Domestic and
International) and Business Head of System Integration
Business. He is a leading figure in India’s metal and mining
industry and has been playing a significant role in driving
policies and facilitating reform of the exploration, mining,
and non-ferrous metal sector in the country to promote
sustainability. Mr. Sharma holds important positions in
various eminent industry associations, including being
the current President of the Aluminium Association of
India (AAI), Chairman of Indian Captive Power Producers
Association (ICPPA), and Co‑Chair of FICCI’s Mining
Committee. In recognition of his exemplary leadership,
he has been conferred various awards and accolades,
including ‘People’s CEO of the Year’ award in 2020.
He was anointed ‘Business Leader of the Year’ at the
International Conference on Non‑Ferrous Metals‑2017
for his contribution to India’s Metal and Mining industry.
Mr. Sharma is an alumnus of IIM Ahmedabad, where he
completed the Executive General Management program.
He is an MBA in Marketing and a BE in Electronics
and Communication.
Sauvick Mazumdar
Chief Executive Officer – Iron and Steel Sector
Mr. Mazumdar was appointed as Chief Executive Officer
of the Iron and Steel business on 1 May 2021. Prior to
this role, he was Chief Executive Officer ‑ Sesa Goa since
12 July 2019. Mr. Mazumdar joined the organisation in
1994 as a graduate engineer trainee and rose to the ranks
of CEO. He is a well‑seasoned executive with more than
27 years of extensive experience, having built a solid
reputation for achieving business growth through strategic
direction, insight and positive leadership. He is presently
responsible for the overall business and expansion of the
Iron and Steel business within India and overseas - Sesa
Goa, Western Cluster Liberia (WCL), ESL Steel (erstwhile
Electro Steel Ltd.), Ferro Alloys Corporation (FACOR), Nickel‑
Cobalt (Nicomet), Port (VGCB & MVPL). Mr. Mazumdar
has a B.Tech degree in Mining Engineering from NIT
Surathkal, and a first class Mines Manager’s Certificate of
Competency from DGMS, GoI, Dhanbad.
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Prachur Sah
Vikas Sharma
Abhijit Pati
Prachur Sah
Deputy Chief Executive Officer, Cairn Oil and Gas
Mr. Sah joined Vedanta as Director-New Ventures and
Reserves of Cairn on 21 August 2018 and assumed the
position of Deputy Chief Executive Officer of Cairn Oil &
Gas on 19 October 2020. He has since played a key role
towards realising Cairn’s broader vision and is responsible
for unlocking value through monetisation of our new
exploration blocks under the Open Acreage Licensing
Program (OALP). Prior to joining Vedanta, Mr. Sah was with
Schlumberger, where he gained rich and diverse experience
working across geographies including Houston, South
America, the UAE and India for 19 years. At Schlumberger,
he held various roles in Operations, Transformation and
Business Development. His last role at Schlumberger was
Managing Director for India, Bangladesh and Sri Lanka. He
holds a Bachelor’s degree in Electrical Engineering from IIT
Bombay and a Master’s degree in Oil & Gas Management
from Heriot Watt University, Edinburgh.
Vikas Sharma
Chief Executive Officer and Whole-Time Director,
Talwandi Sabo Power Limited (TSPL) and Chief
Executive Officer – Strategy and Business Development
Mr. Sharma was appointed to the role of Chief Executive
Officer–Strategy and Business Development on 26
September 2021, in addition to his role as Chief Executive
Officer, TSPL, our Power business, where he was appointed
in July 2019. He was appointed Whole‑Time Director with
effect from October 2019. Prior to his stint at TSPL, he held
the position of CEO and Whole‑Time Director of BALCO in
March 2017. He has over 32 years of experience, working
for various national and multinational companies. He has
served at HMT Watches Limited, Su‑Raj Diamonds India
Private Limited, AMP India Private Limited (now Tyco
Electronics), Praxair India Private Limited, Jindal Praxair
Oxygen Company Limited and JSW Steel Limited in various
key positions. Mr. Sharma joined the Vedanta Group as
Location Head of the Chanderiya Smelter of HZL in 2012
and was elevated to the role of Chief Operating Officer of
the Smelters division of HZL in June 2014. At Vedanta,
he has made significant contributions towards safety,
productivity, and people development. As part of his current
responsibilities, he works closely with the CEOs of Vedanta’s
various businesses to drive key strategic initiatives for
the Company and advises on government and regulatory
matters through engagement with the Government of India
and other key stakeholders. He holds a Bachelor’s degree
in Mechanical Engineering from Engineering College Kota,
University of Rajasthan and an MBA in Marketing from
Sikkim Manipal University, Gangtok, India.
Abhijit Pati
Chief Executive Officer and Whole-Time Director,
Bharat Aluminum Corporation (BALCO)
Mr. Pati was appointed as the Chief Executive Officer and
Whole‑Time Director of BALCO on 25 July 2019. Prior to
this, he was CEO of our Aluminium business, Jharsuguda
from March 2015. Since April 2012, he was President
and Chief Operating Officer of our Aluminium and Power
business at Odisha. He has over 33 years of experience
in the aluminium industry. Before joining Vedanta, he was
Vice President at Hindalco Industries Limited. He started
his career as a budding engineer at Indian Aluminium
Company in 1989. He received the ‘Exceptional Contributor
Award’ from the Aditya Birla Group Chairman, Mr. Kumar
Mangalam Birla, for his significant contribution in the
turnaround of the Hirakud Aluminium Smelter in 2006 and
won the prestigious British Sword of Honor for the Hirakud
Smelter in 1999. He is a member of the Bureau of Energy
Efficiency under the Ministry of Power, Government of India.
He is also Vice President of the Aluminium Association
of India and member of its governing body. He has twice
won gold medal from prestigious institutes such as the
Calcutta University and International Management Institute,
New Delhi. Mr. Pati holds a first class Bachelor’s degree in
Chemical Engineering from Calcutta University and an MBA
from International Management Institute, New Delhi.
65
Integrated Report and Annual Accounts 2021-22 Executive Committee
Sunil Gupta
Gobinda Gopal Pal
Navanath Vhatte
Sunil Gupta
Chief Executive Officer, Vedanta Limited, Jharsuguda
Mr. Gupta was appointed as the Chief Executive Officer
of Jharsuguda, effective from 31 January 2022. In this
role, Mr. Gupta has the critical responsibility of providing
leadership to the Aluminum business at Jharsuguda, with
a strong focus on HSE, ESG, volume, cost, organisation,
talent, and technology, and implementing best-in-class
practices. He brings over 27 years of rich experience
from the cement industry, where he worked extensively
in operations, project implementation, strategic planning,
and the execution of various critical projects for ACC
and KJS Cements. He holds a B.Tech degree in Electrical
Engineering from the Government Engineering College,
Ujjain, Madhya Pradesh.
Gobinda Gopal Pal
Deputy Chief Executive Officer, Vedanta Limited,
Lanjigarh
Mr. Pal was appointed as Deputy Chief Executive Officer
of our Alumina business- Lanjigarh in April 2021. He had
joined Vedanta in 2011 as Head‑ Pot Line of Vedanta
Ltd, Jharsuguda. He has a rich experience of 34 years in
the Aluminium Industry and has played a pivotal role in
various O&M verticals (Aluminium business) and senior
management profiles. He has also worked for companies
like National Aluminium Company, MOZAL Aluminium,
Bharat Aluminium Company (BALCO). He holds a BE in
Metallurgy from REC, Durgapur.
Navanath Vhatte
Chief Executive Officer and Whole-Time Director,
Electrosteel Steels Limited
Mr. Vhatte was appointed as the Chief Executive Officer
and Whole‑Time Director of ESL Steel Limited with effect
from 10 May 2021. Mr. Vhatte has been associated
with Vedanta since 1993 and has held various senior
management positions. Prior to moving to ESL as CEO, he
led the Value Addition Business (VAB) of Vedanta. In this
role, he was responsible for the growth of VAB along with
plant operations, sales of pig iron, met coke and power. His
leadership and strategic approach have helped VAB become
the largest merchant pig iron producer in India at the lowest
cost among its peer groups. Mr. Vhatte has championed
the successful expansion of pig iron, met coke and power
plant capacities, raising the unit capacity to 800k mt of
pig iron. Previously, Mr. Vhatte worked with Kalyani Steels,
Pune for 8.5 years as a Project & Maintenance Engineer. He
brings with him more than 36 years of experience in the pig
iron, metallurgical coke, waste heat-based power plant and
steel industry. He holds a Diploma in Electrical Engineering
(DEE) from Government Polytechnic Maharashtra and is a
graduate in Electrical Engineering (AMIE) from the Institute
of Engineers and an MBA in Finance from IGNOU.
66
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Puneet Khurana
Dilip Golani
Sandep Agarwal
Sandep Agarwal
Head – Investor Relations
Mr. Agarwal was appointed as Head–Investor Relations for
Vedanta on 7 February 2022. Prior to this role, Mr. Agarwal
was with Tata Steel, where he was the Head of Group
Investor Relations. He has previously worked with diverse
organisations such as JSW Group, CRISIL and TCS. At
Vedanta, he is working with the finance leadership and lead
Group IR team to enhance quality, depth, and diversity of
our investor base. His strong financial and analytical skills,
rich experience in capital market engagement and strong
relationship with the investor community is of immense
value to the Company as we strive to optimise value for
our shareholders. Mr. Agarwal is a qualified Chartered
Accountant from the Institute of Chartered Accountants of
India (ICAI).
Puneet Khurana
Deputy Chief Executive Officer, Copper Operations –
Fujairah and Silvassa
Mr. Khurana was appointed as the Deputy CEO of Vedanta’s
copper operations (Fujairah and Silvassa) on 6 August
2021. In his role, he oversees an overall US$125 million
bottom line growth. He has been associated with Vedanta
since 2006, and has been instrumental in driving increase
in sales, NEP, cash flow, and cost reduction through
various roles in the Vedanta Group companies such as
Sterlite Industries, Cairn Oil and Gas and Fujairah Gold,
where he has held diverse profiles in Sales, Marketing
and Supply Chain Management. Mr. Khurana has an MBA
from ICFAI Business School Hyderabad, and a B.Tech in
Computer Science and Engineering from AKG Engineering
College, Ghaziabad.
Dilip Golani
President – Management Assurance Services
Mr. Golani was appointed as President, Management
Assurance Services (MAS) on 1 March 2021. He previously
headed the Sales and Marketing division of HZL and the
Vedanta Performance Management function. Before
joining the Group in April 2000, he was a member of the
Unilever Corporate Audit team, where he was responsible
for auditing Unilever group companies in Central Asia,
the Middle East and the Africa region. Prior to that, he
was in charge of managing the Operations and Marketing
functions for one of the exports businesses of Unilever
India. He has over 30 years of experience, having worked
with organisations such as Union Carbide India Limited and
Ranbaxy Laboratories Limited. Mr. Golani holds a Bachelor’s
degree in Mechanical Engineering and has completed
his postgraduate studies in Industrial Engineering and
Management from the National Institute of Industrial
Engineering, Mumbai, India.
67
Integrated Report and Annual Accounts 2021-22 Executive Committee
Vineet Jaiswal
Ritu Jhingon
Dhiraj Nayyar
Vineet Jaiswal
Dhiraj Nayyar
Deputy Chief Executive Officer – Center of Excellence
Director – Economics and Policy
Mr. Nayyar was appointed as Director, Economics and
Policy on 1 October 2019. He was the Chief Economist
of Vedanta Limited since October 2018. Before joining
the Group, he was Officer on Special Duty and Head,
Economics, Finance and Commerce, at NITI Aayog from
October 2015 till October 2018. He has more than 16 years
of experience in the domain of economics and public
policy. In this role, functionally equivalent to Joint Secretary,
Government of India, he was responsible for all policy
matters related to the Departments of Economic Affairs,
Revenue, Financial Services, Investment and Public Asset
Management and Commerce. He was Secretary of the
Inter‑ministerial Committee on Sick and Loss‑making Public
Sector Enterprises, Member‑Secretary of NITI Aayog’s
Committee on Strategic Disinvestment and Member, Spices
Board. Prior to joining the government, Mr. Nayyar spent
several years in the media in senior positions. He was an
India columnist at Bloomberg View, Managing Editor at The
Quint, Editor-at-large at Firstpost.com, Deputy Editor at India
Today and Opinion Editor at Financial Express. Mr. Nayyar
completed his Bachelor’s in Economics from St. Stephen’s
College, Delhi University, MA in Philosophy, Politics and
Economics from Merton College, Oxford and M. Phil in
Development Economics from Trinity College, Cambridge,
where he also pursued doctoral research in Economics and
taught Development Economics.
Mr. Jaiswal is the Deputy CEO–Center of Excellence of
Vedanta with effect from 22 September 2021. He joined
the Group in August 2021, as Chief Digital and Technology
Officer. In this role, Mr. Jaiswal partners with business CEOs
and CoE teams to establish a robust CoE vertical across
Vedanta, and in building synergies across businesses, with
an emphasis on improving the quality of performance,
driving a culture of innovation, building focus on R&D,
putting in place best practices for asset optimisation, and
driving process transformation through digitalisation.
He brings with him 25 years of rich global experience.
Mr. Jaiswal has worked with firms such as General Electric
and JSW Steel in the past. He is an MBA, and completed his
B.Tech in Mechanical Engineering from Nagpur University.
Ritu Jhingon
Director - Communications, PR, and Branding, and
CEO-Nand Ghar
Ms. Jhingon is Director‑ Communications, PR and Branding,
and CEO‑Nand Ghar. She was elevated to this position
on 9 December 2021. Prior to this role, she held various
leadership positions in communications and Nand Ghar
functions. In her current role, Ms. Jhingon is responsible
for positioning the organisation, maintaining continuous
engagement with key stakeholders, devising internal
and external campaigns and communications for the
organisation, and conveying leadership messages across
multiple platforms. She also works towards driving and
cultivating the brand image and establishing Vedanta as a
prominent philanthropic group. She has over 30 years of
industry experience and has priorly worked with Hindustan
Times and Ogilvy. Ms. Jhingon holds an MBA in Marketing
and Advertising from Delhi University and has been
associated with Vedanta since 2010.
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Rajinder Singh Ahuja
Leena Verenkar
Rajinder Singh Ahuja
Leena Verenkar
Head – Health, Safety, Environment and Sustainability
Head – Corporate Social Responsibility
Mr. Ahuja was appointed as Head–HSE&S for Vedanta
on 20 July 2021. He was priorly Deputy CEO‑TSPL. In his
current role, he is responsible for designing and driving
the Company’s HSE&S policies and initiatives with a
strong emphasis on ESG, advocacy, and governance, and
in bringing onboard globally benchmarked best-in-class
practices through the systematic adoption of technology,
automation, and digitalisation. He also works in partnership
with our business CEOs and IR/Communications teams
to position a strong corporate HSE brand through our
communications with external and internal stakeholders.
Mr. Ahuja has been associated with Vedanta since 2003 and
has been instrumental in establishing benchmark practices
in HSE&S as HSE head of our Zinc business. He holds a
Bachelor’s degree in Electrical Engineering from Maulana
Azad College of Technology (NIT Bhopal).
Ms. Verenkar was appointed as Head of Corporate Social
Responsibility (Vedanta) on 1 October 2019. In addition
to her current responsibilities, she also holds charge as
the Head of CSR for the Sesa Iron Ore business since
2015, additionally providing CSR leadership for the iron
and steel sector since April 2021. Prior to this, she was
Head of CSR of Iron Ore Goa since 2010. Ms. Verenkar
started her career with the Company in 1996, in the field
of environment management and compliance and led the
environment team for 13 years. She has more than 25 years
of experience in environment management, community
relations, advocacy and public relations. She holds a
Master’s degree in Microbiology from Goa University and
in Ecology and Environment from Bhopal University, India.
She was awarded a Fulbright Scholarship by US Foundation
in India and LEAD Fellowship by Lead India. She was
recognised as ‘Women Leader of the Year’ by Economic
Times and was counted among ‘100 Most Impactful
CSR Leaders’ (a global listing) by World CSR in 2017. She
received the Great Manager’s Award in 2019.
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy
ESG: A business imperative
The natural and social fabric around the world is undergoing rapid change.
There are dire warnings that the world may soon breach the dangerous
threshold of 2.0 Celsius. It goes without saying that harsh realities and
harsh choices confront us. We have to collectively stave off climate change
and commit to global decarbonisation. This calls for concerted action from
public and private bodies alike. The role of large organisations like us is
critical, and we are aware of this.
Empowering communities
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Taking cognisance of the changes in the external
environment, and considering a strong business case
for sustainability, FY2022 became a watershed year for
Vedanta with respect to ESG. While our journey till date
has been laden with notable initiatives to conserve the
environment, contribute to society and conduct business
responsibly, this year was markedly different, as it defined
an altogether new prism of thinking within Vedanta. The
year saw us take a pledge to become ESG leaders within the
natural resources sector – a bold ambition, powered by a
new purpose.
As we embarked on a journey to raise the aspiration and
ambition of our sustainability commitment towards ‘Zero
Harm, Zero Waste, Zero Discharge’, from the Board to
business units, from core operations to community and
people engagement, we have mainstreamed ESG as a
mantra that drives our organisation. This ethos is the very
foundation of our new ESG purpose, and the driving force
behind our sustainability initiatives and investments.
Transforming for Good
Our new ESG purpose, ‘Transforming for Good’
has become our Group’ tagline as well, indicating
to both our internal and external stakeholders
that sustainability will be embedded in every
decision we make and every action we take as
an organisation. This new purpose is supported
by a well-established framework of three pillars
and nine aims, each with a set of quantifiable
goals and commitments. Substantial capital
investments, resources and policies have
been engaged to ensure that our progress on
these commitments fructify within our target
years, and contribute to the larger global
aspirations under the United Nations Sustainable
Development Goals.
ESG Purpose
Transforming for Good
Commitments and targets
TRANSFORMING
COMMUNITIES
TRANSFORMING
THE PLANET
TRANSFORMING
THE WORKPLACE
Aim 1
Keep community welfare at the
core of business decisions
Aim 4
Net-carbon neutrality by 2050
or sooner
Aim 7
Prioritising safety and health of
all employees
Aim 2
Empowering over 2.5 million
families with enhanced skillsets
Aim 5
Achieving net water positivity
by 2030
Aim 3
Uplifting over 100 million
women and children through
Education, Nutrition,
Healthcare and Welfare
Aim 6
Innovating for a greener
business model
Aim 8
Promote gender parity,
diversity and inclusivity
Aim 9
Adhere to global
business standards of
corporate governance
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy
ESG governance
As part of our continued commitments to ESG, we have expanded the scope of the erstwhile Sustainability Board
Committee and implemented a uniform ESG governance structure across the organisation. The Committee,
together with our Group Sustainability and ESG function, will be responsible for activating, mainstreaming and
monitoring initiatives under the ‘Transforming for Good’ agenda. We have also established dedicated forums for
regular management oversight at all levels and ESG-themed communities at each BU and SBU to own projects
and drive their timely implementation.
ESG GOVERNANCE AND MANAGEMENT STRUCTURE
Forums set up to drive ESG agenda
Description
ESG Board Sub-committee
ESG ManCom
Corporate
Transformation
Office
Apex executive body convening fortnightly to oversee the overall
strategy, decision-making and monitor progress
• Program update (9 aims ‑ Corp ‑ BU targets against actual)
• Key decisions (strategic direction, cross functional support)
Weekly / Fortnightly Transformation Office meeting with GCEO to
drive and accelerate high impact project implementation
Group ESG ExCo
(Part of Group ExCo)
Monthly forum with ExCo to update on overall ESG progress (overall
MIS and updates)
Transformation office
(TOs)-BU & Functional
9 BU TOs, Functional TOs and 1 reporting and disclosure TO
running on a weekly/fortnightly level to monitor progress and drive
implementation across the organisation
Communities of
Practice (CoPs)
12 CoPs, Overall CoP leaders, 250+ Community members identified
across all BUs/SBUs to drive agenda within communities
External ESG Advisory Committee
To bring the best of the world to implement our ESG agenda, we have tapped into
the expertise of globally leading organisations and professionals by partnering
with them. Apart from leading consulting organisations, we have brought on-
board experts to help our leadership teams get an independent view to shape the
ESG agenda for the organisation.
Dr. Raj Aseervatham
Non‑Executive Director on Boards, author and acclaimed
ESG expert
Mr. Peter Sinclair
Ex‑Chief Sustainability Officer – Barrick Gold, Strategic
Advisor to the Global Mining Sector and Member on Boards
Mr. Kuldip Kaura
Ex‑CEO, Vedanta
Enablers of ESG culture
At Vedanta, we are planning and
adopting best-in-class and novel
initiatives to mainstream our ESG
culture. These include:
• The world’s first ESG Academy
for in-house competency
creation of all our employees and
business partners
• Vedanta Sustainability Venture
Fund to support and harness
external innovation
• New ‘green’ business strategy to
leverage attractive adjacencies like
green metals, renewables, green
hydrogen, recycling etc.
• ESG Centre of Excellence
for regular monitoring and
continuous improvement
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Trasforming for Good
Vedanta Sustainability Framework
Robust monitoring
Developed in line with global standards from international
bodies such as International Council on Mining and
Metals (ICMM), International Finance Corporation (IFC),
Organisation for Economic Co‑operation and Development
(OECD), United Nations Global Compact (UNGC) and SDGs,
the framework comprises several policies, standards and
guidance notes which facilitate its execution.
9
POLICIES
Biodiversity, Energy & Carbon,
HIV-AIDS, Human Rights,
Social, Supplier & Contractor
Sustainability Management,
Water, Indigenous People
92
STANDARDS & GUIDANCE NOTES
Covering all the policy subject areas
In line with ICMM, IFC Performance Standards,
Global Reporting Initiative (GRI)
• Annual audit (VSAP) conducted at all Vedanta locations
to check compliance with VSF
• Monitored by Group ExCo
Please refer to the Sustainable Development Report 2022
for more information
Vedanta Sustainability Assurance Process
(VSAP)
VSAP is our sustainability risk assurance tool, instrumental
in assessing the compliance of all our businesses with
the Vedanta Sustainability Framework. It ensures that
sustainable development is well integrated into all our
decisions and actions at Vedanta. Further, VSAP also guides
our annual process with specific tracking of results by
the ESG Committee, and the Group Executive Committee,
which, in turn, reports to the Board. The results of VSAP
have a direct bearing on the overall performance evaluation
of our entire full-time-employee workforce with 15%
weightage attributed to sustainability KPIs. A minimum
of 70% is needed in VSAP audit as a threshold for pay‑out
under this component.
Stakeholder engagement and material matters
To align our priorities and actions towards the new ESG
purpose, we refreshed our materiality assessment in
FY2022 through a detailed peer benchmarking exercise
and limited stakeholder consultations. The results of this
assessment have been considered while adopting the
three pillars and nine aims of the ‘Transforming for Good’
ESG framework.
Stakeholders identified
• Local communities
• Employees
• Shareholders, Investors, & Lenders
• Civil Society
•
• Governments
Industry (Suppliers, Customers, Peers, Media)
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Our ESG strategy
Top material topics
We classify our material issues as High, Medium, Low. All material issues within a particular classification (H, M, L) are
treated with the same priority. Our ESG KPIs are focused on responding to those issues identified as High in our materiality
assessment. The top priorities across Environment, Social and Governance have been identified as below.
High
Medium
Low
M1
Climate Change
& Decarbonisation
M2 Water Security
M15 Human Rights
M25 Noise & Vibration
M16 Resource Efficiency
M26 Materials Management
M17 Transparent Disclosure
M27 Use of Recycled Materials
M3 Solid Waste Management
M18 Learning & Development
M19 Brand Salience
M20 Innovation
M21 Governance for Sustainability
M22 Land Acquisition &
Rehabilitation
M23 Pandemic Response
& Preparedness
M24 Talent Attraction & Retention
M4 Biodiversity
M5
Air Quality &
Emissions Management
M6 Tailings Dam Management
M7 Workplace Health & Safety
M8 Community Development
M9 Grievance Management
M10 Compliance to
Government Regulations
M11 Upholding Rights of
Indigenous People
M12 Ethical Business Practices
M13 Diversity & Equal Opportunity
M14 Supply Chain Sustainability
Priority order of ESG well envisioned
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MANAGEOBSERVEACT Integrated Report
Statutory Reports
Financial Statements
ESG SCORECARD
Over the years, we have progressed along conserving the environment, protecting our people and empowering the
communities. The summary dashboard provided below gives a glimpse of our performance against our goals.
Transforming Communities
Aim 1
Responsible business decisions based around
community welfare
TRANSFORMING
COMMUNITIES
Key performance
indicators
FY2025 goals
FY2030 goals
FY2022 performance Material matters
UN SDGs
Impact Management
Zero social incidents Category 4 and above
Transparency & Trust
Transparency & Trust
Transparency & Trust
Signatories and
participants on
Voluntary Principles of
Security and Human
Rights (VPSHR)
Set up an external SP
advisory body
Annual human rights
assessment across all
the businesses
Aim 2
Empowering over 2.5 million families
with enhanced skillsets
8.3
1 Category 4
social incident
Work to begin
in FY2023
External ESG Advisory
Body established with
three global experts
Human Rights
self-assessment
conducted across
all BUs
Community
Development
Key performance
indicators
Skilling
FY2025 goals
FY2030 goals
FY2022 performance Material matters
UN SDGs
2.5 million families to
be impacted through
skill development and
training by 2030
Community
Development
2.3, 2.4,
4.4, 8.3
Aim 3
Uplifting over 100 million women and children through
Education, Nutrition, Healthcare and Welfare
Key performance
indicators
Nand Ghar
Education, Nutrition,
Healthcare
and Welfare
FY2025 goals
FY2030 goals
FY2022 performance Material matters
UN SDGs
29,000 Nand Ghars
constructed by 2025
Community Development
2.1, 2.2,
4.1, 4.2
2.3, 2.4,
4.4, 8.3
3,000+ Nand Ghars
completed by FY2022
MoU for establishing
25,000 Nand Ghars
by 2025 signed with
the Government
of Rajasthan
100 million women
and children to be
uplifted through Nand
Ghars, educational
initiatives by 2030
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy
Transforming the Planet
Aim 4
Reduction in carbon emission intensity by 25% by 2030,
and net-carbon neutrality by 2050 or sooner
TRANSFORMING
THE PLANET
Key performance
indicators
Absolute
GHG Emissions
GHG
Emissions Intensity
FY2025 goals
FY2030 goals
FY2022 performance Material matters
UN SDGs
25% reduction in
absolute emissions
by 2030 (baseline:
FY2021)
4.30% increase in
GHG emissions
6.59% reduction in
GHG intensity of
Metals business
20% reduction in GHG
intensity of Metals
business (baseline:
FY2021)
7.2, 12.2,
13.2
Renewable Energy
500 MW RE RTC or
equivalent by 2025
2.5 GW of RE RTC or
equivalent by 2030
460 MW RE RTC
LMV Decarbonisation
Energy Savings
50% LMVs to
be decarbonised
Achieve energy
savings of 10
million GJ
Capital Allocation
for Transition
Hydrogen as a Fuel
Climate Change
and Decarbonisation
100% of LMVs
decarbonised by 2030
*New Target*
3.99 million GJ energy
savings in FY22
*New Target*
*New Target*
US$5 bn to be pledged
by 2030 to accelerate
transition to Net Zero
Commitment to
accelerate adoption
of hydrogen as a fuel
and seek to diversify
into H2 fuel or
related businesses
Aim 5
Achieving net water positivity by 2030
Key performance
indicators
FY2025 goals
FY2030 goals
FY2022 performance Material matters
UN SDGs
Net Water Positivity
Net water positivity
Water Consumption
15% reduction
in freshwater
consumption
(Baseline: FY2021)
Water positivity ratio:
0.5
*New Target*
6.3, 6.4,
6.b
Water Management
Water
Related Incidents
Water Recycling
Zero Category 5 incidents related to water
10% increase in the
water recycling rate
(Baseline: FY2021)
Water recycling rate:
30.6%
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Transforming the Planet
Aim 6
Innovations for greener business model
TRANSFORMING
THE PLANET
Key performance
indicators
FY2025 goals
FY2030 goals
FY2022 performance Material matters
UN SDGs
Fly Ash
Sustain the fly ash utilisation at 100%
Fly-ash utilisation:
115%
12.5
Legacy Fly Ash
Waste Utilisation
Tailings Dam Audit
and Findings Closure
Biodiversity Risk
Zero legacy ash
*New Target*
Solid Waste Management
100% low toxicity, high volume generated waste
to be utilised
HVLT Utilisation: HVLT
All tailing facilities
audited and critical
actions closed with
real-time monitoring
Review of site
biodiveristy
risk across all
our locations
98% of Golder’s Audit
observations closed
Tailings Dam Management
To be undertaken
in FY2023
Biodiversity
15.1, 15.2,
15.9
Biodiversity at Vedanta
Zinc International
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy
Transforming the Workplace
Aim 7
Prioritising safety and health of all employees
TRANSFORMING
THE WORKPLACE
Key performance
indicators
Fatalities
TRIFR
Occupational
Health
Management
Systems
Exposure Monitoring
Exposure Prevention
FY2025 goals
FY2030 goals
FY2022 performance Material matters
Capitals
Zero fatalities
Zero fatalities
Fatalities: 12
8.8
Reduce TRIFR by 30%
from 2021 baseline
1.04 TRIFR per mn
man hours by 2030
TRIFR: 1.40
Health performance
standards
implemented and part
of VSAP
Employee and
community exposure
monitoring to
be completed
To be undertaken
in FY2023
Health and Safety
No employee
exposure to red zone
areas by 2030
*New Target*
Employee Wellbeing
Mental health
program in place for
all employees
Employee Wellbeing
100% of eligible employees to undergo periodic
medical examinations
Aim 8
Promote gender parity, diversity and inclusivity
FY2025 goals
FY2030 goals
FY2022 performance Material matters
Equal opportunity
for everyone
Gender diversity (Full-
time employees): 20%
Gender diversity
11.54%
Capitals
5.1, 5.5,
5.c
Gender diversity in
leadership roles (Full-
time employees ): 40%
Gender diversity in
leadership roles: 29%
Gender diversity in
decision-making
bodies (Full-time
employees): 30%
Gender diversity in
technical / shop-
floor roles (Full‑time
employees): 10%
Gender diversity in
decision-making
bodies (Full-time
employees): 27%
*New Target*
Diversity and
Equal Opportunity
Key performance
indicators
% Women in
the Workforce
% Women in
the Workforce
% Women in
the Workforce
% Women in Technical
Leader/Shop
floor roles
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Transforming Workplace
Aim 9
Adhere to global business standards of
corporate governance
TRANSFORMING
THE WORKPLACE
Key performance
indicators
Safety Program for
Business Partners
Supply Chain
GHG transition
Training on Code
of Conduct
% Independent
Directors on Board
% Gender Diversity on
the Board
FY2025 goals
FY2030 goals
FY2022 performance Material matters
Capitals
Rubaru to be
introduced at all
Business Units
across Vedanta
8.7
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
Continue to cover 100% employees in Code of Conduct training
Supply
Chain Sustainability
Minimum 50% Independent Directors on Board as per SEBI requirements
25% gender diversity on the Board
Employees with
product ingot
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy
Transforming
communities
At Vedanta, we work with communities
in and around our operations to build
meaningful and long-standing relationships
by building trust, being transparent and by
adopting globally recognised human rights
principles into our everyday actions.
We also continue to transform lives for the
better through targeted CSR interventions,
and by being the primary economic driver
for the communities in areas we operate.
This makes us the developer of choice for
these communities.
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Transforming lives through
targeted CSR initiatives
Vedanta Limited Integrated Report
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TRANSFORMING
COMMUNITIES
management, governance, learning and synergy in the
Group’s CSR efforts. The CSR Council is further governed
by the Board‑level CSR Committee, which approves the
plans and budget, and reviews the progress of initiatives.
Social performance and social licence to
operate
As a large-scale industrial player, we have a considerable
responsibility to engage and give back positively to the
communities that offer us a social licence to operate. To
measure, manage, and monitor our social performance,
we have adopted widely accepted social performance
frameworks into our business.
In FY2022, we built upon our learnings from the Social
Performance study that was conducted in FY2020. Two
pilot programs were rolled out at Vedanta-Lanjigarh and
HZL’s Rampura Dariba Complex. The pilots are meant to
operationalise the Change Management Program that
is required to drive social performance at the site-level.
Simultaneously, Social Performance Steering Committees
(SPSCs) were formed across all our businesses in order
to start implementing the requirements of our Social
Performance standards as well as imbibe the learnings
emerging from our pilot projects.
The SPSCs represent a cross‑functional approach to
community engagement, thereby breaking the notion that
community engagement is the sole responsibility of our
CSR teams. Greater participation of site leadership teams,
better tracking, investigation and closure of grievances,
eliminating any negative impacts on communities, and
engaging the communities in economic activities are some
of the key outcomes that we seek from this program.
Focus areas and community empowerment
In the past five years, we have spent more than `2,000 crore
as part of our CSR initiatives. In FY2022, we progressed
across all our key focus areas, impacting more than 4.64
million beneficiaries throughout the year, with an annual
expenditure of `399+ crore. Apart from our continuous
impact areas, we also contributed significantly to the fight
against COVID‑19 for our communities through targeted
interventions under the ‘Vedanta Cares’ programme.
81
Key highlights
`399+ crore
TOTAL SOCIAL INVESTMENTS
4.64 million
LIVES IMPACTED
1,268
TOTAL VILLAGES REACHED
3,200+
NAND GHARS AND COUNTING
SOCIAL GOVERNANCE
We are guided by the Vedanta Sustainability Framework and
its associated standards and policies while administering
our corporate responsibility and philanthropic initiatives.
Further, we also follow identified best practices such
as Free, Prior, Informed Consent (FPIC) principles while
engaging in areas with indigenous populations. Our
standards also align with international guidelines proposed
by the IFC.
We have instated a CSR Council comprising a senior
business leader, CSR Heads and CSR Executives from all
business units. The Council meets every month and reviews
the performance, spend and outcome of CSR programmes
across units. It is governed by our in‑house CSR Policy
and ESG Framework, and assumes responsibility for the
Integrated Report and Annual Accounts 2021-22 Our ESG strategy: Transforming communities
COVID-19 RESPONSE
KEY FOCUS AREAS AND IMPACT
~5,30,000
PEOPLE IN OVER 500 VILLAGES
IN 9 STATES WERE BENEFITED
~2,331 metric tonnes
OF MEDICAL OXYGEN SUPPLIED
Healthcare
Nearly 2.4 million
PEOPLE BENEFITED
> 38
INITIATIVES
Drinking water and sanitation
>3,23,000
PEOPLE BENEFITED
>20
INITIATIVES
502
OXYGEN CONCENTRATORS
DISTRIBUTED
1,680
BEDS FOR DISTRICT/STATE
HOSPITALS & ESTABLISHMENT
OF MAKESHIFT HOSPITALS
~2,01,863
DOSES OF VACCINES (INCLUDING
DOSE 1,2 AND BOOSTER DOSE)
15,000+
PPE KITS SUPPLIED TO
COMMUNITIES
Community infrastructure
>96,000
PEOPLE BENEFITED
> 50
INITIATIVES
Sports & culture
>69,000
SPORTS PERSONS AND CULTURE
ENTHUSIASTS BENEFITED
> 16
INITIATIVES
Agriculture and animal husbandry
>36,000
PEOPLE BENEFITED
>16
INITIATIVES
Women’s empowerment
>47,000
WOMEN BENEFITED
11
INITIATIVES
Environmental protection &
restoration
>74,000
SAPLINGS PLANTED
AND UNDER MAINTENANCE
Children’s well-being and
education
>7,00,000
CHILDREN BENEFITED
>44
INITIATIVES
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Affordable
healthcare
Vedanta Limited Integrated Report
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TRANSFORMING
COMMUNITIES
Stitching a wonderful future
together
For the women in Meghwalo ki Basti, a small village in
Rajasthan’s Barmer district, the day begins early. The
house has to be cleaned, food cooked, fodder fetched
for the cattle and the children looked after. They are
also required to lend a hand in the fields and, of course,
fetch water. Notwithstanding this punishing schedule,
Pavani Devi, mother of three young children, inspired by
the Nand Ghar women empowerment program, found
time to attend skill training classes held during the every
alternate day afternoon for a period of three months.
Pavani was determined to supplement her husband’s
meagre income of `9,000 a month. At the afternoon
classes, she learnt how to build on her entrepreneurial
abilities and become proficient in tailoring. With the
help of a micro loan of `10,000, which was to be
repaid in monthly instalments, Pavani bought a sewing
machine and related materials and began her own
tailoring venture.
Her shop, one of its kind in her village, now helps Pavani
earn an average monthly income of `4,500. Her success
has inspired her sister Dhaneshwari, who also wants to
start a tailoring business in her village. Pavani, who is
now a role model for her community, has been featured
in the WeTheWomenAsia series as a successful
Nand Ghar change agent.
“Samadhan” programme
nurturing community
Grooming the
countries future
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy: Transforming communities
Shaping the future for an Aatmanirbhar Bharat
TRANSFORMING
COMMUNITIES
we realised that we needed to ensure the continuity
of our existing skill centres and other livelihood
opportunities for communities when youths were
finding it extremely challenging to navigate the
testing times.
Despite the challenges, we saw to it that the skill
centres in Rajasthan, Goa, Karnataka, Maharashtra,
Odisha, Bihar and Chattisgarh were able to
function without a break. Trainings were conducted
online and ~10,000+ youth were skilled and
successfully placed.
The confidence and skills gained through Vedanta’s
initiatives also helped farmers and rural women
emerge as enterprising individuals who quickly
identified emerging market opportunities to break
barriers and rebuild their lives.
For example, in Rajasthan, rural women joined
hands to develop mammoth grain banks and other
essential grocery items for sale in the market, thus
generating substantial income. Our units across 10
states played a pivotal role in bringing stability in
the lives of people amid the chaos.
For years, we, at Vedanta, have delegated concerted focus
on generating effective livelihood opportunities for the youth
and communities as a way to ensure a dignified future for
them. Social transformation, in fact, is an inalienable part of
our transformation ambition as we embark on the journey
of ‘Transforming for Good’.
Our efforts at promoting agricultural projects, micro-
enterprises and skill development projects, which have
transformed millions of lives over the past one decade,
received a jolt during the pandemic. Although we pooled our
resources to provide healthcare facilities to communities,
LIVELIHOOD IMPACT OVERVIEW
Impacting 4.6 million+ lives across 1,268 villages through
various projects covering all thematic areas
• 12,000+ youth skilled
• ~36,000 farmers impacted
• ~46,000 women benefited
• ~9,200 families benefited cumulatively with
livelihood enhancement projects
7.0 K
6.7 K
20.0 K
4.5 K
6.4 K
2.5 K
4.9 K
3.9 K
1.4 K
35.4 K
BALCO
Cairn
ESL
HZL
SC
SESA
TSPL
VALJ
VALL
VF
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REMARKABLE INITIATIVES
The journey continues
• Project Subhalaxmi at Vedanta Jharsuguda provided
micro‑finance services to 1,091 members, helping them
get loans of `3.34 crore
• Project Sakhi Haat of HZL provided new avenues of
income generation to SHG women with the launch of
two Sakhi Haats in Chhitorgarh and at Udaipur Airport
• Vedanta Lanjigarh’s Mahila Kirana (Sashakti Suvidha
Kendra) provided a permanent solution to the business
aspirations of SHGs, enabling 94 Sashakti Suvidha
Kendras to use its platform to sell over 30 SHG-produced
products, generating `6,700+ per month for each
SHG member
• Vedanta Lanjigarh is closely working with rural artisans
for the revival of the fast declining indigenous art
form of Dokra; bringing the locally made artefacts into
mainstream marketing and providing income for locals
Promoting
local art
Our commitment towards ensuring sustainable livelihoods
is evident from the fact that in the last five years alone, K159
crore+ has been spent on livelihood initiatives.
Both the Subhalaxmi project of Vedanta Jharsuguda and HZL’s
Samadan project have received national and international
recognition for their high impact. They have also bagged
awards from FICCI and BRICS for their contribution to SDG 2
and SDG 5.
Nothing can be more gratifying than the beneficiaries
themselves testifying to these efforts.
Nirmal Rathiya, a farmer from a remote Chattisgarh
village, says, “COVID‑19 was a scary time and the
support I got from project Mor Jal Mor Maati of
Vedanta BALCO kept me afloat. Today I can see a
bright and prosperous future ahead.
Pushpanjali Seth, former president, Subhalaxmi says,
“It is a matter of immense pride and fulfilment for us
to see our Subhalaxmi Cooperative Society getting
national and international acclaim. I am thankful to
Vedanta for this initiative, which has enabled each
one of our women members to progress through skill
development, financial literacy, financial inclusion and
welfare schemes.
At Vedanta, our journey continues as we commit ourselves
towards crafting an empowering and enabling future for an
’Aatmanirbhar Bharat’.
Future impact
roadmap
With the launch
of Swasth Gaon Abhiyan
and by working with
global partners, we plan to
positively impact the lives
of over 75 lakh people in
the next 5 years.
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy
Transforming the planet
Being a natural resources company, we have
a fiduciary responsibility to conserve and
preserve the environment, and leave behind
a positive footprint. Since inception, we have
been cognisant about our environmental
footprint both from the input and impact
perspectives. From time to time, we take
newer and stringent targets to manage our
impact and continuously monitor progress
on material environmental matters.
Sustainable Resources
86
Vedanta Limited ENERGY MANAGEMENT AND
CLIMATE CHANGE
AIM 4
Net-carbon neutrality by 2050 or sooner
On course to Net Zero
Climate change is a reality we acknowledge, and we
recognise the role we can play in reducing the industrial,
national and global carbon footprint. At present, we are a
large consumer of fossil fuel-based energy and intend to
transform into a clean energy consumer. We are cognisant
of the imminent risks associated with climate change to
our organisation and to the world at large and are taking
strong steps to mitigate this challenge. In FY2022, we have
significantly matured our climate change management and
decarbonisation agenda.
In addition to the strong commitment to become a Net Zero
Carbon organisation by 2050 or sooner, we carried out an
in-depth climate risk assessment and scenario analysis
to comprehensively understand and analyse the risks and
opportunities posed by climate change to our business. The
findings of these studies are being used to develop a carbon
strategy and a roadmap to achieve Net Zero status by 2050.
We also made strong strides in inventorising our Scope 3
emissions and plan to publish the results in FY2023. We
are in advanced discussions on developing an Internal
Carbon Price for the organisation, which will be rolled out
in FY2023.
In FY2022, we also released our first TCFD Climate Change
report – a first for the natural resources sector in India. We
will continue to publish this document annually.
The Company’s growing maturity on the subject has not
gone unnoticed. Our CDP rating – which is a global measure
of corporate management levels – has seen a three-year
upward trajectory (2019: D, 2020: B-, 2021: B).
Integrated Report
Statutory Reports
Financial Statements
TRANSFORMING
THE PLANET
Target and strategy
We aim to achieve Net Zero Carbon status by
2050 or sooner, 20 years in advance of India’s
stated commitment.
Our core initiatives to realise this
ambition include:
• Use 2.5 GW of Round‑The‑Clock RE and
reduce absolute emissions by 25% by 2030
from 2021 baseline
• Pledge US$ 5 billion over the next 10 years to
accelerate transition to Net Zero
• No additional coal-based thermal power and
coal-based power only till the end of power
plant’s life
• Decarbonise 100% of our Light Motor Vehicle
(LMV) fleet by 2030 and 75% of our mining
fleet by 2035
• Commit to accelerate adoption of hydrogen
as fuel and seek to diversify to H2 fuel or
related businesses
• Ensure all our businesses account for their
Scope 3 emissions by 2025
• Work with long‑term Tier 1 suppliers to submit
their GHG reduction strategies by 2025 and
align with our commitments by 2030
• Disclose our performance in alignment with
TCFD requirements
• Help communities adapt to the impacts of
climate change through our social impact/
CSR programs
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy: Transforming the planet
Key highlights
Renewable power
Committed to using 2.5 GW
of RE RTC (eq) by 2030
In FY2022, Vedanta Aluminium became the largest
consumer of green energy in India when it purchased
2 billion units of green power on Indian Energy
Exchange (IEX).
Further strengthening our commitment to decarbonise our
energy, we signed a Power Distribution Agreement to bring
580 MW of RE RTC (eq) online by FY2024. A break‑up of this
580 MW is given below:
• 200 MW at BALCO
• 200 MW at VAL‑Jharsuguda
• 180 MW at HZL
Green metals
Our approach to decarbonisation has not only been
limited to minimising our carbon footprint. In FY2022, we
also forayed into developing low-carbon products for the
industry. The Aluminium business launched Restora and
Restora Ultra – green product lines for the metal, bringing
Vedanta into an elite league of global players. The GHG
intensity of these metals is significantly below global
standards for low-carbon aluminium.
Global Standard: 4 tCO2e/tonne of metal
Restora: 2.36 tCO2e/tonne of metal
Restora Ultra: 0.37 tCO2e/tonne of metal
Our Copper business has also been looking at ways to
decarbonise and produce low-carbon copper. In FY2022,
we piloted 3,000 mt of copper products made from scrap
and recycled copper. We plan to increase production of this
low‑carbon product line significantly in FY2023.
Fuel Switch Programs
Fuel switch is another key lever of our decarbonisation
strategy and we have several programs underway to reduce
the carbon load of our processes.
Biomass firing
Committed to using 5% biomass in our thermal
power plants
• 17 kt of biomass used in HZL
• Pilot programs at BALCO, VAL‑Jharsuguda, VAL‑
Lanjigarh
Natural gas
VAL-Lanjigarh/GAIL partnership to supply natural gas for
calciner - substituting coal use; potential to decrease plant
GHG intensity by 10%
Electric mobility
Committed to decarbonise 100% of LMV fleet by 2030; 75%
of mining fleet by 2035
• VAL‑J partners with GEAR India to supply e‑forklift fleet
• 11 EVs deployed at HZL
• 40 EVs deployed at ESL
Turbine revamp
HZL has taken an initiative of Study of Turbine Revamping
with an aim to increase the unit load from 80 MW to 91.5
MW to sustain the business in the future.
• Carbon emission reduction potential of 2.4 lakh TPA
• Reduction of specific coal consumption by 25 grams
Increase in power generation (75 MW) to meet our
•
power requirements
• Auxiliary power reduction by 0.3%
Performance trends
GHG EMISSIONS
(million tCO2e)
59.49
58.93
57.48
55.12
51
FY 2022
FY 2021
FY 2020
FY 2019
FY 2018
ENERGY CONSUMPTION
(million GJ)
3.34
1.31
62.83
1.86
3.51
1.2
60.24
59.34
58.63
52.20
531.88
FY 2022
FY 2021
FY 2020
FY 2019
FY 2018
528
519
485
425
31.95
563.90
15
12
68
21
543
531
553
446
Scope 1 (direct)
Scope 2 (indirect)
Direct
Indirect
We calculate and report Greenhouse Gas (GHG) 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 Protocol.
88
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
WATER
MANAGEMENT
AIM 5
Achieving net water positivity by 2030
Water is a shared resource on which both our host
communities and our operations depend upon. At Vedanta,
we ensure that water is kept as a central consideration
across our operations through initiatives such as water
screening assessment. We manage our water resources as
per guidance by the Group water policy and management
standards and have consistently improved our water
recycling rate in the past four years, with our Hindustan Zinc
business turning fully water positive.
As part of our new ESG framework, we are aiming to be
water positive by 2030. We will track our performance using
specific indicators such as freshwater withdrawal, water
consumption, water recycling and water recharge to keep
track of this target.
TRANSFORMING
THE PLANET
Key highlights
Water | Net water positive by 2030
• Onboarded specialised agency for water positivity
roadmap, water accounting across BUs
• High impact initiatives - Ash pond water reuse at Al |Rain-
water harvesting at Cairn | STP water usage at HZL |
Upgradation of evaporation based ZLD to RO-based ZLD
projects in progress at ESL and HZL
• 3,000 KLD ZLD plant commissioned at HZL’s Debari unit
WATER CONSUMPTION AND RECYCLING
(million m3)
FY 2022
FY 2021
FY 2020
FY 2019
FY 2018
85.8
83.05
73.9
67.6
74.4
280
270.4
255.1
278.7
280
30.6%
30.71%
28.95%
24.25%
26.6%
Total water consumption
Water recycled/reused (% Water recycled)
Utmost importance of
water as a resource
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy: Transforming the planet
WASTE AND TAILINGS
MANAGEMENT
Across our mining and conversion operations, waste
management assumes core priority. Safe and responsible
use, recycling and disposal are crucial to the natural
environment and human life around our mines and plants.
The bulk of hazardous waste we generate is attributed
to used/spent oil, waste refractories, spent pot lining and
residual sludge from smelters. Non-hazardous waste,
on the other hand, is constituted by fly ash (from captive
and merchant power plants), red mud (aluminium refinery
waste), jarofix (from zinc smelting), slag, lime grit (process
residues from smelters and aluminium refineries) and
phosphogypsum (phosphoric acid plant).
Key highlights
Waste management and circular
economy | Aim for 100% utilisation of
HVLT wastes
• Specific projects underway for jarofix, red mud,
slag, fly ash 100% utilisation | Utilised 115% of fly‑
ash generated
• VAL‑BALCO| Dispatched fly‑ash 1st rake to cement
industries (6.1 kt) | Partnered with NHAI ‑ 12‑13% annual
fly ash offtake
• VAL‑ Lanjigarh‑ 32 kt red mud dispatched to Wonder
Cement and UltraTech for pilot
HIGH VOLUME LOW EFFECT WASTE
(million mt)
FY2022
Fly
ash
Bottom
ash
Slag
Jarosite
Red
mud
FY2021
Fly
ash
Bottom
ash
Slag
Jarosite
Red
mud
Generated
Recycled/Reused
14.53
16.69
0.075
0.072
1.30
1.27
0.64
0.09
2.50
0. 52
13.9
15.32
0.079
0.081
1.01
1.15
0.6
0.15
2.27
0.13
115%
FLY ASH
UTILISED
98%
HVLT WASTES RECYCLED
90
Reducing impact on
the environment
Vedanta Limited TAILINGS DAM MANAGEMENT
Tailings dams are used to store and manage waste from
ores and other mining activities. Any breach to the integrity
of the dams can have far-reaching effects on the nature
and communities around our operations. At Vedanta, we
oversee 19 active, seven inactive, and one closed tailings
management facilities (TMFs), and adhere to our Group
tailings dam management standards; 100% of our active
facilities have undergone independent audit assessment
in FY2022.
Integrated Report
Statutory Reports
Financial Statements
TRANSFORMING
THE PLANET
Other details:
• We are committed to adopting the Global Industry
Standard on tailings in all our operations
• We are working to implement the Global Industry
•
•
Standard on Tailings Management (GISTM) compliance
by FY2026
In 2018, we engaged M/s. Golder Associates, global
experts in tailings management, to audit and provide
guidance for design, construction, and operation
practices of our tailing facilities. This exercise was
aimed to ensure that our tailing management facilities
operation and maintenance practices are aligned with
global best practices. All the suggestions from the
exercise have been implemented and are now part of our
management review at the highest level
In FY2022, after the release of ICMM standards, we
have further onboarded M/s. ATC Williams to validate
our existing standards and practices and help build a
roadmap for compliance to GISTM across Vedanta sites
Taking care of our footprint
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Integrated Report and Annual Accounts 2021-22 Our ESG strategy: Transforming the workplace
Transforming the
workplace
Transforming the workplace is one of the key pillars of
our ESG purpose and framework, which focuses on
the health & safety of our workforce and promoting
diversity, inclusivity, and gender parity to unleash
the full potential of our workforce. We provide equal
opportunities in employment, recognition, and
development for all our people.
The Group benefits significantly from the skills,
experience, and perspectives of the wide range
of people who work with us.
Leaders in
the making
92
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Health, safety and well-being
While Vedanta remains committed to creating a Zero Harm culture and workplace, we are deeply saddened
to note that our work areas experienced 12 fatalities in FY2022. All these fatalities were among our business
partner workforce.
FATALITIES AT VEDANTA
FY2022
FY2021
FY2020
FY2019
12
8
7
9
TRIFR
FY2022
FY2021
FY2020
FY2019
TRANSFORMING
THE WORKPLACE
1.3
1.5
1.6
1.2
The uptick in fatalities is a cause for concern and our
leadership teams have been actioned into ensuring that
unsafe work conditions are eliminated from our sites.
Actions being undertaken include:
• Focus on ‘Critical Risk Management’ to reduce
hazardous activities at site
• Launch of cross business audits to ensure best safety
practices are transferred across BUs
• On-boarding of a specialised safety agency to improve
the safety culture at all BUs and their leadership teams
Implementation and horizontal deployment of fatality
learning across Vedanta, led by our business CEOs
•
• Launch of the lift safety standard
Diversity, engagement and inclusion
Our objective is to achieve gender parity across all levels of
the organisation, from the senior leadership and decision-
making bodies to our SBUs and enabling functions. We
welcome talent from diverse geographies, minorities,
ethnicities, and cultures. Our goal in driving inclusivity in our
workforce is to further strengthen our position as an equal
opportunity employer. We have also taken steps to include
members of the LGBTQ+ community in our organisation
and will continue to work on their inclusion going forward.
To further our diversity agenda, we have constituted the
Group Diversity, Equity & Inclusion Council. The council’s
mandate is to ensure the integration of our DE&I goals
under the ESG framework in line with the organisation’s
broader business strategy. The DE&I Council’s responsibility
includes reviewing and revamping policies, creating
diversity dashboards, empanelling special colleges and
search firms, creating employee resource groups, etc.
On the talent management front, we have dedicated
initiatives for promoting a healthy diversity mix. V-Lead,
our flagship mentoring programme for women, includes
our army of 100 women leaders who are being groomed to
take on greater responsibilities. They are being anchored by
senior leaders in the Company with an objective to retain
them and catapult them to our top 200 CXO roles across
the Group.
Key DE&I achievements
• Establishment of Diversity, Equity &
Inclusion Council
• Deployment of all women security
teams at Cairn and VAL
• Women’s mine at Zawar
Streamlined, responsible and empowered
management
Vedanta is a professionally managed company run by
the Management Committee (ManCom), a collective
decision-making body, at the centre and at each business.
Each business is further independently led by their
respective CEOs.
We have also set up Centres of Excellence (CoEs), which are
responsible for driving initiatives in the areas of quality, IT
& security, digital, R&D, innovation and asset optimisation
(AO). The function is headed by the CEO, Centre of
Excellence, who reports to the Group CEO. This structure at
the centre is replicated at the level of each business.
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Integrated Report and Annual Accounts 2021-22 Our ESG Strategy: Transforming workplace
Nurturing a meritocratic culture
We understand that it is the passion and dedication of our
people that have propelled the Company ahead. We reward
the efforts that our people and business partners make
towards Vedanta’s continued success through our best‑
in-class and globally benchmarked people practices and
reward programmes. They also receive recognition from
our management and Board for going the extra mile with
their endeavours to support the business. These include
the Chairman Individual Awards, Chairman Awards for
COVID‑19 efforts, Chairman Award for Business Partner and
Best Performing ManCom and the Chairman’s Discretionary
Award. We also reward high‑performing employees through
incentive schemes, development programmes, as well
as compensation re-structuring practices. Our appraisal
and remuneration programmes also includes an ESG
component, which correlates employee performance to
safety, sustainability and carbon footprint reduction.
Engaging best-in class talent
As part of our overarching initiative of onboarding talent
through campus hiring from esteemed institutions, we
inducted 1,000+ young professionals during the year with
a focus on enhancing workforce diversity across gender,
region, faith and culture. We are also inducting talent with
new-age specialisations such as digital, data science &
analytics, quality, R&D, sustainability, forensics, and so on.
Our Group philosophy is to grow leaders from within than
hire lateral talent. Over the last year, we have identified
1,000+ leaders through industry leading initiatives such
as workshops, V-Reach, internal job postings and Act-
UP programmes.
Fast track career within
the group for youth
94
3,000+
TALENT IDENTIFIED
ACROSS 15 FUNCTIONS
COVERED THROUGH
THE ACT-UP PROGRAMME
We have initiated hiring from global campuses at mid‑ and
entry‑level positions across businesses and functions. We
are targeting top campuses in the US, UK, Australia, Asia
etc. for inducting 100 candidates who will be nurtured for
the role of CXOs in the organisation. V‑Excel, a one‑of‑a‑kind
structured talent development programme, was launched to
complement this. This initiative will provide each new hire a
single digitally-driven platform that will enable performance,
provide the right anchoring, continuous engagement, and
recognition from an early stage of their career.
Another flagship programme is Vedanta Leadership
Development Programme (VLDP), wherein we hire bright
students from top IITs and IIMs.
Through our flagship ACT‑UP programme, we identify and
nurture high performers and develop leaders for tomorrow.
This year, we completed a talent management programme
focused specifically on our senior leadership. Globally, one
of the biggest leadership development programmes, the
Management ACT‑UP was launched in partnership with
Korn Ferry, a global management consulting firm, as a
unique succession planning initiative for our senior roles.
We have replicated the broad structure for another such
programme targeting our business partners as well. So
far, we have identified over 300 individuals, almost 35% of
whom are women.
Grooming the youth
We have robust plans in place for the 5,000+ strong
talent pool who joined us as graduates and who form the
backbone of our businesses. The V-Reach programme,
launched digitally in three phases, will identify the top 500
talent from this pool and provide them elevated roles and
opportunities to fast-track their career within the Group.
To groom leaders among Cost and Management
Accountants (CMA professionals), we launched the
V-Aspire programme, and the V-Reach Tech programme for
young engineers.
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
TRANSFORMING
THE WORKPLACE
Enhancing people experience through digital
In partnership with Darwinbox, we are working on building
a consolidated, digitalised, and centralised management
information system for people management. The module
is structured through phases. The first phase of the module
deals with the areas of organisation management, HR
workflows, performance management systems, learning
management systems, employee helpdesks and an internal
social networking platform.
We have two ongoing special programmes – Chairman’s
Young Leaders Program and Vice‑Chairman’s SBU
engagement workshops – where top talent get to interact
directly with the Chairman and Vice Chairman.
We have a strong re‑hiring project, initiated as part of
the drive to build a strong talent pipeline, with a focus on
individuals who superlatively contributed towards Vedanta’s
stellar growth over the years, and who wish to return to the
Company in an elevated capacity.
Through all these initiatives, we ensure that a robust
pipeline of successors is nurtured and prepared to take the
place of the leaders in key positions as per need.
For knowledge dissemination among the top talent, we
have a central and BU-level learning and development
programme in place. Gurukul is Vedanta’s first‑ever
Group-wide platform, which is end-to-end digitally driven. It
promotes knowledge sharing while encouraging employees
to come up with innovative and disruptive ideas.
Readying the succession line-up
Functional CXOs, around 100 leaders were identified to take
up higher roles across Vedanta.
Of the 100 leaders identified through Management ACT‑UP
• 40% have moved into Cross Business & Location
• 50% have been placed in SBU Leadership/Deputy and
shadow roles
• 51% have been identified with future CXO potential
Management ACT‑UP does not end here. The identified
leaders will go through a high impactful learning and
development journey at top global and Indian institutes,
which will sharpen their skills and hone their leadership
acumen.
At Vedanta, we have a structured process to identify
and nurture high performers and develop leaders of
tomorrow. Through rigorous training and grooming,
they absorb the necessary values and skills to take on
responsibilities, keeping us future-ready. Aligned with
this practice, we have launched Management ACT‑UP
– the biggest ever, industry-leading global leadership
identification and development program.
The program in 2021 engaged 1,800 senior leaders
across the Group, from whom 400 were shortlisted
after a detailed desktop study. All 400 leaders were put
through a rigorous online psychometric and leadership
assessment tool hosted by our partner, Korn Ferry, a
global consulting firm. A further shortlist was created
of 230+ participants, who had the unprecedented
opportunity to showcase to an exclusive panel their
ideas on how they could contribute to the Group’s critical
business priorities including ESG, People Development,
Cost & Volume and Digital & Innovation, among others
and promote their personal aspirations. The panel
comprised industry stalwarts, Board members of
reputed organisations and key subject matter experts,
who provided their own unique outside-in perspective.
Over a record four weeks of panel evaluations and
discussions with the senior managment, including
Chairman, Vice Chairman, Group CEO, Business CEOs,
Passing the baton
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Integrated Report and Annual Accounts 2021-22 Governance
Upholding responsibility
and integrity
We operate in a dynamic environment, while managing natural resources that make the
nation self‑sufficient. At Vedanta, our principles of good governance and integrity help us
navigate our business growth and operations ethically. Our governance practices, led by our
core values of Trust, Entrepreneurship, Innovation, Excellence, Integrity, Respect and Care,
form the foundation of sustained value creation.
Vedanta’s business conduct is best reflected in the
way it has continued to create lasting stakeholder
value, while maintaining a proactive focus on
business, social and environmental sustainability. The
unwavering adherence to Vedanta values continues
to build the Company from strength to strength.
Today, led by its ‘Transforming for Good’ purpose, the
business is aligning to newer realities and the evolving
ESG landscape, investing and intervening to minimise
its footprint and maximise its contribution.
Mr. U. K. Sinha
Independent Director, Vedanta Limited
Corporate governance framework
The governance framework of the Company is underpinned
by its core values and the strength of its vision, strategic
mission, and the primary objective of delivering
sustainable growth.
Risk
Management
Governance
Strategy,
Planning &
Performance
ESG
Stakeholders
Integrity
& Transparency
Corporate
Governance
Framework
Compliance &
Reporting
Corporate governance philosophy
At Vedanta, our commitment to good governance goes
beyond compliance and statutory norms. We truly believe
that purpose-led corporate governance and ethics-led
corporate behaviour are essential to our success. In fact,
this is the foundation on which we continue to build Vedanta
as not only India’s largest diversified natural resources
company, but also the most sustainable.
While we are structured as a group of entities, each with
their own individual management and systems, we also
function as a single unit, aligned to our collective purpose.
We also believe that operating responsibly is our fiduciary
responsibility as trustees of various capitals (financial,
manufactured, intellectual, human, social and relationship,
and natural) in order to manage them effectively and
consistently deliver value by executing our integrated value
chain.
Spearheaded by an involved and informed Board, we create
sustainable investor and stakeholder value, while remaining
rooted to our value system. We draw from the insights of our
illustrious, diverse and competent set of Directors on Board,
and are able to continuously predict and proactively manage
our opportunities and risks to protect and enhance our value.
This is especially important in the commodities space, which
is underlined by volatility and dynamism and where there
exists significant scope to run a conscientious business.
As we grow from strength to strength, we continue to raise
our bar across our governance practices, ranging from
our groundbreaking ESG commitments, to best-in-class
disclosure practices, Board independence, alignment to
globally-accepted norms and policies, and our emphasis
on digitally-enabled, technology-led business. Our strong
governance practices invariably underpin our future
transformation journey, where effecting responsible change
is a core mandate. Through this, we not only push ourselves
better, but also set newer benchmarks for the industry
and peers to adopt. We continue to be a change maker in
everything we do, and good governance is the cornerstone
that empowers us to do so.
ESG governance
As part of our continued commitment to ESG, we have
expanded the scope of the erstwhile Sustainability Board
Committee and implemented a uniform ESG governance
structure across the organisation. The Committee, together
with our Group Sustainability and ESG function, will be
responsible for activating, mainstreaming and monitoring
initiatives under the ‘Transforming for Good’ agenda.
We have also established dedicated forums for regular
management oversight at all levels and ESG-themed
communities at each BU and SBU to own projects and drive
their timely implementation.
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Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
ESG ratings
By focusing on sustainability and ESG as business imperatives, we have consistently improved on our ESG ratings.
SUSTAINALYTICS RANKING(1)
DOW JONES PERCENTILE
2021
2020
(1) Lower the better
44.1
47.3
2021
2020
89
86
B rating in 2021
(CCC in 2020)
B rating in 2021
(B- in 2020)
OECD framework
We align ourselves with the G20/OECD Principles of Corporate Governance governance.
Ensuring the
basis for an
effective corporate
governance
framework
• Our business aligns with free market practices, anti-competitive policies and
fair competition
• We comply with all the requirements as listed by the SEBI, MCA and
other regulators
• An informed, diverse, relevant and experienced Board setting integrity as a
standard from the top, with collective and specific responsibility
• We ensure the rights and equitable treatment of all shareholders, including
minority and foreign shareholders
• Specific channels for shareholders to voice their concerns
• Annual General Meetings conducted as per existing norms
• Regular publications that apprise shareholders regarding financial and non‑
financial performance, strategy, governance etc.
Guaranteeing the
rights and equitable
treatment of
shareholders and key
ownership functions
The role of
stakeholders
in corporate
governance
• Consistent focus on stakeholder relations, with constant engagement with
investors, clients, customers, employees, and regulators
• Specific policies for suppliers
• Health, safety, well-being and growth-focused employee policies
• Strong Whistleblower Policy
• Social responsibility initiatives in consultation with communities
• Compliance‑led annual and quarterly disclosures
• Voluntary reporting on globally accepted principles and frameworks such as
Integrated Reporting, GRI, TCFD etc. We are also the only company that published
a Tax Transparency Report in India
• External independent auditors for financial and non‑financial information
Disclosure
and
transparency
The Board ensures the implementation of the strategic objectives of the Company and guides the management to
fulfil commitments made to various stakeholders while upholding the principles of ethical business conduct and
responsible growth. In conducting its business, the Board is supported by:
• Established committees;
• Risk Management Framework;
• Vedanta Sustainability Framework and Vedanta Sustainability Assurance Process (VSAP)
• Code of Business Conduct and Ethics and various other policies & practices adopted by the Group
Through its prudence, valued counsel, adherence to Group values and prioritisation of ESG principles, the Board at
Vedanta ensures the viability of the Company and thus its ability to deliver sustained value to its stakeholders.
97
Integrated Report and Annual Accounts 2021-22 Business Responsibility & Sustainability Report
Note: Vedanta Limited’s primary disclosure document on its sustainability & ESG practices, performance is its Annual
Sustainability Report, which is written in accordance with GRI standards. The company will be producing its 14th
Sustainability Report in FY2022. Kindly refer to this report for detailed information on our sustainability and ESG
performance. The report can be found at www.vedantalimited.com
Section B
MANAGEMENT AND PROCESS DISCLOSURES
Sr.
No.
Disclosure Question
P2
P3
P1
P4
P5
P6
P7
P8
P9
Policy and management processes
1
a. Whether your entity’s
policy/policies cover
each principle and its
core elements of the
NGRBCs. (Yes/No)
b. Has the policy been
approved by the Board?
(Yes/No)
c. Web Link of the
Policies, if available
Yes
Yes
Yes
Yes
Yes
Yes
Yes
NA
Yes
NA
NO
NO
No
No
No
No
https://
vedantalimited.com/
CorporateGovernance/
Code%20of%20
Business%20
Conduct%20and%20
Ethics.pdf
https://www.vedantaresources.
com/InvestorRelationDoc/
supplier_code_of_
conduct_-_december_2016.
pdf#:~:text=Vedanta%20
Supplier%20Code%20
of%20Conduct%20
%EF%82%A7HEALTH%2C%20
SAFETY%20%26,all%20
applicable%20laws%20and%20
regulations%20regarding%-
20working%20conditions.
https://www.
vedantalimited.
com/Media/
VSFDocuments/
Vedanta%20
Sustainability%20
Policies%20
2020/05-Social-
2020-Published.
pdf
https://www.
vedantalimited.
com/Media/
VSFDocuments/
Vedanta%20
Sustainability%20
Policies%20
2020/06-Human-
Rights-2020-
Published.pdf
https://www.
vedantalimited.
com/Media/
VSFDocuments/
Vedanta%20
Sustainability%20
Policies%20
2020/01-HSES-
2020-Published.
pdf
https://www.
vedantalimited.
com/Media/
VSFDocuments/
Vedanta%20
Sustainability%20
Policies%20
2020/05-Social-
2020-Published.
pdf
Yes
Yes
Yes
Yes
Yes
Yes
NA
Yes
NA
Yes
No
Yes
Yes
NA
NA
NA
ISO 45001
NA
No
ISO 14001, ISO
50001
NA
NA
NA
Na
NA
NA
NA
SDR
NA
NA
NA
Na
Na
NA
SDR
NA
Na
NA
SDRs
2 Whether the entity has
Yes
Yes
NA
NA
3
4
5
6
7
translated the policy into
procedures. (Yes / No)
Do the enlisted policies
extend to your value
chain partners? (Yes/
No)
Name of the national
and international codes/
certifications/labels/
standards (e.g. Forest
Stewardship Council,
Fairtrade, Rainforest
Alliance, Trustee)
standards (e.g. SA
8000, OHSAS, ISO, BIS)
adopted by your entity
and mapped to each
principle.
Specific commitments,
goals and targets set by
the entity with defined
timelines, if any.
Performance of the
entity against the
specific commitments,
goals and targets along-
with reasons in case the
same are not met.
Statement by
Director responsible
for the business
responsibility report,
highlighting ESG related
challenges, targets and
achievements (listed
entity has flexibility
regarding the placement
of this disclosure)
98
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Sr.
No.
8
9
Disclosure Question
P1
P2
P3
P4
P5
P6
P7
P8
P9
Details of the highest
authority responsible
for implementation
and oversight of the
Business Responsibility
policy (ies).
In line with upholding our core commitment to Environmental, Social and Governance (ESG) priorities and business responsibility
policies, the Board of Directors of the Company has approved the enhancement of the scope of the existing Board Sustainability
Committee and upgraded it to Board ESG Committee with effect from July 26, 2021, to strengthen Board level rigor and advice into all
aspects of ESG. The board of ESG committee like the erstwhile sustainability committee will report to highest governance body.
As per updated Terms of Reference of the Board level ESG Committee, the Group HSE Head and ESG Director are permanent invitees
to the Committee meetings.
The Committee comprises of Mr. Upendra Kumar Sinha as the Chairperson; Members of ESG Committee are Mr. Akhilesh Joshi,
Mr. Sunil Duggal and Ms. Priya Agarwal.
As per updated Terms of Reference of the Board level ESG Committee, the Group HSE Head and ESG Director are permanent invitees
to the Committee meetings.
The Committee comprises of Mr. Upendra Kumar Sinha as the Chairperson; Members of ESG Committee are Mr. Akhilesh Joshi, Mr.
Sunil Duggal and Ms. Priya Agarwal.
Does the entity have a
specified Committee
of the Board/ Director
responsible for decision
making on sustainability
related issues? (Yes
/ No). If yes, provide
details
12 If answer to
question (1) above
is “No” i.e. not
all Principles are
covered by a policy,
reasons to be
stated:
Questions
The entity does not consider the Principles material to
its business (Yes/No)
The entity is not at a stage where it is in a position to
formulate and implement the policies on specified
principles (Yes/No)
The entity does not have the financial or/human and
technical resources available for the task (Yes/No)
It is planned to be done in the next financial year (Yes/
No)
P1
NA
P2
NA
P3
NA
P4
NA
P5
NA
P6
??
P7
NA
P8
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
Any other reason (please specify)
NA
NA
NA
NA
NA
NA
NA
Sewage Treatment Plant
at Udaipur
99
Integrated Report and Annual Accounts 2021-22 Business Responsibility & Sustainability Report
Principle 2
BUSINESSES SHOULD PROVIDE GOODS AND SERVICES IN A MANNER THAT
IS SUSTAINABLE AND SAFE
Sr.
No.
2
3
Indicators
Response
a. Does the entity have
procedures in place for
sustainable sourcing? (Yes/No)
Yes, the Company includes sustainable sourcing practices by intrinsically building the clauses
related to HSE practices and positive affirmation on aspects preventing the use of child and
forced labour in the contract
b. If yes, what percentage
of inputs were sourced
sustainably?
Kindly refer to Vedanta Limited’s FY2022 Sustainability Report for more information on this
topic.
Describe the processes in place
to safely reclaim your products
for reusing, recycling, and
disposing at the end of life, for
(a) Plastics
(including
packaging)
(b) E-waste
(c) Hazardous
waste
Not Material to Vedanta’s operation. All the plastic waste is disposed
through certified third parties.
Not Material to Vedanta’s operation. All the plastic waste is disposed
through certified third-party agencies as per e-waste management and
handling rules.
Waste management in a safe and responsible manner is a crucial priority
for our businesses. Vedanta’s waste management system is built to handle
waste in an efficient and responsible manner. The company is guided
by ‘The resource use and waste management’ Technical Standard and
supporting guidance notes, which are part of the Vedanta Sustainability
Framework. The hazardous wastes comprise used/spent oil, waste
refractories, spent pot lining and residual sludge from smelters. All the
hazardous wastes are sent to government authorised handlers or recyclers.
(d) Other waste. Waste management in a safe and responsible manner is a crucial priority
for our businesses. Vedanta’s waste management system is built to handle
waste in an efficient and responsible manner. The company is guided
by ‘The resource use and waste management’ Technical Standard and
supporting guidance notes, which are part of the Vedanta Sustainability
Framework.
High volume- low-toxicity wastes are stored in tailings dams/ash-dykes or
other secure landfill structures before being sent to other industries as raw
materials – thereby recycling the waste stream.
Other non-hazardous wastes are sent for recycling, disposed, or incinerated.
4
No
Whether Extended Producer
Responsibility (EPR) is
applicable to the entity’s
activities (Yes / No). If yes,
whether the waste collection
plan is in line with the Extended
Producer Responsibility (EPR)
plan submitted to Pollution
Control Boards? If not, provide
steps taken to address the
same.
Captive Power Plant
at HZL
100
Vedanta Limited
Sr.
No.
3
4
6
Integrated Report
Statutory Reports
Financial Statements
PRINCIPLE 3
BUSINESSES SHOULD RESPECT AND PROMOTE THE WELL-BEING OF ALL
EMPLOYEES, INCLUDING THOSE IN THEIR VALUE CHAINS
Indicators
Response
Accessibility of workplaces
Are the premises / offices of the entity
accessible to differently abled employees
and workers, as per the requirements of the
Rights of Persons with Disabilities Act, 2016?
If not, whether any steps are being taken by
the entity in this regard
The premises/offices where we have people with disabilities are equipped with
enabling infrastructure such as ramp, walkways, braille enabled elevators, text
to speech software for visually impaired, washrooms for people with disabilities,
which are as per requirements of Rights of Persons with Disabilities Act 2016.
As next step, we are working on a roadmap in accordance with the guidelines
and Space Standards for Barrier Free environment for disabled persons, which
will ensure standardised inclusive infrastructure
Does the entity have an equal opportunity
policy as per the Rights of Persons with
Disabilities Act, 2016? If so, provide a web-
link to the policy.
Is there a mechanism available to receive
and redress grievances for the following
categories of employees and worker? If yes,
give details of the mechanism in brief
Permanent Workers
Other than Permanent Worker
Permanent Employees
Other than Permanent Employees
10 Health and safety management system
a.
Whether an occupational health and
safety management system has been
implemented by the entity? (Yes/ No). If
yes, the coverage such system?
https://www.vgcb.co.in/public/
testimonial/879b539cc9cc9d6bfcfe8d0e61143c36.pdf
Yes/No
(If Yes, then give details of the mechanism in brief)
Yes. In Business Units like HZL, there are online Portal available where the
employees can log their complaints and seek for resolution. There are dedicated
HR SPoCs as well for resolving the grievances. Additionally, the unified HRMS
system Darwinbox is on the way and it has a dedicated employee helpdesk
portal, which will serve the purpose for the entire group, including business
partners, when it is deployed in its entirety.
Yes, it is mandatory for our business partner to have a grievance redressal
mechanism as part of the contract for its employees
Yes. In Business Units like HZL, there are online Portal available where the
employees can log their complaints and seek for resolution. There are dedicated
HR SPoCs as well for resolving the grievances. Additionally, the unified HRMS
system Darwinbox is on the way and it has a dedicated employee helpdesk
portal, which will serve the purpose for the entire group, including business
partners, when it is deployed in its entirety.
Yes, it is mandatory for our business partner to have a grievance redressal
mechanism as part of the contract for its employees.
Yes, we have implemented a robust health and safety management system
across our business. It is guided by Vedanta Sustainability Framework and is
implemented as per the Vedanta Safety Standards (VSS) and other relevant
standards and guidance documents. VSS is applicable to all the Vedanta
operations including subsidiaries and acquisitions. All our operational facilities
are certified with ISO 45001.
b.
What are the processes used to identify
work-related hazards and assess risks
on a routine and non-routine basis by the
entity?
Vedanta follows the Hazard Identification and Risk Assessment (HIRA) process
along with Job Safety Analysis (JSA) for identification of risks and development
of mitigation plan. These mitigation plans are periodically updated to ensure
safety at workplace.
Whether you have processes for workers to
report work-related hazards and to remove
themselves from such risks. (Y/N)
All our sites have incident and hazard reporting procedures laid down to assist
the workforce to highlight unsafe working conditions and remove themselves
from such situations. A responsibility matrix is in place with site leadership
driving the closure of such unsafe observations and risks.
101
Integrated Report and Annual Accounts 2021-22 Business Responsibility & Sustainability Report
Sr.
No.
12
Indicators
Response
Describe the measures taken by the entity to
ensure a safe and healthy work place.
Our safety culture is guided by a robust health and safety framework
encompassing all activities across the organisation. A definite structure
helps in implementing the framework. Vedanta Sustainability Framework
(VSF) puts significant emphasis on Safety & Occupational Health. We have
17 safety performance standards and over 20 health and safety technical and
management standards. We are proud that all our operational facilities are
certified with ISO 45001 and align to ICMM guidelines and other applicable
international occupational health and safety management systems. The robust
framework, guided by our commitment to ensuring a reliable workplace, equips
us to deal with setbacks that we face.
In order to improve safety at workplace, in FY2022 we have initiated the
implementation of Critical Risk Management. Under this initiative, 13 critical risks
have been identified across the business, based on historical safety incidents
and fatality learnings. A detailed mitigation plan is developed to minimise or
eliminate each risk across the group. This program is led by the business CEOs
from across the Group companies.
All the fatalities including high potential incidents undergo a detailed
investigation using ICAM (Incident Cause Analysis Method) under the oversight
of the Group CEO. A corrective action and preventive action (CAPA) plan
is developed based on the findings of the investigation. The learnings are
implemented across the group to avoid repeat incidents. The corrective actions
are driven by site leadership of each location.
15
Provide details of any corrective action
taken or underway to address safety-related
incidents (if any) and on significant risks /
concerns arising from assessments of health
& safety practices and working conditions.
PRINCIPLE 4
BUSINESSES SHOULD RESPECT THE INTERESTS OF AND BE RESPONSIVE
TO ALL ITS STAKEHOLDERS
Indicators
Response
Describe the processes
for identifying key
stakeholder groups of the
entity
Our stakeholders are those individuals or organisations who have an interest in, and/or whose
actions impact our ability to execute our strategy. We periodically engage with different stakeholder
groups and actively respond to their concerns and issues. We refer to international standards like
GRI and SASB to carry out stakeholder identification and materiality assessment at group level.
Our facilities are guided by internal standards on stakeholder management (part of the Vedanta
Sustainability Framework) to identify and engage with the local stakeholders. These standards are
in line in line with IFC, UNCG and other global standards.
List stakeholder groups
identified as key for your
entity and the frequency
of engagement with each
stakeholder group
Stakeholder
Group
Whether
identified as
Vulnerable &
Marginalised
Group (Yes/No)
Channels of communication
(Email, SMS, Newspaper,
Pamphlets, Advertisement,
Community Meetings, Notice
Board, Website), Other
Local
Community
Mixed
Community group meetings
Village council meetings,
Community needs/social
impact assessments
Public hearings
Grievance mechanisms
Cultural events
Engaging with communities
via various community
initiatives of Vedanta
Foundation
Frequency of
engagement
(Annually/
Half yearly/
Quarterly
/ others
– please
specify)
Continuous
Connect
Purpose and scope
of engagement
including key
topics and
concerns raised
during such
engagement
Developing and
undertaking
need-based
community
projects
Increasing
community
outreach
through our
programs
Improving
grievance
mechanism for
community
Sr.
No.
1
2
102
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Sr.
No.
Indicators
Response
Employees
No
Chairman’s workshops
Chairman’s/CEO’s town hall
Continuous
Connect
No
Shareholders,
Investors,
& Lenders
Civil Society No
meetings
Feedback sessions
Performance management
systems
Various meetings at plant
level
V-Connect mentor program,
Event management
committee and welfare
committee
Women’s club
Regular updates
Investor meetings
Site visits (put on hold in
the last year due to COVID),
AGM and conference
Quarterly result calls
Dedicated contact channel
– Vedantaltd.ir@vedanta.
co.in and sustainability@
vedanta.co.in
Partnerships with,
and membership of
international organisations
Working relationships with
organisations on specific
projects
Engagement with
international, national, and
local NGOs
Conferences and
workshops
Dedicated contact channel
– sustainability@vedanta.
co.in
Quarterly and
on case to
case basis
As needed
basis
Industry
(Suppliers,
Customers,
Peers, Media)
No
Customer satisfaction
surveys
Vendor scorecards
In-person visits to
customers, suppliers, and
vendor meetings (put on
hold during COVID)
Continuous
basis
Governments No
Participation in government
consultation programs,
Engagement with national,
Continuous
basis
state, and regional
government bodies at
business and operational
level
Meet all the regulatory
requirement laid down
Improving
training on
HSES and
other pertinent
material
issues for the
organisation
Providing
increased
opportunities
for career
growth through
internal talent
recognition
Promote culture
of care
Consistent
disclosure on
economic, social,
and environmental
performance.
Spread awareness
of the development
in business
with respect to
business and ESG
initiatives
Expectation of
being aligned
with the global
sustainability
agenda
Commitment
to ensuring
human rights
for all
Consistent
implementation
of the Code
of Business
Conduct and
Ethics
Ensuring
contractual
integrity
Compliance
with laws
Contributing
towards the
economic
development of
the nation
103
Integrated Report and Annual Accounts 2021-22 Business Responsibility & Sustainability Report
PRINCIPLE 5
BUSINESSES SHOULD RESPECT AND PROMOTE HUMAN RIGHTS
Sr.
No.
Indicators
Response
4
5
7
8
Do you have a focal point (Individual/
Committee) responsible for addressing
human rights impacts or issues caused
or contributed to by the business? (Yes/
No)
Describe the internal mechanisms in
place to redress grievances related to
human rights issues.
Mechanisms to prevent adverse
consequences to the complainant in
discrimination and harassment cases
Yes, we have Social Performance Steering committee (SPSC) at all out sites, which is
responsible to drive local stakeholder engagement, grievance mechanism and human
rights impacts associated to our business operations.
All our sites have a Social Performance Steering Committee (SPSC), which is
responsible to drive all the social performance related standards including grievance
mechanism at site to local stakeholder and human rights related issues.
Grievance system at Vedanta sites are guided by Technical Standard and Guidance
note on Grievance Mechanism which are part of Vedanta Sustainability Framework
(VSF). These standards are in line with IFC Performance Standards and other global
best practices.
ICC or internal complaints committee is in place to handle sexual and non-sexual
harassment (bullying, discrimination) – which has a mixture of internal and external
members from relevant mix of backgrounds. For sexual harassment there were
already a set criterion in place for handling those (https://www.vedantalimited.com/
CorporateGovernance/policy_on_prevention_and_prohibition_of_sexual_harassment_
final.pdf).
The additional provision of non-sexual harassment redressal has been added this year.
Sensitisation and training will be provided to all the employees in coordination with HR
and other functions.
Do human rights requirements form
part of your business agreements and
contracts? (Yes/No)
Yes
PRINCIPLE 6
BUSINESSES SHOULD RESPECT AND MAKE EFFORTS TO PROTECT AND RESTORE
THE ENVIRONMENT
Indicators
Response
Does the entity have any sites /
facilities identified as designated
consumers (DCs) under the
Performance, Achieve and Trade (PAT)
Scheme of the Government of India?
(Y/N) If yes, disclose whether targets
set under the PAT scheme have been
achieved. In case targets have not been
achieved, provide the remedial action
taken, if any
Has the entity implemented a
mechanism for Zero Liquid Discharge?
If yes, provide details of its coverage
and implementation.
Does the entity have any project related
to reducing Green House Gas emission?
If Yes, then provide details
Our Aluminium Business (Balco, Vedanta Ltd Jharsuguda) and our IPP’s (TSPL,
Vedanta Ltd Jharsuguda IPP and Balco IPP’s) are designated consumers.
The targets set under PAT scheme have been achieved by all these sites.
We have a long standing zero waste and zero discharge vision. We understand the role
we play as an organisation in ensuring that we do not have any negative impact on the
environment.
Yes. Vedanta has committed to become a “Net Zero Carbon organisation by 2050 or
sooner” and we have several projects to decarbonise our operations. Some of the
major GHG emissions reduction projects are undertaken in FY2022 are:
1. Biomass firing in our power plants
2. Pot graphitisation project at Vedanta Jharsuguda and BALCO
3. Turbine revamping in HZL (5 turbines)
4. Vedanta Jharsuguda has purchased ~ 2 Billion units of green power in FY2022
5. Planned turbine revamping to improve SHR at BALCO and VAL Jharsuguda
Briefly describe the waste
management practices adopted in
your establishments. Describe the
strategy adopted by your company
to reduce usage of hazardous and
toxic chemicals in your products and
processes and the practices adopted to
manage such wastes.
Waste management in a safe and responsible manner is a crucial priority for our
businesses. Vedanta’s waste management system is built to handle waste in an
efficient and responsible manner. The company is guided by ‘The resource use and
waste management’ Technical Standard and supporting guidance notes, which are
part of the Vedanta Sustainability Framework. These standards are in alignment with
the national Hazardous Waste Management Rules, 2016. The hazardous wastes
comprise used/spent oil, waste refractories, spent pot lining and residual sludge from
smelters. All the hazardous wastes are sent to government authorised handlers or
recyclers.
Sr.
No.
2
4
7
9
104
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
S.
No
Location of operations/offices
Type of
operations
Whether the conditions of
environmental approval /
clearance are being complied
with? (Y/N) If no, the reasons
thereof and corrective action
taken, if any
10
12
If the entity has operations/offices in/
around ecologically sensitive areas (such
as national parks, wildlife sanctuaries,
biosphere reserves, wetlands, biodiversity
hotspots, forests, coastal regulation zones
etc.) where environmental approvals /
clearances are required, please specify
details in the following format
1
2
3
Vedanta Lanjigarh (Lanjigarh,
India)
Alumina
Refinery
Skorpan Zinc (Rosh Pinah,
Namibia)
Black Mountain Mines
(Gamsberg, South Africa)
Mining
Mining
Yes
Yes
Yes
Is the entity compliant with the applicable
environmental law/ regulations/ guidelines
in India, such as the Water (Prevention and
Control of Pollution) Act, Air (Prevention
and Control of Pollution) Act, Environment
protection act and rules thereunder (Y/N).
If not, provide details of all such non-
compliances, in the following format:
S.
No.
Specify the law
/ regulation /
guidelines which
was not complied
with
Provide
details of
the non-
compliance
1
Nil
Nil
Any fines / penalties
/ action taken by
regulatory agencies
such as pollution
control boards or by
courts
At Hindustan Zinc
Limited (HZL), the
National Green
Tribunal (NGT)
directed the
company under
the Precautionary
Principle to
spend INR 25
crores towards
community welfare
programmes.
Corrective action taken,
if any
NGT has accepted
HZL review petition for
allowing to spend the
funds under the CSR
program and directed
to joint committee to
submit the action taken
report.
PRINCIPLE 7
BUSINESSES, WHEN ENGAGING IN INFLUENCING PUBLIC AND REGULATORY
POLICY, SHOULD DO SO IN A MANNER THAT IS RESPONSIBLE AND
TRANSPARENT
S.
No.
Name of the trade and industry chambers/
associations
Reach of trade and industry
chambers/ associations
(State/National)
2
b. List the top 10 trade and industry
chambers/ associations (determined
based on the total members of such
body) the entity is a member of/
affiliated to.
1
2
3
4
5
6
7
8
9
Federation of Indian Mining Industries
Confederation of Indian Industry
Indian Institute of Metal
Federation of Indian Chambers of Commerce
& Industry
Mining Engineers Association of India
Federation of Indian Petroleum Industry
Association of Oil and Gas Operators
Indian Steel Association
ASOCHAM India
10
Aluminum Association of India
National
National
National
National
National
National
National
National
National
National
105
Integrated Report and Annual Accounts 2021-22 Business Responsibility & Sustainability Report
PRINCIPLE 8
BUSINESSES SHOULD PROMOTE INCLUSIVE GROWTH AND EQUITABLE
DEVELOPMENT
2
3
Provide information on project(s) for which
ongoing Rehabilitation and Resettlement
(R&R) is being undertaken by your entity, in
the following format:
Name of
Project for
which R&R
is ongoing
State
District
No. of Project
Affected
Families (PAFs)
% of PAFs
covered by
R&R
Amounts
paid to
PAFs in the
FY (In INR)
Describe the mechanisms to receive and
redress grievances of the community.
Vedanta
Lanjigarh
Odisha
Kalahandi
Under process
All our sites have a Social Performance Steering Committee (SPSC) which is
responsible to drive all the social performance related standards including
grievance mechanism at site to local stakeholder and human rights related issues.
Grievance system at Vedanta sites is guided by Technical Standard and Guidance
note on Grievance Mechanism, which are part of Vedanta Sustainability Framework
(VSF). These standards are in line with IFC Performance Standards and other
global best practices.
PRINCIPLE 9
BUSINESSES SHOULD ENGAGE WITH AND PROVIDE VALUE TO THEIR
CONSUMERS IN A RESPONSIBLE MANNER
5
6
Yes
NA
Does the entity have a framework/ policy
on cyber security and risks related to data
privacy? (Yes/No) If available, provide a
web-link of the policy.
Provide details of any corrective actions
taken or underway on issues relating
to advertising, and delivery of essential
services; cyber security and data privacy of
customers; re-occurrence of instances of
product recalls; penalty / action taken by
regulatory authorities on safety of products
/ services.
Nuturing the body and
the mind
106
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Awards
Recognised for excellence
Operational and business excellence
Sr.
No
Name of award
Category/Recognition
Recipient(Business Unit)
1
2
3
4
5
6
7
8
9
Best Corporate Finance team and Best CFO
AIAI (all India association of Industries) summit
and awards 2021
Vedanta Limited
‘Icon of Trust | The Extraordinaire – Brand’
2020-22
Brand Vision Summit & Awards
Vedanta Aluminium
Business
‘India’s Largest Silver Miner and Refiner’
IGC Excellence Award Committee
Gold and Silver award
CII National Kaizen competition
National Award for Manufacturing
Competitiveness (NAMC)
S&P Global and RobecoSAM Sustainability
Yearbook
Federation of Indian Mineral Industries (FIMI)
Awards CII National Awards
Business Excellence
Business Excellence
Business Excellence
Frost & Sullivan - India Manufacturing Excellence
Award
Business Excellence
Association of Business Communicators in India
(ABCI)
Branding
HZL
IOK, IOB
HZL
Vedanta Limited
Vedanta Limited
Vedanta Limited
Vedanta Limited
10
Business Tycoon Award
11
12
Best Indirect Tax Team
Industry Leadership Award - Base, Precious and
Speciality Metals
13
Best Brands of 2021
14 Gold Award
15
League of American Communications
Professionals (LACP)
CFO, ESL, awarded ‘Most Innovative Leader for the
use of technology in Finance’
5th Annual GST Summit & Awards 2022
S&P Global Platts Global Metal Award
Economic Times
Quality Circle Forum of India (QCFI) on the
initiative ‘Quality Improvisation of Ravva Sales
Gas’ at the 21st Chapter Convention held at
Vishakhapatnam
ESL
ESL
HZL
IOB
Cairn
Gold award for excellence within the report’s
competition class and Top 100 Communication
Materials with a rank of 56 among all entries
under the Spotlight awards 2021 category for the
integrated annual report FY 2020-21
HZL
16
Dow Jones Sustainability Index
Business Excellence
17 National Convention on Quality Concepts (NCQC)
2021
18
CCQC (Convention on Quality Concepts) Award-
Kaizen
1 Excellent & 2 Distinguished Award by QCFI
Coimbatore
Quality Circle Forum of India (QCFI)
19 Gold and Silver award
CII National Kaizen competition
Vedanta Limited
FACOR
ESL
IOB
People
Sr.
No
Name of award
1
2
3
4
5
6
7
8
9
Great Place to Work
‘Best Employer Brand Award’
Greentech Award 2021
Green Tech Award
Winner, Human Capital Award
Legal Team of the Year
Bronze Award
CII HR Excellence Award
Greentech Award 2021
Category/Recognition
Recipient(Business Unit)
People Practices
Vedanta Limited
South India Best Employer Brand Awards 2021
held by World HRD Congress
IOB
CSR & HR Excellence
BALCO
For Employee Engagement & Technology in HR
IOB
For ‘Developing Future Leaders’ by Frost &
Sullivan.
India Legal Awards 2021
For “Excellence in Reward and Recognition”
category at the Economic Times Human Capital
Awards
Strong Commitment to HR Excellence
Abhijit Pati, CEO and WTD of BALCO, awarded
Greentech Leading Director Award 2021
Cairn
Cairn
VAL-L
VAB
BALCO
107
Integrated Report and Annual Accounts 2021-22 Awards
Environmental and Social
Sr.
No
1
2
3
4
5
6
7
8
9
Name of award
Category/Recognition
Recipient(Business Unit)
Dow Jones Sustainability Index 2021
Ranked 5th globally, 1st in Asia Pacific and 1st
Globally in Environment dimension in the Metal
and Mining sector
HZL
S&P Global Sustainability Awards
ESG
Gold Award for Environment Excellence in Metal
and Mining Sector category
HZL
VAL-J
For Best Regional Campaign Category for Mission
Kalahandi: Zero Poverty, Zero Hunger
Aluminium Business
Apex Green leaf award
Silver Award
Winner’ at the 5th CII National HR Circle
Competition 2021.
For efforts in ‘Inclusion and Social Impact’
Most Sustainable Company in Mining Industry for
2021
World Finance Magazine
Excellence in Corporate Governance
Greentech Foundation
HZL
HZL
Balco
Most Sustainable Company in the Mining Industry
– 2021
Sustainability 4.0 Awards 2021
10
Apex India Green Leaf Award
11
SABERA Award 2021
World finance at their Sustainability Awards 2021 HZL
The “Challengers Award” under Mega Large
Business Metals Category.
For Environment Excellence from Apex India
Foundation
For its CSR efforts under the Responsible
Business of the Year category
Sterlite Copper (Silvassa)
IOB
BALCO
12
Frost and Sullivan & TERI Sustainability Award
Sustainability 4.0 Award 2021 : Leaders’ Award
Under Mega Large Business Sector
Cairn
13 Golden Peacock Awards
For Energy Efficiency – 2021
BALCO
Paste Fill Plant at Rajpura
Dariba Complex
108
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Health and Safety
Sr.
No
Name of award
Category/Recognition
Recipient(Business Unit)
1
2
3
4
5
6
7
8
9
British Safety Award
HSE
Greentech Effective Safety Culture Award 2021
Safety Award
Bronze
British Safety Council (BSC).
CII Health, Safety and Environment Excellence
Award
Apex India Safety Award 2021
Cairn’s three mines in Barmer, Rajasthan –
Mangala, Bhagyam and Aishwariya (MBA)
received ‘Five Star’ ratings in the Occupational
Health and Safety Audit
CII Odisha Annual Meet 2021-22
FACOR
Vizag General Cargo
Berth Private Limited,
Visakhapatnam, IOB
ESL
Cairn
VAL J- Vedanta Ltd.,
Jharsuguda
The Best Rural Health Initiative Award under the
Gold Category
5th CSR Health Impact Awards organised by
Integrated Health & Wellbeing Council.
Cairn Oil & Gas, Vedanta
Limited
International Safety Award 2021 Merit
Awarded by the British Safety Council for the
project at the Rajpura Dariba Complex
World CSR Congress Forum
The Best Rural Health Initiative
COVID Warrior Award
District Hospital
HZL
Cairn
Cairn
Digitalisation
Sr.
No
Name of award
Category/Recognition
Recipient(Business Unit)
1
2
3
4
5
Confederation of Indian Industry (CII).
Innovative Award’ for ‘HR Digitisation’
Cairn
Gold Awards
IDC India Future Enterprise awards
For Manufacturing Excellence & Digital Smart
Manufacturer categories at IMexl Integrated
Manufacturing Excellence Initiative
VAL J- Vedanta Ltd.,
Jharsuguda
Winner of ‘Best in Future of Digital Infrastructure’
award
VAL-J
CII Digital Transformation (Dx) Award
Digitalisation
World Book of records
Certificate of Participation for Largest virtual
marathon - Cairn Pink City Half Marathon
HZL
Cairn
Vedanta Oil &
Gas facility
109
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Market review
High Speed Billets,
Vedanta Aluminium
110
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Global economy
After contracting sharply by -3.4% in pandemic-hit 2020,
the world economy is estimated to have grown 5.5%
in 2021 – the strongest post-recession recovery over
more than last eight decades, as per World Bank. The
International Monetary Fund (IMF) also estimated a global
economic growth of 6.1% in 2021, driven by the widespread
vaccination rollout across countries and policy support
to counter the socio-economic impact of the pandemic.
With countries relaxing lockdowns, demand for goods and
services too received a boost, leading to a sharp uptick
in global trade. Notwithstanding logistical bottlenecks,
global trade reached a record level of about US$28.5 trillion
in 2021, nearly 25% higher than 2020, and close to 13%
increase over the pre-pandemic level of 2019.
However, new mutations of the coronavirus caused fresh
outbreaks in 2021, leading to mobility disruptions. A
slowdown in industry operations, port lockdowns, shortage
in shipping containers, unfavourable weather conditions,
and backlogs affected global trade. Together, these factors
hindered global recovery and created a supply-demand
mismatch. Rising inflation, driven by supply side constraints,
labour market factors and high commodity prices, created a
challenge for governments and industries across countries.
The geopolitical tension between Ukraine and Russia has
set back global recovery. Commodity prices reached all
time high and are likely to remain uncertain in the short
term. Supply chain disruptions intensified further due to the
ongoing war. According to IMF, global growth is expected
to slow significantly in 2022 to 3.6% from the earlier
projections of 4.4%.
Country-wise growth prospects
The US economy witnessed a growth of 5.7% in 2021,
the highest since 1984, indicating its resilient recovery.
Generous fiscal stimulus packages have aided this
QUARTERLY GROWTH RATE OF GDP
(% y-o-y)
economic recovery but also created challenges like
high inflation, which is at a 40‑year high due to the
supply-demand mismatch and labour shortage. IMF has
downgraded the growth prospect of US economy to 3.7%
driven by the monetary policy tightening to control inflation
and the trade disruption fueled by the Ukraine-Russia war.
The Chinese economy started 2021 on a strong note
with the resurgence in global and domestic demand
but witnessed challenges in the second half of the year.
Disruptions in the real estate sector, the power sector
crisis and its impact on industrial production, and the
government’s strict Zero‑COVID strategy enhanced
uncertainties and dampened growth. Low private
consumption, withdrawal of private investments and slump
in production and economic activities due to the COVID
protocols, have had a cascading effect on the economy and
impeded its growth prospects in 2022. The growth prospect
of China has been revised down to 4.4% in 2022 due to
the war affected external demand disruption and stringent
COVID protocols.
European Union witnessed record growth in the first half of
2021, following resurgence of domestic demand, modest
consumer spending and healthy growth in public and private
investment. Rise in COVID‑19 infections, high energy prices,
particularly that of natural gas, supply chain disruptions
together with geopolitical tension between Ukraine and
Russia impacted Europe’s economic recovery, leading
to uncertainties. The European Commission estimates
annual inflation to reach 3.5% in 2022. Inflation rose 4.8% in
Q1FY2022, mainly driven by supply bottlenecks, high energy
prices in the short term and worsening of the standoff
between Ukraine and Russia. Overall, despite challenges
caused by supply‑chain disruption and high inflation, most
economies witnessed modest growth in 2021 due to the
low base effect and recovery in economic activities.
30
20
10
0
-10
-20
-30
Q1 2020
Q2 2020
Q3 2020
Q4 2020
Q1 2021
Q2 2021
Q3 2021
Q4 2021
India
China
USA
Japan
Germany
France
United Kingdom
Source: OECD
111
Integrated Report and Annual Accounts 2021-22 Market review
Globally, governments and central banks have been vigilant
about their strategies to counter inflation given that the
factors involved are different from those causing regular
cyclical inflation.
Among the global economies, the US witnessed a sharp
spike in inflation, which reached 8.5% on a year‑on‑year
basis in March 2022, the highest in four decades. The US
Federal Reserve has started to increase interest rates and
has made subsequent plans to increase rates multiple
times in 2022 to counter rising inflation. It also believes
that sufficient time has been provided for the economy to
recover from the pandemic.
Indian economy
After the downslide in 2020, the Indian economy recovered
resiliently in 2021, supported by the largest vaccination
drive in the world. Unlike in other economies, India’s supply‑
side reforms in response to the pandemic not only kept
inflation under control but also facilitated long‑term growth
prospects. Compared to a contraction of 6.6% in FY2021,
the Indian economy is expected to grow by 8.9% in FY2022,
as per the Second Advance Estimates of National Income of
the National Statistical Office (NSO) of India.
SECTOR-WISE GVA GROWTH OF INDIA
(% y-o-y)
The European Central Bank has decided to end net asset
purchases under the Pandemic Emergency Purchase
Program (PEPP) from the third quarter of 2022. Inflation
has reached 7.5% in March 2022 driven by the war impacted
high energy cost.
Agriculture
Mining
The commodity market is expected to face frequent
fluctuations until the supply chain disruption is brought
under control and demand growth sustains. Commodity
prices are expected to remain volatile in 2023 due to
counterflowing developments like slowdown in major
economies and rising interest rates but high energy prices,
resulting into production cut in some parts of the world,
particularly Europe and supply chain disruptions. But the
outlook remains cautious amid possibility of the continued
ill effect of the Ukraine‑Russia war, high inflation as well as
spread of new variants of the COVID‑19 virus.
The World Bank expects the global economy to decelerate
to 4.1% in 2022 as a result of continuing pandemic-related
uncertainties, diminishing fiscal support from governments
and supply chain bottlenecks. Global trade is projected to
slow down to 5.8% in 2022.
Manufacturing
Electricity, gas,
water supply, etc.
Construction
Trade, hotels,
transport...
Financial, real estate
& prof serve
Public Admin., defence
and other services
GVA at basic price
GDP
FY2021
FY2022
Source: NSO
3.3
3.3
(8.6)
12.6
(0.6)
10.5
(3.6)
7.8
(7.3)
10.0
(20.2)
11.6
2.2
4.3
(5.5)
12.5
(4.8)
8.3
(6.6)
8.9
The manufacturing sector saw healthy growth in 2021,
with the Purchasing Managers’ Index (PMI) remaining in
the expansionary zone (i.e., above 50) levels since Jun’21
despite the challenges caused by the second wave of the
pandemic. The service sector is also expected to grow by
8.6% in FY2022 as steady recovery has been observed in
service PMI since August’21. The strong support provided
by the government’s stimulus packages, increased
infrastructure spending and an accommodative monetary
policy of the Reserve Bank of India (RBI) have assisted India
to sustain its economic recovery.
Control room,
Gamsberg
112
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
India registered highest ever merchandise exports of
US$419.65 billion in FY2022, which is 43.8% higher than
FY2021 and 33.9% more as compared to exports made in
FY2020. Indian exporters were able to take advantage of
global supply disruptions and high commodity prices in the
global export market in FY2022. Service exports also grew
by 21.3% in FY2022 to reach US$250 billion.
PURCHASING MANAGERS’ INDEX - INDIA
70
60
50
40
30
20
10
0
0
2
-
n
a
J
0
2
-
r
a
M
0
2
-
y
a
M
0
2
-
l
u
J
0
2
-
p
e
S
0
2
-
v
o
N
1
2
-
n
a
J
1
2
-
r
a
M
1
2
-
y
a
M
1
2
-
l
u
J
1
2
-
p
e
S
1
2
-
v
o
N
2
2
-
n
a
J
2
2
-
r
a
M
Manufacturing PMI
Composite PMI
Services PMI
With the signing of new Free Trade Agreements (FTA) with countries like the UAE and Australia and upcoming FTAs with
UK, Canada, Israel, EU etc. which are in different stages of negotiations, coupled with Production Linked Incentive (PLI)
schemes, India has set the target of US$1 trillion of export of merchandise from India by 2030.
Merchandise Exports
Merchandise Imports
Trade Balance
Services Exports
Services Imports
Net of Services
Overall Exports
Overall Imports
Trade Balance
Source: Commerce Mininstry
FY2022
FY2021
FY2020
% Growth
(FY2022/FY2021)
% Growth
FY2022/FY2021
419.7
611.9
-192.2
250.0
144.8
105.2
669.7
756.7
-87.0
291.8
394.4
-102.6
206.1
117.5
88.6
497.9
512.0
-14.1
313.4
474.7
-161.4
213.2
128.3
84.9
526.6
603.0
-76.4
43.8
55.1
-87.3
21.3
23.2
18.8
34.5
47.8
-518.9
33.9
28.9
-19.2
17.3
12.9
23.9
27.2
25.5
-13.9
Jharsuguda
Facility, Odisha
113
Integrated Report and Annual Accounts 2021-22
Market review
Consumption scenario in India, as indicated by Private Final
Consumption Expenditure (PFCE) and Government Final
Consumption Expenditure (GFCE) improved in FY2022 from
previous year by 16.5% and 12.2%, respectively, though
their shares in GDP were down (PFCE: 59.3% in FY2022
vs. 60.8% in FY2021; GFCE: 11.4% in FY2022 vs. 12.1% in
FY2021). Overall investment scenario in India, as measured
by Gross Fixed Capital Formation (GFCF), improved from
26.6% of GDP in FY2021 to 28.3% of GDP in FY2022. This
was mainly backed by continued capital expenditure by the
government which grew by 19.7% in FY2022, on the back of
27% in FY2021.
CAPITAL FORMATION AND GOVT. CAPEX
28.6
27.0
26.6
28.3
19.7
9.1
FY2020
FY2021
FY2022
However, India’s inflation rate as measured by Consumer
Price Index (CPI) remained high in FY2022, briefly dipping
in September 2021 before picking up to 6.95% in March
2022, breaching the upper tolerance limit of 6%. High
energy prices, particularly crude oil prices, drove the
Wholesale Price Index (WPI) to the second highest level
since 2004. The Reserve Bank of India has maintained an
accommodative monetary stance, keeping the repo rate
unchanged while maintaining a strict watch on the inflation
level. Although central banks of some countries have
already started considering reversing their pandemic-time
expansionary monetary policy by taking a more hawkish
stance, the RBI has considered it necessary to retain
a commensurate accommodative policy to enable the
economy to recover further with focus on keeping inflation
in its target range.
INFLATION IN INDIA
(% y-o-y change)
13.1
14.9
13.8
14.6
13.7
12.1
11.6
11.6
11.8
14.3
13.1
10.7
7.9
4.8
5.5
4.1
6.3
5.6
6.3
5.0
4.2
4.4
4.9
5.3
4.5
7.0
5.7
6.1
6.0
Gross Fixed Capital Formation (GFCF) (as % of GDP, LHS)
Government Capital Expenditure (% of Growth, RHS)
2.5
Source: NSO
Improvement in economic activity was reflected by massive
rise in GST collection which grew by 30.8% in FY2022 to
`14,87,313 crore, while March 2022 witnessed the highest
ever monthly collection of GST of `1,42,095 crore. Non-food
credit growth also accelerated for the 11 months in FY2022
to 6.2% as compared to 3.7% during the same period
last year.
1
2
-
n
a
J
1
2
-
b
e
F
1
2
-
r
a
M
1
2
-
r
p
A
1
2
-
y
a
M
1
2
-
n
u
J
1
2
-
l
u
J
1
2
-
g
u
A
1
2
-
p
e
S
1
2
-
t
c
O
1
2
-
v
o
N
1
2
-
c
e
D
2
2
-
n
a
J
2
2
-
b
e
F
2
2
-
r
a
M
CPI
WPI
Source: MOSPI
Cairn offshore rig
114
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Facor facility
Policy initiatives from the Indian government
The Government of India has taken various initiatives
to make the country a global hub of manufacturing and
become globally competitive. For example, the government
has rolled out the Production Linked Incentive (PLI) scheme
with an outlay of `1.97 lakh crore for 13 sectors. The
scheme provides incentives based on the sales value and
differential incentive slabs, which are targeted to make
India’s domestic manufacturing sector globally competitive,
reduce import bills, enhance domestic capacity and export
and create as many as 1 crore additional jobs. The National
Master Plan of PM Gati Shakti is another initiative that is
targeted to ensure seamless connectivity for the movement
of people, goods and services from one mode of transport
to other, providing last-mile connectivity and reducing travel
time for people. This will be achieved through integrated
inter-ministerial planning and coordination for infrastructure
connectivity projects under a digital platform.
The National Monetisation Pipeline (NMP) again is another
initiative which is expected to help efficiently manage
public assets and provide benefits to the common public.
With a monetisation potential of `6 lakh crore through the
utilisation of core assets of the government over FY2022-
FY2025, it is projected to bring private investments to
provide universal access to high quality and affordable
infrastructure to citizens by unlocking the value of
investments in brownfield public sector assets.
Many initiatives have also been introduced to facilitate ease
of doing business in India. The National Single Window
System (NSWS) provides a single platform to enable
investors to identify and obtain approvals and clearances
needed in India. NSWS will, in effect, help realise the vision
of Aatmanirbhar Bharat by not only giving easy access
to information about schemes like Make in India, the PLI
scheme, Start-up India, etc. but also handholding the
investor through the processes in a transparent manner.
Remission of Duties and Taxes on Export Products
(RoDTEP) has been introduced to enable refund of currently
un‑refunded duties/taxes/levies on the production and
distribution of the exported product at the central, state
and local level. This is expected to encourage domestic
players to expand their business internationally. Although
certain industries like Iron & Steel, Pharma, Chemicals
etc. were left out of the scheme and certain categories of
exports like products manufactured or exported by 100%
EOU, FTZ, EPZ, SEZ or products manufactured partly or
wholly in a bonded warehouse etc. were excluded from the
benefit, the government reserves the right to modify any
of the categories or industries for inclusion or exclusion
under the scope of RoDTEP at a later date based on the
recommendations of the RoDTEP Committee.
Amendments in the Mineral Conservation and Development
(Amendment) Rules and the Minerals (Other than Atomic
and Hydrocarbons Energy Mineral) Concession Rules also
contribute to the ease of doing business for mining.
All such initiatives are likely to support the Indian economy
get back to a strong growth trajectory and expand demand
for minerals, metals and fuel.
115
Integrated Report and Annual Accounts 2021-22 Market review
Outlook
INDIA’S REAL GDP GROWTH PROJECTIONS
Although the Indian economy made a smart comeback
in FY2022, it is likely to face some headwinds in FY2023
due to geopolitical tensons, high commodity prices, supply
chain bottlenecks, threat of surging COVID‑19 cases and
global slowdown. The current war between Ukraine and
Russia and the consequent surge in crude oil and other
commodity prices have triggered a round of downward
revisions in India’s real GDP growth projections by various
agencies. The RBI in April 2022, revised down its GDP
growth projection for FY2023 to 7.2% from its earlier
projection of 7.8%.
The RBI attributed the downward revision in its growth
outlook to several factors including escalation of the
geopolitical situation and the accompanying surge in
international crude oil and other commodity prices,
tightening of global financial conditions, persistence of
supply‑side disruptions, significantly weaker external
demand and uncertainties about the pace of monetary
policy normalisation in major advanced economies.
The World Bank in April 2022 trimmed down India’s GDP
forecast for FY2023 to 8% from 8.7%, while IMF also
followed the same by reducing the forecast to 8.2% from
earlier 9%, citing worsening supply bottlenecks, higher oil
prices which are expected to weigh on private consumption
and investment and rising inflation risks caused by Russia’s
invasion of Ukraine.
Agency/ Institution
Economic Survey
RBI
RBI forecasters survey
(Median)
International Monetary
Fund (IMF)
World Bank
United Nations (UN)
Asia Development Bank
(ADB)
OECD
S&P Global Ratings
Fitch Ratings
Moody’s
Source: CMIE
Month of Release
2022-23 (%)
Jan-22
Apr-22
Apr-22
Apr-22
Apr-22
Jan-22
Apr-22
Apr-22
Dec-21
Mar-22
Mar-22
8-8.5
7.2
7.5
8.2
8
5.9
7.5
8.1
7.8
8.5
9.1
In spite of that, India is projected to be the fastest growing
major economy in the world in 2022 and 2023, with IMF
estimating its GDP growth to be 8.2% in 2022 and 6.9%
in 2023.
Economic growth in India is supported by a strong thrust
on physical and health infrastructure building. In the Union
Budget for FY2023, outlay for capital expenditure sharply
increased by 35.4% from `5.54 lakh crore in FY2022
to `7.50 lakh crore in FY2023. The capex provision for
FY2023 is projected to be 2.9% of GDP and more than 2.2x
the expenditure of FY2020. Along with Grants‑in‑Aid to
States for creation of capital assets, the ‘Effective Capital
Expenditure’ of the Central Government is estimated at
`10.68 lakh crore in FY2023, which is likely to be around
4.1% of GDP.
The government has also envisaged to
expand the National Highways network by
25,000 km, complete 80 lakh houses for
the identified eligible beneficiaries of PM
Awas Yojana and provide tap water to 3.8
crore households under Har Ghar, Nal Se Jal
project in 2022-23.
Solar power
plant at HZL
India is projected to be the fastest
growing major economy in the world
in 2022 and 2023
116
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
In the quarter ended March 2022, India witnessed a big
increase in new investment proposals; 660 new project
proposals with an investment of `5.1 trillion to create new
productive capacities were recorded during the quarter.
This is big compared to the average of `3.1 trillion worth
of new investment projects that were recorded during the
preceding three quarters.
Demand for bank credit has also picked up pace in the last
few months. Outstanding non-food credit disbursed by
scheduled commercial banks (SCBs) was growing year‑
on-year at 5.5% at the beginning of FY2022. The growth
improved to 6.8% by September 2021 and accelerated
further to 8.7% by March 2022.
India’s health infrastructure is also much better equipped
to face new waves of COVID‑19 cases and accelerated
vaccination drive has made the Indian economy resilient to
fresh shock.
With the government’s focus on self‑reliant India backed
by supports like PLI scheme and infrastructure spending,
the Indian economy is likely to see healthy growth, which
augurs well for the metals, mineral and energy sectors.
ESL Facility
117
Integrated Report and Annual Accounts 2021-22 Segment review
Zinc
Overview
Inflation worries, the US Federal Reserve’s change of
stance, strengthening of the dollar and expected sale of
metals by China led to declining zinc prices in Q2FY2022.
The zinc market, in any case, had been bracing itself for
smelter production disruption since October 2021. Even
though there is still no real evidence of sizeable smelter
cutbacks, premiums for spot refined metal in all regions
have increased while annual contract premium offers in
Europe and the US for 2022 have doubled.
Supply chain constraints induced by the pandemic are likely
to remain and, as previously, cause delay in meeting the
pent-up demand for zinc-intensive manufactured goods.
The manufacturing sector, meanwhile, has been recovering
fast. Although the manufacturing PMI for the Eurozone is
less than its peak recording in June 2021, the region has
registered strong sectoral growth.
In India, both the manufacturing sector and services
sector have seen robust improvement although hopes of
increasing output levels have been tempered by inflationary
pressures. Given the government push for infrastructure,
highways, electrification and transmission projects, the
structural sector will create major demand for zinc.
Market drivers
Despite a downward revision in global zinc
consumption forecast for 2022, global zinc
consumption is expected to grow by 1.3%
to 14.3 mt, and eventually to 14.5 mt in
2024. Notwithstanding the global demand
downgrade, the refined market is expected
to remain tight. Global refined stocks are
forecast to fall from the equivalent of 44 days
of consumption at the end of 2021 to 35 days
by the end of 2022 and remain close to this
level till 2025. Such low stocks should support
elevated zinc prices at annual averages of
US$3,734/t, US$3,525/t and US$3,400/t
(Source: Woodmac) respectively.
118
While possible disruptions to smelter production remain an
upside risk to this outlook, it is likely to be offset, at least in
part, by disruption to first and end use demand in Europe
and potentially elsewhere in the world.
Products and customers
Hindustan Zinc Limited (HZL) is the largest primary zinc
producer in India, with an expected 80% market share
in 2022. Around 65% of the refined zinc produced by
HZL’s smelters is sold in the domestic market, and the
rest is exported to Southeast Asian and Middle Eastern
markets. Over 70% of the Indian zinc demand comes from
galvanising steel, predominantly used in the construction
and infrastructure sectors. HZL also produces Continuous
Galvanising Grade (CGG), EPG (Electro Platting Grade)
and two grades of zinc for use in die-casting alloys. The
company is working closely with its customers to increase
the proportion of value‑added products (VAP) in its zinc
portfolio. It will strive to increase the supply of VAP to 24%
of total zinc sales in FY2023, from 20% in FY2022.
Rajpura dariba Mine
Hindustan Zinc Limited (HZL) is the
largest primary zinc producer in
India, with an expected 80% market
share in 2022.
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Products and customers
India’s refined lead market, including both primary and
secondary markets, is about 1.1 mt. The primary lead market,
approximately 280 kt in size, remained stagnant in 2021. We
expect to close at the same rate; about 87% of our production
will be consumed by the domestic market and the rest will be
exported to the Southeast Asian market. Next year, we are
expecting to increase our sales by 3‑4% through new customer
acquisition, enabled by our e-commerce platform (Evolve), and
the introduction of lead alloys in our product portfolio.
Silver
Overview
Silver Institute predicts global demand to rise by 8% from 2021
to a record high of 1.112 billion ounces in 2022. The rise will be
driven by record silver industrial fabrication, as consumption
increases in traditional and green technologies. Investment
demand for physical silver bar and bullion coins is expected to
jump by 13% in 2022 to a seven-year high. Demand for silver for
jewellery is expected to rise by 11% and for silverware by 21%.
As governments around the world increasingly commit
to carbon emissions reduction, silver demand for solar
photovoltaic panels will reach an all‑time high. With increasing
vehicle electrification and the acceleration of 5G network
infrastructure, demand from the automotive and 5G telecom
sectors can be expected to remain strong.
The silver market in India saw extreme volatility in Q3FY2022,
swinging between the extremes of US$21.8 to US$25.2
per troy ounce. The rise in price was anticipated, given the
festive demand, especially in the Indian subcontinent and
the Gulf region. Imports, which began in Q2FY2022, gained
momentum with more than 54 mt of silver being imported
in October 2021 alone. With silver mines now operational
worldwide, higher production has resulted in higher import
sales in the domestic market.
Market drivers
The Silver Institute has projected total supply to rise by 7% to
1.092 billion ounces in 2022, with mine production ramping up
to a six‑year high. Primary silver mines are expected to increase
output from large sites and new projects. The silver market
fell into a deficit in 2021 for the first time in six years, which is
expected to continue in 2022 with a shortfall of 20 million ounces,
which is believed to be relatively modest in absolute terms.
Products and customers
Hindustan Zinc (HZL) is India’s only primary silver producer
and ranks 6th globally among the top silver producing
companies. Exclusively catering to the domestic market, HZL’s
production finds use in industry (electrical contacts, solder
and alloys, and pharmaceuticals), jewellery and silverware.
Last year, the company started spot sales of silver through an
e-auction to reduce manual intervention. This also provided
buyers equal opportunity to compete, while ensuring complete
price transparency.
119
Lead
Overview
For base metals, sentiment turned bullish following signs
of economic improvement. However, a strengthened dollar
and apprehension of inflation in the US pushed down
base metal prices. Global lead demand fell -3.4% in 2020
compared to 2019, but has picked up since, averaging 2.2%
pa in the medium term and 2.0% pa over the long term to
our forecast horizon of 2040. While this is lower than the
2.6% pa average over the decade from 2010, it should still
be regarded as a positive outlook. In 2022, we forecast
12.9 mt of refined lead consumption, increasing to 15 mt in
2030 and 18.4 mt in 2040.
Market drivers
The Chinese and Indian automotive sectors will be the
main drivers of global demand growth, along with other
Asian countries. Changes in the high lead‑consuming
but developed regions of North America, Europe and
Japan will be minimal over this period, with stable vehicle
populations and increasing levels of finished battery
imports from regions of lower production costs, such as
Asia. Automotive replacement batteries will be the key
demand drivers, growing over the medium term between
2021-2025 at 2.8% pa. The increase in original equipment
(OE) batteries is a more modest 1.7% pa. With a weakened
economic outlook for this period, and people’s tendency to
retain their existing vehicles for longer, the balance will tip in
favour of replacement batteries over OE.
Construction for a new lead battery production
facility has started in Dubai (UAE), including
a secondary lead smelter. Once completed
in 2023, the plant can recycle 25 kt of scrap
batteries per annum, producing 14 kt of refined
lead for its battery production.
Ukraine, which produces many key components for
the European auto industry, is likely to see disruption in
production. Given that it is also a major producer of inert
gases used in semiconductor production, problems are
likely to deepen for the sector. Thus, a wider European and
global economic impact of the Ukraine‑Russia conflict will
lower demand for new vehicles in 2022 and beyond.
Integrated Report and Annual Accounts 2021-22 Our product portfolio includes aluminium ingots, primary
foundry alloys, wire rods, billets, and rolled products. These
products cater to varied industries globally such as power,
transportation, construction and packaging, to name a few.
As much as 39% of Vedanta’s total aluminium sales globally
are high quality value-added products.
Our major focus area is the domestic market. In FY2022,
domestic sales volume was similar to that of last year.
Value-added products accounted for ~66% of domestic
sales. Major growth was registered in the international
markets, where sales volume increased by ~23% y-o-y to
1.66 mt, while overall sales volume increased by 14%.
We have a large OEM base throughout the world for
consumption of our value-added products. Europe and
North America have the largest share in overall export sales.
Aluminium
Overview
FY2022 mostly saw a deficit in the global primary
aluminium market, and the trend is expected to continue
in the next fiscal. During the autumn of 2021 (Q2 and
Q3FY2022), energy prices skyrocketed due to COVID‑
induced closure of coal mines in Australia, higher
Indonesian coal demand from China and geopolitical
instability in Africa and Eastern Europe, together with
an exceptionally high demand for oil. This resulted in
the closure of several European smelters, which pushed
aluminium prices around the world to a record high. FY2022
also witnessed demand growth stabilisation around
the world to pre‑COVID levels. During the year, India’s
primary aluminium demand grew at an average of 14%.
However, overall export sales of aluminium grew by 6%
during FY2022.
Market drivers
India has witnessed impressive economic recovery post-
lockdown of 2021. With continued structural support
from the government through various schemes focusing
on infrastructure and manufacturing, demand and
industrial activity are expected to witness stellar growth.
Aatmanirbhar Bharat, ‘Make in India’, the PLI scheme
for domestic manufacturing, the National Infrastructure
Pipeline and National Rail Plan of the Government of India
will help increase the demand for metal in the market.
Taking these macro drivers into cognisance, Vedanta
continues to expand its value‑added product portfolio in line
with the evolving market demand.
Products and customers
With an annual production capacity of ~2.2 mt,
Vedanta is India’s largest primary aluminium
producer. It leads the primary product segment
with a domestic market share of ~47% among
the primary producers in India.
Wire Rods produced by
Vedanta Aluminium
120
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Power
Overview
Oil and gas
Overview
The year 2021, which saw marked global economic
recovery, also witnessed relative stability in the Oil & Gas
market. Vaccination efforts and limited lockdowns boosted
demand, and this was supported by rising mobility and
travelling activities.
Global oil supply increased by 1.6 Mbpd to 95.4 Mbpd in
2021, with OPEC countries increasing their production
and the US, Russia, Saudi Arabia, and Iraq contributing
to the pool. With an increase of 5.2 mb/d, in 2021, world
oil demand substantially outpaced the historical low of
2020, although it remained below pre-pandemic levels.
Notwithstanding a dip in Q1FY2022, world oil demand
during Q3 and Q4 proved to be substantially more resilient
than previously anticipated. Demand growth in non‑OECD
countries was substantially high at 2.7 mb/d. In the OECD,
the US continued to be the major driver of oil demand.
India, the world’s third largest oil consumer and the fourth
largest refiner, currently meets 85% of its oil consumption
and 50% of its gas consumption through imports.
Market drivers
The year 2022 could be pivotal in the natural gas sector
as Russia tries to secure its strategic interests in Ukraine.
Given that Europe depends on Russia for most of its crude
oil, natural gas, and solid fossil fuel supplies, Russia-
Ukraine tensions have stirred anxiety within Europe over the
potential outcome of financial sanctions imposed on Russia
or Nord Stream 2 or the possibility of Russia slashing
Europe’s energy supplies or cutting capacity through
Ukraine. Many see Germany’s strategic energy partnership
with Russia over Nord Stream 2 pipeline as a conflict of
interest in diplomatic dealings involving Ukraine.
India is the third largest producer and second largest
consumer of electricity in the world with an installed
capacity of 399 GW as on March 2022 and an estimated
power consumption of 1894.7 TWh in 2022. For FY2022,
the electricity generation target from conventional sources
has been fixed at 1,356 billion units (BU), higher by 9.83%
y‑o‑y. Between FY2016 and FY2021, the country’s electricity
generation grew at 1% CAGR, driven by government
initiatives and schemes to increase rural electrification and
provide round-the-clock power supply.
Market drivers
India’s power demand is likely to touch 1,894.7 TWh by
FY2022, driven by multiple factors such as expansion
in industrial activities, growing population, rising
per capita income, policy support and increasing
electricity penetration.
The Government of India and state governments have
also been supportive of growth of the power sector
through various reforms, such as delicensing the electrical
machinery industry and allowing 100% Foreign Direct
Investment (FDI). In addition, policy support (Saubhagya,
Integrated Power Development Scheme, DeenDayal
Upadhyaya Gram Jyoti Yojana or DDUGJY, Unnat Jyoti
by Affordable LEDs for All or UJALA, Restructured
Accelerated Power Development and Reforms Programme
or R‑APDRP, Ujwal DISCOM Assurance Yojana or UDAY,
National Infrastructure Pipeline or NIP, and many others)
have provided the much-needed impetus to the sector. The
country’s power sector is likely to attract an investment of
US$128.24 billion to US$135.37 billion between FY2019
and FY2023.
Energy sector projects accounted for the highest
share (24%) in the US$1.4 trillion NIP between 2019‑25.
The Government of India has opened the coal sector
for commercial mining, which is expected to ease
coal availability.
Products and customers
Vedanta’s Power business operates over 9 GW power
portfolio in India. Of its portfolio in aluminium business,
~16% is used for commercial power while ~84% is meant
for captive use. The power generated for commercial
purposes is backed by long‑term Power Purchase
Agreements (PPAs) with state distribution companies such
as Tamil Nadu, Kerala, Chhattisgarh, and Odisha.
Ravva Offshore Rig
121
Integrated Report and Annual Accounts 2021-22 According to the International Energy Agency, global oil
stores were reduced by 600 million barrels in 2021, a 200
million barrel discrepancy from the forecast tally. This
difference could lead to a tighter market in 2022. There
are apprehensions that the world is hurtling towards an oil
supply crisis. There is a possibility that oil prices could be
elevated further to about US$140 to US$150, if not higher, to
kill discretionary demand.
Oil could also see an uptick in demand as it becomes
increasingly used as a substitute for natural gas in heating
and electricity generation. The World Bank expects oil
prices to average US$74 in 2022, as demand continues to
recover to pre-pandemic levels in H2. It also anticipates
a steady decline in natural gas prices in 2022 and into
2023 because of shrinking demand growth outside Asia,
plus production and export increases. The Bank has also
highlighted how events in 2021 show the growing risk from
climate change to energy markets, affecting both demand
and supply. In perspective of the energy transition, the
intermittent nature of renewable energy highlights the need
for reliable baseload and backup electricity generation.
Marinchenko and Fitch Ratings see oil prices steadying in
the US$70 range based on the expectation that OPEC+ will
continue to actively manage supply to avoid large surpluses
or deficits in the market.
Market drivers
Iron ore prices are expected to remain range‑bound going
into 2022. Imbalances in demand and supply led to the price
rally in the global market in Q1 and Q2. Global supply of
iron ore, which was tight in the first half of 2021, continued
easing as the year came to an end. The improvement
reflected recovery in production and exports from western
Australia as the acute weather disruptions seen at the
beginning of 2021 dissipated.
In May 2021, the Chinese government announced its aim
to diversify its iron ore supply (Australia currently accounts
for more than 60% of the nation’s iron ore imports.) The
new plan included a target of 45% self‑sufficiency in raw
materials for steelmaking by 2025; increased domestic
exploration and output of iron ore; and securing more
overseas reserves.
Although Vale has announced plans to expand its capacity
significantly, much of the resulting output is not expected
to reach overseas markets for at least two to three years.
BHP and Rio Tinto are starting production in new mines
in the Pilbara region of western Australia, but much of
the resulting output will substitute for depleting mines
in the same area. Consequently, overall output growth
is not expected to occur at a pace that would reduce
prices significantly.
Products and customers
Products and customers
Iron ore, a key ingredient in steelmaking, is used in
construction, infrastructure, and automotive sectors.
Vedanta’s iron ore mining operations in Goa ceased
from March 2018, pursuant to the Supreme Court order.
Meanwhile in February 2021, the permitted mining capacity
at Karnataka has increased from 4.5 mt in FY2020 to
5.6 mt.
Vedanta is the largest private sector producer of crude oil
in India. Our crude is sold to hydrocarbon refineries and our
natural gas is used by the fertiliser industry and the city gas
sector in India.
Iron ore
Overview
Iron prices increased globally during FY2022, and
Karnataka’s iron ore industry reflected this trend in
Q1 FY2022. Demand side improvement together with
relaxation in lockdown guidelines, further raised prices
in Q2. The next two quarters were subdued, due to weak
demand from the steel market. The market reflected
developments in China’s steel industry, which in 2021
saw mandatory steel output cuts aimed at reducing the
sector’s carbon emissions and weakening demand from the
construction sector.
Metcoke
122
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Steel
Overview
Steel is one of India’s core industries, contributing slightly
more than 2% to the GDP. India, the second‑largest
steel producer in the world, manufactured 118.1 mt of
steel between January‑December in 2021. Crude steel
production increased 18% in FY2022 (Apr-Jan), reaching
98.887 mt.
After being impacted by the pandemic and the monsoons
in H1FY2022, steel production recovered in H2. H1 however
saw substantial rise in exports due to the lowering of
domestic demand and better export realisation. Demand
picked up in Q4FY2022 as a result of infrastructure projects
and increased exports. March 2022 saw a steep increase in
prices on the back of increased raw material prices due to
the Russia–Ukraine conflict.
Market drivers
Demand in FY2023 is expected to be robust with the
government’s push to increase steel production as per the
National Steel Policy. The government’s Make in India policy
will also support the industry.
Demand from the major sectors such as infrastructure,
construction and housing, renewables and automobile
is expected to be strong. The Union Budget 2022‑23 has
announced expansion of the national highway network by
25,000 km in FY2023. There will be increased demand from
railways as well, given that 2,000 km of railway network
will be brought under ‘Kavach’ in FY2023 as a part of
the Aatmanirbhar Bharat policy. The rail budget has also
declared 400 Vande Bharat Express trains and 100 cargo
terminals with multimodal logistics.
The housing sector is also expected to contribute to the
demand, given the government target to set up 80 lakh
houses under the Pradhan Mantri Awas Yojana for rural
and urban areas. A resurgent automobile sector, which is
expected to draw an investment of `74,850 crore as part of
the PLI scheme, is likely to boost demand for steel.
In FY2023, steel prices are likely to remain volatile due to
high and fluctuating raw material prices and various global
factors. Coking coal prices has crossed US$700 CFR,
forcing steel companies in India to pass on the cost to
customers. The government is reported to have committed
to improving the availability of suitable coking coal, which
will go a long way in fundamentally strengthening India’s
steel industry.
Products and customers
During the year, we developed new products and received
blanket approval from the National Highways Authority of
India. We also exported our first consignment of DI pipes
and will continue to focus on strengthening our exports
across various products. The acquisition of two iron ore
mines via auction in Odisha during the year is helping
Vedanta grow more self-reliant in iron ore supply while
facilitating future expansion plans. A major focus will be
digitalisation for fair price recovery. For prime grades for
all products, we are also considering conduct of sales via
auction. The upcoming financial year will see us focus more
on retail segments.
Worker tagging the wire rods
123
Integrated Report and Annual Accounts 2021-22 Copper
Overview
Year 2022 was another volatile year for copper prices,
given rising geopolitical tensions, inflation and energy
costs, as well as the impact of the pandemic on labour
availability, which affected the market. However, demand
in the world ex‑China looks set to remain strong this year,
which should underpin high prices. There are also supply
chain constraints which are impacting manufacturing.
Notwithstanding these challenges, copper consumers, both
first and end users, appear to be upbeat about the 2022
demand prospects. Despite the resurgence of COVID‑19 in
China, the country’s plans to hedge against the economic
slowdown would render stability to copper demand from
the construction and infrastructure sectors.
The major copper smelters in China appear to be sitting on
ample concentrate stocks. This may be the reason why the
usual flurry of buying activity at the beginning of a new year
has not happened. Producers are also content to deliver
concentrate into contracts rather than load the market with
spot volumes when the demand is soft.
Market drivers
Resurgence of COVID‑19 in China has caused several
cities to impose lockdown. If the situation persists, it
could present a downside risk to our current demand
forecast. Total copper consumption in China is projected
to grow by 0.7% in 2022, and by 1.1% and 1.7% in 2023 and
2024, respectively.
Research (Source: Woodmac) shows that mine disruptions
in 2021 amounted to almost 5%, or 1.1 mt, of the total mine
output, 0.84 mt for copper concentrate operations, and 0.22
mt for SxEw operations.
Analysts project a 16% rise in copper demand, which is
expected to reach 25.5 mtpa by 2030. This contrasts with
the supply forecast, which at 19.1 mtpa will fall well short
of the demand. Copper demand from all sectors combined
is expected to grow 32% by 2040, compared to that in
2020. This includes demand from solar, onshore/offshore
wind, hydroelectric, biomass and nuclear projects. This
‘green’ demand is expected to contribute more than half the
incremental increase in 2022. Primary copper use, which
reportedly increased by 6.5% y-o-y in 2021 (Source: ING), is
expected to see a more moderate increase in 2022.
Products and customers
Refined copper is predominantly used in the manufacture
of cables, transformers and motors as well as castings and
alloy‑based products. Foxconn has partnered with Vedanta
to make semiconductors in India, as the electronics giant
looks to diversify its business amid a global chip shortage.
Electric vehicles (EVs) and wind and solar farms, which
can contribute to carbon emission reduction, need copper
favoured in applications. Total copper demand from the EV
sector is expected to rise to nearly to 3.3 mt by 2030 from
under 500,000 tonnes this year.
The renewable energy sector could see copper demand rise
from around 650,000 tonnes in 2020 to over 1.3 mt in 2030.
Global copper demand is expected to rise to more than
26 mt in 2025 from around 23 mt this year, much of this
growth coming from renewable energy and EVs.
On an average, a battery electric vehicle (BEV) contains
about 83 kg of copper and a plug-in hybrid electric vehicle
(PHEV) contains about 60 kg compared to an internal
combustion engine car, which needs an average of 23 kg
of copper.
124
Management Discussion and AnalysisVedanta Limited Finance review
Executive summary
We had a strong operational and financial performance in
FY2022 amidst the challenges faced due to the pandemic.
We continue to focus on controllable factors such as
resetting cost base through diverse cost optimisation
initiatives, disciplined capital investments, working capital
initiatives, marketing initiatives and volume with strong
control measures to ensure safe operations across
businesses within framed government and corporate
guidelines amidst the pandemic.
In FY2022, we recorded an EBITDA of ₹45,319 crore, 66%
higher y-o-y and robust adjusted EBITDA margin1 of 39%.
(FY2021: ₹27,341 crore, margin 36%).
Higher sales volumes resulted in increase in EBITDA by
₹1,578 crore, driven by higher volumes at Aluminium, Zinc
International and Iron ore business.
Market factors resulted in increase in EBITDA by ₹18,142
crore. This was primarily driven by increase in the
commodity prices, rupee depreciation, partially offset by
input inflation and change in Profit Petroleum Tranche.
Gross debt as on 31 March 2022 was ₹53,109 crore,
a decrease of ₹3,919 crore since 31 March 2021. This
was mainly due to the repayment of debt at HZL, BALCO
and CIHL partially offset by increase in borrowing at
Vedanta Standalone.
Net debt as on 31 March 2022 was ₹20,979 crore,
decreased by ₹ 3,435 crore since 31 March 2021 (FY2021:
₹24,414 crore), majorly on account of cash flow from
operations, partially offset by payment of dividend and
capex payment. The balance sheet of Vedanta Limited
continues to remain strong with cash & cash equivalents, of
₹32,130 crore and Net Debt to EBITDA ratio at 0.5x (FY2021:
0.9x).
1 Excludes custom smelting at Copper India.
Consolidated EBITDA
EBITDA increased by 66% in FY2022 to ₹45,319 crore.
This was mainly driven by higher commodity prices,
higher sales realisation from Iron ore and Steel business,
increased volumes at Zinc International and Aluminium
business, and rupee depreciation, partially offset by input
inflation and change in Profit Petroleum Tranche.
Integrated Report
Statutory Reports
Financial Statements
Consolidated EBITDA
Zinc
-
-
India
International
Oil & Gas
Aluminium
Power
Iron Ore
Steel
Copper India
Others
Total EBITDA
(₹ crore, unless stated)
FY2022
17,695
16,161
1,533
5,992
17,337
1,082
2,280
701
(115)
348
FY2021
12,431
11,620
811
3,206
7,751
1,407
1,804
871
(177)
47
45,319
27,341
% change
42%
39%
89%
87%
124%
(23)%
26%
(19)%
(35)%
632%
66%
Consolidated EBITDA bridge
EBITDA for FY2021
Market and regulatory: 18,142
a) Prices, premium / discount
b) Direct raw material inflation
c) Foreign exchange movement
d) Profit petroleum to GOI at Oil & Gas
e) Regulatory changes
Operational: (1,045)
f) Volume
g) Cost and marketing
Others
EBITDA for FY2022
a) Prices, premium/discount
(₹ crore, unless stated)
27,341
27,973
(9,127)
105
(788)
(21)
1,578
(2,622)
880
45,319
Commodity price fluctuations have a significant
impact on the Group’s business. During FY2022, we
saw a net positive impact of ₹27,973 crore on EBITDA
due to commodity price fluctuations.
Zinc, lead and silver: Average zinc LME prices during
FY2022 increased significantly to US$3,257 per tonne,
up 34% y-o-y; lead LME prices decreased to US$2,285
per tonne, up 22% y-o-y; and silver prices increased
to US$24.6 per ounce, up 7% y-o-y. The cumulative
impact of these price fluctuations increased EBITDA by
₹5,880 crore.
Aluminium: Average aluminium LME prices increased
to US$2,774 per tonne in FY2022, up 54% y o y, this
had a positive impact of ₹15,795 crore on EBITDA.
Oil & Gas: The average Brent price for the year was
US$81.1 per barrel, up 82% y-o-y. This had positive
impact on EBITDA by ₹3,231 crore.
Iron & Steel: Higher realisations positively impacted
EBITDA at ESL by ₹1,650 crore and IOB by ₹1,199 crore.
125
Integrated Report and Annual Accounts 2021-22
Finance Review
b) Direct raw material inflation
Prices of key raw materials such as imported alumina, thermal coal, carbon and caustic have increased in FY2022,
negatively impacting EBITDA by ₹9,127 crore, primarily at Aluminium, Zinc and Iron & Steel business.
c) Foreign exchange fluctuation
INR depreciated against the US dollar during FY2022. Stronger dollar is favourable to the Group’s EBITDA, given the
local cost base and predominantly US dollar-linked pricing. The favourable currency movements positively impacted
EBITDA by ₹105 crore.
Key exchange rates against the US dollar:
Indian rupee
Average
year ended
31 March 2022
74.46
Average
year ended
31 March 2021
70.11
% change
As at
31 March 2022
(` crore, unless stated)
As at
31 March 2021
0.5%
75.59
73.30
d) Profit petroleum to GOI at Oil & Gas
INCOME STATEMENT
The profit petroleum outflow to the Government of
India (GOI), as per the production sharing contract
(PSC), increased by ₹788 crore.
e) Regulatory
During FY2022, changes in regulatory levies such as
Renewable Power Obligation etc. had a cumulative
positive impact on the Group EBITDA of ₹21 crore.
f) Volumes
Higher volume led to increase in EBITDA by ₹1,578
crore in the following businesses:
Aluminium (positive K1,138 crore)
In FY2021, the Aluminium business achieved metal
sales of 2.26 million tonnes, up 15% y-o-y. This
volume increase had a positive impact on EBITDA of
₹1,138 crore.
FACOR (positive K213 crore)
Increased EBITDA driven by increase in sales volumes
at FACOR.
Zinc International (positive K112 crore)
Sales volume increased at Gamsberg mine.
g) Cost and marketing
Higher costs resulted in decrease in EBITDA by
₹2,622 crore over FY2022, primarily due to increased
cost, partially offset by higher premia realisations at
Aluminium and Zinc business.
h) Others
This primarily includes the impact of higher capex and
opex recovery in the Oil & Gas business, inventory and
foreign exchange adjustments during FY2022 partially
offset by lower power EBITDA, impacting EBITDA
positively by ₹880 crore.
Particulars
Net Sales/Income from
Operations
Other Operating Income
EBITDA
EBITDA margin1 (%)
Finance Cost
Investment Income
Exchange Gain /(Loss)
Profit before
Depreciation and Taxes
Depreciation and
Amortisation
Profit before
Exceptional Items
Exceptional Items2 :
credit/(expense)
Taxes3
Profit after Taxes
Profit after Taxes
(before Exceptional
Items)
Minority Interest
Attributable PAT after
Exceptional Items
Attributable PAT
(before Exceptional
Items)
Basic Earnings Per
Share (`/share)
Basic EPS before
Exceptional Items
(`/share)
Exchange Rate (`/US$)
– Average
Exchange Rate (`/US$)
– Closing
(` crore, unless stated)
FY2022
FY2021
% Change
1,31,192
86,863
1,541
45,319
39%
4,797
2,341
(235)
1,158
27,341
36%
5,210
3,269
129
42,627
25,528
8,895
7,638
33,732
17,891
(768)
(678)
9,255
23,710
24,299
2,180
15,032
15,557
4,908
18,802
3,429
11,602
19,279
12,151
50.73
31.32
52.02
32.80
74.46
74.11
75.59
73.30
51
33
66
-
(8)
(28)
-
67
16
89
13
-
58
56
43
62
59
62
59
0.5
3
1. Excludes custom smelting at Copper India
2. Exceptional items gross of tax
3.
Tax includes tax benefit on exceptional items of ₹178 crore on
special items in FY2022 (FY2021: tax benefit of ₹154 crore);
Previous period figures have been regrouped/rearranged wherever
necessary to conform to current period presentation
126
4.
Management Discussion and AnalysisVedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Revenue
Revenue for the year was ₹131,192 crore, higher 51%
y-o-y. This was driven by higher commodity prices, higher
volumes at Aluminium business, Copper, TSPL, Iron Ore
and, FACOR, increase in premium in aliminium and zinc and
rupee depreciation.
EBITDA and EBITDA margin
EBITDA for the year was ₹45,319 crore, 66% higher y‑o‑y.
This was mainly driven by higher commodity prices, higher
sales realisation from Iron ore and Steel business, increased
volumes at Zinc International and Aluminium business,
and rupee depreciation; partially offset by input inflation
and change in Profit Petroleum Tranche. We maintained
a robust adjusted EBITDA margin1 of 39% for the year
(FY2021: 36%).
Depreciation and amortisations
Depreciation for the year was ₹8,895 crore compared
to ₹7,638 crore in FY2021, higher by 16%, primarily on
account of higher ore production in Zinc business, higher
depletion at Oil & Gas business and capitalisation at
Aluminium business.
Net interest
Attributable profit after tax (before exceptional
items)
Attributable PAT before exceptional items was ₹19,279 crore
in FY2022 compared to ₹12,151 in FY2021.
Earnings per share
Earnings per share before exceptional items for FY2022
were ₹52.02 per share as compared to ₹32.80 per share
in FY2021.
Dividend
The Board has declared a total dividend of ₹45 per share
during the year.
Shareholders fund
Total shareholders fund as on 31 March 2022 aggregated to
`65,383 crore as compared to `62,278 crore as of 31 March
2021. This was primarily net profit attributable to equity
holders earned during the year partially offset by dividend
paid during the year.
Net fixed assets
The net fixed assets as on 31 March 2022 were `1,09,345
crore. This comprises `14,230 crore as capital work-in-
progress.
The blended cost of borrowings was 7.9% for FY2022
compared to 7.7% in FY2021.
Balance Sheet
Finance cost for FY2022 was ₹4,797 crore, 8% lower
compared to ₹5,210 crore in FY2021 mainly on account of
decrease in average borrowings, and marginal decrease in
blended cost of borrowings.
Investment income for FY2022 stood at ₹2,341 crore,
28% lower compared to ₹3,269 crore in FY2021. This was
mainly due to Mark to Market movement and change in
investment mix.
Exceptional items
The exceptional items for FY2022 was at negative ₹ 769
crore, mainly on account of exploration write off in Oil &
Gas business, provision against KCM receivables, fly ash
disposal at Aluminium, partially offset by impairment
reversal in Oil & Gas business.
[For more information, refer note [34] set out in P&L notes of
the financial statement on exceptional items].
Taxation
Tax expense for FY2022 stood at `9,255 crore (FY2021:
`2,180 crore). The normalised ETR is 28% (excluding tax
on exceptional items of `178 crore and DTA reversal on
ESL losses of `122 crore) compared to the normalised
ETR of 27% (excluding tax on exceptional items `154 crore,
tax on dividend from HZL `869 crore, new tax regime
impact `(271) crore and Deferred Tax Asset of `3,111 crore
recognised on losses in ESL).
1 Excludes custom smelting at Copper India.
Our financial position remains strong with cash and liquid
investments of ₹32,130 crore.
The Company follows a Board approved investment policy
and invests in high quality debt instruments with mutual
funds, bonds and fixed deposits with banks. The portfolio
is rated by CRISIL, which has assigned a rating of Tier 1
(meaning highest safety) to our portfolio Further, the
Company has undrawn fund based committed facilities of
c.`6,800 crore as on 31 March 2022.
Gross debt as on 31 March 2022 was `53,109 crore,
a decrease of `3,919 crore since March 31, 2021. This
was mainly due to the repayment of debt at HZL, BALCO
and CIHL partially offset by increase in borrowing at
Vedanta Standalone.
Gross Debt comprises term debt of c.`46,400 crore, working
capital loan of c.`1,600 crore and short-term borrowing of
c. `5,100crore. The loan in INR currency is 91% and balance
9% in foreign currency. Average debt maturity of term debt
is c. 3.4 years as of 31 March 2022.
CRISIL and India Ratings revised the rating of Vedanta from
AA- to AA with Stable Outlook in FY2022
127
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Zinc India
THE YEAR IN BRIEF
Mine production progressively improved during the year with
record ore production for the full year up 6% y-o-y to deliver
a record 16.3 mt, supported by strong production growth at
Zawar mines, SK Mines and Rampura Agucha mine, which
were up 12%, 8% and 6% respectively. Highest every mined
metal production was up 5% y-o-y to 1,017 kt primarily on
account of higher ore production and milling recovery, partly
offset by lower ore metal grade.
Diverse
Workforce
128
128
Vedanta Limited
Management Discussion and AnalysisVedanta Limited Occupational health & safety
It is with deep sadness that we report the loss of four
colleagues (Business partners) in work-related incidents
at our managed operations. These incidents happened
despite continuous efforts to eliminate fatalities and attain
a Zero Harm work environment. A thorough investigation
was conducted to identify the causes of these incidents
and to share lessons learned across HZL, with the aim of
preventing repeat or similar incidents.
LTIFR for the year was 0.79 as compared to 0.97 in FY2021.
LTIFR for the last quarter was 0.62 as compared to 0.89 in
FY2021 driven by several safety awareness, investigation
and prevention initiatives. As compared to a year ago,
number of LTIs decreased from 13 to 10 in the fourth
quarter. LTIFR for the year was 0.79 (total 50 LTIs for the
year). There has been greater management focus to bring
a cultural change via felt leadership programs, town halls,
enabling tools like safety whistle blower as well as reward &
recognition for near-miss reporting.
During the second wave of COVID‑19, we set up an oxygen
bottling plant in record 5 days; it was commissioned
to produce 500 oxygen cylinders per day, helping local
government and hospitals in the fight against COVID‑19.
New field hospital was established in Dariba, with a
capacity of 100 beds with air conditioning facility and
medical assistance. Apart from these efforts, the Company
has extended all kinds of support to the local health
administration for fighting against COVID‑19. Unfortunately,
we reported loss of 59 employees and contract employees
during wave 1 and wave 2 of COVID.
To ensure vaccination to all the employees, business
partners and their family members, mega drives were
organised during the year. The company has also
introduced the Group Corona Kavach Policy that covers
more than ~25000 business partners in Rajasthan and
Pantnagar in Uttarakhand. This cashless policy covers
all corona related diagnostic charges including pre-
hospitalisation and post‑hospitalisation expenses. There is
also a dedicated 24×7 Covid Care Apollo helpline number to
provide any kind of healthcare support and assistance for
all employees and their dependents. Post covid care drive
also initiated to boost the motivation level of the employee.
Company has also rolled out Group Term Life policy which
provides life (term) insurance protection in case of death of
active regular executive. The coverage limit is 5 Times of
Fixed Salary of each employee up to a max. Limit i.e., INR
5.5 Cr.
~25,000
BUSINESS PARTNERS COVERED
BY THE GROUP CORONA KAVACH POLICY
Integrated Report
Statutory Reports
Financial Statements
During the year we commissioned first made in India
emergency escape route staircase type in underground
at Rajpura Dariba Mine and underground rescue station
at Rampura Agucha Mine which significantly improves
the response time in emergency cases. Qualitative and
Quantitative Exposure Assessment completed for all units
and exposure mitigation plan developed. 22 Digitised
safety modules launched for easy understanding of
safety standard requirements and road map developed to
eliminate manual charging by all mining locations.
HZL is also using & deploying IOT solutions for safety of its
employees and equipment. Connected work force solution
which are safety wearables & tags, is one such technology
that will alert management proactively to ensure safety
of employees and to intervene on priority for necessary
support and rescue. Detect technology is another IOT
that uses of Artificial intelligence and video analytics, of
presently installed CCTV cameras and identify and capture
Unsafe conditions and Unsafe acts which gets reported and
help Line leadership to act on violators and build around the
clock assurance for preventing safety incidents. Through
this technology, we are achieving autonomous system for
detection of safety violations during turnarounds through a
network of cameras, supported by back-end data analytics
& frontend real-time reporting.
Demonstrating the highest standards of
health and safety management during the
year, Chanderia CPP and Debari both received
the prestigious ‘Sword of Honor’ from British
Safety Council for showing excellence in the
management of health and safety risks at work.
This came as a double swoop following the top
Five-Star rating achieved by Chanderia CPP
and Debari, for successfully completing the
best practice Occupational Health and Safety
Audit conducted by the British Safety Council.
Our Kayad Mine was also awarded the National
Safety Award from the Government of India for
Longest Accident-Free in metal mines and for
lowest injury frequency rate (LIFR).
129
Integrated Report and Annual Accounts 2021-22 Operational review: Zinc India
Environment
Hindustan Zinc commits to ‘Long-term target to reach net-
zero emissions by 2050’ in alignment with Science Based
Targets initiative (SBTi) aiming to have clearly defined path
to reduce emissions in line with the Paris Agreement goals.
To achieve the target, we are working towards improving our
energy efficiency, switching to low carbon energy sourcing,
introducing battery operated electrical vehicles and
increasing the role of renewables in our energy mixes.
Company has made notable technological advancements
in energy conservation. Zinc Smelter Debari has revamped
the Cell House and eliminated current losses through
electrolytic cells by successfully replacing 600+ concrete
cells with poly concrete cells. As a result, the power rating
has improved. Additionally, the turbine revamping project
is certified as a carbon reduction project by VERRA (the
world’s most widely used voluntary GHG program) resulting
in a decrease of 270,000 tCO2e per year. For Decarbonising
the future of Indian mining, Hindustan Zinc partnered
with leading global manufacturers for introducing BEVs in
underground mines. All units of HZL are certified to ISO
50001 (Energy Management system).
At HZL, we recognise the reality of climate change,
Therefore, our risk management processes embed climate
change in the understanding, identification, and mitigation
of risk. We have published our first TCFD (Task Force
on Climate‑related financial disclosure) report during the
year which sets the adoption of the TCFD framework for
climate change risk and opportunity disclosure. HZL
actively participated in ‘Business Leaders Group COP26’
and was engaged for shaping the agenda for COP26 which
was held at Glasgow (UK) in Nov’21. Endeavoring towards
sustainable organisation HZL enhanced the governance by
establishing Board Level ESG & Sustainability Committee
formed to overview the ESG progress of the organisation.
Hindustan Zinc joins the Taskforce on Nature-Related
Financial Disclosures (TNFD) Forum to tackle nature-
related risks. Miyawaki Method of Afforestation pilot project
completed at DZS and horizontal deployment will be done
across HZL. 3 years Engagement with IUCN will help in
development of Biodiversity Management Plan focusing No
Net Loss approach to achieve Sustainability Goal 2025.
10 MLD
SEWAGE
TREATMENT
PLANT (STP)
COMMISSIONED
130
Effluent Treatment Plant,
Dariba Smelting Complex
One of the most notable achievements has been the
successful commissioning of a 3000 KLD Zero Liquid
discharge (RO-ZLD) plant at the Zinc Smelter Debari.
Expansion of 3200 KLD ZLD plant at Dariba Smelter is
under progress and shall be commissioned by first Quarter
of FY 23. Apart from that Zawar (ZM) and Rampura Agucha
Mine ZLD projects of 4000 KLD capacity each have been
initiated to improve recycling and strengthen the zero
discharge. Like ZM, Dry tailing plant at Rajpura Dariba Mine
is also under final stage of commissioning and will result in
significant amount of water recovery from the tailings.
The company has also commissioned 10 MLD Sewage
Treatment Plant (STP) and 5 MLD facility in Udaipur,
bringing the total Udaipur STP capacity built up by it to
60 MLD. This will treat nearly all of Udaipur’s sewage, and
the treated sewage is used by Beneficiation, Smelters and
Captive Power Plants, lowering its freshwater use. In the
area of water stewardship Rampura Agucha Mine has also
completed astonishing project of executing groundwater
recharge intervention project across 4 blocks of Bhilwara
district having ground water recharge potential of 8.5
MCM/ annum.
Successful public hearing was conducted during the year
for Expansion of Zawar Mines from 4.8 million TPA (Tones
per annum) to 6.5 Million TPA and Beneficiation from 4.8
Million TPA to 7.3 Million TPA.
One of the most notable achievements
has been the successful commissioning
of a 3000 KLD Zero Liquid discharge
(RO-ZLD) plant at the Zinc Smelter
Debari.
Management Discussion and AnalysisVedanta Limited Our sustainability activities received several
endorsements during the year
• The Company is ranked 1st in Asia‑Pacific and
globally 5th in Dow Jones Sustainability Index in
2021 amongst Mining & Metal companies. (1st
in environment Dimension among the metal and
mining sector globally)
• Company won the 1st Bronze Medal and been
featured in the prestigious Sustainability Yearbook
for the fifth year in a row by S&P Global
• The company received the award for ‘Outstanding
Accomplishment in Corporate Excellence and
Dariba smelter received the award for excellence
in Environment management’ in 16th CII‑ITC
Sustainability Awards
• HZL received IEI Industry Excellence Award 2021,
instituted by The Institution of Engineers (India)
• HZL’s RAM and Kayad mine received 5 Star Rated
Mines’ award by the Ministry of Mines, Govt.
of India
• Hindustan Zinc wins at ESG India Leadership
Awards – Leadership in Environment and Green
House Gas Emissions Reduction Categories
organised by ESGRisk.ai, India’s first ESG
rating company
• Kayad received FIMI Bala Gulshan Tandon Award
of Excellence for the year
• HZL has been awarded the Most Sustainable
Company in the Mining Industry by World finance
at their Sustainability Awards 2021
• Hindustan Zinc has been Awarded as Most
Innovative Project (CLZS‑ Restoration of Jarofix
Yard Project) and Innovative Project (RDM‑
Biodiversity Park) in the renowned CII National
Award for Environmental Best Practices 2021
• Hindustan Zinc’s Dariba Smelting Complex wins
Prestigious CII‑National Awards for Excellence in
Water Management
Hindustan Zinc is a law-abiding corporate citizen and
will always uphold the law. National Green Tribunal
(NGT) appointed a seven-member committee of subject
matter experts, and this committee submitted its report
recommending plantation of trees worth INR 90 lakh, which
Hindustan Zinc Limited is willing to comply with.
However, NGT has directed that the company under the
precautionary principle should spend INR 25 crores towards
community welfare programmes under the aegis of a newly
constituted committee. For us, our local communities have
always been an integral part of all our social initiatives and
will continue to be so.
Integrated Report
Statutory Reports
Financial Statements
We are already preparing a blueprint for
INR 1000 crore CSR plan, to be executed in
the next 4 to 5 years, along with the local
administration and stakeholders for
the socio-economic welfare of communities
in all our areas of operations.
While we continue with our social welfare work on ground,
Hindustan Zinc Limited will be filing an appeal against
certain observations made by NGT, that are contradictory
to the finding of the expert committee and the realities on
the ground.
Production performance
PRODUCTION (kt)
FY2022
FY2021
FY2020
Total mined metal
1017
Refinery metal production
Refined zinc –integrated
Refined lead – integrated1
Production – silver
(in tonnes)2
967
776
191
647
972
930
715
214
706
5%
4%
8%
(11%)
(8%)
1. Excluding captive consumption of 6,951 tonnes in FY2022 vs. 6,424 tonnes in
FY2021.
2. Excluding captive consumption of 37.4 tonnes in FY2022 vs. 34.6 tonnes in
FY2021.
Operations
For the full-year, ore production was up 6% y-o-y to 16.3
million tonnes on account of strong production growth at
Zawar mines, SK mines & Rampura Agucha mines, which
were up 12%, 8% and 6% respectively. FY2022 saw the best
ever Mined metal production of 1,017,058 tonnes compared
to 971,975 tonnes in the prior year in line with higher ore
production across Mines supported by improved recovery.
For the full year, we saw our ever-highest metal production,
up 4% to 967 kt in line with better plant and MIC availability,
while silver production was 8% lower at 647 MT in line with
lower Lead metal production.
131
Integrated Report and Annual Accounts 2021-22
Operational review: Zinc India
Production performance
PRICES
Particulars
FY2022
FY2021
% Change
ZINC DEMAND – SUPPLY
Zinc Global Balance In KT
CY2020
CY2021
CY2022 E
3,257
2,422
34%
Mine Production
12276
13094
13083
2,285
1,868
22%
Consumption
13205
14147
14469
Smelter Production
13679
13867
13937
The metal market is little changed, the refined zinc market
outside of China is fundamentally tight.The cash‑to three
months spread has been in backwardation for virtually all
of the first two months of the year. Although the average
backwardation has halved from $30/t in January to just
under $15/t in February, it remains significant. Meanwhile,
LME stocks have continued to drip lower ending February
at 144kt, 10kt lower than January. At the equivalent of just 4
stock days this is extremely low.
India’s manufacturing PMI increased to 54.9 in February,
a slight improvement from January’s 54.0, signalling a
stronger improvement of the sector. “The seasonally
adjusted IHS Markit India Manufacturing Purchasing
Managers’ Index® (PMI®) was at 54.9 in February, up from
54.0 in January and signalling a stronger improvement
in the health of the sector. Growth has now been seen in
each of the latest eight months, with the headline figure
remaining above its long‑run average of 53.6,” stated IHS
Markit in its report.
The report added that firms responded to strong increases
in new work intakes by lifting production, input buying and
stocks of purchases. Employment fell at the softest pace
and favourable demand conditions improved sentiments
to its strongest since October. Demand for raw materials
strengthened to lead to another marked rate of input
price inflation.
As government spending continues in infrastructure,
highways, electrification and transmission projects,
the major demand for zinc came from the structural
segment. Buying activity was higher in February for Indian
manufacturers due to higher output in new order inflows.
Average zinc LME cash
settlement prices US$ per
tonne
Average lead LME cash
settlement prices US$ per
tonne
Average silver prices
US$/ounce
24.58
22.89
7%
Global zinc consumption growth will slow from the 7.1%
seen in 2021 to 2.3% in 2022 and an average of 1.7% p.a. in
2023 and 2024. Compared with zinc’s recent pre‑pandemic
history, this is still a robust growth rate and sufficient to
lift consumption to 14.5Mt, surpassing the 2017 all-time
high of 14.2Mt. In 2023 and 2024, the pace of growth is
projected to moderate further with average growth of 1.7%
pa or approximately 250kt/a, lifting consumption to just
under 15Mt. Tightness in the refined market continues
to be evidenced in the spot markets of Europe and North
America where spot premiums remain high. However, the
backwardation together with high prices and premiums is
encouraging consumers to buy on a hand to mouth basis.
Meanwhile, the concentrate market has seen indicative spot
TCs jump to $135‑150/t of concentrate, up from $85/t in
December 2021. Spot TCs will have to remain at elevated
levels until the arbitrage of Chinese prices over the LME
returns, or any shortage of domestic concentrates force
Chinese smelters into the international market.
Although the Russia/Ukraine conflict has rocked many
commodities markets, the impact on the zinc market has
been negligible, a reflection of the fact that Ukraine is of
modest importance as a zinc consumer. The roughly 20kt/a
of zinc consumed by the country is largely supplied by
Kazzinc. With Ukraine’s 500kt of continuous galvanising
capacity being idled in the face of the conflict, the zinc
normally destined for the country will be readily re-directed
into the tight refined markets in other parts of the world.
The more profound impacts for zinc will be indirect.
Energy prices were already high, and the conflict has only
exacerbated the situation. As a result, a significant easing
of European electricity prices, and the financial pressure on
Europe’s smelters is unlikely this summer.
132
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
UNIT COSTS
Particulars
Unit costs (US$ per tonne)
Zinc (including royalty)
Zinc (excluding royalty)
FINANCIAL PERFORMANCE
FY2022
FY2021
% Change
1,567
1,122
1,286
954
22%
18%
Particulars
Revenue
EBITDA
FY2022
FY2021
% Change
28,624
21,932
16,161
11,620
31%
39%
For the full year, zinc COP excluding royalty was $1122,
higher by 18% y‑o‑y (18% higher in INR terms). The COP has
been affected by higher coal & commodity price increase
partially offset by benefits from better volumes, operational
efficiencies & recoveries.
EBITDA margin (%)
56%
53%
Revenue from operations for the year was ₹28,624 crore,
up 31% y-o-y, primarily on account of higher metal prices,
higher production & higher sulphuric acid realisations
EBITDA in FY2022 increased to ₹16,161 crore, up 39% y‑o‑y.
The increase was primarily driven by higher revenue and
partly offset by higher cost of production.
Hi tech Cell house at HZL
133
Integrated Report and Annual Accounts 2021-22 Projects
In HZL journey of 1.25 mtpa MIC expansion, some of key
projects are under execution at RD Mines complex. We
have successfully completed RD Mines Shaft & Conveyor
upgradation for enhancement of ore hoisting capacity in Q3
of this FY. In line with our ESG journey, we have completed
installation of Dry Filtration & Paste fill plant to enable
effective tailings managements by switching from Wet to
Dry tailing management system. Commissioning of plant
will start by Q1 of next FY. For enhancing metal recovery,
we have placed order for RD Beneficiation plant revamping,
enabling better Pb, Zn & Ag recoveries and improving
plant reliability by replacing obsolete Grinding, Floatation
& Filtration circuits. Civil construction already ongoing and
plant is scheduled to be commissioned in Q3 of next FY.
1.25 mtpa
MIC EXPANSION
At Zawar, in order to enhance the ventilation capacities and
working conditions of West Mochia and North Baroi mines,
installation of underground ventilation fans has started. For
increasing the capacity of Tailing storage Facility, design
and stabilisation studies have been conducted and the dry
stacking is under progress.
The development of North Decline (ND1) was completed at
Rampura Agucha (RA) mine. This improves the accessibility
of shaft section, alternate emergency evacuation, ease in
mine equipment deployment at lower levels of mine, face
charging with emulsion explosives, face drilling with long
feed jumbo, etc.
Treatment of Raw Zinc Oxide (RZO) in RKD circuit
(component of overall Fumer project) continued during the
entire year. Process for applying employment visa for the
Chinese experts coming for Fumer commissioning has
started. Regular follow ups are being done with government
authorities for speedy issuance of the visas. Fumer
Commissioning is targeted by Q1 of FY23.
Panormic view of Chanderiya
Smelting Complex
134
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Exploration
Zinc India’s exploration objective is to upgrade the
resources to reserves and replenish every ton of mined
metal to sustain more than 20 years of metal production
by fostering innovation and using new technologies.
The Company has an aggressive exploration program
focusing on delineating and upgrading Reserves and
Resources (R&R) within its license 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).
Strategic Priorities & Outlook
Our primary focus remains on enhancing overall output,
cost efficiency of our operations and disciplined capital
expenditure. 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 $1125‑ $1175 per tonnes through efficient
ore hauling, higher volume & 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
On an exclusive basis, total ore reserves at the
end of FY2022 totalled 161.21 million tonnes
and exclusive mineral resources totalled
286.73 million tonnes. Total contained metal
in Ore Reserves is 9.57 million tonnes of zinc,
2.45 million tonnes of lead and 298.3 million
ounces of silver and the Mineral Resource
contains 13.17 million tonnes of zinc, 5.86
million tonnes of lead and 576.27 million
ounces of silver. At current mining rates, the
R&R underpins metal production for more than
20 years.
135
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Zinc International
THE YEAR IN BRIEF
During FY2022, Zinc International continued
to ramp up production from its flagship
project Gamsberg mine and achieved record
production of 170kt. Several milestone
projects were completed including rougher
cells commissioning at Gamsberg resulting
in throughput increase from 535tph to
575tph and the BMM plant debottlenecking
project which resulted in throughput of
238tph, up from 213tph.
Black Mountain continued to have a stable
production of 52kt, slightly lower than
FY2021 due to lower head grades and
mining challenges including Deeps Shaft
dewatering system failure.
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
progressing well.
Gamsberg facility,
Zinc International
136136
Vedanta Limited
Management Discussion and AnalysisVedanta Limited Safety
The LTIFR rate improved to 1.1 in FY2022 (FY2021 1.7).
Black Mountain Mine had a fatality on 11 November
2021 when a business partner employee succumbed to
injuries sustained after a rockslide inside the blast hole.
As part of the remedial measures, the drilling and blasting
of blastholes were reviewed to improve fragmentation
and eliminate boulders. Planned Task Observations are
conducted to enforce these remedial measures and prevent
employees entering blast holes.
With regards to Gamsberg South Pit failure that happened in
November 2020, rescue and recovery search are continuing
and remains our first priority. Revised plan and approach
has been shared with Department of Mineral Resources
with expected date of completion being Q1 FY2023.
Employee engagement is an integral part
of our Safety strategy, and our leaders are
required to conduct Frequent, Caring and Risk
based Visible Felt Leadership Interactions
to coach and address behavioural issues at
both our operations. Both Black Mountain and
Gamsberg Mines have embarked on a Critical
Control Management programme where all the
employees are required to know the Top
High-Risk activities in their area of work as well
as the mitigating strategy.
Occupational Health
At Vedanta Zinc International, 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. Since the start of the
COVID‑19 pandemic, we have recorded 880 positive cases,
873 recoveries and 6 deceased. We have implemented
stringent protocols to mitigate COVID‑19 spread and we
have social programs in place to assist communities in
which we operate. We have also embarked on a Workplace
(and community) Vaccination programme to ensure
100% coverage of vaccination for the employees and
their families.
Integrated Report
Statutory Reports
Financial Statements
Airborne particulate management remains a key focus in
reducing Lead and silica dust exposures of employees.
Black Mountain Mine has had 9 blood lead withdrawals for
FY2022, against more stringent limits than required by law.
We have strengthened our Employee Wellness Programme,
focussing on the increased participation of employees
and communities in VCT for Aids / HIV, Blood donation
and wellness.
Environmental
Gamsberg further reduced water consumption in the plant
by implementing conversions from potable (RAW) water
to process water and successfully reduced the plant water
intensity to 0.45m3/t. A strategy that will enable Vedanta
Zinc International to transition to a low carbon operation
was finalised and the two main projects is in early stages
of implementation. These projects include reducing
reliance on the coal-based electricity from ESKOM through
implementation of Renewable energy replacements of
77MW for Black Mountain and Gamsberg. The first phase
of implementing a programme to replace current diesel
fuelled underground TMM with Battery Electrical Vehicles
commenced which will culminate in a full replacement
strategy of the total BMM mining TMM fleet with Battery
Electrical Vehicles.
The Gamsberg Nature Reserve Strategic Management Plan
has approved, and the properties transferred to Department
Public Works. A major campaign saw the collaboration
between the South African police force, Department
Environment Nature conservation and SANBI, to spread
awareness of biodiversity and endangered species of
the Region.
PRODUCTION PERFORMANCE
FY2022
Particulars
FY2021
% Change
Total production (kt)
223
203
10%
Production – mined metal
(kt)
BMM
Gamsberg
Refined metal Skorpion*
52
170
-
58
145
-
(9)%
18%
-
* The mine is under care & maintenance since May’20 onwards
137
Integrated Report and Annual Accounts 2021-22 Operational review: Zinc International
Operations
Projects
During FY2022, total production stood at 223,000 tonnes,
10% higher y-o-y. This was primarily through ramp up and
higher production in Gamsberg.
At BMM, production was 52,000 tonnes, 9% lower y-o-y.
This was mainly due to lower grades of zinc (2.1% vs 2.6%),
lead (2.1% vs 2.3%), lower zinc recoveries (75.2% vs 80.2%)
and lower lead recoveries (81.6% vs 81.8%) offset by 13.6%
higher throughput.
Gamsberg’s production was at 170,000 tonnes as the
operation continues to ramp up with improved performance
during current financial year.
At Skorpion Zinc engagement with technical experts to
explore opportunities of safely extracting the remaining
ore is ongoing. The pit optimisation work is complete. The
business is currently evaluating options to restart mining.
UNIT COSTS
Particulars
Zinc (US$ per tonne)
unit cost
FY2022
FY2021
% Change
1,442
1,307
10%
The unit cost of production increased by 10% to US$1,442
per tonne, from US$1,307 per tonne in the previous year.
This was mainly driven by higher mining cost and local
currency appreciation offset by higher production at
Gamsberg and higher BMM copper production and credits.
FINANCIAL PERFORMANCE (₹ crore, unless stated)
Particulars
Revenue
EBITDA
EBITDA margin
FY2022
FY2021
% change
4,484
1,533
34%
2,729
811
30%
64%
89%
During the year, revenue increased by 64% to
₹4,484 crore, driven by higher sales volumes
compared to FY2021 due to higher production
at Gamsberg and higher LME prices, partially
offset by higher costs. EBITDA increased by
89% to ₹1,533 crore, from ₹811 crore in FY2021
mainly on account of higher LME prices and
sales volumes.
Refinery Conversion
Substantial progress has been made on Skorpion Zinc
Refinery conversion Project with the completion of FEED,
feasibility study, tendering activities & techno-commercial
adjudication. All regulatory approval is in place to start
project execution. Previously completed feasibility study
also has been updated. With power tariffs being very critical
for the viability of the project, discussions/ negotiations are
happening with the state power utility along with the option
of renewable power which is also being explored. We are
only waiting for confirmation of power tariff to take the final
decision and starting the execution on the ground by H1
2022-23.
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. This will have additional Metal in concentrate (MIC)
of 200+ which will take the total MIC production capacity
to 450+. The EOI for the Concentrator plant was floated
and proposals were received. The project was approved by
Vedanta Board in March 2022. The execution philosophy
is on EPC basis and the project is on track for start of
execution in Q1 FY 2023.
Gamsberg Smelter
We would set‑up a 300 ktpa Smelter Project by repeating
the conventional Roaster-Leach-Electrolysis(R-L-E)
process along with necessary modifications required for
capacity upgrade to treat Gamsberg Concentrate. We have
received the environmental approval for Bulk water pipeline
construction and outcome of ESIA is also expected in April
2022. We are appointing an Advocacy partner for engaging
with Gov. of South Africa on the other critical success
factors like SEZ, power price, sulphuric acid offtake,
logistics infrastructure and other regulatory approvals which
are absolutely vital for economic feasibility of the project.
Black Mountain Iron Ore project
This is a project to recover iron ore (magnetite) from the
BMM tailings. The 0.7mtpa Iron Ore plant is currently under
execution with the EPC contractor being Lead EPC. Owners’
Engineer for the project has been appointed. World class
Iron Ore will be produced from the new plant with Fe grade >
68%. First production is expected in August 2022.
138
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Exploration
Strategic Priorities & Outlook
5.8% reduction in reserve metal tons from 8.3Mt to
7.8Mt, with 24.0% increase in resources from 21.9Mt to
27.2Mt metal
Total R&R for VZI increased from 566Mt to 671Mt of ore,
while metal increased from 30.2Mt to 35.0Mt (15.9%
increase in total metal)
Reduction in reserve largely attributed to smaller open
pit design at Gamsberg North, while main factors
affecting resources is discovery of Gamsberg Kloof
deposit, remodelling of Gamsberg East and lower CoGs
for resources.
Zinc International continues to remain focused 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 our Gamsberg Plant at Designed
capacity and simultaneously develop debottlenecking
plan to increase Plant capacity by 10% to 4.4Mt Ore
throughput. Likewise, BMM continues to deliver stable
Production performance and focus is to debottleneck its
Ore volumes from 1.6Mt to 1.8Mt. Skorpion is expected
to remain in Care and Maintenance for H1 FY23 while
management is assessing feasible & 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$1100
per tonne.
In addition to above, Core Growth strategic
priorities include:
• Completion of Magnetite project in H1 FY 2023.
• Commencement of construction activities of
Gamsberg Phase 2 project with aim to start
production in H2 FY2024
• Continue to improvise Business case of Skorpion
Refinery Conversion Project and Gamsberg Smelter
Project through Government support, Capex and
Opex reduction
Gamsberg Wet Area
139
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Oil & Gas
THE YEAR IN SUMMARY
During FY2022, Oil & Gas business
delivered gross operated production of 161
kboepd, down by 1% y-o-y, primarily driven
by natural reservoir decline at the MBA
fields. The decline was partially offset by
addition of volumes from ramp up of gas
volumes, commissioning of Aishwariya
Barmer Hill facility, impact of polymer
injection in Bhagyam and Aishwariya fields,
new infill wells brought online in Mangala
field and reduced operational downtime.
In OALP blocks, seismic acquisition
program has been completed in Assam,
Cambay, Rajasthan and Offshore region.
As part of the 15 well drilling program,
11 wells have been drilled till date across
basins. Of these, two hydrocarbon
discoveries in Rajasthan (KW-2 Updip and
Durga -1) and one in Cambay (Jaya-1) have
been notified as oil and gas discovery.
Employees at
operational site
140140
Vedanta Limited
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Occupational Health & Safety
Environment
There are seven lost time injuries (LTIs) in FY2022.
Frequency rate stood at 0.20 per million-man hours
(FY2021: 0.16 per million-man hours) amidst increased
development activities.
Our focus remains on strengthening our safety philosophy
and management systems. We were recognised with
awards conferred by external bodies:
• Five Star Rating in Occupational Health & Safety Audit
conducted by British Safety Council for Mangala,
Bhagyam and Aishwarya Mines
Our Oil & Gas business is committed to protect the
environment, minimise resource consumption and drive
towards our goal of ‘zero discharge’. Highlights for FY2022
are as:
• NABL accreditation (ISO 17025:2017) and ILAC‑
MRA (International Laboratory Accreditation
Cooperation ‑ Mutual Recognition Arrangement)
approval for Environment Lab at Mangala Processing
Terminal, Barmer
• Leaders Award in Sustainability 4.0 under Mega large
business category conferred by Frost & Sullivan and TERI
• Raageshwari Gas Terminal (RGT) recognised for
• Reduction in GHG emission:
Quality with Excellence Award in the 46th International
Convention on Quality Control 2021
• Golden Peacock Occupational Health & Safety Award
2021 for Cambay asset
a. Commissioning of pipeline from Raag Oil to RGT for
gas transportation instead of flaring resulted in ~0.8
mmscfd gas with annual GHG reduction potential of
32,500 tons of CO2e
• Gold award for Ravva asset from Quality Circle Forum of
b. Diversion of condensate from Bridge plant to RDG
India (QCFI) at 21st Chapter Convention
• Apex Gold Award in Occupational Health & Safety for
Mangala, Bhagyam and Aishwarya mines
• Cairn awarded Greentech Safety Excellence Award 2021.
resulted into saving of 1 mmscfd gas with annual GHG
reduction potential of 27,750 tons of CO2e/annum
c. Commissioned 100 KWP Solar Plant at Sara WP#01
d. Green OB project: Commissioned 530 KWP Solar
Cairn Oil & Gas has taken various initiatives:
• COVID‑19 mass vaccination drive for employees, their
family members, and Business Partners. 100% of
eligible employees of Cairn and Business Partners have
completed both dose of vaccination
“5S” certification for Mangala, Bhagyam and
Aishwarya Mines
•
• Launched Business Partner’s awards to recognise
HSE initiatives to make workplace and work
environment safe
Digital initiatives: Drone based inspection of
Overhead Power Lines, Artificial Intelligence
(AI) based CCTV Camera in Suvali, High voltage
proximity detectors for cranes and tippers to
avoid incident with overhead electrical lines,
e-Lock for crude tankers, Solar based traffic
light system, Contactless Breath Analyzer,
Hazard reporting through Kiosk and Mobile
App etc.
Plant at Operation Base Camp at MPT (Annual GHG
reduction potential of 790 tons of CO2e/annum
• Reject water treatment plant commissioned at MPT
to increase produced water recycling rate: ~194,811
KL recovered
• Hydrocarbon recovery by processing of skimmed oil:
~18,233 bbls
Mangala
Processing Terminal
141
Integrated Report and Annual Accounts 2021-22 Operational review: Oil & Gas
PRODUCTION PERFORMANCE
Gross operated production
Rajasthan
Ravva
Cambay
OALP
Oil
Gas
Net production – working interest
Oil*
Gas
Gross operated production
Net production – working interest
Unit
Boepd
Boepd
Boepd
Boepd
Boepd
Bopd
Mmscfd
Boepd
Bopd
Mmscfd
Mmboe
Mmboe
FY2022
160,851
137,723
14,166
8,923
39
135,662
151
103,737
87,567
97
58.7
37.9
FY2021
162,104
132,599
19,177
10,329
-
140,353
131
101,706
88,923
77
59.2
37.1
% change
(1%)
4%
(26%)
(14%)
100%
(3%)
15%
2%
(2%)
26%
(1%)
2%
* Includes net production of 535 boepd in FY2022 and 441 boepd in FY2021 from KG‑ONN block, which is operated by ONGC. Cairn holds a 49%
stake.
Operations
Average gross operated production across our
assets was 1% lower y-o-y at 160,851 boepd.
The company’s production from the Rajasthan
block was 137,723 boepd, 4% higher y-o-y.
The increase was primarily due gains realised
from ramp up of gas sales, continued impact
of polymer injection in Bhagyam & Aishwariya
fields and new infill wells brought online in
Mangala field. Production from the offshore
assets, was at 23,089 boepd, 22% lower y-o-y,
owing to natural field decline.
137,723 boepd
AVERAGE GROSS PRODUCTION
FROM THE RAJASTHAN BLOCK
142
Production details by block are summarised below.
Rajasthan block
Gross production from the Rajasthan block averaged
137,723 boepd, 4% higher y-o-y. The natural reservoir
decline has been offset by ramp‑up of gas production, infill
wells in Mangala field and impact of polymer injection in
Bhagyam and Aishwariya fields.
Gas production from Raageshwari Deep Gas (RDG)
averaged 158 million standard cubic feet per day (mmscfd)
in FY2022, with gas sales, post captive consumption, at
128 mmscfd.
On 26th October 2018, the Government of India, acting
through the Directorate General of Hydrocarbons (DGH),
Ministry of Petroleum and Natural Gas, granted its approval
for a ten‑year extension of the PSC for the Rajasthan block,
RJ-ON-90/1, subject to certain conditions, with effect from
15th May 2020. The Division Bench of the Delhi High Court
in March 2021 set aside the single judge order of May
2018 which allowed extension of PSC on same terms and
conditions. We have filed a Special Leave Petition (SLP) in
Supreme Court against this Delhi High court judgement. We
have also filed application for amendment of SLP to bring
additional grounds and question of law on 8th March 2022
along with the application for seeking interim relief.
We have served notice of Arbitration on the GoI in respect of
the audit demand raised by DGH based on PSC provisions.
The Government has accepted it and the arbitration tribunal
stands constituted. It is our position that there is no liability
arising under the PSC owing to these purported audited
exceptions. The audit exceptions do not constitute demand
and hence shall be resolved as per the PSC provisions.
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
PRICES
Particulars
Average Brent prices
–US$/barrel
FY2022
FY2021
% Change
81.15
44.3
83%
Crude oil price averaged US$81.15 per barrel, compared
to US$44.3 per barrel in FY2021. The continuous upward
movement is mostly driven by accelerating global oil market
rebalancing, increasing vaccination rates, continued easing
of COVID‑19‑related mobility restrictions and increasing
geopolitical tensions around the world.
Early in the year, demand dampened amid deteriorating
situation around the world due to surge in COVID‑19 Delta
variant taking the oil prices downwards. However, increased
COVID‑19 vaccination rate, continued efforts by OPEC to
follow their scheduled crude oil production increase of
400,000 barrels per day (b/d) and natural factors effecting
production in US, offset the sudden downward spikes in the
prices due to planned and unplanned outages.
Later during the year, crude prices remained volatile
bolstered by fast spreading omicron variant, raising demand
concerns and need for harsh lockdowns. However, low
death rates and higher vaccinations around the world
nullified the concerns over demand.
Russian invasion further into Ukraine on February 24 and
the subsequent escalation of armed conflict, contributed
to rising crude oil prices crossing 100$/bbl mark. The
increase in crude oil prices reflects potential effects of the
extensive sanctions levied by the United States, European
Union, and others on Russian entities in response to
Russia’s continued invasion of Ukraine, as well as the risk
of potential disruptions to crude oil and energy production
and infrastructure related to the conflict. In addition to
western sanctions and the U.S. import ban, weather-related
disruptions at Kazakhstan’s Caspian Pipeline Consortium
(CPC) terminal along Russia’s Black Sea Coast, as well as
a fire related to a Houthi missile attack at a Saudi Aramco
oil storage and distribution facility in Jeddah, contributed to
additional volatility and risk of supply disruptions, led to a
continued rally in prices.
The Tribunal had a first procedural hearing on 24th October
on which Vedanta also filed its application for interim relief.
The interim relief application was heard by the Tribunal on
15th December 2020 wherein it was directed that the GoI
should not take any coercive action to recover the disputed
amount of audit exceptions which is presently in arbitration
and that during the arbitration period, the GoI should
continue to extend the tenure of the PSC on terms of current
extension. The GoI has challenged the said order before the
Delhi High court which is now listed on 25th May 2022.
We have filed Statement of Reply and Defence to
Counterclaim on 30th November 2021. Rejoinder to
Statement of Reply and Statement of Reply to Defence to
Counterclaim has been filed by GoI on 7th March 2022.
The GoI has also filed application before the Tribunal
objecting to its jurisdiction to decide issues arising out of or
relating to the PSC extension policy dated 7th April 2017, the
Office Memorandum dated 1st February 2013, as amended
and audit exceptions notified for FY 2016‑18. We have filed
our objection to this assertion by GoI. Tribunal’s Procedural
Order dated 23rd September 2021 dismissed the motion
and ordered costs in favour of Vedanta. The costs are not
payable until the end of the arbitration or further order in
the meantime.
Further, on 23rd September 2020 GoI filed an application for
interim relief before Delhi High Court seeking payment of all
disputed dues. The bench has not been inclined to pass any
ex‑parte orders and the matter is now listed for hearing on
25th May 2022.
Further to above stated letter from GoI on 26th October
2018, in view of pending non‑finalisation of the Addendum to
PSC, the GoI granted, permission to the Oil & Gas business
to continue petroleum operations in Rajasthan block, till
the execution of the Addendum to PSC or 14th May 2022,
whichever is earlier.
Ravva block
The Ravva block produced at an average rate of 14,166
boepd, lower by 26% y‑o‑y, owing to natural field decline.
Previous year production included impact of infill
drilling campaign.
Cambay block
The Cambay block produced at an average rate of 8,923
boepd, lower by 14% y-o-y. This was primarily due to natural
field decline partially offset by well interventions and
production optimisation measures.
143
Integrated Report and Annual Accounts 2021-22 Operational review: Oil & Gas
FINANCIAL PERFORMANCE
Tight Oil (ABH)
Particulars
Revenue
EBITDA
EBITDA margin
(₹ crore, unless stated)
FY2022
FY2021
% change
12,430
5,992
48%
7,531
3,206
43%
65%
87%
Aishwariya Barmer hill stage II drilling program enabled to
establish the confidence in reservoir understanding of ABH.
Based on the success of it, drilling of 5 additional wells were
conceptualised and drilling of which completed in fourth
quarter of fiscal year 2022. Of these, 2 wells have been
hooked up.
Revenue for FY2022 was 65% higher y‑o‑y at ₹12,430
crore (after profit petroleum and royalty sharing with the
Government of India), as a result of the increase in oil prices.
EBITDA for FY2022 was at ₹5,992 crore, higher by 87% y‑o‑y
in line with the higher revenues.
The Rajasthan operating cost was US$10.1 per barrel in
FY2022 compared to US$7.7 per barrel in the FY2021,
primarily driven by increase in polymer commodity index,
owing to oil price rally and increased interventions. Previous
year cost included impact of lower maintenance activities
due to COVID‑19.
NI Infill
The project entails drilling, completion, and hook-up of 3
producer wells in the NI field. Drilling and hook up of 3 well
campaign has been completed during fiscal year 2022.
Tight Gas (RDG)
In order to realise the full potential of the gas reservoir, an
infill drilling campaign of 27 wells has commenced during
fiscal year 2022. As of March 31, 2022, 6 wells have been
drilled and they are being progressively hooked up to ramp
up volumes.
Growth Projects Development
Satellite Fields
The Oil & Gas business has a robust portfolio of infill
development & 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 FM3 infill drilling campaign,
opportunities to further accelerate production by drilling
4 horizontal wells and 1 vertical well in FM3 & FM5 sands
were identified. The project also entails drilling of few
deviated wells for FM2/3 sands and conversion of 3 wells to
polymer injector.
In order to monetise the satellite fields, an integrated
contract for the appraisal and development activity through
global technology partnership has commenced. Till March
31, 2022, 14 wells have been drilled, of which 2 wells are
hooked-up.
Offshore (Cambay)
Infill program in Cambay over the last few years has
resulted in incremental recovery. New opportunities have
been identified basis integration of advanced seismic
characterisation, well and production data. Drilling
commenced during third quarter of fiscal year 2022. As of
March 31, 2022, 2 wells have been drilled of which 1 well is
hooked-up
As of March 31, 2022, drilling campaign of 5 wells is
completed, of which 4 horizontal wells are hooked up.
Discovered Small Field (DSF)
Hazarigaon: Well intervention and testing activities was
carried out in Hazarigaon‑1 well. Extended well testing and
monetisation is under planning.
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Financial Statements
Exploration and Appraisal
Rajasthan - (BLOCK RJ-ON-90/1)
Rajasthan exploration
The Rajasthan portfolio provide access to multiple play
types with oil in high permeability reservoirs, tight oil and
tight gas. We have completed drilling of 3 exploration
wells during fiscal year 2022. We also performed appraisal
activities in Felsic (oil) zone in RDG and monetisation is
under planning. We are also evaluating further opportunities
to drill low to medium risk and medium to high reward
exploration wells to build on the resource portfolio.
Open Acreage Licensing Policy (OALP)
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.
Full Tensor Gravity Gradiometry™ (FTG) airborne survey
for prioritising area of hydrocarbon prospectivity has been
completed in Assam, Cambay, Rajasthan & Kutch region.
Seismic acquisition program has been completed in Assam,
Rajasthan, Cambay, and Offshore region.
15 wells exploration (risked resource potential of 122
mmboe) work program spread over Rajasthan, Cambay,
and North-east with drilling cost of $118 million is under
execution. Till March 31, 2022, 11 wells have been drilled (3
in Rajasthan, 6 in Cambay and 2 in North‑east). Additional
drilling, fraccing, and related preparation activities are
ongoing in Rajasthan, Cambay, and North‑east.
Till date three hydrocarbon discoveries have been notified
under the OALP portfolio.
• Rajasthan (2 Discoveries): KW2‑Updip‑1 was notified
as oil discovery and is under extended testing. Durga
‑1 notified as oil discovery during fiscal year 2022 and
monetisation is under planning.
• Cambay (1 Discovery): Jaya‑1 is a gas and condensate
discovery, and monetisation is under planning.
Geophysical and geotechnical site survey is ongoing in
Offshore region Drilling is expected to commence during
first half of fiscal year 2023.
Strategic Priorities & Outlook
Vedanta’s Oil & Gas business has a robust portfolio
mix comprising of 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
• Unlock the potential of the exploration portfolio
comprising of OALP and PSC blocks
• Continue to operate at a low cost‑base and
generate free cash flow post‑capex
Cairn
facility overview
145
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Aluminium
THE YEAR IN BRIEF
In FY2022, the aluminium smelters achieved
India’s highest production of 2.27 million
tonnes. It has been a remarkable year as
we inched towards our vision of 3 mtpa
Aluminium. Though this year saw headwinds
in cost due to rising commodity prices
and the coal crisis, we undertook several
structural initiatives to make our business
immune from market induced volatilities.
These reforms coupled with our continued
focus on operational excellence, optimising
our coal and bauxite mix, improved capacity
utilisation across refinery, smelter and power
plant, will further help reduce our cost in
sustainable manner and make the business
more predictable. and improving our price
realisation to improve profitability in a
sustainable manner through well-structured
PMO approach. The hot metal cost of
production for FY2022 stood at US$ 1,858 per
tonne. We also achieved record production
of 1.97 million tonnes at the alumina refinery
through continued debottlenecking.
146146
Vedanta Limited
Promoting Inclusivity
Management Discussion and AnalysisVedanta Limited Integrated Report
Statutory Reports
Financial Statements
Occupational health & safety
Environment
We report with deep regret, five fatalities of business partner
employees during the year at our Aluminum business, two
each at Lanjigarh project site and at Jharsuguda and one
at BALCO. We have thoroughly investigated all the five
incidents and the lessons learned were shared across all
our businesses to prevent such incidents in future.
During the year, Jharsuguda has recycled 11.5% of the water
used, while BALCO has recycled 10.6%.
Our specific water consumption at VLJ metal was 0.39
m3/t, BALCO metal was 0.54 m3/t and alumina refinery was
1.90 m3/t.
This year, we experienced total 30 Lost Time Injuries (LTIs)
resulting in LTIFR of 0.41 at our operations.
We conducted safety stand‑downs across the sites to
communicate the learnings from safety incidents and
prevent repeated future incidents. Our safety leadership
regularly engages with the business partner site in-charges
and their safety officers for their capability development and
strengthening the culture of safety at our sites. We follow a
zero-tolerance policy towards any safety related violations
with stringent consequence management.
To enhance competencies of our executives, engineers,
and supervisors of business partners and inculcate culture
of Safety, we have engaged DuPont Safety Solutions.
The initiative is known as Sankalp – demonstrates our
resolve to provide Safe and Healthy workplace to all our
employees. Under this initiative the unit Leadership are
trained to provide visible felt leadership and lead effective
safety interactions with the employees. Safety Committees
are formed across the business to drive and review safety
performance across the business. Training is being given in
various areas of safety to improve the safety culture. Visible
felt leadership is core to our operations and all leaders are
expected to demonstrate highest level of safety discipline in
their respective areas of operations ensuring inclusivity of
Business Partners as well.
To build a culture of CARE, a new initiative of assigning 10
to 15 business partner employees to an executive, who
will work with them to drive safe behavior and eliminating
unsafe practices has been implemented. This is an attempt
/ opportunity to solidify the relations between workers
and executive.
Several Projects are being taken in water conservation
to increase the amount of recycled water at each of our
location. Reverse Osmosis plant has been commissioned at
JSG thermal power plant to recycle water.
EV vehicles will be used in operations as part of the green
drive. Under this initiative, the Jharsuguda unit has signed
a contract to use 23 Electrical forklift instead of diesel-
based forklift. We have planned to shift to 100 % EV LMV by
FY 30. This will help us eliminate our in-plant scope 3 GHG
emission from LMV operations at the Jharsuguda business.
This year we launched our low carbon aluminium brand,
Restora, manufactured using Renewable energy through
our two product lines – Restora and Restora Ultra. GHG
emission intensity for these product lines are about half
the global threshold for low carbon aluminium. A Strong
step towards our commitment to achieve GHG emission
intensity reduction of 25% by 2030 and Net zero carbon
by 2050.
Restora Ultra is an ultra-low carbon aluminium brand in
collaboration with Runaya Refining. Near zero carbon
footprint – one of the lowest in the world. Testament to our
focus on ‘zero waste’ through operational efficiencies and
recovery from dross.
In the current fiscal year, we have reduced our GHG
emission intensity by about 8.2% compared to the
FY2021 baseline.
Management of hazardous waste such as spent Pot line,
aluminium dross, and high volume low toxic waste such as
fly ash, red mud etc. are material waste management issues
for the aluminium business.
During the year, our operations have utilised 120% of Ash
and 102% Dross. Ash is being utilised in partnership with
NHAI and cement companies as part of circular economy
model. JSG operations is supplying fly ash for highway
construction activities in and around Odisha as part of
partnership with NHAI. This partnership aims at creating
a connected economy aligned to our vision of creating
a cleaner, greener and sustainable tomorrow. BALCO is
associated with Cement inhdustries in the vicinity through
road mode and striving to achieve economies of scale and
enterprise solution which is environmentally friendly and
cost effective. For the very purpose, BALCO has ventured
into supplying the conditioned Fly Ash through Rake.
147
Integrated Report and Annual Accounts 2021-22 Operational review: Aluminium
This meaningful, sustainable increase in fly ash utilisation
at locational, distant thermal power plant is mutual win
for both Cement companies and BALCO. BALCO is also
engaged in Mine back filling of Manikpur Mines which will
further support the effort to utilise Fly Ash. Our Lanigarh
operation has placed an order for manufacturing of red mud
bricks. It is in the direction of waste-to-wealth initiative. On
similar lines, JSG unit is working with Runaya refining for
extracting valuable metals from Dross as part of waste‑to‑
wealth initiatives.
The organisation is working proactively
towards the vision of Zero Waste.
PRODUCTION PERFORMANCE
Particulars
Production (kt)
Alumina – Lanjigarh
Total aluminium production
Jharsuguda
BALCO
FY2022
FY2021
% Change
1,968
2,268
1,687
582
1,841
1,969
1400
570
7%
15%
20%
2%
Alumina refinery: Lanjigarh
At Lanjigarh, production was 7% higher y-o-y at 1.97 million
tonnes, primarily through continued plant debottlenecking
and improved capacity utilisation.
Aluminium smelters
We ended the year with all time high production of 2.27
million tonnes. Our smelter at BALCO continued to show
consistent performance.
Coal Security
We continue to focus on the long‑term security of our coal
supply at competitive prices. We added Jamkhani (2.6
mtpa), Radhikapur (West) ;(6 mtpa) and Kuraloi (A) North (8
mtpa) coal mines through competitive bidding process by
GOI. We intend to operationalise Jamkhani and Radhikapur
(West) in the next fiscal year. These acquisitions, along with
15 million tons of long-term linkage will ensure 100% coal
security for Aluminium Business. We also look forward to
continuing our participation in linkage coal auctions and
secure coal at competitive rates.
PRICES
Particulars
Average LME cash
settlement prices
(US$ per tonne)
FY2022
FY2020
% Change
2,774
1,805
54%
Average LME prices for aluminium in FY2022 stood at US$
2,774 per tonne, 54% higher y-o-y. The LME aluminium price
has seen a wild swing this year, especially in the last quarter
owing to both supply and demand side disruptions. Post
the covid resurgence, the aluminium market is in a growth
phase now with dedicated focus to accelerate development
and reached to pre covid levels. This demand growth is
expected to increase from 68 million tons to 75 million tons
by 2025 driven by sunrise sectors such as Electric Vehicle,
Renewable Energy, Défense and Aerospace. On supply
side, during Q2 & Q3 FY2022, the energy price skyrocketed
due to closure of coal mines in China, exceptionally higher
demand for oil and closure of oil refinery in the east coast
of Americas. Pertaining to exceptionally higher energy
prices, several European smelters closed during the FY2022
causing a deficit of ~1.5 million tonnes in CY21. The deficit
is expected to intensify with the ongoing geopolitical
situation and continued high energy prices in CY22. FY2022
also witnessed demand growth stabilisation around
the world.
UNIT COSTS
(US$ per tonne)
Particulars
FY2022
FY2021
% change
Alumina cost (ex-Lanjigarh)
Aluminium hot metal
production cost
Jharsuguda CoP
BALCO CoP
291
1,858
1,839
1,913
235
1,347
1,304
1,450
24%
38%
41%
32%
During FY2022, the cost of production (CoP) of alumina
increased to US$ 291 per tonne, due to headwinds in
the input commodity prices, partially offset via benefits
from increase in locally sourced bauxite, continued
debottlenecking and improved capacity utilisation
In FY2022, the total bauxite requirement of about 5.8
million tonnes were met through domestic as well as import
sources. ~63% of the Bauxite requirement was catered
from Odisha through our LTC with the Government of
Odisha and remaining 37% through imports from LTC with a
reputed supplier.
In FY2022, the CoP of hot metal at Jharsuguda was US$
1,839 per tonne, increase by 41% from US$ 1,304 in FY2021.
The hot metal CoP at BALCO stood at US$ 1,913 per tonne,
increase by 32% from US$ 1,450 per tonne in FY2021. This
was primarily driven by the headwinds in commodity prices
and reduced materialisation of domestic coal from Coal
India Limited (CIL) with higher auction premiums.
FINANCIAL PERFORMANCE
Particulars
Revenue
EBITDA
EBITDA margin
(₹ crore, unless stated)
FY2022
FY2021
% Change
50,881
17,337
34%
28,644
7,751
27%
78%
124%
148
Management Discussion and AnalysisVedanta Limited Integrated Report
Strategic priorities & outlook
With the primary aluminium demand expected to
increase and the ongoing geopolitical issues, the outlook
for FY2023 is strong. European premiums are soaring
while US premiums are supported by high demand and
low stocks. The deficit is expected to intensify in 2022.
The input commodity prices across carbon are moving
on a higher side driven by continued demand increases.
We are looking at ways to continuously optimise our
costs, while also increasing the price realisation to
improve profitability sustainably.
India’s market is expected to have robust growth,
supported primarily by growing industrial activity and
government focus on infrastructure sector and domestic
manufacturing in the country. Several government
initiatives (Make in India, Production‑linked Incentive for
domestic manufacturing, National Infrastructure Pipeline
and National Rail Plan) will enhance aluminium demand,
going forward.
Vedanta continues to expand its value‑added product
portfolio in line with evolving market demand, making it
poised to grow in the Indian aluminium market.
At our power plants, we are also working towards
improving materialisation from CIL, reducing gross
calorific value (GCV) losses in coal as well as improving
plant operating parameters which should deliver higher
plant load factors (PLFs) and a reduction in non‑coal
costs. Vedanta is working out a plan to expediate
operationalisation of Jamkhani, Radhikapur and Kuraloi
coal mines.
Whilst the current market outlook remains bullish, our
core strategic priorities include:
• ESG: Focus on the health & safety of our employees,
business partners, customers, and community
• Asser Optimisation: Deliver alumina and
aluminium production through structured asset
optimisation framework
• Growth: Complete Lanjigarh Expansion, Expedite
Value Added Product Projects
• Raw Material Security: Enhance bauxite and alumina
security through LTCs and new mines auctions.
• Coal security: Expedite operationalisation of
Jamkhani, Radhikapur and Kuraloi coal block,
improve linkage coal materialisation
• Quality: Zero slippage in quality in entire value chain
• Operational Excellence: Improve our plant operating
parameters across locations; and
• Product Portfolio: Improve realisations by enhancing
our value-added product portfolio
During the year, revenue increased by 78%
to ₹50,881 crore, driven primarily by rising
LME Aluminium prices and higher production
volumes. EBITDA was significantly up at
₹17,337 crore (FY2021: ₹7,751 crore), mainly
due to improved hot metal cost of production
& increased sales realisation.
Value-added Product Portfolio
149
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Power
THE YEAR IN BRIEF
In FY2022, TSPL’s (Talwandi Sabo Power
Limited) plant availability was 76% and
Plant Load Factor (PLF) was 51%.
Occupational health & safety
In FY2022 TSPL focus on Category 5 Safety Incident
elimination such as Critical Risk management, Catastrophic
Risk Management, Horizontal deployment of Safety alert
learnings, Vedanta Safety Standard Implementation and
Engineering / Controls such as Line of Fire Prevention and
Safety improvement project.
We continue to strengthen the ’Visible Felt Leadership
‘through the 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 assisting infrastructure development through the
construction of pedestrian pathways, dedicated route for
bulkers, creation of secondary containment for hazardous
chemicals and other infra development across sites.
TSPL facility
150150
Vedanta Limited
Management Discussion and AnalysisVedanta Limited Environment
TSPL focus 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 ensure 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 recommendation of M/s
Golder associates for ash dyke. Additional desk top review
of TSPL Ash Dyke Facility by ATC Williams, Australia & TATA
Consultancy (TCE) as Engineer of Records (EOR) to ensure
Ash Dyke stability to review dyke design, quality assurance
during for ash dyke raising and quarterly audit of ash dyke
facility. In FY2022, TSPL achieved 91% 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 16.7% of the water used & Reduce the
Fresh water consumption by various operation controls.
TSPL continue its focus on energy saving projects such
as CWP RPM reduction, HPT performance improvement,
replacement of conventional lighting fixtures with LED
lighting fixtures.
To stimulate efforts and reach towards new heights
of sustainable business practices, TSPL established
ESG transformation office. Under this initiative, TSPL
has accelerated its efforts in Environment, Social and
Governance aspects. TSPL ESG Transformation Office was
created which included 12 communities of practice from
each aspect of sustainability. Communities of Practice
included Carbon, Water, Waste, Biodiversity, Supply chain,
People, Communities (CSR), communication, Safety and
Health, Acquisitions, Expansions. Each Community is led
by a senior leader in the concerned department. Each
community is driving sustainability initiatives in their
community. In FY2021‑22, total 55 projects are identified,
and improvement initiatives works are in progress.
PRODUCTION PERFORMANCE
Integrated Report
Statutory Reports
Financial Statements
The 600MW Jharsuguda power plant operated at a lower
plant load factor (PLF) of 53% in FY2022.
The 300 MW BALCO IPP operated at a PLF of 63%
in FY2022.
The MALCO plant continues to be under care and
maintenance, effective from 26 May 2017, due to low
demand in Southern India.
UNIT SALES AND COSTS
Particulars
FY2022
FY2021
% Change
Sales realisation (₹/kWh)1
Cost of production (₹/kWh)1
TSPL sales realisation
(₹/kWh)2
TSPL cost of production
(₹/kWh)2
3.10
2.42
3.62
3.09
2.34
2.96
2.76
2.10
-
3%
22%
31%
(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, excluding TSPL, remained flat
and the average generation cost was marginally higher at
₹2.4 per kWh (FY2021: ₹2.3 per kWh).
In FY2022, TSPL’s average sales price was lower at ₹3.6 per
kWh (FY2021: ₹3 per kWh), and power generation cost was
higher at ₹2.8 per kWh (FY2021: ₹2.1 per kWh).
FINANCIAL PERFORMANCE
Particulars
Revenue
EBITDA
EBITDA margin
* Excluding one‑offs
(₹ crore, unless stated)
FY2022
FY2021
% change
5,826
1,082
19%
5,375
1,407
26%
8%
(23%)
EBITDA for the year was 23% lower y‑o‑y at ₹1,082
crore from ₹1,407 crore.
(US$ per tonne)
Strategic priorities & outlook
Particulars
FY2022
FY2021
% Change
Total power sales (MU)
11,872
11,261
Jharsuguda 600 MW
BALCO 300 MW*
MALCO#
HZL wind power
TSPL
TSPL – availability
2,060
1,139
-
414
8,259
76%
2,835
1,596
-
351
6,479
81%
5%
(27%)
(29%)
-
18%
28%
-
# Continues to be under care and maintenance since 26 May 2017 due
to low demand in Southern India.
* We have received an order dated 01 Jan 2019 from CSERC for
Conversion of 300MW IPP to CPP w.e.f. 01 April 2017. During the Q4
FY2019, 184 units were sold externally from this plant.
Operations
During FY2022, power sales were 11,872 million units,
5% higher y‑o‑y. Power sales at TSPL were 8,259 million
units with 76% availability in FY2022. At TSPL, the Power
Purchase Agreement with the Punjab State Electricity Board
compensates us based on the availability of the plant.
During FY2023, we will remain focused on
maintaining the plant availability of TSPL and
achieving higher pant load factors at the BALCO and
Jharsuguda IPPs.
Our focus and priorities will be to:
• Resolve pending legal issues and recover aged
power debtors;
• Achieve higher PLFs for the Jharsuguda and
•
BALCO IPP; and
Improve power plant operating parameters to
deliver higher PLFs/availability and reduce the
non-coal cost
Ensuring safe operations, energy &
carbon management
151
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Iron Ore
THE YEAR IN BRIEF
Production of Crude ore at Karnataka stood at 5.60 wet million tons. With
the order of Central Empowered Committee (Supreme Court appointed
body) on 21st March’20, our annual mining capacity has been increased
up to 5.89 mtpa. In line with this the Govt. of Karnataka on Feb’2021 has
allocated the production quantity of 5.60 wet million tons from FY2021
onwards to maintain the SC allocated district cap.
Meanwhile, operations in Goa remained in suspension in FY2021 due to
a state‑wide directive from the Supreme Court. However, we continue to
engage with the Government to secure a resumption of mining operations.
Amona Plant night view
152152
Vedanta Limited
Management Discussion and AnalysisVedanta Limited Occupational health & safety
With our vision towards the of Zero Harm we are committed
to achieve zero fatal accident at Iron ore Business. Our
Lost Time Injury Frequency Rate (LTIFR) is 0.85 compared
to 0.56 (FY2021). We are now focusing 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 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 COVID
Marshalls, usage of non-contact type voltage detectors,
underground cable detectors, usage of AI cameras for
spotting safety violations etc. Currently we are working on
implementing virtual reality training for our manpower in
areas such as safety performance standards, hazards, risk
control measures, and best practices in the field of Safety.
We are also considering the possibility of implementing geo
fencing so as to achieve better access control at various
locations across the plant.
In order to achieve highest levels of safety
at site we have identified key personnel from
operation and maintenance to serve as safety
stewards in addition to their current roles and
responsibilities. Those who are nominated as
safety stewards have been made to pursue
a distance Masters degree in safety from
reputed universities from the country which
will enable them to identify and rectify issues
at site using sophisticated tools.
Integrated Report
Statutory Reports
Financial Statements
design and implementation of the same as per Vedanta
Safety Standards. At VAB we have conducted a training
on crane and lifting safety through a third party so as to
authorise a shortlisted group of competent personnel for
approving critical lift plan and better focus on safety in
areas of lifting and critical lifts.
In addition to employees nominated as safety stewards
we also conducting training on NEBOSH and IOSH for
shortlisted Vedanta personnel from departments such as
Operation, Maintenance and Environment.
In FY 2023 we will be further strengthening our Fatality
Prevention Programme and also improving our safety
management system through cross business audits.
Environment
At our Value-Added Business we recycle and reuse almost
all the wastewater. Only the non-contact type condenser
cooling water of the power plant is cooled and treated for
pH adjustment and discharged back into the Mandovi river,
which is a consented activity by the authorities.
8500 numbers of plantation were done in the year
2021-22, including 7500 numbers of plantation through
Miyawaki method.
Also, Value Added Business received Environmental
Clearance for expansion project for installing Ductile
Iron plant, oxygen plant & Ferro Silicon Plant along with
increasing hot metal production capacity.
At Iron ore Karnataka, continuing with its best practises,
company has constructed 38 check dams, 7 settling pond
and 2 Harvesting pits. Additionally, company has de-silted
6 nearby village ponds increasing their rainwater harvesting
potential by 60000 m3/annum.
In FY2022, around 18 Ha of mining dump slope was covered
with biodegradable geotextiles to prevent soil erosion &
45,000 native species sapling were planted. Various latest
technologies like use of fog guns; environment friendly dust
suppressants mixed with water were adopted on the mines
to reduce water consumption for dust suppression without
affecting the effectiveness of the measures.
We have also conducted trainings through third party on
incident investigations in which various investigation tools
such as ICAM, etc are covered. At IOK we have conducted
trainings through a third-party post which a selected
number of employees have been nominated as certified
machine safety experts. These certified machine safety
experts will be responsible for improving machine guarding
8,500
NUMBERS
OF PLANTATION
WERE DONE IN
THE YEAR 2021-22
153
Integrated Report and Annual Accounts 2021-22 Operational review: Iron Ore
Awards and accolades
For the year FY2022 various IOB units have received awards
for their performance in Health and Safety such as Green
Triangle Safety Award by Factories & Boilers for VAB, Apex
India Gold Award for Safe Work Place Management and
Apex India Green Leaf Award for Environment Excellence
for Also our Sanquelim mine won Platinum award for Best
environment Practises from International Conference
on Geotechnical Challenges in mining , Tunneling and
Underground Structures, 2021.
PRODUCTION PERFORMANCE
Particulars
Production (dmt)
Saleable ore
Goa
Karnataka
Pig iron (kt)
Sales (dmt)
Iron ore
Goa
Karnataka
Pig iron (kt)
Operations
FY2022
FY2021
% Change
5.4
-
5.4
790
6.8
1.1
5.7
790
5.0
-
5.0
596
6.5
2.1
4.4
609
8%
-
8%
33%
4%
(50%)
30%
30%
At Karnataka, production was 5.4 million tonnes, 8% higher
y-o-y. Sales in FY2022 were 5.7 million tonnes, 30% higher
y‑o‑y due to Covid‑19 Impact in the previous financial year.
Production of pig iron was 789,717 tonnes in FY2022, higher
by 30% y‑o‑y due to Covid‑19 Impact in previous year and
efficiency improvement post relining.
At Goa, mining was brought to a halt pursuant to the
Supreme Court judgement dated 7 February 2018 directing
all companies in Goa to stop mining operations with effect
from 16 March 2018. We continue to engage with the
Government for a resumption of mining operations.
We bought low grade iron ore in auctions held by Goa
Government in Auction No -25, 26 & 27. This ore along with
opening stock of ore purchased in 23rd & 24th auction and
fresh royalty paid ore moved out of mines post the supreme
court order, was then beneficiated and around 1.1 million
tonnes were exported which further helped us to cover our
fixed cost and some ore were used to cater to requirement
of our pig iron plant at Amona.
FINANCIAL PERFORMANCE
Particulars
Revenue
EBITDA
EBITDA margin
(₹ crore, unless stated)
FY2022
FY2021
% Change
6,350
2,280
36%
4,528
1,804
40%
40%
26%
In FY2022, revenue increased to `6,350 crore, 40% higher
y-o-y mainly due to increase in sales volume at Karnataka
& VAB and higher realisations at Karnataka & VAB during
the year. EBITDA increased to `2,280 crore compared with
`1804 crore in FY2021 was mainly due to improved margin
at Karnataka and higher volume at Karnataka & VAB.
`6,332 crore
40% Y-O-Y
HIGHER REVENUE
`2,279 crore
EBITDA
154
Metallurgical Coke
Management Discussion and AnalysisVedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Strategic priorities & outlook
Our near-term priorities comprise:
• Resume mining operations in Goa through
continuous engagement with the government and
the judiciary
• Realign and revamp resources, assets, HEMM’s for
starting the mine’s operation
• Grow our footprint in iron ore by continuing
to participate in auctions across the country,
including Jharkhand.
• Advocacy for removal of E-auction/trade b
Vedanta Sesa Goa
155
Integrated Report and Annual Accounts 2021-22 Operational review
Steel
THE YEAR IN BRIEF
ESL is an integrated steel plant (ISP) in Bokaro, Jharkhand, with
a design capacity of 2.5mtpa. Its current operating capacity is
1.5mtpa with a diversified product mix of Wire Rod, Rebar, DI Pipe
and Pig Iron. This year business has achieved highest ever hot metal
production of 1,355kt, since acquisition.
In FY2022, ESL Steel Limited (ESL) has achieved highest ever NSR
during the year since acquisition resulting in favorable EBITDA
margin of US$74 per tonne.
ESL facility
156
156
Vedanta Limited
Management Discussion and AnalysisVedanta Limited Occupational health & safety
We had one unfortunate incident in the month of September
where we had lost 3 of our business partners while carrying
out a job on lift. A detailed investigation was carried out by
cross business experts and actions implemented in letter
and spirit. The current LTIFR for FY2022 is 0.80
As part of our safety culture transformation journey, we
had come up with various safety initiatives to enhance our
safety performance.
Given below are few of the significant initiatives:
• Project Prarambhik: We have engaged DuPont
Sustainable Solutions in our safety transformation
journey with key focus on safety interactions and people
engagement in executing safe operational practices
• Safety Park: An on-site demonstration facility for
trainings on various VSS Standards developed with
prototypes for better understanding
• AR/VR: Virtual Reality technology used for safety
trainings to place the employees and business partners
in the work environment and build their capability before
actually placing them in the workplace
• Safety Portals: Introduced various safety portals-Safety
Interaction portal, Incident Management portal, mQuiz
Portal, Safety Projects portal to provide user friendly
platforms to capture various leading indicators of safety
promoting a better workplace
• CCTV cameras with AI detection technology
• NDO: Night Duty Officer concept initiated where senior
leaders are engaged in night duties for better vigilance
round the clock on observations
• Joint Safety Walks: Site leadership team visits each
shop/floor on every Saturday to have a site walkthrough
survey and conducts safety interactions to identify gaps
and handhold the team in mitigating the risks
• Surakshavahan: A mobile safety van concept to
provide on job safety training to business partners and
employees with audio visual facility for effective training
with maximum engagement
• Theme based campaigns: Every month we select one
safety standard as a theme and drive various awareness
initiatives and competitions including trainings and
webinars along with quick wins
On COVID preparedness we have successfully ensured
business continuity during the third wave with reinforcing
various facilities including the Vedanta Field Hospital
in Bokaro City. Vaccination of both the doses have
been arranged for employees, business partners and
their families.
Integrated Report
Statutory Reports
Financial Statements
Environment
In Waste Management system, ESL has attained 100 %
utilisation of BF granulated Slag and Fly Ash by sending
it to nearby cement Industries and Brick manufacturers.
Recyclable Hazardous waste is sent to PCB authorised
recyclers/re-processors and rest is sent to TSDF for which
membership has already been taken. E-waste is also sent to
authorised dismantlers.
In Water Management, treatment of 4500 Kl of effluent
daily in the Effluent Treatment Plant is done and it is being
re‑utilised in several processes such as Coke Quenching, BF
Slag granulation, in Greenbelt Development, Fire Fighting,
Dust Suppression and in operations of Lime and Dolo, DIP
and others. Recycling percentage has increased from 12%
to 28 %. Settling pits at different locations are constructed
and proper retention time is given for better treatment of
water. In FY2022 till date 2,272,125 KLD of water is saved
through different projects and initiatives being undertaken
in ESL.
In Energy Management, the usage of waste heat from
coke oven flue gas for generation of steam which ultimately
helps in power generation, reduction in auxiliary power
consumption from 12 % to 8 % through improvement in
station heat rate is carried out.
Usage of LP steam in blast furnace to minimise
the fuel requirement, LD gas and BF gas in
several operations such as reheating furnace
of rolling mills, Blast Furnace, DIP and lime and
Dolo to reduce the fuel consumption, Running
of TG through steam generated from Waste
Heat recovery.
157
Integrated Report and Annual Accounts 2021-22 PRODUCTION PERFORMANCE
Particulars
Production (kt)
Pig iron
Billet
TMT bar
Wire rod
Ductile iron pipes
Operations
FY2022
FY2021
% Change
1,260
1,187
186
91
399
421
164
189
165
338
361
135
6 %
(2)%
(45)%
18%
17%
22%
There have been significant gains in Sales & NSR front.
However, operational inefficiencies higher raw material
prices of coking coal & other market factors resulted in
higher cost of sales. We are trying to stable our raw material
prices. We have acquired two iron ore mines to achieve raw
material long term security & pricing stability.
During FY2022, we produced 1,260,000 tonnes
of saleable product, higher by 6% y-o-y on
account of increased availability of hot metal
due to higher production.
Operational review: Steel
In Air Emission Management, Revamping of Oxygen
Convertor Gas Recovery (OG) system in Steel Melting
Shop (SMS) to reduce fugitive emission, Upgradation of Air
pollution control equipment’s to meet the norms stipulated
by the regulatory authorities, ESP revamping of Sinter Plant,
Installation of fixed sprinklers all along the roads in RMHS
area and dry fog system in all the closed conveyors and
deployment of mechanical sweepers for road sweeping is
carried out. Apart from that fixed type of fog guns are also
installed in RMHS and CHP area of CPP in order to arrest
the dust. Provision of water tanker is also there where fixed
sprinklers are not installed.
Several initiatives have been taken in Biodiversity section as
well. Miyawaki Forest development is carried out in ESL in
1.25 acres area and altogether 35000 saplings are planted
during FY2022. Wildlife conservation plan for schedule 1
species is prepared and approved from all the levels in order
to conserve them for 10 kms of area surrounding the plant.
We at ESL are driving ESG in order to facilitate sustenance
in long run. Several CoPs (community of parties) are framed
keeping into consideration all the three pillars Environment,
Social and Governance. Several initiatives are taken in
order to move towards Net Zero carbon by 2050 and net
water positive by 2030. ESL is focused on deployment
of EVs (Electrical vehicle) in order to reduce its Scope 3
emissions as well. In the renewable section the work is
already in progress for installation of 4.5 MW rooftop Solar
Power Plant.
Several community development programmes are
carried out all along the area for women empowerment,
livelihood generation, Health & Nutrition, Education, Water
and Sanitation for all. In social front several initiatives are
undertaken by Human resource for diversity inclusion and
development of potential leaders from within by several
employee development programmes.
Employee at
operational site
158
Management Discussion and AnalysisVedanta Limited The priority remains to enhance production of value-added
products (VAPs), i.e., TMT Bar, Wire Rod and DI Pipe. ESL
maintained 78% of VAP sales, in line with priority.
Our Consent to Operate (CTO) for the steel plant at Bokaro,
which was valid until December 2017, was not renewed by
the Jharkhand State Pollution Control Board (JSPCB). This
was followed by the Ministry of Environment, Forests and
Climate Change (MoEF&CC) revoking the Environmental
Clearance (EC) dated February 21, 2018. MoEF&CC, on
August 25, 2020, has granted a Terms of Reference to ESL
for 3 mtpa plant with conditions like fresh EIA/EMP reports
and public hearing. The Honorable High Court of Jharkhand
had extended the interim protection granted in the pending
writ petitions till September 16, 2020. Hon’ble High Court on
September 16, 2020, pronounced and revoked the interim
stay for plant continuity w.e.f September 23, 2020. ESL filed
a SLP before Hon’ble Supreme Court against September 16,
2020, order for grant of interim status quo order and plant
continuity. Vide order dated September 22, 2020, Hon’ble
Supreme Court issued notice and allowed plant operations
to continue till further orders. In furtherance of the Supreme
Court orders for plant continuity, MoEF vide its letter
dated 02.02.2022 has deferred the grant of Environment
Clearance till Forest Clearance Stage‑II is granted to ESL.
ESL has submitted its reply against MoEF letter vide letter
dated 11.02.2022 for reconsidering the decision and not
linking EC with FC since as per the applicable law and
available precedents, grant of FC Stage ‑ II is not a condition
precedent for grant of EC. CTO will be procured post
furnishing the EC.
PRICES
Particulars
Pig Iron
Billet
TMT
Wire rod
DI pipe
Average steel price
(US$ per tonne)
(US$ per tonne)
FY2022
FY2021
% Change
545
612
687
706
628
659
382
336
539
537
544
488
43%
82%
27%
31%
15%
35%
`6,474 crore
REVENUE
`701 crore
EBITDA
Integrated Report
Statutory Reports
Financial Statements
Average sales realisation increased 35% y-o-y from
US$488 per tonne in FY2021 to US$659 per tonne in
FY2022. Prices of iron and steel are influenced by several
macro-economic factors. These include global economic
slowdown, US‑China trade war, supply chain destocking,
government expenditure on infrastructure, the emphasis
on developmental projects, demand-supply dynamics, the
Purchasing Managers’ Index (PMI) in India and production
and inventory levels across the globe especially China. Even
though the NSR increased by US$ 171 per tonne, we were
unable to increase our EBITDA margin & landed to US$ 74
per tonne for the year (against US$ 95 per tonne in FY2021)
due to increased raw material prices of coking coal.
UNIT COSTS
Particulars
FY2022
FY2021
% Change
Steel (US$ per tonne)
585
393
49%
Cost has increased by 49 % y‑o‑y from US$ 393 per tonne to
US$ 585 per tonne in FY2022, primarily on account of heavy
increase in coking coal prices during the year, uncontrollable
factors and operational inefficiencies.
FINANCIAL PERFORMANCE
Particulars
Revenue
EBITDA
EBITDA margin
(₹ crore, unless stated)
FY2022
FY2021
% Change
6474
701
11%
4668
871
19%
39%
(19)%
-
Revenue increased by 39% to ₹6,474 crore (FY2021: ₹4,668
crore), primarily due to higher volume. EBITDA decreased by
19% to ₹701 crore even after higher sales due to increased
cost of production.
Strategic priorities and outlook
Steel demand is expected to surge owing to the
gradual recovery in economic activities across the
world, and the emphasis of governments to ramp up
infrastructure spend. The focus is to operate with the
highest Environment, Health and Safety standards,
while improving efficiencies and unit costs.
The focus areas comprise:
• Ensuring business continuity
• Greater focus on Reliability Centred Maintenance
• Obtain clean ‘Consent to Operate’ and
environmental clearances
• Raw material securitisation through –long-
term contracts; approaching FTA countries for
coking coal
• Ensure zero harm and zero discharge, fostering a
culture of 24x7 safety culture
159
Integrated Report and Annual Accounts 2021-22 Management Discussion and Analysis
Operational review
Ferro Alloys
Corporation Limited (FACOR)
THE YEAR IN BRIEF
FACOR has achieved highest ferro chrome ore production of 250kt,
since acquisition through operationalisation of two ore mines. Also
achieved historic high ferro chrome production of 75Kt and ever
highest sales of 77Kt.
Building talent
through teamwork
160
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Financial Statements
Health Safety Environment
In FY2022, HSE and Sustainability Policies were rolled
out. HSE E-library launched for easy access to HSE
documents. For capability developments trainings given on
Lifting plan, Defensive Driving, Machine Guarding, Work at
Height, Forklift operation, Fire extinguisher to Employees
& BPs. Training on Compliance, IFC/ICMM, HIV, Incident
Investigation, VSAP/VSS modules were also given to all
Employees. We also introduced Golden Safety rules and
Cardinal rules for risk mitigation at workplace. We also
framed SOPs related to Permit to Work, JSA, HIRA and
PSSR. Visual Signage displayed at all strategic locations.
Man‑machine segregation & wheel Choke provided at
strategic locations to mitigate risks. Mandatory PPEs and
PPEs zone were introduced for all Employees and BPs.
For environment wellbeing and to ensure zero harm to
environment we installed Sewage Treatment Plant, Effluent
Treatment Plant at Mines & Power plant. Wheel wash
system, HD IP Camera, Rainwater harvesting structure
were also installed at FPL to reduce environmental risks.
First ever VSAP, IMS Level 1 and Level 2 Audits conducted
at FACOR.
Under the guidance of our CEO and unit wise cross
functional teams, for implementation of all the preventive
and precautionary measures, are engaged in prevention
and control of the virus. We were implemented the COVID
protocol/SOP formulated to ensure business continuity by
ensuring minimum footfall and mitigating COVID risk. This
includes staggered shift schedules, mandatory screening,
social distancing, usage of masks, contact tracing, work
from home, zero touch auto sanitising facilities, daily
sanitisation of workplace, vaccination for frontline warriors,
SOP & handbook on COVID, Vigilance of PPE compliances
through automation, Cardinal COVID rules, etc.
At Charge Chrome Plant (CCP), we recorded ever highest
Ferrochrome metal volume of 75 kt in FY2022 since
inception. We also achieved 1st and 2nd ever highest
Ferrochrome metal volume of 6,902 and 6,852 MT in May
and December since inception and highest metal volume
of 20,058 MT in Q‑3 FY2022 since acquisition. We started
blending Met Coke with Anthracite coal and Coke Fines
Briquettes in FY2022 and were able to achieve average
blending of 15% (10% Anthracite Coal and 5% Coke Fine
Briquettes) in FY2022. We also reduced our specific Power
consumption up to levels of 3,347 Kwh/T against 3,450
Kwh /T and specific Ore consumption up to 2.4 against 2.5
in FY2022.
At Power Plant, we recorded annual Power Generation of
292 MU in FY2022, increased 8% Y‑o‑Y. We achieved first
ever 100MW Power plant operation since inception.
FINANCIAL PERFORMANCE
Particulars
Revenue
EBITDA
EBITDA margin
FY2022
FY2021
% Change
830
325
39%
274
69
25%
-
-
-
Awards and Accolades
• Won the British Safety Council Prestigious International
Safety Awards 2022
• Bagged 01) Excellent & 02) Distinguished Award at
National Convention on Quality Concepts (NCQC) 2021
organised by QCFI Coimbatore.
• Received HR award for excellence under Employee
Engagement category by World HRD Congress
Strategic Priorities
PRODUCTION PERFORMANCE
• Expansion of Mines from current capacity of
Particulars
FY2022
FY2021
% Change
250 kt to 390 kt.
• Metal capacity addition of 60 ktpa through new
33MVA Furnace.
• Lease revival of Kathpal Mine.
•
Installation of Waste Heat Recovery system and
refractory relining in 45 MVA furnace.
• 100 MW Power Generation & sale of
additional power.
• New COB plant commissioning of enhanced
capacity of 50 TPH.
Ore Production (kt)
Ferrochrome Production (kt)
Ferrochrome Sales (kt)
Power Generation (MU)
250
75
77
294
147
68
71
274
69%
10%
8%
7%
At Mining division, we recorded ever highest Chrome Ore
production of 250 kt in FY2022 since acquisition. Through
disrupt ideas and out of the box thinking we also achieved
ever highest monthly and quarterly Ore Production of 45
kt in June’21 and 123 kt in Q1 FY2022 since acquisition.
Ensuring our commitment towards zero harm we installed
Slope Stability Radar (SSR) for real time pit slope & dump
monitoring at our Ostapal Mines and installed fatigue
monitoring system in all dumpers at Mines. We also
installed Renewable Energy (RE) based solar panels for
energy savings at Ostapal & Kalarangiatta Mines.
161
Integrated Report and Annual Accounts 2021-22 Operational review
Copper – India / Australia
THE YEAR IN BRIEF
FACOR has achieved highest ferro chrome ore production of 250kt, since acquisition
through operationalisation of two ore mines. Also achieved historic high ferro chrome
production of 75kt.
Refinery, Sterlite Copper
Occupational health & safety
The lost time injury frequency rate (LTIFR) was Zero till
Mar’22 (FY2021: 0).
Environment
Copper Mines of Tasmania continued in care and
maintenance awaiting a decision on restart. Meanwhile,
a small, dedicated team is maintaining the site and there
were no significant safety or environmental incidents during
the year. The site retained its ISO accreditation in safety,
environment and quality management systems and the
opportunity of a lull in production was used to review and
further improve these systems.
PRODUCTION PERFORMANCE
Particulars
Production (kt)
India – cathode
Operations
FY2022
FY2021
% Change
125
101
24%
The Tamil Nadu Pollution Control Board (TNPCB) vide order,
dated 9 April 2018, rejected the consent renewal application
of Vedanta Limited for its copper smelter plant at Tuticorin.
It directed Vedanta not to resume production operations
without formal approval/consent (vide order dated 12
April 2018) and directed the closure of the plant and the
disconnection of electricity (vide order dated 23 May 2018).
The Government of Tamil Nadu also issued an order
dated 28 May 2018 directing the TNPCB to permanently
close and seal the existing copper smelter at Tuticorin;
this was followed by the TNPCB on 28 May 2018. Vedanta
Limited filed a composite appeal before the National Green
Tribunal (NGT) against all the above orders passed by the
TNPCB and the Government of Tamil Nadu. In December
2018, NGT set aside the impugned orders and directed
the TNPCB to renew the CTO. The order passed by the
NGT was challenged by Tamil Nadu State Govt. in Hon’ble
Supreme Court.
The Company had filed a writ petition before Madras
High Court challenging the various orders passed against
the Company in 2018 and 2013. On August 18, 2020, the
Madras High Court delivered the judgement wherein it
dismissed all the Writ Petitions filed by the Company.
The Company has approached the Supreme Court and
challenged the said High Court order by way of a Special
Leave Petition (SLP) to Appeal and also filed an interim relief
for care & maintenance of the plant. The matter was then
162
Management Discussion and AnalysisVedanta Limited Integrated Report
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Financial Statements
listed on December 02, 2020, before Supreme Court Bench.
The Bench after having heard both the sides concluded
that at this stage the interim relief in terms of trial run could
not be allowed. Further, considering the voluminous nature
of documents and pleadings, the matter shall be finally
heard on merits. Further, Hon’ble Supreme Court held that
the case will be listed once physical hearing resumes in
Supreme Court. The matter was again mentioned before
the bench on 17th March 2021, wherein the matter was
posted for hearing on 17th August 2021. However, the
matter was not listed on 17 August 2021. After a series of
computer‑generated hearing dates, the matter was finally
taken up on 15 March 2022 and was part heard. The next
date of hearing is yet to be intimated.
Meanwhile, the Company’s Silvassa refinery and rod plant
continues to operate as usual, enabling us to cater to the
domestic market.
Our copper mine in Australia has remained under extended
care and maintenance since 2013. However, we continue to
evaluate various options for its profitable restart, given the
Government’s current favourable support and prices.
PRICES
Particulars
FY2022
FY2021
% Change
Average LME cash
settlement prices
(US$ per tonne)
9,689
6,897
40%
Average LME copper prices increased by 40% compared
with FY2021.
FINANCIAL PERFORMANCE
Revenue
EBITDA
EBITDA margin
(₹ crore, unless stated)
FY2022
FY2021
% change
15,151
10,890
(115)
(1)%
(177)
(2)%
39%
-
During the year, revenue was ₹ 15,151 crore, an increase of
3% on the previous year’s revenue of ₹ 10,890 crore. The
increase in revenue was mainly due to higher Copper LME
prices and higher volume. EBITDA loss reduced to ₹ 115
crore on account of improved operational deliveries partially
offset by cost associated with supply of medical oxygen
during COVID pandemic from our oxygen plant facility
at Tuticorin.
Strategic priorities & outlook
Over the following year our focus and priorities will
be to:
• Engage with the Government and relevant
authorities to enable the restart of operations at
Copper India
Improving operating efficiencies, reducing our
cost profile;
•
• Upgrade technology 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.
Port Business
Vizag General Cargo Berth (VGCB)
In FY2022 VGCB discharge volume increased by 49% compared to FY2021
and dispatch volume increased by 60%. This increase in volumes is due to
increase in coal consumption and the critical power crisis in India during
Q2 and Q3 which eventually increased the coal imports and the overall coal
imports in Vizag region increased by 14% compared to FY2021
163
Integrated Report and Annual Accounts 2021-22 Directors’ Report
Dear Members,
Your Directors take pleasure in presenting the Integrated
Report (prepared as per the framework set forth by
the International Integrated Reporting Council) and the
Annual Standalone as well as Consolidated Financial
Statements for the financial year ended 31 March 2022
of Vedanta Limited (‘Company’).
164
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
1.
KEY BUSINESS, FINANCIAL AND
OPERATIONAL HIGHLIGHTS
COMPANY OVERVIEW
Vedanta Limited (‘Vedanta’) is a diversified global
natural resources company. The Group produces
aluminium, copper, zinc, lead, silver, iron ore, oil &
gas, steel, ferro chrome and commercial energy.
Vedanta has operations in India, Namibia, South
Africa, UAE, Australia and Ireland. One of the largest
producers of these natural resources globally, we are
headquartered in Mumbai, India. We strive to make
a positive, all-round impact on the communities
in which we operate, both as an employer and a
contributor, and to leave a legacy of pride. Our goal
is to create long-term value for all our stakeholders
through research, discovery, acquisition, sustainable
development and utilisation of diversified natural
resources. To accomplish that, we empower our
people to drive excellence and innovation. We strive
to demonstrate world-class standards of governance,
safety, sustainability and social responsibility. Our core
values “Trust, Entrepreneurship, Innovation, Excellence,
Integrity, Care, Respect” help us achieve our purpose.
They bind us and build our culture. They are at the
heart of everything we do and achieve. At Vedanta,
we understand the importance of working together
in a team as we pursue growth and sustainable
development. Spread across geographies, our facilities
are focussed on all‑round operational excellence to
achieve benchmark performance across our business
by debottlenecking our assets, adopting technology
and digitalisation, strengthening people-practices,
enhancing vendor and customer bases, optimising the
spend base and improving realisations.
Vedanta’s strategic focus is on good governance, and
social licence to operate, while it continues its journey
towards zero harm, zero waste and zero discharge.
Vedanta has diversified portfolio of commodities,
which are seeing strong demand and pricing cycle
with global focus on decarbonisation and materials
intensive energy transition. Further, the Company’s
majority assets and operations are in India, one of the
largest, most stable, and fastest growing economies
in the world. The Company’s steadfast focus
remains on delivery and operational excellence while
increasing the use of technology and digitalisation to
enhance profitability.
Aluminium
Zinc & Silver
Oil & Gas
Iron & Steel
• Largest aluminum
capacity in India with
captive power and
an alumina refinery
• 9th largest
Aluminium producer
globally in terms of
smelting production
• One of the Largest
integrated zinc-
lead smelter
• Rampura Agucha -
largest underground
mine globally
• 6th largest silver
producer globally
• Gamsberg - one
of the largest zinc
deposits in the world
•
India’s largest
private sector crude
oil producer
• One of the lowest
cost producers in
the world
• Strong exploration
fundamentals
supports reserves
and resources growth
(OALP 51 blocks
having > 5.5 mmboe
with 65,000 sq km
average)
• One of the largest
merchant iron-ore
miners in India
• ESL Steel is engaged
in the manufacturing
of steel with a total
current capacity
of 1.5 MT per year
and the potential to
increase to 3 MT
per year
Complemented by other key business segments including Copper & Power
165
Integrated Report and Annual Accounts 2021-22
Key investment highlights
World-class natural resources powerhouse with
Low cost and long-life diversified asset base.
Well positioned to capitalise on India’s growth
and benefit through the cycle with attractive
commodity mix.
Robust financial profile with improving
ROCE, increasing cash flow and a
stronger balance sheet.
Committed to ESG leadership in
the natural resources sector.
1
2
7
Vedanta -
Well positioned
to capitalise on
the opportunity
6
5
3
4
Proven track record of operational
excellence with well invested assets.
Focused on digitalisation and innovation
to drive efficiency and resilience.
Disciplined capital allocation framework with emphasis
on superior and consistent shareholder returns.
COMPANY PERFORMANCE
Vedanta has always focused on ‘Growth in a
Responsible way’ to unearth elements that contribute
significantly towards self‑sustainability and growth of
the regions in which it operates and the well-being of
the communities around its operations.
To drive value-added volume growth and enhance
long-term sustainable value, Vedanta continues to
focus on world-class ESG performance, augmenting
reserves and resources base, building on its
operational excellence and cost leadership while
optimising capital allocation, maintaining a strong
balance sheet and delivering on growth opportunities.
This drive is intertwined with its efforts to support
India’s growth ambitions by ensuring adequate
supply of metals and minerals required for critical
infrastructure, manufacturing and building projects.
Vedanta’s contribution to education, skill training
and healthcare projects is also supporting India’s
aspirations to harness the potential of its large
population. Technology and innovation, with a focus on
zero harm, zero waste, zero discharge, recycling and
reducing the carbon footprint, are at the centre of the
Company’s harnessing of resources.
In FY 2022, Vedanta delivered strong performance
across its business verticals, the success underpinned
by its asset quality and strength of business model.
The Aluminium business recorded the highest ever
annual production, driven by a strong focus on
operational excellence and asset optimisation. With
a consistent emphasis on growth and integrated
operations, the Aluminium business has now become
2nd largest contributor to the Group’s profitability.
For Zinc India operations, we crossed mark of the 1
MT mined metal production. We are also achieving
strong momentum in silver production and aim to
be among the top 3 producers of silver, globally.
For Zinc International, our performance ramp-up
continues, achieving highest ever production till date
at Gamsberg. In Oil & Gas, we notified hydrocarbon
discovery in Durga -1 in Rajasthan and Jaya-1 in
Cambay with resource addition of > 50 mmboe.
With an objective of backward integration, aluminium
business has secured an additional 3rd coal mine for
captive consumption. ESL Steel Limited (‘ESL’) has
also secured 2 Iron Ore mines in Orissa, which will
provide 100% material security to ESL.
Vedanta is well-positioned to deliver superior
performance operationally and financially. In Oil &
Gas, Vedanta is the largest private sector producer of
crude oil in India and ranks among the world’s lowest
cost producers with a pipeline of assets in production,
development, and exploration. In Zinc, the Company is
the world’s largest fully integrated zinc‑lead producer.
In Aluminium, it is India’s largest primary aluminium
166
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
producer supported by its own captive power
generation. With the successful acquisition of a Nickel
and Cobalt plant at Goa, Vedanta has become the sole
producer of Nickel in India. The Company is also on
track towards fulfilling its long‑term goal of becoming
a benchmark in ESG for the industry. Vedanta’s
ESG rating on Sustainalytics improved from 47.3
in 2020 to 44.1 in 2021. The Company also jumped
from 86th percentile to 89th percentile in Dow Jones
Sustainability Index in the year. Both MSCI and CDP
improved Vedanta’s ESG rating to B in 2021 from CCC
and B- respectively in 2020 to validate its performance
on key ESG aspects during the year.
Vedanta’s diversified portfolio of world‑class, low‑
cost, scalable assets consistently generate strong
profitability and deliver robust cash flows. The
Company’s continued focus on applying smart
manufacturing technologies aimed at significantly
improving HSE, driving up production volumes,
reducing operating cost, improving stakeholder
experiences, and enhancing ease of doing business is
raising the bar across its wide canvas of operations.
FY 2022 Highlights
Operational
Financial
ESG
• Record annual production across
• Record Revenue of `131,192 crore
• 3,200+ Nand Ghars created for
key businesses and stable Oil &
with 51% y-o-y growth
social welfare
Gas performance:
− Aluminium and Alumina production
grew to 2.3 mn tonnes and 2 mn
tonnes, respectively
− Zinc India Mined metal production
• All time high consolidated EBITDA
•
`359 crores Social Investment;
driven by volumes, LME and
operational efficiencies; EBITDA
grew 66% y-o-y to `45,319 crore
(FY 2021: `27,341 crore)
improving the lives of
4.81 million people
•
`54,165 crore contribution to the
National Exchequer (FY 2021:
crossed 1 mn tonnes mark
•
Industry leading EBITDA margin of
₹ 34,500 crore).
− Gamsberg delivered 170kt mined
39% (FY 2021: 36%)
• ~13.75 mn tonnes GHG emissions
metal
• Free cash flow (FCF) post‑
avoided from 2012 baseline
− VAB: Pig Iron production grew 33%
y-o-y
− ESL: Hot Metal production grew
5% y-o-y
• Maintained 1st quartile cost
curve positioning globally, across
capex of `21,715 crore (FY 2021:
`13,821 crore)
• Strong liquidity position with cash
and cash equivalents of `32,130
crore (FY 2021: `32,614 crore)
• Net debt declined by `3,435 crores
• 31% water recycled
• Electric mobility: Jharsuguda
partners with GEAR India to
supply 23 e-forklifts; deployed
50+ EVS at HZL and ESL together
• 10-year MoU signed with TERI
key segments
• Net debt / EBITDA at 0.5x and debt
to develop implementation
• Strong margins across key businesses
equity ratio at 0.6x‑ lowest in 5 years
programs to further our
despite higher COP amidst input
• Strong ~30% ROCE; 1.6 times y‑o‑y
ESG vision
commodity inflation and power cost
• ~14% dividend yield with record
• Won 3rd coal mine - Kurloi North;
Jharsuguda coal security will be 100%
pay-out of `45/share declared during
FY 2022 (FY 2021: `9.50 per share)
• Won 2 Iron ore mines in Orissa; Iron
ore security for Steel business will be
100%
• PAT before exceptional and one time
gain at `24,299 crore, 95% higher
y-o-y (FY 2021: `12,446 crore)
• Signed PDA for 580 MW RE ‑a
significant step towards 2.5 GW
RE commitment
• Launched green Aluminium
under the brands ‘Restora’ &
‘Restora Ultra’ to usher new era of
green metals
• Collaboration with TUV‑SUD to
develop roadmap for our ‘Net
Water Positive’ initiative
167
Integrated Report and Annual Accounts 2021-22
REVENUE
(C Cr)
EBITDA
(C Per Share)
ROCE
(%)
2
9
1
1
3
1
,
1
1
0
2
9
,
1
0
9
0
9
,
5
4
5
3
8
,
3
6
8
6
8
,
0
0
9
4
2
,
2
1
0
4
2
,
1
4
3
7
2
,
0
6
0
1
2
,
9
1
3
5
4
,
0
3
7
1
3
1
1
1
9
1
FY 2018
FY 2019
FY 2020 FY 2021 FY 2022
FY 2018
FY 2019
FY 2020 FY 2021 FY 2022
FY 2018
FY 2019
FY 2020 FY 2021 FY 2022
NET DEBT
(C Cr)
6
5
9
6
2
,
8
5
9
1
2
,
4
1
4
4
2
,
6
2
4
1
2
,
9
7
9
0
2
,
NET DEBT / EBITDA
.
1
1
0
1
.
.
9
0
.
9
0
.
5
0
FY 2018
FY 2019
FY 2020 FY 2021 FY 2022
FY 2018
FY 2019
FY 2020 FY 2021 FY 2022
`1,31,192 cr
51%y-o-y
`45,319 cr
66%y-o-y
`23,709 cr
99%y-o-y
`16,728 cr
Highest ever
Revenue
EBITDA
PAT
Dividend
`54,165 cr
₹58%y-o-y
`20,979 cr
14%y-o-y
EXCHEQUER CONT.
NET DEBT
30%
₹1.6 times y-o-y
ROCE
0.5X
Lowest in 5 years
ND/EBITDA
CORPORATE
GOVERNANCE
CAPITAL
ALLOCATION
DIGITAL
TRANSFORMATION
TSR
96%
MKT CAP
CREDIT RATING
>1.5Lakh cr
AA stable
The standalone and consolidated financial statements of the Company for the financial year ended 31 March 2022, prepared as
per Indian Accounting Standards (‘IndAS’) and in accordance with the provisions of the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) forms part of this Annual Report.
168
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
OPERATIONAL HIGHLIGHTS
Key Highlights
Strong year with increased production, highest ever EBITDA, strong financial performance, maintained trajectory of cost
driven by structural initiatives, asset health improvement, strong margins backed by favourable market with sustainability
at core
Record financial performance: Highest
ever yearly EBITDA INR 45,319 Cr, up 66%
y-o-y driven by strong market; Quarterly
EBITDA INR 13,768 Cr with robust
EBITDA margin of 39%
Highest ever yearly production, up
6% with increased 15% Aluminium/7%
Alumina, 4% Zn metal & 1st ever 1MnT+
mined Zn metal, 18% Gamsberg, 33% VAB
Pig iron, 6% ESL, 10% Fe‑Cr, and sustained
oil& gas production
Integrated operations: Lanjigarh Alumina
refinery expansion 2 5 6 MTPA, 100%
coal security via mines operationalization,
Gamsberg concentrator debottlenecking
& Expansion 250 600 ktpa, ESL 1.5 3
MTPA, 100% Iron ore security for ESL via
mines operationalization Barbil, Fe-Cr mines
0.75-1.5 EC expansion & Oil & Gas growth
via Exploration/infill/ASP/Shale drilling
FY 2023 Outlook-Early finalization
of Business Plans to enable advance
ordering of critical project equipment,
placing MIP, identification of A Class
initiatives & better cash flow management
to deliver the business plan Fully
Empowered BUs/SBUs managing their
own P&L
Integrated planning via strategic
levers of ESG, Center of Excellence,
Commercial, Marketing and Business
Partner Transformation
Going forward-focus remains on
becoming ESG leader, Volume growth via
capacity enhancement & utilization and
Cost reduction via structural measures-
RM security, RM mines operationalization,
plant health improvement & leveraging
digitalization and technology
EBITDA GROWTH THROUGH DIVERSIFICATION
FY 2020
FY 2021
FY 2022
EBITDA
`21,060 crore
EBITDA
`27,341 crore
EBITDA
`45,319 crore
` in crore
` in crore
` in crore
43% 9,094 Zinc
46% 12,431 Zinc
39% 17,695 Zinc
35% 7,271 Oil & Gas
12% 3,206
Oil & Gas
13% 5,992
Oil & Gas
9%
1,998 Aluminium
28% 7,751
Aluminium
38% 17,337 Aluminium
7%
1,466
Iron Ore & Steel
10% 2,744
Iron Ore & Steel
6%
1,231 Others
4%
1,209 Others
8%
2%
3,306
Iron Ore & Steel
989
Others
• Aluminium: became 2nd largest contributor to the group EBITDA of 38% in FY 2022 from 9% in FY 2020 driven by 365kt
higher volumes, operational efficiencies including structural cost reduction
• Zinc: continues to be primary contributor with 39% to group EBITDA, remained strong with volume increase,
operational efficiencies
• Oil and Gas: in absolute terms contribution remain stable despite increased profit petroleum share from 40% to 60% and
higher COP
169
Integrated Report and Annual Accounts 2021-22 Business Highlights
Aluminium: value creation through continued focus on growth and integrated operations
Key highlights:
• Record annual Aluminium production at 15% y-o-y growth driven by JSG ramp-up; quarterly production grew 8% y-o-y.
• Highest ever annual Alumina production with 7% y-o-y growth; quarterly production grew 7% q-o-q.
• Highest ever annual VAP sales at 819 kt; grew 23% y‑o‑y.
• Margins improved despite higher COP amidst increase in input commodity prices and power cost.
• Completed debottlenecking of Jharsuguda Billet facility from 400 ktpa to 460 ktpa capacity.
• First in India to launch Low Carbon Aluminium under the brand “Restora” and “Restora Ultra”.
• Secured 15.3 million tons of Coal in Tranche V at competitive price for next 5 years.
• Continued to be in 1st quartile cost curve globally1.
• 2nd largest contributor in group EBITDA, contributed 38%2 in FY 2022.
ALUMINIUM: achieved record production, margins continue to improve
Production (kt)
8
6
2
2
,
9
6
9
1
,
2,182
1,185
1,347
528
1,858
1,031
1,433
692
1
3
5
2
7
5
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
COP ($/T)
Margin ($/t)
ALUMINA: achieved best ever annual production
Production (kt)
1
4
8
1
,
8
6
9
1
,
6
9
4
3
0
5
332
291
246
235
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
COP: Cost of production; JSG: Jharsuguda; VAP: Value added products
1: CY 2021 global cost curve; 2: Contribution to full year FY 2022 group EBITDA
COP ($/T)
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Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Zinc India: touched a new milestone with >1 mn tonnes Mined metal production
Key performance highlights:
• Highest ever annual mined Metal production ‑ crossed 1 MTPA mark; best ever quarterly production since
underground transition.
• Highest ever annual refined Metal production with 4% y‑o‑y growth; supported by better plant and concentrate
availability. Quarterly production grew 2% y-o-y.
• Quarterly integrated zinc production increased 8% y‑o‑y. Integrated Lead production decreased with change in Pyro plant
(at CLZS) operations to Zinc‑Lead mode. Silver production was lower in line with the lower Lead production.
• High margins driven by volumes, improved recoveries and rising LME prices; partially offset by input commodity inflation
• Continues to be in 1st quartile cost curve globally.
MINED METAL
Production (kt)
8
8
2
5
9
2
2
7
9
7
1
0
1
,
SILVER
Production (kt)
3
0
2
2
6
1
6
0
7
7
4
6
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
REFINED METAL
Production (kt)
6
5
2
0
6
2
0
3
9
7
6
9
1,136
1,122
945
954
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021 Q4 FY 2022
FY 2021
FY 2022
CLZS: Chanderiya lead zinc smelter
COP ($/T)
Zinc International: Gamsberg achieved 220 kt annualized run rate of MIC production in Mar’22
Key highlights:
• Achieved highest ever annual production of mined metal with 18% y‑o‑y growth; Crushing throughput increased to
827tph in FY 2022 from 767tph in FY 2021.
• Quarterly mined metal production grew 10% q-o-q with highest ever quarterly Ore production of 935kt.
• Throughput & recovery improvement projects in beneficiation plant completed in Q4:
− Zinc Rougher Cell and lead pump box commissioning resulted in 3% to 5% recovery improvement
− Reagent skid upgrade to meet requirement of 600tph throughput
• COP increased mainly due to spend on south pit recovery project, exchange rate appreciation and input
commodity inflation.
GAMSBERG - PRODUCTION
Production (kt)
0
7
1
5
4
1
1
4
5
4
GAMSBERG - COP
COP ($/T)
1,473
1,400
1,377
1,312
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021 Q4 FY 2022
FY 2021
FY 2022
MIC: Metal in concentrate; COP: Cost of production
171
Integrated Report and Annual Accounts 2021-22 Iron ore: continue to improve performance trajectory
Iron ore Karnataka:
• Achieved highest ever annual sales of 5.7 mn tonnes with 30% y-o-y growth; Quarterly sales increased 22% y-o-y driven
by support from all key operational projects.
• Annual Iron ore production was up by 8% y-o-y; quarterly production grew 18% y-o-y.
Value added business (VAB):
• VAB achieved record annual production with a 33% y-o-y growth; Quarterly production increased 14% y-o-y.
• VAB achieved highest ever annual margins of $111/t; Quarterly margins were impacted mainly by higher Coking coal
cost; partially offset by higher Steel prices.
Iron Ore Goa:
• Continuously engaging with the state and Central governments for earliest resumption of mining.
VAB : PRODUCTION AND MARGIN
Production (kt)
0
9
7
6
9
5
6
5
1
8
7
1
Margin ($/t)
153
111
105
64
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021 Q4 FY 2022
FY 2021
FY 2022
KARNATAKA IRON ORE SALES
Sales (mn tonnes)
.
7
5
4
.
4
4
1
.
7
1
.
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
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Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Oil & Gas: stable operations with focus on growth projects
Key highlights:
• Production: annual production was broadly stable as impact of natural decline was largely offset by –
− Polymer injection in Bhagyam & Aishwariya fields
− Infill wells in Mangala, NI and ABH fields and
− Ramp-up of gas production at Rajasthan block
• Opex: Annual and quarterly Opex increased to $10/boe and $12.4/boe, respectively; primarily due to increased
polymer prices.
• O&M contracts: awarded key O&M contracts for end-to-end management across assets.
• Growth:
− Drilled 25 infill wells in FY 2022 across producing fields
− Exploration focused across Rajasthan, Cambay & Northeast
− Notified hydrocarbon discovery in Durga ‑1 in Rajasthan and Jaya‑1 in Cambay with resource addition of > 50
mmboe
GROSS PRODUCTION
(kboepd)
OPEX
($/boe)
5
6
1
4
5
1
2
6
1
1
6
1
12.4
10.0
9.0
7.7
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021 Q4 FY 2022
FY 2021
FY 2022
O&M: Operations and management; Kboepd: Thousand barrel of oil equivalent per day; Boe: barrel of oil equivalent
ABH: Aishwarya barmer hills
ESL Steel and FACOR
ESL: key performance highlights
• Record Annual Hot Metal production of 1,355 kt since acquisition, up 5% y-o-y.
• Quarterly Hot Metal production grew 3% y-o-y to 344 kt.
• Quarterly saleable production grew 3% y-o-y; annual production was up 6% with enhanced furnace operations.
• Margins increased 11% q-o-q, driven by improved market.
• Commenced commercial production in March 2022 from two recently acquired Iron ore mines in Orissa: “Nadidih BICO”
and “Nadidih FEEGRADE”.
SALEABLE
Production (kt)
7
8
1
1
,
0
6
2
1
,
Margin ($/t)
131
95
9
1
3
8
2
3
80
74
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021 Q4 FY 2022
FY 2021
FY 2022
173
Integrated Report and Annual Accounts 2021-22 FACOR: key performance highlights
• Highest ever Annual Chrome Ore production at 250kt, since acquisition, up 70% y‑o‑y.
• Quarterly Ore production was in line with statutory limits.
• Historic high annual Ferro Chrome Production with 10% y‑o‑y growth; Quarterly Ferro Chrome production was lower due
to maintenance shutdown.
• FY 2022 margin increased by 3x to $534/t.
FERRO CHROME
Production (kt)
8
1
8
1
8
6
5
7
MARGIN ($/T)
492
534
470
176
Q4 FY 2021
Q4 FY 2022
FY 2021
FY 2022
Q4 FY 2021 Q4 FY 2022
FY 2021
FY 2022
Upcoming growth projects – Oil & Gas and Aluminium
Oil & Gas: $687mn new growth capex projects, this includes $360mn to monetize 52.6mmboe reserves and $327mn to
grow resources
Infill wells:
~70 wells across operating fields viz Aishwarya, Bhagyam, Tight Oil, Tight Gas and Offshore to augment reserves & mitigate
natural decline
Exploration PSC/OALP:
30 exploration wells both onshore & offshore across the PSC and OALP blocks to establish resource potential
Shale:
5 pilot wells program in Barmer, in partnership with global service providers to leverage technology, to unlock unconventional
resources potential
ASP:
a) ASP surface facility award for Mangala field,
b) Early ASP injection in select pads,
c) Pilot project in Bhagyam and Aishwariya fields
Partnership‑model with leading OFS companies from concept to execution.
174
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Aluminium: $1.4 bn growth capex over 2 years; vertical integration focus to reduce market volatility impact and
create value
• Aluminium capacity expansion to 3 MTPA
− JSG capacity ramp‑up to 1.8 MTPA – Q1 FY 2023
− Balco capacity expansion to 1 MTPA – Q1 FY 2024
− Debottlenecking for balance 0.2 MTPA – Q3 FY 2024
• Value added product capacity expansion to 90%
− JSG VAP expansion to 1.6 MTPA – Q2 FY 2024
− Balco VAP expansion to 1.1 MTPA – Q2 FY 2024
• Alumina capacity expansion to 6 MTPA
− Environmental clearance is in place
− New 3 MTPA expansion project – Q4 FY 2023
− 1 MTPA via debottleneck initiatives – FY 2024
• Bauxite security:
− Enhance delivery from exiting mine
− Participation in new mines auction
• Coal security: 100% operationalization of 3 coal mines
− Jamkhani - mining commencement in Q1 FY 2023
− Radhikapur (W) – mining targeted by Q3 FY 2023
− Kurloi (North) – mining targeted by Q3 FY 2024
OALP: Oil Acerage Licensing Policy; PSC: Production Sharing Contract; ASP: Alkali Surfactant Polymer; OFS: Oilfield
Service Companies
Upcoming growth projects – Zinc International and ESL
Zinc International
ESL Steel
• $466 mn capex on Gamsberg phase 2 project
• Capex investment of $348 mn
• New 4 MTPA Concentrator (200 kt MIC)
• Doubling Hot Metal Capacity to 3.0 MTPA from 1.5 MTPA
• Completion by H1 FY 2024 and commissioning in
• Completion of project by end of FY 2023
Q3 FY 2024
• Key facilities include:
• Key project activities:
− New tailing dam – adjacent to current dam with HDPE
lining as per environmental regulations
− Debottlenecking of Blast furnace ‑ 3 by 0.2 MTPA
− Additional blast furnace of ~ 1.1 MTPA
− Open cast mine expansion from 4 MTPA to 8 MTPA
− Additional Coke oven capacity of 0.5 MTPA
− New 4 MTPA concentrator for additional MIC of
200ktpa
− New 20km, 22 MVA power line to site
− 6.5km line for 7.5 MLD water
− Pellet plant 1.8 MPTA
− Oxygen plant 800tpd
− New ductile Iron plant 0.18 MTPA to maximize the VAP
− Other auxiliary and infrastructure upgradation
MIC: Metal in Concentrate; VAP: Value Added Product; HDPE: High Density Polyethylene; MLD: Million of liter per day
The details of the business, results of operations and the significant developments have been further elucidated in
Management Discussion & Analysis section of the Annual Report.
175
Integrated Report and Annual Accounts 2021-22 Unique and diversified portfolio of
natural resources
Significant Macro opportunity demand/
pricing. Vedanta’s portfolio well positioned
to capitalize the opportunity
Large and scalable asset base with top
quartile cost position
Successful track record of delivering long
term sustainable growth
Robust dividend payout - amongst the
highest in the country. Paid `48,870 crore
in last 10 years
Multiples re-rating to create
significant shareholder value
DISCIPLINED CAPITAL ALLOCATION FRAMEWORK
Key Strategic Priority
Optimize Leverage Ratio
Intend to deleverage at group level
•
• Leverage ratio at Vedanta Limited should not be more than 1.5x.
Capital
Expenditure
Project Capex
• Volume augmentation, cost reduction or creating value added
products are key guiding principles for all projects
• Growth projects to ensure minimum guidelines for IRR -18%
Sustaining Capex
• All sustaining capital expenditure to be a part of Business Plan
• Sustaining capex to be defined and tracked in $/tonne
CAPITAL
ALLOCATION
• Minimum 30% of Attributable Profit after tax (before exceptional
items) of Company (excluding profits of HZL)
Dividend
• Dividend income received from HZL will be pass through within
6 months
Mergers &
Acquisitions
•
Intent to enhance value via acquiring accretive assets/
business that have: synergies with existing line of
core businesses
Maximize Total Shareholder’s Return (TSR)
176
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
ESG Highlights
Pillar 1: Transforming communities - benefitting the lives of 4.81 million people across 1268 villages
Nearly 4.81 million beneficiaries through Vedanta-wide 180 programs
Healthcare:
• Nearly 2.45 million people benefited
• > 38 Initiatives
Women’s empowerment:
• > 87,000 women benefited
• > 11 Initiatives
Community infrastructure:
• > 0.96 million people benefitted
• > 50 Initiatives
Environmental protection & restoration:
• Nearly 75,000 saplings planted and
under maintenance
Drinking water and sanitation:
• More than 332,000 people benefited
• > 20 Initiatives
Agriculture and animal husbandry:
• > 36,000 people benefited
• 16 Initiatives
Children’s well-being and education
• Over 800,000 children benefited
• > 44 Initiatives
Sports & culture:
• Nearly 70,000 sports persons and culture
enthusiasts benefitted
• > 16 Initiatives
3,200+ Nand Ghar
across India
Football Academy
Vedanta Medical
Research Foundation
177
Integrated Report and Annual Accounts 2021-22 ESG HIGHLIGHTS
Pillar 2: Transforming the planet
Net Zero Carbon Company by 2050 or sooner | 25% absolute GHG reduction by 2030
Renewable power:
Committed to use 2.5 GW of RE RTC equivalent by 2030
• Signed PDA for 580 MW of RE by FY 2025
− 200 MW at BALCO
− 180 MW at VAL‑Jharsuguda
− 200 MW at HZL
• 3 billion units of green power purchased by Aluminium sector in FY 2022 – largest consumer of RE in India
Green Metals:
• Launched pilot programs to support the green economy
• Low Carbon Green Aluminium: Launched ‘Restora’ & ‘Restora Ultra’
Global Standard
4 TCO2e/T of metal
Restora
Restora Ultra
2.36 TCO2e/T of metal
0.37 TCO2e/T of metal
• Green Copper: Pilot project to produce Copper from recycled Copper, 2.909 MT in FY 2022; target to scale up
to 20,000 MT in FY 2023
Fuel Switch Programs:
• Blomass firing: Committed to use 5% biomass in thermal power plants
− 15.7KT of biomass used in HZL
− Pilot programs at BALCO, Jharsuguda, Lanjigarh
• Natural Gas: Vedanta Aluminium Lanjigarh partnership with GAIL to supply natural gas for calciner-substituting
coal use; potential to decrease plant GHG intensity by 20%
• Electric mobility: Committed to decarbonize 100% of LMV fleet by 2030 and 75% of mining fleet by 2035
− Jharsuguda partners with GEAR India to supply 23 e-forklifts
− 11 EVS deployed at HZL
− 40 EVS deployed at ESL
178
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Water Positivity I Waste Management I Partnerships
Achieve Water Positivity by 2030:
• Collaboration with TUV‑SUD to develop roadmap for ‘Net Water Positive’ initiative.
• 31% of water recycled in FY 2022.
Waste Management: Committed to 100% utilization of HVLT wastes; bring legacy waste to zero
• Nearly 100% HVLT utilized in FY 2022.
• One rake of red mud (3309 MT) dispatched to one of the largest Indian cement company.
• 1st Fly ash rake from Jharsuguda dispatched to Cement Plant.
• Commenced Ash backfilling in one of the coal India’s open‑cast mine in Mar’22 with all requisite
regulatory approvals.
• 6.25 Ha of Jarofix Yard Phase 2 at CLZS restored via plantation using Mycorrhiza technique in partnership
with TERI.
Partnerships:
• Green Spark: Program to collaborate with technology start‑ups to solve ESG challenges across our BUs.
• TERI: 10-year MoU to further our ESG vision, 600+ opportunities to development implementation programs
in the areas of research, policy facilitation, stakeholder management, environmental awareness and on-
ground implementation.
•
IUCN: Partnership with HZL to upgrade biodiversity management plans to align with ‘No Net Loss’ or ‘Net
Positive Impact’ targets.
• CII: Signatory to the CII Climate Charter.
Green Spark
Green spark objective:
Strategic investments in start-ups to unlock value across
Vedanta. Offers opportunities to explore breakthrough
products or technologies, new markets, additional revenue
streams in the long term and accelerate journey towards
ESG leadership.
FY 2023 Challenge curation and startup discovery process:
• To execute quarterly sprints of challenge curation and
startup discovery.
• Each sprint to include 1/3rd challenges on ESG themes.
• 1500+ start-ups to be scouted for 20+ opportunity
themes and 50+ innovation challenges.
• 100+ start-ups to be selected for engagement across
Vedanta; —$100 mn business value realisation potential
to be targeted over next 12 months.
Themes being targeted in Q1 FY 2023:
• ESG
− Communities first
− Green excellence
− Zero harm
• Core
− Asset optimization and predictive maintenance
• Allied
− Commercial and marketing excellence
− Quality excellence
• Core and Allied
− Emerging technologies
Spark vision:
To achieve corporate innovation and growth
outcomes through strategic partnerships and
investments with Digital or Technology Start-ups.
50
Challenge Curation
1500+
Startups Outreach
500+
Startups Screening
200+
Startups Evaluation
100+
Startups Engagement
179
Integrated Report and Annual Accounts 2021-22 Pillar 3: Transforming workplace
Organizational design to ensure right people in right roles; Launch of ‘People’ CoP to have globally benchmarked HR
practices on ESG side
Group
Diversity
FY 2030 Target
FY 2022 Status
In decision making
bodies
Leadership
roles
30%
29%
40%
29%
Enabling
roles
50%
Overall
50%
29%
11.5%
Diversity & inclusion
(D&I) council
Sustainability
academy
• Announced 1st D&I council of the group; includes leaders
from operations & enabling functions
• ESG academy phase 1 completed — 100+ senior
executives completed “Sustainability 101” training
• Setting up organization’s first employee resource group
•
“Sustainability 101” training made compulsory for
all employees
• Empanelment of diversity focused institutes/
search firms
• Building all women teams and internal women networks
• Focus on women representation in all talent
management, and award & reward programs
• Completed training on ESG topics for the Board in
March 2022
• ESG Academy development is on-track
Safety &
health
Strengthening
policy
• Focus on “Critical Risk Management” to reduce
•
Introducing anti-harassment policy, board diversity policy
• Revamping Human Rights Policy, and 15+ diversity
focused policies for workforce including aspects
like ‑ flexible working hours, Work from home, Part
time working
•
Introducing Indigenous People policy to strengthen
indigenous people relationships
hazardous activities
• Launched cross business audit to ensure best
safety practices
• Lunched lift safety standard
• 12 fatalities in FY 2022 (all with business partners’
employees); Business units CEOs focusing to drive 100%
CAPA closure of learnings
• Health Community of Practice formed to review all
health‑related major issues, and to ensure exposure
reduction and 100% Periodic Medical Examination
• 100% double vaccination of COVID‑19 vaccine; started
Covid ‑19 booster dose for all eligible employees
180
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Strategy to Enhance Long Term Value
Delivering on Growth
Opportunities
Operational Excellence
and Cost Leadership
Augment Our Reserves
& Resources Base
Optimise Capital Allocation &
Maintain Strong Balance Sheet
Continue Focus on World Class
ESG Performance
KEY EVENTS DURING THE YEAR
VOLUNTARY OPEN OFFER AND CREEPING
ACQUISITION BY PROMOTER AND PROMOTER
GROUP:
Pursuant to the Voluntary Open Offer made by Vedanta
Resources Limited (“Acquirer”) together with Twin
Star Holdings Limited, Vedanta Holdings Mauritius
Limited and Vedanta Holdings Mauritius II Limited, as
persons acting in concert with the Acquirer (“PACs”),
to the public shareholders of the Company during the
year, in accordance with the Securities and Exchange
Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations, 2011, the Acquirer and
PACs have acquired 374,231,161 equity shares of the
Company representing 10.07% of fully diluted voting
share capital, thereby increasing acquirer’s indirect
shareholding in the Company from 55.1% to 65.18%.
Further, Vedanta Netherlands Investments BV
and Twinstar Holdings Limited, members of the
promoter group of the Company had purchased
63,514,714 and 103,985,286 equity shares respectively
(representing 1.71% and 2.80% of the equity share
capital respectively), during the FY 2022, through
a block deal on the stock exchanges. Post this, the
total shareholding of Promoter and Promoter Group
increased to 69.69%.
The complete details can be accessed at
www.vedantalimited.com.
DELISTING OF AMERICAN DEPOSITARY SHARES
FROM THE NEW YORK STOCK EXCHANGE (“NYSE”)
AND TERMINATION OF AMERICAN DEPOSITARY
SHARE PROGRAM:
The Company had announced its intention to delist
American Depositary Shares from the New York Stock
Exchange (“NYSE”) and to terminate its American
Depositary Share Program on 23 September 2021
and the American Depositary Shares (ADS) of the
Company have been delisted from NYSE effective
close of trading on NYSE on 08 November 2021. This
follows the filing done by the Company of Form 25 with
Securities and Exchange Commission on 29 October
2021. As a consequence of the delisting becoming
effective, termination of the Deposit Agreement under
which the ADS were issued (the “Deposit Agreement”)
has also become effective close of trading on NYSE on
08 November 2021. The said action has no impact on
the current listing status or trading of the Company’s
equity shares on BSE and NSE.
181
Integrated Report and Annual Accounts 2021-22
Post 11 January 2022, the ADS underlying equity
shares which were not surrendered in accordance with
the Deposit Agreement within the extended timelines
i.e., 10 January 2022, were sold by the depositary and
the proceeds, less and withholding taxes, fees and
expenses were remitted to the ADS holders. Hence, as
on 31 March 2022, there are no outstanding ADS of
the Company.
Further, the Company will continue to be subject
to reporting obligations under the U.S. Securities
Exchange Act of 1934 until such time as it can
terminate its registration under the Exchange Act.
The complete details can be accessed at
www.vedantalimited.com.
SCHEME OF ARRANGEMENT BETWEEN VEDANTA
LIMITED AND ITS SHAREHOLDERS UNDER SECTION
230 AND OTHER APPLICABLE PROVISIONS OF THE
COMPANIES ACT, 2013:
The Board of Directors of the Company, basis the
recommendations of the Audit & Risk Management
Committee and Committee of Independent Directors
of the Company, at its meeting held on 29 October
2021 approved the Scheme of Arrangement between
the Company and its shareholders under Section 230
and other applicable provisions of the Companies
Act, 2013 (“Act”) (“Scheme”). The Scheme inter alia
provides for capital reorganization of the Company,
whereby it is proposed to transfer amounts standing
to the credit of the General Reserves to the Retained
Earnings of the Company with effect from the
Appointed Date. The Scheme is subject to receipt of
regulatory approvals/ clearances from the Hon’ble
National Company Law Tribunal, Mumbai Bench,
Securities and Exchange Board of India (through BSE
Limited and National Stock Exchange of India Limited),
BSE Limited and National Stock Exchange of India
Limited (collectively referred to as “Stock Exchanges”)
and such other approvals/ clearances as may
be applicable.
Pursuant to the Scheme, the Company will possess
greater flexibility to undertake capital related
decisions and reflect a much efficient balance sheet
of the Company. The Scheme is in the interest of all
stakeholders including public shareholders.
The complete details can be accessed at
www.vedantalimited.com.
ACQUISITION
In FY 2022, the Company through its subsidiaries has
closed the following three acquisitions:
Firstly, Vedanta strengthened its position in the Met
Coke sector with the acquisitions of assets of Gujarat
NRE Coke Limited which were in Liquidation under the
Indian Bankruptcy Code (IBC). The total capacity of
Bhachau and Khambalia plants in Gujarat is ~1MTPA.
The acquisition will complement our existing Iron Ore
business via backward integration through provision
of the Met Coke requirement to our existing facilities.
Acquisition was implemented by Vedanta’s direct
wholly owned subsidiary MALCO Energy Limited.
Further, Vedanta acquired assets of Nicomet
Industries Limited, a leading Nickel and Cobalt
producer based in Goa, which was also in Liquidation
under IBC. With this acquisition, Vedanta has
become India’s sole and largest producer of Nickel,
which is widely used in batteries of electric vehicles.
This acquisition was also implemented by MALCO
Energy Limited.
Lastly, Vedanta via its indirect wholly owned subsidiary
Sesa Mining Corporation Limited (SMCL), acquired
Desai Cement Company Private Limited (DCCPL),
a cement manufacturing plant based out of Goa.
The acquisition was made under ‘Waste to Wealth’
theme to utilize slag from our Goa plants for the
manufacturing of cement, thereby not only reducing
waste but also generating value.
PROJECTS AND EXPANSION PLAN
Projects are key driving factor of our Group as our
aspirations for growth are very different from any
of the peers globally. In HZL, we have successfully
completed the development of North Decline (ND1) at
Rampura Agucha mine. This marked the completion of
most awaited shaft integration and liberated RA shaft
from statutory compliance of secondary outlet. This
improves the accessibility of shaft section, alternate
emergency evacuation, ease in mine equipment
deployment at lower levels of mine, face charging
with emulsion explosives, face drilling with long feed
jumbo, etc.
In HZL journey of 1.25 mtpa MIC expansion, some of
key projects are under execution at RD Mines complex.
We have successfully completed RD Mines Shaft &
Conveyor upgradation for enhancement of ore hoisting
capacity in Q3 of this FY. In line with our ESG journey,
we have completed installation of Dry Filtration & Paste
fill plant to enable effective tailings managements
by switching from Wet to Dry tailing management
system. The same is under Commissioning stage.
For enhancing metal recovery, we have placed order
for RD Beneficiation plant revamping, enabling better
Pb, Zn & Ag recoveries and improving plant reliability
by replacing obsolete Grinding, Floatation & Filtration
circuits. Civil construction already ongoing & plant is
scheduled to be commissioned in Q3 of next FY.
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In VZI, the Gamsberg mine and processing facilities
are almost stabilized and set the stage for Gamsberg
Phase II. Gamsberg phase‑2 will further enhance the
mining capability and processing capacity to double
the current volumes. Iron ore project, VZI’s “Value
from Waste” project is progressing well. In Cairn, we
are still focussed on the journey to produce India’s
50% Oil & Gas production. 25 infill wells were drilled in
FY 2022 across producing fields. We are undertaking
further Infill Drilling campaigns across all fields to
maximise recovery and exploration campaigns to
discover resources for further growth. In Aluminium
Business, the vision is to be among top 3 global
aluminium producers globally with 3 MTPA capacity,
100% Value Added Product Portfolio (VAP) and
100% forward & backward integration. On backward
integration, Lanjigarh expansion from 2 to 5 MTPA is
the biggest value driver for the Aluminium Business.
This project has all the requisite statutory approvals
and construction is in full swing for completion in
next fiscal. We had acquired 3 coal blocks through
competitive bidding namely Jamkhani, Radhikapur
West & Kuraloi North. These mines have potential to
cater to 100% of Jharsuguda’s coal requirement. We
plan to operationalize 2 out of these 3 blocks in the
next fiscal. On forward integration, we are setting up
VAP facilities at both Jharsuguda & BALCO, which
are designed to cater sunrise sectors such as Electric
Vehicle, Renewable Energy, Defense & Aerospace.
We also plan to set up 300 KTPA Aluminium Park at
Jharsuguda which will bring more than 100 SMEs
together to produce downstream products. With this
our product portfolio will have 100% VAP which will
be largest in the world. We also plan to expand our
smelting capacity at BALCO to 1 MTPA. All these
facilities will be operational in next 12‑24 months.
ESL: 3 MTPA project ‑ This includes 5 major packages
i.e., BF#1/HCO/CPP, RMHS/DIP, Oxygen Plant, Pellet
Plant, Railway project. All partners are finalized,
expected BF#1 commissioning by Dec’22. The steel
expansion project with an investment of `2,696 Cr
comes with additional Blast Furnace of 1050 m3
supported by a 0.5 MTPA Coke Ovens, 1.8 MTPA Pellet
Plant, 800 TPD Oxygen Plant & other auxiliaries and
infrastructure upgradation including Railway siding to
Plant head. This project also comes with a new 0.18
MTPA Ductile Iron Pipe Plant which will help us to
maximize VAP. This project along with debottlenecking
of BF#3, Sinter Plants & new LRF will take us to the
capacity of 3 MTPA with the lowest quartile cost &
premium product portfolio.
FACOR: 60 KTPA ‑ This project includes 3 key
packages i.e., Furnace, Transformer and EPC partner.
All partners are locked in. Plant commissioning
is expected by Sep’22. This project along with
debottlenecking of existing SAF will take our Fe‑Cr
capacity from 80 to 150 KTPA.
We are set to deliver tremendous value to all our
stakeholders once we successfully execute these
projects of across the group.
DIVIDEND DISTRIBUTION POLICY AND
DIVIDEND
In terms of the provisions of Regulation 43A of the
Listing Regulations, the Company has adopted Dividend
Distribution Policy to determine the distribution of
dividends in accordance with the applicable provisions.
The policy can be accessed on the website of the
Company at www.vedantalimited.com.
With consistent dividend as a healthy sign of our
sustained growth, our firm belief in percolating the
benefits of our business progress for widespread
socio-economic welfare facilitates the equitable
sharing of our economic value generated. Attaining
steady operational performance and a harmonised
market environment in continuation of the historical
trends helped us to reaffirm the realisation of
competent numbers for FY 2022.
RETURN TO SHAREHOLDERS
(C Per Share)
5
4
5
8
8
1
.
.
9
3
5
9
.
FY 2019
FY 2020
FY 2021
FY 2022
~14% dividend yield with record pay-out of `45/share
in last year.
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The Company has declared the following dividends during the year in compliance with the Dividend Distribution Policy:
Particulars
Record Date
1st Interim Dividend
2nd Interim Dividend
3rd Interim Dividend
09 September 2021
20 December 2021
Date of Declaration
01 September 2021
11 December 2021
Rate of Dividend per share (Face
Value of `1 per share)
%
Total Payout (` in Crore)
18.50
1850
6,877
13.50
1350
5,019
10 March 2022
02 March 2022
13.00
1300
4,832
Pursuant to the Finance Act, 2020, dividend is taxable in the hands of the shareholders with effective from 01 April
2020 and tax has been deducted at source on the Dividend at prevailing tax rates inclusive of applicable surcharge and
cess based on information received by the Registrar & Transfer Agent and the Company from the Depositories.
The Directors do not recommend any final dividend for the financial year ended 31 March 2022.
CREDIT RATING
Your Company is rated by CRISIL and India Rating and Research Private Limited on its various debt instruments.
Rating agency
Date of rating action
Current Rating
CRISIL Ratings
25 February 2022
CRISIL AA/ Stable (upgraded from CRISIL AA-/Positive)
India Ratings
29 March 2022
IND AA/ Stable (upgraded from IND AA-/Positive)
Rating drivers
• Strong operational performance driven by volume growth across businesses;
• Strong commodity prices with sustained cost efficiencies;
• Disciplined capital allocation framework;
• Commitment to further deleverage.
AA-/Pos
AA-/Neg
AA/Pos
AA/Stable
AA/Neg
AA-/Stable
AA/Stable
2016
2017
2018
2019
2020
2021
2022
• Continued gross and net debt reduction to be key monitorable by the agencies
• Upgrade trigger: ND/EBITDA below 1.5x for CRISIL and India Ratings; Downgrade trigger: 2.7x
ECONOMIC RESPONSIBILITY
Your Company is one of the world’s foremost natural resources conglomerates with primary interests in zinc, lead‑
silver, iron ore, steel, copper, power, oil and gas. With world‑class, low‑cost, long‑life strategic assets based in India
and Africa, we are rightly positioned to create long‑term value with superior cash flows. We cater to diverse consumer
markets for their primary material needs and are leaders in the segment we operate. Through our activities that
generate economic, human and social value, we responsibly support India in its journey towards self- reliance.
Giving back is in the DNA of Vedanta, which is focused on enhancing the lives of local communities. Retaining the
social license to operate is central to our ability to do business as Vedanta is the primary economic driver in most of
the geographies where we operate. The Chairman has signed the Giving Pledge, a movement of global philanthropists
who commit to giving the majority of their wealth to philanthropy or charitable causes. In line with the past trends,
we are proud to declare that we have contributed ~`54,165 Cr to the public exchequer of the various countries
where we operate. The total contribution to exchequer is the result of value addition by various business segments
across their respective value chain and multiple hierarchies of business cycle. At Vedanta, our sustainability-focused
and integrated business model continues to propel our value creation process, helping deliver better returns for all
stakeholders along its value chain.
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Total Contribution
`54,165 crores
Taxes Borne
60%
Indirect Contribution
36%
Other Indirect
Contributions 10%
Withholding
Taxes 14%
Other Taxes
Borne 30%
Taxes on Income
and Capital 18%
Government
Royalty and Profit
Petroleum 52%
Dividend paid to Govt.
4%
Indirect Taxes
76%
Business Spread of Contribution to Exchequer
Zinc
`15,825 cr
Others
`4,456 cr
Oil and Gas
`18,539 cr
Total Contribution
`54,165 cr
Copper
`4,565 cr
Iron Ore
`2,060 cr
Aluminium
`7,475 cr
Steel
`1,245 cr
Your Company publishes Tax Transparency Report which provides an overview of the tax strategy, governance and tax
contributions made by the Company. The report is available on the website at www.vedantalimited.com.
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SUSTAINABILITY AND SOCIAL
RESPONSIBILITY
ENVIRONMENTAL, SOCIAL AND
GOVERNANCE (ESG) APPROACH
TRANSFORMING FOR GOOD
We are committed to delivering sustainable and
responsible growth, relying on the principles of
environmental stewardship, social equity and impact,
and good corporate governance.
In 2021, Vedanta pledged to become the benchmark
in sustainability for the resources sector. Over the
course of the year, Vedanta employees came forward
and became champions of the cause, taking up
responsibilities, creating agendas, and becoming the
heart and soul of Vedanta’s sustainable future – and
drivers for a better future for the world.
Vedanta is committed to delivering sustainable
and responsible growth, which creates value for
both our shareholders and all our stakeholders. We
proactively engage to incorporate sustainability in all
Transforming for good
our practices. We are committed to sustainability in
our mining practices, energy conservation, recycling,
proper treatment, and disposal of the waste, health
& safety practices, wellbeing of our employees and
development of our local communities.
Vedanta has been at the forefront of sustainable
practices and is leveraging new technologies to
safeguard the environment and communities. Guided
by the philosophy of Zero Harm, Zero Waste, Zero
Discharge’, Environmental, Social and Governance
(ESG) practices are at the heart of Vedanta’s
operations which are focused on delivering sustainable
and responsible growth thereby creating value for
all stakeholders.
Vedanta has redefined its ESG strategy and refreshed
its mission statement from “Transforming elements”
to “Transforming for good” to make a meaningful
difference to the society at large, with its overall
purpose supported by the three pillars and nine aims
as below:
Transforming
Communities
Transforming
the Planet
Transforming
the Workplace
Aim 1. Keep community welfare at
the core of business decisions.
Aim 4. Net-carbon neutrality by
2050 or sooner.
Aim 7. Prioritizing safety and health
of all employees
Aim 2. Empowering over 2.5 million
families with enhanced skillsets
Aim 5. Achieving net water
positivity by 2030
Aim 8. Promote gender parity,
diversity and inclusivity
Aim 3. Uplifting over 100 million
women and children through
Education, Nutrition, Healthcare
and Welfare
Aim 6. Innovating for a greener
business model
Aim 9. Adhere to global business
standards of corporate governance
These aims are supported by powerful initiatives that aim to embed sustainability in every aspect of the operations. With
this new identity, Vedanta wants to further its commitment towards ESG in everything it does.
Sustainability Academy
At Vedanta we pride ourselves in putting Learning and Development at the forefront ‑ the first step of any big bold goal, here
the goal being sustainability, is always to upskill. Sustainability Academy is our leap towards a sustainable Vedanta.
We are excited for a sustainability focused future at Vedanta. We have big bold goals to achieve – and we are confident that
our collective will achieve those goals with the light of sustainability principles to guide them.
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Sustainability Academy - a key enabler of the ESG transformation at Vedanta
Work towards advancing the
field of Sustainability through
research and outreach
Deliver cutting-edge knowledge and
share best practice to employees
- enabling creation of a Centre of
Excellence for Sustainability
Induct all Vedanta leaders, employees
and business partners into the ESG
transformation: Educate employees
regarding key ESG issues for resources
companies and enable incorporation of
ESG in decision making and operations
Platform for building internal
capability through deeper knowledge
and understanding on key ESG topics
for different functional teams (HR,
Finance, Health & Safety, etc.)
Community Relations
Environment
Safety
Occupational
Reporting and
& Social Performance
Health
Communication
BUSINESS RESPONSIBILITY &
SUSTAINABILITY REPORT
Sustainable Development is integral to Vedanta’s core
business strategy. We continue to be a transparent and
responsible corporate citizen; committed to a ‘social
license to operate’ and partner with communities,
local governments, and academic institutions to help
catalyze socio-economic development in the areas
where we operate.
The Company reaffirms its core values of Trust,
Entrepreneurship, Innovation, Excellence, Integrity,
Respect and Care, which are the basis of our
Sustainable Development Model and will drive the
ESG transformation.
These four pillars are critical to ensuring the long-
term successful future of our business – meeting
our strategic goals of growth, long-term value,
and sustainability.
A separate detailed report on Company’s Sustainability
Development also forms part of the Annual
Reporting suite.
Recognizing sustainable development as a core
requirement to strategically improve the value of
our business, the Board of Directors had constituted
a Sustainability Committee effective 01 April 2019
to provide oversight and assistance in building an
approach towards sustainability which mirrors our
prevailing business ethos of achieving excellence
through continuous improvement in our processes
and outcomes, while also benchmarking ourselves
against our global peers. In line with upholding our
core commitment and Board oversight on ESG
priorities, the Board, in its meeting held on 26 July
2021, approved the enhancement of the scope of the
erstwhile Sustainability Committee and upgraded it to
Board‑level ESG Committee with immediate effect to
strengthen Board level rigor and advice into all aspects
of ESG.
Details of the composition of the committee, its terms
and reference and the meetings held during FY 2022 is
elucidated in the Corporate Governance Report.
Your Company publishes an annual Sustainability
Report prepared in accordance with the Global
Reporting Initiative (GRI) Standards; mapped to the
United Nations Global Compact (UNGC); and aligned
to Sustainable Development Goals (SDGs). It reports
our approach and disclosure towards triple bottom line
principles ‑ People, Planet and Profit.
As per SEBI directives on Integrated Reporting (IR),
the Company follows the framework of the
International Integrated Reporting Council to report
on all the six capitals that are used to create long‑term
stakeholder value and also continues to provide the
requisite mapping of principles between the Integrated
Report, the Global Reporting Initiative (‘GRI’) and
the Business Responsibility Report (BRR) which has
now been advanced to the Business Responsibility
& Sustainability Report (BRSR) as per new SEBI
requirements. Hence, a BRSR containing basic
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information about the Company’s sustainability practices is being published in the Integrated report this year. Detailed
information about the Company’s sustainability performance can be found in our annual Sustainability Report. The
Sustainability Report of the Company can be accessed at www.vedantalimited.com.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS &
OUTGO
The information on conservation of energy, technology absorption stipulated under Section 134(3)(m) of the Act read
with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as ‘Annexure A’.
The details of the Foreign Exchange Earnings and Outgo are as follows:
Particulars
Expenditure in foreign currency
Earnings in foreign currency
CIF Value of Imports
(` Crores)
Standalone
Consolidated
FY 2022
FY 2021
FY 2022
FY 2021
2,574
33,744
22,918
1,251
17,706
16,447
9,324
47,991
29,520
5,240
27,017
20,981
CORPORATE SOCIAL RESPONSIBILITY
Vedanta is a responsible natural resources company and has always found its purpose in giving back to the
community and it is an inherent part of the Vedanta ethos.
Over the years, Vedanta has been positively impacting lives, through healthcare, education, skilling, and livelihood
providing inclusive development of our communities and developed trust with our communities. We spent `399.57
crore across subsidiaries of Vedanta group on social impact initiatives in the FY 2022. We treat CSR not as a mandate
but as the very core of why business exists – to eventually share the wealth for prosperity of our communities.
With the launch of Anil Agarwal Foundation, as part of our `5,000 crore social impact program, we are now
focusing on Covid Mukt villages. We are also launching a first‑of‑its‑kind animal welfare project which will provide
world‑class infrastructure, veterinary services, training facility and shelters. We are setting up a sustainable and
scalable ecosystem for the well-being of animals which will have tie-ups with global academic institutions and
knowledge partners
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• Educating Children
• Nurturing Lives
• Serving Mankind
• Building Nation
• Empowering Women
• Skilling Youth
• Protecting Environment
• Fulfilling Dreams
CSR SPENT (`)
399.57 cr
TOTAL BENEFICIARIES (NO.)
4.81 million
The expenditure focused on integrated development
which impacted the overall socio-economic growth and
empowerment of people, in line with baseline and need
assessment, the national development agendas.
Vedanta is committed to conduct its business in a socially
responsible, ethical and environment friendly manner and
to continuously work towards improving quality of life of the
communities in and around its operational areas.
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Benefitted 4.81m Lives from 1268 villages across the country
Covid Relief Measures & Medical
Infrastructure Support
• 100 — Bedded Hospitals
• 2331 MT liquid oxygen
• 502 Oxygen concentrators
Education
Promotion of Digital Education :
• E- kaksha
• Siksha Sambal
G
E
FY 2022
Responsible
Business Conduct
Livelihood/Employability
Creation
Alternative Livelihood
Enhancement Opportunities
• SHG Interventions
• Agri & Non Agri activities
Skilling
S
Programs for Skilling of
youth across all BU’s
ESG Aim 1:
Responsible business decisions based around
community welfare
• Social Performance
• Community Connect
• Trust Building
• Grievance Redressal
ESG Aim 2 & 3:
Focus on Community welfare through Skill
development, Women empowerment, Livelihood ,
Education, Nutrition, Health Care etc.,
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Health Care
Women & Child
Development
Animal Welfare
• Priority towards COVID relief
• Super specialty cancer Hospital
• Nand Ghar: Flagship project
• Women empowerment, early
•
India’s first of its kind animal
welfare project
(ViVIRF)
childhood care
20 Lakh people to be benefitted
25 Lakh women and children to
be impacted
World Class Veterinary Care
Sports
CSR across
Business Units
•
Promoting grass root level sports
for encouraging youth to become
globally competitive
• Education
• Skills
• Water and Sanitation
• Agriculture
Benchmarked to World Class
training infrastructure
32 Lakh beneficiaries
from communities
Vedanta works towards a larger goal of nation
building and socio-economic empowerment of the
communities in and around its operational areas.
Towards that end, we undertake various need-
based community programs aligned to Sustainable
Developmental Goals (SDGs) and focused ESG
interventions as part of our Corporate Social
Responsibility (CSR). The COVID‑19 outbreak has
affected every aspect of daily life in the country
and the world at large. Despite of all challenges,
Vedanta proactively maintained its commitment
through planned programs as well as reached out to
communities across India to address the immediate
needs of health care services by setting up ten 100
bedded COVID hospitals, supplied liquid oxygen,
oxygen concentrators etc. in Wave 2 and Wave 3 of
the pandemic. The relentless contribution towards the
communities by Vedanta Group companies has been
well recognised by various firms including CMO Asia’s
Best CSR Practices Award, Leaders for Social Change
Award, ICC Social Impact Award, BRICS Runners‑Up,
CSR Health Impact Awards, Green Tech CSR Award
and many more leading it to achieve 4 International, 17
National and 3 State Awards for this financial year.
At Vedanta, we follow a bottom up community
engagement approach in almost all our developmental
programs. This collaborative approach ensures
community ownership, suitable project design,
effective delivery, and post project sustainability. Apart
from communities, we also partner with government
agencies, corporates, civil society organizations &
community-based organizations to carry out robust
and meaningful interventions.
All our CSR programs are governed by the Vedanta
CSR Policy, Corporate Technical Standards, and each
entity specific Standard Operating Procedures for CSR.
Further, in order to benefit from diverse perspectives,
and in keeping with a culture of collective leadership,
Vedanta has formed a Group CSR Management
Committee (ManCom) and CSR Executive Committee
(ExCo). Both these are instrumental in creating a
seamless enabling eco‑system for Group CSR and
Business Units to carry out best-in-class community
development programs. Vedanta has a strong
Board CSR Committee including senior Independent
Directors. The Committee provides strategic direction
for CSR programs and approves its plans and
budgets. It also reviews progress and guides the CSR
teams towards running well-governed and impactful
community programs.
An overview of CSR initiatives is provided in earlier
section of this Annual Report and report on CSR
activities for FY 2022 as per Section 135 of Companies
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Act, 2013 and rules made thereunder forms part of this
Directors’ Report and is affixed hereto as ‘Annexure B’.
The policy can be looked into by visiting
www.vedantalimited.com.
VEDANTA’S EFFORTS TO COMBAT COVID-19
PANDEMIC
In this battle of combating COVID‑19 outbreak,
Vedanta has reached out to communities across 9
states. It set up ten 100 bedded COVID make‑shift
hospitals across India. Along with this, as a focus on
the medical equipment, around 37 ventilators, 200+
flow meters, 502 oxygen concentrators, 177 oxygen
regulators, 22 nebulizers & 30 ICU beds, 11,250 N‑95
masks, 15,000+ PPE kits, 2,72,830+ sanitizers, 5,187
ration kits were supplied across various locations
covering around 343 villages. Total 26,806 filled
oxygen cylinders were supplied to the medical
institutions & 2331.34 MT liquid oxygen supplied.
Adding to this, around 1 lakh+ empty oxygen cylinders
were also contributed to the cause. SHG Women were
involved in making masks in most of the locations
across Vedanta. With the help of this, around 1,90,492
masks have been distributed in the community.
Awareness for sensitization about the outbreak and
vaccinations among the communities has also been
carried out.
COVID‑19 being a virus with high infectious rate, there
is a great risk of contamination from one person
to other in the community. Therefore, importance
of awareness sessions regarding the preventive
measures and preparedness to tackle COVID
situations in surroundings is quite high. Across 312
villages in various locations, awareness sessions
have been carried in different innovative modes like
wall paintings, digital & print awareness through audio
& digital campaigns etc., on COVID preparedness/
prevention/ vaccination.
DIGITIZATION INITIATIVES - CSR
Digitalization is one of the key 7 pillars of Vedanta and
we ensure that we have digital or innovative tools in
place to manage and monitor our CSR programs which
are spread across our business units. We have in‑
house Power BI application launched across Vedanta
– CSR DISHA App to monitor the CSR projects of
Vedanta across all BUs. Nivaran portal – Community
Help Desk is a request and grievance redressal
dashboard where a common repository of grievances
is maintained. Grievances can be raised by any internal
or external stakeholders. Business units of Vedanta are
adopting the tool now and a larger unified mechanism
will be in place for the organization.
Our Cairn unit has collaborated with Government of
Rajasthan on a public-private partnership model where
25% of the funds are being contributed by Vedanta to
maximize coverage and utilize resources optimally.
After this, 100% of all secondary and senior secondary
schools in Barmer will go digital.
e-Kaksha project launched in collaboration with
the Government of Rajasthan has been a landmark
achievement. The project was aimed at increasing
access to free digital education platforms and
improving capacities of teachers in developing
e-Learning pedagogy. The teaching-learning videos
are available for all subjects and have Sanskrit,
Hindi, English and Urdu languages. They were made
a part of the Doordarshan Rajasthan’s Shiksha
Darshanan program.
Cairn Pink City Half Marathon entered its 6th year this
time and the second time it was on a virtual platform.
Each year a social cause is part of the awareness
event and the theme for this year was #GetSetVaccine.
A total of 47,797 runners participated in the event from
22 countries setting up the record for ‘India’s Biggest
Virtual Marathon’ for the second straight year in a row
and recognized by the Book of World Records, UK.
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IMPACT ASSESSMENT
HAPPINESS QUOTIENT
SATISFACTION QUOTIENT
95%
93%
In order to assess Vedanta’s contribution towards
the fight to combat COVID‑19 pandemic again in
2021-22, an impact study was voluntary undertaken
to assess the effectiveness and delivery of services
to the people. The study is conducted across eight
business units covering 20 districts in nine states in
India. Study was carried out through Weber Shandwick
covering more than 700 respondents across different
categories of stakeholders.
• Great “happiness quotient” – Internal and external
stakeholders “recognize” the efforts undertaken by
Vedanta during COVID.
• There is a substantial trust established in various
stakeholders regarding Vedanta’s impact creation,
which can be seen in high Happiness & Satisfaction
Quotients of more than 92%.
• Vedanta’s COVID relief efforts are enhanced during
the second wave compared to the first wave and
stakeholders want Vedanta to focus more on
Education & Healthcare.
• More than 90% of stakeholders remember Vedanta
for support of ICU beds, PPE kits & support to
local hospitals.
• The study noted a high recollection of 69% for
Vedanta’s 10,500 PPE kits donation in COVID
relief efforts.
The Impact Assessment of BU CSR programs across
India is in progress and is expected to be completed in
FY 2023.
3. HUMAN RESOURCES MANAGEMENT
PEOPLE AND CULTURE
Your Company has always aspired to build a culture
that demonstrates world-class standards in safety,
environment, and sustainability. People are our most
valuable asset and we are committed to provide
all our employees with a safe and healthy work
environment. Our culture exemplifies our core values
and nurtures innovation, creativity, and diversity. We
align our business goals with individual goals and
enable our employees to grow on personal as well as
professional front.
It is through the passion and continued dedication of
our people that our Company continues to succeed,
and we have always unequivocally and firmly believed
in rewarding our people for their consistent efforts
through our best-in-class and globally benchmarked
people practices and reward programs. During
the year, we have introduced various rewards and
benefits to recognize employee contribution to the
organization. We have also launched COVID Benefits
policy to help our employees and their families.
We received the following coveted External Award:
• 100+ External Recognitions received in last 7 years
• Vedanta Group Certified as Great Place to Work:
(one of the first conglomerates) and sustained it
consecutively two times
• Kincentric Best Employer - Award for Commitment
to Diversity & Inclusion
• Economic Times - Company with Great Managers
• We were featured in global media such as Forbes
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INDIA
People Practices, Succession Planning
Our group philosophy is to grow leaders from within.
Robust Succession Pipeline - aimed at identifying
top‑quality leaders who will lead the next level of growth
trajectory at Vedanta. Resulting in A “future‑proof”
workforce & Greater organizational stability & resilience.
Best Talents to change Fabric of the Organization
- Right Roles, best benefits, career path & anchoring
diverse talent: gender, skill & geography
• Globally, one of the biggest
leadership development programs,
the Management ACT‑UP was
conducted in partnership with Korn
Ferry to ensure a strong succession
pipeline for key/CXO positions by
Identification of top 100 leaders for
high impact, elevated positions.
• 3 successors for all key positions
prepared before vacancy
• 150+ Premier campuses, 1000
Freshers, 37% gender diversity, 10%
minority, 30% Rank holders
• Vedanta Leadership Development
Programme (VLDP) hiring from
top IITs and IIMs. Global Technical
Expert and advisors hiring
• Hiring from Global campuses at
mid & entry level positions from top
campuses from US, UK, Australia,
Asia etc.
• Anchoring and mentorship by senior
leaders, tracked digitally
No Talent Left Unnoticed – In Vedanta, there is a talent
initiative for every facet of our employee pool, catering
to their needs for ensuring a swift and fast-tracked
career growth.
Brand Building – To improve the brand image and recall
value in the external world including campuses, as one
of the best employers/workplaces to work for.
• ACT-UP, V Reach, V-Aspire,
V-Reach Tech launched for
Engineering, Graduates. Enabling
functions and Cost Accountants.
V-Lead for 100+ High potential
women leaders. Strong Re-hiring
project in place, Central learning
and development program
called Gurukul
• Launched XStrat – Vedanta’s first
Case Challenge competition. at top
B-Schools across India
• Case studies published in top
B-Schools, positioning unique HR
Practices in Vedanta
• Suitable amplification strengthening
and utilizing social media base
A detailed update on People & Culture detailing the Company’s initiatives, recruitment strategy, hiring projects and talent
management and development is elucidated in the Sustainability and ESG Section of the Annual Report.
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Statutory Reports
Financial Statements
No employee has been issued stock options during the
year, equal to or exceeding one percent of the issued
capital of the Company at the time of grant.
During the year, the acquisition by the trust does
not exceeded 2% of the paid‑up capital of the
Company. Further, the total acquisition by trust at
no time exceeded 5% of the paid‑up equity capital of
the Company.
Pursuant to the provisions of SEBI (Share Based
Employee Benefits and Sweat Equity) Regulations,
2021 (‘Employee Benefits Regulations’), disclosure
with respect to the ESOS Scheme of the Company as
on 31 March 2022 is available on the website of the
Company at www.vedantalimited.com.
The Company confirms that the Scheme complies
with the SEBI Employee Benefits Regulations and there
have been no material changes to the plan during the
financial year.
A certificate from M/s Vinod Kothari & Company,
Practicing Company Secretaries, Secretarial Auditors,
with respect to the implementation of the Company’s
ESOS schemes, would be placed before the
shareholders at the ensuing Annual General Meeting
(AGM). A copy of the same will also be available for
inspection through electronic mode.
MANAGERIAL REMUNERATION, EMPLOYEE
INFORMATION AND RELATED DISCLOSURES
The remuneration paid to Directors, Key Managerial
Personnel, and Senior Management Personnel during
FY 2022 was in accordance with the Nomination and
Remuneration Policy of the Company.
Disclosures under Section 197 of the Act and Rule 5(1)
of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 (“Rules”) relating
to the remuneration and other details as required is
appended as ‘Annexure C’ to the Report.
In terms of provision of Section 136 of the Act and Rule
5(2), the Report and the Financial Statements are being
sent to the Members of the Company excluding the
statement of particulars of employees as prescribed
under Rule 5(2) of the Rules. The said information is
available for inspection through electronic mode. Any
member interested in obtaining a copy of the said
statement may write to the Company Secretary and
the same will be furnished upon such request.
EMPLOYEE STOCK OPTION SCHEME
Employee stock options is a conditional share plan
for rewarding performance on pre-determined
performance criteria and continued employment with
the Company. It provides a much better line‑of‑sight
to all the employees and gives the control of outcome
to employees.
Your Company has established a share incentive
schemes viz., ‘Vedanta Limited Employee Stock
Option Scheme 2016’ (“the Scheme”). The Scheme
was framed with a view to reward employees for their
contribution in successful operation of the Company
with wealth creation opportunities, encouraging high-
growth performance and reinforcing employee pride.
The Scheme was launched after obtaining statutory
approvals, including shareholders’ approval by way of
postal ballot on 12 December 2016.
On 29 October 2021, the Nomination & Remuneration
Committee approved the grant of Employee Stock
Options 2021 to Vedanta employees covering 38%
of eligible population. In-order to align the scheme
with the best-in-class reward practices globally and
pertinent Indian peers, as well as to emphasize on our
value system of ‘CARE’ for employees and culture of
‘Pay for Performance’ the ESOS plan had undergone
significant transformation. The grant under the
ESOS 2021 is completely driven by Business and
Individual performance.
The scheme is robust with an objective to place
greater prominence on superior individual
performance to recognize high performing talent while
keeping them accountable for business delivery. It
has been ensured that the scheme fulfills its motive of
wealth creation for employees to fulfill their financial
goals and give them the sense of ownership.
To give prime importance to business delivery, ESG
and Carbon footprint are part of additional parameters
to measure business performance. To ensure that
we operate sustainably in line with our motto of ‘zero
harm, zero waste and zero discharge’, multiplier based
on fatalities has also been included as a performance
parameter for vesting.
The Scheme is currently administered through
Vedanta Limited ESOS Trust (ESOS Trust) which
is authorized by the Shareholders to acquire the
Company’s shares from secondary market from time
to time, for implementation of the Scheme. The details
of the trustees are provided can be accessed at
www.vedantalimited.com.
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COMPENSATION GOVERNANCE PRACTICES AT VEDANTA
Our Compensation Philosophy: People are our greatest asset, and we are committed to providing all our employees
with a safe and healthy work environment. Linkage of Reward Priorities to Business Priorities Ensuring a Uniform
Experience Across Group. Built on the core objective of driving ‘Pay for Performance’ culture, the mix of components
of the Executive Compensation aim to drive the short as well as long term interests of the Company and its
shareholders through strong emphasis on operational / financial fundamentals, social license to operate and business
sustainability, strategic objectives of resource and reserve creation and wealth creation for stakeholders.
BUSINESS
PRIORITIES
Zero Harm, Zero Waste
and Zero Discharge
Build a Performance
Driven Culture
Reflect and Enable Long Term
Business Growth & Vision
I‑RECITE at Heart
REWARDS
PRIORITIES
Zero Undesirable Talent Loss
It Pays to Perform
Above Market Pay Positioning
High Differentiation at 1.8 ‑ 2.2X
Relentless Focus on
Productivity & Performance
Compelling Pay Mix Basis
Position in the Firm
Individualized EVP
Holistic Employee Growth
EXECUTIVE COMMITTEE MEMBERS
31%
31%
Maximum
On-Target
Minimum
24%
34%
38%
42%
100%
Fixed Pay
Annual Bonus
LTIP
1 : Ratio Fixed Pay vs Variable Pay in Senior Executives Remuneration
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Linkage to ESG/safety
• Scorecard based performance management
approach. Greater emphasis is laid on setting
of objective KPIs along with continuous
performance dialogue.
• Culture of safety and sustainability to achieve
our ultimate vision of “Zero Harm”, “Zero Waste
& “Zero Discharge”. The safety and sustainability
scorecards under the Vedanta Sustainability
Assurance Program form an integral component.
Progressively, impact of carbon footprint has been
added as a performance parameter.
• ESG Component in Annual Performance Bonus:
based on a balanced scorecard of financial,
operational, sustainability and strategic metrics.
Appropriate weightage is allocated to efforts
towards our people and individual performance.
• Long Term Incentive Plan (LTIP) The vesting is
attributed to sustained business and individual
performance against the pre-determined criterion.
• Any fatality in the group impacts the annual bonus
of all the employees associated with the respective
entity as a negative multiplier. On the other hand, as
a reinforcer, a positive multiplier is added to reward
efforts towards ensuring nil fatality.
• Governance: The Executive Compensation
Philosophy is well established & benchmarked
across relevant industry comparators. All
parameters are reviewed each year by the
Nomination and Remuneration Committee. Timely
risk assessment of compensation practices is
done in addition to review of all components
of compensation for consistency with stated
compensation philosophy.
• Voice of the employee: Involvement from diverse
functions and well‑ known external partners &
timely communication to ensure transparency to
all employees.
Vedanta has been built on a strong foundation of
governance where the Board, Key Executives and
Compliance Officer have been vigilant and committed
to ensure structural integrity, soundness and highest
standards of compensation practices. Over the last
few years we have matured many of our reward
practices as an attempt to continue to raise the bar.
• The composition of Nomination and Remuneration
Committee (NRC) is in compliance with the
Listing Regulations and majority of the members
are Independent Directors. The Chairman of the
committee is an Independent Director.
• The members of the NRC together bring out the rich
expertise, diverse perspectives and independence in
decision making on all matters of remuneration for
Directors, Key Managerial Personnel (KMP) & Senior
Management Personnel (SMP). The Independent
Directors are actively engaged throughout the year
as members of the NRC in various people matters
even beyond remuneration.
• A board charter appoints and sets our primary
responsibilities of NRC which includes selecting,
compensating, monitoring and, when necessary,
replacing key executives and overseeing
succession planning.
• Best in class independent consultants are engaged
to advise and support the committee on matters
of board evaluation and leading reward practices in
the industry.
• The Executive Compensation Philosophy is well
established and benchmarked across relevant
industry comparators which enables us to
differentiate people on the basis of performance,
potential and criticality in-order to provide a
competitive advantage in the industry.
• Timely risk assessment of compensation practices
is done in addition to review of all components
of compensation for consistency with stated
compensation philosophy:
− Financial analysis & simulation of the long-
term cost of reward plans and their Return on
Investments (ROI).
− Provision of claw back clause as part of the
ground rules of our long-term incentive scheme
for all our leaders.
− Upper limits and caps defined on incentive pay‑
outs in the event of over-achievement of targets
to avoid windfall gains.
• We do not encourage provision of excessive perks
or special clauses as part of employee contract
such as:
− No provision of Severance Pay in Employment
contracts of Whole‑Time Directors (WTD), KMP
& SMP.
− No Tax Gross up done for executives except for
expatriates as part of tax equalization
− No provision of unearned Incentives / unvested
Stock or Cash Options
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Any benefit provided to Key Executives are available
to all the employees of the Company as per the
defined Company policy.
We continue to corroborate the Internal Pay Equity
Principles, sustained attention to equity grant practices
and maintain checks & balances to confirm that the
practices are legally and ethically compliant with
International, national, and state/regional laws.
PREVENTION OF SEXUAL HARASSMENT AT
WORKPLACE
The Company has zero tolerance for sexual
harassment at workplace and has adopted a Policy
on Prevention, Prohibition and Redressal of Sexual
Harassment at Workplace, which provides detailed
rules on employee conduct and the process for
reporting any misconduct.
All employees are expected to respect their colleagues
and not to harass them by their conduct, sexually
or otherwise.
As part of Vedanta Group, your Company is an equal
opportunity employer and believes in providing
opportunity and key positions to women professionals.
The Group has endeavored to encourage women
professionals by creating proper policies to tackle
issues relating to safe and proper working conditions
and create and maintain a healthy and conducive work
environment that is free from discrimination. This
includes discrimination on any basis, including gender,
as well as any form of sexual harassment. During the
period under review, out of all the complaints received,
seven complaints were found to be correct which were
duly resolved and appropriate action was undertaken.
Your Company has constituted Internal Complaints
Committee (ICC) for various business divisions
and offices, as per the requirements of the Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
4. RISK MANAGEMENT
RISK MANAGEMENT
The businesses are exposed to a variety of risks, which
are inherent to a global natural resources organization.
The effective management of risk is critical to support
the delivery of the Group’s strategic objectives. Risk
management is embedded in the organization’s
processes and the risk framework helps the
organization meet its objectives by aligning operating
controls with the mission and vision of the Group set
by the Board.
As part of our governance philosophy, the Board has
a Risk Management Committee to ensure a robust
risk management system. The details of Committee
and its terms of reference are set out in the Corporate
Governance Report, which forms part of this
Annual Report.
With effect from 06 June 2020, the Risk Management
Committee has been consolidated with the Audit
Committee comprising of only Independent Directors
ensuring robust risk management systems in place
with valued feedback of Independent Directors being
on the Committee.
Our risk-management framework is designed to
be simple, consistent, and clear for managing and
reporting risks from the Group’s businesses to the
Board. Our management systems, organizational
structures, processes, standards, and code of
conduct together form the system of internal controls
that govern how we conduct business and manage
associated risks. We have a multi‑layered risk
management framework to effectively mitigate the
various risks, which our businesses are exposed to in
the course of their operations.
The Audit & Risk Management Committee aids
the Board in the risk management process by
identification and assessment of any changes in risk
exposure, review of risk control measures and by
approval of remedial actions, where appropriate. The
Committee is in turn supported by the Group Risk
Management Committee which helps the Audit & Risk
Management Committee in evaluating the design and
operating effectiveness of the risk mitigation program
and the control systems.
Major risks identified by businesses and functions are
systematically addressed through mitigating actions.
Risk officers have also been formally nominated
at operating businesses, as well as at Group level,
to develop the risk-management culture within
the businesses.
The Risk Management Policy of the Company revised
in 2019 covers cybersecurity as well.
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Integrated Report
Statutory Reports
Financial Statements
GROUP RISK MANAGEMENT FRAMEWORK
External
Strategic
Identify
Evaluate
Monitor
Mitigate
Financial
Operational
For a detailed risk analysis, you may like to refer
to the risk section in the Management Discussion
and Analysis Report which forms part of this
Annual Report.
CYBER SECURITY
The Group has a structured framework for
cybersecurity. Each of the Business Units has a CIO
(Chief Information Officer) with suitable experience in
Information / Cybersecurity. Every year, cybersecurity
review is carried out by IT experts (belonging to IT
practices of Big‑4 firms). Vulnerability Assessment
and Penetration Testing (VAPT) review is also carried
out by cyber experts. This practice has been in place
for several years now and has helped in strengthening
the cyber security environment in the group. At the
same time, the external environment on cybersecurity
is continuously evolving. The respective CIOs are
responsible for ensuring appropriate controls are in
place to address the emerging cyber risks.
INTERNAL FINANCIAL CONTROLS
Your Board has devised systems, policies, and
procedures/ frameworks, which are currently
operational within the Company for ensuring the
orderly and efficient conduct of its business, which
includes adherence to policies, safeguarding its
assets, prevention and detection of frauds and
errors, accuracy and completeness of the accounting
records and timely preparation of reliable financial
information. In line with best practices, the Audit &
Risk Management Committee and the Board reviews
these internal control systems to ensure they remain
effective and are achieving their intended purpose.
Where weaknesses, if any, are identified as a result
of the reviews, new procedures are put in place
to strengthen controls. These controls are in turn
reviewed at regular intervals.
The systems/frameworks include proper delegation
of authority, operating philosophies, policies and
procedures, effective IT systems aligned to business
requirements, an internal audit framework, an
ethics framework, a risk management framework,
and adequate segregation of duties to ensure an
acceptable level of risk. Documented controls are in
place for business processes and IT general controls.
Key controls are tested by entities to assure that these
are operating effectively. Besides, the Company has
also adopted an SAP GRC (Governance, Risk and
Compliance) framework to strengthen the internal
control and segregation of duties/ access.
The Company has documented Standard Operating
Procedures (SOP) for procurement, project/
expansion management capital expenditure, human
resources, sales and marketing, finance, treasury,
compliance, Safety, Health, and Environment (SHE),
and manufacturing.
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The Group’s internal audit activity is managed through
the Management Assurance Services (‘MAS’) function.
It is an important element of the overall process by
which the Audit & Risk Management Committee and
the Board obtains the assurance on the effectiveness
of relevant internal controls.
The scope of work, authority and resources of MAS
are regularly reviewed by the Audit & Risk Management
Committee. Besides, its work is supported by the
services of leading international accountancy firms.
The Company’s system of internal audit includes
covering monthly physical verification of inventory,
a monthly review of accounts and a quarterly review
of critical business processes. To enhance internal
controls, the internal audit follows a stringent grading
mechanism, focusing on the implementation of
recommendations of internal auditors. The internal
auditors make periodic presentations on audit
observations, including the status of follow-up to the
Audit & Risk Management Committee.
The Company is also required to comply with the
Sarbanes Oxley Act Sec 404, which pertains to Internal
Controls over Financial Reporting (ICOFR). Through
the SOX 404 compliance programme, which is aligned
to the Committee of Sponsoring Organizations of
the Treadway Commission (COSO) framework, the
Audit & Risk Management Committee and the Board
also gains assurance from the management on the
adequacy and effectiveness of ICOFR.
In addition, as part of their role, the Board and its
Committees routinely monitor the Group’s material
business risks. Due to the limitations inherent in any
risk management system, the process for identifying,
evaluating, and managing the material business
risks is designed to manage, rather than eliminate
risk. Besides it created to provide reasonable, but not
absolute assurance against material misstatement
or loss.
Since the Company has strong internal control
systems which are further strengthened by periodic
reviews as required under the Listing Regulations and
SOX compliance by the Statutory Auditors, the CEO
and CFO recommend to the Board continued strong
internal financial controls.
There have been no significant changes in the
Company’s internal financial controls during the year
that have materially affected or are reasonably likely
to materially affect its internal financial controls, other
than as mentioned in the “Audit Report and Auditors”
section to this report.
There are inherent limitations to the effectiveness of
any system of disclosure controls and procedures,
including the possibility of human error and the
circumvention or overriding of the controls and
procedures. Accordingly, even effective disclosure
controls and procedures can only provide reasonable
assurance of achieving their objectives. Moreover,
in the design and evaluation of the Company’s
disclosure controls and procedures, the management
was required to apply its judgement in evaluating
the cost‑benefit relationship of possible controls
and procedures.
Further, the Audit & Risk Management Committee
annually evaluates the internal financial controls for
ensuring that the Company has implemented robust
systems/framework of internal financial controls viz.
the policies and procedures adopted by the Company
for ensuring the orderly and efficient conduct of its
business, including adherence to Company’s policies,
the safeguarding of its assets, the prevention and
detection of frauds and errors, the accuracy and
completeness of the accounting records, and the
timely preparation of reliable financial information.
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Statutory Reports
Financial Statements
"Internal Financial Control are policies and procedures adopted by the company for ensuring the orderly and
efficient conduct of its business, including adherence to company's policies, the safeguarding of its assets, the
prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the
timely preparation of reliable financial information"
Building blocks
1
2
3
Policies and procedures:
Safeguarding of assets:
• Policies and procedures exist for
effective conduct of business,
delegation of authority is formally
documented and implemented,
organization structure is defined,
and segregation of duties and
responsibilities are maintained.
• Ownership and rights to assets is
maintained with the Company.
• The Company has implemented
processes for safeguarding
of assets.
Prevention and detection of
frauds and errors:
• Proactive anti‑fraud
controls / fraud risk
management framework has
been implemented.
4
5
Accuracy and completeness of the
accounting records:
Timely preparation of reliable
financial information:
• All transactions occurred
• Financial items are properly
during a specific period have
been recorded.
described, sorted and classified.
• Financial information is provided
• Assets, liability, revenue and
expense components are
recorded appropriately.
as per the timelines defined by the
relevant stakeholders.
VIGIL MECHANISM
The Company has in place a robust vigil mechanism
for reporting genuine concerns through the Company’s
Whistle‑Blower Policy. As per the Policy adopted by
various businesses in the Group, all complaints are
reported to the Director – Management Assurance,
who is independent of operating management
and the businesses. In line with global practices,
dedicated email IDs, a centralized database, a 24X7
whistle-blower hotline and a web-based portal have
been created to facilitate receipt of complaints.
All employees and stakeholders can register their
integrity related concerns either by calling the toll-free
number or by writing on the web-based portal which
is managed by an independent third party. The hotline
provides multiple local language options. All cases
reported as part of whistle-blower mechanism are
taken to their logical conclusion within a reasonable
timeframe. After the investigation, established
cases are brought to the Group Ethics Committee
for decision‑making. All Whistle‑Blower cases are
periodically presented and reported to the Company’s
Audit & Risk Management Committee. The details
of this process are also provided in the Corporate
Governance Report and the Whistle‑Blower Policy
is available on the Company’s website at www.
vedantalimited.com.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report for
the year under review, as specified under Regulation
34 read with Schedule V of Listing Regulations is
presented in a separate section, forming part of this
Annual Report.
5.
INNOVATION, DIGITALIZATION AND
TECHNOLOGY
INNOVATION, DIGITALIZATION &
TECHNOLOGY
At Vedanta, we are building on our successes with
‘digital’ both in the mining and metals, and oil and gas
business with rapid digital transformation. It is the
group’s ambition to leverage cutting edge technology
and partners to drive best in class operations and
sustainability. In our oil and gas business, the focus is
to enable the users to capitalize on digital technology
breakthroughs in R&R and daily operations to deliver
tomorrow’s energy in an efficient and sustainable
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manner. In Mining and Metals, we have transformed
ourselves from operating mechanized and manual
mines to fully digital mines. We are at a juncture in our
digital journey where we are scaling our digital efforts
across businesses.
In this connection – the company has greenlit
multiple flagship programs to not only drive the
overall transformation journey, but also to build
the internal “Digital muscle” to sustain the gains of
the transformation.
At Vedanta we are doing a group-wide digital
transformation, Project Pratham with the vision
of transforming Vedanta Group into a truly digital-
first organization and making digital the new way
of working. Project Pratham is delivering digital
transformation across our Mining & Metals and
Oil & Gas business with a focus on driving asset
optimization, production volume growth, operating
cost reductions, enhanced safety and improve ease
of doing business. The objective of the program is to
deliver a combination of tangible value in the form of
EBITDA increase and other intangible gains such as
enhanced safety and security, sustainability, better
governance, and improved employee productivity.
To sustain this change, we have a built a foundation
which has a healthy pipeline of initiatives in the areas
of Industry 4.0 like Smart Manufacturing, Analytics,
Automation, Horizontal and vertical system integration
and Cybersecurity. Last year, Vedanta’s Oil & Gas
vertical won IDC Award for Innovation in Operations
category in the industry vertical of Electric, Gas, Oil &
Water, Utility, Mining.
To engage with innovative start-ups and leverage their
technological capabilities and agility ‑ Vedanta Spark’s
first edition was launched in Oct’20. The program
attracted 1,300+ startups and more than 50 startup
engagements have been initiated across Vedanta’s
diverse business. The Company has launched the
second edition of Vedanta Spark with an increased
focus on ESG and sustainability. Vedanta is also
looking to invest in startups through the program’s
ventures arm.
In addition, the Company has launched yearly group‑
wide idea generation competition – Pratham Digital
Olympics, Innovation Challenge to incentivize grass‑
root level innovations and bring digital cultural change.
Top ideas are selected for implementation with the
senior management sponsorship and incentivized
the team based on the deliverables to motivate
peer employees to come up with new ideas in the
yearly competition.
POLICY AND ADVOCACY
Vedanta believes in sustainable and equitable
development of natural resource sector in national
interest. Our Policy Advocacy efforts evolve around our
core values and we bring out the industry issues along
with recommendations for feasible solutions. Our
Company participates in stakeholder consultations on
economic reforms, raw material & energy security, cost
of doing business, business continuity, ease of doing
business, sustainable business practices and other
policy and regulatory matters which are related to the
industries we work within in a responsible manner. We
work across stakeholder groups including industry
associations, think tanks, academia and media, having
an impact on our sector and economy as a whole.
RESEARCH AND DEVELOPMENT
Vedanta is a very progressive company in absorbing
emerging technologies for exploitation, while
accounting for the sustainability and techno-
commercial aspects. This has helped Vedanta in
staying ahead in several areas of their business.
Hindustan Zinc Limited has renewed its commitment
to R&D through a decision to significantly enhance
the R&D intensity. It works at the interface between
science and business to generate ideas and converting
these into practical innovation. The focus areas
include studies of the changing characteristics of
the ore, estimating the future developmental needs,
optimization of the processes for enhancing the
recovery of metals, reducing material consumption
and waste generation, development of alternative
applications etc. This is achieved through new
technology development in collaboration with world
class universities and institutes, technology providers
and start-ups. Some commercial implementations
of this year include process for Zn metal recovery
from treatment of lead concentrates, and process
for controlling concentrate impurities while using
non-hazardous cost-effective reagents. Monitoring
of ore characteristics at various mines has provided
opportunities for optimizing ore blend. Successful
plant trials are completed for enhanced metal recovery
from smelter residues. In the coming year, we will
focus on improving mineral processing and smelting
processes, efficiencies of electrolysis processes, and
recovery of valuables from multiple waste streams.
In Aluminium Business, a new R&D vertical has been
constituted with a robust pipeline of 20+ initiatives
across areas like Process Improvement, Waste to
Wealth, Product Development, Product Quality, Cost
Optimization, etc. To this effect, we have entered
into partnerships with various eminent institutes
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Vedanta Limited
like IIT Kharagpur, IIT Delhi, Institute of Minerals &
Materials Technology (IMMT) Bhubaneswar, etc. In the
meantime, in-house capabilities will be strengthened
both in terms of R&D infrastructure and highly skilled
technical workforce.
Sterlite Copper always strive to provide best in class
support to the customers in terms of product quality,
packaging and other services. In the FY 2022, under
the sustainable packaging initiative, 100% recyclable
packaging solution is introduced for the copper
rod. This packaging provides protection even under
adverse climate conditions and has lead to customer
delight. Further, our extraction processes have been
improved to provide purer products. As a part of ESG
journey, addition to our renewable Solar Energy power
has lead to reduction of the carbon footprint by 445
TCO2 eq/year, and we are aiming towards further the
journey to “green copper”.
In Iron & Steel sector, we are working with CSIR –
NML for reductant blend optimization in submerged
electric arc furnaces in ferro chrome production. We
have partnered with IMMT Bhubaneshwar to develop
process for converting medium grade high LOI iron
ore from Karnataka into good quality pellet, and we
are proceeding to scale‑up. We are jointly working
with IIT Roorkee on development of white cast iron
which is a potential import substitute. On R&D front,
we are working with IIT Bombay for understanding the
fundamentals of green steel making. We also have had
good success with replacing coke with alternatives
like Briquettes.
In Cairn we continue to operate our fields in a digital
manner through unmanned well pads with remote
access which drastically reduces human exposure
to risk and increases operational efficiency. We have
undertaken further digital initiatives to improve our
efficiency, ranging from drone‑base inspection of
overhead power lines, Artificial‑Intelligence (AI) based
CCTV cameras to solar based traffic light systems. We
have also strengthened our hazard management by
enabling reporting through kiosks and mobile-based
apps and increased usage of high‑voltage proximity
detectors for cranes and tippers to avoid incident with
overhead electrical lines.
Integrated Report
Statutory Reports
Financial Statements
6.
INVESTOR RELATIONS
Your Company’s active Investor Relations (IR) function
continuously strives for excellence by engaging
with international and domestic investors. Your
Company benchmarks global IR standards and aims
at exceeding them. The Company proactively seek
feedback from all stakeholders throughout the year.
Shareholder engagement
The Investor Relations team interacts with investors
at various platforms to ensure consistent and clear
communication of Company’s Investment case.
Some of these forums include quarterly earnings
calls, hosting Investor/Analyst Day, site visits for key
businesses, one-on-one as well as group meetings and
participation in sell-side conferences. The leadership
teams from various businesses, along with promoters
of the Company and senior management consisting of
the CEO and the CFO, also participate in some of these
engagements. These proactive investor engagement
activities and openness of senior leaders to interact
with investors and analysts is well appreciated by
all stakeholders.
Shareholder communication
Shareholders can contact us any time through our
Investor Relations team, with contact details available
online at www.vedantalimited.com. Shareholder
and analyst feedbacks are shared in a timely and
structured manner with the Board through the
Chairman, the Senior Independent Director, the
CEO, the CFO, and the Company Secretary. Ongoing
communication with our stakeholders keeps the board
and senior management abreast of their views and
helps to gain insight.
Shareholder disclosures
Vedanta has set standards through the detailed and
transparent disclosures on the Company’s operational
and financial performance. Your Company created its
first Integrated Report (for Financial Year 2018) and
continued thereafter. The Company was conferred
the prestigious LACP award for its FY 2021 Integrated
Report. Having a diverse shareholder base and
multiple business verticals, demands enormous
efforts from an IR function to manage investors,
sell-side analysts as well as ensuring a timely and
complete business update is provided to all. As a
key milestone in this continuing endeavour, your
Company created a digital interactive microsite on the
corporate website to provide an interactive experience
beyond what is available in the annual and quarterly
results materials.
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Integrated Report and Annual Accounts 2021-22
KEY INITIATIVES WITH RESPECT TO VARIOUS
STAKEHOLDERS
The Company maintains its focus on all round
development and contribution towards its
stakeholders. The Integrated Report, CSR Report,
Tax Transparency Report, TCFD Report and the
Sustainability Report, which are separately published,
provides detailed information on the ESG and investor-
focused key initiatives taken by the Company towards
its employees, shareholders, investors, business
partners, civil society, local community, and nation
at large.
7. CORPORATE GOVERNANCE
REPORT ON CORPORATE GOVERNANCE
Your directors reaffirm their continued commitment
to good corporate governance practices. Your
Company fully adheres to the standards set out by the
Securities and Exchange Board of India for Corporate
Governance practices.
Your Company is consistent in maintaining the
highest standards of corporate governance in the
management of its affairs and ensuring its activities
reflect the culture we wish to nurture with our
colleagues and other stakeholders.
As part of commitment to the various stakeholders,
the Company follows global best practices. To meet
its obligations towards its shareholders and other
stakeholders, the Company has a corporate culture of
conscience and consciousness, integrity, transparency,
and accountability for efficient and ethical conduct
of business.
Our disclosures seek to attain the best practices in
international corporate governance, and we constantly
endeavor to enhance long-term shareholder value. Our
Corporate governance report for fiscal 2022 forms
part of this Annual Report.
DIRECTORATE, KEY MANAGERIAL
PERSONNEL AND SENIOR MANAGEMENT
PERSONNEL
The Board of Directors of the Company provide
entrepreneurial leadership and plays a crucial role
in providing strategic supervision, overseeing the
management performance, and long-term success of
the Company while ensuring sustainable shareholder
value. Driven by its guiding principles of Corporate
Governance, the Board’s actions endeavor to work in
best interest of the Company.
The Directors hold a fiduciary position, exercises
independent judgement, and plays a vital role in
the oversight of the Company’s affairs. Our Board
represents a tapestry of complementary skills,
attributes, perspectives and includes individuals with
financial experience and a diverse background.
In line with the recommendation of SEBI and our
relentless endeavor to adhere to the global best
practices, the Company is chaired by Mr. Anil Agarwal,
Non‑Executive Chairman effective 01 April 2020.
During FY 2022, the following appointments were
made on the Board of the Company:
1.
Appointment of Mr. Sunil Duggal (DIN: 07291685)
as a Whole‑Time Director designated as Chief
Executive Officer for a period from 25 April 2021
to 31 July 2023.
Mr. Duggal brings with him over 36 years of
experience of leading high‑performance teams
and more than 20+ years in leadership positions.
He is known for his ability to calmly navigate
through tough and challenging times, nurture and
grow a business, evaluate opportunities & risks
and successfully drive efficiency & productivity
whilst reducing costs & inefficiencies and deliver
innovative solutions to challenges.
2.
Appointment of Mr. Akhilesh Joshi (DIN:
01920024) as a Non‑Executive Independent
Director for first term of one (1) year effective
from 01 July 2021 to 30 June 2022.
Mr. Joshi has rich professional experience of
over 44 years in mining. He nurtured one of the
worlds’ largest zinc, lead and silver producing
organization. With his exemplary skillset and
knowledge of the mining industry, your Board
believes that he will broaden the board’s
experience and will be an asset in the growth of
the Company.
The detailed profile of Mr. Joshi and Mr. Duggal forms
part of the Corporate Governance Report in this
Annual Report.
Further, pursuant to the recommendation of the
Nomination and Remuneration Committee, the
Board approved the re-appointment of Mr. U.K. Sinha
(DIN:00010336) for a second and final term of 3 years
effective from 11 August 2021 to 10 August 2024. The
said re-appointment was approved by shareholders in
the Annual General Meeting held on August 10, 2021.
Mr. Ajay Goel was appointed as Acting Chief
Financial Officer of the Company with effect from
23 October 2021. Mr. Ajay Goel is a national rank‑
holder both in Chartered Accountant and Company
Secretary and comes with a rich experience in global
multinational companies such as GE, Nestle, Coca
204
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Integrated Report
Statutory Reports
Financial Statements
Cola and Diageo – USL. Your Board believes that
Mr. Goel has demonstrated the leadership acumen
and potential to head the finance function and has
been managing all the affairs of the company with
appropriate blend of financial and technical experience.
The Key Managerial Personnel and Senior
Management Personnel, similarly, comprises of
multifarious leaders with each member bringing in
their key proficiency in different areas aligned with our
business and strategy.
A comprehensive update on the change in the
Directorate, Key Managerial Personnel and Senior
Management Personnel of the Company along with
the directorships held in other Companies, their skills
and expertise have been explicated in the Corporate
Governance report forming part of this Annual Report.
DIRECTOR RETIRING BY ROTATION:
As per the provisions of Companies Act, 2013,
Ms. Priya Agarwal (DIN: 05162177), Non‑Executive
Director of the Company, is liable to retire by rotation
at the ensuing AGM and being eligible, offers herself
for re-appointment. Based on the performance
evaluation and recommendation of the Nomination
& Remuneration Committee, Board recommends her
re-appointment.
Brief Profile and other related information seeking re‑
appointment is provided in the AGM Notice.
BOARD AND COMMITTEES
The Board has overall responsibility for establishing
the Company’s purpose, values, and strategy to deliver
the long‑term sustainable success of the Company
and generate value for shareholders. The Board places
great importance on ensuring these key themes
continue to be appropriate for the businesses and
markets in which we operate around the world, while
being aligned with our culture.
The Board is supported by the activities of each of
the Board Committees which ensure the right level
of attention and consideration are given to specific
matters. Accordingly, the Board has established
Committees to assist it in exercising its authority. Each
of the Committees has terms of reference under which
authority is delegated by the Board. At present, the
Company has the following Board Committees which
ensures greater focus on specific aspects of Corporate
Governance and expeditious resolution of issues of
governance as and when they arise.
An all-embracing update on the Board, its committees,
their composition, terms and reference, meetings held
during FY 2022 and the attendance of each member is
detailed in the Corporate Governance Report.
VEDANTA LIMITED
Board Commmittees
Statutory Board Committees
Audit & Risk
Management Committee
Nomination &
Remuneration Committee
Corporate Social
Responsibility Committee
Stakeholders’
Relationship Committee
Other Committees
ESG Commitee
Share & Debenture
Transfer Commitee
Committee of
Directors
BOARD EFFECTIVENESS
Familiarization Program for Board Members
Your Company has developed comprehensive
induction processes for our new Board members
which aim to provide a broad introduction to the Group
and enable new directors to contribute to the Board’s
deliberations from the outset. The details of the
familiarization programme and process followed are
provided in the Corporate Governance Report forming
part of this Annual Report and can also be accessed
on the website of the Company at www.vedantalimited.
com.
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Integrated Report and Annual Accounts 2021-22
Annual Board Evaluation
The Board is committed to transparency in
assessing the performance of Directors. The Board
conducts annual evaluations of its performance,
the performance of its Committees, the Chair, CEO,
Directors, and the governance processes that support
the Board’s work. As a part of governance practice,
the Company, had engaged a leading consultancy
firm, to conduct the Board Evaluation Process which
was facilitated through an online secured module
ensuring transparent, effective, and independent of
the management. The evaluation parameters and
the process have been explained in the Corporate
Governance Report.
BOARD DIVERSITY AND INCLUSION
The Board sets the tone for inclusion and diversity
across the Group and believes it is important to
have an appropriate balance of skills, knowledge,
experience, and diversity on the Board and at senior
management level to ensure good decision-making.
It recognizes the need to create conditions that foster
talent and encourage all colleagues to achieve their
full potential. A diverse Board with a range of views
enhances decision‑making which is beneficial to the
Company’s long‑term success and in the interests of
Vedanta’s stakeholders.
The Board Diversity Policy adopted by the Board
sets out its approach to diversity. The Policy can be
accessed at www.vedantalimited.com.
Additional Details on the Board Diversity and the key
attributes of the Board Members are explicated in the
Corporate Governance Report forming part of this
Annual Report.
POLICY ON DIRECTORS’ APPOINTMENT &
REMUNERATION
The Nomination & Remuneration Policy adopted by
the Board on the recommendation of the Nomination
& Remuneration Committee enumerates the criteria
for assessment and appointment/re-appointment of
Directors, Key Managerial Personnel (KMP) and Senior
Management Personnel (SMP) on the basis of their
qualifications, knowledge, skill, industrial orientation,
independence, professional and functional expertise
among other parameters with no bias on the grounds
of ethnicity, nationality, gender or race or any other
such discriminatory factor.
The Policy also sets out the guiding principles
for the compensation to be paid to the Directors,
KMP and SMP; and undertakes effective
implementation of Board familiarization, diversity,
evaluation and succession planning for cohesive
leadership management.
With your Company continuing to comply with
the Policy in true letter and spirit, the complete
Policy is reproduced in full on our website at www.
vedantalimited.com and a snapshot of the Policy is
elucidated in the Corporate Governance Report.
OBSERVANCE OF THE SECRETARIAL
STANDARDS
The Directors state that proper systems have been
devised to ensure compliance with the applicable
laws. Your Company adheres and complies with the
applicable Secretarial Standards issued by the Institute
of Companies Secretaries of India (ICSI).
INDEPENDENT DIRECTORS STATEMENT
The Company has received declaration from all the
Independent Directors that they continue to meet
the criteria of independence as provided under the
Companies Act and Listing Regulations and comply
with the Code for Independent Directors as specified
under Schedule IV of the Act.
The Directors have also confirmed that they are not
aware of any circumstance or situation, which exists
or may be reasonably anticipated, that could impair
or impact their ability to discharge their duties with
an objective independent judgement and without any
external influence.
Further, the Company in compliance with SEBI LODR
(Third) Amendment Regulations, 2021, has received
the declaration of Independence revised as per the
regulations and in compliance with Rule 6(1) and 6(2)
of the Companies (Appointment and Qualification of
Directors) Rules, 2014, all Independent Directors of the
Company have registered themselves with the Indian
Institute of Corporate Affairs (IICA).
ANNUAL RETURN
In terms of provisions of Section 92, 134(3)(a) of the
Companies Act, 2013 read with Rule 12 of Companies
(Management and Administration) Rules, 2014, the
Annual Return in Form MGT‑7 for the financial year ended
31 March 2022 is put up on the Company’s website and
can be accessed at www.vedantalimited.com.
AUDIT REPORTS AND AUDITORS
Audit Reports:
The Statutory Auditors have issued unmodified opinion
on the financial statements of the Company as of and
for the year ended 31 March 2022.
• The Statutory Auditors’ report for FY 2022 does
not contain any other qualification, reservation or
adverse remarks which calls for any explanation
from the Board of Directors. The Auditors’ report
is enclosed with the financial statements in the
Annual Report.
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Integrated Report
Statutory Reports
Financial Statements
• The Secretarial Auditors’ Report for FY 2022 does
not contain any qualification, reservation, or adverse
remark. The report in form MR-3 along with Annual
Secretarial Compliance Report is enclosed as
‘Annexure D’ to the Directors’ Report. Further, in
terms of Regulation 24A of Listing Regulations,
the secretarial audit report of Bharat Aluminium
Company Ltd. (BALCO) which is an unlisted material
subsidiary of the Company is also enclosed as
‘Annexure D’ to the Directors’ Report.
Auditors Certificates:
• As per the listing regulations, the auditors’
certificate on corporate governance is enclosed
as an Annexure to the Corporate Governance
Report forming part of the Annual Report. The
Certificate does not contain any other qualification,
reservation, or adverse remark except as mentioned
in the report.
• A certificate from Company Secretary in Practice
certifying that none of the directors on the Board
of the Company have been debarred or disqualified
from being appointed or continuing as directors
of companies by the SEBI / Ministry of Corporate
Affairs or any such statutory authority forms part of
the Corporate Governance Report.
Auditors:
Statutory
Auditors
M/s S.R. Batliboi & Co. LLP, Chartered Accountants (Firm Registration No. 301003E / E300005)
had been appointed as the Statutory Auditors of the Company in the 56th Annual General
Meeting to hold office for a period of five (5) years to the conclusion of 61st Annual General
Meeting.
The Auditors have confirmed that they are not disqualified from being re-appointed as
Statutory Auditors of the Company.
The report of the Statutory Auditors along with notes to financial statements is enclosed to
this Report. The Notes on financial statements referred to in the Auditors’ Report are self-
explanatory and do not call for any further comments.
The auditors have also furnished a declaration confirming their independence as well as their
arm’s length relationship with the Company. The Audit & Risk Management Committee reviews
the independence and objectivity of the auditors and the effectiveness of the audit process.
The Statutory Auditors were present at the last AGM of the Company.
Secretarial
Auditors
M/s Vinod Kothari & Co., Practicing Company Secretaries had been appointed by the Board to
conduct the secretarial audit of the Company for FY 2022.
The Company had received a certificate confirming their eligibility and consent to act as the
Auditors.
The Secretarial Audit Report for the financial year ended March 31, 2022 forms part of this
report and confirms that the Company has complied with the provisions of the Act, Rules,
Regulations and Guidelines and that there were no deviations or non-compliances.
Pursuant to SEBI circular no. CIR/CFD/CMO1/27/2019 dated February 8, 2019, the Company
has also undertaken an audit for all applicable compliances as per the Listing Regulations
and circular guidelines issued thereunder. The Annual Secretarial Compliance Report for the
FY 2022 has also been submitted to the Stock Exchanges within the stipulated timeline.
The Secretarial Audit Report of its unlisted material subsidiary is annexed to this report.
The Secretarial Auditors were also present at the last AGM of the Company.
M/s Shome and Banerjee and M/s Ramnath Iyer & Co., Cost Accountants, had been appointed
by the Board to conduct the audit of cost records of the Oil & Gas Business and other Business
segments of the Company respectively for the FY 2022.
M/s Ramnath Iyer & Co., Cost Accountants were nominated as the Lead Cost Auditors.
The Company had received a certificate confirming their eligibility and consent to act as the
Auditors.
The cost accounts and records of the Company are duly prepared and maintained by the
Company as required under Section 148(1) of the Act pertaining to cost audit.
M/s KPMG had been appointed as the Internal Auditors of the Company for FY 2022 to
conduct the Internal Audit on the basis of detailed Internal Audit Plan.
The Company has an independent in-house Management Assurance Services (MAS) team
to manage the group’s internal audit activity and that functionally reports to the Audit & Risk
Management Committee.
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REPORTING OF FRAUD BY AUDITORS
During the reporting year, under Section 143(12)
of Companies Act, 2013, none of the Auditors of
the Company have reported to the Audit & Risk
Management Committee of the Board any instances
of fraud by the Company or material fraud on the
Company by its officers or employees.
LEGAL, COMPLIANCE, ETHICS AND
GOVERNANCE FUNCTION
Through its concerted efforts to generate value
while keeping integrity at the forefront, the Legal
function of your Company is a valued partner in
providing regulatory support and gauging the viability
of strategic assistance for business partnership
and expansion. It ensures advisory and compliance
services pertaining to existing regulations and
legislative developments for facilitating business
agenda in the areas of effective claims and contract
management, mergers and acquisitions, dispute
resolution, litigation and adherence to competition,
business ethics and governance.
With the aim to ensure smooth operations and
safeguard interests of your Company for business
growth and sustenance in an evolving, ambiguous and
complex environment, the function continues to focus
on presenting areas of opportunities; mitigating risks;
providing proactive assistance to other functions and
departments; and bringing about policy changes based
on persistent interaction with various Government
bodies and industrial associations like CII and FICCI.
As newer technologies continue to transform
the market, your Company ensures adeptness in
mechanisms to safeguard the data security and
privacy of our stakeholders with enhanced legal and
security standards. Simultaneously, to meet the
growing business needs, the Legal function continues
to seek and identify technological opportunities
while harnessing existing know‑how to streamline
compliance frameworks, litigation management and
conduct online ethics awareness training.
Our organizational values and principles are made
applicable to all our employees through our Code of
Business Conduct and Ethics. In a bid to create a better
understanding of its practical implications, the Legal
function conducts an annual online ethics training
module to necessitate all employees to mandatorily
embrace the values and principles embodied as a part
of the afore‑mentioned Code. Additionally, the function
drives an Ethics Compliance Month initiative for raising
awareness by conduct of employee trainings in areas
of ethical concern such as insider trading, prevention
of sexual harassment, anti‑bribery, anti‑corruption, and
anti-trust laws through use of interactive learning tools.
Through our Supplier Code of Conduct, we also
ensure that third parties, including their employees,
agents and representatives who have a business
relationship with your Company, are bound by industry
standards as well as applicable statutory requirements
concerning labour and human rights; health, safety,
and environment; and business integrity.
8. OTHER DISCLOSURES
RELATED PARTY TRANSACTIONS
Your Company has in place a Policy on Related Party
Transaction (‘RPT’) (‘RPT Policy’) formulated in line
with the provision of the Companies Act and Listing
Regulations. The Company has voluntarily adopted a
stricter policy as against the legal requirements. The
Policy may be accessed at www.vedantalimited.com.
The Policy sets out the philosophy and processes to
be followed for approval and review of transactions
with Related Party and intends to ensure that proper
reporting, approval and disclosure processes are in
place for all transactions with Related Parties.
A detailed landscape of all RPTs specifying the nature,
value, and terms and conditions of the transaction is
presented to the Audit & Risk Management Committee.
Also, a Related Party Transactions Manual‑Standard
Operating Procedures has been formulated to identify
and monitor all such transactions.
During FY 2022, all the contracts/ arrangements/
transactions entered into by the Company with the
related parties were in the ordinary course of business
and on an arm’s length basis and were in compliance
with the provisions of the Companies Act and Listing
Regulations other than those mentioned in the
Annexure IV of the Report on Corporate Governance
forming part of the Annual Report.
All Related Party Transactions are subjected to
independent review by a reputed accounting firm to
establish compliance with the requirements of Related
Party Transactions under the Companies Act, 2013
and Listing Regulations.
Further, there have been no materially significant
RPTs during the year pursuant to the provisions of the
Companies Act and Listing Regulations. Accordingly,
the disclosure required u/s 134(3)(h) of the Act in Form
AOC‑2 is not applicable to your Company.
SHARE CAPITAL AND ITS EVOLUTION
The Authorised Share Capital of the Company is
₹ 74,120,100,000 divided into 44,020,100,000 number
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Statutory Reports
Financial Statements
of equity shares of `1/- each and 3,010,000,000
Preference Shares of `10/- each. There was no change
in the capital structure of the Company during the
period under review. All Equity Shares of the Company
carry equal voting rights.
The details of share capital as on 31 March 2022 is
provided below:
Particulars
Authorised Share Capital
Paid up Capital
Listed Capital
Shares under Abeyance pending
allotment *
Amount (₹)
74,120,100,000
3,717,504,871
3,717,199,039
3,05,832
* During the year, the Company allotted 2,400 equity shares from
the abeyance category. As on 31 March 2022, out of the total
paid up capital of 3,717,504,871 equity shares, 305,832 equity
shares are pending for allotment and listing and hence kept
under abeyance since they are sub-judice.
The American Depositary Shares (ADS) of the
Company have been delisted effective close of
trading on NYSE on 08 November 2021. Further, post
11 January 2022, the ADS underlying equity shares
which were not surrendered in accordance with the
Deposit Agreement within the extended timelines i.e.,
10 January 2022, were sold by the depositary and
the proceeds, less and withholding taxes, fees and
expenses were remitted to the ADS holders. Hence, as
on 31 March 2022, there were no outstanding ADS of
the Company.
The details of the Capital Evolution has been provided
on the Company’s website and can be accessed at
www.vedantalimited.com.
SUBSIDIARIES, JOINT VENTURES, AND
ASSOCIATE COMPANIES
Your Company has 48 subsidiaries (13 direct and 35
indirect) as on 31 March 2022 as disclosed in the
notes to accounts.
During the year and till date the following changes have
taken place in subsidiary companies:
• Sterlite (USA) Inc. has been dissolved w.e.f.
20 December 2021.
• Cairn South Africa (Pty) Ltd has been deregistered
effective from 06 April 2021.
• Sesa Resources Limited has acquired shares of
Sterlite Ports Limited and Paradip Multi Cargo Berth
Private Limited w.e.f 30 August 2021.
• Hindustan Zinc Alloys Private Limited, 100%
subsidiary of Hindustan Zinc Limited, incorporated
w.e.f. 17 November 2021.
• Desai Cement Company Private Limited,
100% subsidiary of SMCL, acquired w.e.f.
15 November 2021.
• Vedanta Zinc Football & Sports Foundation, 100%
subsidiary of Hindustan Zinc Limited, incorporated
w.e.f. 21 December 2021. There has been no
material change in the nature of the business of
the subsidiaries.
• Rampia Coal Mines and Energy Private Limited
struck off on 19 April 2021.
As at 31 March 2022, the Company has 07 associate
companies and joint ventures.
Associate Companies and Joint Ventures:
• Gaurav Overseas Private Limited
• RoshSkor Township (Pty) Ltd
• Raykal Aluminium Company Private Limited
• Goa Maritime Private Limited
• Madanpur South Coal Company Limited
• Rosh Pinah Health Care (Proprietary) Limited
• Gergarub Exploration and Mining (Pty) Limited
As required under Listing Regulations, the
Consolidated Financial Statement of the Company
and its subsidiaries and joint ventures, prepared in
accordance with Ind AS 110 issued by the Institute
of Chartered Accountants of India, form part of the
Annual Report and are reflected in the Consolidated
Financial Statement of the Company.
During the year, the Board of Directors have reviewed
the affairs of the subsidiaries. Pursuant to Section
129(3) of the Companies Act 2013 (the Act), a
statement containing the salient features of the
financial statement of the subsidiary and associate
companies is attached to the financial statement in
Form AOC‑1. The statement also provides details
of performance and financial position of each of
the subsidiaries and their contribution to the overall
performance of the Company.
In accordance with Section 136 of the Act, the audited
Standalone and Consolidated financial statements of
the Company along with relevant notes and separate
audited accounts of subsidiaries are available on the
website of the Company at www.vedantalimited.com.
Copies of the financial statements of the Company and
of the subsidiary companies shall be made available
upon request by any member of the Company.
Additionally, these financial statements shall also be
available for inspection by members on all working
days during business hours at the Registered Office of
the Company.
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MATERIAL SUBSIDIARIES
The Company has adopted a policy on determination
of material subsidiaries in line with the Listing
Regulations. The policy aims to determine the Material
Subsidiaries and Material Unlisted Indian Subsidiaries
of the Company and to provide the governance
framework for such subsidiaries. The policy may be
accessed at www.vedantalimited.com.
In accordance with Regulation 16(1)(c) of the Listing
Regulations, your Company has the following material
subsidiary companies during the FY 2022:
• Hindustan Zinc Limited (HZL), a listed subsidiary;
• Cairn India Holdings Limited (CIHL), an unlisted
subsidiary; and
• Bharat Aluminium Co. Limited (BALCO), an
unlisted subsidiary.
The Company is in compliance with the applicable
requirements of the Listing Regulations for its
subsidiary companies during the FY 2022.
DEBENTURES
During the FY 2022, your Company raised `1,000
Crores through issuance of Secured, Rated,
Redeemable, Non‑Cumulative, Non‑Convertible Debentures (NCDs) of face value of `1,000,000 each on private
placement basis as per the following details:
Coupon Rate
Date of Allotment
No. of NCDs Total Amount (in ₹) Tenor
Maturity Date
7.68% Secured Rated Listed
Redeemable Non-Convertible
Debentures
31 December 2021 10,000
1,000 Crores
3 years
31 December 2024
The aforesaid debentures are listed on BSE Limited.
Further, the details of NCDs outstanding debentures as of 31 March 2022 have been detailed in the Corporate
Governance Report.
COMMERCIAL PAPERS
The Commercial Papers (CPs) issued by the Company had been listed on National Stock Exchange of India Limited
and have been duly redeemed on timely basis. As on 31 March 2022, there are outstanding CPs aggregating to `5,095
Crores. Further details have been provided in the Corporate Governance Report.
UNCLAIMED SHARES
Pursuant to the SEBI Circular and Regulation 39 of Listing Regulations regarding the procedure to be adopted for
unclaimed shares issued in physical form in public issue or otherwise, the Company has a separate demat account in
the title of ‘Vedanta Limited – Unclaimed Suspense Account’ with HDFC Bank Limited. The details of shares lying in
the unclaimed suspense account are provided below:
Description
Aggregate number of shareholders and the outstanding shares in the suspense account
lying at the beginning of the year;
Number of shares transferred to the unclaimed suspense account during the year
Number of shareholders who approached issuer for transfer of shares from suspense
account during the year;
Number of shareholders to whom shares were transferred from suspense account
during the year;
Number of shares transferred to IEPF account pursuant to Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 read
with Amendment Rules, 2017
Aggregate number of shareholders and the outstanding shares in the suspense account
lying at the end of the year. The voting rights on these shares shall remain frozen till the
rightful owner of such shares claims the shares
No. of
shareholders
No. of Equity
shares of Re. 1/-
each
618
705,812
-
18
-
80
-
43,874
-
147,566
520
514,372
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TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION
FUND (IEPF)
In accordance with the provisions of Companies Act, 2013 and Investor Education and Protection Fund (Accounting,
Audit, Transfer and Refund) Rules, 2016 (‘IEPF Rules’), the Company is required to transfer the following to IEPF:
• Dividend amount that remains unpaid/unclaimed for a period of seven (7) years; and
• Shares on which the dividend has not been paid/claimed for seven (7) consecutive years or more.
Your Company, in its various communications to the shareholders from time to time, requests them to claim the
unpaid/unclaimed amount of dividend and shares due for transfer to IEPF established by Central Government.
Further, in compliance with IEPF Rules including statutory modifications thereof, the Company publishes notices in
newspapers and also sends specific letters to all the shareholders, whose shares are due to be transferred to IEPF, to
enable them to claim their rightful dues.
Dividend and other amounts transferred/credited to IEPF during FY 2022
The details of dividend and other unpaid/unclaimed amounts transferred to IEPF during the year are provided below:
Dividend and other unpaid/unclaimed amounts transferred to IEPF during the year
Financial Year
Type of Amount
Date of Declaration
Amount
transferred
to IEPF (in ₹)
Date of transfer to IEPF
2013-14
2013-14
2014-15
2014-15
Total
Final Dividend
Final Dividend
11 July 2014
23 July 2014
13,616,692.00
26 August 2021
4,163,711.00
14 September 2021
Interim Dividend
17 September 2014
3,679,435.00
02 November 2021
Interim Dividend
29 October 2014
13,846,831.00
14 December 2021
35,306,669.00
In view of specific order of court/tribunal/statutory authority restraining transfer of shares and dividend thereon, such
shares and unpaid dividend have not been transferred to IEPF pursuant to Section 124 of Companies Act, 2013 and
Rule 6 of IEPF Rules including statutory modifications or re‑enactments thereof.
The details of dividend declared during the year on shares already transferred to IEPF are provided below:
Dividend declared during FY 2022 on shares already transferred to IEPF
Financial Year
Type of Dividend
Date of Declaration
Amount
transferred to IEPF
(in ₹)
Date of transfer to IEPF
2021-22
2021-22
2021-22
Total
Interim Dividend (1st) 01 September 2021
Interim Dividend (2nd) 11 December 2021
Interim Dividend (3rd) 02 March 2022
78,131,965.59
17 September 2021
55,634,768.81
04 January 2022
55,683,880.00
24 March 2022
189,450,614.40
Shares transferred/credited to IEPF during FY 2022
During the year, the Company transferred 420,334 equity shares of `1/‑ each comprising of 874 shareholders to IEPF.
The Company has also uploaded the details of unpaid and unclaimed amounts lying with the Company as on 10
August 2021 (the date of last Annual General Meeting) on the website of the Company at www.vedantalimited.com.
Further, the details of equity shares transferred are also made available on the website of the Company at
www.vedantalimited.com.
The shareholders whose shares/dividends have been transferred to IEPF can claim the same from IEPF in accordance
with the prescribed procedure and on submission of such documents as prescribed under the IEPF Rules. The
process for claiming the unpaid shares/dividends out of IEPF can be accessed on the IEPF website at www.iepf.gov.in
and on the website of the Company at www.vedantalimited.com.
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Integrated Report and Annual Accounts 2021-22
Dividend due to be transferred to IEPF during FY 2023
The dates on which unclaimed dividend and their corresponding shares would become due to be transferred to IEPF
during FY 2023 are provided below:
Dividend due to be transferred to IEPF during FY 2023
Particulars
Date of Declaration
Date of completion of
seven years
Due date for transfer to IEPF
Final Dividend 2014-15
11 July 2015
Final Dividend 2014-15
21 July 2015
15 August 2022
25 August 2022
14 September 2022
24 September 2022
Interim Dividend 2015-16
27 October 2015
01 December 2022
31 December 2022
Total
Amount as on
March 31, 2022
(in ₹)
20,255,065.95
4,668,076.00
32,340,168.00
57,263,309.95
Ms. Prerna Halwasiya, the Company Secretary & Compliance Officer of the Company is designated as the Nodal
Officer under the provisions of IEPF. The contact details can be accessed on the website of the Company at
www.vedantalimited.com.
TRANSFER TO RESERVES
The Company proposes Nil transfer to General
Reserve out of its total profit of `17,245 Crore for the
financial year.
Further, with respect to transfer of amount lying to
the credit of General Reserves to Retained Earnings,
the Board of Directors of the Company, basis the
recommendations of the Audit & Risk Management
Committee and Committee of Independent Directors
of the Company, at its meeting held on 29 October
2021 approved the Scheme of Arrangement
(‘Scheme’) between the Company and its shareholders
under Section 230 and other applicable provisions
of the Companies Act, 2013 (‘Act’). The detailed
information pertaining to the above scheme forms part
of the Notes to the standalone financial statements.
PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS
The particulars of loans given, investments made,
guarantees given and securities provided along with
the purpose for which the loan or guarantee or security
is proposed to be utilised as per the provisions of
Section 186 of the Act are provided in the standalone
financial statements. (Please refer to Notes to the
standalone financial statements).
FIXED DEPOSITS
As on 31 March 2022, deposits amounting to `54,000
remain unclaimed. Since the matter is sub judice, the
Company is maintaining status quo.
PUBLIC DEPOSITS
The Company has not accepted any deposits falling
under the ambit of Section 73 of the Companies Act,
2013 (‘Act’) and the Rules framed thereunder during
the year under review.
MATERIAL CHANGES AFFECTING THE
FINANCIAL POSITION OF THE COMPANY
No material changes and commitments have occurred
subsequent to the close of the financial year till the
date of this Report which may affect the financial
position of the Company.
SIGNIFICANT & MATERIAL ORDERS PASSED
BY THE REGULATORS OR COURTS OR
TRIBUNALS
Provided below are the significant and material orders
which have been passed by any regulators or courts
or tribunals against the Company impacting the going
concern status and Company’s operations in future.
Iron-Ore Division – Goa Operations
Supreme Court (‘SC’) in the Goa Mining matter in
2014 declared that the deemed mining leases of the
lessees in Goa expired on 22 November 1987 and the
maximum of 20 years renewal period of the deemed
mining leases in Goa under the Mines and Minerals
(Development and Regulation) (‘MMDR’) Act had also
expired on 22 November 2007 and directed state to
grant fresh mining leases.
Thereafter, various mining leases were renewed by the
state government before and on the date the MMDR
Amendment Ordinance 2015 came into effect (i.e. 12
January 2015).
These renewal of mining leases were challenged
before the SC by Goa Foundation and others in 2015
as being arbitrary and against the judgment of the
SC in the earlier Goa mining matter. The SC passed
the judgement in the matters on 07 February 2018
wherein it set aside the second renewal of the mining
leases granted by the State of Goa. The court directed
all lease holders operating under a second renewal to
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Financial Statements
stop all mining operations with effect from 16 March
2018 until fresh mining leases (not fresh renewals
or other renewals) in accordance with the provisions
of the MMDR Act, 1957 and fresh environmental
clearances are granted.
Subsequently, mining lessees and other mining
stakeholder have filed applications in the pending
Abolition Act matter for resumption of mining in
the State. The Central Government has also filed
an early hearing application in the long pending
abolition matter.
We separately also filed a Special Leave Petition in the
Supreme Court in appeal from the HC order against
a non-consideration of our representation seeking an
amendment of the mining lease till 2037 based on
the provisions on the MMDR Amendment Act, 2015.
The Special Leave Petition was disposed off by the
Supreme Court vide an order dated 07 September
2021. We have filed a review petition against the order
passed by SC dated 07 September 2021 which has
been dismissed by the Supreme Court by order dated
30 March 2022.
Copper Division
Copper division of Vedanta Limited has received
an order from Tamil Nadu Pollution Control Board
(‘TNPCB’) on 09 April 2018 whereby they have rejected
the Company’s application for renewal of Consent to
Operate (‘CTO’) for the 400,000 Metric Tonnes Per
Annum (‘MTPA’) Copper Smelter plant in Tuticorin.
In furtherance to the order of TNPCB rejecting the
Company’s application, the Company decided to shut
its Copper smelting operations at Tuticorin and filed
an appeal with TNPCB Appellate Authority against
the order. During the pendency of the appeal, the
TNPCB vide its order dated 23 May 2018 ordered
disconnection of electricity supply and closure of the
Company’s Copper Smelter plant. Post this the Govt
of Tamil Nadu on 28 May 2018 ordered the permanent
closure of the plant. The Company challenged the
same in the National Green Tribunal (‘NGT’) which
passed a favorable order for reopening of the plant.
The order was appealed by the TNPCB and the State of
Tamil Nadu in the Supreme Court. The Supreme Court
passed an order upholding the appeal and directing the
Company to approach the Madras High Court for relief.
On 18 August 2020, the Division Bench of Madras
High Court dismissed all the writ petitions filed by
the Company. Vedanta Limited subsequently filed a
Special Leave Petition to appeal against the Madras
High Court decision before the Supreme Court. The SC
commenced hearing of the SLP on 15 March 2022 and
it was partly heard. The matter was to be heard again
on 22 March 2022, however, due to the reconstitution
of the bench that first heard the matter, the matter was
not listed on that day. Next date of hearing shall be
intimated upon the reconstitution of the original bench.
In the meantime, the Madurai Bench of the High Court
of Madras in a public interest litigation filed against
Vedanta by Fathima Babu held through 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 the said application shall be decided by
the competent authority on or before 23 September
2018. In the interim, the High Court ordered Vedanta to
cease construction and all other activities on site for
the proposed expansion project with immediate effect.
Currently, the Ministry of Environment, Forest and
Climate Change (‘MoEF’) has updated on its website
that Vedanta Limited’s environmental clearance for
expansion project will be considered for ToR either
upon verdict of the NGT case or upon filing of a
Report from the State Government/ District Collector,
Thoothukudi. Separately, SIPCOT through its letter
dated 29 May 2018, cancelled 342.22 acres of the land
allotted to Vedanta Limited for the proposed expansion
project. Further, the TNPCB issued orders on 07
June 2018, directing the withdrawal of the consent
to establish for the expansion project, which is valid
until 31 December 2022. In a writ filed before Madras
High Court Madurai Bench challenging the lease
cancellation order, Madras High Court through order
dated 03 October 2018 has granted an interim stay in
favour of the Company cancelling on the cancellation
of 342.22 acres of the land allotted.
Further, on 07 June 2018, TNPCB withdrew the CTE
granted for expansion project for a period of five years.
The Company has filed Appeals before the TNPCB
Appellate Authority challenging withdrawal of CTE by
the TNPCB.
CHANGE IN NATURE OF BUSINESS OF
COMPANY
There is no change in the nature of business of your
Company during the year under review.
FAILURE TO IMPLEMENT ANY CORPORATE
ACTION
There were no instances where the Company failed to
implement any corporate action within the specified
time limit.
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Integrated Report and Annual Accounts 2021-22
9. AWARDS AND RECOGNITION
In its constant quest for growth and excellence,
your Company continues to be committed towards
maintaining the highest standards of corporate
governance and sustainable practices. As a
recognition for our unconventional innovations and
significant contributions towards stakeholders and the
society as a whole, your Company has been winning
an array of accolades at various forums while securing
plaudits as the recipient of numerous prestigious
awards for demonstrating its business ethos.
These acknowledgements render a testament to the
Company’s progress and its diligent efforts towards
delivering value for all its stakeholders.
The details of the key recognitions bestowed upon the
Company have been highlighted in a separate section
in the Annual Report.
10. DIRECTORS’ RESPONSIBILITY
STATEMENT
As stipulated in Section 134 of the Companies Act,
2013, your Directors subscribe to the “Directors’
Responsibility Statement” and to the best of their
knowledge and ability, hereby confirm that:
(a)
(b)
(c)
in the preparation of the annual accounts, the
applicable accounting standards have been
followed and there are no material departures
from the same;
they have selected such accounting policies and
applied them consistently and made judgments
and estimates that are reasonable and prudent
so as to give a true and fair view of the state of
affairs of the Company at the end of the financial
year, i.e., 31 March 2022 and of the profit and loss
of the Company for that period;
they have taken proper and sufficient care for the
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 2013 for safeguarding the Company’s assets
and for preventing and detecting fraud and
other irregularities;
(d)
(e)
(f)
the annual accounts have been prepared on a
going concern basis;
they have laid down internal financial controls
to be followed by the Company and that such
internal financial controls are adequate and are
operating effectively; and
proper systems have been devised to ensure
compliance with the provisions of all applicable
laws and that such systems were adequate and
operating effectively.
11. APPRECIATION
We would like to record by gratitude and appreciation
to all our stakeholders, including the Central and State
Government Authorities, Stock Exchanges, Financial
Institutions, Analysts, Advisors, Local Communities,
Customers, Vendors, Business Partners, Shareholders,
and Investors forming part of the Vedanta family for
their continued support during the year. Your faith and
vote of confidence hold in good stead, and motivate
us in pursuing greater opportunities, responsible
growth and enhanced delivery on our strategy. Let
us also take this opportunity to thank our employees,
whose enthusiasm, energy, and zeal, help us progress
along our vision. The contribution our people make is
the base on which we build further, and is integral to
Vedanta’s high performing culture. At Vedanta, we are
truly ‘Transforming for Good’ by increasing our focus
on value-accretive growth, investing in digitalisation,
bolstering our sustainability commitments and
optimising our operations. Through this, we believe in
playing an increasing role in nation building, and adding
to India’s self sufficiency. As we grow from strength to
strength, we request your extended support.
For and on behalf of the Board of Directors
Sd/-
Anil Agarwal
Non‑Executive Chairman
DIN: 00010883
Place: London
Date: 28 April 2022
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Annexure A
Conservation of Energy and Technology Absorption
(A) Conservation of Energy:
Conservation of natural resources continues to be
the key focus area of your Company. Some of the
important steps taken in this direction follow.
OIL & GAS BUSINESS:
Rajasthan Operations
i.
ii.
iii.
iv.
v.
vi.
vii.
Utilization of associated natural gas by
commissioning of 1.1 MW GEG at Rajasthan
North satellite field (NI‑02) for power generation
and thereby reducing GHG emission by avoiding
flaring. Cumulative GHG reduction potential of
~6100 tons of CO2e/annum, reduction in 1240
tons of CO2e in FY 2022.
Energy conservation by replacement of
conventional lights with energy efficient lightings
(LED) at MBA. Approx. 4,86,173 KWH equivalent
to 1750 GJ saved in FY 2022.
Installation of Solar roof top of 15 KW at AGI 18
& 19. Renewable power generation potential of
22500 KWH/annum.
Avoidance of GHG emission by renewable
power generation (solar): 345,171 KWH for RJ
operations (Avoidance in 272 tons of CO2e in
FY 2022) and 62,227 KWH from midstream
in FY 2021 (Avoidance in 272 tons of CO2e in
FY 2022.
Conversion of induction motor to Permanent
Magnetic Motor (4 motors) results in increasing
energy efficiency; approx. 1555 GJ energy saved
in FY 2022.
Solar installation 550 MW at operation base MPT.
GHG reduction potential of ~734 tons of CO2e/
annum, reduction in 47 tons of CO2e in FY 2022.
Commissioning of 4*1.1 MW GEG at MPT/MWPs
for power generation and thereby reducing GHG
emission by avoiding flaring. Cumulative GHG
reduction potential of ~24400 tons of CO2e/
annum.
Ravva Operations
i.
Three turbines to Two Turbines Operation
Normally three gas turbine generators are
operated at Ravva to produce required power for
Ravva terminal. Possibility to stop one turbine
was reviewed to save fuel gas consumption and
GHG emissions. After enhancement of power
system protection settings and Load shedding
logics, two turbine operation commenced during
winters. Two turbine operation was continued for
132 days during winters and ~7000 scmd of fuel
gas could be saved every day.
ii.
Conversion of Borewell pump from three stage to
two stage.
It was reviewed to reduce power consumption
of borewell pumps, and two existing three stage
pumps (each 56 KW) were modified to two stage
pumps (each 46 KW) which resulted in reduction
of 10 KW per pump which would result in total
annual energy conservation of 175200 KWH.
Cambay Operations
i.
Replaced conventional PWM based controllers
with MPPT solar charge controllers at Offshore
platforms resulting in improvement in power
generation capacity by 30%. This also enabled
harvesting increased solar energy during
inclement weather conditions.
ii.
Installed 15 no. solar lights and replaced
conventional lights with LED lamps. Total energy
saving achieved was 8322.5 KWH/year.
COPPER BUSINESS:
i.
ii.
iii.
iv.
v.
vi.
Installation of 825 KW Solar power plant –
expected electric energy reduction of 542025
KWH/Yr.
Replacement of existing roof lights with LED
lights in ACP, CCPC & CCPP – Reduction in
Energy Consumption (157,680 KWH/Yr).
Installation of PNG pipeline & PRMS for using
PNG in place of LPG – Reduction in energy
consumption (159,444 KWH/Yr) – Power for LPG
vaporization – Copper/Fujairah.
350 Kwp roof top solar power on PPA model
– LOI given and approval from authority is in
progress (Estimated saving in GHG emission –
145 T, Saving in conventional electrical energy –
250,800 KWH/Yr) – Copper/Fujairah.
Replacement of existing MH light fittings/Pole
lights with LED light – Reduction in energy
consumption (14,500 KWH/Yr) – Copper/
Fujairah.
Replacement of AC units having frequent failures
with energy efficient AC units (8,780 KWH/Yr) –
Copper/Fujairah.
IRON ORE BUSINESS:
VAB
i.
Installed VFD for main cooling water pumps in
sinter plant (Saving – 84,000 KWH/annum).
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Integrated Report and Annual Accounts 2021-22
Installed VFD for combustion air blower (Saving –
42,000 KWH/annum).
Replacement of HPSV lamps to LED lamps at
PID‑2 dispatch high mast tower (Saving – 35,478
KWH/annum).
vii.
Commissioning of 500 m3/hr Reverse Osmosis
plant to further ensure zero liquid discharge
from plant.
viii.
Installation of smart 360-degree machine
guarding system in CHP belt conveyor.
Replacing cooling tower fan shaft from SS shaft
to composite fiber shaft (Saving – 75,600 KWH/
annum).
ix.
Purchased 2976 MU of Renewable power, Highest
ever Renewable power purchase by any entity in
Power Exchanges.
ii.
iii.
iv.
v.
Connecting under‑loaded Runner cooling fan
motors in star mode (Saving – 33,600 KWH/
annum).
vi.
Conversion of 50KW of conventional lamps with
LED lamps (Saving – 175,200 KWH/annum).
IOK
i.
ii.
Conversion of the luminaire carriage of High mast
lights installed at BBH railway siding from Ring
type to Stadium type and installation of 3 more
masts by eliminating Sodium vapor lamps and
Mobile Lighting generators (Saving: 19KL/annum
HSD, 25.4MWh/annum).
Elimination of Mobile Lighting towers by
installation of Inhouse fabricated 7m lighting
towers and supply given through common DG/
K.E.B. supply. Diesel saving of 2.4KL/IR/Annum
eliminated. Total 5 IRs eliminated in similar way.
POWER BUSINESS:
2400 MW Jharsuguda:
i.
ii.
iii.
iv.
v.
vi.
U#3 Air Preheater basket & seals replaced to
reduce the high flue gas exit temperature at Air
Preheater outlet to design level saving 6 kcal/
KWH in heat rate and 388 KWH in Primary
fan consumption.
Replacement of U#3 flue gas duct & fabric filter
bags replaced to reduce Induced Draft fan power
consumption. 2500 KWH power savings in
induced draft fan on station level.
U#1 Condenser chemical cleaning done to
improve condenser vacuum. Savings 16 Kcal/
KWH.
Mill to classifier section coal pipe changed from
old plane OEM design to ceramic tiles pipe in 10
mills to increase life of coal pipe.
Induced Draft fan 3B electrohydraulic brake
system installed to eliminate the risk of rotation at
fan stopped condition.
Boiler penthouse air sealing in U#3 to reduce
metal excursions and to bring main steam
temperature & Reheater steam temperature to
rated value, thereby saving 3 Gms/KWH.
216
CPP 1215 MW Jharsuguda:
i.
ii.
iii.
iv.
v.
vi.
Replacement of Air preheater basket for 2 units
(Unit 7 & 8) to reduce the very high flue gas
exit temperature to design level saving 4 kcal/
KWH in heat rate and 450 KWH in Primary fan
consumption for the station.
Turbine Overhauling (HIP carrier refining) in
Unit#7 & 8 to improve HP cylinder efficiency
resulted into saving of 4.8 kcal/KWH in heat rate
for the Station.
Replacement of Air preheater seals and fabric
filter bags, flue gas duct repairing for 3 units
to reduce Induced Draft and Primary Air fans
consumption by 520 KWH.
Cooling tower drift eliminator cleaning done (8
units) to save 20 kcal/KWH of heat rate in unit.
Chemical cleaning of cooling tower fills done for 2
units to increase air flow across tower and reduce
vacuum losses.
Condenser bullet cleaning done in Unit #7&8 to
save in heat rate by 25 kcal/KWH for both the
units combined.
vii.
2 Nos. Cooling Water system screen cleaner
taken in service after refurbishment to rectify
frequent condenser choking.
ALUMINIUM BUSINESS:
Smelter Plant Jharsuguda:
Smelter Plant 1
Electrical Energy:
DC Energy saving
i.
ii.
100% graphitized cathode pot implementation.
Improvement in Pot Voltage drops by bolt and
clamp drop reduction
iii. Current efficiency improvement in Potline.
AC auxiliary Energy saving
i.
ii.
iii.
100% graphitized cathode in Pots.
Bulker unloading point modification.
Light replacement with LED in High mast office
area, shop floor, pathway.
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
iv.
Green anode SEC reduction by
productivity improvement
v.
Idle running elimination.
vi. Energy efficient motor replacement.
vii. Optimization of airlift blower power consumption.
viii. VFD installation in CT fan of RPH.
ix.
New hydac technology in Hencon make metal
tapping vehicles.
x.
Rectiformer conversion efficiency improvement
Smelter Plant 2
Electrical Energy:
DC Energy saving
i.
ii.
100% graphitized cathode pot implementation.
Current efficiency improvement
AC auxiliary Energy saving
i.
Replacement of conventional lights with LED
lights in office, MCC area, Streetlights and
High masts.
ii.
Shopfloor lighting automation in GAP.
iii.
Increase pulsating interval for bag filter cleaning
based on pressure drop across bag filter at Green
Anode Plant.
iv.
Stop Idle running of coke conveying belt 101 A in
Green Anode Plant, by load cell installation.
v.
Reducing Idle running hours of R &T Group.
vi.
vii.
RB‑14, RB‑25 and HPP idle running elimination
in bakeoven.
19P3 motor replaced with IE3 efficiency motor in
Rodding shop.
viii.
Reduction in discharge pressure of cooling water
system from 6.5 to 4 kg/cm2 at Casthouse‑2.
ix.
Occupancy Sensors installation in MCCs,
Office area.
Lanjigarh – Refinery:
The following major energy conservation measures
are taken at Lanjigarh:
i.
ii.
iii.
Pulley Modification of 4 ISC pumps to
reduce RPM and saving 4.2 Lakhs units of
electrical energy.
Replacement of 21 numbers of energy efficient
HT Motors from CACA design to TEFC.
Replacement of 2000 numbers of conventional
lights with LED. Annual saving of 2 Lakhs units of
electrical energy.
iv.
v.
vi.
Improvement of 33KV P.F at Substation – 3.2 &
2.1 by adding 0.6 MVAR capacitor bank from 0.87
to 0.91.
Installation of 3 numbers of 45 KW VFD in
Digestion Condensate pumps resulting in 3.6
Lakhs unit of energy saving.
Pulley Modification of Test Liquor Transfer pumps
28 PU 0001N/2N & 36 EPU‑101A/C resulting in
saving of 7.5 lakhs unit of electrical energy.
vii.
Evaporation – 3 Cooling Water Pump size
reduction from 980 KW to 600 KW resulting in
saving of 23 lakhs unit of electrical energy.
viii.
Installation of APC in Evaporation Units resulting
in steam saving of 20 KT per annum.
ix.
Digestion 0 live steam Heater HX005 replacement
resulting in steam saving of 60 KT per annum.
Lanjigarh – CGPP:
i.
ii.
Replacement of Gear Box of Turbine – 2 resulting
in saving of 0.2T/MW of steam consumption
through turbine (saving of 26,000 T of coal per
annum).
Cooling Tower Fills replacement in 2 cells
resulting in 3 lakhs units of electrical
energy saving.
iii.
Import of 670 MW Renewable Energy from grid
during Annual Turbine shutdown in FY 2022.
(B) Additional investments and proposals, if
any, being implemented for reduction of
consumption of energy
OIL & GAS BUSINESS:
Rajasthan Operations
i.
Installation of gas compressor & pipeline from
Raag Oil to RGT to avoid the flaring at Wellpad
and recovery of Gas for sale. GHG reduction
potential of approx. 40,000 tons of CO2e/annum.
ii.
Solar panel at Radhanpur Terminal and RDT LQ.
iii.
iv.
v.
Solar rooftop of 15KW each at 10 above ground
installations AGIs.
Feasibility study for CO2 sequestration for
Aishwariya Field (ABH + Fatehgarh) through CCS
based on Geo mechanics.
Proposal for Installation of Microturbine to
generate up to 8MWH power utilizing Medium
Pressure Steam currently available in the system
as spare.
vi.
Proposal for installation of Solar Panel of 20MWH
nearby MPT.
217
Integrated Report and Annual Accounts 2021-22
Ravva Operations:
i.
Replacement of fluorescent and HPSV lights with LED. Annual energy saving potential of 72,000 KWH.
Sl No Existing Lights
New Installed lights
1
2
3
250W HPSV
160W HPMV
150W LED – Quantity 100 nos
80W LED – Quantity 100 nos
40W Tube lights
20W LED lights 300 nos
Net savings
10,800 KWH
8,640 KWH
52,560 KWH
COPPER BUSINESS:
POWER BUSINESS:
Installation of Biomass fired Boiler.
2400MW Jharsuguda Proposals:
i.
ii.
VFD installation for RCW Pumps in 35TPH CCR
– Project.
i.
ii.
Turbine overhauling of 1 unit.
Eco coil replacement from fin type to plain type in
2 units.
iii. NDCT fills replacement of 2 units.
iv. Flue gas duct replacement of 2 units.
v.
Air preheater basket replacement of 2 units.
1215MW Jharsuguda Proposals:
i.
ii.
Turbine overhauling for 5 units.
Chemical cleaning of Cooling tower fills.
iii. Cooling tower fills replacement for 3 units.
iv. Air preheater Basket replacement for 2 units.
ALUMINIUM BUSINESS:
Smelter Plant Jharsuguda:
i.
ii.
Advanced pot controller & Pot
technology upgradation.
Replacement of old motors with Energy
efficient motor.
iii. 100% LED conversion.
iv.
EFO (Emulsified fluid oil) implementation in
furnace for HFO reduction.
v.
VFD installation for Fan and pumps.
iii. 100% RE power project.
iv.
v.
VFD installation for standby cooling tower pump
& HF blower (Estimated energy saving – 47,232
KWH/Yr) – Copper Fujairah
Energy efficient Air compressor (Estimated
energy saving‑ 54,000 KWH/Yr) –
Copper Fujairah
IRON ORE BUSINESS:
VAB
i.
ii.
iii.
IOK
Replacement of various pumps in VAB with
energy efficient pumps.
Installation of variable frequency drives
for equipment.
Implementing various energy saving measures
suggested by TERI during the energy audit.
i.
Government Electrification of processing plant.
ii. Government Electrification of BBH.
218
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Plant-2
i.
ii.
100% Graphitized cathode pot implementation.
Use of RUC copper inserted collector bar for pot cathode.
iii. Advanced pot controller & Pot technology upgradation
iv. Replacement of conventional lights with LED lights.
v.
VFD installation in Cold well pumps, CT fans.
Refinery:
S.
No.
Project
Target Area
Estimated
Savings (KWH)
1
2
3
4
5
6
7
Replacement or Maintenance of Faulty Steam traps
DIG, EVAP, White 1, Red 2
Installation of VFD in Raw water drinking pump motor
Improvement in refinery power factor from 0.88 to 0.95
Efficiency improvement in HT motors by replacement of highly efficient
TEFC motor
Energy management system and SCADA implementation in entire
refinery
RWTP
Refinery
Refinery
Refinery
Use of blowers instead of compressed air in Sump pumps
PDS, DIG
Replacement of 3000 conventional lights by LED lights
Refinery & CGPP
1,359,000
87,600
1,052,631
368,421
NA -
7,455
459,900
(C) Impact of above measures in a) and b)
IRON ORE BUSINESS:
for reduction of energy consumption and
consequent impact of cost of production
of goods
OIL & GAS BUSINESS:
Rajasthan Operations:
i.
ii.
iii.
Utilization of Associated gas for power and
thereby avoiding flaring/GHG emission.
Conservation of diesel energy by installation of
GEGs at satellite fields.
Renewable power generation resulting in
reduction in electricity and diesel saving.
Ravva Operations:
i.
ii.
iii.
Two turbine operation total fuel saving in FY 2022
is ~925,000 SCM and equivalent monetary
benefit ~$ 150,000.
Borewell pumps motors with two stage operation,
annual energy savings ~175,200 KWH equivalent
monetary benefit ~$ 12,000.
Total Savings from replacement of LED lights:
~72,000 KWH/annum, equivalent monetary
benefit is ~$ 5,000.
VAB
i.
IOK
i.
The Energy Conservation measures undertaken
in various areas in FY 2022 have an annual saving
potential of 1740 MWh of Electricity per annum
for VAB.
The Energy Conservation measures undertaken
in various areas in FY 2022 have an annual
saving potential of 31 KL of Diesel & 25.4 MWh of
Electricity for IOK.
POWER BUSINESS:
2400MW Jharsuguda
i.
Reduction in Specific coal consumption by 6
gms/KWH & 0.7 % reduction in Auxillary power
consumption by U#3 Capital Overhauling.
1215MW Jharsuguda
i.
Plant load factor increases by 1% in FY 2022.
ALUMINIUM BUSINESS:
Plant – 1&2
i.
Specific energy consumption reduction by 142
KWH/ton.
219
Integrated Report and Annual Accounts 2021-22
Refinery:
i.
ii.
Reduction of Specific Electrical energy from
235KWH/T to 216KWH/T.
Reduction of specific FO consumption from
71.23Kg/T to 70.59Kg/T.
(D) The steps taken by the company for
utilizing alternate sources of energy
COPPER BUSINESS:
i.
Initiated 825KW Solar Power Project.
ii.
Planning to setup RE hybrid power through
GCPP model.
IRON ORE BUSINESS:
IOK
i.
ii.
Planning for the installation of 2.1MW windmill.
Planning for the installation of solar LED
streetlights for haul roads.
FORM OF DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION
RESEARCH AND DEVELOPMENT (R & D)
Specific areas in which R&D carried out by the Company:
POWER BUSINESS:
2400 MW Jharsuguda
i.
ii.
Installation of Secondary overfire air damper for combustion optimization.
Economizer coil design change to plane tube.
iii. Digital technology introduced.
• Asset Performance Management implementation under progress.
• OSi Pi historian and real time analytics platform implemented.
• Digitalized shutdown & tracking implemented.
iv.
Installation of acoustic steam leak detector to detect tube leakages at early stage which helps to do proper job planning.
220
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Technology Absorption, Adaptation and Innovation
Efforts in brief made
towards technology
absorption, adaptation,
and innovation
OIL & GAS BUSINESS
Rajasthan Operations:
•
Cairn Oil and Gas commenced exploratory drilling in its OALP blocks based on early prospects matured.
1 well in Rajasthan is drilled and an oil discovery has been notified to MoPNG. Well drilling commenced
in Cambay and in Assam. Airborne FTG surveys completed with advanced processing in progress and
Seismic surveys continued across multiple blocks to delineate viable prospects for exploratory drilling.
Ravva Operations:
•
•
•
•
•
•
•
Commissioning of digital platform P2E for efficient monthly production allocation, DGH and JV report
creation.
Incorporating ML based workflows to existing petrophysical evaluations to ensure accurate log
interpretation and validation.
Incorporating Rock physics and AVO seismic workflows to existing geophysical interpretations for well
planning.
Incorporating innovative dashboards to categorize all types of well data (well location, well category,
producing intervals, well logs, well correlation, core data)
“Mini stimulation package” - Platform based stimulation operation of water injector wells were conducted
in Ravva field. This was an in-house conceived and customized and innovative small footprint-based unit
which enabled pumping higher volumes and higher rates stimulation job using fresh water. This initiative
will result in overcoming weather dependency of well stimulation and requirement of platform supply
vessel this year, and improved water injection, enabling pressure maintenance in the block and enhancing
production from the producer wells.
Gas Dynamic Generator (‘GDG’) technology was successfully implemented in Ravva block to enhance gas
lift performance and contribute to production enhancement. – Technology applied in Well RF-1 in year FY
2022.
To improve slickline intervention in deviated wells, U-line Roller Bogies were implemented successfully
which helped in smooth conveyance of slickline tool string to higher angle depths – Well RD-06 in Year
FY 2022.
IRON ORE BUSINESS
VAB:
• Replacing old motors with super premium efficiency motors (IE4).
• Using variable frequency drive for speed control and hence increasing efficiency
• Changed Cooling tower shaft material from SS to composite fibre and hence enhanced efficiency.
Benefits derived as
a result of above
efforts e.g., product
improvement, cost
reduction, product
development, import
Substitution
In house development of Vedanta pot controller for 1 pot.
ALUMINIUM BUSINESS
Smelter Plant – 1&2:
i.
IRON ORE BUSINESS
VAB:
• Reduction in losses and hence increase efficiency.
• Power saving due to lower speed operation
•
Less failure and reduced power consumption.
Increase in station availability and PLF by 17%.
POWER BUSINESS
2400MW Jharsuguda
• Power cost reduction by 216 $/ton (for 1215 MW + 1800 MW).
•
1215MW Jharsuguda:
• Power cost reduction by 216 $/ton (for 1215 MW + 1800 MW)
• Reduction in forced outage time by 0.9%.
•
Increase in station PLF by 1%. (FY 2022 - 88%)
In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year), the following
information may be furnished:
Year of import
Has technology been fully absorbed
Oil & Gas Business
Technology imported
Ravva Operations
• P2 Explorer (2021)
•
Digital initiatives in application of python & ML in petrophysical
evaluations and log predictions (2019)
• Rock physics, AVO, Fluid factor: 2016 onwards
• Digitalization Dashboard: FY 2021
• U-line Roller Bogies: FY 2022
• GDG: FY 2022
No
Hydraulic compacting station in MCD
Battery-1 and Battery-2
Pulverized coal injection in Blast
furnace 1& 2.
No
No
2018-19 [MCD]
2017 [PID-1]
Copper Division
Iron Ore - Value
Addition Business
Power Business
Aluminium Business
Yes
In progress
Yes
Yes
Yes
Yes
Yes
221
Integrated Report and Annual Accounts 2021-22 5
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Vedanta Limited
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B
Integrated Report and Annual Accounts 2021-22
Annexure B
Annual Report on Corporate Social Responsibility Activities for FY 2022
1
Brief Outline on CSR Policy of the Company
A. POLICY OBJECTIVE
Vedanta Limited (‘VEDL’ or ‘the Company’) is
committed to conduct its business in a socially
responsible, ethical and environment friendly manner
and to continuously work towards improving quality of
life of the communities in and around its operational
areas. This Policy provides guidance in achieving
the above objective and ensures that the Company
operates on a consistent and compliant basis.
B. VEDL CSR PHILOSOPHY
multiplier for complementing efforts, resources and
for building sustainable solutions;
• our employees have the potential to contribute
not just to our business, but also towards building
strong communities.
C. THEMATIC FOCUS AREAS
Our programs focus on poverty alleviation programs,
especially integrated development, which impacts the
overall socio-economic growth and empowerment
of people, in line with the national and international
development agendas. The major thrust areas will be –
We at Vedanta Limited have a well‑established history
and commitment to reinvest in the social good of our
neighbourhood communities and nation.
CSR VISION
Empowering communities, transforming lives and
facilitating nation building through sustainable and
inclusive growth.
We believe, that
• we can positively impact and contribute to the
realization of integrated and inclusive development
of the country, in partnership with National and
State Government as well as local, national and
international partners;
• sustainable development of our businesses is
dependent on sustainable, long lasting and mutually
beneficial relationships with our stakeholders,
especially the communities we work with;
• partnerships with government, corporates and civil
societies/community institutions, offer a strong
a) Children’s Well‑being & Education
b) Women’s Empowerment
c) Health Care
d) Drinking Water & Sanitation
e) Sustainable Agriculture & Animal Welfare
f) Market linked Skilling the Youth
g) Environment Protection & Restoration
h) Sports & Culture
i) Development of Community Infrastructure
j)
Participate in programs of national importance
including but not limited to disaster mitigation,
rescue, relief and rehabilitation
The CSR activities are aligned to the specified
activities in Schedule VII of the Companies Act.
The above may be modified from time to time, as
per recommendations of the CSR Committee of
the Company.
2 Composition of CSR Committee
Sl.
No.
1
2
3
4
5
Name of Director
Designation/Nature of Directorship
Akhilesh Joshi*
Priya Agarwal
UK Sinha
Padmini Sekhsaria
Mahendra Kumar Sharma**
Chairperson, Independent Director
Member, Non-Executive Director
Member, Independent Director
Member, Independent Director
Member, Independent Director
Number of meetings of
CSR Committee held
during the year
Number of meetings of
CSR Committee attended
during the year
2
2
2
2
2
1
2
2
2
1
*Mr. Akhilesh Joshi has been appointed as the Chairperson of the CSR Committee with effect from 21 October 2021.
**Mr. Mahendra Kumar Sharma ceased to be the member of the CSR Committee with effect from close of business hours on 01 October 2021
pursuant to his resignation.
224
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
3
4
5
Provide the web-link where Composition of CSR Committee, CSR Policy and CSR Projects approved
by the board are disclosed on the website of the Company
www.vedantalimited.com
Provide the details of Impact assessment of CSR projects carried out in pursuance of sub-rule (3) of
rule 8 of the Companies (Corporate Social responsibility Policy) Rules, 2014, if applicable (attach the
report)
No projects due for impact assessment study in the reporting year
Details of the amount available for set off in pursuance of sub-rule (3) of rule 7 of the Companies
(Corporate Social Responsibility Policy) Rules, 2014 and amount required for set off for the financial
year, if any
S.
No.
1
2
3
Financial Year
2020-21
2019-20
2018-19
Total
2% Spend
requirement
(` Cr.) [A]
Actual
(` Cr.) [B]
Amount available
for set-off
(` Cr.) [B-A]
16.62
13.00
13.00
38.86
52.66
51.72
22.24
39.66
38.72
100.62
6 Average Net Profit of the Company as per Section 135(5)
(a) Two percent of average net profit of the company as per section 135(5): `37.50 cr
(b) Surplus arising out of the CSR projects or programmes or activities of the previous financial years.: ‑ 0
(c) Amount required to be set off for the financial year, if any: ‑ 0
(d) Total CSR obligation for the financial year (7a+7b‑7c): `37.50 cr
7
(a) CSR amount spent or unspent for the financial year
Total Amount Spent for the
Financial Year. (in ` Cr)
Total Amount transferred to Unspent
CSR Account as per section 135(6).
Amount transferred to any fund specified under Schedule VII
as per second proviso to section 135(5).
138.12
-
NA
NA
NA
NA
Amount
Date of Transfer
Name of the Fund
Amount
Date of Transfer
Amount Unspent (in ` Cr)
(b) Details of CSR amount spent against ongoing projects for the financial year:
(c) Details of CSR amount spent against other than ongoing projects for the financial year:
(d) Amount spent in Administrative Overheads (` Cr)
(e) Amount spent on Impact Assessment, if applicable (` Cr)
(f)
(g)
Sl.
No
(i)
(ii)
Total amount spent for the Financial Year (8b+8c+8d+8e) (` Cr)
Excess amount for set off, if any (` Cr)
Particular
Two percent of average net profit of the company as per section 135(5)
Total amount spent for the Financial Year
(iii) Excess amount spent for the financial year [(ii)-(i)]
(iv) Surplus arising out of the CSR projects or programmes or activities of the previous financial years, if any
(v)
Amount available for set off in succeeding financial years [(iii)-(iv)]
23.19
108.16
6.78
0.00
138.12
100.62
Amount (in ` Cr)
37.50
138.12
100.62
0.00
100.62
225
Integrated Report and Annual Accounts 2021-22
On a consolidated basis, the detailed CSR spent for FY 2022 is provided below.
Particular
Vedanta Limited (Standalone) (A)
Vedanta Subsidiaries (India) (B)
Talwandi Sabo Power Limited (TSPL)
Hindustan Zinc Limited (HZL)
Bharat Aluminium Company Limited (BALCO)
Sesa Resources Limited (SRL)
Sesa Mining Corporation Limited (SMCL)
ESL Steel Limited (ESL)
Ferro Alloys Corporation Limited (FACOR)
Vizag General Cargo Berth Private Limited (VGCB)
Total (B)
Vedanta Subsidiaries (Global) (C)
Zinc International (ZI)
Total (C)
Total CSR Spent
8
9
(a) Details of Unspent CSR amount for the preceding three financial years:
(b) Details of CSR amount spent in the financial year for ongoing projects of the preceding
financial year(s):
In case of creation or acquisition of capital asset, furnish the details relating to the
asset so created or acquired through CSR spent in the financial year (asset-wise
details)
(a) Date of creation or acquisition of the capital asset(s).
(b) Amount of CSR spent for creation or acquisition of capital asset.
(c) Details of the entity or public authority or beneficiary under whose name such capital asset is
registered, their address etc.
(d) Provide details of the capital asset(s) created or acquired (including complete address and
location of the capital asset).
10 Specify the reason(s), if the Company has failed to spend two per cent of the
average net profit as per section 135(5)
Sd/-
Sunil Duggal
Whole-time Director and Chief Executive Officer
Sd/-
Akhilesh Joshi
Non-Executive Independent Director
(Chairman - CSR Committee)
Spend FY 2022
(in ` Cr)
138.12
1.91
190.92
39.95
2.26
0.09
11.90
1.02
0.22
248.27
13.18
13.18
399.57
Nil
21.41
Nil
Nil
NA
NA
NA
226
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
9
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230
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Report on CSR Activities - Table 8(c)
1
2
3
4
5
6
7
8
Sl.
No.
Name of the
Project.
Item from the list
of activities in
schedule VII to
the Act.
Local
area
(Yes/No).
Location of the project.
State.
District.
Amount spent
for the project
(in `).
Mode of
implementation -
Direct (Yes/No).
Mode of implementation - Through
implementing agency.
Name
CSR Registration
number.
1
COVID-19 Relief
Yes
Rajasthan,
Gujarat, Assam
and Andhra
Pradesh
(i) promoting
health care
including
preventinve health
care
(xii) disaster
management,
including relief,
OIL & GAS
Barmer & Jalore
- RJ
Viramgam, Patan,
Banskantha,
Rajkot, Dwarka,
Jamnagar,
Randhanpur,
Surendarnagar
- GJ
East Godavari -
Andhra Pradesh
Jorath - Assam
146,841,680.00
Yes
NA
NA
Sports Promotion
- Awareness and
CPCHM '22
(vii) Promoting
sports and
paralympic sports
Yes
Rajasthan
Barmer, Jaipur
2,292,150.00
No
Dhara Sansthan
CSR00001421
Ambulance - CMHO (i) Eradicating
Yes
Rajasthan
Barmer
65,659.00
Yes
-
2
3
4
5
6
7
8
9
Micro level
Interventions
Micro level
Interventions
Micro level
Interventions
O&M of Old 92 RO
Plants
Chittar ka Par
School
eKaksha
10
CEC-Infra Work
11
12
13
14
DESK BEG
Scholarship project
School Solar Project
Project Divyang
hunger, poverty
and malnutrition,
promoting health
care
(x) rural
development
projects
(x) rural
development
projects
(x) rural
development
projects
(i) making
available safe
drinking water
(ii) promoting
education
(ii) promoting
education
(ii) employment
enhancing
vocational skills;
(ii) promoting
education
(ii) promoting
education
(ii) promoting
education
(vii) Promoting
sports
Yes
Assam
Jorhat, Golaghat,
Tinsukia
750,000.00
Yes
Gujarat
Barmer, Jalore,
Banas, Viramgam
1,400,000.00
Yes
Suvali, GJ
989,200.00
Surendranagar,
Rajkot, Patan,
Jamnagar,
Banas Kantha,
Ahmedabad
Yes
Rajasthan
Barmer & Jalore
16,039,845.00
Yes
Yes
Yes
Yes
Yes
Yes
No
Rajasthan
Barmer
2,749,000.00
Rajasthan
All Rajasthan
-5,476,168.00
Rajasthan
Barmer
226,003.00
Rajasthan
Barmer
-209,090.00
Rajasthan
Barmer
600,000.00
Rajasthan
Barmer
-150,000.00
Pan India
Pan India
-32,000.00
No
No
No
No
No
No
Yes
No
Yes
No
No
Oil & Gas
SUB TOTAL A
166,086,279.00
-
-
CSR00001914
SESTA
Navarachana
Mahila Vikas
Trust
CEDRA
CSR00003663
RDO
CSR00001586
Charbhuja Filling
Station
Bodh
Charbhuja Filling
Station
Power2SME
-
Electra
PCI
-
-
-
-
-
-
-
231
Integrated Report and Annual Accounts 2021-22 1
2
3
4
5
6
7
8
Sl.
No.
Name of the
Project.
Item from the list
of activities in
schedule VII to
the Act.
Local
area
(Yes/No).
Location of the project.
State.
District.
Amount spent
for the project
(in `).
Mode of
implementation -
Direct (Yes/No).
Mode of implementation - Through
implementing agency.
Name
CSR Registration
number.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Social Education
for Women's
Awareness
CSR00006927
15
COVID-19 relief
16
17
18
19
20
21
Agriculture
Development
Ambulance
support to Local
Administration
Support to
Education
Rural infra projects
Educational
Infrastructure
Sanitation units
22
Drinking water
Supply
23
Health camps
Local Sports
& Culture
development
Yes
Goa,
Karnataka,
Maharashtra
IRON ORE
North Goa,
South Goa,
Chitradurga,
Dharwad
Sindhudurg
211,469,067.72
Yes
Yes
Goa
South Goa
187,446.50
Yes
Yes
Goa
North Goa &
Sindhudurga
2,454,878.37
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Goa,
Karnataka
Goa,
Karnataka
North Goa, South
Goa, Karnataka
North Goa, South
Goa, Karnataka
1,494,573.74
4,230,927.53
Goa,
Karnataka
North Goa ,
Chitradurga
2,542,128.93
Goa
North Goa
1,601,302.00
Goa,
Karnataka
North Goa,
Chitradurga
3,897,715.70
Goa,
Karnataka
North Goa,
Chitradurga
185,971.58
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Goa
North Goa
104,245.82
Yes
(i) promoting
health care
including
preventive health
care
(iv) ensuring
environmental
sustainability,
animal welfare,
(i) promoting
health care
including
preventive health
care
(ii) promoting
education
(x) rural
development
projects
(ii) promoting
education
(i) promoting
health care
including
preventinve
health care and
sanitation
(i) making
available safe
drinking water
(i) promoting
health care
including
preventinve health
care
(vii) Promoting
sports
(v) protection of
national heritage,
art and culture
Iron Ore
SUB TOTAL B
228,168,257.89
Social Infrastructure
Projects
Disaster Relief -
Covid-19 response
Educational
Initiatives
Supporting Sports
Aluminium -
Jharsuguda
(x) rural
development
projects
(xii) disaster
management,
including relief
(ii) promoting
education
(vii) training to
promote rural
sports
SUB TOTAL C
ALUMINIUM - JHARSUGUDA
Yes
Odisha
Jharsuguda
5,280,466.39
Yes
Odisha
Jharsuguda
135,734,868.00
Yes
Yes
Odisha
Jharsuguda
22,808,975.47
Odisha
Jharsuguda
396,571.00
Yes
Yes
Yes
No
164,220,880.86
24
25
26
27
28
232
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
1
2
3
4
5
6
7
8
Sl.
No.
Name of the
Project.
Item from the list
of activities in
schedule VII to
the Act.
Local
area
(Yes/No).
Location of the project.
State.
District.
Amount spent
for the project
(in `).
Mode of
implementation -
Direct (Yes/No).
(i), (ii), (iii), & (x)
Yes
Odisha
Kalahandi
2,465,272.00
ALUMINIUM - LANJIGARH
Yes
Odisha
Kalahandi
199,000.00
Mode of implementation - Through
implementing agency.
Name
CSR Registration
number.
Janasahajya
CSR00001642
Janasahajya
CSR00001642
No
No
Yes
Odisha
Dhenkanal
1,752,175.00
Yes
-
-
29
Aspirational District
Program (NITI
Aayog)
30
Clean Energy
31
Plantation
32
COVID-19 relief
Ambulance
Services
Community
Infrastructure
Scholarship
Mo School
Water supply
(iv) ensuring
environmental
sustainability
(iv) ensuring
environmental
sustainability
(i) promoting
health care
(xii) Disaster
management
(i) promoting
health care
(x)rural
development
projects
(ii) promoting
education
(ii) promoting
education
(i) promoting
health care
Skill development
Centre
(ii) promoting
education
Aluminium -
Lanjigarh
SUB TOTAL D
Community & Infra
Development
(x) rural
development
Skilling Initiative
(ii) promoting
education,
including
employment
enhancing
vocation skills
Community Relief
Support
(xii) Disaster
management
COVID relief
Livelihood Initiative
Copper
(i) promoting
health care
(ii) livelihood
enhancement
projects.
SUB TOTAL E
33
34
35
36
37
38
39
40
41
42
43
Yes
Odisha
Kalahandi
99,739,685.42
No
Yes
Odisha
Kalahandi
948,254.81
Yes
Odisha
Kalahandi
764,009.00
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Odisha
Kalahandi
157,525.00
Odisha
Kalahandi
6,000,000.00
Odisha
Kalahandi
18,750.00
Odisha
Kalahandi
300,000.00
112,344,671.23
COPPER
Tamilnadu
Thoothukudi
1,461,100.00
Tamilnadu
Thoothukudi
14,439,583.00
Tamilnadu
Thoothukudi
1,250,000.00
Tamilnadu
Thoothukudi
263,973,419.00
Tamilnadu
Thoothukudi
19,346,077.00
300,470,179.00
CORPORATE
No
Yes
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Yes
44
Covid relief
(xii) Disaster
management
No
Delhi,
Maharashtra
Gurgaon, Mumbai
110,300,000.00
Yes
Corporate
SUB TOTAL F
TOTAL (A+B+C+D+E+F)
110,300,000.00
1,081,590,267.98
Punaruthan
Voluntary
Organisation
Punaruthan
Voluntary
Organisation
CSR00000650
CSR00000650
-
-
-
-
-
-
Vedanta
Foundation
CSR00001617
-
-
-
-
-
-
-
-
-
-
-
-
233
Integrated Report and Annual Accounts 2021-22 Report on CSR Activities - Table 9(b)
(b) Details of CSR amount spent in the Financial Year for ongoing projects of the preceding Financial
Year(s):
1
2
3
4
5
6
7
8
9
Sl.
No
Project ID.
Name of the Project.
Financial
Year in
which the
project was
commenced.
Project
duration.
(In months)
Total amount
allocated for
the project
(in `).
Amount
spent on the
project in
the reporting
Financial Year
(in `).
Cumulative
amount spent
at the end
of reporting
Financial Year.
(in `)
Status of
the project -
Completed /
Ongoing.
OIL & GAS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
FY31.03.2021_1
Barmer Unnati
FY31.03.2021_2
Dairy Development and Animal
Husbandry
FY31.03.2021_3
Nand Ghar
FY31.03.2021_4
Aanganwadi - Gujarat
FY31.03.2021_5
FY31.03.2021_7
FY31.03.2021_8
FY31.03.2021_9
Ujjwal in Gujarat and Baytu
English Medium School
Barmer Smart and Green City
Development
Micro level Interventions - RJ
and Gujarat
Micro level Interventions -
Suvali (GJ)
FY31.03.2021_10 Micro level Interventions -
Assam
FY31.03.2021_12 O&M of Old 32 RO Plants
FY31.03.2021_13 O&M of Old 92 RO Plants
FY31.03.2021_14
Ravaa RO Plant
FY31.03.2021_15
Specialist Doctor - District
Hospital, Barmer and Hospital
Sanitation -Clean Barmer
Green Barmer
FY31.03.2021_16,
17, 18
Mobile Health Van
FY31.03.2021_19
Community Helpdesk
FY31.03.2021_20
Skill Training Programs in CEC
Barmer
17
FY31.03.2021_22
Skill Training Programs in
CCOE Barmer
FY 2018
FY 2019
FY 2019
FY 2019
FY 2019
FY 2019
FY 2019
FY 2019
FY 2020
FY 2018
FY 2020
FY 2021
FY 2018
FY 2018
FY 2019
FY 2016
FY 2018
18
FY31.03.2021_23
Support ot Para athletes
FY 2019
48
36
36
36
48
48
24
24
24
48
24
12
48
48
48
36
48
48
43,299,000.00
4,621,687.00
11,161,687.00
Completed
16,706,667.00
419,134.00
6,959,134.00
Completed
28,700,000.00
4,735,156.00
11,275,156.00
Ongoing
15,964,750.00
-5,551,325.00
988,675.00
Completed
33,564,000.00
8,113,736.00
14,653,736.00
Completed
4,884,000.00
802,628.40
7,342,628.40
Completed
6,300,000.00
1,400,000.00
7,940,000.00
Ongoing
1,800,000.00
989,200.00
7,529,200.00
Ongoing
6,000,000.00
750,000.00
7,290,000.00
Ongoing
35,985,000.00
3,005,718.00
9,545,718.00
Completed
25,860,000.00
16,039,845.00
22,579,845.00
Completed
350,000.00
-
6,540,000.00
Completed
82,074,000.00
22,696,385.00
29,236,385.00
Ongoing
68,173,333.00
14,401,317.00
20,941,317.00
Ongoing
4,617,000.00
1,047,094.00
7,587,094.00
Completed
50,800,000.00
9,806,561.00
16,346,561.00
Completed
23,564,000.00
2,090,220.66
8,630,220.66
Completed
7,600,000.00
-32,000.00
6,508,000.00
Completed
Oil & Gas
Total A
456,241,750.00
85,335,357.06
203,055,357.06
19
FY31.03.2021_30
Alternative Livelihood
Opportunities Project
20
FY31.03.2021_31
Community Medical center &
Mobile health unit
FY 2021
FY 2021
IRON ORE
48
48
14,500,000.00
4,063,826.50
11,530,826.50
Ongoing
7,300,000.00
3,483,888.75
7,339,835.75
Ongoing
Iron Ore
Total B
21,800,000.00
7,547,715.25
18,870,662.25
234
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
1
2
3
4
5
6
7
8
9
Sl.
No
Project ID.
Name of the Project.
Financial
Year in
which the
project was
commenced.
Project
duration.
(In months)
Total amount
allocated for
the project
(in `).
ALUMINIUM - JHARSUGUDA
Amount
spent on the
project in
the reporting
Financial Year
(in `).
Cumulative
amount spent
at the end
of reporting
Financial Year.
(in `)
Status of
the project -
Completed /
Ongoing.
21
FY31.03.2021_32 Mobile Health Unit and Health/
FY 2021
Awareness camps
FY31.03.2021_33
Village cleanliness initiatives
22
23
FY31.03.2021_34
24
FY31.03.2021_36
Vedanta DAV Scholarship
Program
Vedanta Computer Literacy
Program
25
26
FY31.03.2021_37
Vedanta Mini-Science Centre
FY 2021
FY31.03.2021_38 Women Empowerment:
FY 2021
27
FY31.03.2021_39
Subhalaxmi Co-op, Capacity
Buidling, Micro Enterprises
Farm Activity: Project Jeevika
Samridhhi & other initiative
28
29
30
31
32
33
34
35
36
37
38
39
40
FY31.03.2021_41
Plantation & Maintenance
NA
NA
Aluminium -
Jharsuguda
Water & sanitation activities
Nand Ghar
Total C
FY31.03.2021_42
Vedanta Hospital
FY31.03.2021_43 Maa Santoshi Jankalyan
Foundation Hospital
FY31.03.2021_44
Child Care Center
FY31.03.2021_45 Women Empowerment
FY31.03.2021_46
Farm & Non-farm Based
Livelihood
Aluminium -
Lanjigarh
Total D
FY31.03.2021_24
Tamira Surabhi
FY31.03.2021_25
Pasumai Thoothukudi
FY31.03.2021_26
Scholarship
FY31.03.2021_27 Health camps
FY31.03.2021_28 Woman Resource Centre
Copper
Total E
Total (A+B+C+D+E)
FY 2021
FY 2021
FY 2021
FY 2021
FY 2021
FY 2021
FY 2021
48
48
48
48
48
48
48
48
48
48
6,317,000.00
3,279,106.17
6,677,783.52
Ongoing
8,197,000.00
4,710,298.16
7,204,098.16
12,000,000.00
4,008,808.14
8,591,216.38
Ongoing
Ongoing
910,000.00
37,764.80
606,313.80
Ongoing
472,000.00
70,397.30
111,494.22
1,180,000.00
120,578.43
365,749.20
Ongoing
Ongoing
4,280,000.00
2,534,532.82
4,299,688.27
Ongoing
4,200,000.00
1,342,602.00
2,920,551.72
6,400,000.00
6,919,466.00
6,919,466.00
4,000,000.00
3,647,000.00
3,647,000.00
Ongoing
Ongoing
Ongoing
47,956,000.00
26,670,553.82
41,343,361.27
ALUMINIUM - LANJIGARH
FY 2021
FY 2021
FY 2021
FY 2021
FY 2021
FY 2019
FY 2019
FY 2019
FY 2019
FY 2019
36
36
36
36
36
COPPER
48
48
48
48
48
33,600,000.00
33,975,680.94
65,406,680.94
1,500,000.00
1,477,646.00
2,688,703.00
3,100,000.00
2,769,065.02
5,925,574.87
2,300,000.00
2,285,506.00
4,209,900.00
1,700,000.00
1,445,514.00
1,984,514.00
42,200,000.00
41,953,411.96
80,215,372.81
32,629,000.00
7,947,000.00
24,862,367.00
85,519,263.00
7,332,000.00
87,856,263.00
39,712,000.00
31,024,000.00
75,269,215.00
19,981,400.00
1,896,000.00
7,858,846.00
45,546,752.00
4,372,000.00
11,084,300.00
223,388,415.00
52,571,000.00 206,930,991.00
791,586,165.00
214,078,038.09
550,415,744.39
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
Ongoing
235
Integrated Report and Annual Accounts 2021-22 Annexure C
Disclosure in Board’s report as per provisions of Section 197 of the Companies Act, 2013 read with
Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2019
Sr.
No.
1
2
3
4
5
Requirement
Ratio of the remuneration of each director to the
median remuneration of the employees of the
company for the financial year
Ratio of the Fee for attending board/committee
Meetings & Commission of each director to the
median remuneration of the employees of the
company for the financial year
Percentage increase in remuneration of each
director, Chief Financial Officer,Chief Executive
Officer, Company Secretary or Manager, if any, in the
financial year
Name of the Director
Category
Disclosure
Navin Agarwal(1)
Sunil Duggal
GR Arun Kumar(2)
Executive Vice-Chairman
Whole-time Director &
Chief Executive Officer
Whole-Time Director &
Chief Financial Officer
Anil Agarwal
Non Executive Chairman
UK Sinha
DD Jalan
Akhilesh Joshi
Padmini Sekhsaria
MK Sharma(3)
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Priya Agarwal
Non Executive Director
Name
Category
Navin Agarwal
Sunil Duggal
GR Arun Kumar
Ajay Goel
Prerna Halwasiya
Executive Vice-Chairman
Whole-time Director &
Chief Executive Officer
Whole-Time Director &
Chief Financial Officer
Acting Chief Financial
Officer
Company Secretary &
Compliance Officer
Ratio
242.64
136.01
28.13
1.62
13.07
12.57
9.38
11.21
6.08
14.07
Increment
Percentage
5%
5%
NIL
NIL
17%
Percentage increase in the median remuneration of
employees in the financial year
The median remuneration of the employees in the financial year was
increased by 11.43%
Number of permanent employees on the rolls of
company
Average percentile increase already made
in the salaries of employees other than the
managerial personnel in the last financial year
and its comparison with the percentile increase
in the managerial remuneration and justification
thereof and point out if there are any exceptional
circumstances for increase in the managerial
remuneration
There were 8,129 employees of Vedanta Limited as on 31 March, 2022
Average increment in FY 2022 for Managerial Personnel (M4 and Above):
9.25%
Average Increment in FY 2022 for non Managerial Personnel (M5 and
Below): 10.55%
No exceptional increase given in the managerial remuneration.
6
Affirmation that the remuneration is as per the
remuneration policy of the Company
Yes
Notes:
For Mr. Navin Agarwal, the ratio inclusive of remuneration received from Vedanta Resources Limited, UK, the Holding
Company, is 283.74.
Mr. GR Arun Kumar ceased to be Whole‑time Director and Chief Financial Officer of the Company effective close of
business hours on 24 April 2021.
Mr. MK Sharma ceased to be Independent Director with effect from close of business hours on 01 October 2021
pursuant to his resignation.
1.
2.
3.
236
Vedanta Limited Annexure D
Form No. MR-3
Secretarial Audit Report
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022
[Pursuant to Section 204(1) of the Companies Act, 2013
and Rule No. 9 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014]
To,
The Members,
Vedanta Limited
We have conducted the secretarial audit of the compliance
of applicable statutory provisions and the adherence to
good corporate practices by Vedanta Limited (hereinafter
called “the Company”) for the financial year ended 31
March 2022 (“Audit Period”). The secretarial audit was
conducted in a manner that provided us a reasonable basis
for evaluating the corporate conduct/statutory compliances
and expressing our opinion thereon.
Based on our verification of the Company’s books, papers,
minute books, forms and returns filed and other records
maintained by the Company and also the information
provided by the Company, its officers, agents and
authorized representatives during the conduct of secretarial
audit, we hereby report that in our opinion, the Company
has, during the Audit Period, complied with the statutory
provisions listed hereunder and also that the Company
has proper Board-processes and compliance-mechanism
in place.
We have examined the books, papers, minutes, forms
and returns filed and other records maintained by the
Company for the Audit Period, according to the provisions
of applicable law provided hereunder:
The Companies Act, 2013 (‘the Act’) and the rules
made thereunder including any re-enactment thereof;
The Securities Contracts (Regulation) Act, 1956 and
the rules made thereunder;
Integrated Report
Statutory Reports
Financial Statements
a)
b)
c)
d)
e)
f)
g)
h)
Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements)
Regulations, 2015 (“Listing Regulations”);
The Securities and Exchange Board of India
(Issue and Listing of Non‑ Convertible Securities)
Regulations, 2021;
The Securities and Exchange Board of India
(Debenture Trustee) Regulations, 1993;
The Securities and Exchange Board of India
(Prohibition of Insider Trading) Regulations, 2015;
The Securities and Exchange Board of India
(Substantial Acquisition of Shares and Takeovers)
Regulations, 2011;
The Securities and Exchange Board of India
(Share Based Employee Benefits) Regulations,
2014 (till 12 August 2021);
The Securities and Exchange Board of India
(Share Based Employee Benefits and Sweat
Equity) Regulations, 2021 (w.e.f. 13 August 2021)
The Securities and Exchange Board of India
(Registrars to an Issue and Share Transfer
Agents) Regulations, 1993 regarding the
Companies Act and dealing with client to the
extent of securities issued;
6.
Specific laws applicable to the industry to which the
Company belongs, as identified and compliance
whereof as confirmed by the management:
a)
b)
c)
The Mines and Minerals (Development and
Regulation) Act, 2015 and the rules and
regulations made thereunder;
Indian Boilers Act, 1923 and rules and regulations
made thereunder;
Manufacture, Storage, and Import of Hazardous
Chemical Rule, 1989.
The Depositories Act, 1996 and the regulations and
bye‑laws framed thereunder to the extent of Regulation
76 of Securities and Exchange Board of India
(Depositories and Participants) Regulations, 2018;
We have also examined compliance with the applicable
clauses of the Secretarial Standards for Board Meetings
(SS-1) and for General Meetings (SS-2) issued by the
Institute of Company Secretaries of India.
Foreign Exchange Management Act, 1999 and the
rules and regulations made thereunder to the extent of
Foreign Direct Investment, Overseas Direct Investment
and External Commercial Borrowings;
The following Regulations and Guidelines prescribed
under the Securities and Exchange Board of India
Act, 1992:
We report that during the Audit Period, the Company has
complied with the provisions of the Act, rules, standards etc.
mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted
with a proper balance of Executive Directors, Non‑Executive
Directors and Independent Directors. The changes in the
composition of the Board of Directors that took place during
237
1.
2.
3.
4.
5.
Integrated Report and Annual Accounts 2021-22
Delisting of American Depository Receipts (ADRs)
from New York Stock Exchange (NYSE) effective from
close of trading on NYSE on 08 November 2021;
Acquisition of Desai Cement Company Private
Limited by Sesa Mining Corporation Limited
(SMCL), an indirect wholly owned subsidiary of the
Company, making DCCPL a step down subsidiary of
the Company;
Issuance of secured, rated, non-cumulative,
redeemable 10000 Non‑Convertible Debentures at a
face value of `10,00,000 each aggregating to `1000
Crores, on private placement basis;
5. Declaration of interim dividend as under:
iii.
iv.
v.
First interim dividend at the Board Meeting held
on 01 September 2021 of `18.50 per equity share;
Second interim dividend through resolution
passed by circulation passed on 11 December
2021 of `13.50 per equity share;
Third interim dividend through resolution passed
by circulation passed on 02 March 2022 of `13
per equity share;
The Board has at its meeting held on 25 March 2022,
accorded approval for equity investment of `250
Crore in the capital of a SPV. Such investment is in
the form of 26% equity stake through ordinary equity
and quasi equity instruments for procurement of
renewable power;
7.
Further acquisition of 10.07% shares of the Company
by Vedanta Resources Limited, holding company,
along with its Persons Acting in Concerts (PACs) by
way of making a voluntary open offer in the month of
April, 2021.
For M/s Vinod Kothari & Company
Practicing Company Secretaries
Unique Code: P1996WB042300
Sd/-
Nitu Poddar
Partner
Membership No.: A37398
CP No.:15113
UDIN: A037398D000178649
Peer Review Certificate No.: 781/2020
Place: New Delhi
Date: 21 April 2022
The report is to be read with our letter of even date which
is annexed as Annexure ‘I’ and forms an integral part of
this report.
the Audit Period, were carried out in compliance with the
provisions of the Act and other applicable laws.
Adequate notice is given to all directors to schedule the
Board Meetings and Committee meetings and agenda with
detailed notes were sent at least seven days in advance
except for a few meetings which were held at shorter
notice in due compliance with the Act and applicable laws.
Further, a system exists for seeking and obtaining further
information and clarifications on the agenda items before
the meeting and for meaningful participation at the meeting.
2.
3.
4.
All the decisions were unanimous and there was no
instance of dissent in Board or Committee Meetings.
We further report that there are adequate systems and
processes in the Company, which commensurate with its
size and operations to monitor and ensure compliance with
applicable laws, rules, regulations and guidelines.
We further report that during the Audit Period, the Company
has undertaken the below mentioned specific event/
action that can have a major bearing on the Company’s
compliance responsibility in pursuance of the above
referred laws, rules, standards, etc:
1.
The Board of Directors, at its meeting dated 26 July
2021, approved the:
6.
i.
ii.
Purchase of 26% shareholding in Facor Power
Limited (FPL), subsidiary of Ferro Alloys
Corporation Limited (FACOR), which will further
be amalgamated with FACOR. Upon sanction
the scheme of amalgamation, FACOR would
be the only resultant entity. Application for
amalgamation is under process before the
National Company Law Tribunal, Cuttack Bench;
Selling the shareholding in Sterlite Ports Limited
(SPL) and Paradip Multi Cargo Berth Private
Limited (PMCB) to Sesa Resources Limited (SRL),
a wholly‑owned subsidiary of the Company
and further amalgamate SPL, PMCB, Maritime
Ventures Private Ltd (MVPL) and Goa Sea Port
Private Limited (GSPPL) with Sesa Mining
Corporation Limited (SMCL) which is a step down
subsidiary of the Company.
The selling of the aforesaid shareholding was
completed on 30 August 2021. Scheme for
amalgamation is under process before National
Company Law Tribunal, Tamil Nadu and Bombay (Goa
Bench);
238
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Annexure I
Auditor and Management Responsibility
ANNEXURE TO SECRETARIAL AUDIT REPORT
To,
The Members,
Vedanta Limited
Our Secretarial Audit Report of even date is to be read along with this letter.
1.
2.
3.
4.
5.
6.
7.
8.
9.
Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to
express an opinion on these secretarial records based on our audit. The list of documents for the purpose, as seen by
us, is listed in Annexure II;
We have followed the audit practices and the processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the secretarial records. The verification was done on a test basis to ensure that
correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a
reasonable basis for our opinion;
Our Audit examination is restricted only upto legal compliances of the applicable laws to be done by the Company, we
have not checked the practical aspects relating to the same;
Wherever our Audit has required our examination of books and records maintained by the Company, we have relied
upon electronic versions of such books and records, as provided to us through online communication. Given the
challenges and limitations posed by Covid‑19, lockdown restrictions (wherever applicable), as well as considering
the effectiveness of information technology tools in the audit processes, we have conducted online verification and
examination of records, as facilitated by the Company, for the purpose of issuing this Report. In doing so, we have
followed the guidance as issued by the Institute. We have conducted online verification & examination of records, as
facilitated by the Company;
We have not verified the correctness and appropriateness of financial records and books of accounts of the Company
as well as correctness of the values and figures reported in various disclosures and returns as required to be
submitted by the Company under the specified laws, though we have relied to a certain extent on the information
furnished in such returns;
Wherever required, we have obtained the management representation about the compliance of laws, rules and
regulation and happening of events etc;
The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the
responsibility of the management. Our examination was limited to the verification of procedure on test basis.
Due to the inherent limitations of an audit including internal, financial, and operating controls, there is an unavoidable
risk that some misstatements or material non-compliances may not be detected, even though the audit is properly planned
and performed in accordance with audit practices;
The contents of this Report has to be read in conjunction with and not in isolation of the observations, if any, in the
report(s) furnished/to be furnished by any other auditor(s)/agencies/authorities with respect to the Company;
10.
The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
239
Integrated Report and Annual Accounts 2021-22 Annexure II
List of Documents
1.
Scanned minutes for the meetings of the following held during the Audit Period:
a.
Board of Directors;
b. Audit & Risk Management Committee;
c. Nomination and Remuneration Committee;
d. Corporate Social Responsibility Committee;
e. Committee of Directors;
f.
Annual General Meeting;
g.
ESG Committee;
2. Resolution by circulation passed during FY 2022;
3.
Proof of circulation of draft and signed minutes of the Board Committee meetings’ minutes;
4. Annual Report for FY 2021;
5.
6.
7.
8.
9.
Financial Statements and Auditor’s Report for FY 2021;
Directors disclosures under the Act and rules made thereunder;
Statutory Registers maintained under the Act;
Forms filed with the Registrar;
Policies framed under Act and the Listing Regulations.
240
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Annexure D
Form No. MR-3
Secretarial Audit Report - BALCO (material unlisted subsidiary)
FOR THE FINANCIAL YEAR ENDED 31 MARCH 2022
[Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014]
To,
The Members,
Bharat Aluminium Co. Ltd.
We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good
corporate practices by Bharat Aluminium Co. Ltd. (hereinafter called “the Company”) for the financial year ended 31 March
2022 [“Audit Period”] in terms of the engagement letter dated 14 September 2021. The secretarial audit was conducted in
a manner that provided us a reasonable basis for evaluating the corporate conduct/statutory compliances and expressing
our opinion thereon.
Based on our verification of the Company’s books, papers, minute books, forms and returns filed and other records
maintained by the Company and also the information provided by the Company, its officers, agents and authorized
representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the
Audit Period, complied with the statutory provisions listed hereunder and also that the Company has proper Board‑processes
and compliance-mechanism in place.
We have examined the books, papers, minutes, forms and returns filed and other records maintained by the Company for
the Audit Period, according to the provisions of applicable law provided hereunder:
1.
2.
3.
4.
The Companies Act, 2013 (‘the Act’) and the rules made thereunder including any re‑enactment thereof;
The Depositories Act, 1996 and the regulations and bye-laws framed thereunder;
Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of External
Commercial Borrowings;
Specific laws applicable to the industry to which the Company belongs, as identified and compliance whereof as
confirmed by the management, that is to say:
a)
b)
c)
The Mines Act, 1952 and Rules made thereunder.
The Mines and Minerals (Development and Regulation) Act, 1957, and the Rules made thereunder.
The Electricity Act, 2003 and rules and regulations made thereunder.
We have also examined compliance with the applicable clauses of the Secretarial Standards for Board Meetings (SS‑1) and
for General Meetings (SS‑2) issued by the Institute of Company Secretaries of India.
We report that during the Audit Period, the Company has complied with the provisions of the Act, rules, standards etc.
mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with a proper balance of Executive Directors, Non‑Executive
Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the
Audit Period, were carried out in compliance with the provisions of the Act and other applicable laws.
Adequate notice is given to all directors to schedule the Board Meetings and Committee meetings, agenda and detailed
notes on agenda were sent at least seven days in advance. Further, a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
All the decisions were unanimous and there was no instance of dissent in Board or Committee Meetings.
We further report that there are adequate systems and processes in the Company, which commensurate with its size and
operations to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
241
Integrated Report and Annual Accounts 2021-22
We further report that during the Audit Period, the Company has not undertaken any specific events/ actions that can have
a major bearing on the Company’s compliance responsibility in pursuance of the above referred laws, rules, standards, etc.
Equity investment of 26% in Special Purpose Vehicle (SPV):
During the period under review the Board has at its meeting held on 29 March 2022, accorded approval for equity
investment of `250 Crore in the capital of a SPV. Such investment is in the form of 26% equity stake through ordinary equity
and quasi equity instruments for procurement of renewable power.
Place: New Delhi
Date: 19 April 2022
For M/s Vinod Kothari & Company
Practicing Company Secretaries
Unique Code: P1996WB042300
Sd/-
Nitu Poddar
Partner
Membership No.: A37398
CP No.:15113
UDIN: A037398D000161346
Peer Review Certificate No.: 781/2020
The report is to be read with our letter of even date which is annexed as Annexure ‘I’ and forms an integral part of
this report
Annexure I
Auditor and Management Responsibility
ANNEXURE TO SECRETARIAL AUDIT REPORT
To,
The Members,
Bharat Aluminium Co. Ltd.
Our Secretarial Audit Report of even date is to be read along with this letter.
1.
2.
3.
4.
5.
6.
7.
Maintenance of secretarial records is the responsibility of the management of the Company. Our responsibility is to
express an opinion on these secretarial records based on our audit. The list of documents for the purpose, as seen by
us, is listed in Annexure II;
We have followed the audit practices and the processes as were appropriate to obtain reasonable assurance about
the correctness of the contents of the secretarial records. The verification was done on a test basis to ensure that
correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a
reasonable basis for our opinion;
Our Audit examination is restricted only upto legal compliances of the applicable laws to be done by the Company, we
have not checked the practical aspects relating to the same;
Wherever our Audit has required our examination of books and records maintained by the Company, we have relied
upon electronic versions of such books and records, as provided to us through online communication. We have
conducted online verification & examination of records, as facilitated by the Company;
We have not verified the correctness and appropriateness of financial records and books of accounts of the Company
as well as correctness of the values and figures reported in various disclosures and returns as required to be
submitted by the Company under the specified laws, though we have relied to a certain extent on the information
furnished in such returns;
Wherever required, we have obtained the management representation about the compliance of laws, rules and
regulation and happening of events etc;
The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the
responsibility of the management. Our examination was limited to the verification of procedure on test basis.
242
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
8.
9.
Due to the inherent limitations of an audit including internal, financial, and operating controls, there is an unavoidable
risk that some misstatements or material non-compliances may not be detected, even though the audit is properly
planned and performed in accordance with audit practices;
The contents of this Report has to be read in conjunction with and not in isolation of the observations, if any, in the
report(s) furnished/to be furnished by any other auditor(s)/agencies/authorities with respect to the Company;
10.
The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or
effectiveness with which the management has conducted the affairs of the Company.
Annexure II
List of Documents
1.
Scanned unbound minutes for the meetings of the following held during the Audit Period:
a.
Board of Directors;
b. Audit Committee;
c. Nomination and Remuneration Committee;
d. Corporate Social Responsibility Committee;
e.
Finance Standing Committee;
f.
Annual General Meeting;
2.
Proof of circulation of draft and signed minutes of the Board Committee meetings’ minutes on a sample basis;
3. Annual Report for FY 2021;
4.
5.
6.
7.
8.
9.
Memorandum of Association and Articles of Association of the Company;
Financial Statements and Auditor’s Report for FY 2021
Directors disclosures under the Act and rules made thereunder;
Statutory Registers maintained under the Act;
Forms filed with the Registrar;
Policies framed under Act, 2013 viz. CSR Policy, Remuneration Policy, and Whistle Blower Policy.
243
Integrated Report and Annual Accounts 2021-22
Report on Corporate Governance
Company’s Philosophy on Code of Governance
Vedanta is committed to the highest standards of corporate
governance while maintaining its rapid growth and
performance excellence. Being a listed company on the
stock exchanges, we must keep setting global benchmarks
of all‑round excellence in its sustainability performance.
The strong financial footing on which the company stands
today is largely built on the system orientation ingrained in
our departments and business units.
We strongly believe that efficient governance at all levels
is necessary to drive change, towards a more resilient and
responsible future. In order to continue to sustain as a
progressive company balancing financial return to investors
with unwavering focus on being socially responsible,
there is a need to constantly reinvent and upgrade our
governance models in synchronization with the demands of
the contemporary times.
replicates the values, vision, mission and seven pillars
of the Company. To enduringly ensure utmost trust and
confidence of our stakeholders in us and to meet the
stakeholders’ aspirations, transparency, culpability, quality,
fairness, safety, competence and professionalism form a
vital part of our functioning and practices.
Vedanta’s Values driving the Organizational
Culture
Entrepreneurship
Care
Innovation
Effective corporate governance is a continuous process
of prioritisation and improvement, and we must adapt
our processes and activities to be relevant to the evolving
external and internal landscapes.
Trust
At Vedanta, it is believed that maintaining high standards of
corporate governance has been primitive to the business of
the Company since its inception. Our Corporate Governance
Respect
Integrity
Excellence
The objective is to meet the stakeholders’ expectations and generate value for its shareholders through enhanced
corporate governance principles. Hence, our corporate governance practices are globally benchmarked and always strives
to adopt the emerging practices being followed worldwide. The Company is incessantly working towards its performance
goals focusing on long-term and sustainable value creation.
SEVEN PILLARS OF VEDANTA
Sustainability,
Health,
Safety &
Environment
People
Values,
Ethics &
Governance
Digitalisation,
Innovation,
Technology
& Excellence
Quality
Growth
Giving back to
Community/
Society
GUIDING PRINCIPLES
Transparency
and
Accountability
Policies &
Regulatory
Framework
Management/
Board and
Committees
Values &
Ethics
Monitoring
& Internal
Control
Executing
Strategy &
Managing Risk
244
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
With its vision to transform
the Planet; the Communities;
and the Workplace; Vedanta
believes in working towards
‘Desh Ki Zarooraton Ke Liye’
– ascertaining that everything
above the Earth comes from
below the Earth. We, being a
responsible globally diversified
natural resources company, trust
in unearthing and harnessing
the infinite potential of natural
resources in the most sustainable
way to power the nation’s
progress. Vedanta, providing vital
commodities needed for everyday
life, endeavours to bring these
blessings of the earth to you.
‘Atmanirbhar Bharat Ke Liye’ –
developing tomorrow as a reflection
of today’s dream, is also an inherent
part of the ethos at Vedanta.
TRANSFORMING THE
PLANET
Transforming the
Environment by committing
to net-zero carbon by 2050
and supporting India’s target
of carbon-neutrality by 2070
TRANSFORMING
COMMUNITIES
Transforming health by
TRANSFORMING THE
WORKPLACE
Transforming the Workforce
providing nutrition and
by promoting diversity,
healthcare to 100 million
inclusivity and gender
women and children
parity to unleash India’s
full potential
TRANSFORMING
ENERGY
Transforming Energy by
using 2.5GW of Round‑The‑
TRANSFORMING
NATURAL
RESOURCES
Transforming Natural
Clock Renewable Energy
Resource Usage by
to power our operations
achieving net water
by 2030
positivity by 2030
Compliance with Global Guidelines and Best
Practices
Your Company has been at the forefront in complying with
global best practices in Corporate Governance.
Vedanta has maintained the highest standards of corporate
governance all through its operations. Our sustainable
development journey continues to create value for our
stakeholders. We have invested our time and resources in
introspecting our actions; we have achieved our targets and
formulated ambitious new ones; we have adopted global
best practices and taken innovative leaps; we have aligned
our standards with industry benchmarks and charted some
of our own. We have done all this and will continue to do
it with a singular agenda: ensuring long-term growth of
all stakeholders.
In addition to complying with the statutory guidelines, the
Company has voluntarily adopted and evolved various
practices of governance conforming to utmost ethical and
responsible standards of business. These practices reflect
the way business is conducted and value is generated.
Integrated Reporting
Since its inception, Vedanta Limited has taken conscious
efforts to operate in a manner responsible to all
stakeholders. Every decision and action at the Company
is taken after considering the impact they may have on
the Company’s relevant stakeholder groups. This is a true
reflection of the organisation’s integrated thinking, which
takes into account all the resources and relationships that
affect Company’s ability to create sustained value. These
resources and relationships, termed ‘Capitals’, are stocks of
value enabling Company’s operations.
SEBI vide circular no: SEBI/HO/CFD/CMD/CIR/P/2017/10
dated 06 February 2017 had recommended voluntary
adoption of ‘Integrated Reporting’ (IR) from 2017 ‑ 2018 by
the top 500 listed companies in India.
While operating, your Company actively considers its
external environment, the opportunities and challenges, the
organisational strategy to respond to these externalities and
the outputs and outcomes it produces basis its business
activities. Starting FY 2018, the Company has proactively
commenced reporting its annual performance and strategy
using an integrated report, using the content elements and
the guiding principles outlined in the International Integrated
Reporting framework. The organisation has continued its
Integrated Reporting journey and its FY 2022 performance
and forward-looking strategy have been elucidated in the
current Integrated Annual Report. The report takes into
account the following six capitals while reporting:
245
Integrated Report and Annual Accounts 2021-22 Financial
Capital
Natural Capital
Human
Capital
The Company is focused on optimising
capital allocation and maintaining a strong
balance sheet while generating strong
FCFs. It also reviews all investments,
taking into account the Group’s financial
resources with a view to maximising
returns to shareholders.
India and Africa have favourable geology
and mineral potential and these regions
provide the Company with world‑class
mining assets, which are structurally at low
cost and have extensive R&R. Additionally,
operating the Company’s mines requires
a range of resources, including water and
energy, which the Company aims to use
prudently and sustainably.
The Company has employees from
across the world and it is committed to
provide them with a safe and healthy work
environment. In addition, by creating a
culture that nurtures innovation, creativity
and diversity, it enables them to grow
personally and professionally while also
helping to meet our business goals.
Intellectual
Capital
Social &
Relationship Capital
Manufactured
Capital
As a relatively young Company,
the Company is keen to embrace
technological developments. The
Company is setting up a centre of
technological excellence in South Africa,
enabling them to nurture and implement
innovative ideas across the business,
which lead to operational improvements.
The Company aims to forge strong
partnerships by engaging with its key
stakeholders, including shareholders
and lenders, suppliers and contractors,
employees, governments, communities
and the society in general. These
relationships help maintain and
strengthen Vedanta’s licence to operate.
The Company invests in assets including
best-in-class equipment and machinery
to ensure it operates as efficiently and
safely as possible both at its current
operations and in its expansion projects.
This also supports its strong and
sustainable cash flow generation.
Sustainability Reporting Journey at Vedanta
More than thirteen years ago, Vedanta embarked upon
a journey to transform how it does business. We are
committed to not only become the lowest cost metal
producer in the world, but to do so in the most sustainable
way possible. To achieve this, we established policies and
standards in line with global best practices. We then began
the journey of meticulously embedding them across our
business operations. In FY 2022, the Company completed an
extensive program to update our ESG vision and strategy.
Under the revamped corporate vision of “Transforming
for Good”, the Company has placed sustainable business
practices at the center of its way of doing business.
“Transforming Communities”, “Transforming the Planet”
and “Transforming the Workplace” are the three pillars of
this vision and these are supported by nine aims that cover
the most material ESG issues for the Company. These aims
reaffirm Vedanta’s recognition that ESG has a strategic role
to play in the growth of the business. A listing of these nine
aims is given below:
REDEFINING OUR ESG STR ATEGY
REDEFINING OUR ESG STR ATEGY
ESG Purpose
Transforming for good
Pillars
TRANSFORMING
THE PLANET
TRANSFORMING
COMMUNITIES
TRANSFORMING
THE WORKPLACE
TRANSFORMING
THE PLANET
TRANSFORMING
THE PLANET
TRANSFORMING
COMMUNITIES
TRANSFORMING
COMMUNITIES
TRANSFORMING
THE WORKPLACE
TRANSFORMING
THE WORKPLACE
Commitments and Targets
Aim 1
Keep community welfare at the core
of business decisions
Aim 2
Empowering over 2.5 million families
with enhanced skillsets
Aim 3
Uplifting over 100 million women and
children through Education, Nutrition,
Healthcare and welfare
246
Aim 4
Net-carbon neutrality by 2050
or sooner
Aim 5
Achieving net water positivity by 2030
Aim 7
Prioritizing safety and health of
all employees
Aim 8
Promote gender parity, diversity
and inclusivity
Aim 6
Innovating for a greener business model
Aim 9
Adhere to global business
standards of corporate governance
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Your Company has been publishing the Sustainable
Development Report for more than a decade now. The
Report is prepared in accordance with the Global Reporting
Initiative (GRI) Standards: Core option and is also mapped
to the United Nations Global Compact (UNGC) and aligns
to Sustainable Development Goals (SDGs). It should be
considered as our Communication of Progress (COP), which
reports our approach and disclosure towards triple bottom
line principles ‑ people, planet, and profit.
Vedanta applies its sustainability performance reporting
criteria based on GRI Standards including the Mining
& Metals and Oil & Gas Sector Disclosures; National
Guidelines for Responsible Business Conduct framed by the
Ministry of Corporate Affairs, Government of India; United
Nations Global Compact (UNGC) principles; and standards
set by International Council on Mining & Metals (ICMM).
For further insights into the sustainability practices
adopted by your Company, the Sustainability Report can be
accessed at www.vedantalimited.com.
Tax Transparency Reporting
Vedanta has been an industry leader in following one of
the most long-standing and uninterrupted approach to
voluntary reporting on our tax contributions. This dedicated
endeavour is a testament to our commitment to all our
stakeholders to provide greater transparency and disclosure
of profits earned and contributions made to the various
Governments in the jurisdictions in which we operate. In our
journey, we strive for improved efficiency and sustainability
while ensuring excellence in our operations.
The report focuses on our approach to Tax Governance and
Strategy and includes the following:
• Tax Principles;
• Tax Risk Management, Control and Compliance;
• Response to Stakeholder and Tax Environment;
• Tax Approach in our jurisdictions.
This voluntary reporting on tax contributions in done
through our Tax Transparency Report (TTR). In this
report, in addition to economic contribution under various
tax and non‑tax heads, we also provide information on
how we address our tax related decisions, adherence
to tax compliances, approach to tax complexities. The
narration demonstrates our strong governance structure
that promotes and ensures adherence to regulations
while encouraging tax efficiency in operations. The
contributions, that are direct and indirect in nature, are
categorically provided for all the countries where we have
significant operations.
OUR GUIDING TAX PRINCIPLES
1
2
3
To maintain high standards of integrity
with respect to tax compliance
and reporting
To observe all applicable laws, rules and
regulations in the countries where we
operate, including in respect to transfer
pricing. To meet all tax compliance
requirements in a timely manner, through a
team of suitably qualified tax professionals
and external service providers
To maintain the Group’s reputation as a fair
contributor to the economy where tax forms
a part of that contribution. To proactively
disclose detailed information about the
overall tax contribution of the Group to
the governments of the countries where
we operate
4
5
6
To avoid transactions which will have
tax results that are inconsistent with
the underlying economic consequences
unless there exists specific legislation
designed to give that result
To ensure that all transactions and tax
positions are properly documented. In
completing the Group’s tax compliance
requirements, we aim to apply diligent
professional care and judgment, including
ensuring all decisions are taken at an
appropriate level and supported by
documentation that evidences the
judgment involved
Working positively. proactively
and transparently with tax authorities
to minimise the extent of disputes,
achieve early agreement on any
disputed issues when they arise, and
achieve certainty wherever possible
7
8
9
To identify tax risks in a consistent
and formal manner and communicate
these when appropriate to the Audit
Committee and the Board
To actively participate in tax
policy consultation processes
where appropriate at a national or
international level
To develop our people, through training,
experience and opportunity
The report for the FY 2022 is available on the website at www.vedantalimited.com.
247
Integrated Report and Annual Accounts 2021-22 Governance Framework
Your Company has always been a front runner in adopting
best governance practices and endeavours to embed and
sustain a culture of highest ethical standards, personal and
professional integrity and upholding its core values of Trust,
Entrepreneurship, Innovation, Excellence, Integrity, Respect
and Care.
The governance framework of the Company is underpinned
through its resounding core values with the strength of
leading vision, strategic mission, and the primary objective
of delivering sustainable growth.
With a strong governance philosophy, we have a multi‑tiered
governance structure with defined roles and responsibilities
of every constituent of the governance system.
Risk
Management
Governance
Strategy, Planning &
Performance
Corporate
Governance
Framework
Stakeholders
Integrity &
Transparency
ESG
Compliance &
Reporting
Board of Directors
The Board of Directors is an apex body and an enlightened
board creates a culture of leadership providing long-term
vision and improving the governance practices. They play
a crucial role in guiding, overseeing, monitoring strategy,
performance and long‑term success of the Company as a
whole through strategic direction.
The Board of Directors owns a fiduciary position, exercises
appropriate control and independent judgement, monitors
effectiveness of Company’s governance and supervises
the strategic decisions on behalf of the shareholders and
other stakeholders.
Our Board represents a confluence of complementary
skills, attributes, perspectives, expertise in critical areas and
diverse backgrounds.
In line with the recommendation of SEBI and our persistent
endeavor to adhere to the global best practices, the
Company is chaired by Mr. Anil Agarwal, Non‑Executive
Chairman effective 01 April 2020.
With a view to effectively discharge its obligations and
functioning of the relevant areas, the Board has delegated
certain responsibilities to its various designated Board
Committees. Each of the Committee has a clearly defined
charter containing the specific terms of reference and
scope and is entrusted with discharging its duties, roles and
responsibilities which further recommends to the Board for
action. The details of these committees have been provided
in detail in subsequent sections in this report.
Separate of Role of Chairman & CEO
The roles and responsibilities of the Chairman of the Board
and Chief Executive Officer have been demarcated and
the positions are held by separate individuals. Further, as
on 31 March 2022, the Company also had a separately
designated Chief Financial Officer and Company Secretary
& Compliance Officer.
248
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
ROLE & RESPONSIBILITIES
Chairman
• Leads the Board and ensures that it discharges its
responsibilities effectively;
• Develops succession plan for Board appointments for
approval by the Board;
•
Identifies strategic priorities and new business
opportunities to enhance shareholder value;
• Promotes the highest standards of integrity, probity and
governance;
• Chairs the Board meeting and facilitates active
engagement of all Directors;
• Oversees the Director’s induction, performance and
ongoing development; and
• Engages with Company’s stakeholders to ensure that
an appropriate balance is maintained between various
interests.
Vice-Chairman
• Supports the Non‑Executive Chairman in executing the
overall vision and strategy of the Group;
• Enhances and sustains the Group’s overall HSE, people,
digital and technology, ethics and compliance practices at
global standards;
• Oversees stakeolder engagement in India and globally;
• Ensures effective execution of growth projects to deliver
value; and
• Provides mentoring to some of the key corporate
functions like the people function, management
assurance and investor relations including key leadership
development.
Chief Executive Officer
• Leads the management team;
• Develops and executes the corporate strategy in
conjunction with the Board;
•
Implements the decisions of the Board and its
Committees;
• Develops Group policies and ensures effective
implementation; and
• Enhances shareholder value and implements the
organization’s vision, mission, and overall direction.
Senior Management
• Develops and executes business strategy; and
• Manages day-to-day decisions and ensures that decisions
are in parity with the long-term objectives and policies of
the Company.
The reporting structure, as shown below, between the Board, Board Committees and Management Committees forms the
backbone of the Group’s Corporate Governance framework.
Shareholders
CEO
Board of Directors
Management & Executive
Committee
Audit & Risk Management
Committee
UK Sinha
DD Jalan
Akhilesh Joshi
Corporate Social
Responsibility Committee
Akhilesh Joshi
UK Sinha
Padmini Sekhsaria
Priya Agarwal
Chairperson
Member
ESG Committee
UK Sinha
Akhilesh Joshi
Priya Agarwal
Sunil Duggal
Committee of
Directors
Navin Agarwal
Sunil Duggal
Stakeholders’Relationship
Committee
DD Jalan
UK Sinha
Padmini Sekhsaria
Sunil Duggal
Nomination & Remuneration
Committee
UK Sinha
Anil Agarwal
DD Jalan
Share & Debenture
Transfer
Committee
DD Jalan
Ajay Goel
Jagdeep Singh
249
Integrated Report and Annual Accounts 2021-22 Changes in the position of Directors / Key Managerial Personnel (KMPs) of the Company:
Director
Designation
Change (Appointment/
Resignation/ Cessation)
Date of appointment/
re-appointment/
cessation
K Venkataramanan
Independent Director
Dindayal Jalan
Independent Director
GR Arun Kumar
Whole-time Director & CFO
Sunil Duggal
Whole-time Director & CEO
Akhilesh Joshi
Independent Director
Cessation
Appointment
Resignation
Appointment
Appointment
01 April 2021*
01 April 2021
25 April 2021**
25 April 2021#
01 July 2021
UK Sinha
MK Sharma
Ajay Goel
Independent Director
Independent Director
Re-appointment
Resignation
11 August 2021
02 October 2021##
Acting Group Chief Financial Officer Appointment
23 October 2021
Tenure Till
-
31 March 2023
NA
31 July 2023
30 June 2022
10 August 2024
NA
-
* Ceased to be a director consequent to completion of tenure.
** Mr. GR Arun Kumar resigned from the position of Whole‑Time Director & CFO of the Company w.e.f. close of business hours on 24 April 2021.
# Mr. Duggal, in addition to his role as CEO, was appointed as Whole‑time Director of the Company w.e.f. 25 April 2021.
## Mr. MK Sharma stepped down from the position of Non‑Executive Independent Director of the Company w.e.f. close of business hours
on 01 October 2021.
Board Composition and Size
The Board comprises of a good and diverse mix of
Executive, Non‑Executive and Independent Directors
from diversified backgrounds possessing considerable
experience and expertise to promote shareholder interests
and govern the Company effectively by providing valuable
oversight and insightful strategic guidance.
As on 31 March 2022, the Board has a One-Tier structure
comprising of eight (8) members, consisting of a Non-
Executive Chairman, an Executive Vice Chairman, an
Executive Director, a Non‑Executive Woman Director and
four Non‑Executive Independent Directors including one
Woman Director. The composition is in conformity with
the provisions of SEBI Listing Regulations and Companies
Act and in line with global best practices. Further, the
changes in the composition of the Board of Directors that
took place during the year under review were in compliance
with the provisions of the Companies Act and SEBI
Listing Regulations.
Board Composition
(%)
12.5 Non-Executive Chairman
25
Executive Director
12.5 Non-Executive Director
50
Independent Director
The Board reviews its composition, competency and
diversity from time to time to ensure that it remains aligned
with the statutory requirements under law as well as with
the global practices.
Tenure Analysis of Board of Directors as on
31 March 2022
Tenure of Directors (No. of Directors)
4
2
1
1
0-2 Years
2-4 Years
4-6 Years
6 Years
and above
Average Tenure as on 31 March 2022
(years)
5
7
4
.
2
4
3
.
1
9
2
.
3
7
1
.
Executive
Directors
Non-Executive
Directors
Board
Independent
Directors
Diversity and Inclusion
Vedanta is committed to the cause of promoting
diversity and inclusion within the organisation and in
larger communities who we partner with. Our objective
is to achieve gender parity across all levels starting from
our Board.
250
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
The Vedanta Group proposes to employ the Global Diversity and Inclusion Benchmarks Model ©O’Mara and Richter 2014.
The Group’s Diversity and Inclusion initiatives focus on a holistic approach as per below.
Global Diversity and Inclusion Benchmarks Model
INTERNAL
Recruitment, Development,
and Advancement
Benefits, Work-life, and Flexibility
Job Design, Classification and Compensation
D&l Education and Training
FOUNDATION
D&I Vision, Strategy and
Business Case
Leadership and Accountability
Infrastructure and
implementation
BRIDGING
Assesment Measurement,
and Research
D&l Communications
EXTERNAL
Community, Government relations
and social responsibility
Products and services development
Marketing, sales, distribution
and customer service
Supplier diversity
Our workplace policies play an important role in reinforcing
a culture on founding principles of diversity and inclusion.
Policies have a strong underpinning on the way we work
and approach our lives. These policies ensure that we
adhere to highest standards of professionalism and conduct
at workplace. Our policies around work-life integration are
best in class and are framed after extensive deliberations
with impacted groups.
Additionally, during the year, the Board has adopted a Board
diversity policy as a subset of the above policy.
Your organisation recognises and embraces board diversity
as an indispensable component in upholding a competitive
advantage. The Board comprises of two (2) women
directors including one Independent Director.
Board Diversity
(%)
The Company has adopted a diversity policy which shall
help us define, strategize, plan and implement the essential
roadmap, guidance and measurement towards bridging
the gaps as we work on different facets that have a bearing
on achieving diversity goals. This policy is forward looking
and sets a vision for diversity and inclusion for businesses
across the Vedanta group.
75 Men
25 Women
251
Integrated Report and Annual Accounts 2021-22 Key Board Qualifications, Skills and Attributes
The table below summarizes the key qualifications, skills and attributes which are taken into consideration while
nominating to serve on the Board and to function effectively. While all the Board members possess the identified skill
their domain of core expertise is given in the table Board of Directors.
Business Leadership
Sustainable success in business at a senior
executive level
Financial expertise
Proficiency in financial accounting
and reporting, corporate finance and
internal controls, corporate funding, and
associated risks
Natural Resources
Senior executive experience in a large,
global mining & oil & gas organizations
involved in the discovery, acquisition,
development and marketing of
natural resources
ESG
Familiarity with issues associated with
workplace health and safety, asset integrity,
environment and social responsibility,
and communities
Corporate Governance
Experience with a major organization that
demonstrates rigorous governance standards
Mergers & Acquisition
Experience in corporate transactions and
actions and joint ventures
Capital projects
Experience working in an industry with
projects involving large-scale long-cycle
capital outlays
Government & International
relations
Interaction with government and regulators
and involvement in public policy decisions
Global Experience
Experience in multiple global locations,
exposed to a range of political, cultural,
regulatory and business environments
Technology / Digital
A strong understanding of technology
and innovation, and the development
and implementation of initiatives to
enhance production
252
Vedanta LimitedReport on Corporate Governance
Integrated Report
Statutory Reports
Financial Statements
Board of Directors
Age
Date of Appointment
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
Sterlite Technologies Limited
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
69 years
1 April 2020
2 years
Nil
Non-Executive Chairman
2
Member
: Nil
Chairperson : Nil
Anil Agarwal
Non‑Executive Chairman
DIN: 00010883
Age
Initial Date of Appointment
Date of Re-appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
Hindustan Zinc Limited
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
61 years
17 August 2013
01 August 2018
31 July 2023
8.6 years
Nil
Director
2
Member
: Nil
Chairperson : Nil
Navin Agarwal
Executive Vice‑Chairman
DIN:00006303
Age
Initial Date of Appointment
Date of Re-appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
32 years
17 May 2017
17 May 2020
16 May 2023
4.8 years
Nil
None
1
Member
: Nil
Chairperson : Nil
Priya Agarwal
Non‑Executive Director
DIN: 05162177
Profile available at www.vedantalimited.com.
253
Integrated Report and Annual Accounts 2021-22 UK Sinha
Independent Director
DIN: 00010336
Age
Initial Date of Appointment
Date of Re-appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
Havells India Limited
Housing Development Finance Corporation Limited
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
70 years
13 March 2018
11 August 2021
10 August 2024
4 years
Nil
Independent Director
Independent Director
3
Member
: 4
Chairperson : 3
Age
Initial Date of Appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
Everest Industries Limited
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
46 years
5 February 2021
4 February 2023
1.2 years
Nil
Non-Executive
Non-Independent Director
2
Member
Chairperson : Nil
: 2
Padmini Sekhsaria
Independent Director
DIN: 00046486
Age
Initial Date of Appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
65 years
1 April 2021
31 March 2023
1 year
11,000 shares
None
3
: 4
Member
Chairperson : 2
Dindayal Jalan
Independent Director
DIN: 00006882
Profile available at www.vedantalimited.com.
254
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Age
Initial Date of Appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
Hindustan Zinc Limited
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
68 years
01 July 2021
30 June 2022
9 Months
200 shares
Independent Director
7
Member
Chairperson : Nil
: 6
Akhilesh Joshi
Independent Director
DIN: 01920024
Age
Initial Date of Appointment
Tenure till
Tenure as on 31 March 2022
Shareholding
Board Membership - Other Indian Listed Companies
No. of Directorships in Public Limited Companies
Membership/Chairmanship in Committee
Area of Expertise
60 years
25 April 2021
31 July 2023
1 year
20,233 shares
None
1
Member
Chairperson : Nil
: 1
Sunil Duggal
Whole‑Time Director & CEO
DIN: 07291685
Profile available at www.vedantalimited.com.
Notes
• The number of Directorships in Public Limited companies includes
Vedanta Limited.
• The number of Directorships excludes Private Companies,
foreign companies and companies under Section 8 of Companies
Act, 2013.
• For the membership and chairpersonship in Committees, only
Audit Committee and Stakeholders’ Relationship Committee have
been considered as per Regulation 26 of the Listing Regulations.
Also, all public limited companies, whether listed or not, have
been included and all other companies including private limited
companies, foreign companies and companies under Section 8 of
the Companies Act, 2013 have been excluded.
• In the committee details provided, every chairpersonship is also
considered as a membership.
• The details of directorship on board of other Indian listed companies,
public limited companies and membership/ chairpersonship in
committee details are provided as on 31 March 2022.
• Mr. K Venkataramanan ceased to be an Independent Director of the
Company w.e.f. close of business hours on 31 March 2021 upon
completion of his 2nd and final term.
• Mr. Dindayal Jalan has been appointed as Non‑Executive
Independent Director of the Company for a 1st term of 2 years
w.e.f. 01 April 2021 till 31 March 2023. The appointment has been
approved by the shareholders at the 56th Annual General Meeting of
the Company held on 10 August 2021.
• Mr. GR Arun Kumar resigned from the position of Whole‑Time
Director & CFO of the Company w.e.f. close of business hours on
24 April 2021.
• Mr. Sunil Duggal, appointed as Interim Chief Executive Officer and
Key Managerial Personnel of the Company effective 06 April 2020
and CEO of the Company for a fix term of 3 years w.e.f. 01 August
2020, has been appointed as Whole Time Director & CEO and KMP
of the Company effective from 25 April 2021 till 31 July 2023. The
appointment has been approved by the shareholders at the 56th
Annual General Meeting of the Company held on 10 August 2021.
• Mr. Akhilesh Joshi has been appointed as Non‑Executive
Independent Director of the Company for a 1st term of 1 year
w.e.f. 01 July 2021 till 30 June 2022. The appointment has been
approved by the shareholders at the 56th Annual General Meeting
of the Company held on 10 August 2021.
• Mr. UK Sinha has been re‑appointed as Non‑Executive Independent
Director of the Company for a 2nd and final term of 3 years w.e.f.
11 August 2021 till 10 August 2024. The re-appointment has been
approved by the shareholders at the 56th Annual General Meeting of
the Company held on 10 August 2021.
• Mr. MK Sharma stepped down from the position of Non‑Executive
Independent Director of the Company w.e.f. close of business
hours on 01 October 2021 due to personal reasons and pre‑existing
commitments. Mr. Sharma has confirmed to the Company that
there are no other material reasons for his resignation other than
those which are mentioned above.
255
Integrated Report and Annual Accounts 2021-22 DECLARATION & CONFIRMATIONS
W.r.t directorship and membership of the Directors, it is hereby confirmed that:
1. None of the Directors:
a)
b)
c)
d)
e)
f)
g)
are a Director in more than ten (10) public limited companies in terms of Section 165 of Companies Act, 2013;
hold directorship in more than seven (07) listed entities pursuant to Regulation 17A (1) of Listing Regulations;
acts as an Independent Director in more than seven (07) listed entities pursuant to Regulation 17A (1) of
Listing Regulations;
are serving as an Independent Director in more than three (03) listed entities in case they are Whole‑Time
Director of the Company pursuant to Regulation 17A (2) of Listing Regulations;
are members of more than ten (10) board level committees of Indian public limited companies;
are Chairperson of more than five (05) committees, across all companies in which they are directors;
are related to other Directors except Ms. Priya Agarwal, Mr. Navin Agarwal and Mr. Anil Agarwal. Ms. Priya
Agarwal is the daughter of Mr. Anil Agarwal and Mr. Anil Agarwal is the elder brother of Mr. Navin Agarwal;
h) who are serving as a Non‑Executive Director, have attained the age of seventy‑five years.
2.
The Company has received declarations from all the Independent Directors of the Company confirming that they meet
the criteria of independence prescribed under the Act and the Listing Regulations.
Process for Board of Directors, Key Managerial Personnel and Senior Management Appointments
The Board, with the support of the Nomination and
Remuneration Committee (NRC), keeps under constant
review the composition of the Board and its Committees,
succession planning, diversity, inclusion and remuneration
related matters.
shortlisted candidates. We aim to appoint people who will
help us address the operational and strategic challenges and
opportunities facing the Company and ensure that our Board
is diverse in terms of gender, nationality, social background
and cognitive style.
It has sought to balance the composition of the Board and
its Committees and to refresh them progressively over
time. In discharging its responsibilities, the Nomination &
Remuneration Committee regularly reviews the structure,
size and composition of the Board and its Committees,
including skills, knowledge, independence and diversity, to
ensure they are aligned with the Group’s strategy.
The Committee strongly believes that diversity and
providing an inclusive culture is a key driver of business
success and the Committee is committed to having a
diverse and inclusive leadership team which provides
a range of perspectives, insights and critical challenge
needed to support good decision-making, helping with risk
management and strategic planning at the current time
of crisis.
We base our appointments to the Board on merit, and on
objective selection criteria, with the aim of bringing a range
of skills, knowledge and experience to Vedanta Limited. This
involves a formal and rigorous process to source strong
candidates from diverse backgrounds and conducting
appropriate background and reference checks on the
As part of our appointment strategy, a mapping of potential
names is conducted through recommendation from
leading recruitment firms, senior leaders & advisors in the
industry etc.
Following the comprehensive mapping, the candidates are
shortlisted based on the parameters such as qualification,
background, expertise and experience in sectors relevant to
the Company, ability to contribute to the Company’s growth
and complementary skills in relation to the other directors
and upon evaluation, recommended by the Nomination &
Remuneration Committee to the Board.
We believe that an effective Board combines a range of
perspectives with strong oversight, combining the experience
of Directors who have developed a deep understanding of
our business over several years with the fresh insights of
newer appointees. We aim for our Board composition to
reflect the global nature of our business.
256
Vedanta LimitedReport on Corporate Governance
Integrated Report
Statutory Reports
Financial Statements
Process for Selection and Appointment of new Directors
Identification of
Candidate to be
appointed as Director
Nomination & Remuneration
Committee is responsible
for identification and
selection for appointment as
a Director
Recommendation
by NRC
Board
Approval
Shareholders’
Approval
Upon evaluation, the
Committee makes
recommendation to the
Board for approval
The Board members after
approval recommend the
appointment to shareholders
for approval
The proposal is placed
before shareholders
for approval
The criteria for nominating a candidate for directorship has been provided for in the Nomination and Remuneration Policy
(NRC Policy) of the Company which can be accessed at www.vedantalimited.com.
Board Familiarization and Induction Program
Your Company has a structured and comprehensive orientation process in place for newly inducted directors which is
tailored to their individual needs and intends to provide introduction to the Company’s vision, mission, values, operations,
challenges, structure and risks. As a part of an ongoing familiarisation process, the Directors are updated about the
significant regulatory/ industry changes on regular basis through formal reporting process.
Orientation Program upon induction of New
Directors
Other initiatives to update the Directors on a
continual basis:
Roles & Responsibilities
Briefing about role, responsibilities, duties
and obligations as member of board
Plant / Site Visits
Visits to plants and business locations are
organized periodically to provide an insight of
the Company’s operations.
Interactive Sessions
Interactive sessions with senior management,
business & functional heads
Familiarisation Pack
Familiarisation pack is uploaded on a secured
online portal which can accessed only by the Board
members. The pack includes various documents
viz. a viz. Organizational structure, the Company’s
history and milestones, Memorandum & Articles of
Association, latest Annual Report including Form
20F, Code of Conduct, Investor Presentations, CEO/
CFO reports, Minutes of previous meetings, Policies
& Charters etc
Active Communication Channel
An active communication channel with
executive management which allows free flow
of communication among directors.
Business & Regulatory Presentations
Presentations on regulatory and business
environment, Business Plan, risk management
framework, internal audit & controls, cyber security,
HSE, compliance reports, tax & treasury reports,
key accounting matters, CSR, HR initiatives,
Digitalization & Technology initiatives and
Company policies and other relevant issues
Update on Company’s performance and
operations
Update on Company’s and its subsidiaries
performance/operations/ updates/ major
developments affecting the business by various
reports on quarterly basis along with major stock
exchange announcements, press releases etc.
ESG Training
• Educating on key ESG issues for resources
companies and enable incorporation of ESG in
decision making and operations
• Build and scale internal capability through deeper
knowledge and understanding on key ESG topics
for different functional teams
• Advance the field of Sustainability through
research and outreach
The detailed familiarization program can be accessed on the Company’s website at www.vedantalimited.com.
257
Integrated Report and Annual Accounts 2021-22 Membership Term
The Board regularly evaluates the contribution of members
and periodically shares updates with the shareholders
about reappointments consistent with the applicable laws.
Succession Planning
Succession Planning is critical to the success of the
Company as it ensures continuity and sustainability
of corporate performance. It involves a process that
recognizes, develops and retains top leadership talent and
further helps in identifying key roles and mapping out ways
to ensure the organisation has the right people with the right
blend of skills, aptitude, expertise and experiences, in the
right place and at the right time. As per the NRC Policy of
the Company, the NRC has laid a succession plan outlining
the process for retaining, developing, and/or appointing the
Board of Directors, KMPs and SMPs of the Company and
it reviews such plans on an annual basis and recommend
revisions, if any, to the Board.
The NRC works with the management and follow the
following process for effective succession planning:
1.
2.
Assessment of potential employees and creation of a
leadership pool;
Development of the talent pool through actions such
as involvement in strategic meetings, leadership
workshops with top management, coaching,
anchoring, job rotations, role enhancement, council
memberships and involvement in cross function
projects etc.
Leadership Succession Planning
Objective
Strong MIP with right people
in right roles
Develop Top Talent for
future leadership roles
Robust leadership
pipeline - 3 successors
for all key positions
Approach
Talent
Management
Framework
Identify Business
Critical Key Roles
Identify & Develop
Top Talent
Identify Ready Now
Successors
Identify Ready in
1-2 years & 3-5
years Successors
Outcome
Successors prepared & ready
to take over even before the
position is vacant
A “future‑proof” workforce
better prepared to thrive in
dynamic conditions
Greater organizational
stability & resilience
Directors’/KMPs/SMPs Conflicts of Interest
Independent Directors
Your Board has in place a well‑defined process w.r.t
disclosure of interest and associated matters in accordance
with the guidelines prescribed by the Companies Act, 2013
and Listing Regulations. Each Director/KMP/SMP promptly
discloses actual or potential conflicts and any changes, to
the Board which are further noted at forthcoming Board
meeting. The Board considers and authorises potential or
actual conflicts, as appropriate. Directors with a conflict
neither participate in the discussion nor vote on the matter
in question.
The Independent Directors of the Company abide by the
definitions prescribed in the Companies Act, 2013 and SEBI
Listing Regulations.
Based on the disclosures received from all the independent
directors and in the opinion of the Board, the independent
directors fulfil the conditions specified in the Companies
Act, 2013, the Listing Regulations and are independent of
the Management.
258
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
The Board consist of four (4) Independent Directors, out of
which one is woman.
Independent Directors
(%)
75 Men
25 Women
Meeting of Independent Directors
Regulation 25 of Listing Regulations and Schedule IV of
the Companies Act, 2013 read with the Rules thereunder
mandate that the independent directors of the Company
shall hold at least one meeting in a year, without the
attendance of non-independent directors and members of
the Management.
At such meetings, the independent directors discuss,
among other matters, the performance of the Company
and risks faced by it, the flow of information to the Board,
project execution, strategy, governance, compliance, Board
movements, human resource matters and performance
review of the Non-Independent Directors, the Board as a
whole, including the Chairman, Vice‑Chairman and CEO.
Additionally, the Independent Directors also met separately
with the Statutory Auditors to discuss matters such as key
accounting issues, risks, overall control environment and to
invite their overall feedback.
The Audit & Risk Management Committee, Nomination &
Remuneration Committee and the Board are updated by the
Independent Directors about the outcome of the meetings
and actions, if any, required to be taken by the Company.
During the FY 2022, the Independent Directors met without
the presence of management twice on 28 October 2021 and
25 March 2022 chaired by Mr. UK Sinha.
Databank registration of the Independent Directors
Pursuant to the Ministry of Corporate Affairs notification
dated 22 October 2019, requisite confirmations have been
received from all the Independent Directors of the Company
w.r.t registration on the Independent Director’s Databank.
Performance Evaluation
Corporate Governance encompasses a set of systems
and practices to ensure that the Company’s affairs are
being managed in a manner which ensures accountability,
transparency and fairness in all transactions in the widest
sense. The essence of Corporate Governance lies in
promoting and maintaining integrity, transparency and
accountability in the management higher grades. The Board
recognises the benefit of evaluation exercise that provides
meaningful insight to Board members on how they can
improve their individual and collective contribution to the
leadership and effectiveness of the Group.
The Board works with the Nomination and Remuneration
Committee to lay down the evaluation criteria for the
performance of the Chairman, Vice‑Chairman, CEO, the
Board, Board Committees, and Executive / Non‑Executive
/ Independent Directors through peer evaluation, excluding
the director being evaluated.
In line with the previous year, an external evaluation was
carried out by an external agency, one of the largest
multinational professional services networks through a
secured online questionnaire platform to capture the views
of each Director. The evaluation was carefully structured
but pragmatic, designed to bring about a genuine debate
on issues that were relevant, check on progress against
matters identified in the previous evaluation, and assist in
identifying any potential for improvement in the Board’s
processes as given below:
Tailored questionnaires
prepared by external
agency and confrmed
with the Chairperson
of NRC
Secured online
platform for providing
the responses
Results of the
evaluation compiled
by the external
agency without
involvement of
the management
Sharing of
evaluation results
Outcome and
feedback discussed
at the NRC, Separate
Meeting of IDs and
Board Meeting and
Action Plan agreed
259
Integrated Report and Annual Accounts 2021-22 Board as
a whole
Assessment of
Company as a whole,
its performance, its
goals and functions of
the Board;
Quality of decision
making and
Board Practices;
Composition, structure
and quality;
Board Meetings;
Board Environment;
Relationship with
Senior Management;
Progress against
development areas.
Board
Committees
Committee Meeting
& Information;
Effectiveness of
Committee in terms
of well‑defined policy
and charters;
Committee Composition
& Operation;
Specific Committee
responsibilities;
Progress against
development areas.
Individual
Directors
Preparedness and
participation of the
Director for the meetings;
Understanding of
Company’s mission,
vision, industry,
business etc.;
Quality of discussions
during meetings;
Personality and Conduct
of Director;
Quality of the value
additions made.
Chairman &
Vice-Chairman
Demonstration of
effective Leadership;
Objectivity
in discussions;
Constructive
communication &
relationship with
other directors;
Contribution
in enhancing
Company’s image;
Availability and
approachability
to discuss
sensitive matters.
CEO
Company Performance;
Strategy and its execution;
Leadership;
Team building;
Management Succession.
RESULTS OF PERFORMANCE E VALUATION
RESULTS OF PERFORMANCE E VALUATION
Individual
directors
Evaluation
Report shared with
the Chairperson,
Vice‑Chairman
and respective
individual directors.
Summary of evaluation
of Executive Directors
shared with the
Independent Directors
and discussed in the
separate meeting of
Independent Directors.
Chairman/
Vice-Chairman
Evaluation
Summary report
shared with the
Chairperson of
Nomination &
Remuneration
Committee (NRC).
Evaluation results
also discussed in
separate meeting of
Independent Directors.
CEO Evaluation
Report shared
with the Chairman,
Vice‑Chairman and
Chairperson of NRC.
The evaluation
results discussed in
separate meeting of
Independent Directors.
Board Self
Evaluation
Report shared with
all directors.
Results discussed
in meeting of NRC
and Board and
separate meeting of
Independent Directors.
Committee
Evaluation
Summary report
shared with
all directors.
Results discussed
in meeting of NRC
and Board and
separate meeting of
Independent Directors.
Outcome of Performance Evaluation
The evaluation concluded that the Board as a whole is
functioning as a cohesive body which is well engaged
with different perspectives. All Directors continued to
demonstrate a collaborative and constructive mindset,
creating a conducive environment at Board meetings
for participation and challenge. The Committees are
functioning well and besides the Committee’s terms of
reference as mandated by law, important issues are brought
up and discussed in the Committees. The clarity of the
strategy together with the understanding of the capabilities
for implementing and monitoring it were regarded highly.
The effectiveness review identified some opportunities for
the Board which will be acted upon going forward.
260
Vedanta LimitedReport on Corporate Governance
Integrated Report
Statutory Reports
Financial Statements
Meetings of the Board & Committees
Schedule of
meetings and
agenda matters
Circulation of
Agenda
Information presented at
meetings
Conduct and recording of
meeting
• The Board meets at regular intervals to discuss and decide on Company/business policy
and strategy in addition to the statutory and other matters. The Board and Committee
meetings are pre-scheduled and an annual calendar of the meetings is circulated to all the
Directors well in advance to facilitate planning of their schedule and to ensure meaningful
participation in the meetings. However, in case of business exigencies/urgencies,
resolutions are passed through circulation or additional meetings are conducted.
• The Board, the Audit & Risk Management Committee and the Nomination & Remuneration
Committee are facilitated with annual agenda plan in advance in order to enable the members
to focus on key areas of organisational performance and designing the future strategy. The
annual agenda plans are finalised with the inputs from the board members and are approved
by the Board. Additional agenda matters are taken up on requirement basis.
• The agenda is finalized by the Company Secretary in discussion with the CFO, CEO
Vice‑Chairman and Chairman.
• All the Agenda papers are disseminated electronically on a real-time basis. The papers
are uploaded on a secured online platform specifically designed for this purpose, thereby
eliminating circulation of printed agenda papers. The online platform also enables the
Board to access the historical agendas, minutes, constitutional documents, committee
charters, etc. It enables the participants to make notes and exchange notes amongst
each other under a secured environment.
• The Agenda papers other than in nature of Unpublished Price Sensative Information
(UPSI) are circulated well in advance as per statutory requirements and those in nature of
UPSI are circulated at least 24 hours in advance with the approval of the Board.
• The Board business generally includes consideration of important corporate actions and
•
events including but not limited to:
a) quarterly and annual result announcements; b) oversight of the performance of the
business; c) development and approval of overall business strategy; d) Board succession
planning; e) review of the functioning of the Committees; f) Review of internal controls
and risk management and g) other strategic, transactional and governance matters as
required under the Companies Act, 2013, Listing Regulations and other applicable laws.
• The management team is invited to present the performance on key areas such as the
Company’s major business segments and their operations, subsidiary performance and
key functions from time to time.
• Majority of the meetings are conducted as physical meetings, however, at times it may
not be possible for each one to be physically present at all meetings. Hence, we provide
the facility of video conferencing/telepresence to the Board members and invitees at
various locations across the globe.
• During the FY 2022, all meetings were held through video conferencing/telepresence
considering the pandemic situation.
• All the meetings conducted through telepresence are recorded and stored as per
statutory requirements. The Company Secretary records minutes of each of the meeting
of the Board and Committees.
Post Meeting summary/
Follow Up
• Post conclusion of each of the Board/Committee meeting, the Company Secretary
circulates the summary of the proceedings of all meetings along with the action points,
if any.
• Various decisions taken at Board/Committee meetings are promptly communicated to the
concerned departments/divisions.
• Draft minutes and signed minutes are circulated to Board/Committee members within the
timelines prescribed under Secretarial Standards.
• The matters arising from the previous meetings are taken up at the respective forthcoming
Board/Committee meeting.
261
Integrated Report and Annual Accounts 2021-22 Board & Executive Leadership Remuneration Policy
The Remuneration Policy is significant in ensuring that
competitive and impartial rewards are linked to key
deliverables and are also in line with market practices and
shareholders’ expectations.
The Nomination and Remuneration Committee (NRC)
ensures that remuneration policies and practices are
framed and intended to attract, retain and encourage the
Executive Directors (ED) and the senior management group,
while simultaneously meeting the Group’s strategic and
business objectives. The NRC further ensures the interests
of the Executive Directors and the senior management
group are aligned with those of shareholders, to build a
sustainable performance environment.
Remuneration Components:
The ED remuneration has two components: fixed pay and
variable pay including stock incentives (performance linked
incentive). The fixed component is based upon the industry
practice and benchmarks considering the experience,
skill, knowledge and job responsibilities. The performance
incentive is linked to the achievement of the Company and
individual performance goals. Such variable compensation
is ‘at risk’, and rewards contributions to both short‑term
and long‑term financial performance of the Company.
The remuneration of the EDs is governed by the agreements
executed with them, subject to the approval of the Board
and of the shareholders in general meetings and such other
approvals as may be necessary.
The Non‑Executive Independent Directors are paid
remuneration by way of commission and sitting fees.
The appointment letter detailing the terms and conditions
of appointment of Non‑Executive Independent Directors is
available on the Company’s website at www.vedantalimited.
com. The Board decides the payment of commission within
the limits approved by the members subject to the limit not
exceeding 1% of the net profits of the Company. Further,
it may be noted that no stock options were issued to the
Non‑Executive Independent Directors during the year.
The details of remuneration paid/ payable to the Directors
during FY 2022 are as follows:
Remuneration paid or payable to Directors for the year ended 31 March 2022
Name of the Director
Relationship
with other
Directors (1)
Sitting Fees
Salary and
Perquisites(7)
Provident, and
Superannuation
Funds
Commission to
Non-Executive
Directors /
performance
incentive for
the Executive
Directors(8)
(Amount in `)
Vedanta
Limited,
ESOS 2019
ESOS 2020,
ESOS 2021 (9)
Total
13,00,000
-
-
-
13,00,000
Refer
Note 1
Refer
Note 1
None
None
None
None
None
None
None
Non-Executive Chairman
Mr. Anil Agarwal
Executive Directors
Mr. Navin Agarwal(2)
Mr. Sunil Duggal
Mr. GR Arun Kumar(3)
Total
Independent
Non-Executive Directors
Mr. MK Sharma(4)
Mr. UK Sinha
Mr. DD Jalan(5)
Mr. Akhilesh Joshi(6)
Ms. Padmini Sekhsaria
Total
Non-Independent
Non-Executive Directors
Ms. Priya Agarwal
Total
Grand Total
262
-
-
-
1,100,000
3,000,000
2,600,000
1,900,000
1,500,000
10,100,000
Refer
Note 1
1,300,000
1,300,000
120,541,570
750,000
73,594,300
194,885,870
69,993,974
49,30,924
750,000
159,429
38,500,000
109,243,974
17,500,000
22,590,353
525,748
170,440
- 195,466,468
1,659,429
129,594,300 326,720,197
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,780,822
4,880,822
7,500,000
10,500,000
7,500,000
10,100,000
5,630,137
75,30,137
7,500,000
90,00,000
31,910,959
42,010,959
10,000,000
11,300,000
10,000,000
11,300,000
12,700,000 195,466,468
1,659,429
171,505,259 381,331,156
696,188
-
-
-
-
-
-
-
-
-
-
-
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Notes:
1. Ms. Priya Agarwal is the daughter of Mr. Anil Agarwal and Mr. Anil Agarwal is the elder brother of Mr. Navin Agarwal.
2. Sitting fees and commission paid to Mr. Navin Agrawal by HZL was `475,000 and `2,887,500 respectively during the FY 2022 not included
above.
Mr. Navin Agarwal has been awarded 513,260 units in FY 2020, 412,444 units in FY 2021 and 351,000 units in FY 2022 under Long Term
Incentive Plan of Vedanta Resources Limited.
Additionally, Mr. Navin Agarwal was paid the following amounts from Vedanta Resources Limited:
1. GBP 244,269 on account of vesting of Vedanta Resources Limited Cash Based Plan 2018 on 1 November 2021 upon achievement
of performance parameters
2. GBP 85,000 as commission for his services to VRL Board
3. Mr. GR Arun Kumar resigned from the post of Whole-Time Director & CFO of the Company w.e.f. close of business hours on 24 April
2021, hence, the options issued have forfeited. The details provided in salary & perquisites and Provident & Superannuation Fund are
from 01 April 2021 till 24 April 2021 and performance incentive pertains to FY 2021.
4. Commission paid for a period from 01 April 2021 till 01 October 2021.
5. Sitting fees and commission paid to Mr. DD Jalan by BALCO was `600,000 and `1,496,000 respectively during the FY 2022 not included
above
6. Commission paid for a period from 01 July 2021 till 31 March 2022.
Sitting fees and commission paid to Mr. Akhilesh Joshi by HZL was `900,000 and `2,992,500 respectively during the FY 2022 not
included above.
7. Value of Perquisites as per rule u/s 17(2) of Income-tax Act, 1961. Further, as the liabilities for defined benefit plan, i.e., gratuity are
provided on accrual basis for the Company as a whole, the amounts pertaining to Key Management Personnel are not included above.
8. A Discretionary award was given to 124 employees of the Company holding critical positions to recognize the significant contributions
made for the growth of organisation and value their long-term association. Executive Directors were also covered under this award, the
award amount is included in the above table.
9. The ESOS 2018, Cash Plan 2018 and Vedanta Resources Limited LTIP 2018 options/units vested upon completion of performance period
with approval from Nomination and Remuneration Committee on 29 October 2021.
The ESOS 2019, Cash Plan 2019 and Vedanta Resources Limited LTIP 2019 options/units will vest/ be exercise after three years from
date of grant i.e. on 29 November 2022, based on achievement of performance conditions.
The ESOS 2020, Cash Plan 2020 and Vedanta Resources Limited LTIP 2020 options/units will vest/ be exercise after 31 months from
date of grant i.e. on 06 November 2023, based on achievement of performance conditions.
The ESOS 2021, Cash Plan 2021 and Vedanta Resources Limited LTIP 2021 options/units will vest/ be exercise after 36 months from
date of grant i.e. on 01 November 2024, based on achievement of performance conditions.
We hereby confirm that:
• The total managerial remuneration payable in FY 2022 does not exceed 11% of the net profits of the Company.
• The total remuneration received by Whole‑Time Directors and Independent Directors of the Company does not
exceed 10% and 1% of the Net Profits of the Company, respectively.
• Mr. Navin Agarwal, Executive Vice‑Chairman and member of Promoter Group does not receive remuneration in
excess of `5 crores or 2.5% of the Net Profits of the Company, whichever is higher.
• None of the Non‑Executive Directors, have received remuneration exceeding fifty per cent of the total annual
remuneration payable to all Non‑Executive Directors.
Board Committees
The Board has constituted various sub-committees with primary objective of maintaining strong business fundamentals
and delivering high performance through relentless focus on the significant affairs of the Company across all its
geographies. Each committee is set up by the formal approval of the Board and is guided by its respective charter which
clearly defines their purpose, roles, and responsibilities. The Chairperson of the respective Committee briefs the Board on
the summary of the discussions held in the Committee Meetings. The minutes of all the Committee meetings are placed
before the Board for its review and noting. The Company Secretary officiates as the Secretary of these Committees.
263
Integrated Report and Annual Accounts 2021-22
Composition of Committees as on 31 March 2022
All the Committees have optimum composition pursuant to the Listing Regulations. Below is the composition of the
Committees as on 31 March 2022:
Name of Director
Board
Audit & Risk
Management
Committee*
Nomination &
Remuneration
Committee
Stakeholders’
Relationship
Committee
Corporate
Social
Responsibility
Committee
Committee of
Directors
ESG
Committee**
Mr. Anil Agarwal
Mr. Navin Agarwal
Mr. UK Sinha
Mr. DD Jalan
Ms. Padmini Sekhsaria
Mr. Akhilesh Joshi
Ms. Priya Agarwal
Mr. Sunil Duggal
Member
Chairperson
Notes:
* Effective 06 June 2020, the Risk Management Committee has been consolidated with the Audit Committee comprising of only Independent
Directors and renamed as Audit & Risk Management Committee.
** The scope of the existing Board Sustainability Committee was enhanced in order to upgrade it to Board ESG Committee with effect from
26 July 2021.
1. Mr. GR Arun Kumar ceased to be member of Committee of Directors effective close of business hours on 24 April 2021.
2. Mr. DD Jalan has been appointed as Member of the Audit & Risk Management Committee and Nomination & Remuneration Committee
effective 01 April 2021.
3. Ms. Padmini Sekhsaria has been appointed as Member of Stakeholders’ Relationship Committee effective 01 April 2021.
4. Mr. Sunil Duggal has been appointed as Member of Stakeholders’ Relationship Committee and Committee of Directors effective 25 April
2021.
5. Mr. UK Sinha has been designated as the Chairperson and Mr. DD Jalan has been appointed as Member of the ESG Committee (formerly
Sustainability Committee) effective 01 April 2021.
6. Mr. Akhilesh Joshi has been appointed as Member of the Audit & Risk Management Committee and ESG Committee (formerly Sustainability
Committee) effective 01 July 2021.
7. Mr. MK Sharma ceased to be Chairperson of the Audit & Risk Management Committee and Corporate Social Responsibility Committee; Member
of Nomination & Remuneration Committee, Stakeholders’ Relationship Committee effective close of business hours on 01 October 2021.
8. Mr. UK Sinha has been designated as the Chairperson of Audit & Risk Management Committee effective 21 October 2021.
9. Mr. DD Jalan has been designated as Chairperson and Mr. UK Sinha has been designated as Member of the Stakeholders’ Relationship
Committee effective 21 October 2021.
10. Mr. Akhilesh Joshi has been appointed as Chairperson of Corporate Social Responsibility Committee effective 21 October 2021.
11. Ms. Priya Agarwal has been appointed as Member of ESG Committee (formerly Sustainability Committee) effective 21 October 2021.
Board and Committee Meetings for FY 2022
Meeting
Board
Q1
Apr-Jun
06-Apr-21
16-Apr-21
13-May-21
Audit & Risk Management Committee*
13-May-21
Nomination & Remuneration Committee
13-May-21
Stakeholders’ Relationship Committee
-
Corporate Social Responsibility Committee
30-Apr-21
ESG Committee**
Committee of Directors
-
-
Q2
Jul-Sept
26-Jul-21
01-Sep-21
15-Jul-21
26-Jul-21
26-Jul-21
-
-
28-Sep-21
01-Jul-21
24-Aug-21
01-Sep-21
Q3
Oct-Dec
29-Oct-21
17-Nov-21
20-Dec-21
28-Oct-21
17-Nov-21
29-Oct-21
28-Oct-21
-
-
03-Dec-21
20-Dec-21
27-Dec-21
Q4
Jan-Mar
06-Jan-22
28-Jan-22
08-Feb-22
25-Mar-22
27-Jan-22
25-Mar-22
25-Mar-22
-
27-Jan-22
25-Mar-22
14-Mar-22
04-Mar-22
28-Mar-22
* Effective 06 June 2020, the Risk Management Committee has been consolidated with the Audit Committee comprising of only Independent
Directors and renamed as Audit & Risk Management Committee.
** The scope of the existing Board Sustainability Committee was enhanced in order to upgrade it to Board ESG Committee with effect from
26 July 2021.
The maximum interval between any two board meetings did not exceed 120 days, as prescribed in the Companies Act, 2013 and SEBI Regulations.
264
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Resolution passed by Board of Directors/ Committees through Circulation
23
Board of Directors
16
Audit & Risk
Management Committee
6
Nomination &
Remuneration Commitee
58
Committee of Directors
Attendance for Board & Committee Meetings held during FY 2022
Board
Meeting
Audit & Risk
Management
Committee
Nomination &
Remuneration
Committee
Stakeholders’
Relationship
Committee
Corporate
Social
Responsibility
Committee
ESG
Committee
Committee
of
Directors
Average %
(Attended/
Entitled)
9/12
12/12
9/12
12/12
12/12
(Attended/
Entitled)
-
-
-
7/7
7/7
(Attended/
Entitled)
4/4
-
-
4/4
4/4
(Attended/
Entitled)
-
-
-
1/1
1/1
(Attended/
Entitled)
-
-
3/3
3/3
-
(Attended/
Entitled)
-
-
1/1
2/2
1/1
(Attended/
Entitled)
-
8/8
-
-
-
10/12
9/9
-
6/6
3/3
2/2
-
1/2
-
-
81%
100%
81%
100%
100%
88%
95%
Yes
10/10
NA
2/2
-
-
Yes
5/5
3/3
2/2
-
-
-
-
1/1
-
0/1
-
-
-
-
1/1
2/2
8/8
95%
-
-
-
-
100%
100%
Whether
attended
AGM on
10 August
2021
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Name of Director
Mr. Anil Agarwal
Mr. Navin Agarwal
Ms. Priya Agarwal
Mr. UK Sinha
Mr. DD Jalan
(Appointed as director
w.e.f. 01 April 2021)
Ms. Padmini Sekhsaria
Mr. Akhilesh Joshi
(Appointed as director
w.e.f. 01 July 2021)
Mr. Sunil Duggal
(Appointed as director
w.e.f. 25 April 2021)
Mr. GR Arun Kumar
(Ceased to be a
Director w.e.f. close
of business hours on
24 April 2021)
Mr. MK Sharma
(Ceased to be a
Director w.e.f. close
of business hours on
01 October 2021)
Pursuant to Section 167 of the Companies Act, 2013, a director shall incur disqualification if he/she does not meet the minimum attendance
criteria and absents himself/herself from all the meetings of the Board of Directors held during a period of twelve months with or without seeking
leave of absence of the Board. All directors of the Company have duly met the attendance criteria during FY 2022.
AUDIT & RISK MANAGEMENT COMMITTEE
UK Sinha
Chairperson
Akhilesh Joshi
Member
DD Jalan
Member
3
Members
7
Meetings
100%
Independent
100%
Attendance
The Audit & Risk Management Committee is one of
the main pillars of the corporate governance of the
Company. The primary function of the Audit & Risk
Management Committee includes monitoring and
providing effective supervision of the financial reporting;
reviewing the efficacy of the risk management systems;
and maintaining robustness of internal financial controls
and risk management frameworks including cyber
security. The Committee works to fortify the adequacy and
effectiveness of the Company’s legal, regulatory, and ethical
compliance and governance programs while monitoring the
qualifications, expertise, resources, and independence of
both the internal and external auditors; and assessing the
auditors’ performance and effectiveness each year.
Effective 06 June 2020, the Audit Committee and the
Risk Management Committee have been consolidated to
be called as the Audit & Risk Management Committee.
Parallelly, the management team led by the CEO and MAS
Head is a sub‑set of this Committee and is entrusted
with running the existing risk management process.
The management team presents a detailed update to the
Audit & Risk Management Committee twice a year on
the same.
265
Integrated Report and Annual Accounts 2021-22 A separate section on principal risks and uncertainties
governing the business is covered in the Management
Discussion and Analysis Report.
The members of the Audit & Risk Management Committee
comprise only Independent Directors to ensure the
independence in terms of financial opinions and for better
value addition. Each of the member of the committee
brings immense experience and possess strong accounting
and financial management knowledge. In carrying out its
oversight responsibilities transparently and efficiently, the
Committee majorly relies on the expertise and knowledge
of the management, the internal auditors, the Statutory
Auditor and also uses external expertise, if required.
The management is accountable for the preparation,
presentation and integrity of the Company’s financial
statements including consolidated statements, accounting,
and financial reporting principles; internal control over
financial reporting; and all procedures are designed to
ensure compliance with accounting standards, applicable
laws, and regulations as well as for objectively reviewing
and evaluating the adequacy, effectiveness, and quality
of the Company’s system of internal controls. M/s SR
Batliboi & Co. LLP, Chartered Accountants (FRN: 301003E /
E300005), the Company’s Statutory Auditor, is responsible
for performing an independent audit of the financial
statements and expressing an opinion on the conformity of
these financial statements.
The Audit & Risk Management Committee covers a
wide range of topics for deliberations and discussions
in its meetings. These includes standing items that the
Committee considers as a matter of course, typically in
relation to the quarterly unaudited financial statements,
accounting policies and judgements and reporting matters,
and an array of significant issues relevant to Vedanta’s
control framework. The Committee plays a vital role in
evaluating the related party transactions, scrutinizing inter-
corporate loans and verify that the systems for internal
control are adequate and are operating effectively.
The Committee, in its meetings, in addition to the members also has the following set of invitees:
The Chief Executive Officer, the
Chief Financial Officer, Group Assurance
Head, and the external auditor.
The representatives of Statutory
Auditors are permanent invitees
Audit & Risk
Management
Committee
Meeting
Invitees
The Business and Operational Heads
are invited to the meetings, as and
when required
Representatives of Executives from
several departments including
Accounts, Finance, Corporate
Secretarial and Internal Audit
The Committee also meets separately with the external
auditor without members of management to seek the
auditor’s judgement about the quality and applicability
of the accounting principles, the reasonableness of
significant judgement and the adequacy of disclosures in
financial statements.
On a quarterly basis, the Audit & Risk Management
Committee reviews the confirmation of independence made
by the Auditors, and also approves the fees paid to the
Auditors by the Company, or any other company in Vedanta
Group as per the Policy for Approval of Audit/Non‑Audit
Services to be rendered by the Auditors.
The details and biographies of the Committee members
are set out in the Board and Committees section of this
Annual Report. The Committee fulfils the requirements as
specified under the provisions of the Companies Act, 2013,
SEBI Listing Regulations and NYSE Guidelines with respect
to the composition, independence, and financial expertise of
its members.
The schedule of Committee meetings held during FY 2022
along with its members’ attendance records are detailed in
the earlier sections of the Corporate Governance Report.
Performance Review of the Audit & Risk
Management Committee
As part of the Board’s annual evaluation of its effectiveness
and that of its Committees, as described earlier in the
report, the Committee assessed its own effectiveness.
The Audit & Risk Management Committee members
agreed that its overall performance had been effective
during the year.
Review of Financial Results for FY 2022
The Committee reviewed both Standalone and Consolidated
financial statements for FY 2022 and based on this review
and discussions with management, the Committee was
satisfied that the financial statements were prepared in
accordance with applicable accounting standards and fairly
presented the Group’s financial position and results for
the financial year ended 31 March 2022. The Committee
therefore recommended the financial statements for the
financial year ended 31 March 2022 for the consideration
and approval of the Board.
The Board accepted all the recommendations made by the
Audit & Risk Management Committee during FY 2022.
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
The utilization of Audit & Risk Management Committee’s time along with its major responsibilities is
detailed below:
(%)
30
Oversight of Financial Reporting
30
Internal Audit, Internal financials controls
20
Risk Management and Cyber Security
10 Auditors
10 Governance
Oversight of Financial
reporting
• Oversight of the Company’s financial reporting process and disclosure of its financial
information to ensure that the financial statements are true, fair, sufficient and credible;
• Discuss and review, with the management and auditors, the annual/quarterly financial
statements before submission to the Board;
• Review of key significant issues, tax & legal reports and management’s report;
• Review of management’s analysis of significant issues in financial reporting and
judgements made in preparing the financial statements;
• Discuss with the Management regarding pending technical and regulatory matters that
could affect the financial statements, and updates on management’s plans to implement
new technical or regulatory guidelines;
• Review of off-balance-sheet structures, if any;
• Review of Draft limited review/audit reports and qualifications, if any, therein;
• Discuss and Review the Form 20F.
• Review of internal audit observations and monitoring of implementation of any corrective
actions identified;
• Reviewing the internal financial control framework;
• Review of the performance of the internal audit function & internal audit plan;
• Consideration of statutory audit findings and review of significant issues raised;
• Reviewing related party transactions;
• Management discussion and analysis of financial condition and results of operations.
Internal Audit and Internal
financial controls
Risk Management and
Cyber Security
• Review of the risk management framework, risk profile, significant risks, risk matrix and
resulting action plans;
• Review of the significant audit risks with the statutory auditor during interim review and
year-end audit;
• Oversight over the effective implementation of the risk management framework across
various businesses;
• Assurance of appropriate measures in the organisation to achieve prudent balance
between risk and reward in both ongoing and new business activities;
• Annual review of the risk appetite and risk management policy including cyber security
procedures adopted in the Group;
• Analytic validation and recommendation of necessary changes in the risk management
policies and frameworks to the Audit Committee/Board, if any;
• Evaluation of significant and critical risk exposures for assessing management’s action to
mitigate or manage the exposures in a timely manner.
Auditors
• Appointment of Statutory, internal, secretarial, cost & tax auditors, recommending their
fees and reviewing their audit reports;
• Review of the independence of the statutory auditor and the provision of audit/non-audit
services including audit/non-audit fees paid to the statutory auditor;
Independent meetings with statutory auditors.
•
267
Integrated Report and Annual Accounts 2021-22 Governance
• Reviewing minutes, summary reports of subsidiary companies audit committees;
• Reviewing intercorporate loans, advances, guarantees;
• Reviewing ethics (whistle‑blower, sexual harassment, insider trading) and
statutory compliances;
• Review of its own charter and processes;
• Notices received from statutory authorities and the management’s response;
• Regulatory updates;
• Reviewing feedback from the Audit & Risk Management Committee’s performance
evaluation.
NOMINATION AND REMUNERATION COMMITTEE
3
Members
4
Meetings
75%
Independent
100%
Attendance
as required under the provisions of the Companies Act,
2013 and Listing Regulations. In the event of a conflict
of interest, the Chairman of the Board abstains from the
discussions and other members of the NRC participate and
vote. Other Directors, members of the Senior Management
team, representatives from Human Resource department
and external advisers may attend meetings at the invitation
of the Committee, as appropriate. In respect of each of its
meetings, the Chairman of the NRC provides an update to
the Board.
The schedule of NRC meetings held in FY 2022 along with
its members’ attendance records are disclosed in the earlier
sections of the Corporate Governance Report.
As part of the Board’s annual evaluation of its effectiveness
and that of its Committees, as described later in the report,
the NRC assessed its own effectiveness. The members
of the NRC agreed that its overall performance had been
effective during the year.
The Board accepted all the recommendations made by the
Committee in FY 2022.
The utilization of the Committee’s time along with its major
responsibilities is detailed below:
(%)
40
Board Composition and
Nomination
25
Compensation
20 Evaluation
15
Succession Planning &
Governance
UK Sinha
Chairperson
Anil Agarwal
Member
DD Jalan
Member
The Nomination & Remuneration Committee (NRC) is
accountable for overseeing the key processes through
which it can make recommendations to the Board on the
structure, size and composition of the Board, KMP & Senior
Management; and ensure that the appropriate mix of skills,
experience, diversity, and independence is present on the
Board and senior level for it to function effectively. The
NRC also leads the process for new Board appointments,
advises the Board on succession planning arrangements
and oversees the development of management talent within
the Group.
Another key objective of the Committee is to ensure that
competitive and fair awards are linked to key deliverables
and are also aligned with market practice and shareholders’
expectations. The Committee 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 Committee is also focused
on aligning the interests of the Executive Directors and the
senior management group with those of shareholders,
to build a sustainable performance culture. When setting
remuneration for the Executive Directors, the Committee
takes into account the business performance, developments
in the natural resources sector and similar information for
high-performing Indian companies considering that majority
of the Group’s operations are based in India.
The Committee also carries out the entire process of
performance evaluation on an annual basis.
As on 31 March 2022, the NRC comprises of two
Independent Directors and the Non‑Executive Chairman
of the Company whose names, details and biographies are
set out in the Board and Committees section of this Annual
Report. The Committee fulfils the composition requirement
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Board Composition and
Nomination
• Review and recommend the structure, size and composition (including the skills, knowledge,
experience and diversity) of the Board and its Committees;
• Formulate the criteria/policy for appointment of Directors, Key Managerial Personnel (KMPs)
and Senior Management (as defined by the NRC) in accordance with identified criteria;
• Review and appoint shortlisted candidates as Directors, KMPs and Senior Management
(including evaluation of incumbent directors for potential re-nomination) and make
recommendations to the Board;
• Evaluate the balance of skills, knowledge, experience and diversity on the Board for
description of the role and capabilities, required for an appointment;
• Formulate and recommend to the Board the criteria for determining qualifications, positive
attributes and independence of a director.
Compensation
• Recommend to the Board a policy relating to the remuneration of directors (both executive
and non‑executive directors), KMP and Senior Management Personnel;
• Ensuring that the level and composition of remuneration is reasonable and sufficient to
attract, retain and motivate directors of the quality required to run the Company successfully;
• Ensuring relationship of remuneration to performance is clear and meets appropriate
performance benchmarks;
• Ensuring remuneration to directors, KMP and senior management involves a balance
between fixed and incentive pay reflecting short and long‑term performance objectives
appropriate to the working of the Company and its goals;
• Determine remuneration based on the Company’s financial position, trends and practices
on remuneration prevailing in the industry as considered appropriate by the NRC;
• Review of the Company’s Share Based Employee Benefit Scheme(s), if any, including
overseeing the administration of the Scheme(s), formulating the necessary terms and
conditions for such Scheme(s) like quantum of options/ rights to be granted, terms of
vesting, grant options/ rights to eligible employees, in consultation with management;
and allotment of shares/ other securities when options/ rights are exercised etc. and
recommend changes as may be necessary.
Evaluation of the Board, its
Committees and individual
directors
• To develop, subject to approval of the Board, a process for an annual self-evaluation of the
performance of the Board, its committees and the individual directors in the governance of
the Company and to coordinate and oversee this annual self‑evaluation;
• To formulate a criterion for evaluation of Independent Directors and the Board and carry
out evaluation of every Director’s performance and present the results to the Board;
• To review the performance of all the Executive Directors, on the basis of detailed
performance parameters set for each of the Executive Directors at the beginning of the
year and present the results to the Board;
• Action report on suggestions made on evaluation;
• To maintain regular contact with the leadership of the Company. This should include
interaction with the Company’s Leadership Institute, review of data from the employee
survey and regular review of the results of the annual leadership evaluation process.
Succession Planning &
Governance
• Review succession planning for Executive and Non‑Executive Directors and other
Senior Management;
• Establishing policies and procedures to assess the requirements for induction of new
members to the Board;
• To maintain regular interaction and collaborate with the leadership including the HR team
to review the overall HR vision and people development strategy of the Company;
• To review and reassess the adequacy of the NRC’s charter as required and recommend
changes to the Board;
• To develop and recommend a policy on Board diversity.
269
Integrated Report and Annual Accounts 2021-22 Equal Opportunity Policy
Your Company recognises the value of diverse workforce and has reinforced its approach to diversity and inclusion by
adopting Equal Opportunity Policy (“Policy”).
The Policy aimed at providing equal employment opportunities, without any discrimination on the grounds of age, colour,
disability, marital status, nationality, geography, ethnicity, race, religion, sex, sexual orientation. It is our endeavour to maintain
a work environment that is free from any harassment, direct or indirect discrimination based on the above consideration.
CORPORATE SOCIAL RESPONSIBILITY COMMITTEE
Akhilesh Joshi
Chairperson
Priya Agarwal
Member
UK Sinha
Member
Padmini Sekhsaria
Member
4
Members
3
Meetings
75%
Independent
100%
Attendance
The Company continues to focus on its long‑term goal
believing that while targeting to produce maximum
yield for our shareholders during the year, we also lodge
our contributions in furthering our responsibilities
towards the society and environment. As a responsible
corporate citizen, we recognize that those who reside in
our operational areas are our partners in growth and we
seek to foster a mutually benefitting relationship with all
our stakeholders. It is this integration of business and
CSR which provides us the social licence to operate and
helps us to usher in a different developmental paradigm
towards sustainable change in society. As part of our CSR
policy, we regularly engage with government agencies,
development organisations, corporates, civil societies and
community-based organisations to carry our durable and
meaningful initiatives.
In this regard, the role of CSR Committee of the Company
is to formulate and monitor the CSR Policy of the Company
along with formulation of Annual Action Plan and
recommending the CSR Budget. The additional disclosures
in compliance with Companies (Corporate Social
Responsibility) Amendment Rules, 2021 forms part of this
Annual report.
The schedule of CSR meetings held in FY 2022 along with
its members’ attendance records are disclosed in the earlier
section of the Corporate Governance Report.
As part of the Board’s annual evaluation of its effectiveness
and that of its Committees, as described earlier in the
report, the CSR Committee assessed its own effectiveness.
The members of the CSR Committee agreed that its overall
performance had been effective during the year.
The Board accepted all the recommendations made by the
Committee in FY 2022.
The utilization of the Committee’s time along with
its major responsibilities is detailed below:
(%)
15
CSR Policy
45
CSR Activities
40 CSR Budget
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
CSR Policy
CSR Activities
• Formulate and recommend to the Board the CSR Policy and the activities to be undertaken;
• Review the CSR Policy and associated frameworks, processes and practices.
•
Identify the areas of CSR activities and projects and to ensure that the Company is taking
the appropriate measures to undertake and implement CSR projects successfully;
• Assess the performance and impact of CSR Activities of the Company;
• Evaluate CSR communication plans;
• Set path for implementation and monitoring mechanism and the progress stature to
ensure achievement;
• Ensure the value, ethics and principles are upheld in all its activities.
CSR Budget
• Decide and recommend to the Board the amount of expenditure to be incurred on
CSR activities;
• Formulation of Annual Action Plan;
• Evaluate and monitor expenditure towards CSR Activities is in compliance with the
Companies Act 2013;
• Evaluation of need and impact assessment for the projects undertaken by the Company.
STAKEHOLDERS’ RELATIONSHIP COMMITTEE
DD Jalan
Chairperson
UK Sinha
Member
Padmini
Sekhsaria
Member
Sunil Duggal
Member
4
Members
1
Meeting
75%
Independent
75%
Attendance
Vedanta understands and nurtures the value of sustaining
continuous and long-term relationships with our
stakeholders to secure a mutual understanding of the
Company’s strategy, performance, and governance in line
with the business objectives.
The Stakeholders’ Relationship Committee (SRC) cohesively
supports the Company and its Board in maintaining strong
and long-lasting relations with its stakeholders at large. The
SRC majorly ensures and oversees the prompt resolution
of the grievances of security holders; the implementation
of ways to enhance shareholder experience; assessment of
performance of Registrar & Transfer Agent; monitoring of
shareholding movements etc.
The details of SRC composition and meetings are given in
the earlier section of this report.
As part of the Board’s annual evaluation of its effectiveness
and that of its Committees, as described earlier in the
report, the SRC assessed its own effectiveness. The
members of the SRC agreed that its overall performance
had been effective during the year.
The Board accepted all the recommendations made by the
Committee in FY 2022.
The utilization of the Committee’s time along with
its major responsibilities is detailed below:
(%)
40
Shareholder Grievances
45
Enhancing Investor
Relations/ Shareholder
Experience/ Services
15 Shareholding Pattern
271
Integrated Report and Annual Accounts 2021-22 Shareholder grievances
• Review and timely resolution of the grievances of Security holders related to issue,
Enhancing Investor
Relations/ Shareholder
Experience/ Services
allotment, transfer/transmission, dematerialisation, rematerialisation etc. of shares and /
or other securities of the Company;
• Review and timely redressal of all the Security holders grievances related to non- receipt
of information demanded if any, non-receipt of annual report, non-receipt of declared
dividend, issue of new/duplicate share certificates, general meeting etc.;
• Review from time to time the shares and dividend that are required to be transferred to
the IEPF Authority;
• Review & closure of all Investor cases.
• Review of measures taken for effective exercise of voting rights by shareholders;
• Review of the various measures and initiatives taken by the listed entity for reducing the
quantum of unclaimed dividends and ensuring timely receipt of dividend warrants/annual
reports/statutory notices by the shareholders of the Company;
Initiatives for registration of email IDs, PAN & Bank Mandates and demat of shares;
•
• Review reports on shareholder satisfaction surveys, if any;
• Oversight of the performance and services standards of various services being rendered
of/by Registrar and Transfer Agent of the Company;
• To frame Investor Relations Strategy, IR perceptions, actively engaging and
communicating with major shareholders of the Company.
Shareholding Pattern
• Review shareholding distribution;
• Review movement in shareholding pattern;
• Comparative details on demat and physical holding.
An analysis of investor queries and complaints received and responded/ addressed during the year is provided below:
Investor Complaints
Company’s Registrar & Transfer Agent, KFin Technologies Limited (erstwhile KFin Technologies Private Limited) (“RTA”)
entertains and resolves investor grievances in consultation with the Compliance Officer. All grievances can be addressed
either to RTA or to the Company directly. An update on the status of complaints is quarterly reported to the Board and is
also filed with stock exchanges.
The details of Shareholders’ Complaints during FY 2022:
S.
No.
Nature of complaints / letters and correspondence
Received
Replied
Complaints received through Stock Exchanges, SEBI and Ministry of Corporate Affairs
Non-receipt of dividends
Non-receipt of shares
Miscellaneous
Letters and correspondence from shareholders
1
2
3
1
Total
Note: The Company received Nil complaints w.r.t. Non‑Convertible Debentures.
38
16
38
38
16
38
20,331
20,423
20,331
20,423
Closing
Balance
0
0
0
0
0
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Investor Complaints
20
15
10
5
0
Received Replied
Closing
Balance
Received Replied Closing
Balance
Received Replied
Closing
Balance
Received Replied
Closing
Balance
Q1
Q2
Q3
Q4
Non-receipt of dividend
Non-receipt of shares
Miscellaneous
Investor Grievance Redressal Management
Investor
Requests/
Grievances
through
SEBI Scores
Stock Exchange(s)
Registrar & Transfer
Agent (RTA)
Directly to Company
Resolved in time,
by the RTA (on behalf
of the Company) or
Company directly.
Reported to Stakeholders’
Relationship Committee
Reported to Stock
Exchange(s)
Reported to Board
of Directors
Unclaimed shares and transfer of unpaid and unclaimed amounts to Investor Education and Protection
Fund (IEPF)
The details of Unclaimed Suspense Account and IEPF are forming part of the Directors’ Report in this Annual Report.
ESG COMMITTEE (Erstwhile Sustainability Committee)
UK Sinha
Chairperson
Priya Agarwal
Member
Sunil Duggal
Member
Akhilesh Joshi
Member
4
Members
2
Meetings
50%
Independent
90%
Attendance
We are committed to delivering sustainable and responsible
growth, relying on the principles of environmental
stewardship, social equity and impact, and good
corporate governance.
In 2021, Vedanta pledged to become the benchmark in
sustainability for the resources sector. Over the course of
the year, Vedanta employees came forward and became
champions of the cause, taking up responsibilities, creating
agendas, and becoming the heart and soul of Vedanta’s
sustainable future – and drivers for a better future for
the world.
Vedanta is committed to delivering sustainable and
responsible growth, which creates value for both our
shareholders and all our stakeholders. We proactively
engage to incorporate sustainability in all our practices.
We are committed to sustainability in our mining practices,
energy conservation, recycling, proper treatment, and
disposal of the waste, health & safety practices, wellbeing of
our employees and development of our local communities.
Vedanta has been at the forefront of sustainable practices
and is leveraging new technologies to safeguard the
environment and communities. Guided by the philosophy
of ‘Zero Harm, Zero Waste, Zero Discharge’, Environmental,
Social and Governance (ESG) practices are at the heart
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Integrated Report and Annual Accounts 2021-22 of Vedanta’s operations which are focused on delivering
sustainable and responsible growth thereby creating value
for all stakeholders.
Vedanta has redefined its ESG strategy and repurposed
its mission statement from “Transforming elements” to
“Transforming for good” to make a meaningful difference
to the society at large, with its overall purpose supported by
the three pillars and nine aims.
With the integration of Environmental, Social and
Governance (ESG) parameters into the decision-making
of investors; increasing focus of regulatory bodies on
ESG reporting and disclosures round the globe; and in
line with upholding our core commitment and Board
oversight on ESG priorities, the Board, in its meeting held
on 26 July 2021, approved the enhancement of the scope
of the erstwhile Sustainability Committee and upgraded
it to Board‑level ESG Committee with immediate effect
to strengthen Board level rigor and advice into all aspects
of ESG as provided below. The details of Committee
composition and meetings are provided in the earlier
section of this report.
Overseeing the
Company’s ESG
performance
and ensuring
adequacy of
the Company’s
Sustainability
Framework
in line with
international
standards and
ESG rating
parameters.
Advising the
Board on
sustainability/
ESG policies and
management
systems, clearly
setting out the
commitments of
the Company to
manage matters
of sustainable
development
effectively.
Ensuring effective
implementation
of governance,
advocacy and
public relation
mechanisms and
practices related
to sustainability
and ESG.
Outlining
initiatives
required to
institutionalise
a sustainability
and ESG driven
culture through
involvement of
the employees at
all levels.
Evaluating
emerging
sustainability/
ESG risks in
terms of intensity
and impact, in
turn, guiding the
management
on reasonable
avoidance of
adversities likely
to pose a threat to
sustained growth.
Advising the
Board to enable
it to discharge
its ESG
responsibilities,
having regard
to the law and
the expected
international
standards of
sustainability
and stakeholder
governance.
Sustainability Academy
4. Advance the field of Sustainability through research
At Vedanta we pride ourselves in putting Learning and
Development at the forefront ‑ the first step of any big
bold goal, here the goal being sustainability, is always
to upskill. Sustainability Academy is our leap towards a
sustainable Vedanta.
Sustainability Academy strives to achieve the following:
1. Educate employees and business partners regarding
key ESG issues for resources companies and
enable incorporation of ESG in decision making
and operations.
2. Build and scale internal capability through deeper
knowledge and understanding on key ESG topics for
different functional teams (HR, Finance, Health &
Safety, etc.).
3. Design and elucidate sustainability best practices to
employees enabled through knowledge sharing by
creating Centre(s) of Excellence for Sustainability.
and outreach.
Using trainer led sessions and leveraging leading global
experts in the field, Vedanta trained and certified 100+
leaders, including the board of directors, on topics of E, S,
and G.
We now wish to train all ~70,000 Vedanta employees –
including ~50,000 business partners – in the principles
of E, S, and G. Through the creation of dedicated digital
modules on sustainability we aim to empower everyone at
Vedanta with knowledge, tools, and a roadmap to achieve
our sustainability goals.
We are excited for a sustainability focused future at
Vedanta. We have big bold goals to achieve – and we are
confident that our collective will achieve those goals with
the light of sustainability principles to guide them.
274
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Sustainability Academy - a key enabler of the ESG transformation at Vedanta
Work towards advancing the
field of Sustainability through
research and outreach
Deliver cutting-edge knowledge and
share best practice to employees
- enabling creation of a Centre of
Excellence for Sustainability
Induct all Vedanta leaders, employees
and business partners into the ESG
transformation: Educate employees
regarding key ESG issues for resources
companies and enable incorporation of
ESG in decision making and operations
Platform for building internal
capability through deeper knowledge
and understanding on key ESG topics
for different functional teams (HR,
Finance, Health & Safety, etc.)
Other Committees
In line with constant endeavour for adopting best governance practices and ensuring smooth functioning of the board,
the board has constituted various sub-committees and delegated certain roles and responsibilities to ensure prompt and
timely decision‑making on significant matters of the Company. The minutes of the meeting of each committee are placed
before the Board for its noting.
The Board also formulates several project specific sub‑committees from time to time in order to secure speedy
implementation and execution of the projects to meet business needs. The Board is duly kept abreast of each of the
meetings of sub-committees as well.
As on 31 March 2022, the internal Board committees of the Company have been elucidated below:
Committee of Directors
The Committee of Directors (COD) supports the Board by considering, reviewing and approving all borrowing, investments,
finance, banking and treasury related proposals, within the overall limits approved by the Board from time to time. The COD
enables seamless flow of procedures and assists the Board by catering to various routine requirements.
Effective 16 May 2020, Finance Standing Committee has been consolidated with the Committee of Directors by enhancing
the scope of the Committee of Directors to include considering and approving matters related to finance, investment,
banking, treasury etc. within the overall limits approved by the Board.
The composition details of the Committee as on 31 March 2022 is provided below:
Navin Agarwal
Executive Vice-Chairman
Chairperson
Sunil Duggal
Whole-Time Director & Chief Executive Officer
Member
1. Mr. GR Arun Kumar ceased to be member of Committee of Directors effective close of business hours on 24 April 2021.
2. Mr. Sunil Duggal has been appointed as Member of Committee of Directors effective 25 April 2021.
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Integrated Report and Annual Accounts 2021-22 Financial Matters
• Review and approve all policies related to the financial matters of the Company inter alia Investment
policy, Foreign Exchange Policy, Commodity Hedging Policy, Banking Authorization Policy.
Investment
• Review and approve inter‑corporate loans, issuance of Corporate Guarantees, Letter of Comfort
to and on behalf of Company/ Wholly‑Owned Subsidiaries/ Subsidiaries/ Associate Companies in
relation to loans and facilities availed by them;
• Purchase, acquire, subscribe, transfer, sell, redeem or otherwise deal in the shares/ securities of
other Company/ body corporate or any other entity(s) other than for the purpose of trading.
Treasury
• Consider, review and approve all the borrowing proposals including financing proposals within the
overall limits approved by the Board from time to time and to create security/ charge(s) on all or any
of the assets of the Company as may be required for the purpose of the said borrowings and to do
such other incidental and ancillary activities as may be deemed necessary for execution;
• Assess and allocate the working capital limits to business units;
• Consider, review and approve treasury related proposals within the overall limit approved by the Board.
Security related proposals
• Review, consider and approve securities related proposals including allotment of securities,
issuance of duplicate share certificates upon split, consolidation, renewal, remat;
• Consider and review the proposals for buyback of debentures/ bonds issued by the Company
from time.
General
Authorisation
• Nominate and appoint nominee directors on subsidiary, joint ventures, associate companies;
• Authorisation w.r.t. account operation including opening, closing and operation of bank account,
demat account etc.;
• Subsidiary Governance and oversight.
The details of the meetings of COD are given in the earlier section to this report.
Share & Debenture Transfer Committee
The Share & Debenture Transfer Committee is primarily entrusted with the following responsibilities:
• Allotment of shares, debentures, or any other securities; and
• Review and approval of transfer, transmission, deletion and transposition of shares, debentures, or any other securities.
The composition details of the Committee as on 31 March 2022 is provided below:
Dindayal Jalan**
Independent Director
Member
Ajay Goel**
Acting Group Chief Financial Officer
Member
Jagdeep Singh
General Manager, Legal
Member
* Mr. GR Arun Kumar ceased to be the Chairperson of the Committee effective close of business hours on 24 April 2021 and Mr. Anup Agarwal
ceased to be member of the Committee effective 31 March 2021.
** Mr. Ajay Goel and Mr. Dindayal Jalan have been appointed as the Members of the Committee effective 01 April 2021 and 25 April 2021,
respectively.
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Vedanta LimitedReport on Corporate Governance
Integrated Report
Statutory Reports
Financial Statements
Executive Committee
The Executive Committee (EXCO) is responsible for day‑to‑day running of the Company and meets on a monthly basis.
It is entrusted with executing the strategy adopted by the Board; allocating resources in line with delegated authorities;
managing risk; and monitoring the operational and financial performance of the Company. Authority is delegated by the
Executive Committee to the respective Chief Executive Officers of each of the businesses. The Group Chief Executive
Officer keeps the Board informed of the EXCO’s activities through his standing reports placed before the Board.
Group Management Committee
Vedanta continues to embark upon the enriching journey of growth and expansion with best‑in‑class safety, benchmark
technology, and cost‑efficient practices. The design and culture of our organisation is cohesively built in a manner which
aims to ensure that the Group has the right Management‑In‑Place (MIP) to drive the business and take the organisation to
the next level.
In line with our long‑term vision to create value, a fully empowered Group Management Committee has been formed
effective 01 April 2020 comprising of the Group Chief Financial Officer, Chief Executive Officer, Chief Human Resource
Officer and Chief Commercial Officer.
Since its inception, the Management Committee has been instrumental in executing its function as the top‑level body
collectively responsible for all key decisions taken under the guidance of the Chairman and the Board. The Committee is
entrusted with driving all significant initiatives and empowered by the Board to establish operational efficiency in guiding
business strategy and achieving strong performance targets.
General Body Meetings
Annual General Meetings
The details of the last three years Annual General Meetings / Court Convened Meeting are as follows:
Year
Location
54th Annual General Meeting
Date & Time
Special Resolutions passed
Weblink
2018-19
Rangsharda Auditorium,
K.C. Marg, Bandra Reclamation,
Bandra (West), Mumbai
11 July 2019 at
10:30 a.m.
55th Annual General Meeting
2019-20
Through Video Conferencing (VC) /
Other Audio-Visual
Means (OAVM)
30 September 2020
at 3:00 p.m.
56th Annual General Meeting
Payment of remuneration to
Mr. Tarun Jain in excess of
limits prescribed under Listing
Regulations.
Notice
Outcome
Minutes
Video
No Special resolution was passed Notice
2020-21
Through Video Conferencing (VC) /
Other Audio-Visual
Means (OAVM)
10 August 2021 at
3:00 p.m
Re-appointment of Mr. UK Sinha
as an Independent Director for a
second and final term
Postal Ballot
No Resolution was passed through postal ballot during FY 2022.
Proposal for Postal Ballot
There is no immediate proposal for any resolution through postal ballot.
Outcome
FAQs
Notice
Outcome
Video
Chairman Speech
FAQs
Speaker Criteria
277
Integrated Report and Annual Accounts 2021-22 Shareholders
Means of Communication
Financial Results
• The quarterly/ half-yearly/ annual results along with audit/ limited review report, press release and
investor presentation is filed with the stock exchanges immediately after the approval of the Board.
• The results are also published in at least one prominent national and one regional newspaper having
wide circulation viz. a viz. Business Standard, Financial Express, Economic Times and Maharashtra
Times, within 48 hours of the conclusion of the meeting,
• Quarterly financial results are sent to shareholders whose e‑mail ids are registered with the Registrar &
Transfer Agent.
• Financial results are also uploaded on the Company’s website and can be accessed at
www.vedantalimited.com
News Releases
• Stock exchanges are regularly updated on any developments/ events and the same are simultaneously
displayed on the Company’s website as well.
• All the releases can be accessed on the website of the Company at www.vedantalimited.com
Institutional Investor / Analysts Presentation
• The schedule of analyst/investor meets are filed with the stock exchanges and the presentations are
uploaded on the website of the Company at www.vedantalimited.com.
• With an intent to keep our shareholders abreast with the operational performance, the organic project
pipeline and internal developments in a transparent manner from time to time, the Company regularly
files Investor Briefs with Stock Exchanges.
Website
• The Company has a dedicated section on ‘Investor Relation’ on its corporate website
www.vedantalimited.com which encompasses all the information for the investors like financial results,
policies & codes, stock exchange filings, press releases, annual reports, SEC Filings etc.
Annual Report and Form 20F
•
In compliance with circulars issued by SEBI and MCA on account of COVID‑19 pandemic, soft copies of
Annual Reports were sent to those shareholders whose e‑mail ids were registered with the Company.
The Form 20F filed with SEC is also made available on the website of the Company.
Shareholder Satisfaction Survey
• As a part of our constant endeavour to improve shareholder services, the Company has provided a
shareholders’ satisfaction survey on its website for investors.
• The same can be accessed at www.vedantalimited.com.
Chairman Communique
• At every AGM, the Chairman addresses the shareholders on Company’s operations and performance
with his speech.
• Further, Chairman’s statement addressing the shareholders is also published in the Annual Report of
the Company.
Access to Documents
• Shareholders can also access the details of Corporate Governance Policies and Charters, Memorandum
and Articles of Association, Financial information, Shareholding information, details of unclaimed
dividends and shares transferred / liable to transfer to IEPF, etc. on the Company’s website.
278
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Refund) Rules, 2016, as amended, the shares on which
dividend remains unpaid/ unclaimed for seven consecutive
years or more shall be transferred to the IEPF after giving
due notices to the concerned shareholders. Accordingly, the
details of equity shares transferred are also available on the
Company’s website at www.vedantalimited.com.
Registration of Nomination
Registration of Nomination makes easy for dependents to
access your investments and set out the proportion of your
benefits to the nominees.
The company has duly provided the facility of updation of
nominees to the shareholders.
The shareholders holding physical units can submit the
nomination form SH-13 which is available on the website of
the Company at www.vedantalimited.com and the demat
holders can contact their respective depository participant
for the necessary updations.
Conversion of Securities into Dematerialised form
Shareholders are also encouraged to open Demat accounts
to eliminates bad delivery, saves stamp duty on transfers,
ensures faster settlement, eases portfolio management and
provides ‘on‑line’ access through internet.
SEBI vide Circular SEBI/HO/MIRSD/MIRSD_RTAMB/P/
CIR/2022/8 dated 25 January 2022 issued guidelines for
Issuance of Securities in dematerialized form in case of
investor service request. In accordance with the circular,
the company post 25 January 2022 shall issue the
securities in dematerialized form only while processing
the investors’ requests for Issue of duplicate certificate,
Claim from Unclaimed Suspense Account, Renewal/
Exchange/Endorsement/Sub‑division/Splitting of
certificate, Consolidation of certificates/folios, Transmission
and Transposition.
The security holder shall submit duly filled ISR‑4 to the RTA
for processing of service requests. The form is available at
the website of the Company at www.vedantalimited.com
and also at the website of the RTA at https://ris.kfintech.
com.
Considering that SEBI has disallowed the physical
transfer / issuance of equity shares in physical mode,
shareholders are requested to convert their equity holding
into dematerialised form for ease of dealing in securities
markets and processing the service requests.
Investors and Analysts Meet – Engagement with
Chairman and Senior Management
Vedanta organized a two‑day Investors’ and Analysts’
engagement with Chairman, Vice‑Chairman, Group CEO
and Senior Management in March, 2022 in Mumbai.
Over these two days, Vedanta team interacted with more
than 100 participants of Indian Capital Market comprising
of – CIOs/ fund managers from institutional investment
firms with more than $500 bn cumulative asset under
management, equity analysts, ultra-high net worth
individuals and other key opinion makers.
The successful engagement sessions were aimed at
highlighting Vedanta’s unique position to deliver sustainable
growth with cost leadership and significant value creation
potential for its shareholders.
APPEAL TO SHAREHOLDERS
Updation of PAN Bank Mandate & Contact Details
Shareholders are requested to update their email ids,
PAN and Bank Mandate with the Company to ensure
faster communication and credit of amounts. Regular
reminders are also sent to shareholders in this regard. The
shareholders having physical units can avail the facility
to update the details on the website of the Company at
www.vedantalimited.com. and the demat holders can
contact their respective depository participant for updating
the details.
SEBI vide Circular SEBI/HO/MIRSD/MIRSD_RTAMB/P/
CIR/2021/655 dated 03 November 2021, introduced
common and simplified norms for processing investor’s
service request wherein all members holding securities of
the Company in physical mode are mandatorily required to
furnish the PAN and Nomination (for all eligible folios) to the
Company’s Registrar & Transfer Agent (RTA). Shareholders
are requested to furnish the above details to enhance the
ease of doing business in the securities market. A letter
was also sent to the shareholders detailing the above
requirements. The forms can be downloaded from the
website of the Company at www.vedantalimited.com and
also from the website of the RTA at https://ris.kfintech.com.
Unclaimed Dividend/ Shares
Reminders are sent to shareholders to encourage them to
timely claim their unclaimed dividend and shares before the
same is transferred to the IEPF Account.
The Company has also uploaded the details of unpaid and
unclaimed dividend amounts lying with the Company on the
Company’s website at www.vedantalimited.com
Pursuant to the provisions of Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and
279
Integrated Report and Annual Accounts 2021-22 Correspondence Details
All the Share Transfer and Dividend Payment Requests
and Investors Related queries, the shareholder can
directly contact to our Registrar and Transfer Agent
KFin Technologies Limited
(formerly KFin Technologies Private Limited)
Unit: Vedanta Limited
Selenium Building, Tower-B, Plot No- 31 & 32,
Financial District, Nanakramguda,
Serilingampally, Hyderabad, Rangareddi,
Telangana, India, 500032
Tel: +91 40 6716 2222
Fax: +91 40 2300 1153
Email: einward.ris@kfintech.com
The Shareholders can reach out to the designated persons of any department in case of any query for the matters enumerated
below:
Company Secretary and Compliance Officer for queries
related to Corporate Governance and Secretarial
matters / Details of Nodal Officer
Investor Relations
Corporate Communication related matters of the
Company
Sustainability Related Matters
Queries related to Debenture issued by the Company:
Ms. Prerna Halwasiya
Company Secretary & Compliance Officer
Vedanta Limited
Core 6, 3rd Floor, Scope Complex, 7, Lodhi Road, New Delhi - 110003
Tel: +91 11 42262300
Email: comp.sect@vedanta.co.in
Mr. Sandep Agrawal
Vice President - Investor Relations
Vedanta Limited
Vedanta House, 75, Nehru Road, Vile Parle East, Mumbai - 400099
Tel: +91 22 6646 1000
Email: vedantaltd.ir@vedanta.co.in
Mrs. Ritu Jhingon
Director – Communications, PR & Branding
Vedanta Limited
Core 6, 3rd Floor, Scope Complex, 7, Lodhi Road, New Delhi- 110003
Tel: +91 011 42262300
Email: gc@vedanta.co.in
Mr. Rajinder Ahuja
Group Head – HSE and Sustainability
Vedanta Limited
Core 6, 3rd Floor, Scope Complex, 7, Lodhi Road, New Delhi- 110003
Tel: +91 011 42262300
Email: sustainability@vedanta.co.in
Debenture Trustee:
Axis Trustee Services Limited
Axis House, 2nd Floor, Wadia International Centre, Pandurang Budhkar
Marg, Worli, Mumbai - 400 025
Tel: +91 22 2425 2525
Fax: +91 22 2425 4200
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Annual General Meeting for FY 2022
Date & Time
• 10 August 2022
• 3:00 pm
Virtual AGM
Virtual Annual General Meeting with live webcast and facility to participate through Video Conferencing /
other audio-visual means for shareholdets for attending the AGM from their respective places. Respected
Shareholders are requested to kindly join the meeting through VC/ OAVM facility by following the
instructions provided in the notes to the AGM Notice.
For participation and further details, click here: https://www.vedantalimited.com/vedanta2022/
FAQs
A set of Frequently Asked Questions (FAQs) made available for the shareholders on the Company’s website
at www.vedantalimited.com and NSDL website for a seamless participation through VC / OAVM.
Online Chat Facility
Facility to submit suggestions, feedbacks or questions online during the conduct of the Meeting will be
provided to the members.
Online Speaker Registration
Members who desire to speak at the AGM can pre‑register as speakers by sending request to the Company
as per the instructions provided in the Notice convening the Meeting.
Prior to AGM, site testing with the registered speaker shareholders shall be conducted to ensure smooth
participation during the AGM.
E-Voting Facility
Remote e-voting facility will be provided to the shareholders before the date of AGM.
The Company will also provide remote e‑voting facility to the members during the AGM till 15 minutes post
conclusion of the meeting to ensure participation and voting through electronic means.
Transcript of AGM
Recorded transcript of AGM will be made available on the website of the Company.
Financial Year
The Financial Year of Company commences from 01 April and concludes on 31 March of each year. Each quarter the
Company reviewed and approved its financials. The previous and tentative dates for approval of the financials for FY 2022
and FY 2023 are as follows:
2022
First Quarter
26 July 2021
2023
First Quarter
End of July, 2022
Second Quarter and Half Year
Second Quarter and Half Year
29 October 2021
Third Quarter
28 January 2022
End of October, 2022
Third Quarter
End of January, 2023
Fourth Quarter and Year end
Fourth Quarter and Year end
28 April 2022
End of April, 2023
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Integrated Report and Annual Accounts 2021-22 Dividend and Capital Allocation
Dividend Distribution Policy
In terms of the provisions of Regulation 43A of the
Listing Regulations, the Company has adopted Dividend
Distribution Policy to determine the distribution of
dividends in accordance with the applicable provisions.
The policy can be accessed on the website of the Company
at www.vedantalimited.com.
With consistent dividend as a healthy sign of our sustained
growth, our firm belief in percolating the benefits of our
business progress for widespread socio-economic welfare
facilitates the equitable sharing of our economic value
generated. Attaining steady operational performance and
a harmonised market environment in continuation of the
historical trends helped us to reaffirm the realisation of
competent numbers for FY 2022.
Dividend for FY 2022
For the period under review, the Company has declared and paid interim dividend as detailed below:
1st Interim Dividend
2nd Interim Dividend
3rd Interim Dividend
Total Dividend
`18.50
per share
`13.50
per share
`13.00
per share
`45.00
per share
~14% dividend yield with record pay-out of B45/share.
The complete details on date of declaration, date of payment, record date, total pay‑out are detailed in the Directors’
Report forming part of this Annual Report. The payment of the above-mentioned dividend was duly completed within the
statutory timelines.
Further, the Board has not recommended any final dividend for FY 2022.
Shareholders Value Creation
Vedanta has a consistent track record of rewarding its shareholders with strong dividend pay‑out. The Company has paid
attractive dividend amounting to `48,870 crores in last 10 years. The details of the same have been summarized below:
Dividend History
Dividend Pay-out last 10 years
50.00
45.00
40.00
35.00
30.00
25.00
20.00
15.00
10.00
5.00
0.00
45.00
19.45 21.20
18.85
3.25
4.10
3.50
9.50
3.90
-
4
1
3
1
0
2
-
5
1
4
1
0
2
-
6
1
5
1
0
2
-
7
1
6
1
0
2
-
8
1
7
1
0
2
-
9
1
8
1
0
2
-
0
2
9
1
0
2
-
1
2
0
2
0
2
-
2
2
1
2
0
2
0.10
-
3
1
2
1
0
2
Face value of Share (`)
% of Dividend
Dividend per share (`)
Total Payout
D48,870 Crores
Capital Allocation
Your Company has always strived to maintain an optimal
capital allocation to strengthen the balance sheet. The
approach has always been to grow sustainably and with
financial prudence and in the line with the same, the below
guiding principles forms part of the Company’s Capital
Allocation Policy:
• A consistent, disciplined, and balanced allocation of
capital with long term Balance Sheet management.
• Maintain optimal leverage ratio (Net Debt / EBITDA) at
consolidated level.
• Overall capital allocation will maximize Total
Shareholders Returns (TSR).
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
DISCIPLINED CAPITAL ALLOCATION FRAMEWORK
Key Strategic Priority
Optimize Leverage Ratio
Intend to deleverage at group level
•
• Leverage ratio at Vedanta Limited should not be more than 1.5x.
Capital
Expenditure
Project Capex
• Volume augmentation, cost reduction or creating value added
products are key guiding principles for all projects
• Growth projects to ensure minimum guidelines for IRR -18%
Sustaining Capex
• All sustaining capital expenditure to be a part of Business Plan
• Sustaining capex to be defined and tracked in $/tonne
CAPITAL
ALLOCATION
Dividend
Minimum 30% of Attributable Profit after tax (before
exceptional items) of Company (excluding profits of HZL)
Dividend income received from HZL will be pass through
within 6 months
Mergers &
Acquisitions
Intent to enhance value via acquiring accretive assets/
business that have: synergies with existing line of core
businesses Key Strategic Priority
Maximize Total Shareholder’s Return (TSR)
Listing Details
Particular
Indian Stock Exchange
BSE Limited (BSE)
Phiroze Jeejeebhoy Towers, Dalal Street,
Mumbai - 400 001
National Stock Exchange of India Limited (NSE)
Exchange Plaza, Plot No. C/1, G-Block,
Bandra Kurla Complex, Bandra(East),
Mumbai - 400 051
Scrip Code
500295
ISIN code
INE205A01025
VEDL
INE205A01025
Global Stock Exchange
New York Stock Exchange (NYSE)
American Depository Shares (ADS)
VEDL
CUSIP No.
92242Y100
Notes:
• Non‑Convertible Debentures of the Company are listed on the BSE Limited (BSE), details of the same are provided later in this report.
• Commercial Papers of the Company are listed on National Stock Exchange of India Limited, details of the same are provided later in this report.
• Company has paid annual listing fees for the FY 2023 to all the Stock Exchanges, where the securities of the Company are listed.
• The American Depositary Shares (ADS) of the Company have been delisted from NYSE effective close of trading on NYSE on 08 November
2021. This follows the filing done by the Company of Form 25 with Securities and Exchange Commission on 29 October 2021. As a consequence
of the delisting becoming effective, termination of the Deposit Agreement under which the ADS were issued (the “Deposit Agreement”) has
also become effective close of trading on NYSE on 08 November 2021. The said action has no impact on the current listing status or trading
of the Company’s equity shares on BSE and NSE. Further, the Company will continue to be subject to reporting obligations under the U.S.
Securities Exchange Act of 1934 until such time as it can terminate its registration under the Exchange Act.
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Integrated Report and Annual Accounts 2021-22 Stock Price Data for FY 2022
BSE - High Low (In ` )
NSE - High Low (In ` )
Mar-22
Feb-22
Jan-22
Dec-21
Nov-21
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
Low
High
354
322.1
306.95
315.75
300.1
283
283.05
261.2
255
242.6
251.05
209.8
417.8
385.65
357.7
361.65
373.2
385.75
317.9
341.25
306.35
282.8
296.25
266.25
Mar-22
Feb-22
Jan-22
Dec-21
Nov-21
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
Low
High
353.8
322
307.2
315.65
290.3
283.15
282.95
261
255
242.5
251
209.75
417.85
385.85
357.4
361.65
373.2
385.9
317.25
341.45
306.35
282.75
296.3
266.2
0
200
400
600
0
200
400
600
The American Depositary Shares (ADS) of the Company have been
delisted from NYSE effective close of trading on 08 November
2021. Hence, the high and low price for the month of November,
2021 has been provided upto 08 November 2021.
NYSE - High Low (In $)
Nov-21
Oct-21
Sep-21
Aug-21
Jul-21
Jun-21
May-21
Apr-21
15.71
14.99
15.00
14.33
13.50
13.30
13.85
17.25
20.14
17.55
18.01
16.19
15.58
16.32
11.23
0
200
14.13
400
600
800
1000
Low Price
High Price
VEDL Share price v/s BSE Sensex &
BSE Metal Index
VEDL Share price v/s NSE Nifty
50 & NSE Metal Index
200
180
160
140
120
100
80
60
40
20
0
1
2
-
r
p
A
1
2
-
y
a
M
-
1
2
n
u
J
1
2
-
l
u
J
-
1
2
g
u
A
-
1
2
p
e
S
1
2
-
t
c
O
1
2
-
v
o
N
1
2
-
c
e
D
-
2
2
n
a
J
-
2
2
b
e
F
2
2
-
r
a
M
1
2
-
r
p
A
1
2
-
y
a
M
-
1
2
n
u
J
1
2
-
l
u
J
-
1
2
g
u
A
-
1
2
p
e
S
1
2
-
t
c
O
1
2
-
v
o
N
1
2
-
c
e
D
-
2
2
n
a
J
-
2
2
b
e
F
2
2
-
r
a
M
VEDL
BSE Sensex
BSE Metal
VEDL
Nifty 50
NSE Metal
200
180
160
140
120
100
80
60
40
20
0
284
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Market Indices –
Increasing Investor Confidence
EPS (Before Exceptional Items and DDT)
(`)
300
250
200
150
100
50
0
0
5
8
1
.
8
7
0
1
.
0
8
2
3
.
2
0
2
5
.
0
7
4
2
.
.
6
9
1
2
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
FY 2022
0
2
0
2
/
1
/
1
0
2
0
2
/
4
/
1
0
2
0
2
/
7
/
1
0
2
0
2
/
0
1
/
1
1
2
0
2
/
1
/
1
1
2
0
2
/
4
/
1
1
2
0
2
/
7
/
1
1
2
0
2
/
0
1
/
1
2
2
0
2
/
1
/
1
2
2
0
2
/
4
/
1
VEDL
BSE 500
BSE Metal
BSE All CAP
BSE Basic Material
Market Cap*
(C Crores)
Last 12 months
Last 3 months
Vedanta
BSE Metal
BSE All Cap.
76%
56%
22%
Vedanta
BSE Metal
18%
16%
BSE All Cap.
-0.6%
1
1
1
2
0
1
,
0
5
4
3
0
1
,
9
6
0
4
2
,
4
0
3
8
6
,
4
9
9
4
8
,
,
0
7
9
9
4
1
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
FY 2022
Returns calculated at closing rate of quarter/year
*Market cap is closing rate of the period mentioned
Share Transfer System
As part of the effective shareholder management and grievance redressal processes, various shareholder requests
received by the Company through the Registrar and Transfer Agent (RTA) are processed in the following manner:
Request received by
RTA
Requests relating to
transfer, transmission,
transposition, change
of name, deletion of
name are received from
shareholders having
physical shareholding;
Document Verification
Approval
The Company RTA,
KFin Technologies
Limited, verifies
the authenticity of
documents submitted
by shareholders;
RTA thereafter,
sends the requests
to the Company
for processing;
The Company also
inspects and confirms
the veracity and validity
of documents;
Requests are then
approved by the duly
constituted Share &
Debenture Transfer
Committee designated
for the share
transfer procedures;
Communication to
Shareholder
Post Committee
approval, RTA completes
the process and
communicates to the
respective shareholders;
Requests are generally
processed within 15
days of receipt of the
documents, if documents
are clear and found to be
in order in all respects.
In addition to the above, a compliance certificate is issued on an yearly basis by a Company Secretary in Practice pursuant
to Regulation 40(9) of Listing Regulations reiterating due compliance of share transfer formalities by the Company within
timelines as required under the applicable provisions.
The Company/RTA has also duly complied with the operational guidelines including cut‑off date till 31 March 2022 as
provided through SEBI circulars issued during the year with respect to re-lodgement and dematerialisation of share transfer
requests which were earlier rejected/returned due to deficiency in documents.
285
Integrated Report and Annual Accounts 2021-22 Reconciliation of Share Capital Audit
As required by the SEBI Listing Regulations, quarterly audit
of the Company’s share capital is being carried out by a
Company Secretary in Practice with a view to reconcile
the total share capital admitted with NSDL and CDSL and
held in physical form, with the issued and listed capital.
The reports for Share Capital Audit Reconciliation and
Compliance Certificates obtained in line with the statutory
requirements are meticulously filed with the Stock
exchanges on a timely basis and also placed before the
Board of Directors.
Capital Evolution
The details of capital evolution of the Company can be
accessed on the website of the Company at
www.vedantalimited.com.
Shareholding Distribution
Shareholding according to shareholders class as on 31 March 2022
Shareholding of Nominal value of `1/-
No. of
shareholders
% of Total
shareholders
No. of
shares held
Shareholding (%)
758,471
4,320
1,778
489
240
157
272
533
98.98
149,932,163
0.56
0.23
0.07
0.03
0.02
0.04
0.07
31,408,914
25,359,097
12,057,670
8,369,178
7,167,404
20,063,323
3,462,841,290
766,260
100.00
3,717,199,039
4.03
0.85
0.68
0.32
0.23
0.19
0.54
93.16
100.00
31 March 2022
No. of
shares held
Percentage of
shareholding
Face value `1/-
1-5000
5001- 10000
10001- 20000
20001- 30000
30001- 40000
40001- 50000
50001- 100000
100001 & Above
Total
S.
No.
Category
(a) Promoter’s holding
Indian promoters
Foreign promoters
Total (a)
(b) Public Shareholding
Banks, Mutual funds, Financial Institutions, Insurance Companies
(Central/State Govt. Institutions/ Non-Govt. Institutions)
FIIs /Foreign Corporate Bodies
Body Corporates
Indian Public
NRIs
Trust
H U F
Clearing Members
Foreign Bodies
Foreign Nationals
IEPF
NBFCs
QIBs
Overseas Corp Bodies
Alternate Investment Funds
ESOS Trust
Total (b)
(c ) American Depository Receipts
Total (c)
Grand Total (a)+(b)+(c)
286
160,656
2,590,189,293
2,590,349,949
91,461,523
347,431,036
7,29,79,786
23,70,37,472
1,16,26,974
6,13,555
77,79,991
1,930,445
18,75,987
1,439
5,324,251
51,888
339,241,257
1,100
798,980
8,693,406
1,126,849,090
0
0
3,717,199,039
0.00
69.68
69.69
2.46
9.35
1.96
6.38
0.31
0.02
0.21
0.05
0.05
0.00
0.14
0.00
9.13
0.00
0.02
0.23
30.31
0.00
0.00
100.00
Vedanta LimitedReport on Corporate Governance
Integrated Report
Statutory Reports
Financial Statements
1.
Vedanta Resources Limited (Acquirer) together with Twin Star Holdings Limited (PAC 1), Vedanta Holdings Mauritius Limited (PAC 2) and
Vedanta Holdings Mauritius II Limited (PAC 3), as persons acting in concert with the Acquirer (PACs), have acquired 374,231,161 equity
shares of the Company (24,14,43,115 equity shares (6.50%) by PAC 1, 10,73,42,705 equity shares (2.89%) by PAC 2 and 2,54,45,341 equity
shares (0.68%) by PAC 3) under the voluntary open offer (Open Offer) made to the public shareholders of the Vedanta Limited (Company) in
accordance with the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, thereby
increasing acquirer’s indirect shareholding in the Company from the current 55.1% to 65.18%.
2. Monte Cello NV (MCNV) Netherland Antilles forming part of the Promoter Group has been liquidated and hence, removed from the Promoter
Group.
3. During the third quarter, two new entities were incorporated which were covered under the promoter group of the Company: 1) Vedanta
Netherlands Investments BV and 2) Vedanta UK investment Limited.
4. Vedanta Netherlands Investments BV and Twinstar Holdings Limited, members of the promoter group of Vedanta Limited (“VEDL”), had
purchased 63,514,714 and 103,985,286 equity shares respectively of VEDL (representing 1.71% and 2.80% of the equity share capital
respectively of VEDL), on 23 November 2021, through a block deal on the stock exchanges.
5. On 16 December 2021, Vedanta Holdings Mauritius II Limited has acquired 170,116,200 equity shares of Vedanta Limited (representing
4.58% of the equity share capital) from Finsider International Company Limited, pursuant to an inter‐se transfer by way of block deal on the
stock exchange.
6. On 21 December 2021, Vedanta Holdings Mauritius II Limited had acquired 67,915,740 equity shares of the Vedanta Limited (representing
1.83% of the equity share capital) from Finsider International Company Limited, pursuant to an inter‐se transfer by way of block deal on the
stock exchange.
7.
On 24 December 2021, Vedanta Holdings Mauritius II Limited has acquired 44,343,139 equity shares of Vedanta Limited (representing
1.19% of the equity share capital) from Westglobe Limited, pursuant to an inter‐se transfer by way of block deal on the stock exchange. Post
this transaction the holding of Westglobe Limited has reduced to NIL.
8. During the third quarter, 2,400 shares were released from the abeyance category which were pending for allotment as they are subjudice.
Due to this the listed capital of the Company has increased to 3,717,199,039 equity shares.
9. 3,05,832 shares are under abeyance category, pending for allotment as they are sub judice.
10. During the fourth quarter, two new entities were incorporated which are covered under the promoter group of the Company: 1) Vedanta
Netherlands Investments II BV; and 2) Vedanta Resources Mauritius Limited.
11. The American Depositary Shares (ADS) of the Company have been delisted effective close of trading on NYSE on 08 November 2021.
Further, post 11 January 2022, the ADS underlying equity shares which were not surrendered in accordance with the Deposit Agreement
within the extended timelines i.e., 10 January 2022, were sold by the depositary and the proceeds, less and withholding taxes, fees and
expenses were remitted to the ADS holders. Hence, as on 31 March 2022, there were no outstanding ADS of the Company.
Shareholding Distribution
as on 31 March 2022
(%)
Dematerialisation of Shares
and Liquidity
(%)
69.69 Promoter & Promoter Group
9.40
Foreign Institutional Investors
8.64 LIC
6.69
Individuals (Indian Resident, NRIs)
3.13 Others – Body Corporates, HUF,
Trusts, Foreign National. etc
2.45
Domestic Institutional Investors
88.40 NSDL
11.37 CDSL
0.23
Physical
The shares of the Company are compulsorily traded
in dematerialised form on the stock exchanges. As on
31 March 2022, ~ 99% shares of the Company are held in
dematerialised form.
Pursuant to the amendment in Listing Regulations,
post 01 April 2019, except in case of transmission or
transposition of securities, requests for effecting transfer of
securities shall not be processed unless the securities are
held in the dematerialized form with a depository.
The equity shares of the Company are freely tradable in the
market and are among the most liquid and actively traded
shares in the stock exchanges.
Update on NYSE Listing
The Company had announced its intention to delist
American Depositary Shares from the New York Stock
Exchange (“NYSE”) and to terminate its American
Depositary Share Program on 23 September 2021 and
the American Depositary Shares (ADS) of the Company
have been delisted from NYSE effective close of trading on
NYSE on 08 November 2021. This follows the filing done
by the Company of Form 25 with Securities and Exchange
Commission on 29 October 2021. As a consequence of the
delisting becoming effective, termination of the Deposit
Agreement under which the ADS were issued (the “Deposit
Agreement”) has also become effective close of trading on
NYSE on 08 November 2021. The said action has no impact
on the current listing status or trading of the Company’s
equity shares on BSE and NSE.
287
Integrated Report and Annual Accounts 2021-22 Post 11 January 2022, the ADS underlying equity shares
which were not surrendered in accordance with the Deposit
Agreement within the extended timelines i.e., 10 January
2022, were sold by the depositary and the proceeds, less
and withholding taxes, fees and expenses were remitted to
the ADS holders. Hence, as on 31 March 2022, there are no
outstanding ADS of the Company.
Further, the Company will continue to be subject to
reporting obligations under the U.S. Securities Exchange Act
of 1934 until such time as it can terminate its registration
under the Exchange Act.
Listing of Debt Securities
Non-Convertible Debentures
The following Secured Redeemable Non‑Convertible Debentures (NCDs) are listed with the BSE Limited as on
31 March 2022:
S.
No.
ISIN
1
2
3
4
INE205A07170
INE205A07188
INE205A07196
INE205A07212
Commercial Papers
Issuance date
Maturity date
Coupon rate
Payment
frequency
No. of NCDs
(Face value of
`10 lakhs each)
Amount
issued
(` in crores)
09-Dec-2019
09-Dec-2022
30-Jan-2020
30-Jun-2022
25-Feb-2020
25-Feb-2030
31-Dec-2021
31-Dec-2024
9.20% Annual
8.75% Annual
9.20% Annual
7.68% Annual
7,500
12,700
20,000
10,000
750
1,270
2,000
1,000
The following Commercial Papers (CPs) are listed with the National Stock Exchange of India Limited as on 31 March 2022:
S.
No.
ISIN
1
2
3
4
5
6
7
8
9
INE205A14VU4
INE205A14VW0
INE205A14VY6
INE205A14VZ3
INE205A14VS8
INE205A14VT6
INE205A14VV2
INE205A14VX8
INE205A14WA4
10
11
INE205A14WB2
INE205A14WC0
Issuance date
Maturity date
Face Value (`)
Total No. of
Securities
Amount Issued
(` in crores)
21-Jan-2022
24-Jan-2022
25-Jan-2022
28-Jan-2022
27-Dec-2021
21-Jan-2022
24-Jan-2022
25-Jan-2022
22-Mar-2022
25-Mar-2022
28-Mar-2022
21-Apr-2022
22-Apr-2022
25-Apr-2022
28-Apr-2022
24-Jun-2022
21-Jul-2022
22-Jul-2022
27-Sep-2022
21-Mar-2023
23-Sep-2022
28-Mar-2023
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
500,000
7,800
2,500
5,000
4,500
38,000
10,000
2,500
10,000
14,600
5,000
2,000
390
125
250
225
1,900
500
125
500
730
250
100
288
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Credit Ratings
Your Company is rated by CRISIL and India Rating and Research Private Limited on its various debt instruments.
Status as on 31 March 2021
Status as on 31 March 2022
Date of Action
CRISIL
India Ratings
CRISIL
India Ratings
CRISIL
India Ratings
Bank
Loans
CRISIL AA- /
Outlook
Stable
IND AA- /
Outlook
Stable
CRISIL AA/
Outlook
Stable
IND AA/
Outlook
Stable
Outlook Change to
'Positive' from 'Stable' in
October 2021
Outlook Change to
'Positive' from 'Stable'
in December 2021
Upgraded to 'CRISIL AA'
from “CRISIL AA-“and
change in outlook to
‘stable” from “Positive” in
February 2021
The ratings upgrade
factors in expectation
of improved operating
profitability, driven by
elevated commodity
prices during fiscal
2022, volume growth
across businesses,
and sustained cost
efficiencies especially in
the aluminium business
Upgraded to 'IND AA' from
“INDAA-“and change in
outlook to ‘stable” from
“Positive” in March 2021
The rating upgrade
reflects the group’s
continuous deleveraging
and Ind-Ra’s expectation
of an improvement in the
consolidated operational
cash flow in FY 2022
and FY 2023, following a
significant increase in the
operating profitability, led
by high metal prices partly
offset by raw material
input inflation
Same as above
NA
Same as above
Same as above
CRISIL AA- /
Outlook
Stable /
CRISIL A1+
CRISIL AA- /
Outlook
Stable
IND AA- /
Outlook
Stable
CRISIL AA/
Outlook
Stable/
CRISIL A1+
CRISIL AA/
Outlook
Stable
IND AA/
Outlook
Stable
CRISIL A1+
IND A1+
CRISIL A1+
IND A+
No Change
No Change
Working
Capital
Lines
Non-
Convertible
Debentures
Commercial
Paper
Credit Rating Upgrade from both CRISIL and India Ratings
Rating agency
CRISIL Ratings
India Ratings
Rating drivers
Date of rating action
25 February 2022
29 March 2022
Current Rating
CRISIL AA/Stable (upgraded from CRISIL AA-/Positive)
IND AA/Stable (upgraded from IND AA-/Positive)
• Strong operational performance driven by volume growth across businesses
• Strong commodity prices with sustained cost efficiencies
• Disciplined capital allocation framework
• Commitment to further deleverage
Highest credit rating since January 2020
AA-/Pos
AA/Pos
AA/Stable
AA/Stable
AA-/Neg
AA-/Stable
AA/Neg
2016
2017
2018
2019
2020
2021
2022
• Continued gross and net debt reduction to be key monitorable by the agencies
• Upgrade trigger: ND/EBITDA below 1.5x for CRISIL and India Ratings; Downgrade trigger: 2.7x
289
Integrated Report and Annual Accounts 2021-22
Plant Locations
Division
Location
Copper Anodes (Smelter), Refinery,
Continuous Cast Copper Rods
SIPCOT Industrial Complex, Madurai By-pass Road, T.V. Puram PO, Thoothukudi – 628 002
Tamil Nadu, India.
Copper Cathodes (Refinery) and
Continuous Cast Copper Rods / Wire
Continuous Cast Copper Rods/ Wire
1/1/2 Chinchpada, Silvassa – 396 230 Union Territory of Dadra and Nagar Haveli, India
Gat 201, Plot no. 2, 3, 4, 5, 6 and 7 Pune Old Highway,Takwe Khurd. Post Kamshet. Taluka
Maval. Dist. Pune – 410 405 Maharashtra, India.**
209-B, Piparia Industrial Estate, Piparia, Silvassa – 396 230, Union Territory of Dadra and
Nagar Haveli, India.
Iron Ore – Mining
Pig Iron Division 1
Ratnagiri – Y 1, R 57 Zaadzadgaon Block, MIDC, Zadgaon, Ratnagiri – 415 639,
Maharashtra, India.
Megalahally Office Complex, Megalahally Village, Hireguntanur, Hobli, Chitradurga Taluka
and District, Karnataka – 577 520, India.
Plot No. Survey No. 39,41,36/1(Part), 37 (Part),42/1 (Part),43/1 (Part), Survey
No.39, Marcel, Amona, Bicholim, North Goa, 403 107.
Metallurgical Coke (Met Coke)
Plot No.Survey No: 205,206,207,43/1, 44/4, 44/5, Navelim, P. O., Navelim, Bicholim,
North Goa, 403 505.
PIG Iron Division 2
Aluminium Smelter
Alumina Refinery
Sy No 192,193, Vazare, Dodamarg, Sindhudurg, Maharashtra, 416 512.
Plot No. Survey no.177 & 120 (part), Survey No.120, Subdiv No.1, Navelim, P. O., Navelim,
Bicholim, North Goa, 403 505.
PMO Office, Bhurkahamuda, PO-Sripura, Dist. – Jharsuguda, Odisha – 768 202, India.
Alumina Refinery Project, At / PO – Lanjigarh, Via – Viswanathpur, Kalahandi,
Lanjigarh, Odisha – 766 027, India.
Aluminium
Post Box No. 4, Mettur Dam R.S. - 636 402, Salem District, Tamil Nadu, India.
Gat No.924,925, 926 and 927. Sanaswadi Taluka Shirur. Dist. Pune-412 208
Maharashtra, India**
Bhurkahamunda, PO -Sripura, Dist-Jharsuguda Odisha-768 202, India.
SIPCOT Industrial Complex, Meelavitan, Thoothukudi, Tamil Nadu-628 002 India.
Assets
(a) RJ-ON-90/1 - Barmer Basin -India
(b) CB/OS-2 - Cambay Basin -India
(c) PKGM-1 Ravva - Krishna Godavari Basin -India
(d) KG-ONN-2003/1- Krishna Godavari Basin -India
(e) KG-OSN-2009/3 - Krishna Godavari Basin -India
(f) KG/ONDSF/Kaza/2018 - Krishna Godavari Basin -India
(g) AA-ONHP-2017/1 – Assam Basin – India
(h) AA-ONHP-2017/6 – Assam Basin – India
(i)
(j)
AA-ONHP-2017/14– Assam Basin – India
AA-ONHP-2017/4– Assam Basin – India
(k) AA-ONHP-2017/5– Assam Basin – India
(l)
AA-ONHP-2017/8– Assam Basin – India
(m) AA-ONHP-2017/9– Assam Basin – India
(n) AA-ONHP-2017/11– Assam Basin – India
(o) AA-ONHP-2017/15– Assam Basin – India
(p) AA-ONHP-2017/2– Assam Basin – India
(q) AA-ONHP-2017/3– Assam Basin – India
(r) AA/ONDSF/Hazarigaon/2018- Assam Basin – India
(s) KG-ONHP-2017/1– KG Onshore Basin– India
(t) KG-ONHP-2017/2– KG Onshore Basin– India
(u) KG-ONHP-2017/3– KG Onshore Basin– India
(v) KG-OSHP-2017/1– KG Onshore Basin– India
(w) KG-DWHP-2017/1- KG Deepwater Basin- India
(x) CY-OSHP-2017/1- Cauvery Offshore Basin- India
(y) CY-OSHP-2017/2- Cauvery Offshore Basin- India
(z) GK-ONHP-2017/1- Gujarat Kutch Onland Basin- India
(aa) GK-OSHP-2017/1- Gujrat Kutch offshore Basin- India
Power
Oil & Gas
290
Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Division
Location
(ab) GS-OSHP-2017/1- Gujrat Kutch offshore Basin- India
(ac) GS-OSHP-2017/2- Gujrat Kutch offshore Basin- India
(ad) MB-OSHP-2017/2- Mumbai offshore Basin- India
(ae) RJ-ONHP-2017/5- Barmer Basin- India
(af) RJ-ONHP-2017/6- Barmer Basin- India
(ag) RJ-ONHP-2017/7- Barmer Basin- India
(ah) RJ-ONHP-2017/1- Barmer Basin- India
(ai) RJ-ONHP-2017/2- Barmer Basin- India
(aj) RJ-ONHP-2017/3- Barmer Basin- India
(ak) RJ-ONHP-2017/4- Barmer Basin- India
(al) CB-ONHP-2017/1- Cambay Basin- India
(am) CB-ONHP-2017/7- Cambay Basin- India
(an) CB-ONHP-2017/10- Cambay Basin- India
(ao) CB-ONHP-2017/6- Cambay Basin- India
(ap) CB-ONHP-2017/2- Cambay Basin- India
(aq) CB-ONHP-2017/3- Cambay Basin- India
(ar) CB-ONHP-2017/4- Cambay Basin- India
(as) CB-ONHP-2017/5- Cambay Basin- India
(at) CB-ONHP-2017/11- Cambay Basin- India
(au) HF-ONHP-2017/1- Himalaya Foreland Basin- India
(av) GV-ONHP-2017/1- Ganga Vally Basin- India
(aw) CB-ONHP-2018/1- Cambay Basin- India
(ax) GK-OSHP-2018/1- Kutch Basin- India
(ay) GK-OSHP-2018/2- Kutch Basin- India
(az) MN-OSHP-2018/1- Mahanadi Basin- India
(ba) RJ-ONHP-2018/1- Barmer Basin- India
(bb) AA-ONHP-2018/1- Assam Basin- India
(bc) CB-ONHP-2018/3- Cambay Basin- India
(bd) CB-ONHP-2018/4- Cambay Basin- India
(be) KG-ONHP-2018/1- KG Onshore Basin- India
(bf) KG-ONHP-2018/2- KG Onshore Basin- India
Pipeline
(a) Radhanpur Terminal, Patan, Gujarat, India, 385 340
(b) Viramgam Terminal, Viramgam, Ahmedabad, Gujarat, India, 382 150
(c) Bhogat Terminal, Bhogat Jam Kalyanpur Devbhumi Dwarka, Gujarat, 361 315
Plant
(a) Mangala Processing Terminal, Barmer, Rajasthan
Nagana Village, Near Kawas, NH112, Barmer 344 035, Rajasthan
(b) Raageshwari Gas Terminal, Rajasthan
(c)
Suvali Onshore terminal, Gujarat Survey No. 232, Suvali, Surat Hazira Road, Surat,
394 510, Gujarat
(d) Raava Onshare terminal, Andhra Pradesh
Surasani Yanam, Uppalaguptam Mandal, East Godavari Dist., 533 213,
Andhra Pradesh
(e) Nagayalanka EPS Facility, Andhra Pradesh
Nagayalanka GGS, Vakkapatlavaripalem Village, Nagayalanka Mandal, Krishna District,
521 120, Andhra Pradesh
GIDC Doswada, Ta. Fort Songadh, District Tapi, Gujarat, 394 670, India
Paper **
**Non‑operational unit
291
Integrated Report and Annual Accounts 2021-22
Commodity Price Risk or Foreign Exchange
Risk and Hedging Activities
Fluctuation in commodity prices
Impact: Prices and demand for the Group’s products
are expected to remain volatile / uncertain and strongly
influenced by global economic conditions. Volatility in
commodity prices and demand may adversely affect our
earnings, cash flow and reserves.
Mitigation: Our Group has a well‑diversified portfolio, which
acts as a hedge against fluctuations in commodities and
delivers cash flows through the cycle. We consider exposure
to commodity price fluctuations to be an integral part of our
Group’s business and its usual policy is to sell its products at
prevailing market prices, and not to enter into long-term price
hedging arrangements. However, to minimise price risk for
finished goods where price of raw material is also determined
by same underlying base metal prices (e.g. purchase of
alumina, copper concentrate for manufacturing and selling
copper and aluminium products, respectively) we employ
back‑to‑back hedging. In exceptional circumstances, we
may enter into strategic hedging with prior approval of the
Executive Committee. The Group monitors the commodity
markets closely to determine the effect of price fluctuations
on earnings, capital expenditure and cash flows.
Currency exchange rate fluctuations
Impact: Our assets, earnings and cash flows are influenced
by a variety of currencies due to the diversity of the
countries in which we operate. Fluctuations in exchange
rates of those currencies may have an impact on our
financials. Although the majority of the Group’s revenue
is tied to commodity prices that are typically priced by
reference to the US dollar, a significant part of its expenses
are incurred and paid in local currency. Moreover, some of
the Group borrowings are denominated in US dollars, while
a large percentage of cash and liquid investments are held
in other currencies, mainly in the Indian rupee. Any material
fluctuations of these currencies against the US dollar
could result in lower profitability or in higher cash outflows
towards debt obligations.
Mitigation: We do not speculate in forex. We have
developed robust controls in forex management to monitor,
measure and hedge currency risk liabilities. The Committee
of Directors reviews our forex‑related matters periodically
and suggests necessary courses of action as may be
needed by businesses from time to time, and within the
overall framework of our forex policy.
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 uses forward exchange contracts, currency swaps
and other derivatives to hedge the effects of movements
in exchange rates on foreign currency denominated assets
and liabilities. The sources of foreign exchange risk are
outstanding amounts payable for imported raw materials,
capital goods and other supplies as well as financing
transactions and loans denominated in foreign currencies.
The Group is also exposed to foreign exchange risk on
its net investment in foreign operations. Most of these
transactions are denominated in US dollars. 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.
However, all new long‑term borrowing exposures are being
hedged. The hedge mechanisms are reviewed periodically
to ensure that the risk from fluctuating currency exchange
rates is appropriately managed.
S.
No.
Commodity Name(1)
1
2
3
4
5
6
Aluminium(2)
Oil(2)
Gas(2)
Copper(3)
Silver(3)
Gold(3)
Exposure
in INR
towards the
particular
commodity
Units
37,869
KT
5,772
mmboe
892
mmscf
22,887
27
844
KT
Oz
Oz
Exposure
in quantity
towards the
particular
commodity
1,698
10
11,324
316
159,234
63,810
% of such exposure hedged
through commodity derivaties
Domestic market
International market
Total
OTC
Exchange
OTC
Exchange
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
86%
0%
0%
0%
0%
86%
0%
37%
0%
0%
95%
0%
0%
37%
0%
0%
95%
86%
86%
1. Commodity means a commodity whose price is fixed by reference to an international benchmark and having a material effect on the financial
statements.
2. Exposure for Aluminium and Oil is based on sales and closing stock and that for Gas is based on sales.
3. Gold and Silver are sold in the form of anode slime/copper concentrate. Anode slime is the residue formed while refining copper. Exposure for
Copper (including Gold and Silver) is based on opening stock, purchases and sales. Percentage of exposure not hedged represents unpriced
transactions as at 31 March 2022 as the same will be hedged as per the Company’s policy and contractual terms once price period is fixed.
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Other Disclosures
Total fees for all Services on a Consolidated basis to the Statutory Auditor
Particulars
Audit fees (audit and review of financial statements)
Certification and other attest services
Tax Matters
Others
Total
*exclusive of GST
Mar-22
(in crores)*
21
0
0
1
22
Framework for monitoring Subsidiary Companies
The details of the material subsidiaries of the Company have been elucidated in the Directors Report forming part of Annual
Report. The Company has complied with the provisions of Listing Regulations w.r.t material subsidiary for FY 2022.
The Company has in place a policy on Determining Material Subsidiary, duly approved by the Board in conformity with the
Listing Regulations. which can be accessed at www.vedantalimited.com.
The subsidiary companies have their separate independent Board of Directors authorized to exercise all the responsibilities,
duties and rights for effective monitoring and management of the subsidiaries.
The Company supervises and monitors the performance of subsidiary companies:
On a quarterly basis, the minutes of each of the Board and Audit & Risk Management Committee Meeting
of the subsidiary companies and a statement of all significant transactions of the subsidiary companies are
placed before the Board of Directors and Audit & Risk Management Committee for their review and noting.
Quarterly presentations are made to the Audit & Risk Management Committee and Board on the Key
accounting matters, tax matters and legal cases relating to subsidiaries.
Significant Internal Audit Observations of the Subsidiaries are made to the Audit & Risk Management
Committee on a quarterly basis.
Presentations are made to the Company’s Board on business performance by the senior management of
major subsidiaries of the Company
Certain matters of the subsidiaries relating to Financial & Planning and Commercial are reserved for approval
of the Board or Committee of Directors of the Company
Subsidiaries are subject to applicable Statutory Audit and Secretarial Audit
Further, appropriate disclosures related to subsidiaries are made in Financial Statements / Directors’ report of the Company
as per Companies Act 2013 and Listing Regulations.
293
Integrated Report and Annual Accounts 2021-22 Materially Significant Related Party Transactions
All transactions entered into with Related Parties as defined
under the Companies Act, 2013, and Regulation 23 of the
SEBI (LODR) Regulations, 2015 during the financial year
were in the ordinary course of business and on arm’s
length pricing basis. There were no materially significant
transactions with related parties during the financial year
which were in conflict with the interest of the Company.
Your Company has in place a policy on Related Party
Transactions, which envisages the procedure governing
Related Party Transaction entered into by the Company.
The said policy was revised in the board meeting held on
25 March 2022 and displayed on the Company’s website at
www.vedantalimited.com.
Non-Compliance by the Company, Penalties,
Strictures imposed by Stock Exchange or SEBI or
any Statutory Authority on any matter related to
capital markets during the last three years
SEBI has vide its order dated 19 May 2021 imposed a
penalty of INR 5 crores on erstwhile Cairn India Limited
(merged with Vedanta Limited vide Order of Delhi High
Court dated 16 July 2021) under Section 15HA of SEBI Act
for violation of Regulation 3 (a), (b), (c) , (d), regulation 4 (1)
and 4(2) (k) and (r) of SEBI (Prevention of Fraudulent and
Unfair Trade Practices) Regulations, 2003 and a penalty of
INR 25 lakhs under Section 15HB of SEBI Act for violation
of Regulation 19 (1) (a) of SEBI (Buyback) Regulations, 2003
for not completing the buyback offer in the year 2014. The
Company has filed an appeal against the said order. The
same is pending before SEBI Appellate Tribunal.
Vigil Mechanism / Whistle Blower Policy
Vedanta continues to assure utmost commitment
towards highest standards of morals and ethics in the
conduct of business. The employees have been provided
comprehensive access to lodge any complaint against
the Company’s accounting practices, internal controls,
auditing matters or any such suspected incidents of
fraud or violation of the Company’s Code of Conduct that
could adversely impact Company operations, business
performance and/or reputation.
24x7
Hotline
Dedicated
Email IDs
Whistle
Blower
Policy
Web Based
Portal
Centralized
Database
All the employees of the Company and its subsidiaries
are encouraged and expected to raise their concerns. The
Audit & Risk Management Committee has laid down the
procedure governing the receipt, retention, and treatment
of complaints. Your Company has a Whistle Blower Policy
in place as part of the Vigil Mechanism which can be
accessed at www.vedantalimited.com.
All the complaints are reported to the Director –
Management Assurance, who is independent of operating
management and the businesses. In line with global
practices, dedicated email IDs (vedanta.whistleblower@
vedanta.co.in), a centralized database, a 24x7 whistle blower
hotline and a web-based portal (www.vedanta.ethicspoint.
com) have been created and implemented to facilitate
receipt and redressal of complaints. Company hereby
affirms that no personnel have been denied access to the
Chairperson of Audit & Risk Management Committee.
Disclosure in relation to the Sexual Harassment of Women at workplace (Prevention, Prohibition and
Redressal) Act, 2013
The detailed disclosure forms part of the Directors Report.
Compliances
Discretionary Requirements
The Board
As on 31 March 2022, the Board
of the Company is chaired by
a Non‑Executive Director who
maintains the Chairman’s office
at the Company’s expense.
Separation of Roles of CEO &
Chairman
The roles and responsibilities
of the Chairman and CEO have
been distinctively defined
and the positions are held
by separate individuals for
better efficiency.
Unmodified opinion
in Audit Report
During the year under review,
the Independent Auditors
have issued an unmodified
opinion on True and Fair
view of the Company’s
financial statements.
Shareholder’s Rights
Quarterly/ half-yearly/
annual financial results are
sent to the shareholders
whose email IDs are registered
with the Company. Additionally,
news releases, institutional
investor/ analyst presentations,
annual reports and other
governance documents
are also made available to
the shareholders through
Company website.
294
Vedanta LimitedReport on Corporate Governance Reporting of Internal Auditor
The same is reported by briefing
the Audit & Risk Management
Committee through discussion
and presentation of the
observations, review, comments
and recommendations, amongst
others in the Internal Audit
presentation by the Company’s
Internal Assurance.
NYSE Corporate Governance
Listing Standards*
The Company has made
necessary disclosures in
compliance with NYSE Listing
Standards and Listed Company
Manual and the same have been
filed with NYSE and available on
Company’s website at
www.vedantalimited.com.
Integrated Report
Statutory Reports
Financial Statements
ESG Committee
Board Diversity Policy
The Company as part of best
governance practices has
adopted the Board Diversity
Policy as a sub‑set of NRC
Policy to ensure an inclusive
and diverse membership of
the board of directors of the
Company resulting in optimal
decision-making & assisting
in the development and
execution of a strategy which
promotes success of Company
for the collective benefit of
its stakeholders.
With the integration of
Environmental, Social and
Governance (ESG) parameters
into the decision-making of
investors; increasing focus
of regulatory bodies on ESG
reporting and disclosures
round the globe; and in line with
upholding our core commitment
and Board oversight on ESG
priorities, the Board, in its
meeting held on 26 July 2021,
approved the enhancement
of the scope of the erstwhile
Sustainability Committee and
upgraded it to Board-level ESG
Committee to strengthen Board
level rigor and advice into all
aspects of ESG.
*The American Depositary Shares (ADS) of the Company have been delisted from NYSE effective close of trading on NYSE on 08 November
2021. This follows the filing done by the Company of Form 25 with Securities and Exchange Commission on 29 October 2021. As a consequence
of the delisting becoming effective, termination of the Deposit Agreement under which the ADS were issued (the “Deposit Agreement”) has also
become effective close of trading on NYSE on 08 November 2021. The said action has no impact on the current listing status or trading of the
Company’s equity shares on BSE and NSE. Further, the Company will continue to be subject to reporting obligations under the U.S. Securities
Exchange Act of 1934 until such time as it can terminate its registration under the Exchange Act.
Corporate Governance requirements specified in Regulation 17 to 27 and Regulation 46 of Listing
Regulations
Your Company has complied with all the mandatory corporate governance requirements under the Listing Regulations.
Specifically, your Company confirms compliance with corporate governance requirement specified in Regulation 17 to 27
and clauses (b) to (i) of Sub-Regulation (2) of Regulation 46 of the Listing Regulations.
Corporate Policies of the Company
Your Company is inclined towards following highest levels of ethical standards in all our business transactions. To ensure
the same, the Company has adopted various policies, codes and practices. The policies are reviewed periodically by the
Board and are updated in line with amended laws and requirements. The key policies adopted are detailed below:
Category of Policy / Code
Brief Summary
Web link
The Code provides the general rules for our
professional conduct so that the business of the
Company is consistent with our values and core
purpose.
www.vedantalimited.com
Amendments
during FY 2022
The Code was revised
on 28 January 2022
Code of Business
Conduct and Ethics
including Anti-Bribery &
Anti-Corruption Policy,
Whistle Blower Policy and
Anti-Trust Guidance Notes
Corporate Social
Responsibility Policy
Nomination &
Remuneration Policy
including the Criteria
determining the
Independence of Directors
This Policy provides guidance in achieving the
objective of conducting its business in a socially
responsible, ethical and environment friendly
manner and to continuously work towards
improving the quality of life of the communities
in and around its operational area and ensures
that the Company operates on a consistent and
compliant basis.
The policy details the guidelines on identification
and appointment of individual as a Director, KMP
and Senior Management Personnel including the
criteria on their qualification and independence,
manner and criteria for effective evaluation of
the performance. The Policy also details the
compensation principles responsibilities of
senior management and succession planning.
www.vedantalimited.com The Policy was
revised on 13 May
2021
www.vedantalimited.com
The Policy was
revised on 25 March
2022 effective
26 March 2022
295
Integrated Report and Annual Accounts 2021-22 Category of Policy / Code
Brief Summary
Web link
Insider Trading
Prohibition Code
The Code lays down the guideline to regulate,
monitor and report trading in securities of the
Company, Policy & Procedures for inquiry in
case of leak of Unpublished Price Sensitive
Information and Code of Practices and
Procedures for Fair Disclosure & Policy for
determination of Legitimate Purpose.
www.vedantalimited.com
Amendments
during FY 2022
There has been no
change in the Code
during the year
Dividend Distribution Policy The policy details guidelines for dividend
www.vedantalimited.com The Policy
Related Party
Transaction Policy
Determining Material
Subsidiary Policy
distribution for equity shareholders as per the
requirements of the Listing Regulations.
This Policy envisages the procedure governing
Related Party Transactions required to be
followed by the Company to ensure compliance
with the Law and Regulations. The Company has
voluntary adopted a stringent policy as against
the requirements under the law.
The policy determines the guidelines for material
subsidiaries of the Company and also provides
the governance framework for such material
subsidiaries.
Policy for determination
of Materiality for Fair
Disclosure of Material
Events / Unpublished Price
Sensitive Information to
Stock Exchange(s)
and Archival Policy
The policy determines the requirements for
disclosing material events including deemed
material events for the Company and its
subsidiary companies which are in nature of
unpublished price sensitive information.
The policy also lays the guidelines on archival
and retention of records of the Company.
was revised on
08 February 2022
www.vedantalimited.com The Policy was
revised on 25 March
2022 effective 01 April
2022
www.vedantalimited.com There has been no
change in the policy
www.vedantalimited.com There has been no
change in the policy
Policy on Prevention,
Prohibition and Redressal
of Sexual
Harassment at Workplace
Charter of Stakeholders’
Relationship Committee
(SRC)
ESG Committee Charter
Board Diversity Policy
The purpose to this policy is to create and
maintain a healthy and conducive work
environment, free of discrimination. This includes
discrimination on any basis, including gender and
any form of sexual harassment.
The primary purpose of the Stakeholders
Relationship Committee is to oversee all matters
pertaining to investors of the Company. The
Charter sets out the terms of reference for
functioning of the SRC.
The Charter defines the role of the ESG Committee
(erstwhile, “Sustainability Committee”) to assist
the Board in meeting its responsibilities in relation
to the Environmental, Social and Governance
(ESG) matters arising out of the activities and
operations of the Company and its subsidiary
companies (the Group) for aiming towards
enhanced sustainable development.
The purpose of Board Diversity Policy is to ensure
an inclusive and diverse membership of the board
of directors of the Company resulting in optimal
decision-making & assisting in the development
and execution of a strategy which promotes
success of Company for the collective benefit of
its stakeholders.
www.vedantalimited.com There has been no
change in the policy
www.vedantalimited.com
www.vedantalimited.com
The Charter was
revised on 29 October
2021
The Charter adopted
on 26 July 2021 was
revised on 28 January
2022
www.vedantalimited.com
The Policy was
adopted on 25 March
2022 effective
26 March 2022
For ease of reference of our stakeholders, all our policies and codes are available on our website in three different
languages i.e. English, Hindi and Marathi (since registered office of the Company is in Maharashtra) and can be accessed
at: www.vedantalimited.com
Awareness Sessions / Workshops on Governance practices
Vedanta as an organisation staunchly supports transparency and openness in its reporting as well as practice. Believing
in zero tolerance for unethical practices, employees across the Group are regularly sensitized about the policies and
governance practices through various multi-faceted interactive tools.
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
Insider Trading Monitoring Portal
Online Gift Declaration Portal
Statutory System
• Company has a robust mechanism in
place to prevent insider trading.
• As a step towards digitisation, a
web-based portal is in place for
designated employees to enable them
to manage and report dealings in
securities of the Company and ensure
compliance with the Insider Trading
Prohibition Code.
• Employees are sensitised through
various knowledge sharing emails/
updates on a regular basis in order
to monitor as well as ensure initial/
annual/ continual disclosures.
• The employees can neither accept
nor send gifts/ entertainment
in exchange of any business/
services/ giving off any confidential
information etc. to derive any
benefit conflicting with the interest
of the Company.
• The Company has in place an
online gift declaration portal
wherein the employees are required
to promptly declare the gifts
received by them in compliance
with the Gift Policy of the Company
forming part of the Code of
Business Conduct and Ethics.
•
In order to ensure best in class
compliance monitoring and
reporting, Company has in place
an internal standard operating
procedure to manage statutory
compliances across all businesses
and a top of the line automated
compliance management
system with regular updates
on checklists of all applicable
statutory requirements.
• As a best practice, it is mandatory
for all CEOs to issue and sign‑off
on compliance certificates for
their respective businesses each
quarter for placing before the Audit
& Risk Management Committee
and Board.
Employee Sensitisation –
Ethics & Governance
Innovation Portal & Cafes -
Digitalization Initiatives
Sustainability Academy
• Awareness Video Clips and Mailers -
With a firm belief in zero tolerance
for unethical practices, the Company
sensitizes employees about various
matters including prevention of
sexual harassment (POSH), anti‑
bribery, conflict of interest, gift policy,
corruption, ESG etc. through short
video clips and mailers to make the
workplace a better place each day.
• Ethics Quiz - To assess the awareness
and understanding of employees,
an Ethics quiz is also conducted on
periodic basis.
• Ethics Compliance Month - As part of
special annual initiative, the Company
conducts Ethics Compliance Month
wherein awareness and training
sessions are conducted covering
governance and internal policies such
as prevention of insider trading, POSH,
anti bribery, corruption, anti-trust
laws etc.
• Strengthening one of the core
• At Vedanta we pride ourselves in
value, the Company is promoting
and developing digitalization and
innovation culture strategically
among the employees including
business partners.
• Vedanta 360 - Innovation portal
is developed as a unique platform
to capture all the thoughts across
the organisation. People are
encouraged to showcase their
innovative thoughts, success
stories, ideas etc. and they may
also seek innovative solutions to
business challenges. This portal
has end-to-end integration from
Idea to Reward in near future.
• Vedanta Innovation Cafe - A place
at workplace is established across
the operations to provide conducive
environment to think across
business aspects and come out
with Innovation Ideas.
• Top Ideas and success stories are
published in Weekly Innovation
Wrap across the Group to keep the
momentum high and recognise the
team efforts across businesses.
putting Learning and Development
at the forefront ‑ the first step
of any big bold goal, here the
goal being sustainability, is
always to upskill. Sustainability
Academy is our leap towards a
sustainable Vedanta.
• Sustainability Academy strives to
achieve the following:
− Train all ~70,000 Vedanta
Employees - including ~50,000
business partners on key ESG
topics to enable incorporation
of ESG-thinking in business
decision-making.
− Build and scale internal
capability on key ESG topics for
different functional teams (HR,
Finance, Health & Safety, etc.)
− Advance the field of
Sustainability through research
and outreach
− Progress in FY 2022: Using
trainer led sessions and
leveraging leading global
experts in the field, Vedanta
trained and certified 100+
leaders, including the board
of directors, on topics of E, S,
and G
297
Integrated Report and Annual Accounts 2021-22
UPSI Sharing Database
Chess e-learning module
Code of Conduct – Training Module
and Annual Affirmation
• The Company maintains digital
• Continuing the spirit and reinforcing
• Reinforcing the principles under
database for UPSI sharing within
the organization pursuant to the
SEBI guidelines.
the vision of “Zero Harm, Zero Waste
and Zero Discharge” your Company
launched an e‑Learning CHESS
(Consolidated Health, Environment,
Safety and Sustainability)
Module aiming at familiarisation
of employees and business
partners to different aspects of the
HSE&S function.
It is mandatory for all the executives
to undertake the module and impart
learnings in day to day business.
•
the Code of Business Conduct and
Ethics, the Company has in place
an automated training module for
mandatory annual training for all
employees across the group.
• Further, in order to ensure
compliance with the Code of
Business Conduct and Ethics
(“Code”) of the Company by all the
employees, online affirmations
w.r.t. compliance with the Code are
also taken on an annual basis.
Launch of TCFD Report
on Climate Change
• The Company launched its first
Climate Change Report aligned
with the Taskforce on Climate-
related Financial Disclosures
(TCFD) and the guidelines issued
by the Financial Stability Board
(FSB) in 2021 and shall continue to
publish the report every year.
• The report documents Vedanta’s
journey to substantially
decarbonize its business by
2050 and is a precursor to the
commitment made by your
Company to become a Net Zero
Carbon business by 2050 or
sooner. The report can be accessed
on the Company website at
www.vedantalimited.com.
Declarations & Certifications
Declaration by CEO on Code of Business
Conduct & Ethics
A Declaration by the CEO of the Company, stating
that the members of Board of Directors and Senior
Management Personnel have affirmed compliance
with the Code of Business Conduct and Ethics of the
Company in enclosed as Annexure I to this Report.
Certificate from Company Secretary in Practice
A certificate from Chandrasekaran Associates,
Company Secretary in Practice certifying that none
of the directors on the Board of the Company have
been debarred or disqualified from being appointed
or continuing as directors of companies by the SEBI
/ Ministry of Corporate Affairs or any such statutory
authority pursuant to Regulation 34(3) and Schedule
V Para C clause (10)(i) of the Listing Regulations is
enclosed as Annexure III to this Report.
Compliance Certificate
Auditor’s Certificate on Corporate Governance
The Compliance Certificate from the CEO and CFO
of the Company pursuant to Regulation 17(8) of the
Listing Regulations is enclosed as Annexure II to
this Report.
The auditor’s certificate regarding compliance of
conditions of corporate governance pursuant to Listing
Regulations is enclosed as Annexure IV to this Report.
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Vedanta LimitedReport on Corporate Governance Integrated Report
Statutory Reports
Financial Statements
ANNE XURE I
ANNE XURE I
Declaration by Chief Executive Officer on Code of Business Conduct and Ethics of the Company
In accordance with the provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, I, Sunil Duggal, Whole‑Time Director & Chief Executive Officer of Vedanta Limited, hereby
declare that all members of the Board and Senior Management Personnel have affirmed compliance with the Code of
Business Conduct and Ethics of the Company for FY 2022.
Date: 28 April 2022
For Vedanta Limited
Sd/-
Sunil Duggal
Whole-Time Director &
Chief Executive Officer
299
Integrated Report and Annual Accounts 2021-22 ANNE XURE II
ANNE XURE II
CEO CFO Certification
We, Sunil Duggal, Chief Executive Officer and Ajay Goel, Acting Group Chief Financial Officer certify that:
A.
We have reviewed financial statements and the cash flow statement for the year and that to the best of our knowledge
and belief:
(1)
(2)
These statements do not contain any materially untrue statement or omit any material fact or contain statements
that might be misleading;
These statements together present a true and fair view of the Company’s affairs and are in compliance with
existing accounting standards, applicable laws and regulations.
B.
C.
There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which
are fraudulent, illegal or violative of the Company’s code of conduct.
We accept responsibility for establishing and maintaining internal controls for financial reporting. We have evaluated
the effectiveness of internal control systems of the Company pertaining to financial reporting, and we have disclosed
to the auditors and the Audit & Risk Management Committee, where applicable, deficiencies in the design or operation
of such internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify
these deficiencies.
D. We have indicated to the Auditors and the Audit & Risk Management Committee, where applicable,
(1) significant changes in internal control over financial reporting during the year;
(2)
(3)
significant changes in accounting policies during the year and that the same have been disclosed in the notes to
the financial statements; and
instances of significant fraud of which we have become aware and the involvement therein, if any, of the
management or an employee having a significant role in the Company’s internal control system over
financial reporting.
Sd/-
Sunil Duggal
Sd/-
Ajay Goel
Whole‑Time Director & Chief Executive Officer
DIN: 07291685
Acting Group Chief Financial Officer
PAN: AEAPG8383C
Date: 28 April 2022
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Financial Statements
ANNE XURE III
ANNE XURE III
Certificate of Non-Disqualification of Directors
(Pursuant to Regulation 34(3) and Schedule V Para C clause (10)(i) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015)
To,
The Members
Vedanta Limited
1st Floor, C wing, Unit 103, Corporate Avenue, Atul Projects,
Chakala, Andheri (East), Mumbai,
Maharashtra- 400 093
We have examined the relevant registers, records, forms, returns and disclosures received from the Directors of Vedanta
Limited and having CIN L13209MH1965PLC291394 and having Registered office at 1st Floor, C wing, Unit 103, Corporate
Avenue, Atul Projects, Chakala, Andheri (East), Mumbai, Maharashtra‑ 400 093 (hereinafter referred to as ‘the Company’),
produced before us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read
with Schedule V Para‑C Sub clause 10(i) of the Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
In our opinion and to the best of our information and according to the verifications (including Directors Identification Number
(DIN) status at the portal www.mca.gov.in) as considered necessary and explanations furnished to us by the Company &
its officers, We hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year
ending on 31 March 2022 have been debarred or disqualified from being appointed or continuing as Directors of companies by
the Securities and Exchange Board of India, Ministry of Corporate Affairs or any such other Statutory Authority:
Sr.
No.
1.
2.
3.
4.
5.
6.
7.
8.
Name of director
Anil Kumar Agarwal
Navin Agarwal
Akhilesh Joshi
Sunil Duggal
Dindayal Jalan
Upendra Kumar Sinha
Priya Agarwal
Padmini Sekhsaria
*Original date of appointment
DIN
00010883
00006303
01920024
07291685
00006882
00010336
05162177
00046486
Date of appointment in
Company*
01.04.2020
17.08.2013
01.07.2021
25.04.2021
01.04.2021
13.03.2018
17.05.2017
05.02.2021
Ensuring the eligibility for the appointment / continuity of every Director on the Board is the responsibility of the
management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate
is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the
management has conducted the affairs of the Company.
For Chandrasekaran Associates
Company Secretaries
FRN: P1988DE002500
Peer Review Certificate No.: 1428/2021
Sd/-
Dr. S Chandrasekaran
Senior Partner
Membership No. FCS No.: 1644
Certificate of Practices No.: 715
UDIN: A028994D000157507
Date: 20 April 2022
Place: New Delhi
i.
Due to restricted movement amid COVID‑19 pandemic, we have verified the disclosures and declarations received by
way of electronic mode from the Company and could not be verified from the original records. The management has
confirmed that the records submitted to us are the true and correct.
301
Integrated Report and Annual Accounts 2021-22 ANNE XURE IV
ANNE XURE IV
Independent Auditors’ Report on compliance with the conditions of Corporate Governance as
per provisions of Chapter IV of Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended
The Members of Vedanta Limited
1st Floor, ‘C’ Wing, Unit 103, Corporate Avenue, Atul Projects
Chakala, Andheri (E), Mumbai ‑ 400 093
1.
The Corporate Governance Report prepared by Vedanta Limited (hereinafter the “Company”), contains details as
specified in regulations 17 to 27, clauses (b) to (i) and (t) of sub – regulation (2) of regulation 46 and para C, D, and
E of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, as amended (“the Listing Regulations”) (‘Applicable criteria’) for the year ended 31 March 2022 as
required by the Company for annual submission to the Stock exchange.
Management’s Responsibility
2.
3.
The preparation of the Corporate Governance Report is the responsibility of the Management of the Company
including the preparation and maintenance of all relevant supporting records and documents. This responsibility also
includes the design, implementation and maintenance of internal control relevant to the preparation and presentation
of the Corporate Governance Report.
The Management along with the Board of Directors are also responsible for ensuring that the Company complies
with the conditions of Corporate Governance as stipulated in the Listing Regulations, issued by the Securities and
Exchange Board of India.
Auditor’s Responsibility
4.
5.
6.
7.
Pursuant to the requirements of the Listing Regulations, our responsibility is to provide a reasonable assurance in the
form of an opinion whether, the Company has complied with the conditions of Corporate Governance as specified in
the Listing Regulations.
We conducted our examination of the Corporate Governance Report in accordance with the Guidance Note on Reports
or Certificates for Special Purposes and the Guidance Note on Certification of Corporate Governance, both issued
by the Institute of Chartered Accountants of India (“ICAI”). The Guidance Note on Reports or Certificates for Special
Purposes requires that we comply with the ethical requirements of the Code of Ethics issued by ICAI.
We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality
Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and
Related Services Engagements.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks associated
in compliance of the Corporate Governance Report with the applicable criteria. Summary of procedures
performed include:
i.
ii.
iii.
Read and understood the information prepared by the Company and included in its Corporate
Governance Report;
Obtained and verified that the composition of the Board of Directors with respect to executive and non‑executive
directors has been met throughout the reporting period;
Obtained and read the Register of Directors as on 31 March 2022 and verified that atleast one independent
woman director was on the Board of Directors throughout the year;
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iv.
Obtained and read the minutes of the following Committee meetings / other meetings held during 01 April 2021
to 31 March 2022:
(a) Board of Directors;
(b) Audit and Risk Management Committee;
(c) Annual General Meeting (AGM);
(d) Nomination and Remuneration Committee;
(e) Stakeholders Relationship Committee;
(f) Corporate Social Responsibility Committee
v. Obtained necessary declarations from the Directors of the Company.
vi. Obtained and read the policy adopted by the Company for related party transactions.
vii.
Obtained the schedule of related party transactions during the year and balances at the year- end. Obtained
and read the minutes of the Audit and Risk Management Committee meetings where in such related party
transactions have been pre‑approved prior by the Audit and Risk Management Committee.
viii.
Performed necessary inquiries with the management and also obtained necessary specific representations
from management.
8.
The above‑mentioned procedures include examining evidence supporting the particulars in the Corporate Governance
Report on a test basis. Further, our scope of work under this report did not involve us performing audit tests for the
purposes of expressing an opinion on the fairness or accuracy of any of the financial information or the financial
statements of the Company taken as a whole.
Opinion
9.
Based on the procedures performed by us, as referred in paragraph 7 above, and according to the information and
explanations given to us, we are of the opinion that the Company has complied with the conditions of Corporate
Governance as specified in the Listing Regulations, as applicable for the year ended 31 March 2022, referred to in
paragraph 4 above.
Other matters and Restriction on Use
10.
This report is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with
which the management has conducted the affairs of the Company.
11.
This report is addressed to and provided to the members of the Company solely for the purpose of enabling it to
comply with its obligations under the Listing Regulations with reference to compliance with the relevant regulations of
Corporate Governance and should not be used by any other person or for any other purpose. Accordingly, we do not
accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown or
into whose hands it may come without our prior consent in writing. We have no responsibility to update this report for
events and circumstances occurring after the date of this report.
Place of Signature: Mumbai
Date: 28 April 2022
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
Sd/-
per Sudhir Soni
Partner
Membership Number: 41870
UDIN: 22041870AHZHVU3589
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Integrated Report and Annual Accounts 2021-22
Independent Auditor’s Report
To the Members of Vedanta Limited
Emphasis of Matter
Report on the Audit of the Standalone Ind AS
Financial Statements
Opinion
We have audited the accompanying standalone Ind AS
financial statements of Vedanta Limited (“the Company”),
which comprise the Balance sheet as at March 31, 2022,
the Statement of Profit and Loss, including the statement
of Other Comprehensive Income, the Cash Flow Statement
and the Statement of Changes in Equity for the year
then ended, and notes to the standalone Ind AS financial
statements, including a summary of significant accounting
policies and other explanatory information.
In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone Ind AS financial statements give the information
required by the Companies Act, 2013, as amended (“the
Act”) in the manner so required and give a true and fair
view in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company as
at March 31, 2022, its profit including other comprehensive
income, its cash flows and the changes in equity for the
year ended on that date.
Basis for Opinion
We conducted our audit of the standalone Ind AS financial
statements in accordance with the Standards on Auditing
(SAs), as specified under Section 143(10) of the Act.
Our responsibilities under those Standards are further
described in the ‘Auditor’s Responsibilities for the Audit of
the Standalone Ind AS Financial Statements’ section of our
report. We are independent of the Company in accordance
with the ‘Code of Ethics’ issued by the Institute of Chartered
Accountants of India together with the ethical requirements
that are relevant to our audit of the financial statements
under the provisions of the Act and the Rules thereunder,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of
Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our audit
opinion on the standalone Ind AS financial statements.
We draw attention to Note 3(c)(A)(iv) of the accompanying
standalone Ind AS financial statements, which describes
the uncertainty arising out of the demands that have been
raised on the Company, with respect to government’s share
of profit oil by the Director General of Hydrocarbons and one
of the pre‑conditions for the extension of the Production
Sharing Contract (PSC) for the Rajasthan oil block is the
settlement of these demands. While the Government
has granted permission to the Company to continue
operations in the block till May 14, 2022 or signing of the
PSC addendum, whichever is earlier, the Company, based
on external legal advice, believes it is in compliance with the
necessary conditions to secure an extension of this PSC
and that the demands are untenable and hence no provision
is required in respect of these demands. Our opinion is not
modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
standalone Ind AS financial statements for the financial year
ended 31 March 2022. These matters were addressed in
the context of our audit of the standalone Ind AS financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the standalone Ind
AS financial statements section of our report, including in
relation to these matters. Accordingly, our audit included
the performance of procedures designed to respond to
our assessment of the risks of material misstatement of
the standalone Ind AS financial statements. The results of
our audit procedures, including the procedures performed
to address the matters below, provide the basis for our
audit opinion on the accompanying standalone Ind AS
financial statements.
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Key audit matters
How our audit addressed the key audit matter
Accounting and disclosure of transactions with the parent company and its affiliates (as described in note 39 of the
standalone Ind AS financial statements)
The Company has undertaken transactions with
Vedanta Resources Limited (‘VRL’), its parent company
and its affiliates pertaining to payment of brand and
management fee; and obtaining guarantees and payment
of commission in consideration thereof. Accounting and
disclosure of such related party transactions has been
identified as a key audit matter due to:
• Significance of such related party transactions;
• Risk of such transactions being executed without
proper authorisations;
• Risk of material information relating to such
transactions not getting disclosed in the
financial statements
Our procedures included the following:
• Obtained and read the Company’s policies, processes
and procedures in respect of identification of such related
parties, obtaining approval, recording and disclosure of
related party transactions and identified key controls. For
selected controls we have performed tests of controls.
• Tested, such related party transactions and balances with
the underlying contracts, confirmation letters and other
supporting documents.
• Held discussions and obtained representations from the
management in relation to such transactions.
• Examined the approvals of the board and/or audit
committee for entering into these transactions.
• Read the disclosures made in this regard in the financial
statements and assessing whether the relevant and
material information have been disclosed.
Recoverability of carrying value of property plant and equipment, capital work-in-progress, exploration intangible
assets under development and investments being carried at cost (as described in note 3(a)(F), 3(c)(A)(i), (iii) and (vi) of
the standalone Ind AS financial statements)
As at March 31, 2022, the Company had significant
amounts of property, plant and equipment, capital
work‑in‑progress, exploration intangible assets under
development and investments being carried at cost.
We focused our efforts on the Cash Generating Unit
(“CGU”) at (a) Tuticorin within the copper segment; and
(b) Krishna Godavari block and the Rajasthan block within
the oil & gas segment; as it had impairment/impairment
reversal indicators.
Recoverability of property, plant and equipment, capital
work‑in‑progress, exploration intangible assets and
investment being carried at cost has been identified as a
key audit matter due to:
• The significance of the carrying value of assets
being assessed.
• The withdrawal of the Company’s licenses to operate
the copper plant.
• The upward revision to brent oil assumptions up to
2030 due to increased demand.
Our audit procedures included the following:
• Obtained and read the Company’s policies, processes
and procedures in respect of identification of impairment
indicators, recording and disclosure of impairment charge/
(reversal) and identified key controls. For selected controls
we have performed tests of controls.
•
• Assessed through an analysis of internal and external factors
impacting the Company, whether there were any indicators of
impairment in line with Ind AS 36.
In relation to the CGU at (a) Tuticorin within the copper
segment; and (b) Krishna Godavari block and the Rajasthan
block within the oil & gas segment where impairment
indicators were identified, obtained and evaluated the
valuation models used to determine the recoverable amount
by assessing the key assumptions used by management,
which included:
− Assessed management’s forecasting accuracy by
comparing prior year forecasts to actual results and
assessed the potential impact of any variances.
− Corroborated the sales price assumptions used in the
models against analyst consensus and assessing the
reasonableness of costs.
− Assessed Company’s reserves and resources estimation
methods and policies and reading reports provided by
management’s external reserves experts and assessed
the scope of work and findings of these third parties;
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Key audit matters
How our audit addressed the key audit matter
• Changes in production forecasts due to adjustments in
the future reserve estimates
• The fact that the assessment of the recoverable
amount of the Company’s CGUs and investments
involves significant judgements about the future cash
flow forecasts, start date of the plant and the discount
rate that is applied.
The key judgements and estimates centered on the
likely outcome of the litigations, cash flow forecasts and
discount rate assumptions. Details of impairment reversal
amounting to `1,370 crore recognised are given in note 34
of the accompanying financial statements.
− Assessed the competence, capability and objectivity
of Company’s external reserve experts; through
understanding their relevant professional qualifications
and experience.
− Compared the production forecasts used in the
impairment tests with management’s approved reserves
and resources estimates.
− Tested the weighted average cost of capital used to
discount the impairment models.
− Tested the integrity of the models together with their
clerical accuracy.
− Assessed the implications of withdrawal of Company’s
license to operate the copper plants. Inspected the
external legal opinions in respect of the merits of the
case and assessed management’s position through
discussions with the legal counsel to determine the basis
of their conclusion.
− Assessed the implications and likelihood of the possible
outcome of the conditions precedent to the extension
of the Rajasthan oil block and management’s analysis
of the same, including an assessment of how a market
participant would react to the same.
− Engaged valuation experts to assist in performance of
the above procedures.
• Assessed the competence and objectivity of the experts
engaged by us.
• Assessed the disclosures made by the Company in
this regard.
Recoverability of disputed trade receivables in power segment (as described in note 3(c)(B)(ii) and 7 of the standalone
Ind AS financial statements)
As of March 31, 2022, the value of disputed receivables in
the power segment aggregated to `1,293.
Due to disagreements over the quantification or timing of
the receivable, the recovery of receivables from GRIDCO
are subject to increased risk. Some of these balances are
also subject to litigation. The risk is specifically related
to receivables from GRIDCO. These receivables include
long outstanding balances as well and are also subject to
counter party credit risk and hence considered as a key
audit matter.
Our audit procedures included the following:-
• Examined the underlying power purchase agreements.
• Examined the relevant state regulatory commission,
appellate tribunal and court rulings.
• Examined external legal opinions in respect of the merits
of the case and assessed management’s position through
discussions with the management’s in‑house legal team to
determine the basis of their conclusion.
• Examined management’s assessment of recoverability
of receivables.
• Obtained independent external lawyer confirmation from
Legal Counsel representing the Company in these cases.
• Assessed the competence and objectivity of the
Company’s experts.
• Assessed the disclosures made by the Company in
this regard.
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Key audit matters
How our audit addressed the key audit matter
Claims and exposures relating to taxation and litigation (as described in note 3(c)(A)(iv), 3(c)(B)(i), 38D and 45 of the
standalone Ind AS financial statements)
The Company is subject to a large number of tax and
legal disputes, including objections raised by the auditors
appointed by the Director in the oil and gas segment,
which have been disclosed/provided for in the financial
statements based on the facts and circumstances of
each case.
Taxation and litigation exposures have been identified
as a key audit matter due to the complexities involved
in these matters, timescales involved for resolution and
the potential financial impact of these on the financial
statements. Further, significant management judgement
is involved in assessing the exposure of each case
and thus a risk that such cases may not be adequately
provided for or disclosed.
Our audit procedures included the following: -
• Obtained an understanding of the process of identification
of claims, litigations and contingent liabilities and identified
key controls in the process. For selected controls we have
performed tests of controls.
• Obtained the summary of Company’s legal and tax cases and
assessed management’s position through discussions with
the Legal Counsel, Head of Tax and operational management,
on both the probability of success in significant cases, and
the magnitude of any potential loss.
• Examined external legal opinions (where considered
necessary) and other evidence to corroborate management’s
assessment of the risk profile in respect of legal claims.
• Assessed the competence and objectivity of the
Company’s experts
• Engaged tax specialists to technically appraise the tax
positions taken by management with respect to local
tax issues.
• Assessed whether management assessment of similar
cases is consistent across the divisions or that differences in
positions are adequately justified.
• Assessed the relevant disclosures made within the financial
statements to address whether they reflect the facts and
circumstances of the respective tax and legal exposures and
the requirements of relevant accounting standards.
Recoverability of unutilised Minimum Alternate Tax (MAT) credits included under deferred tax assets (as described in
note 3(c)(A)(ii) and 35 of the standalone Ind AS financial statements)
Deferred tax assets as at March 31, 2022 includes MAT
credits of `4,839 crore relating to the Company which
is available for utilisation against future tax liabilities.
Out of the same, `208 crore is expected to be utilised
in the fourteenth year, fifteen years being the maximum
permissible time period to utilise the same.
Our audit procedures included the following:-
• Obtained an understanding of the management’s process
for estimating the recoverability of the deferred tax assets
and identified key controls in the process. For selected
controls we have performed tests of controls.
• Obtained and analysed the future projections of taxable
The analysis of the recoverability of such deferred tax
assets has been identified as a key audit matter because
the assessment process involves judgement regarding
the future profitability and the likelihood of the realization
of these assets, in particular whether there will be taxable
profits in future periods that support the recognition of
these assets. This requires assumptions regarding future
profitability, which is inherently uncertain.
profits estimated by management, assessed key
assumptions used, including the analysis of the consistency
of the actual results obtained by the various segments with
those projected in the previous year. We further obtained
evidence of the approval of the budgeted results included
in the current year’s projections, and the reasonableness of
the future cash flow projections.
• Tested the computation of the MAT credits recognized as
deferred tax assets.
• Assessed the disclosures made by the management in
this regard.
Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the standalone Ind AS financial statements and our auditor’s
report thereon.
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Our opinion on the standalone Ind AS financial statements
does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the standalone Ind AS
financial statements, our responsibility is to read the other
information and, in doing so, consider whether such other
information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated. 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.
Responsibilities of Management and Those
Charged with Governance for the Standalone
Ind AS Financial Statements
The Company’s Board of Directors is responsible for
the matters stated in Section 134(5) of the Act with
respect to the preparation of these standalone Ind AS
financial statements that give a true and fair view of the
financial position, financial performance including other
comprehensive income, cash flows and changes in equity of
the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting
Standards (Ind AS) specified under Section 133 of the Act
read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended. This responsibility also includes
maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets
of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgements and estimates that
are reasonable and prudent; and the design, implementation
and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy
and completeness of the accounting records, relevant to
the preparation and presentation of the standalone Ind AS
financial statements that give a true and fair view and are
free from material misstatement, whether due to fraud
or error.
In preparing the standalone Ind AS financial statements,
management is responsible for assessing the 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 management
either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
Those Charged with Governance are also responsible for
overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the
Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about
whether the standalone Ind AS 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 SAs will always detect a material
misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these standalone Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional
Skepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of
the standalone Ind AS financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing
our opinion on whether the Company has adequate
internal financial controls with reference to financial
statements in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability
to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures
in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a
going concern.
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• Evaluate the overall presentation, structure and
content of the standalone Ind AS financial statements,
including the disclosures, and whether the standalone
Ind AS financial statements represent the underlying
transactions and events in a manner that achieves
fair presentation.
We communicate with those charged with governance
regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including
any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the standalone Ind AS financial
statements for the financial year ended March 31, 2022
and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter
should not be communicated in our report because the
adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of
such communication.
Other Matter
We did not audit the financial statements and other financial
information, in respect of an unincorporated joint venture
not operated by the Company, whose Ind AS financial
statements include total assets of `99 crore as at 31 March
2022. These financial statements and other financial
information of the said unincorporated joint venture not
operated by the Company have not been audited by other
auditors, and such unaudited financial statements and
other unaudited financial information have been furnished
to us by the management and our report on the Ind AS
financial statements of the Company, in so far as it relates
to the amounts and disclosures included in respect of the
said unincorporated joint venture, is based solely on such
unaudited information furnished to us by the management..
In our opinion and according to the information and
explanations given to us by the Management, these financial
statements and other financial information of joint venture,
is not material to the Company. Our opinion is not modified
in respect of this matter.
Report on Other Legal and Regulatory
Requirements
1.
As required by the Companies (Auditor’s Report) Order,
2020 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of Section 143 of
the Act, we give in the “Annexure 1” a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2.
As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit;
(b)
In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of
those books;
(c) The Balance Sheet, the Statement of Profit
and Loss including the Statement of Other
Comprehensive Income, the Cash Flow
Statement and Statement of Changes in Equity
dealt with by this Report are in agreement with
the books of account;
(d)
In our opinion, the aforesaid standalone Ind AS
financial statements comply with the Accounting
Standards specified under Section 133 of the
Act, read with Companies (Indian Accounting
Standards) Rules, 2015, as amended;
(e) On the basis of the written representations
received from the directors as on March 31, 2022
taken on record by the Board of Directors, none of
the directors is disqualified as on March 31, 2022
from being appointed as a director in terms of
Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal
financial controls with reference to these
standalone Ind AS financial statements and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure 2” to this report;
(g)
In our opinion, the managerial remuneration for
the year ended March 31, 2022 has been paid/
provided by the Company to its directors in
accordance with the provisions of Section 197
read with Schedule V to the Act;
(h) With respect to the other matters to be included
in the Auditor’s Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules,
2014, as amended in our opinion and to the
best of our information and according to the
explanations given to us:
309
Integrated Report and Annual Accounts 2021-22 Independent Auditor’s Report
i.
ii.
The Company has disclosed the impact
of pending litigations on its financial
position in its standalone Ind AS financial
statements – Refer Note 3(c)(A)(iv), 3(c)(B)
(ii), 38D and 45 to the standalone Ind AS
financial statements;
The Company did not have any long‑term
contracts including derivative contracts
for which there were any material
foreseeable losses;
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by
the Company
iv.
a)
The management has represented
that, to the best of its knowledge and
belief, no funds have been advanced
or loaned or invested (either from
borrowed funds or share premium or
any other sources or kind of funds)
by the Company to or in any other
person(s) or entity(ies), including
foreign entities (“Intermediaries”),
with the understanding, whether
recorded in writing or otherwise,
that the Intermediary shall, whether,
directly or indirectly lend or invest in
other persons or entities identified
in any manner whatsoever by or on
behalf of the Company (“Ultimate
Beneficiaries”) or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries;
b)
The management has represented
that, to the best of its knowledge and
belief, no funds have been received
by the Company from any person(s)
or entity(ies), including foreign
entities (“Funding Parties”), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, whether, directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
(“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and
c)
Based on such audit procedures that
were considered reasonable and
appropriate in the circumstances,
nothing has come to our notice
that has caused us to believe that
the representations under sub-
clause (a) and (b) contain any
material misstatement.
v.
The interim dividend declared and paid
by the Company during the year is in
accordance with Section 123 of the Act.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sudhir Soni
Partner
Place of Signature: Mumbai Membership Number: 41870
UDIN: 22041870AHZGNE9213
Date: 28 April 2022
310
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Annexure 1
referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date
Re: Vedanta Limited (‘the Company’)
(ii)
(a)
In terms of the information and explanations sought by us
and given by the Company and the books of account and
records examined by us in the normal course of audit and
to the best of our knowledge and belief, we state that:
(i)
(a)
(A)
The Company has maintained proper
records showing full particulars, including
quantitative details and situation of
fixed assets.
The inventory has been physically verified by
the management during the year except for
inventories aggregating `301 crore lying at
Tuticorin plant which is under suspension (refer
note 3(c)(A)(iii)) and inventories lying with third
parties amounting to `409 crore. Inventories lying
with third parties have been confirmed by them
as at March 31, 2022 and discrepancies were
not noted in respect of such confirmation. In our
opinion, except for inventories lying at Tuticorin
plant which is under suspension as stated above,
the frequency of verification by the management
is reasonable and the coverage and procedure
for such verification is appropriate Discrepancies
of 10% or more in aggregate for each class
of inventory were not noticed in respect of
such verification.
As disclosed in note 17B to the financial
statements, the Company has been sanctioned
working capital limits in excess of Rs. five crores
in aggregate from banks and financial institutions
during the year on the basis of security of current
assets of the Company. The quarterly statements
filed by the Company with such banks and
financial institutions are in agreement with the
books of accounts of the Company.
(b)
(iii)
(a)
During the year the Company has provided
loans, stood guarantee and provided security to
companies or any other parties as follows:
Guarantees
(` in crore)
Loans
(` in crore)
5,153
Nil
383
Nil
Aggregate amount
granted/provided
during the year
- Subsidiaries
- Ultimate Parent
Balance
outstanding
as at balance
sheet date in
respect of above
cases (including
opening
balances)
- Subsidiaries
- Ultimate Parent
11,610
115
518
Nil
The Company has not given any advances in the
nature of loans.
(b)
During the year the guarantees provided, security
given and the terms and conditions of the grant
of all loans and guarantees to companies or any
other parties are not prejudicial to the Company’s
311
(b)
(c)
(d)
(e)
(B)
The Company has maintained proper
records showing full particulars of
intangibles assets as reflected in the
financial statements.
All Property, Plant and Equipment have not been
physically verified by the management during
the year but there is a regular programme of
verification in our opinion is reasonable having
regard to the size of the Company and the nature
of its assets except for fixed assets aggregating
`1,213 crore at Tuticorin plant where due to
suspension of operations (refer note 3(c)(A)
(iii)), management has been unable to perform
physical verification which was due in current
year. No material discrepancies were noticed
wherever such verification was performed.
The title deeds of all the immovable properties
(other than properties where the Company is
the lessee and the lease agreements are duly
executed in favour of the lessee) are held in the
name of the Company except for the title deeds
of immovable properties in oil and gas blocks,
jointly owned with other joint venture partners,
which are held in the name of the licensee of the
block. The written down value of such immovable
properties in the accompanying financial
statement aggregates ` 68 crore.
The original title deeds amounting to `142 crore
pertaining to immovable properties have been
pledged with lenders, which have been confirmed
by the lenders/trustees.
The Company has not revalued its Property, Plant
and Equipment (including Right of use assets)
or intangible assets during the year ended 31
March 2022.
There are no proceedings initiated or are pending
against the Company for holding any benami
property under the Prohibition of Benami
Property Transactions Act, 1988 and rules
made thereunder.
Integrated Report and Annual Accounts 2021-22
Annexure 1
referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our
report of even date
interest. The Company has not made any
investments or given advances in the nature of
loans during the year.
Accordingly, the requirement to report on
clause 3(iii)(f) of the Order is not applicable to
the Company.
(iv)
(v)
(c)
In respect of the following loans which were
repayable on demand, the repayment terms for
principal and interest were specified during the
year. Based on original and revised terms no
amounts were due during the year on such loans:
Name of the Entity
Paradip Multi Cargo Berth
Private Limited*
Sesa Resources Limited
Sterlite Ports Limited*
Sterlite Iron & Steel Co. Limited
*Refer note 41
Amount
(` in crore)
0.35
68
4
5
There are no amounts of loans and advances in
the nature of loans granted to companies, firms,
limited liability partnerships or any other parties
which are overdue for more than ninety days.
(vi)
(d)
(e)
The Company had granted a loan of `425 crore to
a wholly owned subsidiary, Vizag General Cargo
Berth Private Limited which had fallen due during
the year and the repayment terms of the loan
were revised. The subsidiary has since repaid
`407 crore up to 31 March 2022 in advance of the
scheduled repayment terms.
The aggregate amount of such dues extended
and the percentage of the aggregate to the total
loans or advances in the nature of loans granted
during the year are as follows:
Aggregate
amount of
overdues of
existing loans
extended
(` in crore)
Percentage of
the aggregate to
the total loans or
advances in the
nature of loans
granted during
the year
425
39%
Name of Parties
Vizag General
Cargo Berth
Private
Loans, investments and guarantee in respect of which
provisions of Sections 185 and 186 of the Companies
Act, 2013 are applicable have been complied with
by the Company. The Company has not granted any
security in terms of Sections 185 and 186.
The Company has neither accepted any deposits
from the public nor accepted any amounts which are
deemed to be deposits within the meaning of Sections
73 to 76 of the Companies Act and the rules made
thereunder, to the extent applicable. In respect of
unclaimed deposits, the Company has complied with
the provisions of Sections 73 to 76 of the Act and the
Companies (Acceptance of Deposits) Rules, 2014 (as
amended).
We have broadly reviewed the books of account
maintained by the Company pursuant to the rules
made by the Central Government for the maintenance
of cost records under Section 148(1) of the Act,
related to the manufacture of goods and generation of
electricity, and are of the opinion that prima facie, the
specified accounts and records have been made and
maintained. We have not, however, made a detailed
examination of the same.
(vii) (a)
Undisputed statutory dues including goods and
services tax, provident fund, employees’ state
insurance, income‑tax, sales‑tax, duty of custom,
value added tax, cess and other statutory dues
have generally been regularly deposited with
the appropriate authorities though there has
been a slight delay in a few cases. According
to the information and explanations given to us
and based on audit procedures performed by
us, no undisputed dues in respect of goods and
services tax, provident fund, employees’ state
insurance, income‑tax, service tax, sales‑tax, duty
of custom, duty of excise, value added tax, cess
and other statutory dues which were outstanding,
at the year end, for a period of more than six
months from the date they became payable. The
provisions relating to excise duty and service tax
are not applicable to the Company.
(f)
During the year, the Company has not granted
any loans or advances in the nature of loans,
either repayable on demand or without specifying
any terms or period of repayment to companies.
312
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
(b)
The dues of goods and services tax, provident fund, employees’ state insurance, income‑tax, sales‑tax, service tax,
duty of custom, duty of excise, value added tax, cess, and other statutory dues have not been deposited on account of
any dispute, are as follows:
Name of the Statute
Nature of the dues
Forum where the dispute is
pending
Period to Which amount
relates
Central Excise Act, 1944
Excise Duty
CESTAT/Supreme court
December 2013 to
February 2015
Central Excise Act, 1944
Excise Duty
Assistant Commissioner
2013-14
Central Excise Act, 1944
Excise Duty
CESTAT
1997-98 to 2015-16
Central Excise Act, 1944
Excise Duty
Commissioner
1997-2013
Central Excise Act, 1944
Excise Duty
Commissioner Appeals
October 2013 to July 2014,
2015-16 to 2016-17
Central Excise Act, 1944
Excise Duty
High Court
2000-2006, 2017-18
Central Excise Act, 1944
Excise Duty
Additional Commissioner
November 07 to July 08
Central Sales Tax 1956
Central Sales Tax 1956
Central Sales Tax 1956
Central Sales Tax 1956
Central Sales Tax 1956
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Additional Commissioner
2004-2020
Commissioner (Appeals)
FY 2014-15
Deputy Commissioner
FY 2015-16 to FY 2017-18
Tribunal
High Court
2007-08 to 2014-15
1998-99, 2009-10, 2010-11,
2012-13, 2016-17
Central Sales Tax 1956
Sales Tax
Assistant Commissioner
FY 2014-15, 2016-17
Custom Act, 1962
Customs Duty
CESTAT
2004-05 to 2013-14,
2016-17 to 2018-19
Custom Act, 1962
Custom Act, 1962
Customs Duty
Customs Duty
Custom Act, 1962
Custom Act, 1962
Custom Act, 1962
Finance Act,1994
Finance Act,1994
Customs Duty
Customs Duty
Customs duty on
exports
Service Tax
Service Tax
Finance Act,1994
Finance Act,1994
Finance Act,1994
Service Tax
Service Tax
Service Tax
Finance Act,1994
Service Tax
The Goods and Service tax,
2017
The Goods and Service tax,
2017
GST
GST
Commissioner Appeals
2012-13, 2014-15
Commissioner
High Court
Supreme Court
2004-05 to 2009-10 and
2012-13 to 2019-20
2005-06 to 2006-07
1996-97, 2005-10, 2015
Assistant Commissioner
FY 2015-16 to FY 2019-20
Assistant Commissioner
FY 2015-2016, FY 2016-17
CESTAT
2004-05 to 2015- 2016
and Oct 2016 to Mar 2017,
2017-18 (upto June 2017).
Directorate General
FY 2016-17
Commissioner Appeals
2010-11, 2012-13 to 2015-16
Commissioner
High Court
CESTAT
2014-15, 2016-17 and
2017-18 (Till June 30, 2017)
2006-07,2007-08, 2016-17
2018-19
Additional Commissioner
2017-18
(` in crore)
Amount*
49.45
0.57
141.24
23.46
0.15
98.29
0.40
8.10
5.47
5.95
17.99
18.89
1.59
116.19
10.46
47.82
47.34
0.18
130.00
28.00
207.18
18.00
1.83
5.44
24.31
0.18
28.06
Income tax Act, 1961
Income tax Act, 1961
Income tax Act, 1961
Income tax Act, 1961
Income tax Act, 1961
Additional Income
Tax demand
Additional Income
Tax demand
Additional Income
Tax demand
Additional Income
Tax demand &
penalty
Additional Income
Tax demand
CIT Appeals
2005-06 to 2016-17
729.04
High Court
2006-07 to 2014-15, 2019-
20
1,493.07
Assessing Officer
1999-00, 2008-09, 2009-10
30.35
Income Tax Appellate Tribunal 2004-05 to 2009-10,2011-
2,014.30
12, 2013-15
Supreme Court
2007-08
205.82
313
Integrated Report and Annual Accounts 2021-22 Annexure 1
referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our
report of even date
Name of the Statute
Nature of the dues
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Entry Tax
Entry Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Sales Tax
Entry Tax
Forum where the dispute is
pending
Period to Which amount
relates
Joint Commissioner
2015-16
Commissioner
High Court
2007-08 to 2014-15
1998-99 to 2016-17
Additional Commissioner
2014-15
Deputy Commissioner
2012 to 2015
High Court
April 2007 to June 2017 and
2007-08 to 2012-13
18 August 2013 –
31 March 2015
Entry Tax
Additional Commissioner
Entry Tax
Electricity Tax
Energy Cess
Entry Tax
Electricity Tax
Energy Cess
Foreign Development Tax &
Foreign Development Fund
Forest Development
tax
Deputy Commissioner
October 2015 to June 2017
High Court
High Court
2017-18 to 2020-21
2014-19
Supreme Court
FY 2008 to till date
Mumbai Metropolitan
Region Development
Authority
Mumbai Metropolitan
Region Development
Authority
Forest lease rent
High Court
FY 2009
Royalty
Supreme Court
FY 2007-12
Railways Act,1971 and
wagon investment scheme
Stacking and Warfare
charge
High Court
FY 2010
Mines and Minerals
(Regulation and
Development) Act, 1957
Goa Rural Improvement and
Welfare Cess Act, 2000
Royalty
High Court
FY 2013-14
Transportation Cess High Court
FY 2010 to till date
Energy Cess
Energy Cess
High Court
2014-19
(` in crore)
Amount*
0.03
53.87
315.96
5.64
0.45
971.08
0.93
7.02
25.10
38.28
341.20
0.08
12.67
4.09
11.78
113.60
38.28
* Net of amounts paid under protest/adjusted against refunds.
(viii) The Company has not surrendered or disclosed any
transaction, previously unrecorded in the books of
account, in the tax assessments under the Income Tax
Act, 1961 as income during the year. Accordingly, the
requirement to report on clause 3(viii) of the Order is
not applicable to the Company.
(ix)
(a)
The Company has not defaulted in repayment of
loans or other borrowings or in the payment of
interest thereon to any lender.
(b)
The Company has not been declared wilful
defaulter by any bank or financial institution or
government or any government authority.
(c)
Term loans were applied for the purpose for
which the loans were obtained.
(d)
(e)
On an overall examination of the financial
statements of the Company, funds raised on
short-term basis have generally not been used for
long‑term purposes by the Company.
On an overall examination of the financial
statements of the Company, the Company has
not taken any funds from any entity or person
on account of or to meet the obligations of its
subsidiaries, associates or joint ventures.
(f)
The Company has raised loans during the year on the pledge of securities held in its subsidiary as per
details below.
Nature of loan taken Name of lender
Amount of facility
(` in crore)
Name of the
subsidiary
Details of
security pledged
Remarks
Rupee term loan
Bank
8,000 Hindustan Zinc
Limited
Shares
Refer note 17(g) of the
financial statements
314
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
The Company has not raised loans during the year on the
pledge of securities held in its joint ventures or associate
companies. Further, the Company has not defaulted in
repayment of such loans raised.
(x)
(a)
Monies raised during the year by the Company
by way of debt instruments were applied for
the purpose for which they were raised. The
Company has not raised monies by way of initial
public offer or further public offer.
(b)
The Company has not made any preferential
allotment or private placement of shares /fully
or partially or optionally convertible debentures
during the year under audit and hence, the
requirement to report on clause 3(x)(b) of the
Order is not applicable to the Company.
(xi)
(a)
No fraud by the Company or no material fraud on
the Company has been noticed or reported during
the year.
(b)
During the year, no report under sub-section (12)
of Section 143 of the Companies Act, 2013 has
been filed by cost auditor/secretarial auditor or by
us in Form ADT – 4 as prescribed under Rule 13
of Companies (Audit and Auditors) Rules, 2014
with the Central Government.
(c)
We have taken into consideration the whistle
blower complaints received by the Company
during the year while determining the nature,
timing and extent of audit procedures.
Company. Accordingly, the requirement to report on
clause (xvi)(a),(b),(c) & (d) of the Order is not applicable
to the Company.
(xvii) The Company has not incurred cash losses in the
current year and immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors
during the year and accordingly requirement to report
on Clause 3(xviii) of the Order is not applicable to
the Company.
(xix) On the basis of the financial ratios disclosed in note
43 to the financial statements, ageing and expected
dates of realisation of financial assets and payment of
financial liabilities, other information accompanying
the financial statements, our knowledge of the Board
of Directors and management plans and based on
our examination of the evidence supporting the
assumptions, nothing has come to our attention, which
causes us to believe that any material uncertainty
exists as on the date of the audit report that Company
is not capable of meeting its liabilities existing at the
date of balance sheet as and when they fall due within
a period of one year from the balance sheet date. We,
however, state that this is not an assurance as to the
future viability of the Company. We further state that
our reporting is based on the facts up to the date of
the audit report and we neither give any guarantee nor
any assurance that all liabilities falling due within a
period of one year from the balance sheet date, will get
discharged by the Company as and when they fall due.
(xii) The Company is not a nidhi Company as per the
(xx) (a)
provisions of the Companies Act, 2013. Therefore, the
requirement to report on clause 3(xii)(a), (b) & (c) of the
Order is not applicable to the Company.
(xiii) Transactions with related parties are in compliance
with Sections 177 and 188 of Companies Act, 2013
where applicable and the details have been disclosed
in the notes to the financial statements, as required by
the applicable accounting standards.
(xiv) (a)
The Company has an internal audit system
commensurate with the size and nature of
its business.
(b)
The internal audit reports of the Company issued
till the date of the audit report, for the period
under audit have been considered by us.
(xv) The Company has not entered into any non‑cash
transactions with its directors or persons connected
with its directors and hence requirement to report
on clause 3(xv) of the Order is not applicable to
the Company.
(xvi) The provisions of Section 45‑IA of the Reserve Bank
of India Act, 1934 (2 of 1934) are not applicable to the
In respect of other than ongoing projects, there
are no unspent amounts that are required to be
transferred to a fund specified in Schedule VII of
the Companies Act (the Act), in compliance with
second proviso to sub-section 5 of Section 135
of the Act. This matter has been disclosed in note
42(a) to the financial statements.
(b)
There are no unspent amounts in respect
of ongoing projects, that are required to be
transferred to a special account in compliance
of provision of sub-section (6) of Section 135 of
Companies Act. This matter has been disclosed
in note 42(a) to the financial statements.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
Place: Mumbai
Date: 28 April 2022
per Sudhir Soni
Partner
Membership Number: 41870
UDIN: 22041870AHZGNE9213
315
Integrated Report and Annual Accounts 2021-22
Annexure 2
to the Independent Auditor’s Report of even date on the Ind AS Standalone Financial Statements of
Vedanta Limted
Report on the Internal Financial Controls under
Clause (i) of sub-section 3 of Section 143 of
the Companies Act, 2013 (“the Act”)
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls over financial reporting with reference to these
standalone financial statements and their operating
effectiveness. Our audit of internal financial controls over
financial reporting included obtaining an understanding
of internal financial controls over financial reporting
with reference to these standalone financial statements,
assessing the risk that a material weakness exists,
and testing and evaluating the design and operating
effectiveness of internal control based on the assessed
risk. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of
material misstatement of the financial statements, whether
due to fraud or error.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
audit opinion on the internal financial controls over
financial reporting with reference to these standalone
financial statements.
Meaning of Internal Financial Controls Over
Financial Reporting With Reference to these
Financial Statements
A company’s internal financial control over financial
reporting with reference to these standalone financial
statements is a process designed to provide reasonable
assurance regarding the reliability of financial reporting
and the preparation of financial statements for external
purposes in accordance with generally accepted
accounting principles. A company’s internal financial
control over financial reporting with reference to these
standalone financial statements includes those policies and
procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted
accounting principles, and that receipts and expenditures
of the Company are being made only in accordance
with authorisations of management and directors of the
Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition,
use, or disposition of the Company’s assets that could have
a material effect on the financial statements.
We have audited the internal financial controls over
financial reporting of Vedanta Limited (“the Company”)
as of 31 March 2022 in conjunction with our audit of the
standalone Ind AS financial statements of the Company for
the year ended on that date.
Management’s Responsibility for Internal
Financial Controls
The Company’s Management is responsible for establishing
and maintaining internal financial controls based on the
internal control over financial reporting criteria established
by the Company considering the essential components
of internal control stated in the Committee of Sponsoring
Organisations of the Treadway Commission (2013
Framework) (“COSO 2013 Criteria”). These responsibilities
include the design, implementation and maintenance of
adequate internal financial controls that were operating
effectively for ensuring the orderly and efficient conduct of
its business, including adherence to the Company’s policies,
the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable
financial information, as required under the Companies
Act, 2013.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s
internal financial controls over financial reporting with
reference to these standalone financial statements based
on our audit. We conducted our audit in accordance with
the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (the “Guidance Note”) and the
Standards on Auditing as specified under Section 143(10)
of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls and, both issued by
the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply
with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether adequate
internal financial controls over financial reporting with
reference to these standalone financial statements was
established and maintained and if such controls operated
effectively in all material respects.
316
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Inherent Limitations of Internal Financial
Controls Over Financial Reporting with
reference to these Standalone Financial
Statements
Because of the inherent limitations of internal financial
controls over financial reporting with reference to these
standalone financial statements, including the possibility
of collusion or improper management override of controls,
material misstatements due to error or fraud may occur
and not be detected. Also, projections of any evaluation of
the internal financial controls over financial reporting with
reference to these standalone financial statements to future
periods are subject to the risk that the internal financial
control over financial reporting with reference to these
standalone financial statements may become inadequate
because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects,
adequate internal financial controls over financial reporting
with reference to these standalone financial statements and
such internal financial controls over financial reporting with
reference to these standalone financial statements were
operating effectively as at 31 March 2022 based on the
internal control over financial reporting criteria established
by the Company considering the essential components of
internal control stated in COSO 2013 criteria.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sudhir Soni
Partner
Place of Signature: Mumbai Membership Number: 41870
UDIN: 22041870AHZGNE9213
Date: 28 April 2022
317
Integrated Report and Annual Accounts 2021-22 Balance Sheet
as at 31 March 2022
Particulars
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Intangible assets
Exploration intangible assets under development
Financial assets
Investments
Trade receivables
Loans
Others
Deferred tax assets (net)
Income tax assets (net)
Other non-current assets
Total non-current assets
Current assets
Inventories
Financial assets
Investments
Trade receivables
Cash and cash equivalents
Other bank balances
Loans
Derivatives
Others
Other current assets
Total current assets
Total Assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Total Equity
Liabilities
Non-current liabilities
Financial liabilities
Borrowings
Lease liabilities
Derivatives
Other financial liabilities
Provisions
Other non-current liabilities
Total non-current liabilities
Current liabilities
Financial liabilities
Borrowings
Lease liabilities
Operational buyers' credit/suppliers' credit
Trade payables
(a) Total outstanding dues of micro, small and medium enterprises
(b) Total outstanding dues of creditors other than micro, small and medium
enterprises
Derivatives
Other financial liabilities
Provisions
Income tax liabilities (net)
Other current liabilities
Total current liabilities
Total Equity and Liabilities
Note
As at
31 March 2022
As at
31 March 2021
(` in crore)
5
5
5
5
6A
7
8
9
35
35
10
11
6B
7
12
13
8
22
9
10
14
15
17A
21
22
20
24
23
17B
21
19
18
22
20
24
35
23
39,490
9,226
26
1,488
60,881
1,293
154
1,440
1,118
1,800
2,214
1,19,130
38,222
9,096
27
1,605
60,887
1,323
180
1,258
333
1,787
2,371
1,17,089
8,563
5,555
585
2,328
5,518
1,630
365
249
7,394
3,197
29,829
1,48,959
372
77,277
77,649
23,421
57
6
192
1,268
2,751
27,695
13,275
25
9,261
195
5,329
277
10,020
158
601
4,474
43,615
1,48,959
2,016
1,136
2,861
1,475
523
66
5,071
1,939
20,642
1,37,731
372
76,418
76,790
20,913
60
50
190
1,169
2,360
24,742
11,253
73
6,029
209
3,594
139
9,169
98
46
5,589
36,199
1,37,731
See accompanying notes to the financial statements
As per our report of even date
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
per Sudhir Soni
Partner
Membership No: 41870
Place: Mumbai
Date: 28 April 2022
318
For and on behalf of the Board of Directors
Navin Agarwal
Executive Vice-Chairman and
Whole-Time Director
DIN 00006303
Ajay Goel
Acting Group Chief Financial Officer
PAN AEAPG8383C
Place: New Delhi
Date: 28 April 2022
Sunil Duggal
Whole-Time Director and Group
Chief Executive Officer
DIN 07291685
Prerna Halwasiya
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Statement of Profit and Loss
for the year ended 31 March 2022
Particulars
Revenue from operations
Other operating income
Other income
Total Income
Expenses:
Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Power and fuel charges
Employee benefits expense
Finance costs
Depreciation, depletion and amortisation expense
Other expenses
Total expenses
Profit before exceptional items and tax
Net exceptional loss
Profit before tax
Tax expense:
On other than exceptional items
Net current tax expense
Net deferred tax (benefit)/expense
On exceptional items
Net current tax expense
Net deferred tax expense/(benefit)
Net tax expense
Net Profit after tax (A)
Net Profit after tax before exceptional items (net of tax)
Other Comprehensive income/(loss)
Items that will not be reclassified to profit or loss
Re-measurements (loss)/gain of defined benefit plans
Tax credit/(expense)
Gain on FVOCI equity investment
Items that will be reclassified to profit or loss
Net loss on cash flow hedges recognised during the year
Tax credit
Net gain on cash flow hedges recycled to statement of profit and loss
Net tax expense
Exchange differences on translation
Tax credit/(expense)
Total Other Comprehensive Income/ (Loss) for the year (B)
Total Comprehensive Income for the year (A+B)
Earnings per share (in `)
- Basic & Diluted
Note
28
29
30
31
26
32
5
33
34
35
(` in crore, except otherwise stated)
Year ended
31 March 2022
Year ended
31 March 2021
62,801
476
8,347
71,624
23,751
228
(1,172)
11,874
867
3,146
2,945
10,051
51,690
19,934
(318)
19,616
3,505
(1,023)
(281)
170
2,371
17,245
17,452
(23)
8
15
0
(142)
51
375
(131)
174
6
333
333
17,578
37,120
320
10,948
48,388
13,990
204
70
6,763
903
3,193
2,519
6,850
34,492
13,896
(232)
13,664
104
3,138
-
(81)
3,161
10,503
10,654
0
(3)
63
60
(199)
69
174
(61)
(66)
(34)
(117)
(57)
10,446
36
46.36
28.23
See accompanying notes to the financial statements
As per our report of even date
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
per Sudhir Soni
Partner
Membership No: 41870
Place: Mumbai
Date: 28 April 2022
For and on behalf of the Board of Directors
Navin Agarwal
Executive Vice-Chairman and
Whole-Time Director
DIN 00006303
Ajay Goel
Acting Group Chief Financial Officer
PAN AEAPG8383C
Place: New Delhi
Date: 28 April 2022
Sunil Duggal
Whole-Time Director and Group
Chief Executive Officer
DIN 07291685
Prerna Halwasiya
Company Secretary and Compliance Officer
ICSI Membership No. A20856
319
Integrated Report and Annual Accounts 2021-22 Statement of Cash Flows
for the year ended 31 March 2022
Particulars
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Adjustments for:
Depreciation, depletion and amortisation
Capital work-in-progress written off/ impairment of assets (reversal)/ charge
Provision for doubtful debts/ advance/ bad debts written off
Exploration costs written off
Other exceptional items
Fair Value gain on financial assets held at fair value through profit or loss
Net gain on sale of long-term investments
(Profit)/ Loss on sale/ discard of property, plant and equipment (net)
Foreign exchange loss (net)
Unwinding of discount on provisions
Share based payment expense
Interest and dividend Income
Interest expense
Deferred government grant
Changes in assets and liabilities
(Increase) in trade and other receivables
(Increase)/decrease in inventories
Increase/(decrease) in trade and other payable
Cash generated from operations
Income taxes paid (net)
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Consideration paid for business acquisition (net of cash and cash equivalents acquired)
Purchases of property, plant and equipment (including intangibles)
Proceeds from sale of property, plant and equipment
Loans repaid by related parties (Refer Note 39)
Loans given to related parties (Refer Note 39)
Short-term deposits made
Proceeds from redemption of short-term deposits
Short-term investments made
Proceeds from sale of short-term investments
Interest received
Dividends received
Payment made to site restoration fund
Net cash generated from investing activities
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
19,616
13,664
2,968
(1,346)
239
1,412
252
(1)
(16)
(129)
146
24
29
(8,050)
3,123
(78)
(4,996)
(3,008)
5,064
15,249
(2,685)
12,564
-
(3,674)
268
567
(383)
(1,067)
1,285
(25,777)
27,230
205
7,830
(76)
6,408
2,543
181
129
6
51
(93)
-
28
80
23
36
(10,730)
3,170
(75)
(1,339)
53
(1,452)
6,275
(228)
6,047
(59)
(2,669)
18
1,684
(579)
(1,441)
962
(18,468)
18,628
415
10,371
(94)
8,768
320
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Statement of Cash Flows
for the year ended 31 March 2022
Particulars
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds/ (repayment) of short-term borrowings (net)
Proceeds from current borrowings
Repayment of current borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Interest paid
Payment of dividends to equity holders of the Company
Payment of lease liabilities
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year (Refer note 12)
Notes:
1.
The figures in parentheses indicate outflow.
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
816
8,868
(4,066)
18,942
(20,250)
(3,872)
(16,689)
(64)
(16,315)
2,657
2,861
5,518
(8,726)
5,499
(6,908)
9,021
(5,564)
(3,439)
(3,519)
(164)
(13,800)
1,015
1,846
2,861
2.
The above cash flow has been prepared under the “Indirect Method” as set out in Indian Accounting Standard (Ind AS) 7 ‑
statement of cash flows.
See accompanying notes to the financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Navin Agarwal
Sunil Duggal
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
Executive Vice-Chairman and
Whole-Time Director
DIN 00006303
Whole-Time Director and Group
Chief Executive Officer
DIN 07291685
per Sudhir Soni
Partner
Membership No: 41870
Place: Mumbai
Date: 28 April 2022
Ajay Goel
Prerna Halwasiya
Acting Group Chief Financial Officer
PAN AEAPG8383C
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Place: New Delhi
Date: 28 April 2022
321
Integrated Report and Annual Accounts 2021-22 Statement of Changes in Equity
for the year ended 31 March 2022
A. Equity Share Capital
Equity shares of ` 1 each issued, subscribed and fully paid
As at 31 March 2022, 31 March 2021 and 31 March 2020*
* There are no prior period errors for the years ended 31 March 2021 and 31 March 2020.
Number of shares
Amount
(in crore)
(` in crore)
372
372
Reserves and surplus
Items of OCI
Capital
reserve
Securities
premium
Retained
earnings
Other
reserves
(Refer
below)
Equity
instruments
through OCI
Hedging
reserve
Foreign
currency
translation
reserve
(` in crore)
Total other
equity
26,027
19,009
5,508
17,024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,503
(3)
-
10,500
-
-
-
503
(503)
-
-
-
-
-
-
-
-
60
(14)
(3,519)
13,038
17,245
(15)
58
(92)
(44)
-
16,443
-
-
-
-
17,230
-
-
-
-
-
557
(557)
-
24
(20)
(16,689)
43
(34)
(43)
-
30
-
63
63
-
-
-
-
-
93
-
15
15
-
-
-
-
-
(22)
1,947
69,523
-
(17)
-
10,503
(100)
(57)
(17)
(100)
10,446
-
-
-
-
-
-
-
-
-
-
(39)
-
153
1,847
-
180
-
58
(32)
(58)
(3,519)
76,418
17,245
333
153
180
17,578
-
-
-
-
-
-
-
-
-
-
-
43
(10)
(63)
(16,689)
26,027
19,009
14,140
15,852
108
114
2,027
77,277
Balance as at 31 March 2021
26,027
19,009
B. Other Equity
Particulars
Balance as at
01 April 2020
Profit for the year
Other comprehensive income
for the year, net of tax
Total Comprehensive Income
for the year
Transfer from debenture
redemption reserve (net)
Recognition of share based
payment
Stock options cancelled during
the year
Exercise of stock options
Dividends (Refer note 37)
Profit for the year
Other comprehensive loss for
the year, net of tax
Total Comprehensive Income
for the year
Transfer from debenture
redemption reserve (net)
Recognition of share based
payment
Stock options cancelled during
the year
Exercise of stock options
Dividends
(Refer note 37)
Balance as at
31 March 2022
322
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Statement of Changes in Equity
for the year ended 31 March 2022
Other reserves comprises:
Particulars
Capital
redemption
reserve
Debenture
redemption
reserve
Balance as at 01 April 2020
38
Transfer to retained earnings
Recognition of share based
payment
Stock options cancelled
during the year
Exercise of stock options
-
-
-
-
Balance as at 31 March 2021
38
Transfer to retained earnings
Recognition of share based
payment
Stock options cancelled
during the year
Exercise of stock options
-
-
-
-
Balance as at 31 March 2022
38
1,060
(503)
-
-
-
557
(557)
-
-
-
-
Preference
share
redemption
reserve
3,087
-
-
-
-
3,087
-
-
-
-
3,087
Amalgamation
Reserve
General
reserve
Share Based
Payment
Reserve
(` in crore)
Total
3
12,587
249
17,024
-
-
-
-
3
-
-
-
-
3
-
-
-
-
12,587
-
-
-
-
12,587
-
58
(92)
(44)
171
-
43
(34)
(43)
137
(503)
58
(92)
(44)
16,443
(557)
43
(34)
(43)
15,852
See accompanying notes to the financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Navin Agarwal
Sunil Duggal
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
Executive Vice-Chairman and
Whole-Time Director
DIN 00006303
Whole-Time Director and Group
Chief Executive Officer
DIN 07291685
per Sudhir Soni
Partner
Membership No: 41870
Place: Mumbai
Date: 28 April 2022
Ajay Goel
Prerna Halwasiya
Acting Group Chief Financial Officer
PAN AEAPG8383C
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Place: New Delhi
Date: 28 April 2022
323
Integrated Report and Annual Accounts 2021-22
1 Company overview:
Vedanta Limited (“the Company”) is a diversified
natural resource company engaged in exploring,
extracting and processing minerals and oil and gas.
The Company engages in the exploration, production
and sale of oil and gas, aluminium, copper, iron ore
and power.
The Company was incorporated on 08 September
1975 under the laws of the Republic of India. The
registered office of the Company is situated at 1st
Floor, ‘C’ wing, Unit 103, Corporate Avenue, Atul
Projects, Chakala, Andheri (East), Mumbai – 400 092,
Maharashtra. The Company’s shares are listed on
National Stock Exchange (“NSE”) and Bombay Stock
Exchange (“BSE”) in India. In June 2007, the Company
completed its initial public offering of American
Depositary Shares, or ADS, each representing
four equity shares, and listed its ADSs on the New
York Stock Exchange (“NYSE”). In July 2009, the
Company completed its follow‑on offering of an
additional 131,906,011 ADSs, each representing
four equity shares, which are listed on the New York
Stock Exchange.
The American Depositary Shares (“ADS”) of the
Company have been delisted from NYSE effective
close of trading on NYSE on 08 November 2021. This
follows the filing done by the Company of Form 25 with
Securities and Exchange Commission on 29 October
2021. As a consequence of the delisting becoming
effective, termination of the Deposit Agreement under
which the ADS were issued (the “Deposit Agreement”)
has also become effective close of trading on NYSE on
08 November 2021. The said action has no impact on
the current listing status or trading of the Company’s
equity shares on BSE and NSE. Further, the Company
will continue to be subject to reporting obligations
under the U.S. Securities Exchange Act of 1934 until
such time as it can terminate its registration under the
said Exchange Act.
The Company is majority owned by Twin Star Holdings
Limited (“Twin Star”), Finsider International Company
Limited (“Finsider”), Vedanta Holdings Mauritius
II Limited (“VHM2L”), Vedanta Holdings Mauritius
Limited (“VHML”), Welter Trading Limited (“Welter”)
and Vedanta Netherlands Investments BV (“VNIBV”)
which are in turn wholly-owned subsidiaries of Vedanta
Resources Limited (“VRL”), a company incorporated
in the United Kingdom. VRL, through its subsidiaries,
held 69.68% (31 March 2021: 55.1%) of the Company’s
equity as at 31 March 2022.
VRL, through its subsidiaries, acquired 54,17,31,161
equity shares of the Company during the current
period, thereby increasing their shareholding in the
Company from the current 55.1% to 69.68%.
324
Details of Company’s various businesses are
as follows:
• The Company’s oil and gas business consists
of business of exploration and development and
production of oil and gas.
• The Company’s iron ore business consists of iron
ore exploration, mining and processing of iron ore,
pig iron and metallurgical coke. The Company has
iron ore mining operations in the States of Goa and
Karnataka. Pursuant to Honourable Supreme Court
of India order, mining operations in the state of Goa
are currently suspended.
• The Company’s copper business is principally
one of custom smelting and includes captive
power plants at Tuticorin in Southern India. The
Company’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 Company’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 Company 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. We continue to
engage with the Government of India and relevant
authorities to enable the restart of operations at
Copper India.
Further, the Company’s copper business includes
refinery and rod plant Silvassa consisting of a 133,000
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. (Refer note 3(c)(A)(iii)).
• The Company’s aluminium business include a
refinery and captive power plant at Lanjigarh and
a smelter and captive power plants at Jharsuguda
both situated in the State of Odisha in Eastern India.
• The Company’s power operations include a thermal
coal‑based commercial power facility of 600 MW at
Jharsuguda in the State of Odisha in Eastern India.
Besides the above the Company has business interest
in zinc, lead, silver, iron ore, steel, ferro alloys and other
products and services through its subsidiaries in India
and overseas.
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
These are the Company’s separate financial
statements. The details of Company’s material
subsidiaries, associates and joint ventures is given in
note 41.
3 a) Significant accounting policies
A. Revenue recognition
•
Sale of goods/rendering of services (including
revenue from contracts with customers)
2
Basis of preparation and basis of
measurement of financial statements
(a) Basis of preparation
i)
These financial statements have been prepared
in accordance with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian
Accounting Standards) Rules, 2015 and other
relevant provisions of the Companies Act, 2013
(the Act) (as amended from time to time) and
Guidance Note on Accounting for Oil and Gas
Producing Activities issued by the Institute of
Chartered Accountants of India.
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.
These financial statements are approved for
issue by the Board of Directors on 28 April 2022.
All financial information presented in Indian
Rupee has been rounded off to the nearest crore
except when indicated otherwise. Amounts less
than ` 0.50 crore have been presented as “0”.
ii)
Certain comparative figures appearing in these
financial statements have been regrouped and/
or reclassified to better reflect the nature of those
items (Refer note 2(c) below).
(b) Basis of measurement
The financial statements have been prepared on a
going concern basis 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) Reclassification
Consequent to amendments to the Schedule III to the
Companies Act, 2013, current maturities of long‑term
borrowings (31 March 2021: ` 10,113 crore) have been
presented as part of the current borrowings and lease
liabilities (31 March 2021: ` 133 crore) have been
presented on the face of balance sheet, which were
previously included under ‘other financial liabilities’.
The Company’s revenue from contracts with
customers is mainly from the sale of oil and
gas, aluminium, copper, iron ore and power.
Revenue from contracts with customers is
recognised when control of the goods or services
is transferred to the customer which usually is
on delivery of the goods to the shipping agent
at an amount that reflects the consideration to
which the Company 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 Company’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 Ind
AS 109 ‘Financial Instruments’ rather than Ind
AS 115 Revenue from contracts with customers
and therefore the Ind AS 115 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 statement of profit and loss 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
Company’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 Company’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
Company excludes government’s share of profit
oil which gets accounted for when the obligation
in respect of the same arises.
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Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
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.
A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. If the Company performs
part of its obligation by transferring goods or
services to a customer before the customer
pays consideration or before payment is due,
a contract asset is recognised for the earned
consideration when that right is conditional on
the Company’s future performance.
A contract liability is the obligation to transfer
goods or services to a customer for which the
Company has received consideration from the
customer. If a customer pays consideration
before the Company 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 Company 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 Company 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 a current liability.
•
Interest income
Interest income from debt instruments is
recognised using the effective interest rate
method. The effective interest rate is the rate that
exactly discounts estimated future cash receipts
through the expected life of the financial asset to
the gross carrying amount of a financial asset.
When calculating the effective interest rate, the
Company estimates the expected cash flows
by considering all the contractual terms of the
financial instrument (for example, prepayment,
extension, call and similar options) but does not
consider the expected credit losses.
•
Dividends
Dividend income is recognised in the statement
of profit and loss 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. Property, plant and equipment
i) Mining properties and leases
When a decision is taken that a mining property
is viable for commercial production (i.e. when the
Company determines that the mining property
will provide sufficient and sustainable return
relative to the risks and the Company 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 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 Company 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.
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Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 Company
determines that the mining property will not
provide sufficient and sustainable returns relative
to the risks and the Company 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.
ii)
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
statement of profit and loss.
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 statement of profit and loss
to the extent that the net proceeds exceed or
are less than the appropriate portion of the net
capitalised costs of the asset.
iii) 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.
Land acquired free of cost or at below market rate
from the government is recognised at fair value
with corresponding credit to deferred income.
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 statement of profit and
loss for the period during which such expenses
are incurred.
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 statement of profit and loss when the asset
is derecognised. Major inspection and overhaul
expenditure is capitalised, if the recognition
criteria are met.
iv) 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.
v)
Depreciation, depletion and amortisation
expense
Mining properties and other assets in the course
of development or construction and freehold land
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.
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Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
• Oil and gas producing facilities
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
depletable 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.
Depletable reserves are proved reserves for
acquisition costs and proved and developed
reserves for successful exploratory wells,
development wells, processing facilities,
distribution assets, estimated future
abandonment cost and all other related
costs. These assets are depleted within
each cost centre. Reserves for this purpose
are considered on working interest basis
which are reassessed atleast annually.
Impact of changes to reserves are accounted
for 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 lives of assets are as follows:
Asset
Buildings (Residential, factory
etc.)
Plant and equipment
Railway siding
Office equipment
Furniture and fixture
Vehicles
Useful Life
(in years)
3-60
15-40
15
3-6
8-10
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 statement of
profit and loss if the next overhaul is undertaken
earlier than the previously estimated life of the
economic benefit.
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.
C. 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.
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.
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 statement of profit and loss 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.
D.
Exploration and evaluation intangible 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
(intangible assets) and stated at cost less impairment,
if any. Exploration and evaluation intangible assets are
transferred to the appropriate category of property,
plant and equipment when the technical feasibility and
commercial viability has been determined. Exploration
intangible assets under development 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
328
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
depreciation and applicable operating costs of related
support equipment and facilities and other costs of
exploration activities:
• Acquisition costs - costs associated with
acquisition of licenses 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 exploration drilling and equipping
exploration and appraisal wells.
Exploration expenditure incurred in the process
of determining oil and gas exploration targets is
capitalised within “Exploration and evaluation assets”
(intangible 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 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 and
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 statement of profit and loss.
Expenditure incurred on the acquisition of a license
interest is initially capitalised on a license-by-license
basis. Costs are held, undepleted, within exploration
and evaluation assets until such time as the
exploration phase on the license 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 statement of profit and loss.
E. Non-current assets held for sale
Non‑current assets and disposal groups are classified
as held for sale if their carrying amount will be
recovered through a sale transaction rather than
through continuing use. This condition is regarded
as met only when the sale is highly probable and the
asset (or disposal group) is available for immediate
sale in its present condition. Management must be
committed to the sale which should be expected to
qualify for recognition as a completed sale within one
year from the date of classification.
Non‑current assets and disposal groups classified as
held for sale are not depreciated and are measured at
the lower of carrying amount and fair value less costs
to sell. Such assets and disposal groups are presented
separately on the face of the balance sheet.
F.
Impairment of non-financial assets
Impairment charges and reversals are assessed at the
level of cash-generating units. A cash-generating unit
(CGU) is the smallest identifiable group of assets that
generate cash inflows that are largely independent of
the cash inflows from other assets or group of assets.
The Company assesses at each reporting date,
whether there is an indication that an asset may
be impaired. The Company 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 then an 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 Company
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
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Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
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 Company’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.
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 statement of profit and loss.
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.
Exploration and evaluation assets:
In assessing whether there is any indication that an
exploration and evaluation asset may be impaired,
the Company considers, as a minimum, the
following indicators:
•
the period for which the Company 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 Company 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
underway or planned. To the extent that capitalised
expenditure is no longer expected to be recovered, it is
charged to the statement of profit and loss.
G. 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.
(i)
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 market place
(regular way trades) are recognised on the trade
date, i.e. the date that the Company commits to
purchase or sell the asset.
For purposes of subsequent measurement,
financial assets are classified in four 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. 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
the statement of profit and loss. The losses
arising from impairment are recognised in the
statement of profit and loss.
330
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
• Debt instruments 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 statement of
profit and loss. On derecognition of the
asset, cumulative gain or loss previously
recognised in other comprehensive
income is reclassified from the equity to
statement of profit and loss. Interest earned
whilst holding fair value through other
comprehensive income debt instrument
is reported as interest income using the
EIR method.
• Debt instruments at fair value through profit
or loss (FVTPL)
FVTPL is a residual category for debt
instruments. Any debt instrument, which
does not meet the criteria for categorisation
as at amortised cost or as FVOCI, is
classified as at FVTPL.
In addition, the Company 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 Company 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 statement of
profit and loss.
• Equity instruments
All equity investments in the scope of Ind
AS 109 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 Ind AS 103 applies are classified as
at FVTPL. For all other equity instruments,
the Company may make an irrevocable
election to present in other comprehensive
income subsequent changes in the fair
value. The Company makes such election
on an instrument-by-instrument basis. The
classification is made on initial recognition
and is irrevocable.
If the Company decides to classify an
equity instrument as at FVOCI, then all fair
value changes on the instrument, excluding
dividends, are recognised in the OCI. There
is no recycling of the amounts from OCI to
the statement of profit and loss, even on
sale of investment. However, the Company
may transfer the cumulative gain or loss
within equity. For equity instruments which
are classified as FVTPL all subsequent
fair value changes are recognised in the
statement of profit and loss.
(ii) Financial Assets - derecognition
The Company derecognises a financial asset
when the contractual rights to the 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.
(iii) Impairment of financial assets
In accordance with Ind AS 109, the Company
applies expected credit loss (ECL) model for
measurement and recognition of impairment loss
on the following financial assets:
a)
b)
c)
Financial assets that are debt instruments,
and are measured at amortised cost, e.g.
loans, debt securities and deposits;
Financial assets that are debt instruments
and are measured as at FVOCI;
Trade receivables or any contractual right to
receive cash or another financial asset that
result from transactions that are within the
scope of Ind AS 115.
The Company follows ‘simplified approach’
for recognition of impairment loss allowance
on trade receivables, contract assets and
lease receivables.
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Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
The application of simplified approach
does not require the Company 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.
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 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 Company reverts to
recognising impairment loss allowance
based on 12‑month ECL.
Lifetime ECL are the expected credit
losses resulting from all possible default
events over the expected life of a financial
instrument. The 12‑month ECL is a portion
of the lifetime ECL which results from
default events that are possible within 12
months after the reporting date.
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.
ECL impairment loss allowance (or reversal)
recognised during the year is recognised as
income/ expense in the statement of profit
and loss. The balance sheet presentation
for various financial instruments is
described below:
a)
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 Company does not reduce
impairment allowance from the gross
carrying amount.
b)
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 Company 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 Company does not have any purchased
or originated credit‑impaired (POCI) financial
assets, i.e. financial assets which are credit
impaired on purchase/origination.
(iv) 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, borrowings and
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 Company’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 Company that
are not designated as hedging instruments
in hedge relationships as defined by Ind AS
109. 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 statement of profit
and loss.
332
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 Ind AS
109 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 statement of profit and loss.
However, the Company may transfer the
cumulative gain or loss within equity. All
other changes in fair value of such liability are
recognised in the statement of profit and loss.
The Company has not designated any financial
liability at fair value through profit or loss.
• Financial liabilities at amortised cost (Loans,
Borrowings and Trade and Other payables)
After initial recognition, interest-bearing loans,
borrowings and trade and other payables are
subsequently measured at amortised cost
using the EIR method. Gains and losses are
recognised in the statement of profit and loss
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 statement of
profit and loss.
(v) 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 statement of profit and loss.
(vi) Embedded derivatives
An embedded derivative is a component of a
hybrid (combined) instrument that also includes
a non-derivative host contract – with the effect
that some of the cash flows of the combined
instrument vary in a way similar to a stand-alone
derivative. An embedded derivative causes some
or all of the cash flows that otherwise would be
required by the contract to be modified according
to a specified interest rate, financial instrument
price, commodity price, foreign exchange rate,
index of prices or rates, credit rating or credit
index, or other variable, provided in the case of
a non‑financial variable that the variable is not
specific to a party to the contract. Reassessment
only occurs if there is either a change in the terms
of the contract that significantly modifies the
cash flows that would otherwise be required or a
reclassification of a financial asset out of the fair
value through profit or loss.
If the hybrid contract contains a host that is a
financial asset within the scope of Ind AS 109,
the Company does not separate embedded
derivatives. Rather, it applies the classification
requirements contained in Ind AS 109 to the
entire hybrid contract. Derivatives embedded
in all other host contracts are accounted for as
separate derivatives and recorded at fair value
if their economic characteristics and risks are
not closely related to those of the host contracts
and the host contracts are not held for trading
or designated at fair value though profit or loss.
These embedded derivatives are measured at fair
value with changes in fair value recognised in the
statement of profit and loss, unless designated as
effective hedging instruments.
(vii) 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 Company are
recognised at the proceeds received, net of direct
issue costs.
(viii) Offsetting of financial instruments
Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the
asset and settle the liability simultaneously.
H.
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 Company
enters into forward, option, swap contracts and
other derivative financial instruments. The Company
does not hold derivative financial instruments for
speculative purposes.
333
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
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 statement
of profit and loss, except for the effective portion of
cash flow hedges, which is recognised in OCI and
later reclassified to the 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.
For the purpose of hedge accounting, hedges are
classified as:
• Fair value hedges when hedging the exposure to
changes in the fair value of a recognised asset or
liability or an unrecognised firm commitment;
• Cash flow hedges when hedging the exposure to
variability in cash flows that is either attributable to
a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised
firm commitment;
• Hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Company
formally designates and documents the hedge
relationship to which the Company wishes to apply
hedge accounting. The documentation includes the
Company’s risk management objective and strategy
for undertaking hedge, the hedging/ economic
relationship, the hedged item or transaction, the
nature of the risk being hedged, hedge ratio and how
the entity will assess the effectiveness of changes in
the hedging instrument’s fair value in offsetting the
exposure to changes in the hedged item’s fair value
or cash flows attributable to the hedged risk. Such
hedges are expected to be highly effective in achieving
offsetting changes in fair value or cash flows and
are assessed on an ongoing basis to determine that
they actually have been highly effective throughout
the financial reporting periods for which they
were designated.
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 statement of profit and loss
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
statement of profit and loss. Hedge accounting
is discontinued when the Company 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
statement of profit and loss.
Amounts recognised in OCI are transferred
to the statement of profit and loss 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.
I.
Leases
The Company 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.
(a) Company as a lessor
Leases in which the Company does not transfer
substantially all the risks and rewards of
ownership of an asset are classified as operating
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Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
leases. Rental income from operating lease is
recognised on a straight-line basis over the term
of the relevant lease. Initial direct costs incurred
in negotiating and arranging an operating lease
are added to the carrying amount of the leased
asset and recognised over the lease term on the
same basis as rental income. Contingent rents
are recognised as revenue in the period in which
they are earned.
Leases are classified as finance leases when
substantially all of the risks and rewards of
ownership transfer from the Company to the
lessee. Amounts due from lessees under
finance leases are recorded as receivables at the
Company’s net investment in the leases. Finance
lease income is allocated to accounting periods
so as to reflect a constant periodic rate of return
on the net investment outstanding in respect of
the lease.
Company as a lessee
The Company applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The Company recognises lease liabilities
towards future lease payments and right-of-
use assets representing the right to use the
underlying assets.
(i) Right-of-use assets
The Company 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 ‘B’ above.
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 Company and
payments of penalties for terminating the
lease, if the lease term reflects the Company
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 Company uses its incremental
borrowing rate 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 (. 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 Company’s lease liabilities are disclosed on
the face of Balance sheet.
(iii) Short-term leases and leases of low-value assets
The Company 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.
(ii) Lease liabilities
J.
Inventories
At the commencement date of the lease, the
Company recognises lease liabilities measured
at the present value of lease payments to be
made over the lease term. The lease payments
Inventories and work-in-progress are stated at
the lower of cost and net realisable value. Cost is
determined on the following basis:
335
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
• 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 a weighted average basis except in Oil and Gas
business where stores and spares are valued on
FIFO basis;
• finished products are valued at raw material cost
plus costs of conversion, comprising labour costs
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.
K. Government grants
Grants and subsidies from the government are
recognised when there is reasonable assurance that (i)
the Company will comply with the conditions attached
to them, and (ii) the grant/subsidy will be received.
When the grant or subsidy relates to revenue, it
is recognised as income on a systematic basis in
the statement of profit and loss over the periods
necessary to match them with the related costs, which
they are intended to compensate.
Where the grant relates to an asset, it is recognised
as deferred income and released to income in equal
amounts over the expected useful life of the related
asset and presented within other income.
When the Company receives grants of non‑monetary
assets, the asset and the grant are recorded at fair
value amounts and released to profit or loss over the
expected useful life in a pattern of consumption of the
benefit of the underlying asset.
When loans or similar assistance are provided by
governments or related institutions, with an interest
rate below the current applicable market rate, the
effect of this favourable interest is regarded as a
government grant. The loan or assistance is initially
recognised and measured at fair value and the
government grant is measured as the difference
between the initial carrying value of the loan and
the proceeds received. The loan is subsequently
measured as per the accounting policy applicable to
financial liabilities.
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;
• deferred income tax is not recognised on initial
recognition of an asset or 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); 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.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date. Tax
relating to items recognised outside the statement of
profit and loss is recognised outside the statement of
profit and loss (either in other comprehensive income
or equity).
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.
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 Company 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.
L. Taxation
M. Retirement benefit schemes
Tax expense represents the sum of current tax and
deferred tax.
The Company operates or participates in a number of
defined benefits and defined contribution schemes,
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Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 statement of profit and loss.
Past service costs are recognised in profit or loss on
the earlier of:
− the date of the plan amendment or curtailment, and
− the date that the Company recognises related
restructuring costs
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 cost are recognised
within employee benefit expense. Net interest expense
or income is recognised within finance costs.
For defined contribution schemes, the amount
charged to the statement of profit and loss 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.
N. Share-based payments
Certain employees (including executive directors) of
the Company 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 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 Company’s estimate of shares that will eventually
vest. The estimate of the number of awards likely to
vest is reviewed at each balance sheet 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.
O.
Provisions, contingent liabilities and
contingent assets
The assessments undertaken in recognising
provisions and contingencies have been made in
accordance with the applicable Ind AS.
Provisions represent liabilities for which the amount
or timing is uncertain. Provisions are recognised
when the Company 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 statement of profit and loss 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 the
Company 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 Company does
not recognise a contingent liability but discloses its
existence in the Balance Sheet.
Contingent assets are not recognised but disclosed in
the financial statements when an inflow of economic
benefit is probable.
The Company has significant capital commitments
in relation to various capital projects which are not
recognised in the balance sheet.
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Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
P.
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 statement
of profit and loss 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 finance cost in the statement of
profit and loss.
Costs for the 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 statement of profit and loss
as extraction progresses. Where the costs of site
restoration are not anticipated to be material, they are
expensed as incurred.
Q. Accounting for foreign currency transactions
The functional currency of the Company is determined
as the currency of the primary economic environment
in which it operates. For all principal businesses of the
Company, the functional currency is Indian rupee (`)
with an exception of oil and gas business operations
which has 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 Indian rupee (`).
In the financial statements of the Company,
transactions in currencies other than the functional
currency are translated into the functional currency at
the exchange rates ruling at the date of the transaction.
Monetary assets and liabilities denominated in other
currencies are translated into the functional currency
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 statement
of profit and loss except those where the monetary
item 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.
The statement of profit and loss of oil and gas
business is translated into Indian Rupees (INR) at
the average rates of exchange during the year /
exchange rates as on the date of the transaction. The
Balance Sheet is translated at the exchange rate as
at the reporting date. Exchange difference arising
on translation is recognised in other comprehensive
income and would be recycled to the statement of
profit and loss as and when these operations are
disposed off.
The Company had applied paragraph 46A of AS 11
under Previous GAAP. Ind AS 101 gives an option,
which has been exercised by the Company, whereby a
first time adopter can continue its Indian GAAP policy
for accounting for exchange differences arising from
translation of long-term foreign currency monetary
items recognised in the Indian GAAP financial
statements for the period ending immediately before
the beginning of the first Ind AS financial reporting
period. Hence, foreign exchange gain/loss on long‑
term foreign currency monetary items recognised
up to 31 March 2016 has been deferred/capitalised.
Such exchange differences arising on translation/
settlement of long-term foreign currency monetary
items and pertaining to the acquisition of a depreciable
asset are amortised over the remaining useful lives of
the assets.
Exchange differences arising on translation/
settlement of long-term foreign currency monetary
items, acquired post 01 April 2016, pertaining to the
acquisition of a depreciable asset are charged to the
statement of profit and loss.
R. Earnings per share
The Company presents basic and diluted earnings per
share (“EPS”) data for its equity shares. Basic EPS is
calculated by dividing the profit or loss attributable to
equity shareholders of the Company by the weighted
average number of equity shares outstanding during
the period. Diluted EPS is determined by adjusting
the profit or loss attributable to equity shareholders
and the weighted average number of equity shares
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Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
outstanding for the effects of all dilutive potential
equity shares.
S.
Buyers’ Credit/ Suppliers’ Credit and vendor
financing
The Company 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 Company 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 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. Where these 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 balance sheet. Interest
expense on these are recognised in the finance cost.
Payments made by banks and financial instiutions to
the operating vendors are treated as a non cash item
and settlement of due to operational buyer’s credit/
suppliers’ credit by the Company is treated as an
operating cash outflow reflecting the subtsance of
the payment.
T. Current and non-current classification
The Company presents assets and liabilities
in the balance sheet based on current / non-
current classification.
An asset is classified as current when it satisfies any
of the following criteria:
− it is expected to be realised in, or is intended for sale
or consumption in, the Company’s normal operating
cycle;
− it is held primarily for the purpose of being traded;
− it is expected to be realised within twelve months
after the reporting date; or
− it is cash or cash equivalent unless it is restricted
from being exchanged or used to settle a liability for
at least twelve months after the reporting date.
All other assets are classified as non‑current.
A liability is classified as current when it satisfies any
of the following criteria:
− it is expected to be settled in the Company’s normal
operating cycle;
− it is held primarily for the purpose of being traded;
− it is due to be settled within twelve months after the
reporting date; or
− the Company does not have an unconditional right
to defer settlement of the liability for at least twelve
months after the reporting date. Terms of a liability
that could, at the option of the counterparty, result
in its settlement by the issue of equity instruments
do not affect its classification.
All other liabilities are classified as non‑current.
Deferred tax assets and liabilities are classified as non
current only.
U. 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.
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 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
Company during the year.
All other borrowing costs are recognised in the
statement of profit and loss 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.
EIR is the rate that exactly discounts the estimated
future cash payments or receipts over the expected
life of the financial liability or a shorter period, where
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Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
appropriate, to the amortised cost of a financial
liability. When calculating the effective interest rate,
the Company estimates the expected cash flows by
considering all the contractual terms of the financial
instrument (for example, prepayment, extension, call
and similar options).
V. Cash and cash equivalents
Cash and cash equivalents comprise cash at bank
and on 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 statement of cash flows, cash
and cash equivalents consist of cash and short-term
deposits, as defined above.
W.
Equity investment in subsidiaries, associates
and joint ventures
Investments representing equity interest in
subsidiaries, associates and joint ventures are carried
at cost. A subsidiary is an entity that is controlled
by the Company. Control is evidenced where the
Company has the power over the investee or exposed,
or has rights, to variable returns from its involvement
with the investee and has the ability to affect those
returns through its power over the investee. Power
is demonstrated through existing rights that give the
ability to direct relevant activities, which significantly
affect the entity returns. An associate is an entity
over which the Company has significant influence.
Significant influence is the power to participate in the
financial and operating policy decisions of the investee,
but is not control or joint control over those policies.
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.
Joint Operations
The Company has joint operations within its Oil
and gas segment and participates in several
unincorporated joint operations which involve the
joint control of assets used in oil and gas exploration
and producing activities. The Company accounts
for its share of assets and income and expenditure
of joint operations in which it holds an interest.
Liabilities in unincorporated joint ventures, where the
Company is the operator, is accounted for at gross
values (including share of other partners) with a
corresponding receivable from the venture partners.
These have been included in the financial statements
under the appropriate headings. [Details of joint
operations are set out in note 38(b)].
X. 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 specifically covered by Ind AS 103. Such
transactions are accounted for using the pooling-
of-interest method. The assets and liabilities of
the acquired entity are recognised at their carrying
amounts recorded in the parent entity’s consolidated
financial statements with the exception of certain
income tax and deferred tax assets. No adjustments
are made to reflect fair values, or recognise any new
assets or liabilities. The only adjustments that are
made are to harmonise accounting policies. The
components of equity of the acquired companies are
added to the same components within the Company’s
equity. The difference, if any, between the amounts
recorded as share capital issued plus any additional
consideration in the form of cash or other assets
and the amount of share capital of the transferor is
transferred to 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 are combined, retrospectively, as
if the transaction had occurred at the beginning of
the earliest reporting period presented. However,
the prior year comparative information is only
adjusted for periods during which entities were under
common control.
Y. Exceptional items
Exceptional items are those items that management
considers, by virtue of their size or incidence
(including but not limited to impairment charges
340
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 periods. Also
tax charges related to exceptional items and certain
one‑time tax effects are considered exceptional. Such
items are material by nature or amount to the year’s
result and require separate disclosure in accordance
with Ind AS.
3(b) Application of new and amended
standards
(A) The Company has adopted, with effect from 01 April
2021, the following new and revised standards and
interpretations. Their adoption has not had any
significant impact on the amounts reported in the
financial statements.
1.
2.
3.
4.
5.
Amendments to Ind AS 103 regarding the
definition of identifiable assets acquired and
liabilities assumed to qualify for recognition as
part of applying the acquisition method;
Amendments to Ind AS 107, 109, 104 and 116
regarding Interest Rate Benchmark Reform -
Phase 2;
Conceptual framework for financial reporting
under Ind AS issued by the ICAI;
Amendments to Ind AS 116 regarding COVID‑19
related rent concessions;
Amendments to Ind AS 105, 16 and 28 regarding
definition of recoverable amount.
(B) Standards notified but not yet effective
The Ministry of Corporate Affairs has notified
Companies (Indian Accounting Standard) Amendment
Rules 2022 dated 23 March 2022, effective from
01 April 2022, resulting in amendments such as
Onerous Contracts – Costs of Fulfilling a Contract
– Amendments to Ind AS 37, Reference to the
Conceptual Framework – Amendments to Ind
AS 103, Property, Plant and Equipment: Proceeds
before Intended Use – Amendments to Ind AS 16,
Ind AS 101 First-time Adoption of Indian Accounting
Standards – Subsidiary as a first‑time adopter, Ind AS
109 Financial Instruments – Fees in the ’10 per cent’
test for derecognition of financial liabilities, Ind AS 41
Agriculture – Taxation in fair value measurements.
These amendments are not expected to have any
impact on the Company. The Company has not early
adopted any amendments that has been notified but is
not yet effective.
3(c) Significant accounting estimates and
judgements
The preparation of financial statements in conformity
with Ind AS 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 financial statements and the reported
amounts of revenues and expenses for the years
presented. These judgements 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:
(A) Significant Estimates
(i) Carrying value of exploration and evaluation assets
Exploration assets are assessed by comparing the
carrying value to higher of fair value less cost of
disposal or value in use if impairment indicators,
as contained in Ind AS 106, exists. Change to
the valuation of exploration assets is an area of
judgement. Further details on the Company’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 statement of
profit and loss 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 5.
(ii)
Recoverability of deferred tax and other income tax
assets
The Company has carry forward tax losses,
unabsorbed depreciation and MAT credit 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
341
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
against which the unused tax losses or tax credits
can be utilised. 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 statement of profit and loss.
The total deferred tax assets recognised in these
financial statement (Refer note 35) includes MAT credit
entitlements of ` 4,839 crore (31 March 2021: ` 3,701
crore), of which ` 208 crore (FY 2020-21: ` 340 crore)
is expected to be utilised in the fourteenth year, fifteen
years being the maximum permissible time period to
utilise the MAT credits.
(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 Company 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
Company 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 Company
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 Company 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 authorisation
to handle hazardous substances, subject to
342
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 Company to file an appeal in High court.
The Company has filed a writ petition before Madras
High Court challenging the various orders passed
against the Company 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 Company. The Company has approached
the Supreme Court and challenged the said High
Court Order by way of a Special Leave Petition (“SLP”)
to Appeal and also filed an interim relief for care &
maintenance of the plant or trial run for certain period.
The matter was then listed on 02 December 2020
before Supreme Court. After having heard both the
sides concluded that at this stage the interim relief in
terms of trial run could not be allowed. The hearing on
care & maintenance could not be listed at Supreme
Court, Further, considering the voluminous nature of
documents and pleadings, the matter shall be finally
heard on merits.
As per the Company’s assessment, it is in compliance
with the applicable regulations and expects to get
the necessary approvals in relation to the existing
operations and hence the Company does not expect
any material adjustments to these financial statements
as a consequence of above actions.
The Company has carried out an impairment
analysis for existing plant assets during the period
ended 31 March 2022 considering the key variables
and concluded that there exists no impairment.
The Company has done an additional sensitivity
analysis with commencement of operations of the
existing plant w.e.f. 01 April 2025 and noted that the
recoverable amount of the assets would still be in
excess of their carrying values.
The carrying value of the assets as at 31 March 2022
is ` 1,982 crore (31 March 2021: ` 2,144 crore).
Expansion Project:
Separately, the Company 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
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Committee of the Ministry of Environment, Forests and
Climate Change (“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 High
Court of Madras 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 Company 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 Company has approached Madras High Court
by way of writ petition challenging the cancellation
of lease deeds by SIPCOT pursuant to which an
interim stay has been granted. The Company has also
filed Appeals before the TNPCB Appellate Authority
challenging withdrawal of CTE by the TNPCB, the
matter is pending for adjudication. Considering
the delay in existing plant matter and accordingly
delay in getting the required approval for Expansion
Project, management considered to make provision
for impairment for Expansion Project basis fair value
less cost of disposal. The net carrying value of ` 41
crore as at 31 March 2022 (31 March 2021: ` 97 crore)
approximates its recoverable value.
Property, plant and equipment of ` 1,213 crore and
inventories of ` 301 crore, 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, since operations are
suspended and access to the plant restricted, any
difference between book and physical quantities is
unlikely to be material.
(iv) PSC Extension
Rajasthan Block
The Company operates an oil and gas production
facility in Rajasthan under a Production Sharing
Contract (“PSC”). The management is of the opinion
that the Company is eligible for automatic extension
of the PSC for Rajasthan (“RJ”) block on same terms
w.e.f. 15 May 2020, while Government of India (“GOI”)
in October 2018, accorded its approval for extension of
the PSC, under the Pre‑NELP Extension policy as per
notification dated 07 April 2017 (“Pre‑NELP Policy”), for
RJ block by a period of 10 years, w.e.f. 15 May 2020. As
per the said policy and extension letter, the Company
is required to comply with certain conditions and pay
an additional 10% profit oil to GOI. The Company had
challenged the applicability of Pre‑NELP Policy to the
RJ block. The Division Bench of the Delhi High Court
in March 2021 set aside the single judge order of May
2018 which allowed automatic extension of PSC.
Nevertheless, GOI, in their submissions to the Delhi
High Court, has not objected to Vedanta obtaining a
10‑year extension of Rajasthan PSC. The legal dispute
only relates to additional 10% profit petroleum rather
than Vedanta’s right to obtain 10‑year extension. In the
interim, without prejudice to the Company’s rights, the
Company has commenced paying the additional 10%
profit petroleum (“PP”) claimed from 15 May 2020 to
the Government. The Company has also filed an SLP
in Supreme Court against above Delhi HC order and
revised date for SLP listing is awaited.
In parallel, the Company is in discussion with the
Ministry of Petroleum and Natural Gas (“MoPNG”) on
execution of the PSC addendum. On the other issue
related to DGH audit exceptions, discussions are
ongoing to agree on the position that this issue will be
dealt with as per ongoing arbitration with GOI as per
PSC mechanism.
One of the conditions for extension of PSC relates
to notification of certain audit exceptions raised for
FY 2016‑17 as per PSC provisions and provides for
payment of amounts, if such audit exceptions result
into any creation of liability. The Company had also
clarified that the same should be de‑linked as a
condition for the extension which had been granted
vide letter dated 26 October 2018.
The Directorate General of Hydrocarbons (“DGH”)
in May 2018 raised a demand on the Company and
its subsidiary for the period up to 31 March 2017 for
Government’s additional share of Profit oil based on
its computation of disallowance of costs incurred in
excess of the initially approved Field Development
Plan (“FDP”) of the pipeline project for ` 1,524 crore
(US$ 202 million) and retrospective re-allocation of
certain common costs between Development Areas
(“DAs”) of RJ block aggregating to ` 2,752 crore (US$
364 million). The DGH vide its letter dated 12 May
2020, reiterated its demand only with respect to the
retrospective re-allocation of certain common costs
between DAs of the RJ block of ` 2,752 crore (US$ 364
million towards contractor share for the period up to
31 March 2017. This amount was subsequently revised
to ` 3,465 crore (US$ 458 million) till March 2018 vide
DGH letter dated 24 December 2020.
343
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
In September 2021, DGH communicated the
approval by Empowered Committee of Secretaries
for the revised pipeline project cost over the initial
approved FDP.
The Company believes that it has sufficient as well as
reasonable basis pursuant to the PSC provisions and
related approvals, supported by legal advice, for having
claimed such costs and for allocating common costs
between different DAs. In the Company’s opinion,
these computations of the aforesaid demand / audit
exceptions are not appropriate, and the accounting
adjustments sought for issues pertaining to Year 2007
and onwards are based on assumptions that are not
in consonance with the approvals already in place.
The Company’s view is also supported by independent
legal opinion and the Company has been following
the process set out in PSC to resolve these aforesaid
matters. The Company has also invoked the PSC
process for resolution of disputed exceptions and
has issued notice for arbitration and an arbitration
tribunal (“Tribunal”) stands constituted. Further, on 23
September 2020, the GOI had filed an application for
interim relief before Delhi High Court seeking payment
of all disputed dues. The matter was heard on 25
September 2020 wherein the Bench has not passed
any ex parte orders. The matter is now listed for
hearing on 29 August 2022.
Also, on Vedanta’s application under Section 17 of the
Arbitration and Conciliation Act, 1996, the Tribunal in
2020 ordered that GOI should not take any action to
enforce any of the amounts at issue in this arbitration
against the Claimants during the arbitral period. The
GOI has challenged the said order before the Delhi
High Court under the said Act. This matter is also
scheduled for hearing on 25 May 2022.
The Company has also filed application under Section
151 of Code of Civil Procedure (CPC) read with Section
9 of the Arbitration Act, 1996 requesting the Court
to direct GOI to extend the PSC for 10 years without
insisting upon a payment of disputed dues under
audit exceptions which have been already referred to
arbitration. On 12 April 2022, basis the application, the
Court has issued notice under this application.
In management’s view, the above‑mentioned condition
on demand raised by the DGH for additional petroleum
linked to PSC extension is untenable and has not
resulted in creation of any liability and cannot be a
ground for non‑extension. In addition, all necessary
procedures prescribed in the PSC including invocation
of arbitration, in respect of the stated audit observation
have also been fulfilled. Accordingly, the PSC extension
approval granted vide DGH letter dated 26 October
2018 upholds with all conditions addressed and no
material liability would devolve upon the Group.
Simultaneously, the Company is also pursuing with
the GOI for executing the RJ PSC addendum at
the earliest. In view of extenuating circumstances
surrounding COVID‑19 and pending signing of the
PSC addendum for extension after complying with
all stipulated conditions, the GOI has been granting
interim permission to the Company to continue
Petroleum operations in the RJ block. The latest
permission is valid up to 14 May 2022 or signing of the
PSC addendum, whichever is earlier.
(v) Oil and Gas reserves
Significant technical and commercial judgements
are required to determine the Company’s estimated
oil and natural gas reserves. Reserves considered
for computing depletion are proved reserves for
acquisition costs and proved and developed reserves
for successful exploratory wells, development wells,
processing facilities, distribution assets, estimated
future abandonment cost and all other related costs.
Reserves for this purpose are considered on working
interest basis which are reassessed at least annually.
Details of such reserves are given in note 44. Changes
in reserves as a result of change in management
assumptions could impact the depreciation rates and
the carrying value of assets (refer note 5 )
(vi) Carrying value of developing/producing oil and gas
assets
Management performs impairment tests on the
Company’s developing/producing oil and gas assets
where indicators of impairment are identified in
accordance with Ind AS 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
management’s best estimate based
on historical prevailing discount and
updated sales contracts
granted till 2030 on the expected
commercial terms (Refer note 3(c)
(A)(iv)
cost of capital risk-adjusted for the
risk specific to the asset/ CGU
Discount to price
Extension of PSC
Discount rates
344
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 reversal
and the assumptions used are disclosed in note 5 and
34 respectively.
(B) Significant Judgement
(i) Contingencies:
In the normal course of business, contingent liabilities
may arise from litigation, taxation and other claims
against the Company. A provision is recognised when
the Company has a present obligation as a result of
past events and it is probable that the Company 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 legal or tax
cases as probable, possible or remote, there is
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 Company does
not expect them to have a materially adverse impact
on the Company’s financial position or profitability.
These are set out in Note 38.
(ii)
Revenue recognition and receivable recovery in
relation to the power division:
In certain cases, the Company’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 Ind AS 115 and to
assess the recoverability of withheld revenue currently
accounted for as receivables.
In assessing this critical judgement, management
considered favourable external legal opinions that
the Company has obtained in relation to the claims.
In addition, the fact that the contracts are with
government owned companies implies that the credit
risk is low [refer note 7 (c)].
(iii) Exceptional items:
Exceptional 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 periods. Also
tax charges related to exceptional items and certain
one‑time tax effects are considered Exceptional. Such
items are material by nature or amount to the year’s
result and require separate disclosure in accordance
with Ind AS.
The determination as to which items should be
disclosed separately requires a degree of judgement.
The details of exceptional items are set out in note 34.
3(d) Business Combination and others:
Ferro Alloys Corporation Limited
During the previous year ended 31 March 2021,
the Company acquired control over Ferro Alloys
Corporation Limited (“FACOR”). FACOR was admitted
under Corporate insolvency resolution process in
terms of the Insolvency and Bankruptcy Code, 2016
of India. The National Company Law Tribunal (NCLT)
vide its order dated 30 January 2020 approved the
resolution plan for acquiring controlling stake in
FACOR. Pursuant to the approved resolution plan,
FACOR has become a wholly owned subsidiary of the
Company. FACOR holds 90% equity in its subsidiary,
Facor Power Limited (FPL).
FACOR is in the business of producing Ferro Alloys
and owns a Ferro Chrome plant with capacity of
72,000 TPA, two operational Chrome mines and 100
MW of Captive Power Plant through its subsidiary,
FPL. The acquisition will complement the Group’s
existing steel business as the vertical integration of
ferro manufacturing capabilities has the potential to
generate significant efficiencies.
4 Segment Information
A.
Description of segment and principal activities
The Company is a diversified natural resource
company engaged in exploring, extracting and
processing minerals and oil and gas. The Company
produces oil and gas, aluminium, copper, iron ore and
power. The Company has five reportable segments: oil
and gas, aluminium, copper, iron ore and power. The
management of the Company is organised by its main
products: oil and gas, aluminium, copper, iron ore and
power. Each of the reportable segments derives its
345
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
revenues from these main products and hence these
have been identified as reportable segments by the
Company’s Chief Operating Decision Maker (“CODM”).
Segment Revenue, Results, Assets and Liabilities
include the respective amounts identifiable to
each of the segments and amount allocated on a
reasonable basis. Unallocated expenditure consist of
common expenditure incurred for all the segments
and expenses incurred at corporate level. The assets
and liabilities that cannot be allocated between the
segments are shown as unallocated assets and
unallocated liabilities respectively.
The accounting policies of the reportable segments
are the same as the Company’s accounting policies
described in Note 3. Earnings before Interest, Tax and
Depreciation & Amortisation (EBITDA) are evaluated
regularly by the CODM, in deciding how to allocate
resources and in assessing performance. The
operating segments reported are the segments of the
Company for which separate financial information is
available. The Company’s financing (including finance
costs and finance income) and income taxes are
reviewed on an overall basis and are not allocated to
operating segments.
Pricing between operating segments are on an arm’s
length basis in a manner similar to transactions with
third parties.
The following table presents revenue and profit
information and certain assets and liabilities
information regarding the Company’s business
segments as at and for the year ended 31 March 2022
and 31 March 2021 respectively.
346
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
For the year ended 31 March 2022
Oil and Gas
Aluminium
Copper
Iron Ore
Power
Eliminations
Total
Business Segments
(` in crore)
6,622
38,371
11,096
6,143
-
-
-
-
6,622
38,371
11,096
6,143
3,137
936
13,024
1,591
(150)
188
2,187
101
569
218
787
(172)
129
-
62,801
(218)
(218)
-
62,801
-
-
18,026
2,945
Particulars
Revenue
External revenue
Inter segment revenue
Segment revenue
Results
Segment Results (EBIDTA) a
Less: Depreciation, depletion
and amortisation expense
Add: Other income b
Less: Finance costs
Add: Other income (excluding
exchange difference and
deferred grant)
Add: Net exceptional loss
Net profit before tax
Other information
Segment Assets
Financial asset investments
Deferred tax assets
Income tax assets
(net of provisions)
Cash and cash equivalents
(including other bank balances
and bank deposits)
Others
Total Assets
Segment Liabilities
Borrowings
Income tax liabilities (net)
Others
Total Liabilities
Capital Expenditure c
Net (Impairment)/ reversal or
write off/ (write back) relating
to assets d
a) EBITDA is a non‑GAAP measure.
16,420
47,307
5,383
3,590
3,044
10,178
15,848
4,638
2,321
152
1,378
(42)
2,731
(125) -
4
80
0
-
-
b) Amortisation of duty benefits relating to assets recognised as government grant.
c) Total capital expenditure includes capital expenditure of ` 20 crore not allocable to any segment.
d) Includes write off of ` 24 crore which is not allocable to any segment.
78
3,146
7,921
(318)
19,616
75,744
61,466
1,118
1,800
7,209
1,622
1,48,959
33,137
36,696
601
876
71,310
4,213
(191)
347
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
For the year ended 31 March 2021
Oil and Gas
Aluminium
Copper
Iron Ore
Power
Eliminations
Total
Business Segments
(` in crore)
4,086
20,162
7,623
4,529
-
-
-
-
4,086
20,162
7,623
4,529
1,743
708
5,471
1,389
(105)
205
1,735
89
720
-
720
(55)
128
-
56
2
6
11
-
-
-
-
-
-
13,161
42,303
5,289
2,548
3,161
7,403
13,508
3,895
2,301
210
1,082
-
1,517
(181)
21
-
111
-
-
-
37,120
-
37,120
8,789
2,519
75
79
3,193
10,823
(232)
13,664
66,462
62,903
333
1,787
4,395
1,851
1,37,731
27,317
32,166
46
1,412
60,941
2,733
(181)
Particulars
Revenue
External revenue
Inter segment revenue
Segment revenue
Results
Segment Results (EBIDTA) a
Less: Depreciation, depletion
and amortisation expense
Add: Other income b
Less: Unallocated expenses
Less: Finance costs
Add: Other income (excluding
exchange difference and
deferred grant)
Add: Net exceptional loss
Net profit before tax
Other information
Segment Assets
Financial asset investments
Deferred tax asset
Income tax assets (net of
provisions)
Cash and cash equivalents
(including other bank balances
and bank deposits)
Others
Total Assets
Segment Liabilities
Borrowings
Income tax liabilities (net)
Others
Total Liabilities
Capital Expenditure c
Net (Impairment)/ reversal or
write off/ (write back) relating
to assets
a) EBITDA is a non‑GAAP measure.
b) Amortisation of duty benefits relating to assets recognised as government grant.
c) Total capital expenditure includes capital expenditure of ` 2 crore not allocable to any segment.
348
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
B. Geographical segment analysis
The following table provides an analysis of the Company’s sales by region in which the customer is located, irrespective of
the origin of the goods.
Geographical Segments
Revenue by geographical segment
India
Europe
China
The United States of America
Turkey
Mexico
Malaysia
Others
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
28,142
10,779
5,055
3,231
4,068
2,089
227
9,210
19,328
1,662
3,483
1,160
312
872
4,209
6,094
62,801
37,120
The following is an analysis of the carrying amount of non‑current assets, excluding deferred tax assets and financial
assets, analysed by the geographical area in which the assets are located:
Geographical Segments
Carrying amount of non-current assets
India
Total
C.
Information about major customer
(` in crore)
As at
31 March 2022
As at
31 March 2021
54,244
54,244
53,108
53,108
No single customer has accounted for more than 10% of the Company’s revenue for the year ended 31 March 2022.
Revenue from one customer amounted to ` 4,932 crore for the year ended 31 March 2021 arising from sales made in the
Aluminium segment. No other customer contributed to more than 10% of revenues.
D. Disaggregation of Revenue
Below table summarises the disaggregated revenue from contract with customers:
Particulars
Oil
Gas
Aluminium products
Copper Cathode
Iron Ore
Metallurgical coke
Pig Iron
Power
Others
Revenue from contracts with customers*
Gains from provisionally priced contracts under Ind AS 109
Total Revenue
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
5,480
892
37,696
10,267
2,354
314
3,348
570
1,861
62,781
20
62,801
3,491
385
19,513
7,084
2,173
297
1,882
720
1,315
36,859
261
37,120
* includes revenues from sale of services aggregating to ` 109 crore (FY 2020-21: ` 101 crore) which is recorded over a period of time and the
balance revenue is recognised at a point in time.
349
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 )
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o
j
a
m
n
o
i
t
a
c
fi
i
s
s
a
l
c
e
r
/
s
r
e
f
s
n
a
r
T
*
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Right of Use (ROU) Assets
Particulars
Gross Block
As at 01 April 2020
Additions
Exchange differences
As at 31 March 2021
Additions
Transfers/Reclassifications
Disposals/Adjustments
Exchange differences
As at 31 March 2022
Accumulated depreciation and impairment
As at 01 April 2020
Charge for the year
Exchange differences
As at 31 March 2021
Charge for the year
Transfers
Disposals/Adjustments
Exchange differences
As at 31 March 2022
Net Book Value/Carrying amount
As at 01 April 2020
As at 31 March 2021
As at 31 March 2022
Intangible Assets
ROU Land
ROU Building
ROU Plant and
Equipment
278
6
-
284
12
-
(8)
-
288
42
12
-
54
10
-
(8)
-
56
236
230
232
43
-
(1)
42
-
-
-
1
43
8
7
-
15
9
-
-
-
24
35
27
19
345
3
(7)
341
-
(346)
-
6
1
19
62
(1)
80
-
(81)
-
2
1
326
261
-
Particulars
Software License
Mining Rights
Gross Block
As at 01 April 2020
Additions
Transfers from Property, Plant and Equipment
Disposals/Adjustments
Exchange differences
As at 31 March 2021
Additions
Transfers from Property, Plant and Equipment
Exchange differences
As at 31 March 2022
Accumulated amortisation and impairment
As at 01 April 2020
Charge for the year
Disposals/Adjustments
Transfers from Property, Plant and Equipment
Exchange differences
As at 31 March 2021
Charge for the year
Transfers from Property, Plant and Equipment
Exchange differences
As at 31 March 2022
Net Book Value/Carrying amount
As at 01 April 2020
As at 31 March 2021
As at 31 March 2022
300
8
1
(6)
(5)
298
10
4
7
319
277
12
(6)
-
(4)
279
15
-
7
301
23
19
18
227
-
-
-
-
227
-
-
-
227
219
-
-
-
-
219
-
-
-
219
8
8
8
Total
666
9
(8)
667
12
(346)
(8)
7
332
69
81
(1)
149
19
(81)
(8)
2
81
597
518
251
(` in crore)
Total
527
8
1
(6)
(5)
525
10
4
7
546
496
12
(6)
-
(4)
498
15
-
7
520
31
27
26
351
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Capital Work-In-Progress (CWIP) Ageing Schedule
As at 31 March 2022
As at 31 March 2021
CWIP
Less than 1 year
1-2 years
2-3 years
More than 3
years
Total
Projects in
progress
2,062
321
1,093
5,089
8,565
Projects
temporarily
suspended
2
6
33
620
661
Total
2,064
327
1,126
5,709
9,226
Projects in
progress
728
1,161
1,306
5,144
8,339
Projects
temporarily
suspended
14
288
150
305
757
(` in crore)
Total
742
1,449
1,456
5,449
9,096
CWIP completion schedule for projects whose completion is overdue or has exceeded its cost compared
to its original plan
As at 31 March 2022
To be completed in
(` in crore)
As at 31 March 2021
To be completed in
Less than 1
year
1-2 years
2-3 years
More than
3 years
Less than 1
year
1-2 years
2-3 years
More than
3 years
545
234
4,146
863
58
1,032
155
286
-
-
11
*
-
-
-
*
-
-
-
-
-
-
-
*
-
-
-
-
781
247
-
4,363
819
727
-
196
-
-
-
-
-
44
269
110
371
-
-
-
*
22
*
11
*
-
-
*
-
-
-
-
-
371
-
*
CWIP
Projects in Progress
Jharsuguda 1.25
MTPA aluminium
smelter Project
Lanjigarh alumina
2-5 MTPA expansion
Project 1
RDG gas Project
Oil & Gas development
CWIP
Projects temporarily
suspended
Oil & Gas development
CWIP
Lanjigarh alumina
5-6 MTPA expansion
Project 1
Other iron ore
business Projects
Copper 4LTPA
expansion Project
* Excludes ageing for Copper 4 LTPA Expansion project which is on hold due to restrictions imposed by the State government. Refer Note 3(c)
(A)(iii)
1) Lanjigarh alumina expansion project commenced in the year 2008 and then had been temporarily suspended in 2010 due to regulatory
restrictions. The 2‑5 MTPA expansion project has been re‑commenced during the year ended 31 March 2021. The balance 5‑6 MTPA
expansion project is temporarily suspended.
Exploration intangible assets under development Ageing Schedule
Intangible assets under development
Less than 1 year
1-2 years
2-3 years
More than 3 years
Total
352
(` in crore)
As at
31 March 2022
As at
31 March 2021
Projects in
progress
547
533
340
68
1,488
Projects in
progress
690
184
3
728
1,605
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Title deeds of immovable properties not held in the name of Company
Relevant line item
in the Balance
sheet
Description
of item of
property
Gross block
as at
31 March
2022
Gross block
as at 31
March 2021
Title deeds
held in the
name of
Property, Plant
and Equipment
Land &
Building
1,533
1,417
Oil and
Natural Gas
Corporation
Limited
(ONGC) &
Cairn India
Limited
(now a
division
of the
Company)
Whether title
deed holder is a
promoter, director
or relative of
promoter/
director or
employee of
promoter/
director
No
(` in crore)
Property held
since which
date
Reason for not being
held in the name of the
Company
10 April
2009
The title deeds of Oil &
Gas exploration blocks
jointly owned by the
JV partners are in the
name of ONGC, being
the licensee of these
exploration blocks.
Notes:
a)
Plant and equipment include refineries, smelters, power plants, railway sidings, ships, aircraft, river fleet and
related facilities.
b) During the year ended 31 March 2022, interest capitalised was ` 267 crore (31 March 2021: ` 233 crore).
c)
d)
Certain property, plant and equipment are pledged as collateral against borrowings, the details related to which have
been described in Note 17 on “Borrowings”.
In accordance with the exemption given under Ind AS 101, which has been exercised by the Company, a first time
adopter can continue its previous GAAP policy for accounting for exchange differences arising from translation of
long‑term foreign currency monetary items recognised in the previous GAAP financial statements for the period
ending immediately before the beginning of the first Ind AS financial reporting period, i.e. 01 April 2016.
Accordingly, foreign currency exchange differences arising on translation/settlement of long‑term foreign currency
monetary items acquired before 01 April 2016 pertaining to the acquisition of a depreciable asset amounting to ` 16
crore loss (31 March 2021: ` 40 crore loss) is adjusted to the cost of respective item of property, plant and equipment.
e)
Property, Plant and Equipment, Capital work‑in‑progress and exploration and evaluation assets net block includes
share of jointly owned assets with the joint venture partners ` 5,801 crore (31 March 2021: ` 6,510 crore).
f) Reconciliation of depreciation, depletion and amortisation expense
Particulars
Depreciation/ Depletion/ Amortisation expense on:
Property, Plant and Equipment (Including ROU assets)
Intangible assets
As per Property, Plant and Equipment and Intangible assets schedule
Less: Cost allocated to joint ventures
As per Statement of Profit and Loss
(` in crore)
For the year ended
31 March 2022
For the year ended
31 March 2021
2,954
15
2,969
(24)
2,945
2,531
12
2,543
(24)
2,519
353
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
6 Financial assets – Investments
A. Non-current Investments
Particulars
(a)
Investment in equity shares -
at cost/deemed cost a
(fully paid up unless otherwise
stated)
Subsidiary companies
Quoted
- Hindustan Zinc Limited, of
` 2/-each b (Refer Note 17)
Unquoted
- Bharat Aluminium Company
Limited, of ` 10/- each
(including 5 shares held
jointly with nominees) b
As at 31 March 2022
As at 31 March 2021
No.
Amount
(` in crore)
No.
Amount
(` in crore)
2,74,31,54,310
44,398 2,74,31,54,310
44,398
11,25,18,495
553
11,25,18,495
553
- Monte Cello BV, The
40
204
40
204
Netherlands, of Euro 453.78
each
Less: Reduction pursuant to
merger c
- Sterlite (USA) Inc., of US$
0.01 per share (` 42.77 at
each year end) e
(204)
0
0
100
(204)
0
0
100
- Cairn India Holdings Limited
42,08,10,062
28,873
42,08,10,062
28,873
(CIHL) of GBP 1 each
Less: Reduction pursuant to
merger c
(15,067)
13,806
(15,067)
13,806
- Vizag General Cargo Berth
4,71,08,000
182
4,71,08,000
182
Private Limited, of ` 10 each
(including 6 shares held
jointly with nominees) d
- Paradip Multi Cargo Berth
Private Limited, of ` 10 each
(including 6 shares held
jointly with nominees) g
- Sterlite Ports Limited, of ` 2
each (including 6 shares held
jointly with nominees) g
- Talwandi Sabo Power
Limited, of ` 10 each
(including 6 shares held
jointly with nominees)
-
-
0
0
10,000
2,50,000
0
0
3,20,66,09,692
3,207 3,20,66,09,692
3,207
- Sesa Resources Limited, of
12,50,000
757
12,50,000
757
` 10 each
- Bloom Fountain Limited, of
2,20,10,00,001
14,734
2,20,10,00,001
14,734
US$ 1 each
Less: Reduction pursuant to
merger c
- MALCO Energy Limited of ` 2
each (including 6 shares held
jointly with nominees)
Less: Reduction pursuant to
merger c
- THL Zinc Ventures Limited of
US$ 100 each consisting of 1
ordinary share of US$ 1 and
1,00,000 Ordinary Shares of
US$ 100 each
Less: Reduction pursuant to
merger c
(14,320)
414
(14,320)
414
2,33,66,406
116
2,33,66,406
116
1,00,001
(23)
46
(46)
23
93
0
1,00,001
37,38,000
(23)
46
(46)
23
93
0
- THL Zinc Holdings BV of
37,38,000
EURO 1 each
354
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Particulars
Less: Reduction pursuant to
merger c
As at 31 March 2022
As at 31 March 2021
No.
Amount
(` in crore)
0
(23)
No.
(23)
- ESL Steel Limited of ` 10
1,76,55,53,040
1,770 1,76,55,53,040
Amount
(` in crore)
0
1,770
-
each (including 6 shares held
jointly with nominees)
Ferro Alloys Corporation
Limited of ` 1 each
Associate companies –
unquoted
- Gaurav Overseas Private
Limited, of ` 10 each
Joint venture – unquoted
- Rampia Coal Mines and
Energy Private Limited, of ` 1
each f
Investment in equity shares
at fair value through other
comprehensive income
Quoted
- Sterlite Technologies Limited,
of ` 2 each ( including 60
shares held jointly with
nominees)
Unquoted
-
Sterlite Power Transmission
Limited, of ` 2 each (including
12 shares held jointly with
nominees)
34,00,00,000
37
34,00,00,000
4,23,000
0
3,23,000
2,72,29,539
-
2,72,29,539
47,64,295
107
47,64,295
9,52,859
11
9,52,859
- Goa Shipyard Limited of ` 5
2,50,828
0
2,50,828
(b)
each
Investment in preference shares
of subsidiary companies –
at cost
Unquoted
- Bloom Fountain Limited,
0.25% Optionally Convertible
Redeemable Preference
shares of US$ 1 each
- Bloom Fountain Limited,
0.25% Optionally Convertible
Redeemable Preference
shares of US$ 100 each
- THL Zinc Ventures Limited,
0.25% Optionally Convertible
Redeemable Preference
shares of US$ 1 each
Less: Reduction pursuant to
merger c
18,59,900
907
18,59,900
3,60,500
215
3,60,500
70,00,000
3,187
70,00,000
3,187
(3,187)
- THL Zinc Holdings BV,
55,00,000
2,495
0.25% Optionally Convertible
Redeemable Preference
shares of EURO 1 each
Less: Reduction pursuant to
merger c
(c)
Investment in Government
or Trust securities at cost/
amortised cost
- 7 Years National Savings
Certificates (31 March 2022:
` 35,450 31 March 2021:
` 35,450) (Deposited with
Sales Tax Authority)
(2,495)
NA
0
0
0
(3,187)
55,00,000
2,495
(2,495)
NA
37
0
3
92
11
0
907
215
0
0
0
355
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
As at 31 March 2022
As at 31 March 2021
No.
100
NA
-
Amount
(` in crore)
0
0
-
No.
100
NA
-
Amount
(` in crore)
0
0
-
- MALCO Energy Limited,
6,13,54,483
6,136
6,13,54,483
6,136
Particulars
- UTI Master gain of ` 10 each
(31 March 2022: ` 4,072 31
March 2021: ` 4,072)
- Vedanta Limited ESOS Trust
(31 March 2022: ` 5,000 31
March 2021: ` 5,000)
Investments in debentures of
subsidiary companies at cost/
amortised cost
- Vizag General Cargo Berth
Private Limited, 0.1%
compulsorily convertible
debentures of ` 1,000 each d
(d)
(e)
compulsorily convertible
debentures of ` 1,000 each
Less: Reduction pursuant to
merger c
Investments in Co-operative
societies at fair value through
profit and loss
- Sesa Ghor Premises Holders
Maintenance Society Limited,
of ` 200 each (31 March
2022: ` 8,000 31 March 2021:
` 8,000)
- Sesa Goa Sirsaim Employees
Consumers Co- operative
Society Limited, of ` 10 each
(31 March 2022: ` 2,000 31
March 2021: ` 2,000)
- Sesa Goa Sanquelim
Employees Consumers
Co- operative Society
Limited, of ` 10 each (31
March 2022: ` 2,300 31
March 2021: ` 2,300)
Sesa Goa Sonshi Employees
Consumers Co- operative
Society Limited, of ` 10 each
(31 March 2022: ` 4,680 31
March 2021: ` 4,680)
Sesa Goa Codli Employees
Consumers Co- operative
Society Limited, of ` 10 each
(31 March 2022: ` 4,500 31
March 2021: ` 4,500)
-
-
40
200
230
468
450
- Sesa Goa Shipyard
500
Employees Consumers
Co-operative Society Limited,
of ` 10 each (31 March 2022:
` 5,000 31 March 2021:
` 5,000)
- The Mapusa Urban
40
(f)
Cooperative Bank Limited, of
` 25 each (31 March 2022:
` 1,000 31 March 2021:
` 1,000)
Investment in Bonds - Unquoted
at fair value through profit and
loss
- Infrastructure Leasing &
Financial Services Limited
356
(6,118)
18
(6,118)
18
0
0
0
0
0
0
0
40
200
230
468
450
500
40
0
0
0
0
0
0
0
30
51
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Particulars
As at 31 March 2022
As at 31 March 2021
No.
Amount
(` in crore)
No.
Amount
(` in crore)
Less: Provision for diminution in
value of investments in:
Bloom Fountain Limited
Sesa Resources Limited
Rampia Coal Mines and Energy
Private Limited f
Cairn India Holdings Limited
(CIHL)
Total
Aggregate amount of
impairment
Aggregate amount of quoted
investments
Market value of quoted
investments
Aggregate carrying amount of
unquoted investments
(1,536)
(750)
-
(3,339)
60,881
(5,625)
44,505
85,062
16,376
(1,536)
(750)
(2)
(3,339)
60,887
(5,627)
44,490
74,926
16,397
a) Carrying value of investment in equity shares of Hindustan Zinc Limited (HZL) is at deemed cost and for all other subsidiaries, it is at the cost
of acquisition.
b) Pursuant to the Government of India’s policy of disinvestment, the Company in April 2002 acquired 26% equity interest in HZL from the
Government of India. Under the terms of the Shareholder’s Agreement (‘SHA’), the Company had two call options to purchase all of the
Government of India’s shares in HZL at fair market value. The Company also acquired an additional 20% of the equity capital in HZL through
an open offer. The Company 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 Company 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
Company 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 Company invoked arbitration. 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 while hearing the 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. The matter was heard before the Supreme Court on 27 October 2021, and the final order was 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. The Supreme Court of India also directed the Central Bureau of Investigation 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 Supreme Court order dated 18
November 2021, the Company has filed for withdrawal of the arbitration proceedings.
Pursuant to the Government of India’s policy of divestment, the Company in March 2001 acquired 51% equity interest in BALCO from the
Government of India. Under the terms of the SHA, the Company has a call option to purchase the Government of India’s remaining ownership
interest in BALCO at any point from 02 March 2004. The Company exercised this option on 19 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 (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 Company, the arbitral tribunal by a majority award rejected the claims of the Company 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 erstwhile Companies Act, 1956 and are not enforceable. The Company has challenged the validity of the majority award in the Hon’ble
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 is currently scheduled for hearing by 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 09 January 2012, the Company offered to acquire the Government of India’s interests in HZL and BALCO for ` 15,492 crore and ` 1,782
crore respectively. This offer was separate from the contested exercise of the call options, and Company 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 Company 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.
c) Reduction pursuant to merger of Cairn India Limited with Vedanta Limited accounted for in the year ended 31 March 2017.
d) During the previous year, 15,00,000 units of 0.1% compulsorily convertible debentures of ` 1,000 each held by the Company has been fully
converted into equity shares of Vizag General Cargo Berth Private Limited.
e) Dissolved in current year with effect from 20 December 2021
f) Struck off from the registrar of companies and dissolved with effect from 19 April 2021.
g) During the current year, 100% equity shares held by the Company in Paradip Multi Cargo Berth Private Limited and Sterlite Ports Limited have
been transferred to its wholly owned subsidiary Sesa Resources Limited.
357
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
B. Current Investments
Particulars
Investments carried at fair value through profit and loss
Investment in mutual funds – unquoted
Investment in India Grid Trust – quoted
Total
Aggregate amount of quoted investments, and market value thereof
Aggregate amount of unquoted investments
7 Financial assets – Trade receivables
(` in crore)
As at
31 March 2022
As at
31 March 2021
585
0
585
-
585
2,016
0
2,016
-
2,016
(` in crore)
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
Particulars
Secured, Undisputed
Not due
Less than 6 months
1-2 Years
More than 3 years
Sub-total
Unsecured, disputed
Unbilled dues
Not due
Less than 6 months
6 months -1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
Unsecured, Undisputed
Not due
Less than 6 months
6 months -1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
-
-
-
-
-
9
-
123
67
106
153
1,601
2,059
-
-
-
-
-
-
-
121
53
-
3
177
-
-
-
-
-
-
8
8
571
1,560
17
3
-
9
121
53
-
3
177
9
-
123
67
106
153
1,609
2,067
571
1,560
17
3
-
9
2,160
(17)
2,160
(783)
-
-
-
-
-
-
13
28
79
153
190
1,433
1,896
-
-
-
-
-
-
-
(573)
31
56
2
3
92
-
-
-
-
-
-
3
3
393
609
7
2
35
7
1,053
(12)
31
56
2
3
92
-
13
28
79
153
190
1,436
1,899
393
609
7
2
35
7
1,053
(585)
Less: Provision for expected credit
loss
(766)
Total
1,293
2,328
3,621
1,323
1,136
2,459
(a) The credit period given to customers ranges from zero to 90 days. Also refer note 22(C)(d).
(b) For amounts due and terms and conditions relating to related party receivables, see note 39.
(c)
Trade receivables include ` 1,293 crore (31 March 2021: ` 1,323 crore) withheld by GRIDCO Limited (‘GRIDCO’ or
‘the customer’) on account of certain disputes relating to computation of power tariffs pending adjudication by the
Appellate Tribunal for Electricity (APTEL). Additionally, GRIDCO has raised claims of ` 514 crore on the Company in
respect of short supply of power, against which a provision of ` 218 crore has been made in previous years. Various
minutes of meetings were signed with the customer for computing the short supply claims, which were subject
to approval of the Odisha State Electricity Regulatory Commission (OERC). Hearing on the subject matter (PPA
Amendment Case) was completed in October 2019 and OERC had pronounced the order on 22 June 2020. In August
2020, the Company filed an appeal before APTEL against the said OERC order which was finally admitted for hearing
on 22 March 2022 and is awaited for listing. GRIDCO has also sought review of the said OERC order. The matter has
358
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
been posted for order by OERC in due course. In the meanwhile, power supply to GRIDCO has resumed and GRIDCO
has been making regular payments against monthly energy invoices.
(d) The total trade receivables as at 01 April 2020 were ` 2,178 crore (net of provision for expected credit loss).
8 Financial assets – Loans
Particulars
Unsecured, considered good
Loans to related parties
(Refer note 39)
Loans and advances to employees
Unsecured, considered credit
impaired
Loans to related parties
(Refer note 39)
Less: Provision for expected credit
loss
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
154
364
518
180
522
702
-
-
-
1
5
(5)
1
5
(5)
-
-
-
1
5
(5)
1
5
(5)
Total
154
365
519
180
523
703
9 Financial assets – Others
Particulars
Bank deposits a, b
Site restoration asset b
Unsecured, considered good
Security deposits
Advance recoverable (Oil and Gas
Business)
Others c
Receivable from related parties
(Refer note 39)
Unsecured, considered credit
impaired
Security deposits
Others
Receivable from related parties
(Refer note 39)
Less: Provision for expected credit
loss
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
61
589
74
-
716
-
15
458
-
-
-
18
7,068
82
226
1
273
-
61
589
92
7,068
798
226
16
731
-
59
495
70
-
634
-
15
450
-
-
-
6
4,731
112
222
1
253
11
(` in crore)
Total
59
495
76
4,731
746
222
16
703
11
(473)
(274)
(747)
(465)
(265)
(730)
Total
1,440
7,394
8,834
1,258
5,071
6,329
(a) Bank deposits include margin money of ` Nil crore (31 March 2021: ` 4 crore) and ` 61 crore (31 March 2021: Nil) held as margin money
created against bank gaurantee.
(b) Bank deposits and site restoration asset earns interest at fixed rate based on respective deposit rate.
(c) 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 Cost 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 recognising 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. At year end, an amount of ` 790 crore (US$ 105 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.
359
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
766
61
-
84
766
145
Advances for supplies
-
1,658
1,658
(` in crore)
Total
767
250
807
897
277
1,312
202
3
37
317
(559)
767
94
42
512
277
679
202
3
-
313
(518)
-
156
765
385
-
633
-
-
37
4
(41)
607
178
602
173
3
-
366
(542)
619
1,226
-
836
-
9
58
4
(71)
178
1,438
173
12
58
370
(613)
10 Other assets
Particulars
Capital advances
Advances for related party supplies
(Refer note 39)
Others
Balance with government
authorities a
Loan to employee benefit trust
Others b
Unsecured, considered doubtful
Capital advances
Balance with government
authorities
Advance for supplies
Others b
Less: Provision for doubtful
advances
Total
2,214
3,197
5,411
2,371
1,939
4,310
(a) Includes ` 30 crore (31 March 2021: ` 30 crore), being Company’s share of gross amount of ` 86 crore (31 March 2021: ` 86 crore), paid under
protest on account of Education Cess and Secondary Higher Education Cess for the financial year 2013‑14.
(b) Others include claim receivables, advance recoverable (oil and gas business), prepaid expenses and export incentive receivables.
11 Inventories
Particulars
Raw Materials
Goods-in transit
Work-in-progress
Finished goods
Fuel Stock
Goods-in transit
Stores and Spares
Goods-in transit
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
1,908
1,208
3,018
385
1,084
357
600
3
8,563
1,464
871
1,681
548
399
88
500
4
5,555
(a) For method of valuation for each class of inventories, refer note 3(a)(J).
(b) Inventory held at net realisable value amounted to ` 2,632 crore (31 March 2021: ` 2,329 crore).
(c) Write down of inventories amounting to ` 42 crore has been charged to the Statement of Profit and Loss during the year (31 March 2021:
` 42 crore).
12 Current financial assets – Cash and cash equivalents
Particulars
Balances with banks
Deposits with original maturity of less than 3 months (including interest accrued thereon) a
Cash on hand
Total
a) Bank deposits earn interest at fixed rate based on respective deposit rates.
(` in crore)
As at
31 March 2022
As at
31 March 2021
3,817
1,701
0
5,518
1,361
1,500
0
2,861
360
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
13 Current financial assets – Other bank balances
Particulars
Bank deposits with original maturity of more than 3 months but less than 12 months
(including interest accrued thereon) a, b, c
Bank deposits with original maturity of more than 12 months (including interest accrued
thereon) d
Earmarked unpaid dividend accounts e
Earmarked escrow account f
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
1,171
1,397
18
439
2
1,630
0
76
2
1,475
(a) Includes ` 439 crore (31 March 2021: ` 633 crore) on lien with banks and margin money of ` 40 crore (31 March 2021: ` 12 crore).
(b) Includes restricted funds of ` 156 crore (31 March 2021: ` 460 crore) held as interest reserve created against interest payment on loans from
banks, ` 7 crore (31 March 2021: ` 21 crore) on lien with others and ` 57 crore (31 March 2021: Nil) held as margin money created against
bank gaurantee.
(c) Includes restricted funds of ` 81 crore (31 March 2021: ` NIL crore) held as reserve created against principal repayment on loans from banks.
(d) Includes ` 3 crore (31 March 2021: ` 1 crore) of margin money with banks and fixed deposit under lien with others of ` 15 crore (31 March
2021: ` Nil crore).
(e) Earmarked unpaid dividend accounts are restricted in use as it relates to unclaimed or unpaid dividend.
(f) Earmarked escrow account is restricted in use as it relates to unclaimed redeemable preference shares.
14 Share capital
Particulars
A. Authorised equity share capital
Opening and Closing balance [equity shares of ` 1
each with voting rights]
Authorised preference share capital
Opening and Closing balance [preference shares
of ` 10/- each]
B.
Issued, subscribed and paid up
Equity shares of ` 1/- each with voting rights a, b
Total
As at 31 March 2022
As at 31 March 2021
Number
(in crore)
Amount
(` in crore)
Number
(in crore)
Amount
(` in crore)
4,402
4,402
4,402
4,402
301
3,010
301
3,010
372
372
372
372
372
372
372
372
(a) Includes 3,05,832 (31 March 2021: 3,08,232) equity shares kept in abeyance. These shares are not part of listed equity capital and pending
allotment as they are sub-judice.
(b) Includes 86,93,406 (31 March 2021: 1,21,93,159) equity shares held by Vedanta Limited ESOS Trust (Refer note 27).
C.
Shares held by the ultimate holding company and its subsidiaries*
Particulars
Twin Star Holdings Limited
Finsider International Company Limited
Westglobe Limited
Welter Trading Limited
Vedanta Holdings Mauritius Limited
Vedanta Netherland Investment BV
Vedanta Holdings Mauritius II Limited
Total
As at 31 March 2022
As at 31 March 2021
No. of Shares held
(in crore)
% of holding
No. of Shares held
(in crore)
% of holding
172.48
16.35
-
3.82
10.73
6.35
49.28
259.02
46.40
4.40
0.00
1.03
2.89
1.71
13.25
69.68
137.94
40.15
4.43
3.82
-
-
18.50
204.84
37.11
10.80
1.19
1.03
-
-
4.98
55.11
* The % of holding has been calculated on the issued and subscribed share capital as at the respective balance sheet dates.
(1) All the above entities are subsidiaries of Volcan Investments Limited, the ultimate holding company.
361
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
D.
Aggregate number of bonus shares issued, shares issued for consideration other than cash and
shares bought back during the period of five years immediately preceding the reporting date
Particulars
Equity shares issued pursuant to Scheme of Amalgamation (in FY 2017-18)
Preference shares issued pursuant to Scheme of Amalgamation (in FY 2017-18)*
* These were redeemed on 27 October 2018.
E. Details of shareholders holding more than 5% shares in the Company *
(` in crore)
As at
31 March 2022
As at
31 March 2021
75
301
75
301
Twin Star Holdings Limited
Finsider International Company Limited
Vedanta Holdings Mauritius II Limited
Life Insurance Corporation of India
As at 31 March 2022
As at 31 March 2021
No. of Shares held
(in crore)
% of holding
No. of Shares held
(in crore)
% of holding
172.48
16.35
49.28
32.11
46.40
4.40
13.25
8.64
137.94
40.15
18.50
24.40
37.11
10.80
4.98
6.56
* The % of holding has been calculated on the issued and subscribed share capital as at the respective balance sheet dates.
As per the records of the Company, including its register of shareholders/members, the above shareholding represents
legal ownership of shares.
F. Disclosure of Shareholding of Promoters and Promoter Group
Particulars
Twin Star Holdings Limited
Finsider International Company
Limited
Westglobe Limited
Welter Trading Limited
Vedanta Holdings Mauritius II
Limited
Vedanta Holdings Mauritius
Limited
Vedanta Netherland Investment BV
Mr. Pravin Agarwal
Ms. Suman Didwania
Mr. Ankit Agarwal
Ms. Sakshi Mody
Total
G. Other disclosures
As at 31 March 2022
As at 31 March 2021
No. of Shares
held
(in crore)
172.48
16.35
-
3.82
49.28
10.73
6.35
0.00
0.01
0.00
0.00
% of holding
% Change
during the year
No. of Shares
held
(in crore)
% of holding
% Change
during the year
46.40
4.40
-
1.03
13.25
2.89
1.71
0.00
0.00
0.00
0.00
9.29
(6.40)
(1.19)
-
8.27
2.89
1.71
-
-
-
-
137.94
40.15
4.43
3.82
18.50
-
-
0.00
0.01
0.00
0.00
37.11
10.80
1.19
1.03
4.98
-
-
0.00
0.00
0.00
0.00
-
-
-
-
4.98%
-
-
-
-
-
-
259.03
69.68
14.57
204.86
55.11
4.98%
The Company has one class of equity shares having a par value of ` 1 per share. Each shareholder is eligible for
one vote per share held and dividend as and when declared by the Company. The dividend proposed by the Board
of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case
of interim dividend which is paid as and when declared by the Board of Directors. In the event of liquidation of the
Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after
distribution of all preferential amounts, in proportion to their shareholding.
In terms of Scheme of Arrangement as approved by the Hon’ble High Court of Judicature at Mumbai, vide its order
dated 19 April 2002, the erstwhile Sterlite Industries (India) Limited (merged with the Company during 2013‑14) during
2002-2003 reduced its paid up share capital by ` 10 crore. There are 1,99,373 equity shares (31 March 2021: 2,01,296
equity shares) of ` 1 each pending clearance from NSDL. The Company has filed an application in Hon’ble High Court
i)
ii)
362
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
of Mumbai to cancel these shares, the final decision on which is pending. Hon’ble High Court of Judicature at Mumbai,
vide its interim order dated 06 September 2002 restrained any transaction with respect to subject shares.
15 Other equity (Refer statement of changes in equity)
a)
General reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer
of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers
was to ensure that if a dividend distribution in a given year is more than 10% of the paid‑up capital of the Company for
that year, then the total dividend distribution is less than the total distributable reserves for that year. Consequent to
introduction of Companies Act, 2013, the requirement to mandatorily transfer a specified percentage of the net profit
to general reserve has been withdrawn.
The Board of Directors of the Company, basis the recommendations of the Audit & Risk Management Committee
and Committee of Independent Directors of the Company, at its meeting held on 29 October 2021 approved the
Scheme of Arrangement (“Scheme”) between the Company and its shareholders under Section 230 and other
applicable provisions of the Companies Act, 2013 (“Act”). The Scheme inter alia provides for capital reorganisation
of the Company, whereby it is proposed to transfer amounts standing to the credit of the General Reserves to the
Retained Earnings of the Company with effect from the Appointed Date. The Scheme is subject to receipt of regulatory
approvals/ clearances from the Hon’ble National Company Law Tribunal, Mumbai Bench, Securities and Exchange
Board of India (through BSE Limited and National Stock Exchange of India Limited), BSE Limited and National Stock
Exchange of India Limited (collectively referred to as “Stock Exchanges”) and such other approvals/ clearances as may
be applicable.
Pursuant to the Scheme, the Company will possess greater flexibility to undertake capital related decisions and reflect
a more efficient balance sheet.
b)
c)
Debenture redemption reserve: As per the earlier provisions under the Act, companies that issue debentures were
required to create debenture redemption reserve from annual profits until such debentures are redeemed. Companies
are required to maintain 25% as a reserve of outstanding redeemable debentures. The amounts credited to the
debenture redemption reserve may be utilised only to redeem debentures. The MCA vide its Notification dated 16
August 2019, had amended the Companies (Share Capital and Debenture) Rules, 2014, wherein the requirement of
creation of Debenture Redemption Reserve has been exempted for certain class of companies. Accordingly, the
Company is now not required to create Debenture Redemption Reserve.
Preference share redemption reserve: The Companies Act, 2013 provides that companies that issue preference
shares may redeem those shares from profits of the Company which otherwise would be available for dividends, or
from proceeds of a new issue of shares made for the purpose of redemption of the preference shares. If there is a
premium payable on redemption, the premium must be provided for, either by reducing the additional paid in capital
(securities premium account) or net income, before the shares are redeemed. If profits are used to redeem preference
shares, the value of the nominal amount of shares redeemed should be transferred from profits (retained earnings)
to the preference share redemption reserve. This amount should then be utilised for the purpose of redemption of
redeemable preference shares. This reserve can be used to issue fully paid-up bonus shares to the shareholders of
the Company.
d)
Capital reserve: The balance in capital reserve has mainly arisen consequent to merger of Cairn India Limited with
the Company.
16 Capital management
The Company’s objectives when managing capital is 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
Company’s overall strategy remains unchanged from previous year.
The Company 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 requirements are met through a mixture of equity, internal fund generation and borrowings. The Company’s
policy is to use current and non-current borrowings to meet anticipated funding requirements.
The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net
debt). The Company is not subject to any externally imposed capital requirements.
363
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances and current
investments. Equity comprises all components including other comprehensive income.
The following table summarises the capital of the Company:
Particulars
Cash and cash equivalents (Refer note 12)
Other bank balances a (Refer note 13)
Non-current bank deposits a (Refer note 9)
Current investments (Refer note 6B)
Total cash (a)
Non-current borrowings (Refer note 17A)
Current borrowings (Refer note 17B)
Total borrowings (b)
Net debt c=(b-a)
Total equity
Total capital (equity + net debt) (d)
Gearing ratio (times) (c/d)
(` in crore except otherwise stated)
As at
31 March 2022
As at
31 March 2021
5,518
954
-
585
7,057
23,421
13,275
36,696
29,639
77,649
2,861
916
59
2,016
5,852
20,913
11,253
32,166
26,314
76,790
1,07,288
1,03,104
0.28
0.26
a)
The constituents of ‘total cash’ for the purpose of capital management disclosure include only those amounts
of restricted funds that are corresponding to liabilities (e.g. margin money deposits). Consequently, restricted
funds amounting to ` 737 crore (31 March 2021: ` 559 crore) have been excluded from ‘total cash’ in the capital
management disclosures.
17 Financial liabilities – Borrowings
A. Non-current borrowings
Particulars
At amortised cost
Secured
Non-convertible debentures
Term loans from banks
- Rupee term loans
- Foreign currency term loans
External commercial borrowings
Others
Unsecured
Deferred sales tax liability
Term loans from banks
Redeemable preference shares
Non-current borrowings
Less: Current maturities of long-term debt a
Total Non-current borrowings (Net) (A)
Current borrowings (Refer note 17B) (B)
Total borrowings (A+B)
364
(` in crore)
As at
31 March 2022
As at
31 March 2021
5,016
10,909
22,557
623
1,119
-
54
500
2
29,871
(6,450)
23,421
13,275
36,696
18,868
1,137
-
48
62
-
2
31,026
(10,113)
20,913
11,253
32,166
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
B. Current borrowings
Particulars
At amortised cost
Secured
Working capital loan
Packing credit in foreign currencies from banks
Current maturities of long-term borrowings a
Unsecured
Loans repayable on demand from banks
Loan from Related party
Commercial paper
Term loans from banks
Amounts due on factoring
Current maturities of long-term borrowings a
Total
a)
Current maturities of long-term borrowings consists of:
Particulars
Secured
Non-convertible debentures
Term loans from banks
- Rupee term loans
- Foreign currency term loans
Others
Unsecured
Deferred sales tax liability
Redeemable preference shares
Rupee term loans from banks
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
-
-
5,921
1,000
-
4,986
700
139
529
13,275
300
350
10,099
290
200
-
-
-
14
11,253
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,018
3,280
623
-
27
2
500
6,450
6,890
2,620
541
48
12
2
-
10,113
a) Details of Non-convertible debentures issued by the Company have been provided below (Carrying Value):
Particulars
9.2% due February-2030
7.68% due December-2024
9.20% due December-2022
8.75% due June-2022
7.50% due March-2022
8.9% due December-2021
8.75% due September-2021
9.18% due July-2021
8.5% due June-2021
8.5% due April-2021
8.75% due April-2021
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,000
997
749
1,270
-
-
-
-
-
-
-
2,000
-
749
1,269
493
899
250
1,000
1,650
2,349
250
5,016
10,909
b)
Vedanta Limited has taken borrowings towards funding of its acquisitions, capital expenditure and working capital
requirements. The borrowings comprise funding arrangements from various banks and financial institutions.
The details of security provided by the Company to various lenders on the assets of the Company are as follows:
365
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Particulars
Secured long-term borrowings
Secured short-term borrowings
Total secured borrowings
Facility Category
Security details
Working capital
loans*
Secured by first pari passu charge on current assets of Vedanta
Limited
External Commercial
Borrowings
Non-Convertible
Debentures
Non-Convertible
Debentures
Term loans from
banks (includes
rupee term loans and
foreign currency term
loans)
A First Pari-passu charge by way of hypothecation on the specified
movable fixed assets of the Company 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 1215 (9*135) MW CPP at
Jharsuguda, Odisha
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 18.9 acres situated at Jharsuguda, Odisha
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 the Borrower 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 1215 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
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 85 cents situated at Tuticorin District, Tamil Nadu
Other secured non-convertible debentures
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 1215 (9x135) MW CPP at
Jharsuguda, Orissa, both present and future
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 of (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
1215 (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
(` in crore)
As at
31 March 2022
As at
31 March 2021
23,394
5,921
29,315
30,962
650
31,612
(` in crore)
As at
31 March 2022
As at
31 March 2021
-
1,119
650
-
2,000
5,409
997
-
2,019
-
-
625
5,500
1,883
1,776
2,194
366
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Facility Category
Security details
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
Vedanta Limited along with 90 MW power plant in Lanjigarh and all
its related expansions
Term loans from
banks (includes
rupee term loans and
foreign currency term
loans)
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 1215 MW captive power plant at Jharsuguda,
Odisha
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 1215 MW captive
power plant at Jharsuguda, Odisha
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 1215 (9x135) MW CPP at
Jharsuguda, Orissa and additional charge on Lanjigarh Expansion
project, both present and future
Secured by a first pari passu charge on the identified fixed assets
of the Vedanta Limited both present and future, pertaining to its
Aluminium business (Jharsuguda Plant, Lanjigarh Plant), 2400 MW
power plant assets at Jharsuguda, Copper Plant assets at Silvasa,
Iron ore business in the states of Karnataka and Goa, dividends
receivable from Hindustan Zinc Limited (“HZL”) a subsidiary of the
Vedanta Limited, and the debt service reserve account to be opened
for the Facility along with the amount lying to the credit thereof g
Secured by first pari passu charge by way of hypothecation of whole
of the movable fixed assets of (i) Alumina Refinery having output of
1.7 to 6 MTPA along with co-generation captive power plant with an
aggregate capacity of 90MW at Lanjigarh, Odisha and (ii) Aluminium
Smelter having output of 1.6 MTPA along with a 1,215 (9*135) MW
CPP at Jharsuguda, Odisha
Other secured borrowings
Others
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
402
436
4,019
1,913
6,918
2,801
999
1,092
7,821
8,538
620
1,148
-
29,315
48
31,612
* Includes loans repayable on demand from banks, export packing credit and amounts due on factoring.
c)
The loan facilities are subject to certain financial and non‑ financial covenants. The primary covenants which must
be complied with include interest service coverage ratio, current ratio, debt service coverage ratio, total outside
liabilities to total net worth, fixed assets coverage ratio, ratio of total term liabilities to net worth and debt/EBITDA. The
Company has complied with the covenants as per the terms of the loan agreement.
Further, in case of borrowings having current assets as security, the quarterly statements of current assets filed by the
Company with its lenders are in agreement with the books of account.
367
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
d) Terms of repayment of total borrowings outstanding as at 31 March 2022 are provided below -
(` in crore)
Borrowings
Foreign currency term
loan
Weighted
average
interest
rate as at
31 March
2022
3.92%
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
623
623
-
-
Rupee term loan
7.80%
23,757
4,504
7,033
8,336
Commercial paper
5.90%
4,986
4,986
-
Non-convertible
debentures
Working capital loan*
8.78%
5,016
2,020
1,000
4.98%
1,000
1,000
-
- Repayable in 7 quarterly
installments and 1
monthly installment
3,969 Repayable in 671 quarterly
installments
- Repayable in 12 bullet
payments
2,000 Repayable in 4 bullet
payments
- Export packing credit,
working capital loan and
loan repayable on demand
are repayable within one
year from the date of
drawal
- Repayable within one
month
- Repayable in 55 monthly
installments
-
-
-
-
0
1.23%
139
139
NA
54
27
-
27
Amounts due on
factoring
Deferred sales tax
liability
External commercial
borrowing
Redeemable
preference shares
3.50%
1,119
NA
2
-
2
680
454
- Repayable in 5 half yearly
-
-
payments
- The redemption and
dividend paid to the
preference shares
unclaimed if any, is
payable on claim.
Total
36,696
13,301
8,740
8,790
5,969
The above maturity is based on the total principal outstanding gross of issue expenses and discounting impact of deferred
sales tax liability.
* Includes loans repayable on demand from banks for ` 1,000 crore.
e) Terms of repayment of total borrowings outstanding as at 31 March 2021 are provided below -
(` in crore)
Borrowings
Foreign currency term
loan
Weighted
average of
interest as
at 31 March
2021
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
3.93%
1,137
541
596
-
- Repayable in 15 quarterly
repayments
Rupee term loan
9.12%
18,868
2,647
4,761
5,195
6,400 Repayable in 464 quarterly
Non-convertible
debentures
8.77%
10,909
6,900
2,020
Working capital loan*
7.13%
940
940
-
installments and 1 half
yearly payment
-
-
2,000 Repayable in 10 bullet
payments
- Export packing credit,
working capital loan and
loan repayable on demand
are repayable within one
year from the date of
drawal
Deferred sales tax
liability
NA
62
13
46
12
- Repayable in 67 monthly
installments
368
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Weighted
average of
interest as
at 31 March
2021
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
(` in crore)
NA
2
2
-
-
7.40%
200
200
5.23%
48
48
-
-
-
-
- The redemption and
dividend paid to the
preference shares
unclaimed if any, is
payable on claim.
- Repayable in one bullet
payment
- Repayable in 7 bullet
payments
32,166
11,291
7,423
5,207
8,400
Borrowings
Redeemable
preference shares
Loan from related
party
Others
Total
The above maturity is based on the total principal outstanding gross of issue expenses and discounting impact of deferred
sales tax liability.
* Includes loans repayable on demand from banks for ` 290 crore.
f) Movement in borrowings during the year is provided below-
Particulars
Opening balance at 01 April 2020
Cash flow
Other non-cash changes
Foreign exchange currency translation differences
As at 31 March 2021
Opening balance at 01 April 2021
Cash flow
Other non cash changes
As at 31 March 2022
*including Current maturities of Long‑term borrowing.
Short-term
borrowing
10,819
(10,135)
466
(10)
1,140
1,140
5,618
67
6,825
Long-term
borrowing*
28,118
3,457
(549)
-
31,026
31,026
(1,308)
153
29,871
(` in crore)
Total
38,937
(6,678)
(83)
(10)
32,166
32,166
4,310
220
36,696
Other non‑cash changes comprised of amortisation of borrowing costs, foreign exchange difference on borrowings and
reclassification between borrowings due within one year and borrowings due after one year.
g)
During the current year, the Company executed a ` 8,000 crore facility agreement with Union Bank of India Limited to
take over long-term syndicated facility of ` 10,000 crore. This loan is secured by the way of pledge over the shares held
by the Company in Hindustan Zinc Limited (HZL) representing 5.77% of the paid up share capital of HZL along‑with
a non‑disposal undertaking 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 2022, the principal amount participated for and outstanding under the facility is ` 7,840 crore.
During the previous year, the Company executed into a ` 10,000 crore long-term syndicated loan facility agreement.
This loan was secured by the way of pledge over the shares held by the Company in HZL representing 14.82% of
the paid up share capital of HZL along-with a non-disposal undertaking 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 2021, the principal amount participated for and
outstanding under the facility was ` 8,650 crore. Refer note 6.
369
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
18 Financial liabilities – Trade payables
Particulars
Undisputed dues – MSME
Unbilled dues
Not due
Less than 1 year
1-2 years
2-3 years
More than 3 years
Sub-total
Undisputed dues – Others
Unbilled dues
Not due
Less than 1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
Disputed dues - Others
Less than 1 year
1-2 Years
Sub-total
Total
As at
31 March 2022
(` in crore)
As at
31 March 2021
-
70
115
4
2
4
195
1,173
2,817
1,193
23
72
50
5,328
-
1
1
5,524
54
105
35
6
8
1
209
679
1,618
1,220
28
36
10
3,591
3
-
3
3,803
(a) Trade payables are non-interest bearing and are normally settled up to 180 days terms.
(b) For amount due and terms and conditions relating to related party payables, refer note 39.
19
Operational Buyers’/Suppliers’ Credit is availed in foreign currency from offshore branches of Indian banks or foreign
banks at an interest rate ranging from 0.29% to 3.16% per annum and in rupee from domestic banks at interest rate
ranging from 4.00%-6.65% 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 Company.
20 Financial liabilities – Others
Particulars
Liability for capital expenditure
Security deposits and retentions
Interest accrued but not due
Unpaid/unclaimed dividend a
Unpaid matured deposits and
interest accrued thereon b
Profit petroleum payable
Dues to related parties
(Refer note 39)
Other liabilities c
Total
As at 31 March 2022
As at 31 March 2021
Non-current
192
-
-
-
-
-
-
-
192
Current
6,427
29
180
96
0
1,413
155
1,720
10,020
Total
6,619
29
180
96
0
1,413
155
1,720
10,212
Non-current
190
-
-
-
-
-
-
-
190
Current
4,385
26
859
76
0
862
1,497
1,464
9,169
(` in crore)
Total
4,575
26
859
76
0
862
1,497
1,464
9,359
Does not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund except
` 0.13 crore (31 March 2021: ` 0.10 crore) which is held in abeyance due to a pending legal case.
Matured deposits of ` 0.01 crore (31 March 2021: ` 0.01 crore) due for transfer to Investor Education and Protection
Fund have not been transferred in view of pending litigation between the beneficiaries.
Includes revenue received in excess of entitlement interest of ` 750 crore (31 March 2021: ` 737 crore), reimbursement
of expenses, provision for expenses, liabilities related to compensation/claim etc.
(a)
(b)
(c)
370
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
21 The movement in lease liabilities is as follows:
Particulars
At 01 April 2020
Additions during the year
Interest on lease liabilities
Payments made
Disposals/Adjustments
At 01 April 2021
Additions during the year
Interest on lease liabilities
Payments made
Disposals/Adjustments
At 31 March 2022
22 Financial instruments
A. Financial assets and liabilities:
(` in crore)
Amount
302
9
14
(164)
(28)
133
12
7
(64)
(6)
474
The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:
As at 31 March 2022
Financial Assets
Investments*
Trade receivables
Cash and cash equivalents
Other bank balances
Loans
Derivatives
Other financial assets
Total
Fair value
through profit
or loss
615
248
-
-
-
3
-
866
Fair value
through other
comprehensive
income
118
-
-
-
-
-
-
118
Derivatives
designated
as hedging
instruments
-
-
-
-
-
246
-
246
(` in crore)
Amortised cost
Total carrying
value
Total fair value
-
3,373
5,518
1,630
519
-
8,834
19,874
733
3,621
5,518
1,630
519
249
8,834
21,104
733
3,621
5,518
1,630
519
249
8,834
21,104
(` in crore)
Financial Liabilities
Borrowings
Trade payables
Operational buyers' credit/suppliers' credit
Derivatives
Other financial liabilities**
Total
As at 31 March 2021
Fair value
through profit
or loss
Derivatives
designated
as hedging
instruments
Amortised cost
Total carrying
value
Total fair value
-
990
-
67
-
1,057
-
-
-
216
-
216
36,696
4,534
9,261
-
10,294
60,785
36,696
5,524
9,261
283
10,294
62,058
36,789
5,524
9,261
283
10,294
62,151
(` in crore)
Financial Assets
Investments*
Trade receivables
Cash and cash equivalents
Other bank balances
Loans
Derivatives
Other financial assets
Total
Fair value
through profit
or loss
2,067
51
-
-
-
10
-
2,128
Fair value
through other
comprehensive
income
103
-
-
-
-
-
-
103
Derivatives
designated
as hedging
instruments
Amortised cost
Total carrying
value
Total fair value
-
-
-
-
-
56
-
56
-
2,408
2,861
1,475
703
-
6,329
13,776
2,170
2,459
2,861
1,475
703
66
6,329
16,063
2,170
2,459
2,861
1,475
703
66
6,329
16,063
371
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Financial Liabilities
Borrowings
Trade payables
Operational buyers' credit/suppliers' credit
Derivatives
Other financial liabilities**
Total
Fair value
through profit
or loss
Derivatives
designated
as hedging
instruments
(` in crore)
Amortised cost
Total carrying
value
Total fair value
-
445
-
40
-
485
-
-
-
149
-
149
32,166
3,358
6,029
-
9,492
51,045
32,166
3,803
6,029
189
9,492
51,679
32,107
3,803
6,029
189
9,492
51,620
* Excludes investments (in equity and preference shares) in subsidiaries, associates and joint ventures which are carried at cost and hence are
not required to be disclosed as per Ind AS 107 “Financial Instruments Disclosures”.
**Include lease liabilities of `82 crore (31 March 2021: `133 crore).
B. Fair value hierarchy
The Company uses the following hierarchy for determining and/or disclosing the fair value of financial instruments by
valuation techniques:
(i)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii)
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).
(iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)
The below table summarises the categories of financial assets and liabilities as at 31 March 2022 and 31 March 2021
measured at fair value:
As at 31 March 2022
Investments
Trade receivables
Financial Assets
At fair value through profit or loss
-
- Derivative financial assets*
-
At fair value through other comprehensive income
-
Derivatives designated as hedging instruments
- Derivative financial assets*
Total
Investments
Financial liabilities
At fair value through profit or loss
- Derivative financial liabilities*
-
Derivatives designated as hedging instruments
- Derivative financial liabilities*
Total
Trade payables
As at 31 March 2021
Investments
Trade receivables
Financial Assets
At fair value through profit or loss
-
- Derivative financial assets*
-
At fair value through other comprehensive income
-
Derivatives designated as hedging instruments
- Derivative financial assets*
Total
Investments
372
Level 1
Level 2
(` in crore)
Level 3
586
-
-
107
-
693
-
3
248
-
246
497
29
-
-
11
-
40
Level 1
Level 2
(` in crore)
Level 3
-
-
-
-
67
990
216
1,273
-
-
-
-
Level 1
Level 2
(` in crore)
Level 3
2,016
-
-
92
-
2,108
-
10
51
-
56
117
51
-
-
11
-
62
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Financial liabilities
At fair value through profit or loss
- Derivative financial liabilities*
-
Trade payables
Derivatives designated as hedging instruments
- Derivative financial liabilities*
Total
* Refer “D” below.
Level 1
Level 2
(` in crore)
Level 3
-
-
-
-
40
445
149
634
-
-
-
-
The below table summarises the fair value of borrowings which are carried at amortised cost as at 31 March 2022 and
31 March 2021:
As at 31 March 2022
Financial Liabilities
Borrowings
Total
As at 31 March 2021
Financial Liabilities
Borrowings
Total
Level 1
-
-
Level 1
-
-
Level 2
36,789
36,789
Level 2
32,107
32,107
(` in crore)
Level 3
-
-
(` in crore)
Level 3
-
-
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 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 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).
Trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade
payables and other current financial liabilities: Fair values approximate their carrying amounts largely due to the short‑term
maturities of these instruments.
Other non‑current financial assets and 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.
Non‑current fixed‑rate and variable‑rate borrowings: Fair value has been determined by the Company based on parameters
such as interest rates, specific country risk factors, and the risk characteristics of the financed project.
Derivative financial assets/liabilities: The Company executes 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 include
the forward pricing and swap models, using present value calculations. The models incorporate various inputs including
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 (U.K.).
For all other financial instruments, the carrying amount is either the fair value, or approximates the fair value.
373
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 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 2022 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 year.
C. Risk management framework
The Company’s businesses are subject to several risks and uncertainties including financial risks.
The Company’s documented risk management policies act as an effective tool in mitigating the various financial risks
to which the businesses are exposed 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 Company has in place risk management processes which are in line with
the Company’s policy. Each significant risk has a designated ‘owner’ within the Company 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 Management Assurance function and is regularly reviewed by
the Company’s Audit and Risk Management Committee. The Audit and Risk Management Committee is aided by the
other Committees of the Board 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 Audit Committee on behalf of the Board.
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 maximisation.
The treasury policies are approved by the Committee of the Board. Daily treasury operations of the business units 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 business units. A
monthly reporting system exists to inform senior management of the Company’s investments and debt position, exposure
to currency, commodity and interest rate risk and their mitigants including the derivative position. The Company has a
strong system of internal control which enables effective monitoring of adherence to Company’s policies. The internal
control measures are effectively supplemented by regular internal audits.
The Company uses derivative instruments to manage the exposure in foreign currency exchange rates, interest rates and
commodity prices. The Company does not acquire or issue derivative financial instruments for trading or speculative
purposes. The Company 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 Company’s policies.
Commodity price risk
The Company 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 Company produces and sells will have an immediate and direct impact on the
profitability of the businesses. As a general policy, the Company aims to sell the products at prevailing market prices.
The commodity price risk in imported input commodity such as of Alumina, anodes, etc., for our aluminium and copper
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
374
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
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.
Whilst the Company 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 Company 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 Company, on selective basis hedges the
aluminium content in outsourced alumina to protect its margins. The Company also executes hedging arrangements for its
aluminium sales to realise average month of sale LME prices.
Copper
The Company’s custom refining 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 anodes / blisters and the sale of finished copper.
The Company’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 Company 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.
RCs are a major source of income for the Indian copper refining operations. Fluctuations in Rcs are influenced by factors
including demand and supply conditions prevailing in the market for smelters output. The Company’s copper business has
a strategy of securing a majority of its anodes/blisters feed requirement under long-term contracts with smelters / traders.
Iron ore
The Company 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 crude with a premium or discount over the benchmark
based upon quality differential and competitiveness of various grades. The Company also hedges variability of crude price
through forward contracts on selective basis.
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 2022, the value of net financial liabilities linked to commodities (excluding derivatives) accounted for on
provisional prices was ` 742 crore (31 March 2021: liabilities of ` 394 crore). 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 2022.
Set out below is the impact of 10% increase in LME prices on pre‑tax profit/(loss) for the year and pre‑tax total equity as a
result of changes in value of the Company’s commodity financial instruments:
375
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 For the year ended 31 March 2022
Total Exposure
(` in crore)
Effect on pre-tax
profit/(loss) of a
10% increase in
the LME
Effect on equity of
a 10% increase in
the LME
Copper
(891)
(89)
-
For the year ended 31 March 2021
Total Exposure
(` in crore)
Effect on pre-tax
profit/(loss) of a
10% increase in
the LME
Effect on equity of
a 10% increase in
the LME
Copper
(713)
(71)
-
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 Company’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 Copper division custom smelting operations in India of ` 122
crore loss (31 March 2021: ` 87 crore loss), which is pass through in nature and as such will not have any impact on
the profitability.
Financial risk
The Company’s Board approved financial risk policies include monitoring, measuring and mitigating the liquidity, currency,
interest rate and counterparty risk. The Company 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 Company requires funds both for short‑term operational needs as well as for long‑term investment programmes
mainly in growth projects. The Company generates 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. The Company has been rated by CRISIL Limited (CRISIL) and India Ratings and Research
Private Limited (India Rating) for its capital market issuance in the form of CPs and NCDs and for its banking facilities
in line with Basel II norms.
CRISIL after revising the outlook to ‘Positive’ from ‘Stable’ in October 2021, upgraded its rating on the long‑term bank
facilities and debt instruments of Vedanta Ltd to ‘CRISIL AA’ from ‘CRISIL AA‑‘ in February 2022. The outlook on
ratings was also revised to ‘Stable’ from ‘Positive’. The short‑term rating on bank facilities and commercial paper has
been reaffirmed at ‘CRISIL A1+’. The upward rating action factors in stronger‑than‑expected operating profitability,
driven by elevated commodity prices during fiscal 2022, volume growth across businesses, and sustained cost
efficiency, especially in the Aluminium business.
India Ratings also upgraded Vedanta Limited’s long‑term issuer ratings to “IND AA” from “IND AA‑“ with stable outlook
on 29 March 2022. The rating upgrade reflects the group’s continuous deleveraging and India ratings’ expectation of
an improvement in the consolidated operational cash flow in FY22 and FY23, following a significant increase in the
operating profitability, led by high metal prices partly offset by raw material input inflation.
Anticipated future cash flows, together with undrawn fund based committed facilities of ` 1,588 crore, and cash,
bank and current investments of ` 7,057 crore as at 31 March 2022, are expected to be sufficient to meet the liquidity
requirement of the Company in the near future.
The Company remains committed to maintaining a healthy liquidity, a low gearing ratio, deleveraging and
strengthening its balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining
period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect
the contractual undiscounted cash obligation of the Company.
376
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
As at 31 March 2022
Payments due by year
Borrowings *
Derivative financial
liabilities
Lease liabilities
Trade Payables and other
financial liabilities **
<1 year
15,502
277
25
24,696
1-3 years
11,897
6
27
192
3-5 years
10,457
>5 years
6,773
-
3
-
-
27
-
(` in crore)
Total
44,629
283
82
24,888
Total
40,500
12,122
10,460
6,800
69,882
As at 31 March 2021
Payments due by year
Borrowings *
Derivative financial
liabilities
Lease liabilities
Trade Payables and other
financial liabilities **
<1 year
14,012
139
73
18,174
1-3 years
10,633
50
27
190
3-5 years
7,353
>5 years
9,903
-
13
-
-
20
-
(` in crore)
Total
41,901
189
133
18,364
Total
32,398
10,900
7,366
9,923
60,587
*Includes Non‑current borrowings, current borrowings, committed interest payments on borrowings and interest accrued on borrowings.
**Includes both Non‑current and current financial liabilities and committed interest payment, as applicable. Excludes interest accrued on
borrowings.
The Company had access to following funding facilities:
As at 31 March 2022
Funding facilities
Fund/non-fund based
As at 31 March 2021
Funding facility
Fund/non-fund based
Collateral
Total Facility
46,341
Drawn
44,183
Total Facility
37,590
Drawn
33,923
(` in crore)
Undrawn
2,158
(` in crore)
Undrawn
3,667
The Company has pledged financial instruments with carrying amount of ` 18,407 crore (31 March 2021: ` 13,147
crore) and inventories with carrying amount of ` 8,563 crore (31 March 2021: ` 5,555 crore) as per the requirements
specified in various financial facilities in place. The counterparties have an obligation to release the securities to the
Company when financial facilities are surrendered.
(b) Foreign exchange risk
Fluctuations in foreign currency exchange rates may have an impact on the statement of profit and loss, the statement
of changes 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 Company.
Exposures on foreign currency loans are managed through the Company wide hedging policy, which is reviewed
periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The
Company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged.
The Company’s presentation currency is the Indian Rupee (INR). The assets are located in India and the Indian Rupee
is the functional currency except for Oil and Gas business operations which have a dual 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
377
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 the hedge cost. The hedge mechanisms are reviewed periodically to ensure that the risk from fluctuating currency
exchange rates is appropriately managed.
The following analysis is based on the gross exposure as at the reporting date which could affect the statement
of profit and loss. The exposure is mitigated by some of the derivative contracts entered into by the Company as
disclosed under the section on “Derivative financial instruments”.
The carrying amount of the Company’s financial assets and liabilities in different currencies are as follows:
Currency
INR
USD
Others
Total
As at 31 March 2022
Financial
Asset
13,193
7,656
255
21,104
Financial
liabilities
43,800
17,882
376
62,058
(` in crore)
As at 31 March 2021
Financial
Asset
12,319
3,591
153
16,063
Financial
liabilities
38,218
13,096
364
51,678
The Company’s exposure to foreign currency arises where an entity holds monetary assets and liabilities denominated
in a currency different to the functional currency of the respective business, with US dollar being the major non-
functional currency.
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 foreign currencies by 10% against the functional currency of
the respective businesses.
Set out below is the impact of a 10% strengthening in the functional currencies of the respective businesses on pre-
tax profit/(loss) and pre‑tax equity arising as a result of the revaluation of the Company’s foreign currency monetary
financial assets/liabilities:
For the year ended 31 March 2022
USD
INR
For the year ended 31 March 2021
USD
INR
Effect of
10% strengthening
of functional
currency on
pre-tax profit/
(loss)
666
(384)
(` in crore)
Effect of
10% strengthening
of functional
currency on
equity
-
-
Effect of
10% strengthening
of functional
currency on
pre-tax profit/
(loss)
678
(282)
(` in crore)
Effect of
10% strengthening
of functional
currency on
equity
-
-
A 10% weakening of functional currencies of the respective businesses would have an equal and opposite effect on
the Company’s financial statements.
(c)
Interest rate risk
At 31 March 2022, the Company’s net debt of ` 29,639 crore (31 March 2021: ` 26,314 crore) comprises debt of
` 36,696 crore (31 March 2021: ` 32,166 crore) offset by cash, bank and investments of ` 7,057 crore (31 March 2021:
` 5,852 crore).
The Company is exposed to interest rate risk on short‑term and long‑term floating rate instruments and on the
refinancing of fixed rate debt. The Company’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 Company are principally denominated in Indian Rupees and US dollars with mix of fixed and
378
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 Company 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. The Company invests cash and liquid investments in short‑term deposits and
debt mutual funds, some of which generate a tax‑free return, to achieve the Company’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 Company’s financial assets as at 31 March 2022 to interest rate risk is as follows:
As at 31 March 2022
Financial Assets
Total
Floating rate
financial assets
Fixed rate
financial assets
(` in crore)
Non-interest
bearing financial
assets
21,104
585
4,314
16,205
The exposure of the Company’s financial liabilities as at 31 March 2022 to interest rate risk is as follows:
As at 31 March 2022
Financial Liabilities
Total
Floating rate
financial assets
Fixed rate
financial assets
(` in crore)
Non-interest
bearing financial
assets
62,058
24,876
21,628
15,554
The exposure of the Company’s financial assets as at 31 March 2021 to interest rate risk is as follows:
As at 31 March 2021
Financial Assets
Total
Floating rate
financial assets
Fixed rate
financial assets
(` in crore)
Non-interest
bearing financial
assets
16,063
2,016
4,292
9,755
The exposure of the Company’s financial liabilities as at 31 March 2021 to interest rate risk is as follows:
As at 31 March 2021
Financial Liabilities
Total
Floating rate
financial assets
Fixed rate
financial assets
(` in crore)
Non-interest
bearing financial
assets
51,679
18,916
20,795
11,968
Considering the net debt position as at 31 March 2022 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 table below illustrates the impact of a 0.5% to 2.0% movement in interest rates on 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 that 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.
Increase in interest rates
0.50%
1.00%
2.00%
Effect on pre-tax
profit/(loss)
during the
year ended
31 March 2022
(` in crore)
Effect on pre-tax
profit/(loss)
during the
year ended
31 March 2021
(121)
(243)
(486)
(85)
(169)
(338)
379
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
An equivalent reduction in interest rates would have an equal and opposite effect on the Company’s
financial statements.
(d) Counterparty and concentration of credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company 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 Company is exposed to credit risk from trade receivables, contract assets, investments, loans, other financial
assets, and derivative financial instruments.
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 Company’s businesses trade receivables are spread over a number of
customers with no significant concentration of credit risk. The history of trade receivables shows a negligible provision
for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of non‑performance
by any of the Company’s counterparties.
The Company has clearly defined policies to mitigate counterparty risks. For current 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 for our mutual fund and bond investments. For derivative and financial instruments, the Company attempts
to limit the credit risk by only dealing with reputable banks and financial institutions.
The carrying value of the financial assets represents the maximum credit exposure. The Company’s maximum
exposure to credit risk is ` 21,104 crore and ` 16,603 crore as at 31 March 2022 and 31 March 2021 respectively.
The maximum credit exposure on financial guarantees given by the Company for various financial facilities is
described in Note 38 on “Commitments, contingencies, and guarantees”.
None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding
trade receivables, loans and other financial assets (both current and non‑current), there were no indications as at
the year end, that defaults in payment obligations will occur except as described in Note 7 and 9 on allowance for
impairment of trade receivables and other financial assets.
Of the year end trade receivables, loans and other financial assets (excluding bank deposits, site restoration fund and
derivatives) balance the following, though overdue, are expected to be realised in the normal course of business and
hence, are not considered impaired as at 31 March 2022 and 31 March 2021:
Particulars
Neither impaired nor past due
Past due but not impaired
-
Less than 1 month
- Between 1–3 months
- Between 3–12 months
- Greater than 12 months
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
8,134
6,464
1,692
66
121
2,311
12,323
150
77
260
1,986
8,937
Receivables are deemed to be past due or impaired with reference to the Company’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 tables are those that
have not been settled within the terms and conditions that have been agreed with that customer. The Company based
on past experiences does not expect any material loss on its receivables.
The credit quality of the Company’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.
380
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Movement in allowances for Financial Assets (Trade receivables and financial assets – others)
The changes in the allowance for financial assets (current and non‑current) is as follows:
Particulars
As at 01 April 2020
Allowance made during the year
Reversals/write-off during the year
Exchange differences
As at 31 March 2021
Allowance made during the year
Reversals/write-off during the year
Exploration cost written off
Exchange differences
As at 31 March 2022
D Derivative financial instruments
Trade receivables
Financial
assets - Others
Financial
assets - Loans
(` in crore)
524
61
-
-
585
198
-
-
-
783
671
61
3
(5)
730
7
-
-
10
747
-
5
-
-
5.0
-
-
-
5
The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency
exchange rates, interest rates and commodity prices. The Company does not acquire or issue derivative financial
instruments for trading or speculative purposes. The Company 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 Company guidelines and policies.
The fair values of all derivatives are separately recorded in the balance sheet within current and non-current assets
and liabilities. 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 Company 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.
i)
Cash flow hedges
The Company 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 equity through OCI until the hedged transaction occurs, at which time, the respective gain or losses
are reclassified to profit or loss. These hedges have been effective for the year ended 31 March 2022.
The Company uses foreign exchange contracts from time to time to optimise currency risk exposure on its foreign
currency transactions. The Company hedged part of its foreign currency exposure on capital commitments during the
year ended 2022. Fair value changes on such forward contracts are recognised in other comprehensive income.
The majority of cash flow hedges taken out by the Company 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 ended 31 March 2023 and consequently may
impact profit or loss 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 profit or loss over the expected
useful life of the property, plant and equipment.
381
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 (ii) Fair value hedge
The fair value hedges relate to forward covers taken to hedge currency exposure and commodity price risks.
The Company’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 Company 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 statement
of profit and loss.
The Company uses foreign exchange contracts from time to time to optimise currency risk exposure on its foreign
currency transactions. Fair value changes on such forward contracts are recognised in the statement of profit
and loss.
(iii) Non-designated economic hedge
The Company 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 future contracts on the LME and certain other derivative instruments. Fair value changes on
such derivative instruments are recognised in the statement of profit and loss.
The fair value of the Company’s derivative positions recorded under derivative financial assets and derivative financial
liabilities are as follows:
Derivative Financial Instruments
Current
Cash flow hedge*
- Commodity contracts
-
Interest rate swap
Fair Value hedge
- Commodity contracts
- Forward foreign currency contracts
Non-qualifying hedges/economic hedge
-
Forward foreign currency contracts
Sub-total (A)
Non-current
Cash flow hedge
-
Interest rate swap
Fair value hedge
- Forward foreign currency contracts
Sub-total (B)
Total (A+B)
As at 31 March 2022
As at 31 March 2021
Assets
Liabilities
Assets
Liabilities
(` in crore)
231
1
10
4
3
249
-
-
-
62
-
57
92
67
277
-
6
6
249
283
3
-
39
14
10
66
-
-
-
66
37
5
3
54
40
139
5
45
50
189
* Refer statement of profit and loss and statement of changes in equity for the changes in the fair value of cash flow hedges.
E. Derivative contracts executed by the Company and outstanding as at Balance Sheet date :
(i)
To hedge currency risks and interest related risks, the Company has executed various derivatives contracts. The
category wise break up of amount outstanding as at Balance Sheet date is given below :
Particulars
Forex forward cover (buy)
Forex forward cover (sell)
Interest rate swap
Total
382
(` in crore)
As at
31 March 2022
As at
31 March 2021
12,558
161
1,735
14,454
10,070
188
-
10,258
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
(ii) For hedging commodity related risk :‑ Category‑wise break up is given below.
Particulars
Forwards/Futures
Crude (BBL)
Copper (MT)
Gold (Oz)
Silver (Oz)
Aluminium (MT)
23 Other liabilities
Particulars
Amount payable to owned post-
employment benefit trust
Other statutory liabilities a
Deferred government grant b
Advance from customers c
Advance from related party
(Refer note 39) c
Other liabilities
Total
As at 31 March 2022
As at 31 March 2021
Purchases
Sales
Purchases
Sales
(` in crore)
-
7,425
-
16,091
12,750
16,80,000
24,800
17,625
66,770
78,425
-
6,900
-
17,418
1,825
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
-
14
14
-
15
-
2,346
404
-
1
2,751
1,097
80
3,159
2
122
4,474
1,097
2,426
3,563
2
123
7,225
-
2,360
-
-
-
2,360
883
78
4,496
-
117
5,589
-
24,150
18,683
95,596
67,075
(` in crore)
Total
15
883
2,438
4,496
-
117
7,949
(a) Other statutory liabilities mainly include payable for PF, ESIC, withholding taxes, goods and service tax, VAT, etc.
(b) Represents government assistance in the form of the duty benefit availed under Export Promotion Capital Goods (EPCG) Scheme and
Special Economic Zone (SEZ) scheme on purchase of property, plant and equipments accounted for as government grant and being
amortised over the useful life of such assets.
(c) Advance from customers are contract liabilities to be settled through delivery of goods. The amount of such balances as on 01 April 2020
was ` 6,391 crore. During the current year, the Company has recognised revenue of ` 4,481 crore (FY 2020-21: ` 6,244 crore) out of such
opening balances. All other changes are either due to receipt of fresh advances or exchange differences.
24 Provisions
Particulars
Provision for employee benefits
(Refer note 25) a
- Retirement Benefit
- Others
Provision for restoration,
rehabilitation and environmental
costs b,c
Total
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
-
-
1,268
77
79
2
77
79
1,270
-
-
1,169
42
56
-
42
56
1,169
1,268
158
1,426
1,169
98
1,267
(a) Provision for employee benefits includes gratuity, compensated absences, deferred cash bonus, etc.
(b)
The movement in provisions for restoration, rehabilitation and environmental costs is as follows [Refer note 3(a)(P)]: .
Particulars
At 01 April 2020
Unwinding of discount (Refer note 32)
Revision in estimates
Exchange differences
At 31 March 2021
Unwinding of discount (Refer note 32)
Revision in estimates
Exchange differences
At 31 March 2022
(` in crore)
Restoration, rehabilitation and
environmental costs (Refer c)
1,185
23
(15)
(24)
1,169
24
40
35
1,268
383
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 (c) 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 Company’s obligations under existing Indian law and the
terms of the Company’s exploration and other licences and contractual arrangements.
The principal restoration and rehabilitation provisions are recorded within oil & gas business 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 Company 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 2% to 3%, and become payable at the
end of the producing life of an oil field and are expected to be incurred over a period of twenty one years.
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.
25 Employee Benefit Plans
The Company 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 statement of profit and loss 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.
Remeasurement gains and losses arising in the year are recognised in full in other comprehensive income for the year.
i) Defined contribution plans
The Company contributed a total of ` 60 crore for the year ended 31 March 2022 and ` 62 crore for the year ended
31 March 2021 to the following defined contribution plans.
Particulars
Employer’s contribution to recognised provident fund and family pension fund
Employer’s contribution to superannuation
Employer’s contribution to National Pension Scheme (NPS)
Total
Central recognised provident fund
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
40
17
3
60
47
15
0
62
In accordance with the ‘The Employee’s 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 2022 and 31 March 2021) of an
employee’s basic salary, and includes contribution 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 Company has
no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the
statement of profit and loss in the period they are incurred.
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 subject to a specified
ceiling per employee (included in the 12% rate specified above). 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 Company has no additional liability beyond the
contributions that it makes, regardless of whether the central fund is in surplus or deficit.”
384
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Superannuation
Superannuation, another pension scheme applicable in India, is applicable only to senior executives. The Company
holds a policy with Life Insurance Corporation of India (“LIC”), to which it contributes a fixed amount relating to
superannuation and the pension annuity is met by LIC as required, taking into consideration the contributions made.
The Company has no further obligations under the scheme beyond its monthly contributions which are charged to the
statement of profit and loss 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, 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 holds a corporate account with one of
the pension fund managers authorised by the Government of India to which the Company 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 Company has no further obligations under the scheme beyond its monthly contributions which are
charged to the statement of profit and loss in the year they are incurred.
ii) Defined benefit plans
(a) Contribution to provident fund trust (the “trust”)
The provident fund of the Iron Ore division is 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 Ind AS 19 and the Guidance note issued by the Institute of Actuaries of India for interest
rate guarantee of exempted provident fund liability of employees, there is no interest shortfall in the funds managed
by the trust as at 31 March 2022 and 31 March 2021. Having regard to the assets of the Fund and the return on the
investments, the Company does not expect any deficiencies in the foreseeable future.
The Company contributed a total of ` 7 crore for the year ended 31 March 2022 and ` 6 crore for the year ended
31 March 2021. The present value of obligation and the fair value of plan assets of the trust are summarised below.
Particulars
Fair value of plan assets
Present value of defined benefit obligations
Net liability arising from defined benefit obligation of trust
Percentage allocation of plan assets of trust
Assets by category
Government Securities
Debentures/bonds
Equity
Fixed deposits
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
262
(257)
Nil
233
(225)
Nil
Year ended
31 March 2022
Year ended
31 March 2021
43%
45%
12%
0%
59%
38%
3%
0%
The remeasurement loss of Nil and ` 6 crore for the year ended 31 March 2022 and 31 March 2021 respectively have
been charged to other comprehensive income (OCI).
(b) Gratuity plan
In accordance with the Payment of Gratuity Act, 1972, the Company contributes 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 Company. The Gratuity plan is a funded plan and the Company
makes contribution to recognised funds in India.
Based on actuarial valuations conducted as at year end using the projected unit credit method, a provision is
recognised in full for the benefit obligation over and above the funds held in the Gratuity Plan.
385
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
The iron ore and oil & gas division of the Company have constituted a trust recognised by Indian Income Tax
Authorities for gratuity to employees, contributions to the trust are funded with the Life Insurance Corporation of India
(LIC) and ICICI Prudential Life Insurance Company Limited (ICICI).
Principal actuarial assumptions
Principal actuarial assumptions used to determine the present value of the Gratuity plan obligation are as follows:
Particulars
Discount rate
Expected rate of increase in compensation level of covered employees
In service mortality
Post retirement mortality
Amount recognised in the balance sheet consists of:
Particulars
Fair value of plan assets
Present value of defined benefit obligations
Net liability arising from defined benefit obligation
Year ended
31 March 2022
Year ended
31 March 2021
7.16%
2%-10%
6.90%
2%-10%
IALM (2012-14)
IALM (2012-14)
LIC(1996-98)
Ultimate
LIC(1996-98)
Ultimate
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
151
(228)
(77)
146
(188)
(42)
Amount recognised in the statement of profit and loss in respect of the Gratuity plan are as follows:
Particulars
Current service cost
Net interest cost
Components of defined benefit costs recognised in profit or loss
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
21
3
24
17
3
20
Amount recognised in the other comprehensive income in respect of the Gratuity plan are as follows:
Particulars
Re-measurement of the net defined benefit obligation:-
Actuarial losses/(gains) arising from demographic adjustments
Actuarial losses/(gains) arising from experience adjustments
Actuarial losses/ (gains) arising from changes in financial assumptions
Losses/(gains) on plan assets
Components of defined benefit costs recognised in other comprehensive income
Movement in present value of the Gratuity plan:
Particulars
Opening balance
Current service cost
Benefits paid
Interest cost
Actuarial losses/(gains) arising from changes in assumptions
Closing balance
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
1
(1)
22
1
23
-
(8)
-
2
(6)
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
188
21
(16)
13
22
228
189
17
(23)
13
(8)
188
386
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Movement in the fair value of Gratuity plan assets is as follows:
Particulars
Opening balance
Contributions received
Benefits paid
Re-measurement loss arising from return on plan assets
Interest income
Closing balance
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
146
12
(16)
(1)
10
151
145
16
(23)
(2)
10
146
The above plan assets have been invested in the qualified insurance policies.
The actual return on plan assets was ` 9 crore for the year ended 31 March 2022 and ` 8 crore for the year ended
31 March 2021.
The weighted average duration of the defined benefit obligation is 15.67 years and 16.36 years as at 31 March 2022
and 31 March 2021 respectively.
The Company expects to contribute ` 27 crore to the funded defined benefit plans in during the year ended
31 March 2023.
Sensitivity analysis
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
the reporting period while holding all other assumptions constant.
Increase/(Decrease) in defined benefit obligation
Discount rate
Increase by 0.50%
Decrease by 0.50%
Expected rate of increase in compensation level of covered employees
Increase by 0.50%
Decrease by 0.50%
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
(11)
11
11
(11)
(9)
9
9
(9)
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 benefit obligation liability recognised in the balance sheet.
Risk analysis
The Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined
benefit plans and management’s estimation of the impact of these risks are as follows:
Investment risk
The Gratuity plan is funded with the LIC and ICICI. The Company does not have any liberty to manage the fund
provided to LIC and ICICI. The present value of the defined benefit plan obligation is calculated using a discount rate
determined by reference to Government of India bonds. 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.
387
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
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.
# Code on Social Security, 2020
The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post‑employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India.
However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have
not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any
related impact in the period the Code becomes effective.
26 Employee benefits expense a, b
Particulars
Salaries and Wages
Share based payments (Refer note 27)
Contributions to provident and other funds (Refer Note 25)
Staff welfare expenses
Less: Cost allocated/directly booked in Joint ventures
Total
a) Net of recoveries of ` 52 crore (31 March 2021: ` 38 crore) from subsidiaries.
b) Net of capitalisation of ` 35 crore (31 March 2021: ` 46 crore).
27 Share based payments
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
1,216
29
88
90
(556)
867
1,241
36
85
71
(530)
903
The Company offers equity based and cash based option plans to its employees, officers and directors through the
Company’s stock option plan introduced in 2016 and Cairn India’s stock option plan now administered by the Company
pursuant to its merger with the Company.
The Vedanta Limited Employee Stock Option Scheme (ESOS) 2016
The Company introduced an Employee Stock Option Scheme 2016 (“ESOS”), which was approved by the Vedanta
Limited shareholders to provide equity settled incentive to all employees of the Company including subsidiary
companies. The ESOS scheme includes tenure based, business performance based (EBITDA) and market
performance based stock options. 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 option is measured by comparing Company’s performance
in terms of Total Shareholder Return (“TSR”) over the performance period with the performance of two group of
comparator companies (i.e. Indian and global comparator companies) defined in the scheme. The extent to which
an option vests will depend on the Company’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. The ESOS schemes are administered
through VESOS trust and have underlying Vedanta Limited equity shares.
Options granted during the year ended 31 March 2022 and year ended 31 March 2021 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, ECG & 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.
388
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
The details of share options for the year ended 31 March 2022 is presented below:
Financial Year
of Grant
Exercise Period
Options
outstanding
01 April
2021
Options
granted
during the
year
Options
transferred
(to)/ from
Parent/
fellow
subsidiaries
Options
forfeited/
lapsed
during the
year
Options
exercised
during the
year
Options
outstanding
31 March
2022
Options
exercisable
31 March
2022
2017-18
2018-19
2018-19
2019-20
2019-20
2020-21
2020-21
2021-22
2021-22
01 September
2020 - 28
February 2021
01 November
2021 - 30 April
2022
Cash settled
29 November
2022 - 28 May
2023
Cash settled
06 November
2023 - 05 May
2024
Cash settled
01 November
2024 - 30 April
2025
Cash settled
3,76,940
99,12,240
99,086
1,35,72,278
80,050
1,27,11,112
87,609
-
-
-
-
-
-
-
-
1,20,83,636
-
16,907
3,68,39,315 1,21,00,543
-
23,457
3,53,483
-
-
-
69,06,444
26,82,781
3,23,015
3,23,015
-
-
-
-
-
-
-
-
-
99,086
-
20,90,560
-
1,14,81,718
61,700
19,03,591
68,445
7,79,037
-
-
-
-
-
-
18,350
1,08,07,521
19,164
1,13,04,599
16,907
-
-
-
-
-
-
-
1,18,33,234
31,35,350
3,39,71,274
3,23,015
The details of share options for the year ended 31 March 2021 is presented below:
Financial Year
of Grant
Exercise Period
Options
outstanding
01 April
2020
Options
granted
during the
year
Options
transferred
(to)/ from
Parent/
fellow
subsidiaries
Options
forfeited/
lapsed
during the
year
Options
exercised
during the
year
Options
outstanding
31 March
2021
Options
exercisable
31 March
2021
2016-17
2017-18
2017-18
2018-19
2018-19
2019-20
2019-20
2020-21
15 December
2019 - 14 June
2020
01 September
2020 - 28
February 2021
16 October 2020
- 15 April 2021
01 November
2021 - 30 April
2022
10,68,516
70,27,925
11,126
1,14,20,046
Cash settled
1,78,326
29 November
2022 - 28 May
2023
1,58,81,330
Cash settled
7,35,370
-
-
-
-
-
-
-
06 November
2023 - 05 May
2024
-
1,27,11,112
2020-21
Cash settled
-
87,609
-
8,648
10,59,868
-
-
-
55,14,169
11,36,816
3,76,940
3,76,940
-
11,126
-
-
-
15,07,806
-
99,12,240
(15,360)
63,880
-
23,09,052
-
-
99,086
1,35,72,278
30,430
6,85,750
-
-
-
-
80,050
-
1,27,11,112
-
87,609
-
-
-
-
-
-
-
3,63,22,639 1,27,98,721
15,070
1,01,00,431
21,96,684
3,68,39,315
3,76,940
The fair value of all options has been determined at the date of grant of the option allowing for the effect of any
market‑based performance conditions. This fair value, adjusted by the Group’s estimate of the number of options that
will eventually vest as a result of non‑market conditions, is expensed over the vesting period.
389
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
Business Performance-Based and Sustained Individual Performance-Based Options:
The fair values of stock options following these types of vesting conditions have been estimating 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.
Total Shareholder Returns-Based Options:
The fair values of stock options following this type of vesting condition has been estimated using the Monte Carlo
Simulation method. This method has been used to simulate the expected share prices for Vedanta Limited and
the companies of the comparator group over the vesting period of the options. Based on the simulated prices, the
expected pay‑off at the end of the vesting period has been estimated and present valued to the valuation date.
Further, based on the simulated share prices and expected dividends the relative rank of Vedanta Limited’s share
price return has been estimated vis-à-vis the Indian and Global Group of the comparator group. This rank has been
used to estimate expected % vesting of the options under this type of vesting condition. The inputs to the monte
carlo simulation method include 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), expected dividend yield (estimated based on the actual dividend trend of the companies),
expected volatility (estimated based on the historical volatility of the return in the Company’s share prices for a
term commensurate with the expected tenure of the options). The exercise period of 6 months post the 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 options granted during the year ended
31 March 2022 and 31 March 2021 are set out below:
Particulars
Number of Options
Exercise Price
Share Price at the date of grant
Contractual Life
Expected Volatility
Expected option life
Expected dividends
Risk free interest rate
Expected annual forfeitures
Fair value per option granted (Non-market performance based)
Year ended 31 March 2022
Year ended 31 March 2021
ESOS 2021
ESOS 2020
Cash settled - 16,907
equity settled - 1,20,83,636
Cash settled - 87,609
equity settled - 1,27,11,112
` 1
` 302.15
3 years
49.67%
3 years
6.80%
5.02%
10% p.a
` 193.97
` 1
` 228.75
2 years and 7 months
49.3%
2 years and 7 months
6.80%
4.84%
10% p.a.
` 150.73
Weighted average share price at the date of exercise of stock options was ` 339.32 (31 March 2021: ` 131.08)
The weighted average remaining contractual life for the share options outstanding was years (31 March 2021: 2.03
years).
The Company recognised total expenses of ` 43 crore (31 March 2021: ` 58 crore) related to equity settled share
based payment transactions for the year ended 31 March 2022 out of which ` 15 crore (31 March 2021: ` 19 crore)
was recovered from group companies. The total expense recognised on account of cash settled share based plan
390
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
during the year ended 31 March 2022 is ` 2 crore (31 March 2021: ` 1 crore) and the carrying value of cash settled
share based compensation liability as at 31 March 2022 is ` 4 crore (31 March 2021: ` 1 crore).
Employee stock option plans of erstwhile Cairn India Limited:
The Company has provided CIESOP share based payment scheme to its employees.
CIESOP plan
There are no specific vesting conditions under CIESOP plan other than completion of the minimum service period of
3 years from the date of grant. Phantom options are exercisable proportionate to the period of service rendered by the
employee subject to completion of one year. The exercise period is 7 years from the vesting date.
Details of employees stock option plans is presented below
CIESOP Plan
Year ended 31 March 2022
Year ended 31 March 2021
Outstanding at the beginning of the year
Granted during the year
Expired during the year
Exercised during the year
Forfeited/cancelled during the year
Outstanding at the end of the year
Exercisable at the end of the year
Number of options Weighted average
exercise price in `
287.31
33,15,174
Number of options Weighted average
exercise price in `
288.2
53,41,740
Nil
Nil
4,83,085
17,94,448
10,37,641
10,37,641
NA
NA
286.85
287.70
286.85
287
Nil
10,82,229
Nil
9,44,337
33,15,174
33,15,174
NA
291.3
NA
288.0
287.3
287.3
Weighted average share price at the date of exercise of stock options was ` 375.89 (31 March 2021: NA)
Scheme
The details of exercise price for stock options outstanding as at
31 March 2022 are:
CIESOP Plan
The details of exercise price for stock options outstanding as at
31 March 2021 are:
CIESOP Plan
Range of exercise
price in `
Weighted average
remaining
contractual life of
options (in years)
Weighted average
exercise price in `
286.85
0.31
286.85
286.85-287.75
0.80
287.3
Out of the total expense of ` 30 crore (31 March 2021: ` 40 crore) pertaining to above options for the year ended
31 March 2022, the Company has capitalised ` 1 crore (31 March 2021: ` 4 crore) expense for the year ended
31 March 2022.
28 Revenue from operations
Particulars
Sale of products
Sale of services
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
62,692
109
62,801
37,019
101
37,120
a)
Revenue from sale of products and from sale of services for the year ended 31 March 2022 includes revenue from
contracts with customers of ` 62,781 crore (FY 2020-21: ` 36,859 crore) and a net loss on mark-to-market of ` 20
crore (FY 2020-21: gain of ` 261 crore) on account of gains/ losses relating to sales that were provisionally priced as
at the beginning of the year 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 the end of
the year.
b)
Majority of the Company’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.
391
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
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 Company has a right to receive consideration from its customers for all
completed performance obligations. Accordingly, the Company has availed the practical expedient available under
paragraph 121 of Ind AS 115 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 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.
29 Other operating income
Particulars
Export incentives
Scrap sales
Miscellaneous income
Total
30 Other Income
Particulars
Net gain on investments measured at FVTPL
Net gain on sale of long-term investments (Refer Note 39)
Interest income from investments measured at FVTPL
Interest income from financial assets at amortised cost
- Bank Deposits
- Loans
- Others
Interest on income tax refund
Dividend income from
- financial assets at FVOCI
-
investment in Subsidiaries
Profit on sale of assets
Deferred government grant income
Miscellaneous income
Total
31 Changes in inventories of finished goods and work-in-progress*
Particulars
Opening Stock:
Finished Goods
Work in progess
Total
Add/(Less): Foreign exchange translation difference
Less: Closing Stock
Finished Goods
Work-in-progess
Total
Changes in Inventory
392
Year ended
31 March 2022
244
130
102
476
Year ended
31 March 2022
1
(` in crore)
Year ended
31 March 2021
173
55
92
320
(` in crore)
Year ended
31 March 2021
93
16
-
78
73
69
-
1
7,828
129
78
74
8,347
-
40
68
81
123
47
2
10,369
-
75
50
10,948
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
548
1,681
2,229
2
385
3,018
3,403
(1,172)
465
1,836
2,301
(2)
548
1,681
2,229
70
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
32 Finance cost
Particulars
Interest expense on financial liabilities at amortised cost b
Other finance costs
Net interest on defined benefit arrangement
Unwinding of discount on provisions (Refer note 23)
Less: Allocated to Joint venture
Less: Capitalisation of finance costs a (Refer note 5)
Total
Year ended
31 March 2022
3,123
(` in crore)
Year ended
31 March 2021
3,293
265
3
24
(2)
(267)
3,146
110
3
23
(3)
(233)
3,193
a)
Interest rate of 7.87% (31 March 2021: 7.71%) was used to determine the amount of general borrowing costs eligible
for capitalisation in respect of qualifying asset for the year ended 31 March 2022.
b)
Includes interest expense on lease liabilities for the year ended 31 March 2022 is ` 7 crore (31 March 2021: ` 14 crore)..
33 Other expenses*
Particulars
Cess on crude oil
Royalty
Consumption of stores and spare parts
Repairs to plant and equipment
Carriage
Mine Expenses
Net loss on foreign currency transactions and translations
Other Selling Expenses
Repairs to building
Insurance
Repairs others
Loss on sale/discard of property, plant and equipment (net)
Rent d
Rates and taxes
Exploration costs written off (Refer note 5)
Directors sitting fees and commission
Remuneration to Auditors a
Provision for doubtful advances/ expected credit loss
Bad debts written off
Share of expenses in producing oil & gas
Donation b
Miscellaneous expenses c
Less: Cost allocated/directly booked in Joint ventures
Total
* Net of recoveries of ` 79 crore (31 March 2021: ` 57 crore) from subsidiaries.
(a) Remuneration to auditors comprises:
Particulars
Payment to auditors
For statutory audit (including quarterly reviews)
For overseas reporting
For certification and other attest services
For other services
For reimbursement of expenses
Total
Year ended
31 March 2022
1,568
375
908
512
1,359
257
134
1
67
98
88
-
17
8
-
4
11
233
6
1,472
130
3,134
(331)
10,051
(` in crore)
Year ended
31 March 2021
906
246
710
384
558
256
281
2
43
80
76
28
26
8
6
5
15
125
4
1,149
12
2,205
(275)
6,850
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
6
4
0
1
0
11
7
5
3
0
0
15
393
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
(b)
Includes contributions through electoral bonds of ` 123 crore (31 March 2021: Nil).
(c)
Includes Corporate social responsibility expenses of ` 138 crore (31 March 2021: ` 39 crore) as detailed in note 42(a).
(d) Rent represents expense on short‑term/low value leases.
34 Exceptional items
Particulars
Property, plant and equipment,
exploration intangible assets
under development, capital work-
in-progress and other assets
(impaired)/ reversal or (written off)/
written back in:
-Oil & Gas
1) Exploration wells written off a
2) Reversal of previously recorded
impairment b
- Aluminium c
- Unallocated f
Provision for legal disputes
(including change in law), force
majeure and similar incidences in:
- Copper d
- Aluminium e
Total
Year ended 31 March 2022
Year ended 31 March 2021
Exceptional
items
Tax effect of
Exceptional
items
Exceptional
items after tax
Exceptional
items
Tax effect of
Exceptional
items
Exceptional
items after tax
(` in crore)
(1,412)
1,370
(125)
(24)
(54)
(73)
(318)
493
(479)
44
8
19
26
111
(919)
891
(81)
(16)
(35)
(47)
(207)
-
-
(181)
-
(51)
-
(232)
-
-
63
-
18
-
81
-
-
(118)
-
(33)
-
(151)
(a) During the year, the Company has continued with exploration and appraisal work programme in its PSC block
RJON‑90/1 block and RSC blocks awarded under OALP (Open Acreage Licensing Policy). Based on the outcome
of such exploration and appraisal activities, an amount of ` 1,412 crore towards unsuccessful exploration cost has
been charged off to the statement of profit and loss during the year, as these have proven to be either technically or
commercially unviable.
(b) During the year ended 31 March 2022, the Company has recognised an impairment reversal of ` 1,370 crore on its
assets in the oil and gas segment comprising:
i)
Impairment reversal of ` 1,254 crore relating to Rajasthan oil and gas block (“CGU”) mainly due to increase in
crude price forecast. Of this reversal, ` 850 crore impairment reversal has been recorded against oil and gas
producing facilities and ` 404 crore impairment charge has been recorded against exploration intangible assets
under development.
The recoverable amount of the Company’s share in Rajasthan Oil and Gas cash generating unit “RJ CGU” was
determined to be ` 5,406 crore (US$ 715 million) as at 31 March 2022.
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 Company’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 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$ 86 per barrel
394
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
for the next one year (and tapers down to long‑term nominal price of US$ 68 per barrel three years thereafter
derived from a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate
of 2% per annum. The cash flows are discounted using the post‑tax nominal discount rate of 9.88% 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 Company,
change in crude price assumptions by US$ 1/bbl and changes to discount rate by 1% would lead to a change in
recoverable value by ` 102 crore (US$ 13 million) and ` 159 crore (US$ 21 million) respectively.
ii)
Impairment reversal of ` 116 crore relating to KG‑ONN‑2003/1 CGU mainly due to increase in crude price forecast
and increase in recoverable reserves.
The recoverable amount of the Company’s share in this CGU was determined to be ` 208 crore (US$ 27 million)
based on fair value less cost of disposal approach as described in above paragraph. Discounted cash flow
analysis used to calculate fair value less costs of disposal uses assumption for short-term oil price of US$
86 per barrel for the next one year and tapers down to long‑term nominal price of US$ 68 per barrel three
years thereafter derived from a consensus of various analyst recommendations. Thereafter, these have been
escalated at a rate of 2% per annum. The cash flows are discounted using the post‑tax nominal discount rate of
10.63%. The sensitivities around change in crude price assumptions and discount rate are not material to the
financial statements.
(c)
In relation to a mine in Aluminium business of the Company, the Company had deposited ` 125 crore with the
Government of India. Thereafter, the MoEF&CC and the Hon. Supreme Court declared the mining project inoperable
on environmental grounds. Later, in 2017, the mining license lapsed. Thereafter, the Company has sent several
communications to the authorities requesting a refund of the amount paid. Although several positive deliberations
happened, the Company is yet to receive the amount. Accordingly, the deposit has been fully provided for during the
current year.
(d) A provisional liquidator (‘PL’) was appointed to manage the affairs of Konkola Copper Mines plc (KCM) on 21 May
2019, after ZCCM Investments Holdings Plc (ZCCM‑IH), an entity majority owned by the Government of Zambia and a
20.6% shareholder in KCM, filed a winding up petition against KCM. KCM’s majority shareholder, Vedanta Resources
Holdings Limited (VRHL), and its parent company, Vedanta Resources Limited (VRL), are contesting the winding up
petition in the Zambian courts and have also commenced arbitration against ZCCM‑IH, consistent with their position
that arbitration is the agreed dispute resolution process, together with an application to the South African courts to
stay the winding up proceedings consistent with the agreement to arbitrate.
Meanwhile, KCM has not been supplying goods to the Company and/ or its subsidiaries, which it was supposed to as
per the terms of the advance. The Company has recognised provisions for expected credit losses of ` 54 crore during
the year (31 March 2021: ` 51 crore). As of 31 March 2022, the Company carries provisions of ` 105 crore (31 March
2021: ` 51 crore). Consequently, receivables from KCM as at 31 March 2022 are Nil (31 March 2021: ` 51 crore).
(e)
In December 2021, MoEF&CC has notified guidelines for thermal power plants for disposal of fly ash and bottom ash
produced during power generation process. Effective 01 April 2022, the notification has introduced a three‑year cycle
to achieve average ash utilisation of 100 per cent. The first three‑year cycle is extendable by another one year or two
years where ash utilisation percentage is in the range of 60-80 per cent or less than 60 per cent, respectively. Further,
unutilised accumulated ash, i.e. legacy fly ash stored with such power plants prior to the date of this notification
is required to be utilised fully over a ten year period with minimum twenty percent, thirty percent and fifty percent
utilisation of annual ash generation in year 1, year 2 and years 3-10 respectively. Such provisions are not applicable
where ash pond or dyke has stabilised and the reclamation has taken place with greenbelt or plantation. The Company
has performed detailed evaluations for its obligations under this notification and has recorded ` 73 crore as an
exceptional item for the year ended 31 March 2022, towards estimated costs of legacy fly ash utilisation including
reclamation costs.
(f) During the year ended 31 March 2022, the Company has recognised a loss of ` 24 crore relating to certain items of
capital work‑in‑progress at one of its closed unit in Gujarat, which are no longer expected to be used.
395
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
35 Tax expense
(a) Tax charge/(credit) recognised in profit or loss (including on exceptional items)
Particulars
Current tax:
Current tax on profit for the year
Current tax – special items
Total Current Tax (a)
Deferred tax:
Origination and reversal of temporary differences
Charge in respect of exceptional items (Refer Note 34)
Total Deferred Tax (b)
Net tax charge/(benefit) (a+b)
Profit/(Loss) before tax
Effective income tax rate (%)
Tax expense/(benefit)
Particulars
Tax effect on exceptional items
Tax expense/(benefit) - others
Net tax charge/ (benefit)
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
3,505
(281)
3,224
(1,023)
170
(853)
2,371
19,616
12%
104
104
3,138
(81)
3,057
3,161
13,664
23%
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
(111)
2,482
2,371
(81)
3,242
3,161
(b)
A reconciliation of income tax expense/(credit) applicable to profit/(loss) before tax at the Indian statutory income tax
rate to recognised income tax expense for the year indicated are as follows:
Particulars
Profit/(Loss) before tax
Indian statutory income tax rate
Tax at statutory income tax rate
Non-taxable income
Deduction u/s 80M
Tax holidays
Change in deferred tax balances due to change in tax law
Other permanent differences
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
19,616
34.944%
6,855
(4)
(2,736)
(1,702)
(71)
29
2,371
13,664
34.944%
4,775
(20)
(1,173)
(3)
(410)
(8)
3,161
Certain businesses of the Company are eligible for specified tax incentives which are included in the table above as tax
holidays and similar exemptions. These are briefly described as under:
The location based exemption: SEZ Operations
In order to boost industrial development and exports, provided certain conditions are met, profits of undertaking
located in Special Economic Zone (‘SEZ’) may benefit from tax holiday. Such tax holiday works to exempt 100% of the
profits for the first five years from the commencement of the tax holiday, 50% of profits for five years thereafter and
50% of the profits for further five years provided the amount allowable in respect of deduction is credited to Special
Economic Zone Re-Investment Reserve account. However, such undertaking would continue to be subject to the
Minimum Alternative tax (‘MAT’).
The Company has setup SEZ Operations in its aluminium division where such benefit has been drawn.
396
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Sectoral Benefit – Power Plants
To encourage the establishment of certain power plants, provided certain conditions are met, tax incentives exist to
exempt 100% of profits and gains for any ten consecutive years within the 15 years period following commencement
of the power plant’s operation subject to certain conditions under Section 80IA of the Income tax Act, 1961. However,
such undertakings generating power would continue to be subject to the MAT provisions.
The Company has set up 80IA operations at Aluminium division and iron ore division where such benefit has
been drawn.
(c) Deferred tax assets/liabilities
The Company 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, net of unused tax credit in the form of MAT
credits carried forward. Significant components of deferred tax (assets) & liabilities recognised in the balance sheet
are as follows:
Significant components of deferred tax (assets) and liabilities recognised in the Balance Sheet are as follows :
For the year ended 31 March 2022
Significant components
of Deferred tax (assets) &
liabilities
Opening
balance as at
01 April 2021
Charged /
(credited) to
statement of
profit or loss
Charged /
(credited)
to other
comprehensive
income
Property, Plant and
Equipment
Voluntary retirement
scheme
Employee benefits
Fair valuation of derivative
asset/liability
Fair valuation of other
asset/liability
MAT credit entitlement
Other temporary
differences
Total
3,848
471
-
15
(23)
(36)
1
(9)
-
(0)
(3,701)
(436)
(1,122)
(194)
(333)
(853)
For the year ended 31 March 2021
-
-
(8)
0
-
-
75
66
Significant components
of Deferred tax (assets) &
liabilities
Opening
balance as at
01 April 2020
Charged /
(credited) to
statement of
profit and loss
Charged /
(credited)
to other
comprehensive
income
Property, Plant and
Equipment
Voluntary retirement
scheme
Employee benefits
Fair valuation of derivative
asset/liability
Fair valuation of other
asset/liability
Unused tax asset
MAT credit entitlement
Unabsorbed depreciation
and tax losses
Other temporary
differences
Total
4,143
(308)
(1)
(21)
(16)
85
(3,600)
1
2
-
(121)
(101)
(3,652)
3,652
(402)
(68)
(3,464)
3,057
-
-
2
(7)
-
-
-
34
29
Exchange
difference
transferred
to translation
of foreign
operation
7
-
-
-
-
-
-
7
Exchange
difference
transferred
to translation
of foreign
operation
13
-
-
-
-
-
-
-
(` in crore)
Charged /
(credited) to
equity
Closing
balance as at
31 March 2022
-
-
10
-
-
(16)
-
4,326
1
7
(23)
(36)
(4,839)
(555)
(6)
(1,118)
(` in crore)
Charged /
(credited) to
equity
Closing
balance as at
31 March 2021
-
-
32
-
-
-
-
-
3,848
-
15
(23)
(36)
(3,701)
-
(436)
(333)
397
13
32
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Recognition of deferred tax assets on MAT credit entitlement is based on the Company’s present estimates and
business plans as per which the same is expected to be utilised within the stipulated fifteen year period from the date
of origination. (Refer Note 3(c)(A)(ii))
In addition to the above, the Company has not recognised deferred tax asset on deductible temporary differences
aggregating to ` 3,393 crore (31 March 2021: ` 3,393 crore) on account of impairment of investment in subsidiaries as
the realisation of the same is not reasonably certain.
(d) Non‑current tax assets
Non‑current tax assets of ` 1,800 crore and ` 1,787 crore as at 31 March 2022 and 31 March 2021 respectively
mainly represents income tax receivable from Indian tax authorities by Vedanta Limited 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 including tax holiday claim.
36 Earnings per equity share (EPS)
Particulars
Profit after tax attributable to equity share holders for Basic and Diluted EPS
Weighted Average no. of equity shares outstanding during the year for Basic and Dilutive
EPS (in crore)
Basic and Diluted Earnings per share (in `)
Nominal value per share (in `)
37 Dividends
Particulars
Amounts recognised as distributions to equity shareholders:
Interim dividend (31 March 2022: ` 13.00/-, ` 13.50/- and ` 18.50/- per share, 31 March
2021: ` 9.50/- per share)
Total
(` in crore, except otherwise stated)
Year ended
31 March 2022
17,245
372
Year ended
31 March 2021
10,503
372
46.36
1.00
28.23
1.00
Year ended
31 March 2022
(` in crore)
Year ended
31 March 2021
16,689
16,689
3,519
3,519
Subsequent to the balance sheet date, the Board of Directors of the Company in their meeting held on 28 April 2022 have
approved first interim dividend of ` 31.50 per equity share, i.e. 3,150% on face value of ` 1/- per equity share for FY 2022-23
amounting to ` 11,710 crore.
38 Commitments, contingencies and guarantees
A. Commitments
The Company has a number of continuing operational and financial 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.
Estimated amount of contracts remaining to be executed on capital accounts and not provided for:
Particulars
Oil & Gas sector
Cairn India
Aluminium sector
Lanjigarh Refinery (Phase II)
Jharsuguda 1.25 MTPA smelter
Copper sector
Tuticorin Smelter 400 KTPA*
Others
Total
*currently contracts are under suspension under the force majeure clause as per the contract.
398
As at
31 March 2022
(` in crore)
As at
31 March 2021
1,211
2,861
1,577
3,051
929
9,629
855
1,188
463
2,995
705
6,206
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Committed work programme (Other than capital commitment)
Particulars
Oil & Gas sector
(` in crore)
As at
31 March 2022
As at
31 March 2021
Cairn India (OALP – New Oil and Gas blocks)
5,615
5,625
Other Commitments
The Power Division of the Company has signed a long‑term power purchase agreement (PPA) with GRIDCO Limited
for supply of 25% of power generated from the power station with additional right to purchase power (5%/7%) at
variable cost as per the conditions referred to in PPA. The PPA has a tenure of twenty five years, expiring in FY 2037.
However, the Company has received an order from 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.
Based on the OERC order dated 19 February 2022, the Company has been directed to supply power to GRIDCO from
19 February 2022 to 31 March 2022. The Company resumed supplying power to GRIDCO from 01 April 2022 as per
GRIDCO requisition of power.
B. Guarantees
The aggregate amount of indemnities and other guarantees on which the Company does not expect any material
losses was ` 17,045 crore (31 March 2021: `16,355 crore). The Company has given guarantees in the normal course of
business as stated below:
a)
b)
Guarantees and bonds advanced to the customs authorities in India of ` 470 crore relating to the export and
payment of import duties on purchases of raw material and capital goods (31 March 2021: ` 632 crore).
Guarantees issued for Company’s share of minimum work programme commitments of ` 2,881 crore (31 March
2021: ` 2,889 crore).
c) Guarantees of ` 61 crore (31 March 2021: ` 79 crore) issued under bid bond.
d)
e)
f)
Bank guarantees of ` 115 crore (31 March 2021: ` 115 crore) has been provided by the Company on behalf of
Volcan Investments Limited to Income tax department, India as a collateral in respect of certain tax disputes.
The Company has given corporate guarantees, bank guarantees and also assigned its bank limits to other group
companies primarily in respect of certain short-term and long-term borrowings amounting to ` 11,631 crore (31
March 2021: ` 11,016 crore). Refer Note 39.
Other guarantees worth ` 1,888 crore (31 March 2021: ` 1,624 crore) 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 Company does not
anticipate any liability on these guarantees.
C. Export Obligations
The Company has export obligations of ` 831 crore (31 March 2021: ` 285 crore) 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 laid down by the Government of India.
In the event of the Company’s inability to meet its obligations, the Company’s liability would be ` 192 crore (31 March
2021: ` 46 crore) reduced in proportion to actual exports, plus applicable interest.
The Company has given bonds of ` 224 crore (31 March 2021: ` 50 crore) to custom authorities against these
export obligations.
D. Contingent Liabilities
The Company discloses the following legal and tax cases as contingent liabilities:
a) Ravva Joint Operations arbitration proceedings
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).
399
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
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 Company’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.
The Company 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 Company 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, Company would be liable for approximately ` 484 crore (US$ 64 million)
plus interest. (31 March 2021: ` 469 crore (US$ 64 million) plus interest).
b) Proceedings related to the imposition of entry tax
The Company challenged the constitutional validity of the local statutes and related notifications in the states of
Odisha and Rajasthan pertaining to the levy of entry tax on the entry of goods brought into the respective states
from outside. Post some contradictory orders of High Courts across India adjudicating on similar challenges, the
Supreme Court referred the matters to a nine judge bench. Post 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 heard the matters and 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 Company
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. The Company has amended its appeal (writ petitions) in Odisha 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 Company 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 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 including interest and penalty against the Company (net of provisions made) are ` 774 crore
(31 March 2021: ` 642 crore). Consequential interest after the date of order amounts to ` 530 crore (31 March 2021:
` 501 crore).
c) Miscellaneous disputes – Income tax
The Company is involved in various tax disputes amounting to ` 543 crore (31 March, 2021: ` 528 crore) relating
to income tax for the periods for which initial assessments have been completed. These mainly relate to the
disallowance of tax holiday for 100% Export Oriented Undertaking under Section 10B of the Income Tax Act,
1961, disallowance of tax holiday benefit on production of gas under Section 80IB of the Income Tax Act, 1961, on
account of depreciation disallowances under the Income Tax Act and interest thereon which are pending at various
appellate levels.
The Company believes that these disallowances are not tenable and accordingly no provision is considered necessary.
400
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
d) Miscellaneous disputes – Others
The Company 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 Company’s returns or
other claims.
The approximate value of claims (excluding the items as set out separately above) against the Company totals to
` 2,500 crore (31 March 2021: ` 2,596 crore).
Based on evaluations of the matters and legal advice obtained, the Company believes that it has strong merits in its
favour. Accordingly, no provision is considered at this stage.
Except as described above, there are no pending litigations which the Company believes could reasonably be expected to
have a material adverse effect on the results of operations, cash flows or the financial position of the Company.
39 Related Party Disclosures
List of related parties and relationships
A. Entities controlling the Company (Holding Companies)
Volcan Investments Limited
Volcan Investments Cyprus Limited
Intermediate Holding Companies
Vedanta Resources Limited
Finsider International Company Limited (a)
Richter Holdings Limited (a)
Twin Star Holdings Limited (a)
Vedanta Resources Cyprus Limited (a)
Vedanta Resources Finance Limited (a)
Vedanta Resources Holdings Limited (a)
Welter Trading Limited (a)
Westglobe Limited (a)
Vedanta Holdings Mauritius II Limited (a)
Vedanta Holdings Mauritius Limited (a)
Vedanta Holdings Jersey Limited (a)
Vedanta Netherlands Investments BV (a)
Vedanta UK Investments Limited (a)
B. Fellow Subsidiaries
(with whom transactions have taken place)
Sterlite Iron and Steel Company Limited
Sterlite Technologies Limited
Sterlite Power Transmission limited
Twin Star Technologies Limited
C. Associates and Joint ventures (Refer note 41)
(With whom transaction have taken place)
Gaurav Overseas Private Limited
D. Subsidiaries
Amica Guesthouse (Proprietary) Limited
AvanStrate Inc, Japan
AvanStrate Korea Inc, Korea
AvanStrate Taiwan Inc, Taiwan
Bharat Aluminium Company Limited
Black Mountain Mining (Proprietary) Limited
Bloom Fountain Limited
Cairn Energy Gujarat Block 1 Limited
Cairn Energy Hydrocarbons Limited
Cairn India Holdings Limited
Cairn Lanka (Private) Limited
Cairn South Africa (Pty) Limited (b)
CIG Mauritius Holdings Private Limited (b)
CIG Mauritius Private Limited (b)
Copper Mines of Tasmania (Proprietary) Limited
Desai Cement Company Private Limited (c)
ESL Steel Limited
Fujairah Gold FZC
Goa Sea Port Private Limited
Hindustan Zinc Limited
Killoran Lisheen Finance Limited
Killoran Lisheen Mining Limited
Lakomasko BV
Lisheen Milling Limited
Lisheen Mine Partnership
Malco Energy Limited
Maritime Ventures Private Limited
Monte Cello BV
Namzinc (Proprietary) Limited
Paradip Multi Cargo Berth Private Limited
Sesa Mining Corporation Limited
Sesa Resources Limited
Skorpion Mining Company (Proprietary) Limited
Skorpion Zinc (Proprietary) Limited
Sterlite Ports Limited
Talwandi Sabo Power Limited
Thalanga Copper Mines (Proprietary) Limited
THL Zinc Holding BV
THL Zinc Limited
THL Zinc Ventures Limited
THL Zinc Namibia Holdings (Proprietary) Limited
Vedanta Exploration Ireland Limited
401
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
Vedanta Lisheen Holdings Limited
Vedanta Lisheen Mining Limited
Vizag General Cargo Berth Private Limited
Western Cluster Limited
Ferro Alloys Corporation Limited
FACOR Power Limited
Facor Realty and Infrastructure Limited
E. Post retirement benefit plans
Sesa Group Employees Provident Fund
Sesa Group Employees Gratuity Fund and Sesa Group
Executives Gratuity Fund
Sesa Group Executives Superannuation Scheme Fund
F. Others (with whom transactions have taken place)
Enterprises over which key management personnel/
their relatives have control or significant influence.
Vedanta Foundation
Sesa Community Development Foundation
Vedanta Limited ESOS Trust
Cairn Foundation
Runaya Refining LLP
Janhit Electoral Trust
Caitlyn India Private Limited
(a) These entities are subsidiary companies of VRL and VRL through its subsidiaries holds 69.68% in Vedanta Limited.
(b) Liquidated during the current year.
(c) Acquired during the current year.
Ultimate Controlling party
Vedanta Limited is a majority‑owned and controlled subsidiary of Vedanta Resources Limited (‘VRL’). Volcan Investments
Limited (‘Volcan’) and its wholly owned subsidiary together hold 100 % of the share capital and 100 % of the voting rights of
VRL. Volcan is 100 % beneficially owned and controlled by the Anil Agarwal Discretionary Trust (‘Trust’). Volcan Investments
Limited, Volcan Investments Cyprus Limited and other intermediate holding companies except VRL do not produce Group
financial statements.
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”) with
the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by
or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding
Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or
entities identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
I)
For the period ended 31 March 2022.
Particulars
Income :
Entities
controlling the
Company/ Fellow
subsidiaries
Associates
Subsidiaries
Others
Total
(` in crore)
Revenue from operations
1,176
(i)
(ii)
a)
b)
c)
d)
Other Income
Interest and guarantee commission
Dividend income
Outsourcing service fees
Miscellaneous income
Expenditure and other transactions:
(i)
Purchase of goods/services
(ii)
Stock options expenses/(recovery)
(iii)
Allocation of Corporate Expenses
11
1
4
-
75
-
-
(iv) Management and Brand Fees paid/
1,294
(recovered) c
(v)
Reimbursement for other expenses
(net of recovery)
(vi)
Corporate Social Responsibility
expenditure/ Donation
(0)
-
402
-
-
-
-
-
-
-
-
-
-
-
1,831
103
7,828
-
16
682
(15)
131
-
(45)
-
2
-
-
-
1
46
-
-
-
(0)
15
3,009
114
7,829
4
17
803
(15)
131
1,294
(45)
15
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Associates
Subsidiaries
Others
Total
(` in crore)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
0
-
-
-
9
-
-
-
-
-
-
-
(96)
-
-
-
-
-
51
7
5,106
4,524
-
383
567
(0)
(200)
27
518
224
9
34
11,567
62
-
-
8
-
6
0
1
4
1
-
-
-
-
-
-
99
-
-
-
178
2
17
20
-
-
3
0
8
(96)
11,352
0
1
4
1
178
7
5,106
4,525
-
383
666
0
(200)
37
696
380
74
177
11,567
177
3
0
-
-
-
-
-
-
1
-
0
-
-
-
10
-
145
48
123
-
115
-
-
Particulars
(vii) Contribution to Post retirement
employee benefit trust
(viii) Sale/ (Purchase) of fixed assets
(ix)
Dividend paid
Entities
controlling the
Company/ Fellow
subsidiaries
-
-
To Holding companies
11,346
(xi) Interest and guarantee commission
127
-
-
-
To key management personnel
To relatives of key management
personnel
(x) Commission/Sitting Fees
-
-
To Independent directors
To other key management
personnel
expense d
(xii) Miscellaneous expenses
Transactions during the year:
a) Financial guarantees given
b) Financial guarantees relinquished
c) Banking Limits assigned/utilised/
renewed/(relinquished) to/for group
companies
d)
e)
f)
f)
Loans given during the year
Loans repaid during the year a
Investments made/(redeemed) during
the year
Short-term borrowings taken/(repaid)
during the year
Balances as at period end:
Trade Receivables
Loans given
Other receivables and advances
Trade Payables
Other payables
Financial guarantee given
Banking Limits assigned/utilised to/for
group companies b
Sitting fee, Commission and
consultancy fees payable
-
-
To Independent directors
To key management personnel
a)
b)
c)
d)
e)
f)
g)
h)
a)
b)
c)
The Company reduced its loan receivable from Vedanta Limited ESOS Trust by ` 99 Crore on exercise of stock options
by employees during the year ended 31 March 2022.
Bank guarantee given by Vedanta Limited on behalf of Volcan Investments Limited in favour of Income Tax
department, India as collateral in respect of certain tax disputes of Volcan Investments Limited.
In 2017, the Company had executed a three year brand license agreement (“the Agreement”) with Vedanta Resources
Ltd (‘VRL’) for the use of brand ‘Vedanta’ which envisaged payment of brand fee to VRL at 0.75% of turnover of the
Company. During the year ended 31 March 2021, the Agreement was renewed between the parties and certain
additional services were also agreed to be provided by VRL. Based on updated benchmarking analysis conducted
by independent experts, the brand and strategic service fee was re‑negotiated at 2% of turnover of the Company.
403
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Accordingly, the Company has recorded an expense of ` 1,236 crore (31 March 2021: ` 728 crore) for the year ended
31 March 2022. During the current year, the Agreement was reviewed to extend for a further period of fifteen years.
The Company usually pays such fee in advance at the beginning of the year, based on its estimated annual turnover.
d)
Vedanta Resources Limited (“VRL”), as a parent company, has provided financial and performance guarantee to the
Government of India for erstwhile Cairn India group’s (“Cairn”) obligations under the Production Sharing Contract
(‘PSC’) provided for onshore block RJ‑ON‑90/1, for making available financial resources equivalent to Cairn’s share for
its obligations under the PSC, personnel and technical services in accordance with industry practices and any other
resources in case Cairn is unable to fulfil its obligations under the PSC.
During the year ended 31 March 2021, the Board of Directors of the Company approved a consideration to be paid for
this guarantee at an annual charge of 1.2% of net exploration and development spend, subject to a minimum annual
fee of ` 37 Crore ($5 million), applicable from April 2020 onwards to be paid in ratio of participating interests held
equally by the Company and its step‑down subsidiary, Cairn Energy Hydrocarbons Ltd (“CEHL”).
Similarly, VRL has also provided financial and performance guarantee to the Government of India for the Company’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. During the year ended 31 March 2021, the Board of Directors
of the Company approved a consideration to be paid for this guarantee consisting of one‑time charge of ` 183 crore
($25 million), i.e., 2.5% of the total estimated cost of initial exploration phase of approx. ` 7,330 Crore ($1 billion) and an
annual charge of 1% of spend, subject to a minimum fee of ` 74 Crore ($10 million) and maximum fee of ` 148 Crore
($20 million) per annum.”
Accordingly, the Company has recorded a guarantee commission expense of ` 127 Crore ($17 million) (31 March
2021: ` 133 crore) for the year ended 31 March 2022 and ` 126 Crore ($17 million) (31 March 2021: ` 161 Crore) is
outstanding as a pre-payment.
e)
During March 2022, the Company has executed a Power Delivery Agreement (‘PDA’) with Serentica Renewables India
3 Private Limited (‘Serentica’), a fellow subsidiary created by Volcan Investments Limited for building a renewable
energy power project (“the Project”) of approximately 180 MW, on a group captive basis. Under the terms of the PDA,
the Company is expected to infuse equity of approximately ` 230 Crore for twenty six percent stake in Serentica for
procuring renewable power over twenty five years from the date of commissioning of the Project. No significant
project‑related activities have been carried out subsequent to signing of the PDA.
Remuneration of key management personnel
Particulars
Short-term employee benefits
Post employment benefits f
Share based payments
(` in crore)
For the year ended
31 March 2022
34
1
1
36
f)
Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all
the employees together.
I)
For the year ended 31 March 2021
Particulars
Income:
(i)
Revenue from operations
(ii) Other Income
a)
b)
c)
Interest and guarantee commission
Dividend income
Outsourcing service fees
Entities
controlling the
company/Fellow
Subsidiaries
(` in crore)
Subsidiaries
Others
Total
660
14
2
4
792
113
10,369
-
-
-
-
-
1,452
127
10,371
4
404
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Particulars
Expenditure and other transactions:
(i)
Purchase of goods/services
(ii) Stock options expenses/(recovery)
(iii) Allocation of Corporate Expenses
(iv) Management and Brand Fees paid/(recovered)
(v)
(Recovery of)/ Reimbursement to/for other
expenses
(vi) Corporate Social Responsibility expenditure/
Donation
(vii) Contribution to Post retirement employee
benefit trust
(viii) Sale/(Purchase) of fixed assets
(ix) Dividend paid.
-
-
-
To Holding companies
To key management personnel
To relatives of key management personnel
(x) Commission/Sitting Fees
-
-
To Independent directors
To key management personnel
Transactions during the year:
a)
b)
c)
d)
e)
f)
g)
h)
Financial guarantees given
Financial guarantees relinquished
Banking Limits assigned/utilised/renewed/
(relinquished) to/for group companies
Loans given during the year
Loans repaid during the year a
Short-term borrowings taken/(repaid) during
the year
Sale of investment to Hindustan Zinc Limited
Security deposit received (net of repayment)
Balances as at year end:
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Trade Receivables
Loans given
Other receivables and advances
Trade Payables
Other payables
Other Current liabilities- Advance from
Customers
Financial guarantee given
Banking Limits assigned/utilised to/for group
companies b
Commission and consultancy fees payable to
KMP and their relatives
Short term borrowings
Entities
controlling the
company/Fellow
Subsidiaries
(` in crore)
Subsidiaries
Others
Total
76
-
-
766
(13)
-
-
-
1,770
-
-
-
-
1
-
-
0
-
-
-
-
46
-
166
54
96
3
1
115
-
-
592
(21)
96
-
96
-
-
(0)
-
-
-
-
-
2,393
2,030
(25)
601
(1,672)
200
1,407
1,170
17
702
220
27
1,307
-
10,953
62
-
200
28
-
-
-
(0)
15
7
-
0
0
0
3
1
-
-
-
-
(57)
-
-
-
-
277
2
15
15
-
-
-
5
-
697
(21)
96
766
83
15
7
(0)
1,770
0
0
3
1
2,394
2,030
(25)
601
(1,729)
200
1,407
1,170
63
979
388
96
1,418
3
10,954
177
5
200
(a) The Company reduced its loan receivable from Vedanta Limited ESOS Trust by ` 57 Crore on exercise of stock options by employees during
the year ended 31 March 2021.
(b) Bank guarantee given by Vedanta Limited on behalf of Volcan Investments Limited in favour of Income Tax department, India as collateral in
respect of certain tax disputes of Volcan Investments Limited.
(c) During the previous year ended 31 March 2021, the Company had renewed loan provided to Sterlite Iron and Steel Company Limited to
finance project in earlier years. The loan balance as at 31 March 2022 was ` 5 Crore (31 March 2021: ` 5 Crore). The loan is unsecured in
nature and carries an interest rate of 7.15% per annum. The loan was due in March 2022 and the agreement was renewed for a further period
of 12 months. During the previous year, the Company had recognised a provision of ` 16 Crore (Including accrued interest of ` 11 Crore)
against said loan ` 5 Crore (31 March 2021: ` 5 Crore).
405
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Remuneration of key management personnel
Particulars
Short-term employee benefits
Post employment benefits d
Share based payments
(` in crore)
For the year ended
31 March 2021
27
1
0
28
d) Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all the employees together.
There are no outstanding debts or loans due from directors or other officers (as defined under Section 2(59) of the
Companies Act, 2013) of the Company.
40 Subsequent events
There are no other material adjusting or non‑adjusting subsequent events, except as already disclosed.
41 Interest in other entities
a) Subsidiaries
The Group consists of a parent company, Vedanta Limited, incorporated in India and a number of subsidiaries held directly
and indirectly by the Group which operate and are incorporated around the world. Following are the details of shareholdings
in the subsidiaries.
Subsidiaries
Principal activities
Country of
Incorporation
Immediate holding
company
Australia
Cairn India Holdings
Limited
The Company’s/Immediate
holding company’s percentage
holding (in %)
31 March 2022
31 March 2021
-
-
Australia
Monte Cello BV
100.00
100.00
Exploration for and
development and
production of oil & gas
Copper mining
Sl.
No.
1
2
3
4
5
6
Cairn Energy India Pty
Limited1
Copper Mines of
Tasmania Pty Limited
("CMT")
Thalanga Copper Mines
Pty Limited ("TCM")
Bharat Aluminium
Company Limited
("BALCO")
Desai Cement Company
Private Limited(a)
ESL Steel Limited
7
8
FACOR Power Ltd3
Facor Realty and
Infrastructure Limited(b)
Ferro Alloy Corporation
Limited (FACOR)3
10 Goa Sea Port Private
9
Limited 4
11 Hindustan Zinc Alloys
Private Limited(c)
12 Hindustan Zinc Limited
("HZL")
Copper mining
Australia
Monte Cello BV
100.00
100.00
Aluminium mining and
smelting
Cement
Manufacturing of Steel &
DI Pipe
Power generation
Real estate
Manufacturing of Ferro
Alloys and Mining
Infrastructure
India
Vedanta Limited
51.00
51.00
India
India
India
India
India
India
Sesa Mining
Corporation Limited
Vedanta Limited
FACOR
FACOR
100.00
-
95.49
95.49
90.00
100.00
90.00
100.00
Vedanta Limited
100.00
100.00
Sterlite Ports Limited
100.00
100.00
Zinc Mining & Smelting
India
Vedanta Limited
64.92
-
Zinc mining and smelting India
Vedanta Limited
64.92
64.92
13 MALCO Energy Limited
Power generation
("MEL")
14 Maritime Ventures Private
Infrastructure
15
16
Limited 4
Paradip Multi Cargo Berth
Private Limited 4
Sesa Mining Corporation
Limited 4
Infrastructure
Iron ore mining
India
India
India
India
Vedanta Limited
100.00
100.00
Sterlite Ports Limited
100.00
100.00
Vedanta Limited
100.00
100.00
Sesa Resources
Limited
100.00
100.00
406
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Subsidiaries
Principal activities
Country of
Incorporation
Immediate holding
company
The Company’s/Immediate
holding company’s percentage
holding (in %)
31 March 2022
31 March 2021
Vedanta Limited
100.00
100.00
Sl.
No.
17
18
19
20
21
22
23
29
30
32
33
34
35
36
37
Sesa Resources Limited
("SRL")
Sterlite Ports Limited 4
Talwandi Sabo Power
Limited ("TSPL")
Vedanta Zinc Football &
Sports Foundation (j)
Vizag General Cargo Berth
Private Limited
AvanStrate Inc. ('ASI')
Cairn India Holdings
Limited
Iron ore mining
Infrastructure
Power generation
Sports Foundation
Infrastructure
Manufacturer of LCD
glass substrate
Investment company
24 Western Cluster Limited
Iron ore mining
India
India
India
India
India
Japan
Jersey
Liberia
Operating (Iron ore) and
Investment Company
Investment Company
Mauritius
Mauritius
25
Bloom Fountain Limited
26
27
CIG Mauritius Holdings
Private Limited (d)
CIG Mauritius Private
Limited (d)
28
THL Zinc Ltd
Investment Holding
Company and to provide
services and resources
relevant to oil & gas
exploration, production
and development
Investment company
31 Namzinc (Proprietary)
THL Zinc Ventures Limited Investment company
Accommodation and
Amica Guesthouse
catering services
(Proprietary) Limited
Owns and operates zinc
refinery
Exploration, development,
production and sale of
zinc ore
Operating (Zinc) and
Investment Company
Limited
Skorpion Mining Company
(Proprietary) Limited
('NZ')
Skorpion Zinc
(Proprietary) Limited
('SZPL')
THL Zinc Namibia
Holdings (Proprietary)
Limited (“VNHL”)
Killoran Lisheen Finance
Limited(e)
Killoran Lisheen Mining
Limited
Lisheen Milling Limited
Mining and Exploration
and Investment company
Namibia
Investment company
Development of a zinc/
lead mine
Manufacturing(h)
Mauritius
Mauritius
Mauritius
Namibia
Namibia
Namibia
Namibia
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Scotland
38
Lisheen Mine Partnership Development and
operation of a zinc/lead
mine
39
40
41
Cairn Energy Discovery
Limited1
Vedanta Exploration
Ireland Limited(e)
Vedanta Lisheen Mining
Limited
Oil and gas exploration,
development and
production
Exploration company
Zinc and lead mining
Vedanta Limited
Vedanta Limited
Hindustan Zinc
Limited
Vedanta Limited
Cairn India Holdings
Limited
Vedanta Limited
Bloom Fountain
Limited
Vedanta Limited
Cairn Energy
Hydrocarbons
Limited
CIG Mauritius
Holdings Private
Limited
THL Zinc Ventures
Ltd
Vedanta Limited
Skorpion Zinc
(Proprietary) Limited
Skorpion Zinc
(Proprietary) Limited
Skorpion Zinc
(Proprietary) Limited
THL Zinc
Namibia Holdings
(Proprietary) Limited
THL Zinc Ltd
Vedanta Lisheen
Holdings Limited
Vedanta Lisheen
Holdings Limited
Vedanta Lisheen
Holdings Limited
50% each held by
Killoran Lisheen
Mining Limited &
Vedanta Lisheen
Mining Limited
Cairn India Holdings
Limited
Republic of
Ireland
Republic of
Ireland
Vedanta Lisheen
Holdings Limited
Vedanta Lisheen
Holdings Limited
100.00
100.00
100.00
100.00
64.92
-
100.00
100.00
51.63
51.63
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
100.00
100.00
100.00
100.00
407
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Subsidiaries
Principal activities
Country of
Incorporation
Immediate holding
company
The Company’s/Immediate
holding company’s percentage
holding (in %)
31 March 2022
31 March 2021
-
-
100.00
100.00
Scotland
Scotland
Cairn India Holdings
Limited
Cairn India Holdings
Limited
Scotland(f)
Cairn India Holdings
Limited
100.00
100.00
South Africa
THL Zinc Ltd
74.00
74.00
South Africa
South Korea
Sri Lanka
Taiwan
The
Netherlands
The
Netherlands
The
Netherlands
The
Netherlands
United Arab
Emirates
Cairn Energy
Hydrocarbons
Limited
Avanstrate (Japan)
Inc.
CIG Mauritius Private
Limited
-
100.00
100.00
100.00
100.00
100.00
Avanstrate (Japan)
Inc.
THL Zinc Holding BV
100.00
100.00
100.00
100.00
Vedanta Limited
100.00
100.00
Vedanta Limited
100.00
100.00
THL Zinc Holing BV
100.00
100.00
Malco Energy Limited
100.00
100.00
United States
of America
Vedanta Limited
-
100.00
Sl.
No.
42
43
44
45
Cairn Exploration (No. 2)
Limited1
Cairn Energy Gujarat
Block 1 Limited
Cairn Energy
Hydrocarbons Limited
Black Mountain Mining
(Proprietary) Limited
46
Cairn South Africa Pty
Limited(g)
47
AvanStrate Korea Inc
48
Cairn Lanka Private
Limited
49
AvanStrate Taiwan Inc.
50
Lakomasko BV
Oil and gas exploration,
development and
production
Oil and gas exploration,
development and
production
Oil and gas exploration,
development and
production
Exploration, development,
production and sale of
zinc, lead, copper and
associated mineral
concentrates
Oil and gas exploration,
development and
production
Manufacturer of LCD
glass substrate
Oil and gas exploration,
development and
production
Manufacturer of LCD
glass substrate
Investment company
51 Monte Cello BV (“MCBV”) Holding Company
52
THL Zinc Holding BV
Investment company
53
54
Vedanta Lisheen Holdings
Limited
Fujairah Gold FZC
55
Sterlite (USA) Inc.1
Investment company
Manufacturing of Copper
Rod and Refining of
Precious Metals (Gold &
Silver)
Investment company
(a) Acquired on 15 November 2021
(b) Passed a resolution for striking off on 08 March 2022
(c) Incorporated on 17 November 2021
(d) Under Liquidation
(e) Dissolved on 09 June 2021
(f) Principal place of business is in India
(g) Cairn South Africa Pty Limited has been deregistered w.e.f. 06 April 2021.
(h) Activity of the company ceased in February 2016 .
(i) Liquidated on 20 December 2021.
(j) Incorporated on 21 December 2021.
1 Cairn Exploration (No. 2) Limited and Cairn Energy Discovery Limited have been dissolved w.e.f. 22 September 2020 and Cairn Energy India
(Pty) Ltd. was deregistered on 26 August 2020.
2 The Group also has interest in certain trusts which are neither significant nor material to the Group.
3 The Group has filed an application at NCLT Cuttack on 16 September 2021 for the merger of Ferro Alloy Corporation Limited (“FACOR”) and
FACOR Power Limited.
4 The Group has filed an application at Mumbai NCLT on 25 September 2021 and at Chennai NCLT on 29 September 2021 for the merger of
Maritime Ventures Private Limited, Sterlite Ports Limited, Paradip Multi Cargo Berth Private Limited, Goa Sea Port Private Limited with Sesa
Mining Corporation Limited.
408
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
b) Joint operations
The Company participates in several unincorporated joint operations which involve the joint control of assets used in oil and
gas exploration and producing activities which are as follows:
Oil & Gas blocks/fields
Operating Blocks
Area
Ravva block-Exploration, Development and Production Krishna Godavari
Cambay Offshore
CB-OS/2 – Exploration
Cambay Offshore
CB-OS/2 - Development & production
Rajasthan Onshore
RJ-ON-90/1 – Exploration
Rajasthan Onshore
RJ-ON-90/1 – Development & production
KG-OSN-2009/3 – Exploration
Krishna Godavari Offshore
Non-Operating Blocks
KG-ONN-2003/1
Krishna Godavari Onshore
c)
Interest in associates and joint ventures
(%) Participating Interest
As at
31 March 2022
22.50
60.00
40.00
50.00
35.00
100.00
As at
31 March 2021
22.50
60.00
40.00
50.00
35.00
100.00
49.00
49.00
Set out below are the associates and joint ventures of the Company as at 31 March 2022 which, in the opinion of the
management, are not material to the Company. The country of incorporation or registration is also their principal place of
business, and the proportion of ownership interest is the same as the proportion of voting rights held.
Sl.
No.
1
2
3
4
5
6
7
8
Associates and Jointly controlled entities
Country of incorporation
Gaurav Overseas Private Limited
Raykal Aluminium Company Private Limited
Rampia Coal Mines and Energy Private Limited(a)
Madanpur South Coal Company Limited
Goa Maritime Private Limited
Rosh Pinah Health Care (Proprietary) Limited
Gergarub Exploration and Mining (Pty) Limited
RoshSkor Township (Pty) Limited
India
India
India
India
India
Namibia
Namibia
Namibia
% Ownership interest
As at
31 March 2022
As at
31 March 2021
50.00
24.50
-
17.62
50.00
69.00
51.00
50.00
50.00
24.50
17.39
17.62
50.00
69.00
51.00
50.00
(a) Struck off by the Ministry of Corporate affairs on 19 April 2021.
42 (a) The Company has incurred an amount of ` 140 crore (31 March 2021: ` 39 crore) towards Corporate Social
Responsibility (CSR) as per Section 135 of the Companies Act, 2013:
Particulars
(a) Gross amount required to be spend by the
Company during the year
(b) Amount approved by the Board to be spent
during the year
(c) Amount spent on: *
Construction/acquisition of assets
On purposes other than (i) above (for CSR
projects)
i)
ii)
Total
Year ended 31 March 2022
Year ended 31 March 2021
In Cash
Yet to be
Paid in Cash
In Cash
Yet to be
Paid in Cash
(` in crore)
37
138
-
126
126
-
12
12
17
45
-
21
21
* includes ` 15 crore (31 March 2021: ` 15 crore) paid to related party (Refer note 39).
-
18
18
409
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022 Amount of expense excess spent
Particulars
Opening Balance
Amount required to be spent during the year
Amount spent during the year
Closing Balance
Balance of CSR provision/CSR expenses not yet paid in cash
Particulars
Opening Balance
Provision made during the year
Payments made during the year
Closing Balance
Nature of CSR Expenses
Particulars
Health and sanitation
Infrastructure development
Education sports and culture
Covid support and others
Total
Year ended
31 March 2022
Year ended
31 March 2021
-
37
138
101
-
17
39
22
Year ended
31 March 2022
Year ended
31 March 2021
18
138
144
12
14
39
35
18
Year ended
31 March 2022
Year ended
31 March 2021
14
7
17
100
138
16
9
9
5
39
(b)
Disclosures under Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006
Particulars
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
(i) Principal amount remaining unpaid to any supplier as at the end of the accounting year
186
205
(ii) Interest due thereon remaining unpaid to any supplier as at the end of the accounting year
(iii) The amount of interest paid along with the amounts of the payment made to the
supplier beyond the appointed day
(iv) The amount of interest due and payable for the year
(v) The amount of interest accrued and remaining unpaid at the end of the accounting year
(vi) The amount of further interest due and payable even in the succeeding year, until such
date when the interest dues as above are actually paid
9
-
-
-
-
4
-
-
-
-
(c)
Loans and Advance(s) in the nature of Loan (Regulations 34 (3) and 53 (f) read together with Para A
of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements, 2015):
(a)
Name of the Company
Relationship
Sesa Resources Limited
Sterlite Ports Limited
Sesa Mining Corporation
Limited
ESL Steel Limited
Talwandi Sabo Power
Limited
Ferro Alloys Corporation
Limited
Malco Energy Limited
Vizag General Cargo Berth
Private Limited
Paradip Multi Cargo Berth
Private Limited
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
Wholly owned Subsidiary
410
Balance as at
31 March 2022
Maximum Amount
Outstanding
during the year
(` in crore)
Balance as at
31 March 2021
74
4
20
158
75
22
147
19
0
89
4
43
183
75
22
147
425
0
68
4
-
183
-
22
-
425
0
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
1.
2.
None of the loanee have made, per se, investment in the shares of the Company.
Investments made by Sterlite Ports Limited in Maritime Ventures Private Limited ‑ 10,000 equity shares and Goa Sea
Port ‑ 50,000 equity shares
Investments made by Sesa Resources Limited in Sesa Mining Corporation Limited – 11,50,000 equity shares, Goa
Maritime Private Limited – 5,000 Shares, Sterlite Ports Limited – 2,50,000 shares, and PMCB – 10,000 shares
Investment made by Sesa Mining Corporation Limited in Desai Cement Company Private Limited – 18,52,646 shares”
3.
Includes Nil (31 March 2021: ` 497 Crore) of loans given to related parties which are repayable on demand which
constitues NIL (31 March 2021: 71%) of the total loans and advances in the nature of loans.
(d) The Company does not have any material transactions with companies struck off as per the Companies Act, 2013.
43 Financial ratios are as follows:
Ratio
Current Ratio (in times)
Debt-Equity Ratio (in times)
Debt Service Coverage Ratio (in times)
Return on Equity Ratio (%) a
Inventory turnover Ratio (in times) b
Trade Receivables turnover Ratio (in times) c
Trade payables turnover Ratio (in times) d
Net capital turnover Ratio (in times)
Net profit Ratio (%)
Return on Capital employed (%) e
Return on investment (%) f
1
2
3
4
5
6
7
8
9
10
11
*Net working capital is negative.
Formulae for computation of ratios is as follows:
As at
31 March 2022
As at
31 March 2021
% Variance
0.80
0.47
1.96
23%
6.41
20.81
6.88
*
28%
14%
0.06%
0.79
0.42
2.01
15%
5.10
16.15
4.76
*
28%
6%
6.44%
1%
13%
-2%
55%
26%
29%
45%
*
-2%
132%
-99%
1
2
3
4
5
6
7
8
9
Ratio
Current Ratio (in times)
Formula
Current Assets/Current Liabilities (excluding current maturities of long-
term borrowing)
Debt-Equity Ratio (in times)
Gross Debt/Equity
Debt Service Coverage Ratio (in times)
Income available for debt service/ (interest expense and principal
payments of long term loans), where income available for debt service
= Profit before exceptional items and tax + Depreciation, depletion and
amortization expense + Interest expense
Return on Equity Ratio (%)
Net Profit after tax before exceptional items (net of tax)/ Total Equity
Inventory turnover Ratio (in times)
Revenue from operations less EBITDA/Average Inventory
Trade Receivables turnover Ratio (in times)
Revenue from operations/Average Trade Receivables
Trade payables turnover Ratio (in times)
Total Purchases/Average Trade Payables
Net capital turnover Ratio (in times)
Net profit Ratio (%)
10
Return on Capital employed (in times)
Revenue from operations/Working capital (WC), where WC = Current Assets
– Current Liabilities (excluding current maturities of long-term borrowing)
Net Profit after tax before exceptional items (net of tax)/Revenue from
operations
Earnings before interest and tax/ Average Capital Employed, where capital
employed = Net Debt + Total Equity
11
Return on investment (%)
Income from investments carried at FVTPL/ Average current investments
Notes:
(a) The Return on Equity Ratio has improved due to increase in net profits during the year.
(b) The Inventory turnover Ratio has improved due to higher number of units sold during the year.
411
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
(c). The Trade Receivables turnover Ratio has increased due to significant increase in revenue.
(d) The Trade payables turnover Ratio has increased due to increase in input commodity costs during the year.
(e). The Return on Capital employed has improved due to increase in earnings during the year.
(f) The Return on investment has decreased as the Company has liquidated its investments during the year.
44 Oil & gas reserves and resources
The Company’s gross reserve estimates are updated atleast 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 year end, are as follows:
Gross proved and probable
hydrocarbons initially in place
Gross proved and probable
reserves and resources
Net working interest proved and
probable reserves and resources
Particulars
Country
(mmboe)
(mmboe)
(mmboe)
As at
31 March 2022
As at
31 March 2021
As at
31 March 2022
As at
31 March 2021
As at
31 March 2022
As at
31 March 2021
Rajasthan MBA Fields
Rajasthan MBA EOR
Rajasthan Block Other
Fields
Ravva Fields
CBOS/2 Fields
Other fields
Total
India
India
India
India
India
India
2,307
2,307
-
-
3,603
3,603
704
298
826
704
298
352
230
386
390
23
25
98
266
388
470
27
34
44
7,739
7,265
1,151
1,229
81
135
136
5
10
82
449
93
136
164
6
14
26
439
The Company’s net working interest proved and probable reserves is as follows:
Particulars
Reserves as of 31 March 2020*
Additions/(revision) during the year
Production during the year
Reserves as of 31 March 2021**
Additions/(revision) during the year
Production during the year
Reserves as of 31 March 2022***
Proved and probable reserves
Oil
(mmstb)
157
-6
18
134
-8
17
108
Gas
(bscf)
157
-8
16
133
-8
20
106
Proved and probable reserves
(developed)
Oil
(mmstb)
Gas
(bscf)
86
15
18
84
2
17
69
77
25
16
87
-3
20
64
* Includes probable oil reserves of 67.78 mmstb (of which 12.36 mmstb is developed) and probable gas reserves of 59.36 bscf (of which 23.29
bscf is developed)
** Includes probable oil reserves of 56.83 mmstb (of which 12.80 mmstb is developed) and probable gas reserves of 65.39 bscf (of which 27.22
bscf is developed)
*** 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)
mmboe = million barrels of oil equivalent
mmstb = million stock tank barrels
bscf = billion standard cubic feet
1 million metric tonnes = 7.4 mmstb
1 standard cubic meter =35.315 standard cubic feet
MBA = Mangala, Bhagyam & Aishwarya
EOR = Enhanced Oil Recovery
412
Vedanta LimitedNotesforming part of the financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
45. Other matters
(a)
The Company purchases bauxite under long‑term linkage arrangement with Orissa Mining Corporation Ltd (hereafter
referred as “OMC”) at provisional price of ` 1,000/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
the Group.
The last successful e‑auction based price discovery was done by OMC in April 2019 at ` 673/MT and supplied
bauxite at this rate from September 2019 to September 2020 against an undertaking furnished by the Company to
compensate any differential price discovered through future successful national e‑auctions. Though OMC conducted
the next e‑auction on 31 August 2020 with floor price of ` 1,707/MT determined on the basis of Rule 45 of Minerals
Concession Rules, 2016 (hereafter referred as the ‘Rules’), no bidder participated at that floor price and hence the
auction was not successful. However, OMC raised demand of ` 281 crore on the Company towards differential pricing
and interest for bauxite supplied till September 2020 considering the auction base price of ` 1,707/MT.
The Company had then filed a writ petition before Hon’ble High Court of Odisha in September 2020, which issued
an interim Order dated 08 October 2020 directing that the petitioner shall be permitted to lift the quantity of bauxite
mutually agreed on payment of ` 1,000/MT and furnishing an undertaking for the differential amount, subject to final
outcome of the writ petition.
OMC re‑conducted e‑auction on 09 March 2021 with floor price of ` 2,011/MT, which again was not successful. On
18 March 2021, Cuttack HC issued an order that the current arrangement of bauxite price @ ` 1,000/MT will continue
for the FY 2021‑22. Further, on 06 April 2022, the honourable Cuttack HC directed that the current arrangement will
continue for the FY 2022-23 also.
Supported by legal opinions, management believes that the provisions of Rule 45 of the Rules are not applicable
to commercial sale of bauxite ore and hence, it is not probable that the Company will have any financial obligation
towards the aforesaid commitments over and above the price of ` 673/MT discovered vide last successful e-auction.
However, as an abundant precaution, the Company has recognised purchase of Bauxite from September 2019
onwards at the aforesaid rate of ` 1,000/MT.
(b)
The Ministry of Environment, Forest and Climate Change (“MOEF&CC”) 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 equipments have to be installed. The regulatory authorities vide notification
dated 31 March 2021 have extended the timelines and Aluminium division of Vedanta Limited is now required to
comply with the norms by December 2024.
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Navin Agarwal
Sunil Duggal
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
Executive Vice-Chairman and
Whole-Time Director
DIN 00006303
Whole-Time Director and Group
Chief Executive Officer
DIN 07291685
per Sudhir Soni
Partner
Membership No. 41870
Place: Mumbai
Date: 28 April 2022
Ajay Goel
Prerna Halwasiya
Acting Group Chief Financial Officer
PAN AEAPG8383C
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Place: New Delhi
Date: 28 April 2022
413
Integrated Report and Annual Accounts 2021-22Notesforming part of the financial statements as at and for the year ended 31 March 2022
Independent Auditor’s Report
To the Members of Vedanta Limited
Report on the Audit of the Consolidated Ind AS
Financial Statements
Opinion
We have audited the accompanying consolidated Ind
AS financial statements of Vedanta Limited (hereinafter
referred to as “the Holding Company”), its subsidiaries
(the Holding Company and its subsidiaries together
referred to as “the Group”) its associates and joint ventures
comprising of the consolidated Balance sheet as at March
31 2022, the consolidated Statement of Profit and Loss,
including other comprehensive income, the consolidated
Cash Flow Statement and the consolidated Statement of
Changes in Equity for the year then ended, and notes to the
consolidated financial statements, including a summary
of significant accounting policies and other explanatory
information (hereinafter referred to as “the consolidated
financial statements”).
In our opinion and to the best of our information and
according to the explanations given to us and based on
the consideration of reports of other auditors on separate
financial statements and on the other financial information
of the subsidiaries, associates and joint ventures, the
aforesaid consolidated Ind AS financial statements give
the information required by the Companies Act, 2013, as
amended (“the Act”) in the manner so required and give
a true and fair view in conformity with the accounting
principles generally accepted in India, of the consolidated
state of affairs of the Group, its associates and joint
ventures as at 31 March 2022, their consolidated profit
including other comprehensive income, their consolidated
cash flows and the consolidated statement of changes in
equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the consolidated Ind AS
financial statements in accordance with the Standards on
Auditing (SAs), as specified under Section 143(10) of the
Act. Our responsibilities under those Standards are further
described in the ‘Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements’ section of our
report. We are independent of the Group, associates, joint
ventures in accordance with the ‘Code of Ethics’ issued by
the Institute of Chartered Accountants of India together with
the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Act and
the Rules thereunder, and we have fulfilled our other ethical
responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the consolidated
financial statements.
Emphasis of Matter
We draw attention to Note 3(c)(A)(iv) of the accompanying
consolidated Ind AS financial statements, which describes
the uncertainty arising out of the demands that have been
raised on the Group, with respect to government’s share of
profit oil by the Director General of Hydrocarbons and one
of the pre‑conditions for the extension of the Production
Sharing Contract (PSC) for the Rajasthan oil block is the
settlement of these demands. While the Government has
granted permission to the Group to continue operations in
the block till 14 May 2022 or signing of the PSC addendum,
whichever is earlier, the Group, based on external legal
advice, believes it is in compliance with the necessary
conditions to secure an extension of this PSC and that the
demands are untenable and hence no provision is required
in respect of these demands. Our opinion is not modified in
respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
consolidated financial statements for the financial year
ended 31 March 2022. These matters were addressed
in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have determined the matters described below to be
the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the
Auditor’s responsibilities for the audit of the consolidated
financial statements section of our report, including in
relation to these matters. Accordingly, our audit included
the performance of procedures designed to respond to
our assessment of the risks of material misstatement
of the consolidated financial statements. The results of
audit procedures performed by us and by other auditors of
components not audited by us, as reported by them in their
audit reports furnished to us by the management, including
those procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying
consolidated financial statements.
414
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Key audit matters
How our audit addressed the key audit matter
Accounting and disclosure of transactions with the parent company and its affiliates (as described in note 42(I), 42(J),
42(K), 42(M) and 42(N) of the consolidated Ind AS financial statements)
The Group has undertaken transactions with Vedanta
Resources Limited (‘VRL’), its parent company and
its affiliates pertaining to novation of loans, payment
of brand fee; obtaining guarantees and payment of
consideration thereof
Accounting and disclosure of such related party
transactions has been identified as a key audit matter due
to a) Significance of such related party transactions; b)
Risk of such transactions being executed without proper
authorisations; c) Judgements and estimation involved
in determination of fair value of loans and guarantees
given and expected credit losses on subsequent
measurement; and d)Risk of material information
relating to such transactions not getting disclosed in the
financial statements.
Our procedures included the following:
• Obtained and read the Group’s policies, processes and
procedures in respect of identification of such related
parties, obtaining approval, recording and disclosure of
related party transactions and identified key controls. For
selected controls we have performed tests of controls.
• Tested such related party transactions and balances with
the underlying contracts, confirmation letters and other
supporting documents provided by the Company.
• Obtained and assessed the reports issued by experts
engaged by the management for estimation of fair value of
the loans on novation.
• Tested the methodology adopted by the Group for
determination of subsequent credit losses/(reversals) on
such loans.
• Engaged valuation experts to assist us in performing the
said procedures.
• Assessed the competence and objectivity of the
external experts
• Held discussions and obtained representations from the
management in relation to such transactions.
• Examined the approvals of the board and/or audit
committee for modification of these transactions.
• Read the disclosures made in this regard in the financial
statements and assessing whether relevant and material
information have been disclosed.
Recoverability of carrying value of property plant and equipment capital work-in-progress and exploration intangible
assets under development (as described in note 3(a)(H), 3(c)(A)(i), 3(c)(A)(iii), (vii), 3(c)(A)(v) and 36 of the consolidated Ind
AS financial statements)
As at 31 March 2022, the Group had significant amounts
of property, plant and equipment, capital work-in-progress
and exploration intangible assets under development
which were carried at historical cost less depreciation.
We focused our efforts on the Cash Generating Unit
(“CGU”) at (a) Tuticorin within the copper segment; and
(b) Krishna Godavri block and the Rajasthan block within
the oil & gas segment; as it had identified impairment /
impairment reversal indicators.
Recoverability of property plant and equipment, capital
work‑in‑progress, exploration intangible assets and
investment being carried at cost has been identified as a
key audit matter due to:
Our audit procedures included the following:
• Obtained and read the Group’s policies, processes and
procedures in respect of identification of impairment
indicators, recording and disclosure of impairment charge /
(reversal) and identified key controls. For selected controls
we have performed tests of controls.
• Assessed through an analysis of internal and external
•
factors impacting the Company, whether there were any
indicators of impairment in line with Ind AS 36.
In relation to the CGU at (a) Tuticorin within the copper
segment; and (b) Krishna Godavri block and the Rajasthan
block within the oil & gas segment where impairment
indicators were identified, obtained and evaluated the
valuation models used to determine the recoverable amount
by assessing the key assumptions used by management,
which included:
415
Integrated Report and Annual Accounts 2021-22 Consolidated Independent Auditor’s Report
Key audit matters
How our audit addressed the key audit matter
• The significance of the carrying value of assets
being assessed.
• The withdrawal of the Holding Company’s licenses to
operate the copper plant.
• The fact that the assessment of the recoverable
amount of the Group’s CGU involves significant
judgements about the future cash flow forecasts, start
date of the plant and the discount rate that is applied.
• The upward revision to brent oil assumptions up to
2030 due to increased demand.
• Changes in production forecasts due to adjustments in
the future reserve estimates
The key judgements and estimates centered on the
likely outcome of the litigations, cash flow forecasts and
discount rate assumptions. Details of impairment reversal
amounting to ` 2,697 crore recognised are given in note
36 of the accompanying financial statements
− Assessed management’s forecasting accuracy by
comparing prior year forecasts to actual results and
assessed the potential impact of any variances.
− Corroborated the sales price assumptions used in the
models against analyst consensus and assessing the
reasonableness of costs.
− Assessed Company’s reserves and resources estimation
methods and policies and reading reports provided by
management’s external reserves experts and assessed
the scope of work and findings of these third parties.
− Assessed the competence, capability and objectivity
of Company’s external reserve experts; through
understanding their relevant professional qualifications
and experience.
− Compared the production forecasts used in the
impairment tests with management’s approved reserves
and resources estimates.
− Tested the weighted average cost of capital used to
discount the impairment models.
− Tested the integrity of the models together with their
clerical accuracy.
− Assessed the implications of withdrawal of Company’s
license to operate the copper plants. Inspected the
external legal opinions in respect of the merits of the
case and assessed management’s position through
discussions with the legal counsel to determine the basis
of their conclusion.
− Assessed the implications and likelihood of the possible
outcome of the conditions precedent to the extension
of the Rajasthan oil block and management’s analysis
of the same, including an assessment of how a market
participant would react to the same.
− Engaged valuation experts to assist in performance of
the above procedures.
• Assessed the competence and objectivity of the experts
engaged by us.
• Assessed the disclosures made by the Group in this regard.
Recoverability of disputed trade receivables in Power segment (as described in note 3(c)(B)(iii) and note 8 of the
consolidated Ind AS financial statements)
As of 31 March 2022 the value of disputed receivables in
the power segment aggregated to `3,018 crore.
Due to disagreements over the quantification or timing
of the receivables, the recovery of said receivables are
subject to increased risk. Some of these balances are
also subject to litigation. The risk is specifically related to
receivables from Punjab State Power Corporation Limited
(PSPCL), GRIDCO and Tamil Nadu Electricity Board. These
receivables include long outstanding balances as well and
are also subject to counter party credit risk and hence
considered as a key audit matter
Our audit procedures included the following:
• Examined the underlying power purchase agreements.
• Examined the relevant state regulatory commission,
appellate tribunal and court rulings.
• Examined external legal opinions in respect of the merits
of the case and assessed management’s position through
discussions with the management’s in‑house legal team to
determine the basis of their conclusion.
• Examined management’s assessment of recoverability
of receivables.
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Key audit matters
How our audit addressed the key audit matter
• Obtained independent external lawyer confirmation from
Legal Counsel of the Group who is contesting the cases.
• Assessed the competence and objectivity of the
Group's experts.
• Assessed the disclosures made by the Group in this regard.
Claims and exposures relating to taxation and litigation (as described in note 3(c)(A)(iv), 3(c)(B)(ii), 37(e), 40D and 41 of
the consolidated Ind AS financial statements)
The Group is subject to a large number of tax and
legal disputes, including objections raised by auditors
appointed by the Director General Hydrocarbons in the oil
and gas segment, which have been disclosed/provided
for in the financial statements based on the facts and
circumstances of each case.
Taxation and litigation exposures have been identified
as a key audit matter due to the complexities involved
in these matters, timescales involved for resolution and
the potential financial impact of these on the financial
statements. Further, significant management judgement
is involved in assessing the exposure of each case and
thus a risk that such cases and thus a higher risk involved
on adequacy of provision or disclosure of such cases.
Our audit procedures included the following:-
• Obtained an understanding of the process of identification
of claims, litigations and contingent liabilities and identified
key controls in the process. For selected controls we have
performed tests of controls.
• Obtained the summary of Group’s legal and tax cases
and critically assessed management’s position through
discussions with the Legal Counsel, Head of Tax and
operational management, on both the probability of
success in significant cases, and the magnitude of any
potential loss.
• Examined external legal opinions (where considered
necessary) and other evidence to corroborate
management’s assessment of the risk profile in respect of
legal claims.
• Assessed the competence and objectivity of the
Group's experts.
• Engaged tax specialists to technically appraise the tax
positions taken by management with respect to local
tax issues.
• Assessed whether management assessment of similar
cases is consistent across the divisions or that differences
in positions are adequately justified.
• Assessed the relevant disclosures made within the financial
statements to address whether they reflect the facts and
circumstances of the respective tax and legal exposures
and the requirements of relevant accounting standards.
Recognition and measurement of Deferred Tax Assets including Minimum Alternate Tax (MAT) (as described in note
3(c)(A)(ii) and 37 of the consolidated Ind AS financial statements)
Deferred tax assets as at 31 March 2022 includes MAT
credits of `6,746 crore which is available for utilisation
against future tax liabilities. Of the same, we focused our
effort on MAT assets of `4,839 crore which belong to the
Holding company out of which `208 crore is expected to
be utilised in the fourteenth year, fifteen years being the
maximum permissible time period to utilise the same.
Additionally, ESL Steel Limited, one of the constituents of
the Group, has recognised deferred tax assets of `3,184
crore during the previous year.
Our audit procedures included the following:-
• Obtained an understanding of the management’s process
for estimating the recoverability of the deferred tax assets
and identified key controls in the process. For selected
controls we have performed tests of controls.
• Obtained and analysed the future projections of taxable
profits estimated by management, assessing the key
assumptions used, including the analysis of the consistency
of the actual results obtained by the various segments with
those projected in the previous year. We further obtained
evidence of the approval of the budgeted results included
in the current year’s projections, and the reasonableness of
the future cash flow projections.
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Key audit matters
How our audit addressed the key audit matter
The analysis of the recoverability of such deferred tax
assets has been identified as a key audit matter because
the assessment process involves judgement regarding
the future profitability and likelihood of the realisation of
these assets, in particular whether there will be taxable
profits in future periods that support the recognition of
these assets. This requires assumptions regarding future
profitability, which is inherently uncertain. Accordingly, the
same is considered as a key audit matter.
• Tested the computation of the amounts recognised as
deferred tax assets.
• Engaged valuation experts to assist in performance of the
above procedures.
• Assessed the competence and objectivity of the experts
engaged by us.
• Assessed the disclosures made by the Group in this regard.
Information Other than the Financial
Statements and Auditor’s Report thereon
The Holding Company’s Board of Directors is responsible
for the other information. The other information comprises
the information included in the Annual report, but does
not include the consolidated financial statements and our
auditor’s report thereon.
Our opinion on the consolidated financial statements does
not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial
statements, our responsibility is to read the other
information and, in doing so, consider whether such other
information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit
or otherwise appears to be materially misstated. 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.
Responsibilities of Management and Those
Charged with Governance for the Consolidated
Ind AS Financial Statements
The Holding Company’s Board of Directors is responsible
for the preparation and presentation of these consolidated
financial statements in terms of the requirements of the Act
that give a true and fair view of the consolidated financial
position, consolidated financial performance including
other comprehensive income, consolidated cash flows and
consolidated statement of changes in equity of the Group
including its associates and joint ventures in accordance
with the accounting principles generally accepted in
India, including the Indian Accounting Standards (Ind
AS) specified under Section 133 of the Act read with [the
Companies (Indian Accounting Standards) Rules, 2015,
as amended. The respective Board of Directors of the
companies included in the Group and of its associates and
joint ventures are responsible for maintenance of adequate
accounting records in accordance with the provisions of
the Act for safeguarding of the assets of the Group and of
its associates and joint ventures and for preventing and
detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making
judgements and estimates that are reasonable and prudent;
and the design, implementation and maintenance of
adequate internal financial controls, that were operating
effectively for ensuring the accuracy and completeness
of the accounting records, relevant to the preparation and
presentation of the consolidated financial statements
that give a true and fair view and are free from material
misstatement, whether due to fraud or error, which
have been used for the purpose of preparation of the
consolidated financial statements by the Directors of the
Holding Company, as aforesaid.
In preparing the consolidated financial statements, the
respective Board of Directors of the companies included
in the Group and of its associates and joint ventures are
responsible for assessing the ability of the Group and of
its associates and joint ventures to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting
unless management either intends to liquidate the Group
or to cease operations, or has no realistic alternative but to
do so.
Those respective Board of Directors of the companies
included in the Group and of its associates and joint
ventures are also responsible for overseeing the financial
reporting process of the Group and of its associates and
joint ventures.
Auditor’s Responsibilities for the Audit of the
Consolidated Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about
whether the consolidated Ind AS 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 SAs will always detect a material
misstatement when it exists. Misstatements can arise from
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fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the
basis of these consolidated Ind AS financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement
of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Holding Company has adequate
internal financial controls with reference to financial
statements in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of management’s use
of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material
uncertainty exists related to events or conditions that
may cast significant doubt on the ability of the Group
and its associates and joint ventures to continue as a
going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s
report to the related disclosures in the consolidated
Ind AS financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions
may cause the Group and its associates and joint
ventures to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the consolidated financial statements, including the
disclosures, and whether the consolidated financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business
activities within the Group and its associates and joint
ventures of which we are the independent auditors
and whose financial information we have audited, to
express an opinion on the consolidated Ind AS financial
statements. We are responsible for the direction,
supervision and performance of the audit of the
financial statements of such entities included in the
consolidated financial statements of which we are the
independent auditors. For the other entities included
in the consolidated financial statements, which have
been audited by other auditors, such other auditors
remain responsible for the direction, supervision and
performance of the audits carried out by them. We
remain solely responsible for our audit opinion.
We communicate with those charged with governance of
the Holding Company and such other entities included in
the consolidated financial statements of which we are the
independent auditors regarding, among other matters, the
planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and
where applicable, related safeguards.
From the matters communicated with those charged
with governance, we determine those matters that were
of most significance in the audit of the consolidated Ind
AS financial statements for the financial year ended 31
March 2022 and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of
such communication.
Other Matter
(a)
We did not audit the financial statements and other
financial information, in respect of 18 subsidiaries,
whose financial statements include total assets of
`23,861 crore as at 31 March 2022, and total revenues
of `12,118 crore and net cash inflows of `38 crore for
the year ended on that date. These financial statement
and other financial information have been audited
by other auditors, which financial statements, other
financial information and auditor’s reports have been
furnished to us by the management. The consolidated
financial statements also include the Group’s share of
net loss of Rs. Nil for the year ended 31 March 2022,
as considered in the consolidated financial statements,
in respect of 1 associates and 1 joint ventures, whose
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financial statements, other financial information have
been audited by other auditors and whose reports have
been furnished to us by the Management. Our opinion
on the consolidated financial statements, in so far
as it relates to the amounts and disclosures included
in respect of these subsidiaries, joint ventures and
associates, and our report in terms of sub-sections
(3) of Section 143 of the Act, in so far as it relates to
the aforesaid subsidiaries, joint ventures and joint
operations and associates, is based solely on the
report(s) of such other auditors.
Certain of these subsidiaries and associates are
located outside India whose financial statements
and other financial information have been prepared
in accordance with accounting principles generally
accepted in their respective countries and which
have been audited by other auditors under generally
accepted auditing standards applicable in their
respective countries. The Holding Company’s
management has converted the financial statements
of such subsidiaries and associates located outside
India from accounting principles generally accepted
in their respective countries to accounting principles
generally accepted in India. We have audited these
conversion adjustments made by the Holding
Company’s management. Our opinion in so far as it
relates to the balances and affairs of such subsidiaries
and associates located outside India is based on
the report of other auditors and the conversion
adjustments prepared by the management of the
Holding Company and audited by us.
The accompanying consolidated financial statements
include unaudited financial statements and other
unaudited financial information in respect of 3
subsidiaries, whose financial statements and other
financial information reflect total assets of `2,199 crore
as at 31 March 2022, and total revenues of `468 crore
and net cash inflows of `192 crore for the year ended
on that date. These unaudited financial statements
and other unaudited financial information have been
furnished to us by the management. The consolidated
financial statements also include the Group’s share of
net loss of Rs. Nil for the year ended 31 March 2022,
as considered in the consolidated financial statements,
in respect of 3 associates and 3 joint ventures, whose
financial statements, other financial information
have not been audited and whose unaudited financial
statements, other unaudited financial information
have been furnished to us by the Management. The
consolidated Ind AS financial statements also include
the Group’s share of total assets of `99 crore as at
31 March 2022 in respect of an unincorporated joint
venture not operated by the Group. The Ind AS financial
statements and other financial information of the said
unincorporated joint venture have not been audited
and such unaudited financial statement and other
unaudited financial information have been furnished
to us by the management. Our opinion, in so far as it
relates amounts and disclosures included in respect
of these subsidiaries, joint ventures and associates,
and our report in terms of sub-sections (3) of Section
143 of the Act in so far as it relates to the aforesaid
subsidiaries, joint ventures and associates, is based
solely on such unaudited financial statements and
other unaudited financial information. In our opinion
and according to the information and explanations
given to us by the Management, these financial
statements and other financial information are not
material to the Group.
Our opinion above on the consolidated Ind AS
financial statements, and our report on Other Legal
and Regulatory Requirements below, is not modified
in respect of the above matters with respect to our
reliance on the work done and the reports of the
other auditors and the financial statements and other
financial information certified by the Management.
Report on Other Legal and Regulatory
Requirements
1.
2.
(a)
As required by the Companies (Auditor’s Report) Order,
2020 (“the Order”), issued by the Central Government
of India in terms of sub-section (11) of Section 143 of
the Act, based on our audit and on the consideration
of report of the other auditors on separate financial
statements and the other financial information of the
subsidiary companies, associate companies and joint
ventures companies, incorporated in India, as noted in
the ‘Other Matter’ paragraph we give in the “Annexure
1” a statement on the matters specified in paragraph
3(xxi) of the Order.
As required by Section 143(3) of the Act, based on our
audit and on the consideration of report of the other
auditors on separate financial statements and the
other financial information of subsidiaries, associates
and joint ventures, as noted in the ‘other matter’
paragraph we report, to the extent applicable, that:
We/the other auditors whose report we have relied
upon have sought and obtained all the information and
explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit of
the aforesaid consolidated Ind AS financial statements;
(b)
In our opinion, proper books of account as required
by law relating to preparation of the aforesaid
consolidation of the financial statements have been
(b)
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kept so far as it appears from our examination of those
books and reports of the other auditors;
associates and joint ventures, as noted in the ‘Other
matter’ paragraph:
(c)
(d)
(e)
(f)
(g)
(h)
The Consolidated Balance Sheet, the Consolidated
Statement of Profit and Loss including the Statement
of Other Comprehensive Income, the Consolidated
Cash Flow Statement and Consolidated Statement
of Changes in Equity dealt with by this Report are in
agreement with the books of account maintained
for the purpose of preparation of the consolidated
financial statements;
In our opinion, the aforesaid consolidated Ind AS
financial statements comply with the Accounting
Standards specified under Section 133 of the Act, read
with Companies (Indian Accounting Standards) Rules,
2015, as amended;
On the basis of the written representations received
from the directors of the Holding Company as on
31 March 2022 taken on record by the Board of
Directors of the Holding Company and the reports
of the statutory auditors who are appointed under
Section 139 of the Act, of its subsidiary companies,
associate companies and joint ventures, none of the
directors of the Group’s companies, its associates and
joint ventures, incorporated in India, is disqualified as
on 31 March 2022 from being appointed as a director
in terms of Section 164 (2) of the Act;
With respect to the adequacy of the internal financial
controls with reference to consolidated financial
statements of the Holding Company and its subsidiary
companies, associate companies and joint ventures,
incorporated in India, and the operating effectiveness
of such controls, refer to our separate Report in
“Annexure 2” to this report;
In our opinion and based on the consideration of
reports of other statutory auditors of the subsidiaries,
associates and joint ventures incorporated in India,
the managerial remuneration for the year ended 31
March 2022 has been paid / provided by the Holding
Company, its subsidiaries, associates and joint
ventures incorporated in India to their directors in
accordance with the provisions of Section 197 read
with Schedule V to the Act;
With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
as amended, in our opinion and to the best of our
information and according to the explanations given
to us and based on the consideration of the report of
the other auditors on separate financial statements as
also the other financial information of the subsidiaries,
i.
ii.
iii.
The consolidated financial statements disclose the
impact of pending litigations on its consolidated
financial position of the Group, its associates and
joint ventures in its consolidated Ind AS financial
statements – Refer Note 3(c)(A)(iv), 3(c)(B)(iii),
37(e), 40D and 41 to the consolidated Ind AS
financial statements;
The Group, its associates and joint ventures did not
have any material foreseeable losses in long-term
contracts including derivative contracts during the year
ended 31 March 2022;
There has been no delay in transferring amounts,
required to be transferred, to the Investor Education
and Protection Fund by the Holding Company,
its subsidiaries, associates and joint ventures,
incorporated in India during the year ended 31
March 2022.
iv. a)
The respective managements of the Holding
Company and its subsidiaries, associate and
joint ventures have represented to us and the
other auditors of such subsidiaries, associate
and joint ventures respectively that, to the best of
its knowledge and belief, other than as disclosed
in the notes to the consolidated financial
statements, no funds have been advanced or
loaned or invested (either from borrowed funds
or share premium or any other sources or kind
of funds) by the Holding Company or any of such
subsidiaries, associate and joint ventures to or
in any other person(s) or entity(ies), including
foreign entities (“Intermediaries”), with the
understanding, whether recorded in writing or
otherwise, that the Intermediary shall, whether,
directly or indirectly lend or invest in other
persons or entities identified in any manner
whatsoever by or on behalf of the respective
Holding Company or any of such subsidiaries,
associate and joint ventures (“Ultimate
Beneficiaries”) or provide any guarantee, security
or the like on behalf of the Ultimate Beneficiaries;
b)
The respective managements of the Holding
Company and its subsidiaries, associate and
joint ventures have represented to us and the
other auditors of such subsidiaries, associate
and joint ventures respectively that, to the
best of its knowledge and belief, other than as
disclosed in the notes to the consolidated Ind
AS financial statements, no funds have been
received by the respective Holding Company
or any of such subsidiaries, associate and
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joint ventures from any person(s) or entity(ies),
including foreign entities (“Funding Parties”),
with the understanding, whether recorded in
writing or otherwise, that the Holding Company
or any of such subsidiaries, associate and joint
ventures shall, whether, directly or indirectly, lend
or invest in other persons or entities identified
in any manner whatsoever by or on behalf of
the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and
c)
Based on the audit procedures that have been
considered reasonable and appropriate in the
circumstances performed by us and those
performed by the auditors of the subsidiaries,
associate and joint ventures which are companies
incorporated in India whose financial statements
have been audited under the Act, nothing has
come to our or other auditor’s notice that has
caused us or the other auditors to believe that
the representations under sub-clause (a) and (b)
contain any material mis-statement.
v)
The interim dividend declared and paid during the year
by the Holding Company, its subsidiaries, associate
and joint venture companies incorporated in India is in
accordance with Section 123 of the Act.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sudhir Soni
Partner
Place of Signature: Mumbai Membership Number: 41870
UDIN: 22041870AHZHDV1007
Date: 28 April 2022
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Annexure 1
referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of
even date
Re: Vedanta Limited (‘the Company’)
In terms of the information and explanations sought by us and given by the Company and the books of
account and records examined by us in the normal course of audit and to the best of our knowledge and
belief, we state that:
There are no qualifications or adverse remarks by the respective auditors in the Companies (Auditors Report) Order (CARO)
reports of the companies included in the consolidated financial statements. Accordingly, the requirement to report on
clause 3(xxi) of the Order is not applicable to the Holding Company.
Place of Signature: Mumbai
Date: 28 April 2022
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sudhir Soni
Partner
Membership Number: 41870
UDIN: 22041870AHZHDV1007
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Integrated Report and Annual Accounts 2021-22 Annexure 2
to the Independent Auditor’s Report of even date on the Consolidated Ind AS Financial Statements of Vedanta Limited
Report on the Internal Financial Controls under
Clause (i) of sub-section 3 of Section 143 of
the Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated Ind AS
financial statements of Vedanta Limited as of and for the
year ended 31 March 2022, we have audited the internal
financial controls over financial reporting of Vedanta Limited
(hereinafter referred to as the “Holding Company”) and its
subsidiary companies, its associate companies and joint
ventures, which are companies incorporated in India, as of
that date.
Management’s Responsibility for Internal
Financial Controls
The respective Board of Directors of the Holding Company,
its 18 subsidiary companies, its 3 associate company and
2 joint ventures, which are companies incorporated in India,
are responsible for establishing and maintaining internal
financial controls based on the internal control over financial
reporting criteria established by the Holding Company
considering the essential components of internal control
stated in the Committee of Sponsoring Organisations of
the Treadway Commission (2013 Framework) (“COSO
2013 Criteria”). These responsibilities include the design,
implementation and maintenance of adequate internal
financial controls that were operating effectively for
ensuring the orderly and efficient conduct of its business,
including adherence to the respective company’s policies,
the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of the
accounting records, and the timely preparation of reliable
financial information, as required under the Act.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s
internal financial controls over financial reporting with
reference to these consolidated financial statements based
on our audit. We conducted our audit in accordance with
the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (the “Guidance Note”) and the
Standards on Auditing, both, issued by Institute of Chartered
Accountants of India, and deemed to be prescribed under
Section 143(10) of the Act, to the extent applicable to an
audit of internal financial controls. Those Standards and
the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain
reasonable assurance about whether adequate internal
financial controls over financial reporting with reference
to these consolidated Ind AS financial statements was
established and maintained and if such controls operated
effectively in all material respects.
Our audit involves performing procedures to obtain audit
evidence about the adequacy of the internal financial
controls over financial reporting with reference to these
consolidated Ind AS financial statements and their
operating effectiveness. Our audit of internal financial
controls over financial reporting included obtaining an
understanding of internal financial controls over financial
reporting with reference to these consolidated Ind AS
financial statements, assessing the risk that a material
weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on
the assessed risk. The procedures selected depend on
the auditor’s judgement, including the assessment of the
risks of material misstatement of the financial statements,
whether due to fraud or error.
We believe that the audit evidence we have obtained and
the audit evidence obtained by the other auditors in terms
of their reports referred to in the Other Matters paragraph
below, is sufficient and appropriate to provide a basis for
our audit opinion on the internal financial controls over
financial reporting with reference to these consolidated Ind
AS financial statements.
Meaning of Internal Financial Controls Over
Financial Reporting with reference to these
Consolidated Ind AS Financial Statements
A company’s internal financial control over financial
reporting with reference to these consolidated Ind AS
financial statements is a process designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for
external purposes in accordance with generally accepted
accounting principles. A company’s internal financial control
over financial reporting with reference to these consolidated
financial statements includes those policies and
procedures that (1) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial
statements in accordance with generally accepted
accounting principles, and that receipts and expenditures
of the Company are being made only in accordance
with authorisations of management and directors of the
Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition,
use, or disposition of the Company’s assets that could have
a material effect on the financial statements.
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Inherent Limitations of Internal Financial
Controls Over Financial Reporting with
reference to these Consolidated Financial
Statements
Because of the inherent limitations of internal financial
controls over financial reporting with reference to these
consolidated Ind AS financial statements, including the
possibility of collusion or improper management override
of controls, material misstatements due to error or fraud
may occur and not be detected. Also, projections of any
evaluation of the internal financial controls over financial
reporting with reference to these consolidated Ind AS
financial statements to future periods are subject to the risk
that the internal financial control over financial reporting
with reference to these consolidated financial statements
may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In our opinion, the Holding Company, its subsidiary
companies, its associate company and joint ventures, which
are companies incorporated in India, have, maintained in all
material respects, adequate internal financial controls over
financial reporting with reference to these consolidated Ind
AS financial statements and such internal financial controls
over financial reporting with reference to these consolidated
Ind AS financial statements were operating effectively as at
31 March 2022, based on the internal control over financial
reporting criteria established by the Holding Company
considering the essential components of internal control
stated in the. COSO 2013 criterion.
Other Matters
Our report under Section 143(3)(i) of the Act on the
adequacy and operating effectiveness of the internal
financial controls over financial reporting with reference
to these consolidated financial statements of the Holding
Company, insofar as it relates to 6 subsidiary companies,
which is a company incorporated in India, is based on the
corresponding reports of the auditors of such subsidiary.
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Sudhir Soni
Partner
Place of Signature: Mumbai Membership Number: 41870
UDIN: 22041870AHZHDV1007
Date: 28 April 2022
425
Integrated Report and Annual Accounts 2021-22 Balance Sheet
as at 31 March 2022
Particulars
ASSETS
Non-current assets
Property, Plant and Equipment
Capital work-in-progress
Intangible assets
Exploration intangible assets under development
Financial assets
Investments
Trade receivables
Loans
Others
Deferred tax assets (net)
Income tax assets (net)
Other non-current assets
Total non-current assets
Current assets
Inventories
Financial assets
Investments
Trade receivables
Cash and cash equivalents
Other bank balances
Loans
Derivatives
Others
Income tax assets (net)
Other current assets
Total current assets
Total Assets
EQUITY AND LIABILITIES
Equity
Equity share capital
Other equity
Equity attributable to owners of Vedanta Limited
Non-controlling interests
Total Equity
Liabilities
Non-current liabilities
Financial liabilities
Borrowings
Lease liabilities
Derivatives
Other financial liabilities
Provisions
Deferred tax liabilities (net)
Other non-current liabilities
Total non-current liabilities
Current liabilities
Financial liabilities
Borrowings
Lease liabilities
Operational buyers' credit/suppliers' credit
Trade payables
Derivatives
Other financial liabilities
Provisions
Income tax liabilities (net)
Other current liabilities
Total current liabilities
Total Equity and Liabilities
Note
As at
31 March 2022
As at
31 March 2021
(` in crore)
6
6
6
6
7A
8
9
10
37
37
11
12
7B
8
13
14
9
24
10
37
11
15
16
17
19A
23
24
22
25
37
26
19B
23
21
20
24
22
25
37
26
91,990
14,230
1,476
1,649
151
3,219
3,166
2,855
5,085
2,762
3,442
1,30,025
14,313
17,140
4,946
8,671
6,921
2,304
258
8,724
25
5,273
68,575
1,98,600
372
65,011
65,383
17,321
82,704
36,205
150
6
1,327
3,386
4,435
4,674
50,183
16,904
324
10,993
10,538
531
17,312
417
917
7,777
65,713
1,98,600
89,429
13,880
1,041
2,434
156
3,158
5,057
2,532
5,860
2,748
3,210
1,29,505
9,923
16,504
3,491
4,854
11,775
2,019
70
4,245
7
3,318
56,206
1,85,711
372
61,906
62,278
15,138
77,416
37,962
160
76
1,285
3,132
2,215
4,327
49,157
19,066
481
8,265
7,624
279
12,971
353
277
9,822
59,138
1,85,711
See accompanying notes to the financial statements
As per our report of even date
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
per Sudhir Soni
Partner
Membership No. 41870
Place: Mumbai
Date: 28 April 2022
426
For and on behalf of the Board of Directors
Navin Agarwal
Executive Vice-Chairman and
Whole-Time Director
DIN: 00006303
Ajay Goel
Acting Group Chief Financial Officer
PAN AEAPG8383C
Place: New Delhi
Date: 28 April 2022
Sunil Duggal
Whole-Time Director and Group
Chief Executive Officer
DIN: 07291685
Prerna Halwasiya
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Vedanta Limited
Integrated Report
Statutory Reports
Financial Statements
Statement of Profit and Loss
for the year ended 31 March 2022
Particulars
Note
27
28
29
30
31
34
35
36
37
36
Revenue from operations
Other operating income
Other income
Total income
Expenses
Cost of materials consumed
Purchases of stock-in-trade
Changes in inventories of finished goods, work-in-progress and stock-in-trade
Power and fuel charges
Employee benefits expense
Finance costs
Depreciation, depletion and amortisation expense
Other expenses
Total expenses
Profit before exceptional items and tax
Net exceptional loss
Profit before tax
Tax expense/(benefit):
Net current tax expense
Net deferred tax expense
Deferred tax on intra group profit distribution (including from accumulated
profits)
Other deferred tax expense/(benefit)
On exceptional items
Net tax benefit on exceptional items
Net deferred tax expense/(benefit)
Net current tax benefit
Net tax expense:
Profit after tax for the period before share in profit/(loss) of jointly controlled
entities and associates
Add: Share in profit/(loss) of jointly controlled entities and associates
Profit for the period after share in profit/(loss) of jointly controlled entities and
associates (A)
Other comprehensive income/(loss)
Items that will not be reclassified to profit or loss
Re-measurement loss on defined benefit plans
Tax credit/(expense)
Gain on FVOCI equity investment
Items that will be reclassified to profit or loss
Net loss on cash flow hedges recognised during the period
Tax credit
Net gain on cash flow hedges recycled to profit or loss
Tax expense
Exchange differences on translation
Tax credit/(expense)
Total other comprehensive income (B)
Total comprehensive income for the period (A+B)
Profit attributable to:
Owners of Vedanta Limited
Non-controlling interests
Other comprehensive income attributable to:
Owners of Vedanta Limited
Non-controlling interests
Total comprehensive income attributable to:
Owners of Vedanta Limited
Non-controlling interests
Earnings per equity share (`):
- Basic
- Diluted
(` in crore, except otherwise stated)
Year ended
31 March 2022
1,31,192
1,540
2,600
1,35,332
Year ended
31 March 2021
86,863
1,158
3,421
91,442
37,172
133
(2,049)
21,164
2,811
4,797
8,895
28,677
1,01,600
33,732
(768)
32,964
6,889
2,544
-
2,544
(178)
402
(580)
9,255
23,709
1
23,710
(18)
1
15
(2)
(271)
90
371
(131)
793
13
865
863
24,573
18,802
4,908
823
40
19,625
4,948
50.73
50.38
22,849
41
792
13,674
2,861
5,210
7,638
20,486
73,551
17,891
(678)
17,213
2,066
268
869
(601)
(154)
(154)
-
2,180
15,033
(1)
15,032
(1)
(11)
63
51
(253)
87
188
(61)
252
(61)
152
203
15,235
11,602
3,430
110
93
11,712
3,523
31.32
31.13
See accompanying notes to the financial statements
As per our report of even date
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
per Sudhir Soni
Partner
Membership No. 41870
Place: Mumbai
Date: 28 April 2022
For and on behalf of the Board of Directors
Navin Agarwal
Executive Vice-Chairman and
Whole-Time Director
DIN: 00006303
Ajay Goel
Acting Group Chief Financial Officer
PAN AEAPG8383C
Place: New Delhi
Date: 28 April 2022
Sunil Duggal
Whole-Time Director and Group
Chief Executive Officer
DIN: 07291685
Prerna Halwasiya
Company Secretary and Compliance Officer
ICSI Membership No. A20856
427
Integrated Report and Annual Accounts 2021-22 Statement of Cash Flows
for the year ended 31 March 2022
Particulars
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation
Adjustments for:
Depreciation, depletion and amortisation
Capital work-in-progress written off/ impairment of assets (reversal)/charge
Provision for doubtful debts/ advance/ bad debts written off
Exploration costs written off
Liabilities written back
Other exceptional items
Fair value gain on financial assets held at fair value through profit or loss
Profit on sale/discard of property, plant and equipment (net)
Foreign exchange loss/(gain) (net)
Unwinding of discount on provisions
Share based payment expense
Interest and dividend income
Interest expense
Deferred government grant
Changes in assets and liabilities
Increase in trade and other receivables
(Increase)/decrease in inventories
Increase in trade and other payable
Cash generated from operations
Income taxes paid (net)
Net cash generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Consideration paid for business acquisition (net of cash and cash equivalents acquired)
Purchases of property, plant and equipment (including intangibles)
Proceeds from sale of property, plant and equipment
Loans repaid by related parties (Refer Note 42)
Loans given to related parties (Refer Note 42)
Short-term deposits made
Proceeds from redemption of short-term deposits
Short term investments made
Proceeds from sale of short term investments
Interest received
Dividends received
Payment made to site restoration fund
Net cash used in investing activities
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
32,964
17,213
8,919
(2,621)
244
2,618
(65)
771
(209)
(128)
235
78
79
(1,887)
4,712
(245)
(8,199)
(4,373)
7,806
40,699
(5,736)
34,963
-
(10,630)
325
1,623
-
(11,966)
16,960
(87,135)
86,848
1,868
1
(147)
(2,253)
7,662
244
308
7
-
434
(934)
(75)
(119)
72
59
(2,106)
5,123
(229)
(3,215)
1,409
235
26,088
(2,108)
23,980
(45)
(6,886)
168
1,112
(7,660)
(18,040)
14,563
(75,160)
83,330
2,035
2
(169)
(6,750)
428
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Statement of Cash Flows
for the year ended 31 March 2022
Particulars
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds/(repayment) of short-term borrowings (net)
Proceeds from current borrowings
Repayment of current borrowings
Proceeds from long-term borrowings
Repayment of long-term borrowings
Interest paid
Payment of dividends to equity holders of the Company
Loan given to parent in excess of fair value
Payment of dividends to non-controlling interests
Payment of lease liabilities
Net cash used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at end of the year
Notes:
1.
The figures in parentheses indicate outflow.
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
875
13,256
(10,337)
20,916
(28,758)
(5,274)
(16,681)
-
(2,668)
(232)
(28,903)
10
3,817
4,854
8,671
(9,593)
11,298
(11,056)
16,707
(9,577)
(5,348)
(3,519)
(536)
(5,603)
(338)
(17,565)
72
(263)
5,117
4,854
2.
The above cash flow has been prepared under the “Indirect Method” as set out in Indian Accounting Standard (Ind AS) 7 ‑
statement of cash flows.
See accompanying notes to the financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Navin Agarwal
Sunil Duggal
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
Executive Vice-Chairman and
Whole-Time Director
DIN: 00006303
Whole-Time Director and Group
Chief Executive Officer
DIN: 07291685
per Sudhir Soni
Partner
Membership No. 41870
Place: Mumbai
Date: 28 April 2022
Ajay Goel
Prerna Halwasiya
Acting Group Chief Financial Officer
PAN AEAPG8383C
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Place: New Delhi
Date: 28 April 2022
429
Integrated Report and Annual Accounts 2021-22 Statement of Changes in Equity
for the year ended 31 March 2022
A. Equity Share Capital
Equity shares of ` 1 each issued, subscribed and fully paid
As at 31 March 2022, 31 March 2021 and 31 March 2020*
* There are no prior period errors for the years ended 31 March 2021 and 31 March 2020.
Number of shares
Amount
(in crore)
(` in crore)
372
372
B. Other Equity
Reserves and surplus
Items of OCI
Particulars
Capital
reserve
Securities
premium
Retained
earnings
Other
reserves
(Refer
note
below)
Foreign
currency
translation
reserve
Equity
instruments
through
OCI
Effective
portion of
cash flow
hedges
Total
other
equity
Non-
controlling
interests
Total
(` in crore)
Balance as at
01 April 2020
Profit for the year
Other comprehensive
income for the year (net
of tax impact)
Total comprehensive
income for the year
Recognition of share
based payment
Stock options cancelled
during the year
Exercise of stock option
Transfer from debenture
redemption reserve (net)
Recognition of put
option liability/
derecognition of
non- controlling interest
Effect of fair valuation of
inter-company loan*
Acquisition of FACOR
(Refer note 4)
Dividend
Balance as at
31 March 2021
Profit for the year
Other comprehensive
income for the year (net
of tax impact)
Total comprehensive
income for the year
Recognition of share
based payment
Stock options cancelled
during the year
Exercise of stock option
Transfer from debenture
redemption reserve (net)
Recognition of put
option liability/
derecognition of non
controlling interest
Dividend
Balance as at
31 March 2022
18,552
19,009
(6,491)
20,220
2,970
-
-
-
-
-
-
-
(163)
-
123
-
-
-
11,602
(7)
-
11,595
-
-
-
-
-
-
-
-
-
60
(14)
528
-
(536)
-
(3,519)
-
-
-
58
(92)
14
(528)
-
-
-
-
-
75
75
-
-
-
-
-
-
-
-
18,512
19,009
1,623
19,672
3,045
-
734
-
-
-
-
-
-
-
98
-
-
18,802
(17)
-
18,785
-
-
-
-
-
-
24
(19)
584
-
-
-
(16,681)
-
-
-
43
(34)
49
(584)
-
-
30
-
63
(27)
54,263
17,112
71,375
-
11,602
3,430
15,032
(21)
110
93
203
63
(21)
11,712
3,523
15,235
-
-
-
-
-
-
-
-
93
-
15
-
-
-
-
-
-
-
-
58
(32)
0
-
-
-
-
-
58
(32)
0
-
(163)
137
(26)
(536)
-
(536)
123
(31)
92
(3,519)
(5,603)
(9,122)
(48)
61,906
15,138
77,044
-
91
18,802
4,908
23,710
823
40
863
734
15
91
19,625
4,948
24,573
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43
(10)
30
-
98
-
-
-
-
(97)
43
(10)
30
-
1
-
43
(16,681)
(2,668)
(19,349)
65,011
17,321
82,332
18,610
19,009
4,316
19,146
3,779
108
* During the financial year ended 31 March 2021, an amount of ` 336 crore (US $ 46 million) was originally recognised as a transaction with the
shareholder and the same was increased by ` 581 crore (US $ 79 million) upon revision in terms. Of the same, ` 381 crore (US $ 52 million) was
reversed on a subsequent modification during the said year. Refer note 42(J) for further details.
430
Vedanta Limited Integrated Report
Statutory Reports
Financial Statements
Statement of Changes in Equity
for the year ended 31 March 2022
Note:
Other reserves comprise:
Capital
redemption
reserve
Debenture
redemption
reserve
Preference
share
redemption
reserve
Capital
reserve on
consolidation
Share
based
payment
reserve
(` in crore)
Legal
reserve
Treasury
shares
General
reserve
Total
23
1,112
3,087
10
249
25
(381)
16,095
20,220
-
-
-
-
-
-
-
(528)
-
-
-
-
-
-
-
-
58
(92)
(44)
-
-
-
-
-
-
-
58
-
-
-
-
-
58
(92)
14
(528)
23
584
3,087
10
171
25
(323)
16,095
19,672
-
-
-
-
-
-
-
(584)
-
-
-
-
-
-
-
-
43
(34)
(44)
-
-
-
-
-
-
-
93
-
-
-
-
-
43
(34)
49
(584)
23
-
3,087
10
136
25
(230)
16,095
19,146
Particulars
Balance as at
01 April 2020
Recognition of share
based payment
Stock options
cancelled during the
year
Exercise of stock
options
Transfer to retained
earnings
Balance as at
31 March 2021
Recognition of share
based payment
Stock options
cancelled during the
year
Exercise of stock
options
Transfer to retained
earnings
Balance as at
31 March 2022
See accompanying notes to the financial statements
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Navin Agarwal
Sunil Duggal
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
Executive Vice-Chairman and
Whole-Time Director
DIN: 00006303
Whole-Time Director and Group
Chief Executive Officer
DIN: 07291685
per Sudhir Soni
Partner
Membership No. 41870
Place: Mumbai
Date: 28 April 2022
Ajay Goel
Prerna Halwasiya
Acting Group Chief Financial Officer
PAN AEAPG8383C
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Place: New Delhi
Date: 28 April 2022
431
Integrated Report and Annual Accounts 2021-22 1 Group overview
Vedanta Limited (“the Company”) 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.
The Company was incorporated on 08 September
1975 under the laws of the Republic of India. The
registered office of the Company is situated at 1st
Floor, ‘C’ wing, Unit 103, Corporate Avenue, Atul
Projects, Chakala, Andheri (East), Mumbai – 400 092,
Maharashtra. The Company’s shares are listed on
National Stock Exchange (‘NSE’) and Bombay Stock
Exchange (‘BSE’) in India. In June 2007, the Company
completed its initial public offering of American
Depositary Shares, or ADS, each representing four
equity shares, and listed its ADSs on the New York
Stock Exchange (‘NYSE’). In July 2009, the Company
completed its follow-on offering of an additional
131,906,011 ADSs, each representing four equity
shares, which are listed on the NYSE.
The American Depositary Shares (ADS) of the
Company have been delisted from NYSE effective
close of trading on NYSE on 08 November 2021. This
follows the filing done by the Company of Form 25 with
Securities and Exchange Commission on 29 October
2021. As a consequence of the delisting becoming
effective, termination of the Deposit Agreement under
which the ADS were issued (the “Deposit Agreement”)
has also become effective close of trading on NYSE on
08 November 2021. The said action has no impact on
the current listing status or trading of the Company’s
equity shares on BSE and NSE. Further, the Company
will continue to be subject to reporting obligations
under the U.S. Securities Exchange Act of 1934 until
such time as it can terminate its registration under the
said Exchange Act.
The Company is majority owned by Twin Star Holdings
Limited (“Twin Star”), Finsider International Company
Limited (“Finsider”), Vedanta Holdings Mauritius
II Limited (“VHM2L”), Vedanta Holdings Mauritius
Limited (“VHML”), Welter Trading Limited (“Welter”)
and Vedanta Netherlands Investments BV (“VNIBV”)
which are in turn wholly-owned subsidiaries of Vedanta
Resources Limited (“VRL”), a company incorporated
in the United Kingdom. VRL, through its subsidiaries,
432
held 69.68% (31 March 2021: 55.1%) of the Company’s
equity as at 31 March 2022.
VRL, through its subsidiaries, acquired 54,17,31,161
equity shares of the Company during the current year,
thereby increasing their shareholding in the Company
from the current 55.1% to 69.68%.
Details of Group’s various businesses are as follows.
The Group’s percentage holdings in each of the below
businesses are disclosed in note 43.
• 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 the Company and its subsidiary, Cairn
Energy Hydrocarbons Limited and consists of
exploration and development and production of oil
and gas.
• The Group’s iron ore business is owned by the
Company, 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 Honorable
Supreme Court of India order, mining operations
in the state of Goa are currently suspended. The
Group’s iron ore business includes Western Cluster
Limited (“WCL”) in Liberia which has iron ore assets
and is wholly owned by the Group. WCL’s assets
include development rights to Western Cluster and
a network of iron ore deposits in West Africa. WCL’s
assets have been fully impaired.
• The Group’s copper business is owned and
operated by the Company, Copper Mines of
Tasmania Pty Ltd (“CMT”) and Fujairah Gold
FZC and is principally one of custom smelting
and includes 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 Company’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
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
further clarification and consequently the operations
were suspended. The Company 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. We
continue to engage with the Government of India and
relevant authorities to enable the restart of operations
at Copper India. [Refer note 3(c)(A)(iii)].
Further, the Company’s copper business includes
refinery and rod plant at Silvassa consisting of a
133,000 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 the Mt.
Lyell copper mine in Tasmania, Australia through its
subsidiary, CMT and a precious metal refinery and
copper rod plant in Fujairah, UAE through its subsidiary
Fujairah Gold FZC. The operations of Mt Lyell copper
mine were suspended in January 2014 following a mud
slide incident and were put into care and maintenance
since 09 July 2014 following a rock fall incident in
June 2014. In November 2020, 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.
• The Group’s Aluminium business is owned and
operated by the Company and by Bharat Aluminium
Company Limited (“BALCO”). The aluminium
operations include a refinery and captive power
plant at Lanjigarh and a 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 the Company, BALCO, and Talwandi
Sabo Power Limited (“TSPL”), a wholly owned
subsidiary of the Company, which are engaged
in the power generation business in India. The
Company’s power operations include a thermal
coal‑ based commercial power facility of 600 MW
at Jharsuguda in the State of Odisha in Eastern
India. BALCO power operations included 600 MW
(2 units of 300 MW each) thermal coal based
power plant at Korba, of which a unit of 300 MW
was converted to be used for captive consumption
vide order from the Central Electricity Regulatory
Commission (CERC) dated 01 January 2019.
Talwandi Sabo Power Limited (“TSPL”) power
operations include 1,980 MW (three units of 660
MW each) thermal coal‑ based commercial power
facilities. 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.
The Group’s other business also include Vizag General
Cargo Berth Private Limited (“VGCB”) and Maritime
Ventures Private Limited (“MVPL”). Vizag port project
includes mechanisation 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. MVPL is engaged in the business
of rendering logistics and other allied services inter
alia rendering stevedoring, and other allied services
in ports and other allied sectors. VGCB commenced
operations in the fourth quarter of fiscal 2013. The
Group’s other business also include AvanStrate Inc.
(“ASI”), 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. FACOR
is involved in business of producing ferro alloys and
owns a ferro chrome plant with capacity of 72,000
TPA, two operational chrome mines and 100 MW of
captive power plant through its subsidiary, FACOR
Power Limited (FPL). DCCPL is involved in business of
producing slag cements and owns three ball mills with
capacity of 218,000 TPA.
2
Basis of preparation and basis of
measurement of financial statements
(A) Basis of preparation
i)
These consolidated financial statements have
been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under
the Companies (Indian Accounting Standards)
Rules, 2015 and other relevant provisions of the
Companies Act, 2013 (the “Act”) (as amended
from time to time) and Guidance Note on
Accounting for Oil and Gas Producing Activities
issued by the Institute of Chartered Accountants
of India.
These consolidated financial statements have
been prepared in accordance with the accounting
policies, set out below and were consistently
433
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
applied to all periods presented unless
otherwise stated.
These financial statements are approved for
issue by the Board of Directors on 28 April 2022.
All financial information presented in Indian
Rupees has been rounded off to the nearest crore
except when indicated otherwise. Amounts less
than ` 0.50 crore have been presented as “0”.
ii)
Certain comparative figures appearing in these
consolidated financial statements have been
regrouped and/or reclassified to better reflect the
nature of those items (Refer note 2(C) below).
(B) Basis of measurement
The consolidated financial statements have been
prepared on a going concern basis 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) Reclassifications
i)
ii)
Consequent to amendments to the Schedule III
to the Companies Act, 2013, current maturities of
long-term borrowings (31 March 2021: ` 15,351
crore) have been presented as part of the current
borrowings and lease liabilities (31 March 2021:
` 641 crore) have been presented on the face of
balance sheet, which were previously included
under ‘other financial liabilities’.
In the comparative year ended 31 March 2021,
some of the operational buyer’s/suppliers’ credit
which were previously included under trade and
other payables amounting to ` 268 crore have
been reclassed to Operational buyer’s credit/
supplier’s credit on the face of the balance sheet.
3(a) Significant accounting policies
(A) Basis of Consolidation
i)
Subsidiaries:
The consolidated financial statements
incorporate the results of the Company and all its
subsidiaries (the “Group”), being the entities that
it controls. Control is evidenced where the Group
has power over the investee, is exposed, or has
rights, to variable returns from its involvement
with the investee and has the ability to affect
those returns through its power over the investee.
Power is demonstrated through existing rights
that give the ability to direct relevant activities,
which significantly affect the entity’s returns.
434
The financial statements of subsidiaries are
prepared for the same reporting year as the
parent 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 statement of profit and
loss and consolidated balance sheet.
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 statement of profit and loss from
the effective date of acquisition or up to the
effective date of disposal, as appropriate.
Intra-Group balances and transactions, and
any unrealised profit arising from intra‑Group
transactions, are eliminated. Unrealised losses
are eliminated unless costs cannot be recovered.
ii)
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
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 43.”
Joint venture
The Group accounts for its interest in joint
venture using the equity method (see (iv) below),
after initially being recognised at cost in the
consolidated balance sheet. Goodwill arising on
the acquisition of joint venture is included in the
carrying value of investments in joint venture.
iii)
Investments in associates
An associate is an entity over which the Group
has significant influence. Significant influence
is the power to participate in the financial and
operating policy decisions of the investee, but is
not control or joint control over those policies.
Investments in associates are accounted for
using the equity method (see (iv) below). Goodwill
arising on the acquisition of associate is included
in the carrying value of investments in associate.
iv) 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 associates
and joint-ventures are recognised as a reduction
in carrying amount of the investment.
The consolidated statement of profit and loss
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
unrealised 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 3(a)
(H) below.
(B) Business combination
Business combinations are accounted for under
the purchase method. The acquiree’s identifiable
assets, liabilities and contingent liabilities that meet
435
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
the conditions for recognition under Ind AS 103
‘Business Combinations’ 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
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 gain
is recognised in other comprehensive income and
accumulated in equity as capital reserve. However,
if there is no clear evidence of bargain purchase, the
Group recognises the gain directly in equity as capital
reserve, without routing the same through other
comprehensive income.
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 at 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
statement of profit and loss.
If the Group acquires a group of assets in a company
that does not constitute a business combination in
accordance with Ind AS 103 ‘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 specifically covered by Ind AS 103. Such
transactions are accounted for using the pooling-
of-interest method. The assets and liabilities of
the acquired entity are recognised at their carrying
amounts recorded in the parent entity’s consolidated
financial statements with the exception of certain
income tax and deferred tax assets. No adjustments
are made to reflect fair values, or recognise any new
assets or liabilities. The only adjustments that are
made are to harmonise accounting policies.
The components of equity of the acquired companies
are added to the same components within Group
equity. The difference, if any, between the amounts
recorded as share capital issued plus any additional
consideration in the form of cash or other assets
and the amount of share capital of the transferor
is transferred to capital reserve and is presented
separately from other capital reserves. The Company’s
shares issued in consideration for the acquired
companies are recognised at face value 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 year comparative
information is only adjusted for periods during which
entities were under common control.
(C) 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 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
436
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
rebates, outgoing sales taxes/ goods and service
tax and other indirect taxes. Revenues from sale of
by-products are included in revenue.
is recognised for the earned consideration
when that right is conditional on the Group’s
future performance.
Certain of the Group’s sales contracts provide
A contract liability is the obligation to transfer goods
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 Ind AS 109 ‘Financial
Instruments’ rather than Ind AS 115 ‘Revenue from
contracts with customers’ and therefore the Ind AS
115 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 statement of profit and
loss 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.
A contract asset is the right to consideration in
exchange for goods or services transferred to
the customer. If the Group performs part of its
obligation by transferring goods or services to a
customer before the customer pays consideration
or before payment is due, a contract asset
or services to a customer for which the Group
has received consideration from the customer. 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 is
recognised using the effective interest rate method.
The effective interest rate is the rate that exactly
discounts estimated future cash receipts through
the expected life of the financial asset to the
gross carrying amount of a financial asset. When
calculating the effective interest rate, the Group
estimates the expected cash flows by considering
all the contractual terms of the financial instrument
(for example, prepayment, extension, call and
similar options) but does not consider the expected
credit losses.
• Dividends
Dividend income is recognised in the consolidated
statement of profit and loss 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.
(D) Property, Plant and Equipment
i) Mining properties and leases
When a decision is taken that a mining property
is viable for commercial production (i.e. when
437
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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 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.
ii) 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 statement of profit and loss.
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 statement of
profit and loss to the extent that the net proceeds
exceed or are less than the appropriate portion of
the net capitalised costs of the asset.
iii) 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.
Land acquired free of cost or at below market rate
from the government is recognised at fair value
with corresponding credit to deferred income.
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 statement
of profit and loss for the period during which such
expenses are incurred.
438
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 statement of profit and loss
when the asset is derecognised. Major inspection
and overhaul expenditure is capitalised, if the
recognition criteria are met.
iv) 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.
v) Depreciation, depletion and amortisation
expense
Mining properties and other assets in the course
of development or construction and 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 producing facilities
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
depletable 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.
Depletable reserves are proved reserves for
acquisition costs and proved and developed
reserves for successful exploratory wells,
development wells, processing facilities,
distribution assets, estimated future
abandonment cost and all other related
costs. These assets are depleted within
each cost centre. Reserves for this purpose
are considered on working interest basis
which are reassessed atleast annually.
Impact of changes to reserves are accounted
for 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 (Residential;
factory etc.)
3-60
Plant and equipment
15-40
Railway siding
Office equipment
Furniture and fixture
Vehicles
15
3-6
8-10
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 statement of profit and loss
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.
(E) Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost. Subsequently, intangible
439
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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 Appendix C of Ind AS 115 “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 ten 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 statement of profit and loss 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.
(F) Exploration and evaluation intangible 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
440
are capitalised as exploration and evaluation assets
(intangible assets) and stated at cost less impairment,
if any. Exploration and evaluation intangible assets are
transferred to the appropriate category of property,
plant and equipment when the technical feasibility and
commercial viability has been determined. Exploration
intangible assets under development 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 licenses 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 exploration drilling and equipping
exploration and appraisal wells.
Exploration expenditure incurred in the process
of determining oil and gas exploration targets is
capitalised within “Exploration and evaluation assets”
(intangible 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 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 and
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 statement of profit and loss.
Expenditure incurred on the acquisition of a license
interest is initially capitalised on a license-by-license
basis. Costs are held, undepleted, within exploration
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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and evaluation assets until such time as the
exploration phase on the license 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 statement of profit and loss.
(G) Non-current assets held for sale
Non‑current assets and disposal groups are classified
as held for sale if their carrying amount will be
recovered through a sale transaction rather than
through continuing use. This condition is regarded
as met only when the sale is highly probable and the
asset (or disposal group) is available for immediate
sale in its present condition. Management must be
committed to the sale which should be expected to
qualify for recognition as a completed sale within one
year from the date of classification.
Non‑current assets and disposal groups classified as
held for sale are not depreciated and are measured
at the lower of carrying amount and fair value less
costs to sell. Such assets and disposal groups are
presented separately on the face of the consolidated
balance sheet.
(H) Impairment of non-financial assets
Impairment charges and reversals are assessed at the
level of cash-generating units. A cash-generating unit
(CGU) is the smallest identifiable group of assets that
generate cash inflows that are largely independent of
the cash inflows from other assets or group of assets.
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
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 statement of profit and loss.
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 intangible 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;
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Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
• 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
underway or planned. To the extent that capitalised
expenditure is no longer expected to be recovered,
it is charged to the consolidated statement of profit
and loss.
(I) 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.
(i) 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 market place
(regular way trades) are recognised on the trade
date, i.e. the date that the Group commits to
purchase or sell the asset.
For purposes of subsequent measurement,
financial assets are classified in four categories:
• Debt instruments at amortised cost
A ‘debt instrument’ is measured at amortised
cost if both the following conditions are met:
442
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 statement of profit and loss. The
losses arising from impairment are recognised
in consolidated statement of profit and loss.
• Debt instruments 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 statement of
profit and loss. On derecognition of the asset,
cumulative gain or loss previously recognised
in other comprehensive income is reclassified
from the equity to consolidated statement of
profit and loss. Interest earned whilst holding
fair value through other comprehensive
income debt instrument is reported as interest
income using the EIR method.
• Debt instruments at fair value through profit
or loss (FVTPL)
FVTPL is a residual category for debt
instruments. Any debt instrument, which does
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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not meet the criteria for categorisation 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 the consolidated
statement of profit and loss.
• Equity instruments
All equity investments in the scope of Ind
AS 109 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
Ind AS 103 applies are classified as at FVTPL.
For all other equity instruments, the Group
may make an irrevocable election to present
in other comprehensive income subsequent
changes in the fair value. The Group makes
such election on an instrument-by-instrument
basis. The classification is made on initial
recognition and is irrevocable.
If the Group decides to classify an equity
instrument as at FVOCI, then all fair value
changes on the instrument, excluding
dividends, are recognised in the OCI. There is
no recycling of the amounts from OCI to profit
and loss, even on sale of investment. However,
the Group may transfer the cumulative gain
or loss within equity. For equity instruments
which are classified as FVTPL, all subsequent
fair value changes are recognised in the
consolidated statement of profit and loss.
(ii) Financial Assets – derecognition
The Group derecognises a financial asset when
the contractual rights to the 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.
(iii) Impairment of financial assets
In accordance with Ind AS 109, the Group
applies expected credit loss (“ECL”) model for
measurement and recognition of impairment loss
on the following financial assets:
a)
b)
c)
Financial assets that are debt instruments,
and are measured at amortised cost, e.g.
loans, debt securities and deposits;
Financial assets that are debt instruments
and are measured as at FVOCI;
Trade receivables or any contractual right to
receive cash or another financial asset that
result from transactions that are within the
scope of Ind AS 115.
The Group follows ‘simplified approach’ for
recognition of impairment loss allowance on
trade receivables, contract assets 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.
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.
Lifetime ECL are the expected credit losses
resulting from all possible default events over
the expected life of a financial instrument.
The 12‑month ECL is a portion of the lifetime
ECL which results from default events that
are possible within 12 months after the
reporting date.
ECL is the difference between all contractual cash
flows that are due to the Group in accordance
with the contract and all the cash flows that
the entity expects to receive, discounted at the
original EIR.
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Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
ECL impairment loss allowance (or reversal)
during the year is recognised as income/ expense
in consolidated statement of profit and loss. The
balance sheet presentation for various financial
instruments is described below:
a)
b)
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.
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.
(iv) 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:
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 Ind AS
109. 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 statement
of profit and loss.
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 Ind AS
109 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 statement of
profit and loss. The Group has not designated
any financial liability at fair value through profit
or loss.
• 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 the consolidated statement
of profit and loss 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
statement of profit and loss.
• Financial liabilities at fair value through profit
(v) Financial liabilities – Derecognition
or loss
Financial liabilities at fair value through profit
or loss include financial liabilities held for
A financial liability is derecognised when the
obligation under the liability is discharged or
cancelled or expires. When an existing financial
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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 statement of profit
and loss.
(viii) Offsetting of financial instruments
Financial assets and financial liabilities are
offset and the net amount is reported in the
consolidated balance sheet if there is a currently
enforceable legal right to offset the recognised
amounts and there is an intention to settle on
a net basis or to realise the asset and settle the
liability simultaneously.
(vi) Embedded derivatives
(J)
Derivative financial instruments and hedge
accounting
An embedded derivative is a component of a
hybrid (combined) instrument that also includes
a non-derivative host contract – with the effect
that some of the cash flows of the combined
instrument vary in a way similar to a stand-alone
derivative. An embedded derivative causes some
or all of the cash flows that otherwise would be
required by the contract to be modified according
to a specified interest rate, financial instrument
price, commodity price, foreign exchange rate,
index of prices or rates, credit rating or credit
index, or other variable, provided in the case of
a non‑financial variable that the variable is not
specific to a party to the contract. Reassessment
only occurs if there is either a change in the terms
of the contract that significantly modifies the
cash flows that would otherwise be required or a
reclassification of a financial asset out of the fair
value through profit or loss.
If the hybrid contract contains a host that is
a financial asset within the scope of Ind AS
109, the Group does not separate embedded
derivatives. Rather, it applies the classification
requirements contained in Ind AS 109 to the
entire hybrid contract. Derivatives embedded
in all other host contracts are accounted for as
separate derivatives and recorded at fair value
if their economic characteristics and risks are
not closely related to those of the host contracts
and the host contracts are not held for trading
or designated at fair value through profit or loss.
These embedded derivatives are measured at fair
value with changes in fair value recognised in the
consolidated statement of profit and loss, unless
designated as effective hedging instruments.
(vii) 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.
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 statement of profit and loss, except
for the effective portion of cash flow hedges, which
is recognised in OCI and later reclassified to the
consolidated 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.
For the purpose of hedge accounting, hedges are
classified as:
• Fair value hedges when hedging the exposure to
changes in the fair value of a recognised asset or
liability or an unrecognised firm commitment;
• Cash flow hedges when hedging the exposure to
variability in cash flows that is either attributable to
a particular risk associated with a recognised asset
or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised
firm commitment;
• Hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Group
formally designates and documents the hedge
relationship to which the Group wishes to apply
hedge accounting. The documentation includes the
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Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Group’s risk management objective and strategy
for undertaking hedge, the hedging/ economic
relationship, the hedged item or transaction, the
nature of the risk being hedged, hedge ratio and how
the Group will assess the effectiveness of changes in
the hedging instrument’s fair value in offsetting the
exposure to changes in the hedged item’s fair value
or cash flows attributable to the hedged risk. Such
hedges are expected to be highly effective in achieving
offsetting changes in fair value or cash flows and
are assessed on an ongoing basis to determine that
they actually have been highly effective throughout
the financial reporting periods for which they
were designated.
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 statement of profit
and loss 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 statement of profit and loss. 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 statement of profit and loss.
Amounts recognised in OCI are transferred to the
consolidated statement of profit and loss 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.
(iii) Hedges of a net investment
Hedges of a net investment in a foreign operation,
including a hedge of a monetary item that is
accounted for as part of the net investment,
are accounted for in a way similar to cash
flow hedges. Gains or losses on the hedging
instrument relating to the effective portion of
the hedge are recognised in OCI while any gains
or losses relating to the ineffective portion
are recognised in the consolidated statement
of profit and loss. On disposal of the foreign
operation, the cumulative value of any such gains
or losses recorded in equity is reclassified to the
consolidated statement of profit and loss (as a
reclassification adjustment).
(K) 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.
(a) Group as a lessor
Leases in which the Group does not transfer
substantially all the risks and rewards of
ownership of an asset are classified as operating
leases. Rental income from operating lease is
recognised on a straight-line basis over the term
of the relevant lease. Initial direct costs incurred
in negotiating and arranging an operating lease
are added to the carrying amount of the leased
asset and recognised over the lease term on the
same basis as rental income. Contingent rents
are recognised as revenue in the period in which
they are earned.
Leases are classified as finance leases when
substantially all of the risks and rewards of
ownership transfer from the Group to the lessee.
Amounts due from lessees under finance leases
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are recorded as receivables at the Group’s net
investment in the leases. Finance lease income
is allocated to accounting periods so as to reflect
a constant periodic rate of return on the net
investment outstanding in respect of the lease.
(b) Group as a lessee
The Group 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.
(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 ‘D’ 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 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 disclosed on
the face of Balance sheet.
(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.
(L) 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
FIFO basis;
• Finished products are valued at raw material cost
plus costs of conversion, comprising labour costs
447
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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.
(M) 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.
When the grant or subsidy relates to revenue, it is
recognised as income on a systematic basis in the
consolidated statement of profit and loss over the
periods necessary to match them with the related
costs, which they are intended to compensate.
Where the grant relates to an asset, it is recognised
as deferred income and released to income in equal
amounts over the expected useful life of the related
asset and presented within other income.
When the Group receives grants of non‑monetary
assets, the asset and the grant are recorded at fair
value amounts and released to profit or loss over the
expected useful life in a pattern of consumption of the
benefit of the underlying asset.
When loans or similar assistance are provided by
governments or related institutions, with an interest
rate below the current applicable market rate, the
effect of this favourable interest is regarded as a
government grant. The loan or assistance is initially
recognised and measured at fair value and the
government grant is measured as the difference
between the initial carrying value of the loan and
the proceeds received. The loan is subsequently
measured as per the accounting policy applicable to
financial liabilities.
(N) 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.
448
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 or 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); 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.
Deferred tax assets and liabilities are measured at the
tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based
on tax rates (and tax laws) that have been enacted
or substantively enacted at the reporting date. Tax
relating to items recognised outside the consolidated
statement of profit and loss is recognised outside the
consolidated statement of profit and loss (either in
other comprehensive income or equity).
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
statement of profit and loss/other comprehensive
income as the underlying temporary difference
is reversed.
Further, management periodically evaluates positions
taken in the tax returns with respect to situations
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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.
(O) 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 statement of profit
and loss.
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 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 awards likely to vest is
reviewed at each balance sheet 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.
Past service costs are recognised in the consolidated
statement of profit and loss on the earlier of:
(Q) Provisions, contingent liabilities and
contingent assets
− the date of the plan amendment or curtailment, and
− the date that the Group recognises related
restructuring costs
The assessments undertaken in recognising
provisions and contingencies have been made in
accordance with the applicable Ind AS.
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 cost are recognised
within employee benefit expense. Net interest expense
or income is recognised within finance costs.
For defined contribution schemes, the amount
charged to the consolidated statement of profit
and loss 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.
(P) 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
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 statement of profit and loss 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 the
449
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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 balance sheet.
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 balance sheet.
(R) 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 statement of profit and loss 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 finance cost in
the consolidated statement of profit and loss.
Costs for the 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 statement of profit
and loss as extraction progresses. Where the costs of
site restoration are not anticipated to be material, they
are expensed as incurred.
(S) 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
450
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 Indian rupee (`).
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 statement of profit and loss 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 the consolidation of financial
statements, items in the consolidated statement of
profit and loss of those businesses for which the
Indian Rupees is not the functional currency are
translated into Indian Rupees 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 Indian rupees 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.
The Group had applied paragraph 46A of AS 11 under
Previous GAAP. Ind AS 101 gives an option, which
has been exercised by the Group, whereby a first
time adopter can continue its Indian GAAP policy for
accounting for exchange differences arising from
translation of long-term foreign currency monetary
items recognised in the Indian GAAP financial
statements for the period ending immediately before
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
the beginning of the first Ind AS financial reporting
period. Hence, foreign exchange gain/loss on long‑
term foreign currency monetary items recognised
upto 31 March 2016 has been deferred/capitalised.
Such exchange differences arising on translation/
settlement of long ‑term foreign currency monetary
items and pertaining to the acquisition of a depreciable
asset are amortised over the remaining useful lives of
the assets.
Exchange differences arising on translation/
settlement of long-term foreign currency monetary
items, acquired post 01 April 2016, pertaining to the
acquisition of a depreciable asset are charged to the
consolidated statement of profit and loss.
(T) Earnings per share
The Group presents basic and diluted earnings per
share (“EPS”) data for its equity shares. Basic EPS is
calculated by dividing the profit or loss attributable to
equity shareholders of the Company by the weighted
average number of equity shares outstanding during
the period. Diluted EPS is determined by adjusting
the profit or loss attributable to equity shareholders
and the weighted average number of equity shares
outstanding for the effects of all dilutive potential
equity shares.
(U) 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 balance sheet.
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.
(V) Current and non-current classification
The Group presents assets and liabilities in the
consolidated balance sheet based on current /
non‑current classification.
An asset is classified as current when it satisfies any
of the following criteria:
− it is expected to be realised in, or is intended for sale
or consumption in, the Group’s normal operating
cycle.
− it is held primarily for the purpose of being traded;
− it is expected to be realised within 12 months after
the reporting date; or
− it is cash or cash equivalent unless it is restricted
from being exchanged or used to settle a liability for
at least 12 months after the reporting date.
All other assets are classified as non‑current.
A liability is classified as current when it satisfies any
of the following criteria:
− it is expected to be settled in the Group’s normal
operating cycle;
− it is held primarily for the purpose of being traded;
− it is due to be settled within 12 months after the
reporting date; or
− the Group does not have an unconditional right
to defer settlement of the liability for at least 12
months after the reporting date. Terms of a liability
that could, at the option of the counterparty, result
in its settlement by the issue of equity instruments
do not affect its classification.
All other liabilities are classified as non‑current.
Deferred tax assets and liabilities are classified as non
current only.
(W) 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.
451
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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 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 statement of profit and loss 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.
EIR is the rate that exactly discounts the estimated
future cash payments or receipts over the expected
life of the financial liability or a shorter period, where
appropriate, to the amortised cost of a financial
liability. When calculating the effective interest rate,
the Group estimates the expected cash flows by
considering all the contractual terms of the financial
instrument (for example, prepayment, extension, call
and similar options).
(X) Treasury shares
The Group has created an Employee Benefit Trust
(EBT) for providing share-based payment to its
employees. The Group uses EBT as a vehicle for
distributing shares to employees under the employee
remuneration schemes. The EBT buys shares of
the Company from the market, for giving shares to
employees. The shares held by EBT are treated as
treasury shares.
452
Own equity instruments that are reacquired (treasury
shares) are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the Group’s
own equity instruments. Any difference between the
carrying amount and the consideration, if reissued,
is recognised in equity. Share options whenever
exercised, would be satisfied with treasury shares.
(Y) Cash and cash equivalents
Cash and cash equivalents comprise cash at bank
and on hand and short-term money market deposits
which have 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.
(Z) Exceptional items
Exceptional 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 periods. Also
tax charges related to exceptional items and certain
one‑time tax effects are considered exceptional. Such
items are material by nature or amount to the year’s
result and require separate disclosure in accordance
with Ind AS.
3(b) Application of new and amended
standards
A. The Group has adopted, with effect from 01 April
2021, the following new and revised standards.
Their adoption has not had any significant impact
on the amounts reported in the consolidated
financial statements.
1.
2.
Amendments to Ind AS 103 regarding the
definition of identifiable assets acquired and
liabilities assumed to qualify for recognition as
part of applying the acquisition method;
Amendments to Ind AS 107, 109, 104 and 116
regarding Interest Rate Benchmark Reform –
Phase 2;
3.
Conceptual framework for financial reporting
under Ind AS issued by the ICAI;
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
4.
5.
Amendments to Ind AS 116 regarding COVID‑19
related rent concessions;
Amendments to Ind AS 105, 16 and 28 regarding
definition of recoverable amount.
B. Standards notified but not yet effective
The Ministry of Corporate Affairs has notified
Companies (Indian Accounting Standard) Amendment
Rules 2022 dated 23 March 2022, effective from
01 April 2022, resulting in amendments such as
Onerous Contracts – Costs of Fulfilling a Contract
– Amendments to Ind AS 37, Reference to the
Conceptual Framework – Amendments to Ind
AS 103, Property, Plant and Equipment: Proceeds
before Intended Use – Amendments to Ind AS 16,
Ind AS 101 First-time Adoption of Indian Accounting
Standards – Subsidiary as a first‑time adopter, Ind AS
109 Financial Instruments – Fees in the ’10 per cent’
test for derecognition of financial liabilities, Ind AS 41
Agriculture – Taxation in fair value measurements.
These amendments are not expected to have any
impact on the Group. The Group has not early adopted
any amendments that has been notified but is not
yet effective.
3(c) Significant accounting estimates and
judgements
The preparation of consolidated financial statements
in conformity with Ind AS 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 judgements
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.
A. Significant estimates
i)
Carrying value of exploration and evaluation assets
Exploration assets are assessed by comparing the
carrying value to higher of fair value less cost of
disposal or value in use if impairment indicators,
as contained in Ind AS 106, exists. 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 statement of
profit and loss 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 6.
ii) Recoverability of deferred tax and other income tax
assets
The Group has carry forward tax losses, unabsorbed
depreciation and MAT credit 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 utilised. 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 statement of
profit and loss.
The total deferred tax assets recognised in these
financial statements include MAT credit entitlements
of ` 6,746 crore (FY 2020-21: ` 8,232 crore), of which
` 208 crore (FY 2020-21: ` 340 crore) is expected to
be utilised in the fourteenth year, fifteen years being
the maximum permissible time period to utilise the
MAT credits.
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 Company had filed an appeal with
the National Green Tribunal (“NGT”). NGT had, on
453
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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
Company 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 Company
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 Company 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 authorisation
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 Company to file an appeal in
High court.
The Company has filed a writ petition before the
Madras High Court challenging the various orders
passed against the Company 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 Company. The Company has
approached the Supreme Court and challenged the
said High Court Order by way of a Special Leave
Petition (“SLP”) to Appeal and also filed an interim
relief for care & maintenance of the plant or trial run for
certain period.
The Matter was then listed on 02 December 2020
before Supreme Court. After having heard both the
sides concluded that at this stage the interim relief in
terms of trial run could not be allowed. The hearing on
care & maintenance could not be listed at Supreme
Court. Further, considering the voluminous nature of
documents and pleadings, the matter shall be finally
heard on merits.
As per the Company’s assessment, it is in compliance
with the applicable regulations and expects to get
the necessary approvals in relation to the existing
operations and hence the Company does not expect
any material adjustments to these financial statements
as a consequence of above actions.
The Company has carried out an impairment
analysis for existing plant assets during the period
ended 31 March 2022 considering the key variables
and concluded that there exists no impairment.
The Company has done an additional sensitivity
analysis with commencement of operations of the
existing plant w.e.f. 01 April 2025 and noted that the
recoverable amount of the assets would still be in
excess of their carrying values.
The carrying value of the assets as at 31 March 2022
is ` 1,982 crore (31 March 2021: ` 2,144 crore).
Expansion Project:
Separately, the Company 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 High
Court of Madras 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 Company to cease construction and all other
activities on site for the proposed Expansion Project
with immediate effect. The 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.
454
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
The Company has approached Madras High Court
by way of writ petition challenging the cancellation
of lease deeds by SIPCOT pursuant to which an
interim stay has been granted. The Company has also
filed Appeals before the TNPCB Appellate Authority
challenging withdrawal of CTE by the TNPCB, the
matter is pending for adjudication. Considering
the delay in existing plant matter and accordingly
delay in getting the required approval for Expansion
Project, management considered to make provision
for impairment for Expansion Project basis fair value
less cost of disposal. The net carrying value of ` 41
crore as at 31 March 2022 (31 March 2021: ` 97 crore)
approximates its recoverable value.
Property, plant and equipment of ` 1,213 crore and
inventories of ` 301 crore, 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, since operations are
suspended and access to the plant restricted, any
difference between book and physical quantities is
unlikely to be material.
(iv) PSC Extension
Rajasthan Block
The Company operates an oil and gas production
facility in Rajasthan under a Production Sharing
Contract (“PSC”). The management is of the opinion
that the Company is eligible for automatic extension
of the PSC for Rajasthan (“RJ”) block on same terms
w.e.f. 15 May 2020, while Government of India (“GOI”)
in October 2018, accorded its approval for extension of
the PSC, under the Pre‑NELP Extension policy as per
notification dated 07 April 2017 (“Pre‑NELP Policy”), for
RJ block by a period of 10 years, w.e.f. 15 May 2020. As
per the said policy and extension letter, the Company
is required to comply with certain conditions and pay
an additional 10% profit oil to GOI. The Company had
challenged the applicability of Pre‑NELP Policy to the
RJ block. The Division Bench of the Delhi High Court
in March 2021 set aside the single judge order of May
2018 which allowed automatic extension of PSC.
Nevertheless, GOI, in their submissions to the Delhi
High Court, has not objected to Vedanta obtaining a
10‑year extension of Rajasthan PSC. The legal dispute
only relates to additional 10% profit petroleum (“PP”)
rather than Vedanta’s right to obtain 10‑year extension.
In the interim, without prejudice to the Company’s
rights, the Company has commenced paying the
additional 10% profit petroleum claimed from 15 May
2020 to the Government. The Company has also filed
an SLP in Supreme Court against above Delhi HC order
and revised date for SLP listing is awaited.
In parallel, the Company is in discussion with the
Ministry of Petroleum and Natural Gas (MoPNG) on
execution of the PSC addendum. On the other issue
related to DGH audit exceptions, discussions are
ongoing to agree on the position that this issue will be
dealt with as per ongoing arbitration with GOI as per
PSC mechanism.
One of the conditions for extension of PSC relates
to notification of certain audit exceptions raised for
FY 2016‑17 as per PSC provisions and provides for
payment of amounts, if such audit exceptions result
into any creation of liability. The Company had also
clarified that the same should be de‑linked as a
condition for the extension which had been granted
vide letter dated 26 October 2018.
The Directorate General of Hydrocarbons (“DGH”)
in May 2018 raised a demand on the Company and
its subsidiary for the period up to 31 March 2017 for
Government’s additional share of Profit oil based on
its computation of disallowance of costs incurred in
excess of the initially approved Field Development
Plan (“FDP”) of the pipeline project for ` 1,524 crore
(US $ 202 million) and retrospective re-allocation of
certain common costs between Development Areas
(“DAs”) of RJ block aggregating to ` 2,752 crore (US
$ 364 million). The DGH vide its letter dated 12 May
2020, reiterated its demand only with respect to the
retrospective re-allocation of certain common costs
between DAs of the RJ block of ` 2,752 crore (US $
364 million towards contractor share for the period
up to 31 March 2017. This amount was subsequently
revised to ` 3,465 crore (US $ 458 million) till March
2018 vide DGH letter dated 24 December 2020.
In September 2021, DGH communicated the
approval by Empowered Committee of Secretaries
for the revised pipeline project cost over the initial
approved FDP.
The Company believes that it has sufficient as well as
reasonable basis pursuant to the PSC provisions and
related approvals, supported by legal advice, for having
claimed such costs and for allocating common costs
between different DAs. In the Company’s opinion,
these computations of the aforesaid demand/audit
exceptions are not appropriate, and the accounting
adjustments sought for issues pertaining to Year 2007
and onwards are based on assumptions that are not
in consonance with the approvals already in place.
The Company’s view is also supported by independent
legal opinion and the Company has been following
the process set out in PSC to resolve these aforesaid
matters. The Company has also invoked the PSC
process for resolution of disputed exceptions and
455
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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 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 Public Interest Litigation filed against
the Standard Operating Procedure which was issued
by the MoEFCC for regularisation 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 ` 213 crore as part of exceptional item during the
year ended 31 March 2021 with respect to the costs
to be incurred by it for obtaining EC and an additional
` 7 crore has been provided against final order relating
to wildlife conservation plan received during the
current year.
has issued notice for arbitration and an arbitration
tribunal (“Tribunal”) stands constituted. Further, on 23
September 2020, the GOI had filed an application for
interim relief before Delhi High Court seeking payment
of all disputed dues. The matter was heard on 25
September 2020 wherein the Bench has not passed
any ex parte orders. The matter is now listed for
hearing on 29 August 2022.
Also, on Vedanta’s application under Section 17 of the
Arbitration and Conciliation Act, 1996, the Tribunal in
December 2020 ordered that GOI should not take any
action to enforce any of the amounts at issue in this
arbitration against the Claimants during the arbitral
period. The GOI has challenged the said order before
the Delhi High Court under the said Act. This matter is
also scheduled for hearing on 25 May 2022.
The Company has also filed application under Section
151 of Code of Civil Procedure (CPC) read with Section
9 of the Arbitration Act, 1996 requesting the Court
to direct GOI to extend the PSC for 10 years without
insisting upon a payment of disputed dues under
audit exceptions which have been already referred to
arbitration. On 12 April 2022, basis the application, the
Court has issued notice under this application.
In management’s view, the above‑mentioned condition
on demand raised by the DGH for additional petroleum
linked to PSC extension is untenable and has not
resulted in creation of any liability and cannot be a
ground for non‑extension. In addition, all necessary
procedures prescribed in the PSC including invocation
of arbitration, in respect of the stated audit observation
have also been fulfilled. Accordingly, the PSC extension
approval granted vide DGH letter dated 26 October
2018 upholds with all conditions addressed and no
material liability would devolve upon the Group.
Simultaneously, the Company is also pursuing with
the GOI for executing the RJ PSC addendum at
the earliest. In view of extenuating circumstances
surrounding COVID‑19 and pending signing of the
PSC addendum for extension after complying with
all stipulated conditions, the GOI has been granting
interim permission to the Company to continue
Petroleum operations in the RJ block. The latest
permission is valid upto 14 May 2022 or signing of the
PSC addendum, whichever is earlier.
(v) 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
456
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
(vi) Oil and Gas reserves
B. Significant judgements
Significant technical and commercial judgements
are required to determine the Company’s estimated
oil and natural gas reserves. Reserves considered
for computing depletion are proved reserves for
acquisition costs and proved and developed reserves
for successful exploratory wells, development wells,
processing facilities, distribution assets, estimated
future abandonment cost and all other related costs.
Reserves for this purpose are considered on working
interest basis which are reassessed at least annually.
Details of such reserves are given in note 44. Changes
in reserves as a result of change in management
assumptions could impact the depreciation rates and
the carrying value of assets (Refer note 6).
(vii) Carrying value of developing/producing oil and gas
assets
Management performs impairment tests on the
Company’s developing/producing oil and gas assets
where indicators of impairment are identified in
accordance with Ind AS 36.
The impairment assessments are based on a range of
estimates and assumptions, including:
Estimates/ assumptions Basis
(i)
Determining whether an arrangement contains a
lease:
The Group has ascertained that the Power Purchase
Agreement (PPA) entered into between one of the
subsidiaries and a State grid qualifies to be an
operating lease under Ind AS 116 “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
Note 27.
Future production
Commodity prices
Discount to price
Extension of PSC
Discount rates
proved and probable reserves,
production facilities, resource
estimates and expansion projects
management’s best estimate
benchmarked with external
sources of information, to ensure
they are within the range of
available analyst forecast
management’s best estimate
based on historical prevailing
discount and updated sales
contracts
granted till 2030 on the expected
commercial terms (Refer note 3(c)
(A)(iv)
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 note 6 and
36 respectively.
(ii) Contingencies
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 legal or tax
cases as probable, possible or remote, there is
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
457
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
expect them to have a materially adverse impact on
the Group’s financial position or profitability. These are
set out in note 40.
The determination as to which items should be
disclosed separately requires a degree of judgement.
The details of exceptional items are set out in note 36.
(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 Ind AS 115 and to
assess the recoverability of withheld revenue currently
accounted for as receivables.
In assessing this critical judgement, management
considered favourable external legal opinions that
the Group has obtained in relation to the claims.
In addition, the fact that the contracts are with
government owned companies implies that the credit
risk is low (refer note 8).
(iv) Exceptional items
Exceptional 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 periods. Also
tax charges related to exceptional items and certain
one‑time tax effects are considered exceptional. Such
items are material by nature or amount to the year’s
result and require separate disclosure in accordance
with Ind AS.
4 Business Combination
Ferro Alloys Corporation Limited – Business
Combination
During the previous year ended 31 March 2021,
the Company acquired control over Ferro Alloys
Corporation Limited (“FACOR”) under Corporate
insolvency resolution process in terms of the
Insolvency and Bankruptcy Code, 2016 of India. Based
on completion of the closing conditions, the Company
concluded the acquisition date as 21 September
2020. The Company holds 100% in FACOR, while
FACOR holds 90% equity in its subsidiary, Facor Power
Limited (FPL).
FACOR is in the business of producing Ferro Alloys and
owns a Ferro Chrome plant with capacity of 72,000
TPA, two operational Chrome mines and 100 MW of
Captive Power Plant through FPL. The acquisition
complements the Group’s existing steel business
as the vertical integration of ferro manufacturing
capabilities has the potential to generate significant
efficiencies. FACOR has been included in “Others”
for segment reporting purposes. The Company had
finalised acquisition accounting during the year ended
31 March 2021.
If FACOR had been acquired at the beginning of
the comparative period, revenue and profit before
taxation of the Group for the year ended 31 March
2021 would have been ` 87,087 crore and ` 17,229
crore respectively.
458
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
5 Segment Information
A.
Description of segment and principal activities
The Group is a diversified natural resource 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, South Africa, Namibia,
U.A.E, 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 has seven reportable segments: copper,
aluminium, iron ore, power, Zinc India (comprises zinc
and lead India), Zinc international, oil and gas and
others. The management of the Group is organised
by its main products: copper, Zinc (comprises zinc
and lead India, silver India and zinc international),
aluminium, iron ore, oil and gas, power and others.
“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”).
Segment Revenue, Results, Assets and Liabilities
include the respective amounts identifiable to
each of the segments and amount allocated on a
reasonable basis. Unallocated expenditure consist of
common expenditure incurred for all the segments
and expenses incurred at corporate level. The assets
and liabilities that cannot be allocated between the
segments are shown as unallocated assets and
unallocated liabilities respectively.
The accounting policies of the reportable segments
are the same as the Group’s accounting policies. The
operating segments reported are the segments of
the Group for which separate financial information
is available. Earnings before interest, depreciation
and amortisation and tax (“EBITDA”) are evaluated
regularly by the CODM in deciding how to allocate
resources and in assessing performance. The Group’s
financing (including finance costs and finance income)
and income taxes are reviewed on an overall basis and
are not allocated to operating segments.
Pricing between operating segments are on an arm’s
length basis in a manner similar to transactions with
third parties.
The following table presents revenue and profit
information and certain assets and liabilities
information regarding the Group’s business segments
as at and for the year ended 31 March 2022 and 31
March 2021 respectively.
459
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Less: Depreciation,
depletion and amortisation
Add: Other (expense)/
income b
Less: Unallocated
expenses
Less: Finance costs
Add: Other income
(excluding exchange
difference and those
included in segment
results)
Add: Net exceptional loss
Net profit before tax
Other information
Segment assets
Financial assets
investments
Deferred tax assets
Income tax assets
Cash and bank balances
(including restricted cash
and bank balances)
Others
Total assets
For the year ended 31 March 2022
Particulars
Revenue
Business Segments
(` in crore)
Zinc
India
Zinc
International
Oil &
Gas
Aluminium Copper
Iron Ore Power Others Eliminations
Total
External revenue
28,624
4,484 12,430
50,809 15,151
6,233 5,501 7,960
-
1,31,192
Inter segment revenue
-
-
-
72
-
117
325
12
(526)
-
Segment revenue
28,624
4,484 12,430
50,881 15,151
6,350 5,826 7,972
(526) 1,31,192
Results
Segment results (EBITDA) a 16,161
1,533
5,992
17,337
(115)
2,280 1,082 1,049
2,951
513
1,633
2,238
208
118
685
549
139
-
-
80
2
8
15
1
-
-
-
45,319
8,895
245
235
4,797
2,095
(768)
32,964
22,822
6,984 24,149
60,407 5,912
4,156 17,195 9,197
-
1,50,822
17,291
5,085
2,787
15,805
6,810
1,98,600
Segment liabilities
6,229
1,159 16,138
20,231 5,028
2,601 1,976 2,694
-
56,056
Deferred tax liabilities
Borrowing
Income tax liabilities (net
of payments)
Others
Total liabilities
Capital expenditure c
Net impairment/ (reversal)
or write off/ (write back)
relating to assets d
3,705
1,016
1,805
-
(79)
3,535
125
8
-
298
105 1,250
52
4,435
53,109
917
1,379
1,15,896
11,742
122
-
-
a) EBITDA is a non‑GAAP measure.
b) Amortisation of duty benefits relating to assets recognised as government grant.
c) Includes capital expenditure of ` 20 crore which is not allocable to any segment.
d) Includes write off of ` 24 crore which is not allocable to any segment.
460
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
For the year ended 31 March 2021
Zinc
India
Zinc
International
Oil &
Gas
Aluminium Copper
Iron Ore
Power
Others Eliminations
Total
Business Segments
(` in crore)
Particulars
Revenue
External Revenue
21,932
2,729
7,531
28,575 10,888
4,487
5,375
5,346
-
86,863
Inter segment revenue
-
-
-
69
2
41
-
31
(143)
-
Segment revenue
21,932
2,729
7,531
28,644 10,890
4,528
5,375
5,377
(143)
86,863
Results
Segment results
(EBITDA) a
Depreciation, depletion
and amortisation
Add: Other income/
(expense) b
Add: Unallocated income
Less: Finance costs
Add : Other income
(excluding exchange
difference and those
included in segment
results)
Add: Net exceptional loss
Net profit before tax
Other information
11,620
811
3,206
7,751
(177)
1,804
1,407
919
-
27,341
2,592
320
1,223
1,928
218
96
693
568
125
-
-
75
3
8
17
1
-
-
7,638
229
129
5,210
3,040
(678)
17,213
Segment assets
21,302
6,065 18,915
54,764
6,273
2,722 17,565
7,876
- 1,35,482
Financial Assets
investments
Deferred tax Assets
Income tax Assets
Cash and bank balances
(including restricted cash
and bank balances)
Others
Total assets
16,660
5,860
2,755
16,744
8,210
1,85,711
Segment liabilities
5,929
1,067 11,178
18,565
4,388
1,319
2,123
2,140
-
46,709
Deferred tax liabilities
Borrowing
Income tax liabilities (net
of payments)
Others
Total liabilities
Capital expenditure c
Net impairment/
(reversal) or write off/
(write back) relating to
assets
2,333
-
390
1,523
-
-
1,782
(181)
58
-
112
-
57
598
(63)
2,215
57,028
277
2,066
1,08,295
-
-
6,855
(244)
a) EBITDA is a non‑GAAP measure.
b) Amortisation of duty benefits relating to assets recognised as government grant and cost of exploration wells written off in Oil & Gas
segment.
c) Total of capital expenditure includes capital expenditure of `2 crore which is not allocable to any segment. It also includes ` 354 crore
acquired through business combination.
461
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 B. Geographical segment analysis
The following table provides an analysis of the Group’s sales by region in which the customer is located, irrespective of the
origin of the goods.
Geographical Segments
Revenue by geographical segment
India
Europe
China
The United states of America
Turkey
Mexico
Malaysia
Others
Total
Year ended
31 March 2022
(` in crore)
Year ended
31 March 2021
73,619
15,847
9,667
3,487
5,181
2,311
548
20,532
1,31,192
53,621
3,181
5,221
1,163
415
932
7,109
15,221
86,863
The following is an analysis of the carrying amount of non‑current assets, excluding deferred tax assets and financial
assets, analysed by the geographical area in which the assets are located:
Geographical Segments
Carrying amount of non-current assets
India
South Africa
Namibia
Taiwan
Other
Total
As at
31 March 2022
(` in crore)
As at
31 March 2021
1,07,915
5,105
990
893
646
1,15,549
1,05,615
4,449
887
1,002
789
1,12,742
C.
Information about major customer
No single customer has accounted for more than 10% of the Group’s revenue for the year ended 31 March 2022. Revenue
from one customer amounted to ` 10,477 crore for the year ended 31 March 2021 arising from sales made in the
Aluminium, Zinc and Copper segment. No other customer contributed to more than 10% of revenues.
D. Disaggregation of Revenue
Below table summarises the disaggregated revenue from contracts with customers
Particulars
Oil
Gas
Zinc metal
Lead metal
Silver metals and bars
Iron ore
Metallurgical coke
Pig iron
Copper products
Aluminium products
Power
Steel products
Ferro alloys
Others
Revenue from contracts with customers*
Revenue from contingent rents
Loss on provisionally priced contracts under Ind AS 109
Total revenue
Year ended
31 March 2022
10,275
1,712
24,709
4,240
4,215
2,354
406
4,123
14,281
51,253
3,886
5,698
830
3,119
1,31,101
1,381
(1,290)
1,31,192
(` in crore)
Year ended
31 March 2021
6,480
684
16,634
3,880
4,395
2,173
257
2,425
10,205
28,394
3,651
3,966
274
2,126
85,544
1,515
(196)
86,863
* includes revenues from sale of services aggregating to ` 301 crore (For the year ended 31 March 2021: ` 224 crore) which is recorded over a
period of time. The balance revenue from contracts with customers is recognised at a point in time.
462
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 )
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6
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Right of Use (ROU) Assets
Particulars
Gross Block
As at 01 April 2020
Additions
Transfers/Reclassification
Disposals/Adjustments
Exchange differences
As at 31 March 2021
Additions
Transfers/Reclassification
Disposals/Adjustments
Exchange differences
As at 31 March 2022
Accumulated depreciation & impairment
As at 01 April 2020
Charge for the year
Disposals/Adjustments
Exchange differences
As at 31 March 2021
Charge for the year
Disposals/Adjustments
Transfers/Reclassification
Exchange differences
As at 31 March 2022
Net Book Value
As at 01 April 2020
As at 31 March 2021
As at 31 March 2022
Particulars
Intangible assets
Gross Block
As at 01 April 2020
Additions
Acquisition through business
combination
(Refer note 4)
Transfers from Property, Plant
and Equipment
Disposals/Adjustments
Exchange differences
As at 31 March 2021
Additions
Transfers from Property, Plant
and Equipment
Exchange differences
As at 31 March 2022
464
ROU Land
ROU Building
ROU Plant and
Equipment
622
91
253
-
(4)
962
92
(5)
(8)
(6)
1,035
74
48
-
(2)
120
41
(8)
-
(2)
151
548
842
884
64
-
-
(2)
(1)
61
4
-
(1)
1
65
16
14
(1)
-
29
13
(1)
-
-
41
48
32
24
734
16
-
(1)
(12)
737
19
(692)
-
12
76
43
132
-
(1)
174
9
-
(162)
3
24
691
563
53
Software
License
Right to use*
Mining Rights
Port
concession
rights
(refer note i)
Brand &
Technological
know-how
379
9
-
4
(6)
(2)
384
16
11
7
418
112
32
-
-
-
-
144
-
-
-
381
-
220
-
-
-
601
539
-
-
683
247
1
-
-
-
-
684
1
-
-
-
-
-
-
(11)
236
-
-
(15)
221
144
1,140
685
Total
1,420
107
253
(3)
(17)
1,760
115
(697)
(9)
7
1,176
133
194
(1)
(3)
323
63
(9)
(162)
1
216
1,287
1,437
960
(` in crore)
Total
1,802
42
220
4
(6)
(13)
2,049
556
11
(8)
2,608
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Particulars
Software
License
Right to use*
Mining Rights
Port
concession
rights
(refer note i)
Brand &
Technological
know-how
Accumulated amortisation and
impairment
As at 01 April 2020
Charge for the year
Disposals/Adjustments
Exchange differences
As at 31 March 2021
Charge for the year
Exchange differences
As at 31 March 2022
Net Book Value/Carrying
Amount
As at 01 April 2020
As at 31 March 2021
As at 31 March 2022
349
16
(6)
(4)
355
17
8
380
30
29
38
19
6
-
-
25
6
-
31
93
119
113
328
32
-
-
360
50
-
410
53
241
730
170
25
-
-
195
25
-
220
513
489
465
54
23
-
(4)
73
24
(6)
91
193
163
130
Capital Work-in-Progress (CWIP) ageing schedule
(` in crore)
Total
920
102
(6)
(8)
1,008
122
2
1,132
882
1,041
1,476
(` in crore)
Particulars
Less than 1 year
1-2 years
2-3 years
More than 3 years
Total
As at 31 March 2022
As at 31 March 2021
Projects in
progress
4,252
953
1,938
6,426
13,569
Projects
temporarily
suspended
3
5
33
620
661
Projects in
progress
2,307
2,430
2,454
4,799
11,990
Projects
temporarily
suspended
23
541
158
1,168
1,890
CWIP completion schedule for projects whose completion is overdue or has exceeded its cost compared
to its original plan
As at 31 March 2022
To be completed in
As at 31 March 2021
To be completed in
Less than 1
year
1-2 years
2-3 years
More than
3 years
Less than
1 year
1-2 years
2-3 years
More than
3 years
(` in crore)
4,146
863
1,930
1,437
11
572
545
-
-
-
-
-
-
-
-
371
-
4,363
1,262
2,418
111
392
749
884
-
-
-
-
-
-
220
371
Particulars
Projects in progress
Lanjigarh alumina
2-5 MTPA expansion
project 1
Oil & Gas development
CWIP projects
Others*
Projects temporarily
suspended**
* Includes projects which are individually less than 10% of CWIP balance.
** Excludes ageing for the Copper 4 LTPA Expansion project which is on hold due to restrictions imposed by the State government (Refer note
3(c)(A)(iii)).
1) Lanjigarh 2‑6 MTPA Expansion project commenced in the year 2008 and then had been temporarily suspended in 2010 due to regulatory
restrictions. The 2‑5 MTPA Expansion project has been re‑commenced during the year ended 31 March 2021.
465
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Exploration intangible assets under development ageing schedule
Intangible assets under development
Less than 1 year
1-2 years
2-3 years
More than 3 years
Total
Title deeds of immovable properties not held in the name of Company
Relevant line item
in the Balance
sheet
Description
of item of
property
Gross block
as at
31 March
2022
Gross block
as at
31 March
2021
Title deeds
held in the
name of
Whether title
deed holder is a
promoter, director
or relative of
promoter/
director or
employee of
promoter/
director
Property, Plant
and Equipment
Land &
Building
3,061
2,863 Oil &
No
Natural Gas
Corporation
Limited
(ONGC) &
Cairn India
Limited
(now a
division
of the
Company)
No
4 National
Thermal
Power
Corporation
Ltd (NTPC)
Land
4
(` in crore)
As at
31 March 2022
As at
31 March 2021
Projects in
progress
Projects in
progress
624
534
352
139
1,649
760
346
25
1,303
2,434
(` in crore)
Property held
since which
date
Reason for not being
held in the name of the
Company
10 April
2009
20 June
2002
The title deeds of Oil &
Gas exploration blocks
jointly owned by the
JV partners are in the
name of ONGC, being
the licensee of these
exploration blocks.
The 206.18 acres
land transferred to
BALCO by NTPC is
yet to be registered in
favour of BALCO due
to non-availability
of title deeds from
NTPC. In the matter,
arbitration was held
where the Arbitrator
passed the award in
favour of BALCO but
directed that transfer
of title deeds of land
will be effected by the
Central Government
with the assistance of
State Government. The
matter is sub-judice
before the Delhi High
Court.
a)
Plant and equipment include refineries, smelters, power plants, railway sidings, ships, aircrafts, river fleets and
related facilities.
b) During the year ended 31 March 2022, interest capitalised was ` 313 crore (31 March 2021: ` 316 crore).
c)
Certain property, plant and equipment are pledged as collateral against borrowings, the details related to which have
been described in Note 19 on “Borrowings”.
466
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
d)
e)
f)
g)
Freehold land includes 40 quarters at Bidhan Bagh Unit and 300.88 acres of land at Korba which have been occupied
without authorisation for which Group is evaluating evacuation options and the Group has filed the civil suits for
the same.
The Division Bench of the Hon’ble High Court of Chhattisgarh has vide its order dated 25 February 2010, upheld
that BALCO is in legal possession of 1,804.67 acres of Government land. Subsequent to the said order, the State
Government has decided to issue the lease deed in favour of BALCO after the issue of forest land is decided by the
Hon’ble Supreme Court. In the proceedings before the Hon’ble Supreme Court, pursuant to public interest litigations
filed, it has been alleged that land in possession of BALCO is being used in contravention of the Forest Conservation
Act, 1980 even though the said land has been in its possession prior to the promulgation of the Forest Conservation
Act, 1980 on which its Aluminium complex, allied facilities and township were constructed between 1971‑76. The
Central Empowered Committee of the Supreme Court has already recommended ex‑post facto diversion of the forest
land in possession of BALCO. BALCO has also filed two IAs before the Supreme Court, first challenging the order of
the Tehsildar Korba whereby he rejected BALCO’S applications for eviction of illegal encroachers on BALCO’S land
on the ground that land matter is subjudice before the Supreme Court and the other application whereby BALCO has
challenged the state government’s action for allotment of land to illegal encroachers under the Rajiv Ashray Yojna. The
matter is to be listed for hearing in due course.
Property, Plant and Equipment, Capital work‑in‑progress and exploration and evaluation assets net block includes
share of jointly owned assets with the joint venture partners ` 10,665 crore (31 March 2021: ` 11,327 crore).
In accordance with the exemption given under Ind AS 101, which has been exercised by the Group, a first time adopter
can continue its previous GAAP policy for accounting for exchange differences arising from translation of long‑
term foreign currency monetary items recognised in the previous GAAP financial statements for the period ending
immediately before the beginning of the first Ind AS financial reporting period, i.e. 01 April 2016.
Accordingly, foreign currency exchange differences arising on translation/settlement of long‑term foreign currency
monetary items acquired before 01 April 2016 pertaining to the acquisition of a depreciable asset amounting to
` 22 crore (31 March 2021: ` 56 crore) are adjusted to the cost of respective item of property, plant and equipment.
h) Reconciliation of depreciation, depletion and amortisation expense
Particulars
Depreciation/ Depletion/Amortisation expense on:
Property, Plant and Equipment
Intangible assets
As per Property, Plant and Equipment and Intangibles schedule
Less: Depreciation capitalised
Less: Cost allocated to joint ventures
As per Consolidated Statement of Profit and Loss
(` in crore)
For the year ended
31 March 2022
For the year ended
31 March 2021
8,801
122
8,923
(4)
(24)
8,895
7,610
102
7,712
(50)
(24)
7,638
i)
Vizag General Cargo Berth Private Limited (VGCB), a special purpose vehicle and wholly owned by the Company,
was incorporated for the coal berth mechanisation and upgradation at Visakhapatnam port. The project was to be
carried out on a design, build, finance, operate, transfer basis and the concession agreement between Visakhapatnam
Port Trust (‘VPT’) and the Company was signed in June 2010. In October 2010, the Company was awarded with
the concession after fulfilling conditions stipulated as a precedent to the concession agreement. Visakhapatnam
port trust has provided, in lieu of license fee an exclusive license to the Company 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 the
Visakhapatnam port trust would be entitled to receive 38.10% share of the gross revenue as royalty. The Company
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 the Company at the project site and/or in the port’s assets pursuant to concession agreement
would be with the Company until expiry of this concession agreement. The cost of any repair, replacement or
467
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
restoration of the project facilities and services shall be borne by the Company during the concession period. The
Company 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. Intangible asset port concession rights represents consideration for construction
services. No Revenue from construction contract of service concession arrangments on exchanging construction
services for the port concession rights was recognised for the years ended 31 March 2022 and 31 March 2021.
j)
As at 31 March 2022, TSPL’s assets consisting of land (including ROU land), building and plant and machinery having
net carrying value of ` 391 crore (31 March 2021: ` 394 crore), ` 169 crore (31 March 2021: ` 183 crore) and ` 8,640
crore (31 March 2021: ` 9,026 crore) respectively have been given on operating lease (refer note 3(c)(B)(i)).
7 Financial assets – Investments
A. Non-current Investments
Particulars
(I)
Investments at fair value through other comprehensive income
Investment in Equity Shares – quoted
Sterlite Technologies Limited – 47,64,295 shares of ` 2 each (including 60 shares held
jointly with nominees)
Investment in Equity Shares – unquoted
Sterlite Power Transmission Limited – 9,52,859 equity shares of ` 2 each (including 12
shares held jointly with nominees)
(II)
Investments at fair value through profit and loss
Investment in Bonds – quoted – Infrastructure Leasing & Financial Services Limited
(III)
Investment in Equity Shares (fully paid)
Associate Companies and Joint ventures – unquoted
Gaurav Overseas Private Limited - 3,23,000 equity shares of ` 10 each
RoshSkor Township (Proprietary) Limited- 50 equity shares of NAD 1 each
Rampia Coal Mines and Energy Private Limited – 2,72,29,539 equity shares of ` 1 each
b
Raykal Aluminium Company Private Limited – 12,250 equity shares of `10 each
Madanpur South Coal Company Limited – 1,14,421 equity shares of ` 10 each
Goa Maritime Private Limited - 5,000 equity shares of ` 10 each
Rosh Pinah Health Care (Proprietary) Limited- 69 equity shares of NAD 1 each
Less: Impairment in the value of investment
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
107
11
30
0
3
-
0
2
0
0
(2)
151
92
11
51
0
2
3
0
2
0
0
(5)
156
(` in crore)
a)
Particulars
Aggregate amount of quoted investments, and market value thereof
Aggregate amount of unquoted investments
Aggregate amount of impairment in the value of investments
Total
As at
31 March 2022
As at
31 March 2021
137
16
(2)
151
143
18
(5)
156
b)
Rampia Coal Mines and Energy Private Limited has been dissolved w.e.f. 19 April 2021.
468
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
B. Current Investments
Particulars
Investments carried at fair value through profit and loss (fully paid)
Investment in mutual funds – quoted
Investment in mutual funds – unquoted
Investment in bonds – quoted b
Investment in commercial paper – quoted
Investment in India Grid Trust – quoted
Total
a)
Particulars
Aggregate amount of quoted investments, and market value thereof
Aggregate amount of unquoted investments
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
1,196
7,207
8,587
150
0
5,419
6,318
4,767
-
0
17,140
16,504
As at
31 March 2022
As at
31 March 2021
9,933
7,207
17,140
10,186
6,318
16,504
b)
Investment in related parties are sold during the previous year. Refer note 42(L).
8 Financial assets – Trade receivables
Particulars
Secured, Undisputed
Not due
Less than 6 months
6 months – 1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
Unsecured, disputed
Unbilled dues
Not due
Less than 6 months
6 months – 1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
Unsecured, Undisputed
Not due
Less than 6 months
6 months – 1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
Less: Provision for expected credit
loss
Total
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
-
-
-
-
-
-
-
43
28
246
126
651
442
2,515
4,051
1
1
-
-
-
-
2
(834)
186
57
-
-
-
3
246
-
-
19
-
21
9
14
63
2,233
2,361
19
36
1
15
4,665
(28)
186
57
-
-
-
3
246
43
28
265
126
672
451
2,529
4,114
2,234
2,362
19
36
1
15
4,667
(862)
-
-
-
-
-
-
-
-
39
191
347
349
510
2,363
3,799
-
-
-
-
-
-
-
(641)
32
56
-
2
-
3
93
-
-
-
-
1
2
12
15
1,765
1,365
141
94
36
6
3,407
(24)
32
56
-
2
-
3
93
-
39
191
347
350
512
2,375
3,814
1,765
1,365
141
94
36
6
3,407
(665)
3,219
4,946
8,165
3,158
3,491
6,649
469
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 a)
b)
c)
d)
The credit period given to customers is up to 180 days. Also refer note 24 (C)(d)
For amount due and terms and conditions of related party receivables, refer note 42.
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 Honorable
Supreme Court to seek relief, which is yet to be listed.
The outstanding trade receivables in relation to this dispute and other matters is ` 1,725 crore as at 31 March 2022
(31 March 2021: ` 1,605 crore). 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.
Trade receivables also include ` 1,293 crore as at 31 March 2022 (31 March 2021: ` 1,323 crore) withheld by GRIDCO
Limited (‘GRIDCO’ or ‘the customer’) on account of certain disputes relating to computation of power tariffs pending
adjudication by the Appellate Tribunal for Electricity (APTEL). Additionally, GRIDCO has raised claims of ` 514 crore on
the Company in respect of short supply of power, against which a provision of ` 218 crore has been made in previous
years. Various minutes of meetings were signed with the customer for computing the short supply claims, which were
subject to approval of the Odisha State Electricity Regulatory Commission (OERC). Hearing on the subject matter (PPA
Amendment Case) was completed in October 2019 and OERC had pronounced the order on 22 June 2020. In August
2020, the Company filed an appeal before APTEL against the said OERC order which was finally admitted for hearing
on 22 March 2022. GRIDCO has also sought review of the said OERC order. The matter has been posted for order by
OERC in due course. In the meanwhile, power supply to GRIDCO has resumed and GRIDCO has been making regular
payments against monthly energy invoices.
e)
The total trade receivables as at 01 April 2020 were ` 5,808 crore (net of provision for expected credit loss).
9 Financial assets – Loans
Particulars
Unsecured, considered good
Loans to related parties
(Refer note 42)
Loans and advances to employees
Unsecured, considered credit
impaired
Loans to related parties
(Refer note 42)
Less: Provision for expected
credit loss
Total
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
3,164
2,298
5,462
5,056
2,015
7,071
2
-
-
6
8
78
(78)
78
(78)
1
-
-
4
5
78
(78)
78
(78)
3,166
2,304
5,470
5,057
2,019
7,076
470
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
10 Financial assets – Others
Particulars
Bank deposits a, b, c
Site Restoration asset c
Unsecured, considered good
Receivables from related parties
(Refer note 42)
Security deposits
Others
Advance recoverable (oil and gas
business)
Others d
Unsecured, considered credit
impaired
Security deposits
Balance with government
authorities
Receivables from related parties
(Refer note 42)
Others
Less: Provision for expected credit
loss
Total
As at 31 March 2022
As at 31 March 2021
Non-current
Current
207
1,023
-
187
-
-
151
54
Total
207
1,023
151
241
Non-current
Current
115
822
-
181
-
-
101
16
(` in crore)
Total
115
822
101
197
-
8,176
8,176
-
3,908
3,908
1,438
343
1,781
1,414
220
1,634
43
-
-
565
(608)
1
3
-
44
3
-
436
(440)
1,001
(1,048)
42
-
-
558
(600)
1
3
20
43
3
20
396
(420)
954
(1,020)
2,855
8,724
11,579
2,532
4,245
6,777
a) Bank deposits includes fixed deposit with maturity more than twelve months of ` 0 crore (31 March 2021: ` 30 crore) under lien with bank,
` 20 crore (31 March 2021: ` 21 crore) reserve created against principal payment on loans from banks and margin money of ` 39 crore
(31 March 2021: ` 4 crore).
b) Restricted funds of ` 5 crore (31 March 2021: ` 5 crore) held as lien with Others and ` 61 crore (31 March 2021: Nil) held as margin money
against bank guarantees.
c) Bank deposits and site restoration asset earn interest at fixed rate based on respective deposit rates.
d) 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 Cost 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, Group
has started recognising 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. At year end, an amount of ` 1,581 crore (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.
11 Other assets
Particulars
Unsecured, considered good
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
Capital advances
1,702
-
1,702
1,186
-
1,186
Advances other than capital
advances
Advances for supplies to related
party (Refer note 42)
Advances for supplies
Others
Balance with government
authorities a
Others b
61
-
761
918
84
145
2,706
2,706
94
-
227
321
1,235
1,235
1,084
1,845
610
729
1,339
1,399
2,317
1,320
1,127
2,447
471
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Particulars
Unsecured, considered doubtful
Capital advances
Advance for supplies
Balance with government
authorities
Claims and other receivables
Others b
Less: Provision for doubtful
advances
Total
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
185
-
3
-
74
12
185
74
15
220
-
3
-
51
5
220
51
8
1,021
(1,209)
6
(92)
1,027
(1,301)
799
(1,022)
5
(61)
804
(1,083)
3,442
5,273
8,715
3,210
3,318
6,528
a) Includes ` 58 crore (31 March 2021: ` 58 crore), being Company’s share of gross amount of ` 86 crore (31 March 2021: ` 86 crore) paid under
protest on account of Education Cess and Secondary Higher Education Cess for the year ended 2013‑14.
b) Others include claim receivables, advance recoverable (oil and gas business), prepaid expenses, export incentive receivables and amounts
receivable from KCM (Refer note 36(j)).
12 Inventories
Particulars
Raw materials
Goods-in transit
Work-in-progress
Goods-in transit
Finished good
Goods-in transit
Fuel stock
Goods-in transit
Stores and spares
Goods-in transit
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,906
1,471
5,039
1
783
46
1,279
833
1,909
46
14,313
2,070
1,303
3,012
1
823
32
798
190
1,668
26
9,923
a)
b)
Inventory held at net realisable value ` 2,707 crore as at 31 March 2022 (31 March 2021: ` 2,399 crore).
A write down of inventories amounting to ` 172 crore (31 March 2021: ` 159 crore) has been charged to the
consolidated statement of profit and loss during the year.
c)
For method of valuation for each class of inventories, refer Note 3(a)(L).
13 Cash and cash equivalents
Particulars
Balances with banks
Bank deposits with original maturity of less than 3 months (including interest accrued
thereon) a
Cash on hand
Total
a) Bank deposits earn interest at fixed rate based on respective deposit rates.
(` in crore)
As at
31 March 2022
As at
31 March 2021
5,408
3,263
0
8,671
2,661
2,193
0
4,854
472
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
14 Other bank balances
Particulars
Bank deposits with original maturity of more than 3 months but less than 12 months
(including interest accrued thereon) a, b
Bank deposits with original maturity of more than 12 months (including interest accrued
thereon) c
Earmarked unpaid dividend accounts e
Earmarked escrow account f
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,289
4,164
465
3
6,921
11,212
461
100
2
11,775
a) The above bank deposits includes ` 441 crore (31 March 2021: ` 492 crore) on lien with banks, margin money of ` 40 crore (31 March 2021:
` 272 crore) and ` 81 crore held as reserve created against principal payment on loan from banks.
b) Restricted funds of ` 156 crore (31 March 2021: ` 460 crore) held as interest reserve created against interest payment on loans from banks,
` 40 crore (31 March 2021: ` 46 crore) held as collateral in respect of closure costs, ` 7 crore (31 March 2021: ` 21 crore) held as lien with
Others and ` 57 crore (31 March 2021: Nil) held as margin money against bank guarantees.
c) Includes ` 4 crore (31 March 2021: ` 1 crore) margin money with banks and fixed deposit under lien with others of ` 15 crore (31 March 2021:
Nil).
d) Bank deposits earn interest at fixed rate based on respective deposit rates.
e) Earmarked unpaid dividend accounts are restricted in use as it relates to unclaimed dividends or unpaid dividend.
f) Earmarked escrow account includes amount restricted in use as it relates to unclaimed redeemable preference shares.
15 Share capital
Particulars
A. Authorised equity share capital
Opening and closing balance (equity shares of ` 1
each with voting rights)
Authorised preference share capital
Opening and closing balance (preference shares
of ` 10 each)
B.
Issued, subscribed and paid up
Equity shares of ` 1 each with voting rights a.b
Total
As at 31 March 2022
As at 31 March 2021
Number
(in crore)
Amount
(` in crore)
Number
(in crore)
Amount
(` in crore)
4,402
4,402
4,402
4,402
301
3,010
301
3,010
372
372
372
372
372
372
372
372
a) Includes 3,05,832 (31 March 2021: 3,08,232) equity shares kept in abeyance. These shares are not part of listed equity capital and pending
allotment as they are sub-judice.
b) Includes 86,93,406 (31 March 2021: 1,21,93,159) equity shares held by Vedanta Limited ESOS Trust (Refer Note 16).
C.
Shares held by ultimate holding company and its subsidiaries/associates *
Particulars
Twin Star Holdings Limited
Finsider International Company Limited
Westglobe Limited
Welter Trading Limited
Vedanta Holdings Mauritius II Limited
Vedanta Holdings Mauritius Limited
Vedanta Netherlands Investment BV
Total
As at 31 March 2022
As at 31 March 2021
No. of Shares held
(in crore)
% of holding
No. of Shares held
(in crore)
% of holding
172.48
16.35
-
3.82
49.28
10.73
6.35
259.02
46.40
4.40
-
1.03
13.25
2.89
1.71
69.68
137.94
40.15
4.43
3.82
18.50
-
-
37.11
10.80
1.19
1.03
4.98
-
-
204.85
55.11
* The % of holding has been calculated on the issued and subscribed share capital as at the respective balance sheet date.
(1) All the above entities are subsidiaries of Volcan Investments Limited, the ultimate holding company.
473
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 D.
Aggregate number of bonus shares issued, shares issued for consideration other than cash and
shares bought back during the period of five years immediately preceding the reporting date
Particulars
Equity shares issued pursuant to Scheme of Amalgamation (in FY 2017-18)
Preference shares issued pursuant to Scheme of Amalgamation (in FY 2017-18)*
* These were redeemed on 27 October 2018.
E. Details of shareholders holding more than 5% shares in the Company *
(` in crore)
As at
31 March 2022
As at
31 March 2021
75
301
75
301
Twin Star Holdings Limited
Finsider International Company Limited
Vedanta Holdings Mauritius II Limited
Life Insurance Corporation of India
As at 31 March 2022
As at 31 March 2021
No. of Shares held
(in crore)
% of holding
No. of Shares held
(in crore)
% of holding
172.48
16.35
49.28
32.11
46.40
4.40
13.25
8.64
137.94
40.15
18.50
24.40
37.11
10.80
4.98
6.56
* The % of holding has been calculated on the issued and subscribed share capital as at respective balance sheet dates.
As per the records of the Company, including its register of shareholders/members, the above shareholding represents
legal ownership of shares.
F. Disclosure of Shareholding of Promoters and Promoter Group
As at 31 March 2022
As at 31 March 2021
Particulars
Twin Star Holdings Limited
Finsider International Company
Limited
Westglobe Limited
Welter Trading Limited
Vedanta Holdings Mauritius II
Limited
Vedanta Holdings Mauritius
Limited
Vedanta Netherlands Investment
BV
Mr. Pravin Agarwal
Ms. Suman Didwania
Mr. Ankit Agarwal
Ms. Sakshi Mody
Total
G. Other disclosures
No. of Shares
held
(in crore)
172.48
16.35
-
3.82
49.28
10.73
6.35
0.00
0.01
0.00
0.00
% of holding
% Change
during the year
No. of Shares
held
(in crore)
% of holding
% Change
during the year
46.40
4.40
-
1.03
13.25
2.89
1.71
0.00
0.00
0.00
0.00
9.29
(6.40)
(1.19)
-
8.27
2.89
1.71
-
-
-
-
137.94
40.15
4.43
3.82
18.50
-
-
0.00
0.01
0.00
0.00
37.11
10.80
1.19
1.03
4.98
-
-
0.00
0.00
0.00
0.00
-
-
-
-
4.98
-
-
-
-
-
-
259.02
69.68
14.57
204.85
55.11
4.98
i)
The Company has one class of equity shares having a par value of ` 1 per share. Each shareholder is eligible for
one vote per share held and dividend as and when declared by the Company. The dividend proposed by the Board
of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case
of interim dividend which is paid as and when declared by the Board of Directors. In the event of liquidation of the
Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after
distribution of all preferential amounts, in proportion to their shareholding.
474
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
ii)
In terms of Scheme of Arrangement as approved by the Hon’ble High Court of Judicature at Mumbai, vide its order
dated 19 April 2002, the erstwhile Sterlite Industries (India) Limited (merged with the Company during 2013‑14) during
2002-2003 reduced its paid up share capital by ` 10 crore. There are 1,99,387 equity shares (31 March 2021: 2,01,296
equity shares) of ` 1 each pending clearance from NSDL. The Company has filed an application in Hon’ble High Court
of Mumbai to cancel these shares, the final decision on which is pending. Hon’ble High Court of Judicature at Mumbai,
vide its interim order dated 06 September 2002 restrained any transaction with respect to subject shares.
16 Other equity (Refer consolidated statement of changes in equity)
a)
General reserve: Under the erstwhile Companies Act, 1956, a general reserve was created through an annual transfer
of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was
to ensure that if a dividend distribution in a given year is more than 10.0% of the paid‑up capital of the Company for
that year, then the total dividend distribution is less than the total distributable reserves for that year. Consequent to
introduction of Companies Act, 2013, the requirement to mandatory transfer a specified percentage of the net profit to
general reserve has been withdrawn.
The Board of Directors of the Company, basis the recommendations of the Audit & Risk Management Committee
and Committee of Independent Directors of the Company, at its meeting held on 29 October 2021 approved the
Scheme of Arrangement (“Scheme”) between the Company and its shareholders under Section 230 and other
applicable provisions of the Companies Act, 2013 (“Act”). The Scheme inter alia provides for capital reorganisation
of the Company, whereby it is proposed to transfer amounts standing to the credit of the General Reserves to the
Retained Earnings of the Company with effect from the Appointed Date. The Scheme is subject to receipt of regulatory
approvals/ clearances from the Hon’ble National Company Law Tribunal, Mumbai Bench, Securities and Exchange
Board of India (through BSE Limited and National Stock Exchange of India Limited), BSE Limited and National Stock
Exchange of India Limited (collectively referred to as “Stock Exchanges”) and such other approvals/ clearances as may
be applicable.
Pursuant to the Scheme, the Company will possess greater flexibility to undertake capital related decisions and reflect
a more efficient balance sheet.
b)
Debenture redemption reserve: As per the earlier provisions under the Act, companies that issue debentures were
required to create debenture redemption reserve from annual profits until such debentures are redeemed. Companies
are required to maintain 25% as a reserve of outstanding redeemable debentures.
The amounts credited to the debenture redemption reserve may only be utilised redeem debentures. The MCA vide its
Notification dated 16 August 2019, had amended the Companies (Share Capital and Debenture) Rules, 2014, wherein
the requirement of creation of Debenture Redemption Reserve has been exempted for certain class of companies.
Accordingly, the Company is now not required to create Debenture Redemption Reserve.
c)
Preference share redemption reserve: The Companies Act, 2013 provides that companies that issue preference
shares may redeem those shares from profits of the Company which otherwise would be available for dividends, or
from proceeds of a new issue of shares made for the purpose of redemption of the preference shares. If there is a
premium payable on redemption, the premium must be provided for, either by reducing the additional paid in capital
(securities premium account) or net income, before the shares are redeemed. If profits are used to redeem preference
shares, the value of the nominal amount of shares redeemed should be transferred from profits (retained earnings)
to the preference share redemption reserve. This amount should then be utilised for the purpose of redemption of
redeemable preference shares. This reserve can be used to issue fully paid-up bonus shares to the shareholders of
the Company.
d)
Capital reserve: The balance in capital reserve has mainly arisen pursuant to extinguishment of non‑controlling
interests of erstwhile Cairn India Limited, acquisition of ASI and FACOR group. Further, changes in capital reserve are
due to recognition/derecognition of put option liability and non controlling interests pertaining to ASI.
e)
Legal reserve is created at Fujairah Gold FZC in accordance with free zone regulations.
f)
Treasury share represents 86,93,406 (31 March 2021: 1,21,93,159) equity shares (face value of ` 1 each) of the
Company purchased by Vedanta Limited ESOP Trust pursuant to the Company’s stock option scheme as detailed in
note 32.
475
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
17 Non-controlling interests (NCI)
The Non-controlling interests that are material to the Group relate to Hindustan Zinc Limited (HZL) and Bharat Aluminium
Company Limited (“BALCO”).
As at 31 March 2022 and 31 March 2021, NCIs hold an economic interest by virtue of their shareholding of 35.08%, 49.00%,
26.00%, 48.37%, 4.51% and 10% in Hindustan Zinc Limited (HZL), Bharat Aluminium Company Limited (BALCO), Black
Mountain Mining (BMM), Avanstrate Inc. (ASI), ESL Steel Limited (ESL) and Facor Power Limited (FPL) respectively.
The principal place of business of HZL, BALCO, ESL and FPL is in India, that of BMM is in South Africa, that of Avanstrate
Inc. is in Japan, South Korea and Taiwan.
The table below shows summarised financial information of subsidiaries of the Group that have non‑controlling interests.
The amounts are presented before inter-company elimination.
Particulars
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity attributable to owners of the Group
Non-controlling interests a
As at 31 March 2022
HZL
21,234
23,986
4,491
6,094
22,485
12,150
BALCO
12,362
3,091
2,612
4,235
4,389
4,217
a)
` 437 crore loss attributable to NCI of ASI transferred to put option liability. Refer note 22.
Particulars
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Equity attributable to owners of the Group
Non-controlling interests a
As at 31 March 2021
HZL
21,596
24,570
5,590
7,873
21,231
11,472
BALCO
12,376
2,875
3,854
5,425
3,046
2,926
a)
` 534 crore loss attributable to NCI of ASI transferred to put option liability. Refer note 22.
Particulars
Total Income
Profit/(loss) after tax for the year
Profit/(loss) attributable to the equity shareholders
of the Company
Profit/(loss) attributable to the non-controlling
interests
Other comprehensive income during the year
Other comprehensive income attributable to the
equity shareholders of the Company
Other comprehensive income attributable to
non-controlling interests
Total comprehensive income during the year
Total comprehensive income attributable to the
equity shareholders of the Company
Total comprehensive income attributable to non-
controlling interests
Dividends paid/payable to non-controlling interests,
including dividend tax
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net cash inflow
HZL
30,632
9,593
6,227
3,366
(56)
(36)
(20)
9,537
6,191
3,346
2,668
13,291
(87)
(11,925)
1,279
BALCO
13,944
2,651
1,352
1,299
(17)
(9)
(8)
2,634
1,343
1,291
-
2,610
(183)
(2,099)
328
476
(` in crore)
Total
48,780
31,166
15,168
14,560
33,334
17,321
(` in crore)
Total
47,955
31,605
17,945
17,055
29,956
15,138
(` in crore)
Total
56,846
12,996
8,088
4,908
131
91
40
13,127
8,179
4,948
2,668
18,803
(2,447)
(14,534)
1,822
Others
15,184
4,089
8,065
4,231
6,460
954
Others
13,983
4,160
8,501
3,757
5,679
740
Others
12,270
752
509
243
204
136
68
956
645
311
-
2,902
(2,177)
(510)
215
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Particulars
Total Income
Profit after tax for the year
Profit attributable to the equity shareholders of the
Company
Profit attributable to the non-controlling interests
Other comprehensive income during the year
Other comprehensive income attributable to the
equity shareholders of the Company
Other comprehensive income attributable to non-
controlling interests
Total comprehensive income during the year
Total comprehensive income attributable to the
equity shareholders of the Company
Total comprehensive income attributable to non-
controlling interests
Dividends paid/payable to non-controlling interests,
including dividend tax
Net cash inflow from operating activities
Net cash (outflow)/inflow from investing activities
Net cash outflow from financing activities
Net cash (outflow)/inflow
HZL
24,452
7,918
5,140
2,778
(4)
(2)
(2)
7,914
5,138
2,776
5,603
10,579
(2,446)
(9,699)
(1,566)
There were no changes in ownership interests in subsidiaries.
18 Capital management
BALCO
9,868
1,108
565
543
(46)
(23)
(23)
1,062
542
520
-
2,621
(1,030)
(1,646)
(55)
Others
8,287
3,378
3,269
109
402
284
118
3,781
3,553
227
-
766
225
(930)
61
(` in crore)
Total
42,607
12,404
8,974
3,430
352
259
93
12,757
9,233
3,523
5,603
13,966
(3,251)
(12,275)
(1,560)
The Group’s objectives when managing capital is 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 requirements are met through a mixture of equity, internal fund generation and borrowings. The Group’s policy
is to use current and non-current borrowings to meet anticipated funding requirements.
The Group monitors capital on the basis of the net gearing ratio which is Net debt/Total Capital (equity + net debt). The
Group is not subject to any externally imposed capital requirements.
Net debt are non-current and current debt as reduced by cash and cash equivalents, other bank balances and current
investments. Equity comprises all components including other comprehensive income.
The following table summarises the capital of the Group:
Particulars
Cash and cash equivalents (Refer note 13)
Other bank balances a (including interest accrued)(Refer note 14)
Non-current Bank deposits a (Refer note 10)
Current investments (Refer note 7B)
Total cash (a)
Non-current borrowings (Note 19A)
Current borrowings (Note 19B)
Total borrowings (b)
Net debt (c=(b-a))
Total equity (d)
Total capital (e = equity + net debt)
Gearing ratio (times) (c/e)
(` in crore except otherwise stated)
As at
31 March 2022
As at
31 March 2021
8,671
6,178
141
17,140
32,130
36,205
16,904
53,109
20,979
82,704
4,854
11,146
110
16,504
32,614
37,962
19,066
57,028
24,414
77,416
1,03,683
0.20
1,01,830
0.24
477
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 a)
The constituents of ‘total cash’ for the purpose of capital management disclosure include only those amounts of
restricted funds that are corresponding to liabilities (e.g. margin money deposits). Restricted funds amounting to ` 808
crore (As at 31 March 2021:` 635 crore) have been excluded from ‘total cash’ in the capital management disclosures.
19 Financial liabilities – Borrowings
A. Non-current borrowings
Particulars
At amortised cost
Secured
Non-convertible debentures
Term loans from banks
- Rupee term loans
-
-
Foreign currency term loans
External commercial borrowings
Others
Unsecured
Non-convertible debentures
Deferred sales tax liability
Non-convertible bonds
Term loans from banks
- Rupee term loans
-
Foreign currency term loans
Redeemable preference shares
Non-current Borrowings
Less: Current maturities of long-term borrowings a
Total non-current Borrowings (Net) (A)
Current Borrowings (Refer Note 19B) (B)
Total Borrowings (A+B)
B. Current borrowings
Particulars
At amortised cost
Secured
Working capital loan
Packing credit in foreign currencies from banks
Term loans from banks
Current maturities of long-term borrowings a
Others
Unsecured
Loans from banks
Loans repayable on demand from banks
Commercial paper
Working capital loan
Amounts due on factoring
Current maturities of long-term borrowings a
Others
Total
478
(` in crore)
As at
31 March 2022
As at
31 March 2021
5,123
13,076
32,760
2,588
1,233
499
2,814
54
31
499
72
2
45,675
(9,470)
36,205
16,904
53,109
29,393
4,563
388
584
3,516
62
156
1,501
72
2
53,313
(15,351)
37,962
19,066
57,028
(` in crore)
As at
31 March 2022
As at
31 March 2021
565
-
23
8,238
12
700
1,000
4,986
9
139
1,232
-
349
350
-
14,635
106
-
298
2,162
318
27
716
105
16,904
19,066
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
In the event Vedanta Resources Limited (together with its subsidiaries) ceases to be the Company’s majority shareholder,
the Group will be required to immediately repay some of its outstanding long-term debt.
a)
Current maturities of long-term borrowings consists of:
Particulars
Secured
Non-convertible debentures
Term loans from banks
- Rupee term loans
-
Foreign currency term loans
External commercial borrowings
Others
Unsecured
Non-convertible debentures
Term loans from banks
Deferred sales tax liability
Redeemable preference shares
Grand Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,074
4,321
1,231
113
498
703
499
29
2
8,951
3,724
1,097
279
584
702
-
12
2
9,470
15,351
b) Details of Non-convertible debentures issued by Group have been provided below (Carrying value):
Particulars
9.20% due February-2030
7.68% due December-2024
5.35% due September 2022 - ` 703 crore and September 2023 - ` 2,111 crore
8.75% due June-2022
9.20% due December-2022
0.00% due September 2022 - ` 56 crore and September 2023 - ` 51 crore
7.50% due March-2022
8.75% due September-2021
8.50% due April-2021
8.90% due December-2021
9.18% due July-2021
9.27% due July-2021
8.50% due June-2021
8.75% due April-2021
8.55% due April-2021
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,000
997
2,814
1,270
749
107
-
-
-
-
-
-
-
-
-
2,000
-
3,516
1,269
749
167
493
250
2,349
899
1,000
1,000
1,650
250
1,000
7,937
16,592
c)
The Group has taken borrowings in various countries towards funding of its acquisitions, capital expenditure and
working capital requirements. The borrowings comprises funding arrangements from various banks and financial
institutions taken by the parent and subsidiaries. The details of security provided by the Group in various countries, to
various lenders on the asset of the parent and subsidiaries are as follows –
Particulars
Secured long-term borrowings
Secured short-term borrowings
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
33,965
8,838
42,803
33,369
15,440
48,809
479
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Facility Category
Security details
Working capital
loans*
Secured by first pari passu charge on current assets of Vedanta
Limited
Secured by second pari passu charge on fixed assets of TSPL and
first pari passu charge on current assets of the Company, both
present and future
Secured by hypothecation of stock of raw materials, work-in-
progress, semi-finished, finished products, consumable stores and
spares, bills receivables, book debts and all other movables, both
present and future in BALCO. The charges rank pari passu among
banks under the multiple banking arrangements, for fund based
facilities
The facility is secured by first pari passu charge on all movable
property, plant and equipments related to power plants and
aluminium smelters of BALCO located at Korba both present and
future along with secured lenders
A First pari passu charge by way of hypothecation on the specified
movable fixed assets of the Company pertaining to its manufacturing
facilities comprising of (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 1215 (9*135) MW CPP at
Jharsuguda, Odisha
The facility is secured by first pari passu charge on all movable
property, plant and equipments related to power plant and aluminium
smelter located at Korba both present and future along with secured
lenders at BALCO
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 of 18.9 acres situated at Jharsuguda, Odisha
Secured by way of charge against all existing assets of FACOR
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 of 85 cents situated at Tuticorin District, Tamil Nadu
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 the Borrower 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 1215
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
Other secured non-convertible debentures
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
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 1215 (9x135) MW CPP at
Jharsuguda, Orissa, both present and future
External Commercial
Borrowings
Non-convertible
debentures
Term loans from
banks (Includes
rupee term loans and
foreign currency term
loans)
480
(` in crore)
As at
31 March 2022
As at
31 March 2021
-
515
50
650
49
-
76
219
1,119
-
38
169
2,000
5,409
107
2,019
167
-
997
-
-
6,498
7,500
5,140
625
1,883
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Facility Category
Security details
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 of (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
1215 (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
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
Vedanta Limited along with 90 MW power plant in Lanjigarh and all
its related expansions
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 1215 MW captive power plant at Jharsuguda,
Odisha
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 1215 (9x135) MW CPP at
Jharsuguda, Orissa and additional charge on Lanjigarh Expansion
project, both present and future
Term loans from
banks (Includes
rupee term loans and
foreign currency term
loans)
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 1215 MW captive
power plant at Jharsuguda, Odisha
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
Pledge of 49% of shares and other securities and rights to any claims
held by THL Zinc Limited in and against BMM
The facility is secured by first pari passu charge on all movable
property, plant and equipments related to power plants and
aluminium smelters of BALCO located at Korba both present and
future along with secured lenders
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
First pari passu charge on the movable fixed and current assets
(except for the Concession assets) of VGCB at Visakhapatnam,
Andhra Pradesh
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.
(` in crore)
As at
31 March 2022
As at
31 March 2021
1,776
2,194
402
436
4,019
1,913
999
1,092
6,918
2,801
1,602
2,810
45
76
220
147
890
2,500
375
-
2,705
3,134
481
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Facility Category
Security details
Secured by a first pari passu charge on the identified fixed assets
of the Vedanta Limited both present and future, pertaining to its
Aluminium business (Jharsuguda Plant, Lanjigarh Plant), 2400 MW
power plant assets at Jharsuguda, Copper Plant assets at Silvasa,
Iron ore business in the states of Karnataka and Goa, dividends
receivable from Hindustan Zinc Limited (“HZL”) a subsidiary of the
Vedanta Limited, and the debt service reserve account to be opened
for the Facility along with the amount lying to the credit thereof h
Secured by first pari passu charge by way of hypothecation of whole
of the movable fixed assets of (i) Alumina Refinery having output of
1.7 to 6 MTPA along with co-generation captive power plant with an
aggregate capacity of 90MW at Lanjigarh, Odisha and (ii) Aluminium
Smelter having output of 1.6 MTPA along with a 1,215 (9*135) MW
CPP at Jharsuguda, Odisha
Secured by way of hypothecation of stock of raw materials,
work-in-progress, finished products, consumable stores and spares,
bills receivables, book debts and all other movables, both present
and future in BALCO. The charges rank pari passu among banks
under the multiple banking arrangements, both for fund based and
non fund based facilities.
Secured by Fixed asset (platinum) of AvanStrate
Other secured borrowings
Others
(` in crore)
As at
31 March 2022
As at
31 March 2021
7,821
8,538
620
1,148
12
106
499
-
536
48
42,803
48,809
* Includes loans repayable on demand from banks, export packing credit from banks and amounts due on factoring.
d)
The loan facilities are subject to certain financial and non‑ financial convenants. The primary convenants which
must be complied with include interest service coverage ratio, current ratio, debt service coverage ratio, total outside
liabilities to total net worth, fixed assets coverage ratio, ratio of total term liabilities to net worth and debt/ EBITDA.
The Group has complied with the covenants as per the terms of the respective loan agreements. Further, in case of
borrowings having current assets as security, the quarterly statements of current assets filed by the Group with its
lenders are in agreement with the books of accounts.
e) Term of repayment of total borrowings outstanding as at 31 March 2022 are provided below -
(` in crore)
Borrowings
Foreign currency term
loan
Weighted
average of
interest as
at 31 March
2022
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
3.99%
2,660
1,232
1,189
72
172 Repayable in 57 quarterly
installments, 11 annual
installments and 1
monthly installment
Rupee term loan
8.22%
33,982
5,568
10,180
10,383
7,974 Repayable in 889 quarterly
External commercial
borrowings
Non-convertible
debentures
3.48%
1,233
113
680
454
installments and 168
monthly installments
- Repayable in 1 annual
installment and 5 half
yearly installments
8.79%
7,937
2,796
3,184
-
-
2,000 Repayable in 4 bullet
payments and 4 annual
installments
- Repayable in 12 bullet
payment
Commercial paper
5.90%
4,986
4,986
-
482
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Borrowings
Weighted
average of
interest as
at 31 March
2022
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
(` in crore)
Working capital loan *
5.93%
1,574
1,574
-
Amounts due on
factoring
Deferred sales tax
liability
Redeemable
preference shares
1.23%
139
139
NA
NA
54
2
29
2
Non-convertible bonds
0.00%**
31
0
Others
5.01%
511
511
-
25
-
8
-
-
-
-
-
5
-
- Export packing credit
and working capital loan
are repayable within one
year from the date of
drawal, cash credit can be
repaid anytime as per the
availability of business
surplus during the validity
of the facility
- Repayable within one
month
- Repayable in 55 monthly
installments
- The redemption and
dividend paid to the
preference shares
unclaimed if any, is
payable on claim.
17 Repayable in 10 annual
installments starting from
FY 2023-24
- Suppliers credit is
repayable in 1 bullet
payment and Loan
repayable within one year
on demand
Total
53,109
16,950
15,266
10,914
10,163
The above maturity is based on the total principal outstanding gross of issue expenses and discounting impact of deferred
sales tax liability.
*Includes loans repayable on demand from banks of ` 1,000 crore.
** Increasing interest rate from 0.00% to 0.50% till maturity.
f)
Term of repayment of total borrowings outstanding as at 31 March 2021 are provided below –
(` in crore)
Borrowings
Foreign currency term
loan
Weighted
average of
interest as
at 31 March
2021
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
3.85%
4,635
1,098
2,655
701
Rupee term loan
9.00%
30,894
3,754
9,181
7,772
External commercial
borrowings
Non-convertible
debentures
4.34%
388
279
110
7.97%
16,592
9,675
4,978
Commercial paper
4.21%
2,161
2,161
-
-
-
-
209 Repayable in 69 quarterly
installments and 12
annual installments
10,352 Repayable in 177 monthly
repayments, 663 quarterly
installments, 1 half yearly
installments and 1 bullet
payment
- Repayable in 8 annual
installments for three
external commercial
borrowings
2,000 Repayable in 12 bullet
payments and 6 annual
installments
- Repayable in 1 bullet
payment
483
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Borrowings
Weighted
average of
interest as
at 31 March
2021
Total
carrying
value
<1 year
1-3 years
3-5 years
>5 years
Remarks
Working capital loan *
6.06%
1,315
1,315
-
-
- Export packing credit
(` in crore)
Amounts due on
factoring
Deferred sales tax
liability
Redeemable
preference shares
4.65%
NA
NA
27
62
2
27
13
2
-
46
-
-
12
-
and working capital loan
are repayable within one
year from the date of
drawal, cash credit can be
repaid anytime as per the
availability of business
surplus during the validity
of the facility
- Repayable within one
month
- Repayable in 67 monthly
installments
- The redemption and
dividend paid to the
preference shares
unclaimed if any, is
payable on claim.
Non-convertible bonds
0.00%**
156
-
17
20
119 Repayable in 10 annual
Others
5.10%
796
796
-
-
installments starting from
FY 2023-24
- Suppliers credit is
repayable in seven
bullet payments and one
annual repayments; Loan
repayable on demand
and others payable in one
annual payment
Total
57,028
19,120
16,987
8,505
12,680
The above maturity is based on the total principal outstanding gross of issue expenses and discounting impact of deferred
sales tax liability.
*Includes loans repayable on demand from banks for ` 298 crore and packing credit in foreign currency from banks of ` 350 crore
** Increasing interest rate from 0.00% to 0.50% till maturity
g) Movement in borrowings during the period is provided below -
Particulars
Opening balance at 01 April 2020
Net cash inflow/ (outflow)
Debt on acquisition through business combination
Other non-cash changes
Foreign exchange currency translation differences
As at 31 March 2021
Opening balance at 01 April 2021
Net cash outflow
Other non-cash changes
Foreign exchange currency translation differences
As at 31 March 2022
*including Current maturities of Long term borrowing
Short term
borrowing
13,076
(9,351)
8
(7)
(11)
3,715
3,715
3,794
(80)
5
7,434
Long term
borrowing*
46,111
7,130
-
126
(54)
53,313
53,313
(7,842)
138
66
(` in crore)
Total
59,187
(2,221)
8
119
(65)
57,028
57,028
(4,048)
58
71
45,675
53,109
Other non‑cash changes include amortisation of borrowing costs and foreign exchange difference on borrowings.
484
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
h)
During the current year, the Company executed into a ` 8,000 crore facility agreement with Union Bank of India
Limited to take over long-term syndicated facility of ` 10,000 crore. This loan is secured by the way of pledge over the
shares held by the Company in HZL representing 5.77% of the paid up share capital of HZL along‑with a non‑disposal
undertaking 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 2022, the principal amount participated for and outstanding under the facility is ` 7,840 crore.
During the previous year, the Company executed into a ` 10,000 crore long-term syndicated loan facility agreement.
This loan was secured by the way of pledge over the shares held by the Company in HZL representing 14.82% of
the paid up share capital of HZL along-with a non-disposal undertaking 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 2021, the principal amount participated for and
outstanding under the facility was ` 8,650 crore.
20 Financial liabilities – Trade payables
Particulars
Undisputed dues
Unbilled dues
Not due
Less than 1 year
1-2 years
2-3 years
More than 3 years
Sub-total
Disputed dues
Less than 1 year
1-2 Years
2-3 years
More than 3 years
Sub-total
Total
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,042
3,441
4,531
107
91
96
10,308
41
36
22
131
230
1,311
2,477
3,587
120
80
45
7,620
3
-
-
1
4
10,538
7,624
a)
b)
21
Trade payables are majorly non-interest bearing and are normally settled upto 180 days terms.
For amount due and terms and conditions of related party payables refer note 42.
Operational Buyers’ /Suppliers’ Credit is availed in foreign currency from offshore branches of Indian banks or foreign
banks at an interest rate ranging from 0.28% to 3.16% per annum and in rupee from domestic banks at interest rate
ranging from 4.00%-8.00% 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.
485
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
22 Financial liabilities – Others
Particulars
Non-current
Liabilities for capital expenditure
962
Security deposits from vendors
and others
Interest accrued but not due
Put option liability with non-
controlling interest a
Unpaid/unclaimed dividend
Profit petroleum payable
Dues to related parties
(Refer note 42)
Other liabilities b
Total
As at 31 March 2022
As at 31 March 2021
Current
10,998
237
381
-
122
2,180
166
Total
Non-current
Current
11,960
237
381
245
122
2,180
166
936
-
-
263
-
-
-
7,009
218
1,217
-
101
1,468
294
-
-
245
-
-
-
(` in crore)
Total
7,945
218
1,217
263
101
1,468
294
120
1,327
3,227
17,312
3,347
18,639
86
1,285
2,664
12,971
2,750
14,256
a)
b)
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 ` 52 (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.
Includes revenue received in excess of entitlement interest of ` 1,507 crore (31 March 2021: ` 1,482 crore) and
reimbursement of expenses, interest accrued on other than borrowings, liabilities related to claim, liability for stock
options etc.
23 Movement in lease liabilities is as follows:
(` in crore)
Amount
660
360
28
(338)
(69)
641
115
14
(232)
(64)
474
Particulars
At 01 April 2020
Additions during the year
Interest on lease liabilities
Payments made
Disposals/adjustments
As at 31 March 2021
Additions during the year
Interest on lease liabilities
Payments made
Disposals/ adjustments
As at 31 March 2022
486
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
24 Financial instruments
A. Financial assets and liabilities:
The accounting classification of each category of financial instruments, their carrying amounts and their fair values are set
out below:
As at 31 March 2022
Financial Assets
Investments*
Trade receivables
Loans
Other financial assets
Derivatives
Cash and cash equivalents
Other bank balances
Total
Financial Liabilities
Borrowings
Trade payables
Operational buyers' credit /
suppliers' credit
Derivatives
Other financial liabilities**
Total
As at 31 March 2021
Financial Assets
Investments*
Trade receivables
Loans
Other financial assets
Derivatives
Cash and cash equivalents
Other bank balances
Total
Financial Liabilities
Borrowings
Trade payables
Operational buyers' credit /
suppliers' credit
Derivatives
Other financial liabilities**
Total
Fair value
through profit
or loss
17,170
521
-
-
10
-
-
17,701
Fair value
through other
comprehensive
income
118
-
-
-
-
-
-
118
Derivatives
designated
as hedging
instruments
-
-
-
-
248
-
-
248
(` in crore)
Amortised cost
Total carrying
value
Total fair value
-
7,644
5,470
11,579
-
8,671
6,921
40,285
17,288
8,165
5,470
11,579
258
8,671
6,921
58,352
17,288
8,165
5,864
11,579
258
8,671
6,921
58,746
(` in crore)
Fair value
through profit
or loss
-
1,033
-
135
-
1,168
Derivatives
designated
as hedging
instruments
-
-
-
402
-
402
Amortised cost
Others***
Total carrying
value
Total fair value
53,109
9,505
10,993
-
18,868
92,475
-
-
-
-
245
245
53,109
10,538
10,993
537
19,113
94,290
53,202
10,538
10,993
537
19,113
94,383
(` in crore)
Fair value
through profit
or loss
16,555
163
-
-
13
-
-
16,731
Fair value
through other
comprehensive
income
103
-
-
-
-
-
-
103
Derivatives
designated
as hedging
instruments
-
-
-
-
57
-
-
57
Amortised cost
Total carrying
value
Total fair value
-
6,486
7,076
6,777
-
4,854
11,775
36,968
16,658
6,649
7,076
6,777
70
4,854
11,775
53,859
16,658
6,649
7,597
6,777
70
4,854
11,775
54,380
(` in crore)
Fair value
through profit
or loss
-
707
-
93
-
800
Derivatives
designated
as hedging
instruments
-
-
-
262
-
262
Amortised cost
Others***
Total carrying
value
Total fair value
57,028
6,917
8,265
-
14,634
86,844
-
-
-
-
263
263
57,028
7,624
8,265
355
14,897
88,169
56,700
7,624
8,265
355
14,897
87,841
* Investments exclude equity investment in associates and joint ventures which are accounted as per the equity method of accounting.
**includes lease liability of ` 474 crore (31 March 2021: ` 641 crore).
*** Represents net put option liability with non‑controlling interests accounted for at fair value.
487
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 B. Fair value hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
(i)
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
(ii)
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).
(iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The below table summarises the categories of financial assets and liabilities as at 31 March 2022 and 31 March 2021
measured at fair value:
As at 31 March 2022
Financial Assets
At fair value through profit or loss
Investments
Derivative financial assets
Trade receivables
At fair value through other comprehensive income
Investments
Derivatives designated as hedging instruments
Derivative financial assets
Total
Financial Liabilities
At fair value through profit or loss
Derivative financial liabilities
Trade payables
Derivatives designated as hedging instruments
Derivative financial liabilities
Other financial liabilities - Net put option liability with non-controlling
interests accounted for at fair value.
Total
As at 31 March 2021
Financial Assets
At fair value through profit or loss
Investments
Derivative financial assets
Trade receivables
At fair value through other comprehensive income
Investments
Derivatives designated as hedging instruments
Derivative financial assets
Total
Level 1
Level 2
(` in crore)
Level 3
7,208
-
-
107
-
7,315
9,933
10
521
-
248
10,712
29
-
-
11
-
40
Level 1
Level 2
(` in crore)
Level 3
-
-
-
-
-
135
1,033
402
-
1,570
-
-
-
245
245
Level 1
Level 2
(` in crore)
Level 3
6,318
-
-
92
-
10,186
13
163
-
57
6,410
10,419
51
-
-
11
-
62
488
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Financial Liabilities
At fair value through profit or loss
Derivative financial liabilities
Trade payable
Derivatives designated as hedging instruments
Derivative financial liabilities
Other financial liabilities - Net put option liability with non-controlling
interests accounted for at fair value.
Total
Level 1
Level 2
(` in crore)
Level 3
-
-
-
-
-
93
707
262
-
1,062
-
-
-
263
263
The below table summarises the fair value of loans and borrowings which are carried at amortised cost as at 31 March
2022 and 31 March 2021
As at 31 March 2022
Financial Assets
Loans*
Total
Financial Liabilities
Borrowings
Total
As at 31 March 2021
Financial Assets
Loans*
Total
Financial Liabilities
Borrowings
Total
*Refer note 42 (J)
Level 1
-
-
Level 1
-
-
Level 1
-
-
Level 1
-
-
Level 2
5,864
5,864
Level 2
53,202
53,202
Level 2
7,597
7,597
Level 2
56,700
56,700
(` in crore)
Level 3
-
-
(` in crore)
Level 3
-
-
(` in crore)
Level 3
-
-
(` in crore)
Level 3
-
-
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 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 current investments and structured investments are valued by
referring to market inputs including quotes, trades, poll, primary issuances for securities and /or underlying securities
issued by the same or similar issuer for similar maturities and movement in benchmark security etc.
• Trade receivables, cash and cash equivalents, other bank balances, other financial assets, current borrowings, trade
payables, operational buyers’ credit and other current financial liabilities: Fair values approximate their carrying amounts
largely due to the short-term maturities of these instruments.
• Non‑current fixed‑rate and variable‑rate borrowings: Fair value has been determined by the Group based on parameters
such as interest rates, specific country risk factors, and the risk characteristics of the financed project.
489
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
• Derivative financial assets/liabilities: The Group executes 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
include the forward pricing and swap models, using present value calculations. The models incorporate various
inputs including 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 (U.K.).
• Other non‑current financial assets and 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.
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 2022 and 31 March 2021 have been measured as at respective date.
As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts
reported at each period-end.
There were no significant transfers between Level 1, Level 2 and Level 3 during the year.
C. Risk management framework
The Group’s businesses are subject to several risks and uncertainties including financial risks.
The Group’s documented risk management policies act as an effective tool in mitigating the various financial risks to
which the businesses are exposed 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 Management Assurance function and is regularly reviewed by the
Group’s Audit and Risk Committee. The Audit and Risk Committee is aided by the other Committees of the Board 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 Audit
Committee on behalf of the Board.
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 maximisation.
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,
490
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
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 imported input commodity such as Alumina, anodes, etc., for our aluminium and Copper 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.
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 hedging arrangements for its
aluminium sales to realise average month of sale LME prices.
Copper
The Group’s custom refining 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 anodes/blisters 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.
RCs are a major source of income for the Indian copper refining operations. Fluctuations in Rcs are influenced by factors
including demand and supply conditions prevailing in the market for smelters output. The Group’s copper business has a
strategy of securing a majority of its anodes/blisters feed requirement under long-term contracts with smelters / traders.
491
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 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. In exceptional circumstances, we may enter into strategic hedging with
prior approval of the Committee of Directors.
Zinc International
Raw material for zinc and lead is mined in Namibia and 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 crude with a premium or discount over the benchmark
based upon quality differential and competitiveness of various grades. The Group also hedges variability of crude price
through forward contracts on selective basis.
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 2022, the value of net financial liabilities linked to commodities (excluding derivatives) accounted for on
provisional prices was ` 512 crore (31 March 2021: ` 216 crore). 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 2022.
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 2022
Total Exposure
(` in crore)
Effect on pre-tax
profit/(loss) of a
10% increase in
the LME
Effect on equity of
a 10% increase in
the LME
Copper
(830)
(83)
-
For the year ended 31 March 2021
Total Exposure
(` in crore)
Effect on pre-tax
profit/(loss) of a
10% increase in
the LME
Effect on equity of
a 10% increase in
the LME
Copper
(1,002)
(100)
-
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 Copper division custom smelting operations in India of ` 130
crore loss (31 March 2021: ` 87 crore loss), which is pass through in nature and as such will not have any impact on
the profitability.
492
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
(a) 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.
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 generates sufficient cash flows from the current operations which together
with the available cash and cash equivalents, short-term investments and structured investment net of deferred
consideration payable for such investments provide liquidity both in the short-term as well as in the long-term. The
Group has been rated by CRISIL Limited (CRISIL) and India Ratings and Research Private Limited (India Rating) for its
capital market issuance in the form of CPs and NCDs and for its banking facilities in line with Basel II norms.
CRISIL after revising the outlook to ‘Positive’ from ‘Stable’ in October 2021, upgraded its rating on the long‑term bank
facilities and debt instruments of Vedanta Ltd to ‘CRISIL AA’ from ‘CRISIL AA‑‘ in February 2022. The outlook on
ratings was also revised to ‘Stable’ from ‘Positive’. The short‑term rating on bank facilities and commercial paper has
been reaffirmed at ‘CRISIL A1+’. The upward rating action factors in stronger‑than‑expected operating profitability,
driven by elevated commodity prices during fiscal 2022, volume growth across businesses, and sustained cost
efficiency, especially in the Aluminium business. In December 2021, India ratings also revised the outlook to ‘Positive’
from ‘Stable’ while reaffirming the ratings on long‑term bank facilities at “ IND AA‑“.
Anticipated future cash flows, together with undrawn fund based committed facilities of ` 11,103 crore, and cash,
bank, structured investment (net of related liabilities) and current investments of ` 32,130 crore as at 31 March 2022,
are expected to be sufficient to meet the liquidity requirement of the Group in the near future.
The Group remains committed to maintaining a healthy liquidity, a low gearing ratio, deleveraging and strengthening
its balance sheet. The maturity profile of the Group’s financial liabilities based on the remaining period from the
date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual
undiscounted cash obligation of the Group.
As at 31 March 2022
Payments due by year
Borrowings*
Derivative financial
liabilities
Lease liabilities
Trade Payables,
Operational Buyers'
Credit and Other financial
liabilities**
Total
As at 31 March 2021
Payments due by year
Borrowings*
Derivative financial
liabilities
Lease liabilities
Trade Payables,
Operational Buyers'
Credit and Other financial
liabilities**
Total
<1 year
19,028
531
324
38,762
1-3 years
18,180
6
113
1,098
3-5 years
13,103
-
9
-
>5 years
11,654
-
29
-
(` in crore)
Total
61,965
537
474
39,860
58,645
19,397
13,112
11,683
1,02,836
<1 year
23,571
279
481
27,862
1-3 years
22,088
76
60
1,114
3-5 years
11,673
-
22
-
>5 years
15,503
-
78
-
(` in crore)
Total
72,835
355
641
28,976
52,193
23,338
11,695
15,581
1,02,807
*Includes non‑current borrowings, current borrowings, committed interest payments on borrowings and interest accrued on borrowings.
**Includes both non‑current and current financial liabilities and committed interest payment, as applicable. Excludes interest accrued on
borrowings.
493
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
The Group had access to following funding facilities :
As at 31 March 2022
Funding facility
Fund/non-fund based
As at 31 March 2021
Funding facility
Fund/non-fund based
Total
Collateral
Total Facility
78,181
Drawn
64,227
Total Facility
72,752
66,793
Drawn
56,232
51,780
(` in crore)
Undrawn
13,954
(` in crore)
Undrawn
16,520
15,013
The Group has pledged financial instruments with carrying amount of ` 27,191 crore (31 March 2021: ` 21,990 crore)
and inventories with carrying amount of ` 11,448 crore (31 March 2021: ` 7,654 crore) as per the requirements
specified in various financial facilities in place. The counterparties have an obligation to release the securities to the
Group when financial facilities are surrendered.
(b) Foreign exchange risk
Fluctuations in foreign currency exchange rates may have an impact on the consolidated statement of profit and
loss, the consolidated statement 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, Australian dollar, Namibian dollar, AED, ZAR, GBP, JPY, INR and
Euro against the functional currencies of Vedanta Limited and 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 Indian Rupee (INR). 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.
The following analysis is based on the gross exposure as at the reporting date which could affect the consolidated
statement of profit and loss. The exposure 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 :
(` in crore)
As at 31 March 2022
As at 31 March 2021
Financial
Asset
39,170
17,885
1,297
58,352
Financial
liabilities
64,901
26,183
3,206
94,290
Financial
Asset
40,236
12,802
821
53,859
Financial
liabilities
63,672
21,982
2,515
88,169
Currency
INR
USD
Others
Total
494
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
The Group’s exposure to foreign currency arises where a Group entity holds monetary assets and liabilities
denominated in a currency different to the functional currency of the respective business, with US dollar being the
major non-functional currency.
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 foreign currencies by 10% against the functional currency of
the respective entities.
Set out below is the impact of a 10% strengthening in the functional currencies of the respective businesses 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 2022
USD
INR
For the year ended 31 March 2021
USD
INR
EURO
Effect of
10% strengthening
of functional
currency on
pre-tax profit/
(loss)
884
(452)
(` in crore)
Effect of
10% strengthening
of functional
currency on
equity
-
-
Effect of
10% strengthening
of functional
currency on
pre-tax profit/
(loss)
1,132
(307)
26
(` in crore)
Effect of
10% strengthening
of functional
currency on
equity
-
-
-
A 10% weakening of functional currencies of the respective businesses would have an equal and opposite effect on
the Group’s financial statements.
In respect of loans granted to group companies, there have been no non-compliances of the relevant provisions of the
Foreign Exchange Management Act, 1992 and the Prevention of Money Laundering Act, 2002.
(c)
Interest rate risk
At 31 March 2022, the Group’s net debt of ` 20,979 crore (31 March 2021: ` 24,414 crore) comprises debt of ` 53,109
crore (31 March 2021: ` 57,028 crore) offset by cash, bank and current investments of ` 32,130 crore (31 March 2021:
` 32,614 crore).
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. The Group invests cash and liquid 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.
495
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
The exposure of the Group’s financial assets as at 31 March 2022 to interest rate risk is as follows:
Financial Assets
Total
58,352
Floating rate
financial assets
Fixed rate
financial assets
9,113
24,576
The exposure of the Group’s financial liabilities as at 31 March 2022 to interest rate risk is as follows:
Financial Liabilities
94,290
35,579
29,899
The exposure of the Group’s financial assets as at 31 March 2021 to interest rate risk is as follows:
Total
Floating rate
financial assets
Fixed rate
financial assets
Financial Assets
53,859
11,332
27,060
The exposure of the Group’s financial liabilities as at 31 March 2021 to interest rate risk is as follows:
Total
Floating rate
financial assets
Fixed rate
financial assets
Financial Liabilities
88,169
32,391
33,139
Total
Floating rate
financial assets
Fixed rate
financial assets
(` in crore)
Non-interest
bearing financial
assets
24,663
(` in crore)
Non-interest
bearing financial
assets
28,812
(` in crore)
Non-interest
bearing financial
assets
15,467
(` in crore)
Non-interest
bearing financial
assets
22,639
Considering the net debt position as at 31 March 2022 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 table below illustrates the impact of a 0.5% to 2.0% movement in interest rates on 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 that 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.
Increase in interest rates
0.50%
1.00%
2.00%
(` in crore)
Effect on pre-tax
profit/(loss) during
the year ended 31
March 2022
(132)
(265)
(530)
Effect on pre-tax
profit/(loss) during
the year ended 31
March 2021
(105)
(211)
(421)
An equivalent reduction in interest rates would have an equal and opposite effect on the Group’s financial statements.
(d) Counterparty and concentration of 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,
where appropriate, as a means of mitigating the risk of financial loss from defaults.
The Group is exposed to credit risk from trade receivables, contract assets, investments, loans, other financial assets,
and derivative financial instruments.
Credit risk on receivables is limited as almost all credit sales are against letters of credit and guarantees of banks of
national standing.
496
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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. The history of trade receivables shows a negligible provision
for bad and doubtful debts. Therefore, the Group does not expect any material risk on account of non‑performance by
any of the Group’s counterparties.
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 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.
The carrying value of the financial assets represents the maximum credit exposure. The Group’s maximum exposure
to credit risk as at 31 March 2022 and 31 March 2021 is ` 58,352 crore and ` 53,859 crore respectively.
The maximum credit exposure on financial guarantees given by the Group for various financial facilities is described in
Note 40 on “Contingent liability and capital commitments”.
None of the Group’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade
receivables, loans and other financial assets (both current and non‑current), there were no indications as at the year
end, that defaults in payment obligations will occur except as described in Note 8 and 10 on allowance for impairment
of trade receivables and other financial assets.
Of the year end trade receivables, loans and other financial assets (excluding Bank deposits, site restoration fund and
derivatives) balance the following, though overdue, are expected to be realised in the normal course of business and
hence, are not considered impaired as at 31 March 2022 and 31 March 2021:
Particulars
Neither impaired nor past due
Past due but not impaired
- Less than 1 month
- Between 1–3 months
- Between 3–12 months
- Greater than 12 months
Total
As at
31 March 2022
15,828
(` in crore)
As at
31 March 2021
13,433
2,108
369
390
5,289
23,984
612
276
842
4,402
19,565
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 tables are those that
have not been settled within the terms and conditions that have been agreed with that customer. The Group based on
past experiences does not expect any material loss on its receivables.
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 (Trade receivables and Financial assets – others)
The change in the allowance for financial assets (current and non‑current) is as follows:
Particulars
Trade receivables
As at 01 April 2020
Allowance made during the year
Reversals/write-off during the year
Exploration cost written off
Exchange differences
As at 31 March 2021
Allowance made during the year
Reversals/write-off during the year
Exploration cost written off
Exchange differences
As at 31 March 2022
570
94
1
0
(0)
665
197
0
0
0
862
Financial
assets – Others
966
122
(58)
2
(12)
1,020
13
1
0
14
1,048
(` in crore)
Financial
assets – Loans
-
78
0
0
0
78
0
-
-
-
78
497
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 D. 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.
The fair values of all derivatives are separately recorded in the consolidated balance sheet within current and non-
current assets and liabilities. 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 equity through OCI until the hedged transaction occurs, at which time, the respective gain
or losses are reclassified to profit or loss. These hedges have been effective for the year ended 31 March 2022 and
31 March 2021.
The Group uses foreign exchange contracts from time to time to optimise currency risk exposure on its foreign
currency transactions. The Group hedged part of its foreign currency exposure on capital commitments
during the year ended 31 March 2022. Fair value changes on such forward contracts are recognised in other
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 2023 and consequently may
impact profit or loss 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 profit or loss 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 statement of profit and loss.
The Group uses foreign exchange contracts from time to time to optimise currency risk exposure on its foreign
currency transactions. Fair value changes on such forward contracts are recognised in the consolidated statement of
profit and loss.
Non-designated economic hedges
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 future contracts on the LME and certain other derivative instruments. Fair value changes on such
derivative instruments are recognised in the consolidated statement of profit and loss.
498
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Net investment in foreign operations
The Group has partly hedged its foreign exchange risk in net investment in foreign operations in the previous year.
Exchange differences arising from the translation of the net investment in foreign operations are recognised directly
in equity. Gains and losses on those hedging instruments on forward exchange contracts designated as hedges
of the net investments in foreign operations are recognised in equity to the extent that the hedging relationship is
effective. These amounts are included in exchange differences on translation of foreign operations as stated in
other comprehensive income. Gains and losses relating to hedge ineffectiveness are recognised immediately in the
Consolidated Statement of Profit and Loss for the year. Gains and losses accumulated in the translation reserve are
included in profit or loss when the foreign operation is disposed off.
The fair value of the Group’s derivative positions recorded under derivative financial assets and derivative financial
liabilities are as follows:
Derivative Financial Instruments
Current
Cash flow hedge*
- Commodity contracts
-
Interest rate swap
Fair Value hedge
- Commodity contracts
- Forward foreign currency contracts
Non-qualifying hedges/economic hedge
- Commodity contracts
- Forward foreign currency contracts
Sub-total (A)
Non-current
Cash flow hedge*
-
Interest rate swap
Fair Value hedge
- Forward foreign currency contracts
Non- qualifying hedges
- Commodity contracts
Sub-total (B)
Total (A+B)
As at 31 March 2022
As at 31 March 2021
Assets
Liabilities
Assets
Liabilities
(` in crore)
232
1
11
4
2
8
258
-
-
-
-
207
-
65
124
10
125
531
-
6
-
6
3
-
41
14
1
12
70
-
-
-
-
258
537
70
55
5
9
116
3
91
279
5
71
-
76
356
* 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
Particulars
Provision for employee benefits a
(Refer note 33)
- Retirement benefit
- Others
Provision for restoration,
rehabilitation and environmental
costs b
Other provisions b
Total
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Total
(` in crore)
158
10
3,218
-
3,386
100
177
28
112
417
258
187
3,246
112
3,803
146
12
2,974
-
3,132
115
154
28
56
353
261
166
3,002
56
3,485
499
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
a) Provision for employee benefits includes gratuity, compensated absences, deferred cash bonus etc.
b)
Particulars
As at 01 April 2020
Additions
Amounts utilised
Unused amounts reversed
Unwinding of discount (Refer note 34)
Revision in estimates
Exchange differences
As at 31 March 2021
Additions
Amounts utilised
Unwinding of discount (Refer note 34)
Revision in estimates
Exchange differences
As at 31 March 2022
Restoration,
rehabilitation and
environmental
costs (Refer c)
2,677
270
(2)
(24)
72
(12)
21
3,002
35
(4)
78
53
82
3,246
(` in crore)
Others
(Refer d)
56
-
-
-
-
-
-
56
56
-
-
-
-
112
c) 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 exploration and other licences and
contractual arrangements.
Within India, the principal restoration and rehabilitation provisions are recorded within Oil & Gas business 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 2% to 10%, and become payable on
closure of mines and are expected to be incurred over a period of one to thirty years. The lower range of discount
rate is at Oil and Gas business and Zinc International operations in Ireland and higher range is at 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.
d) Other provisions
Other provisions include provision for disputed cases and claims.
26 Other liabilities
Particulars
As at 31 March 2022
As at 31 March 2021
Non-current
Current
Total
Non-current
Current
Amount payable to owned post-
employment benefit trust
Other statutory liabilities a
Deferred government grants b
Advance from customer c
Advance from related party
Other liabilities
Total
-
-
4,270
404
-
-
4,674
500
33
33
3,157
250
4,127
2
208
7,777
3,157
4,520
4,531
2
208
-
-
4,327
-
-
-
32
3,144
229
6,233
-
184
9,822
12,451
4,327
(` in crore)
Total
32
3,144
4,556
6,233
-
184
14,149
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
a)
b)
c)
Statutory liabilities mainly includes payables for Provident fund, ESIC, withholding taxes, goods and services tax, VAT,
service tax, etc.
Represents government assistance in the form of the duty benefit availed under Export Promotion Capital Goods
(EPCG) Scheme and SEZ scheme on purchase of property, plant and equipment accounted for as government grant
and being amortised over the useful life of such assets.
Advance from customers are contract liabilities to be settled through delivery of goods. The amount of such balances
as on 01 April 2020 was ` 8,055 Crore. During the current year, the Group has refunded Nil (FY 2020‑21 ` 5 Crore) to
the customers and recognised revenue of ` 6,221 Crore (FY 2020‑21: ` 7,878 Crore) out of such opening balances. All
other changes are either due to receipt of fresh advances or exchange differences.
27 Revenue from operations
Particulars
Sale of products
Sale of services
Revenue from contingent rents
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
1,29,510
301
1,381
1,31,192
85,124
224
1,515
86,863
a)
b)
Revenue from sale of products and from sale of services for the year ended 31 March 2022 includes revenue from
contracts with customers of ` 1,31,101 crore (31 March 2021: ` 85,544 crore) and a net loss on mark-to-market of
` 1,290 crore (31 March 2021: ` 196 crore) on account of gains/ losses relating to sales that were provisionally priced
as at 31 March 2021 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 2022.
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 Ind AS 115 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.
28 Other operating income
Particulars
Export incentives
Scrap sales
Miscellaneous income
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
488
573
479
1,540
303
527
328
1,158
501
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
29 Other Income
Particulars
Net gain on investment measured at FVTPL
Interest income from investments measured at FVTPL
Interest income from financial assets at amortised cost
- Bank deposits
- Loans (Refer note 42)
- Others
Interest on income tax refund
Dividend income from
- financial assets at FVTPL
- financial assets at FVOCI
Profit on sale of assets
Deferred government grant income
Miscellaneous income
Total
30 Changes in inventories of finished goods and work-in-progress*
Particulars
Opening Stock:
Finished Goods
Work-in-Progress
Total
Add: Foreign exchange translation
Add: Acquired as part of business combination
(Less)/Add: Capitalisation and other adjustments
(Less): Raw material sold during the year
Less: Closing Stock
Finished Goods
Work-in-Progress
Total
Changes in inventory
* Inventories include goods‑in‑transit
31 Employee benefits expense a
Particulars
Salaries and wages
Share based payments
Contributions to provident and other funds
Staff welfare expenses
Less: Cost allocated/directly booked in joint ventures
Total
(a) net of capitalisation of ` 115 crore (31 March 2021: ` 127 crore).
502
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
209
392
537
708
246
2
-
2
128
245
131
2,600
934
478
565
629
351
80
1
2
75
229
77
3,421
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
855
3,013
3,868
14
-
(51)
(11)
829
5,040
5,869
(2,049)
1,270
3,323
4,593
40
23
4
-
855
3,013
3,868
792
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
2,776
79
226
286
(556)
2,811
2,895
60
208
228
(530)
2,861
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
32 Share based payments
The Company offers equity based and cash based option plans to its employees, officers and directors through the
Company’s stock option plan introduced in 2016 and Cairn India’s stock option plan now administered by the Company
pursuant to its merger with the Company.
The Vedanta Limited Employee Stock Option Scheme (ESOS) 2016
The Company introduced an Employee Stock Option Scheme 2016 (“ESOS”), which was approved by the Vedanta Limited
shareholders to provide equity settled incentive to all employees of the Company including subsidiary companies. The
ESOS scheme includes tenure based, business performance based (EBITDA) and market performance based stock
options. 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 option is measured by comparing Company’s performance in terms of Total Shareholder
Return (“TSR”) over the performance period with the performance of two group of comparator companies (i.e. Indian and
global comparator companies) defined in the scheme. The extent to which an option vests will depend on the Company’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. The ESOS schemes are administered through VESOS trust and have underlying Vedanta Limited
equity shares.
Options granted during the year ended 31 March 2022 and year ended 31 March 2021 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, ECG & 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 2022 is presented below:
Financial Year
of Grant
Exercise Period
Options
outstanding
01 April 2021
Options
granted during
the year
Options
forfeited/
lapsed during
the year
Options
exercised
during the year
Options
outstanding
31 March 2022
Options
exercisable
31 March 2022
2017-18
2018-19
2018-19
2019-20
2019-20
2020-21
2020-21
2021-22
2021-22
01 September
2020 - 28
February 2021
01 November
2021 - 30 April
2022
Cash settled
29 November
2022 - 28 May
2023
Cash settled
06 November
2023 - 05 May
2024
Cash settled
01 November
2024 - 30 April
2025
Cash settled
3,76,940
99,12,240
7,28,856
1,35,72,278
8,77,451
1,27,11,112
-
-
-
-
-
-
23,457
3,53,483
-
-
69,06,444
26,82,781
3,23,015
3,23,015
4,89,731
20,90,560
2,39,125
-
-
1,14,81,718
1,97,050
19,03,591
-
-
-
-
6,80,401
1,08,07,521
7,24,923
1,13,04,599
-
-
-
-
-
-
10,20,889
-
-
1,20,83,636
2,95,966
7,79,037
-
3,91,99,766
8,64,537
1,29,48,173
22,770
1,27,08,606
-
32,75,389
8,41,767
3,61,63,944
-
3,23,015
503
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 The details of share options for the year ended 31 March 2021 is presented below:
Financial Year
of Grant
Exercise Period
Options
outstanding
01 April 2020
Options
granted during
the year
Options
forfeited/
lapsed during
the year
Options
exercised
during the year
Options
outstanding
31 March 2021
Options
exercisable
31 March 2021
8,648
10,59,868
-
-
55,14,169
11,36,816
3,76,940
3,76,940
2016-17
2017-18
2017-18
2018-19
2018-19
2019-20
2019-20
2020-21
2020-21
15 December
2019 -14 June
2020
01 September
2020 - 28
February 2021
16 October 2020
- 15 April 2021
01 November
2021 - 30 April
2022
Cash settled
29 November
2022 - 28 May
2023
Cash settled
06 November
2023 - 05 May
2024
Cash settled
10,68,516
70,27,925
11,126
1,14,20,046
10,69,156
1,58,81,330
-
-
-
-
-
-
11,126
15,07,806
3,40,300
23,09,052
18,96,700
-
-
1,27,11,112
10,19,249
-
-
-
-
-
-
-
99,12,240
7,28,856
1,35,72,278
8,77,451
1,27,11,112
-
-
-
-
-
-
-
3,83,74,799
10,20,889
1,37,32,001
-
1,07,10,350
-
21,96,684
10,20,889
3,91,99,766
-
3,76,940
The fair value of all options has been determined at the date of grant of the option allowing for the effect of any market-
based performance conditions. This fair value, adjusted by the Group’s estimate of the number of options that will
eventually vest as a result of non‑market conditions, is expensed over the vesting period.
Business Performance-Based and Sustained Individual Performance-Based Options:
The fair values of stock options following these types of vesting conditions have been estimating 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.
Total Shareholder Returns-Based Options:
The fair values of stock options following this type of vesting condition has been estimated using the Monte Carlo
Simulation method. This method has been used to simulate the expected share prices for Vedanta Limited and the
companies of the comparator group over the vesting period of the options. Based on the simulated prices, the expected
pay-off at the end of the vesting period has been estimated and present valued to the valuation date. Further, based on the
simulated share prices and expected dividends the relative rank of Vedanta Limited’s share price return has been estimated
vis‑à‑vis the Indian and Global Group of the comparator group. This rank has been used to estimate expected % vesting of
the options under this type of vesting condition. The inputs to the monte carlo simulation method include 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), expected dividend yield (estimated based
on the actual dividend trend of the companies), expected volatility (estimated based on the historical volatility of the return
in the Company’s share prices for a term commensurate with the expected tenure of the options). The exercise period of 6
months post the vesting period has not been considered as the options are expected to be exercised immediately post the
completion of the vesting period.
504
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
The assumptions used in the calculations of the charge in respect of the ESOS options granted during the years ended
31 March 2022 and 31 March 2021 are set out below:
Particulars
Number of Options
Exercise Price
Share Price at the date of grant
Contractual Life
Expected Volatility
Expected option life
Expected dividends
Risk free interest rate
Expected annual forfeitures
Fair value per option granted (Non-market performance based)
Year ended
31 March 2022
Year ended
31 March 2021
ESOS 2021
ESOS 2020
Cash settled -
8,64,537
equity settled -
1,20,83,636
Cash settled -
10,20,889
equity settled -
1,27,11,112
` 1
` 302.15
3 years
49.67%
3 years
6.80%
5.02%
10% p.a
` 193.97
` 1
` 228.75
2 years and
7 months
49.28%
2 years and 7
months
6.80%
4.84%
10% p.a.
` 150.73
Weighted average share price at the date of exercise of stock options was ` 339.32 (31 March 2021: ` 131.08)
The weighted average remaining contractual life for the share options outstanding was 1.62 years (31 March 2021: 2.03
years).
The Group recognised total expenses of ` 43 crore (31 March 2021: ` 58 crore) related to equity settled share-based
payment transactions for the year ended 31 March 2022. The total expense recognised on account of cash settled share
based plan during the year ended 31 March 2022 is ` 14 crore (31 March 2021: ` 6 crore) and the carrying value of cash
settled share based compensation liability as at 31 March 2022 is ` 19 crore (31 March 2021: ` 7 crore).
Employee stock option plans of erstwhile Cairn India Limited:
The Company has provided CIESOP share based payment scheme to its employees.
CIESOP plan
There are no specific vesting conditions under CIESOP plan other than completion of the minimum service period of 3 years
from the date of grant. Phantom options are exercisable proportionate to the period of service rendered by the employee
subject to completion of one year. The exercise period is 7 years from the vesting date.
Details of employees stock option plans is presented below:
CIESOP Plan
Year ended 31 March 2022
Year ended 31 March 2021
Number of options
Weighted average
exercise price in `
Number of options
Weighted average
exercise price in `
Outstanding at the beginning of the year
33,15,174
Granted during the year
Expired during the year
Exercised during the year
Forfeited / cancelled during the year
Outstanding at the end of the year
Exercisable at the end of the year
Nil
Nil
4,83,085
17,94,448
10,37,641
10,37,641
287.3
NA
NA
286.85
287.70
286.85
286.85
53,41,740
Nil
10,82,229
Nil
9,44,337
33,15,174
33,15,174
288.2
NA
291.3
NA
288.0
287.3
287.3
505
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Weighted average share price at the date of exercise of stock options was ` 375.89 (31 March 2021: NA)
Scheme
The details of exercise price for stock options outstanding as at
31 March 2022 are:
CIESOP Plan
The details of exercise price for stock options outstanding as at
31 March 2021 are:
Range of exercise
price in `
Weighted average
remaining
contractual life of
options (in years)
Weighted average
exercise price in `
286.85
0.31
286.85
CIESOP Plan
286.85-287.75
0.80
287.3
The Group has awarded certain cash settled share based options indexed to Parents’ shares (Vedanta Resources Limited
shares) and shares of any of its subsidiaries. The total expense recognised on account of cash settled share based plan
during the year ended 31 March 2022 is ` 24 crore (31 March 2021: ` 22 crore) and the carrying value of cash settled share
based compensation liability as at 31 March 2022 is ` 112 crore (31 March 2021: ` 86 crore).
Out of the total expense of ` 81 crore (31 March 2021 : ` 86 crore) pertaining to equity settled and cash settled options for
the year ended 31 March 2022 the Group has capitalised ` 2 crore (31 March 2021 : ` 26 crore) expense for the year ended
31 March 2022.
33 Employee Benefit Plans
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 statement of profit and loss 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.
Remeasurement gains and losses arising in the year are recognised in full in other comprehensive income for the year.
i) Defined contribution plans
The Group contributed a total of ` 139 crore and ` 119 crore for the year ended 31 March 2022 and 31 March 2021
respectively to the following defined contribution plans.
Particulars
Employer’s contribution to recognised provident fund and family pension fund
Employer’s contribution to superannuation
Employer’s contribution to National Pension Scheme
Indian pension plans
Central recognised provident fund
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
111
23
5
139
98
21
0
119
In accordance with the ‘The Employee’s 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 2022 and 2021) of an employee’s basic salary, and includes
contribution 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 statement of profit and
loss in the year they are incurred.
506
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
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 subject to a specified
ceiling per employee (included in the 12% rate specified above). 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, is applicable only to executives above certain grade. However, in case of the
oil & gas business (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 a policy with 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 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 statement of
profit and loss 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 authorised 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 statement of profit and loss in the
year they are incurred.
Australian pension scheme
The Group also participates in defined contribution superannuation schemes in Australia. The contribution of a
proportion of an employee’s salary in a superannuation fund is a compulsory legal requirement in Australia. The
employer contributes, into the employee’s fund of choice, 10.00% (2021 : 9.50%) of an employee’s gross remuneration
where the employee is covered by an industrial agreement and 13.00% (2021 : 12.50%) 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
statement of profit and loss 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 Group 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 statement of
profit and loss in the year they are incurred.
507
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Black Mountain (Pty) Limited, South Africa Pension and 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.
The Group contributes at a fixed percentage of 10.5% for up to supervisor grade and 15% for others.
Membership of both funds is compulsory for all permanent employees under the age of 60.
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 statement of
profit and loss 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 Ind AS 19 and the Guidance note issued by the Institute
of Actuaries of India for interest rate guarantee of exempted provident fund liability of employees, there is no interest
shortfall that is required to be met by Iron ore division, BALCO, HZL, SRL, and SMCL as at 31 March 2022 and
31 March 2021. Having regard to the assets of the fund and the return on the investments, the Group does not expect
any deficiency in the foreseeable future.
The Group contributed a total of ` 47 crore for the year ended 31 March 2022 and ` 48 crore for the year ended
31 March 2021 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 summarised below.
Particulars
Fair value of plan assets of trusts
Present value of defined benefit obligation
Net liability arising from defined benefit obligation
Percentage allocation of plan assets of the trust
Assets by category
Government Securities
Debentures/bonds
Equity
Money Market Instruments
Fixed deposits
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
2,532
(2,510)
NIL
2,421
(2,375)
NIL
Year ended
31 March 2022
Year ended
31 March 2021
58.62%
35.54%
4.64%
1.20%
0.00%
63.19%
34.36%
1.63%
0.83%
0.00%
The remeasurement loss of Nil and ` 6 crore have been charged to Other Comprehensive Income (OCI) during the year
ended 31 March 2022 and 31 March 2021 respectively.
(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 an employee’s spouse 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 2022 was ` 100 crore (31 March 2021: ` 86 crore). 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 Ind
AS 19 ‘Employee benefits’. The current service cost for the year ending 31 March 2022 of ` 1 crore (31 March 2021:
` 1 crore) has been recognised in consolidated statement of profit and loss. The remeasurement (gains)/losses and
508
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
net interest on the obligation of post‑retirement medical benefits of ` 7 crore loss (31 March 2021: ` 2 crore gain) and
` 9 crore (31 March 2021: ` 7 crore) for the year ended 31 March 2022 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.
Based on actuarial valuations conducted as at year end using the projected unit credit method, a provision is
recognised 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 recognised in the consolidated balance sheet.
The iron ore and oil & gas division of Vedanta Limited, SRL, SMCL, HZL and FACOR have constituted a trust recognised
by Income Tax Authorities for gratuity to employees and contributions to the trust are funded with the Life Insurance
Corporation of India (LIC), ICICI Prudential Life Insurance Company Limited (ICICI) and HDFC Life Insurance Company
Limited (HDFC).
Principal actuarial assumptions
Principal actuarial assumptions used to determine the present value of the Other post‑employment benefit Plan
obligation are as follows:
Particulars
Discount rate
Expected rate of increase in compensation level of covered employees
Mortality table
Amount recognised in the consolidated balance sheet consists of:
Particulars
Fair value of plan assets
Present value of defined benefit obligations
Net liability arising from defined benefit obligation
Particulars
Current service cost
Net interest cost
Components of defined benefit costs recognised in consolidated statement of profit
and loss
Year ended
31 March 2022
Year ended
31 March 2021
7.16%
2%-15%
6.90%
2%-15%
IALM (2012-14)
IALM (2012-14)
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
441
(599)
(158)
401
(576)
(175)
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
39
12
51
40
13
53
Amounts recognised in other comprehensive income in respect of Other post-employment benefit plan are as follows:
Particulars
Re-measurement of the net defined benefit obligation:-
Actuarial losses arising from changes in financial assumptions
Actuarial (gains)/losses arising from experience adjustments
Actuarial gains arising from changes in demographic assumptions
Actuarial losses on plan assets (excluding amounts included in net interest cost)
Components of defined benefit costs recognised in Other comprehensive income
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
17
(5)
(3)
2
11
1
(10)
-
6
(3)
509
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
The movement of the present value of the Other post‑employment benefit plan obligation is as follows:
Particulars
Opening balance
Acquired in business combination
Current service cost
Benefits paid
Interest cost
Actuarial losses/(gains) arising from changes in assumptions
Closing balance
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
576
-
39
(64)
39
9
599
631
18
40
(148)
44
(9)
576
The movement in the fair value of Other post‑employment benefit plan assets is as follows:
Particulars
Opening balance
Acquired in business combination
Contributions received
Benefits paid
Re-measurement gain/(loss) arising from return on plan assets
Interest income
Closing balance
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
401
-
69
(54)
(2)
27
441
442
16
18
(100)
(6)
31
401
The above plan assets have been invested in the qualified insurance policies.
The actual return on plan assets was ` 25 crore for the year ended 31 March 2022 and ` 25 crore for the year ended
31 March 2021.
The weighted average duration of the defined benefit obligation is 13.25 years and 14 years as at 31 March 2022 and
31 March 2021 respectively.
The Group expects to contribute ` 54 crore to the funded defined benefit plans during the year ending 31 March 2023.
Sensitivity analysis for Defined Benefit Plan
Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined
benefit obligation and based on reasonably possible changes of the respective assumptions occurring at the end of
the reporting period while holding all other assumptions constant.
Particulars
Discount rate
Increase by 0.50%
Decrease by 0.50%
Expected rate of increase in compensation level of covered employees
Increase by 0.50%
Decrease by 0.50%
(` in crore)
Increase/(Decrease) in
defined benefit obligation
Year ended
31 March 2022
Year ended
31 March 2021
(23)
25
22
(21)
(21)
23
21
(20)
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.
510
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
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 recognised in the consolidated balance sheet.
Risk analysis
Group is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefit
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 and HDFC. The Group does not have any liberty
to manage the fund provided to LIC, ICICI and HDFC.
The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to
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.
# Code on Social Security, 2020
The Code on Social Security, 2020 (‘Code’) relating to employee benefits during employment and post‑employment
benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However,
the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been
issued. The Group will assess the impact of the Code when it comes into effect and will record any related impact in the
period the Code becomes effective.
34 Finance cost
Particulars
Interest expense on financial liabilities at amortised cost
Other finance costs
Net interest on defined benefit arrangement
Unwinding of discount on provisions
Exchange difference regarded as an adjustment to borrowing cost
Less: Capitalisation of finance cost/borrowing cost
Less: Cost allocated/directly booked in joint ventures
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
4,712
294
21
78
7
(313)
(2)
4,797
5,185
238
19
72
15
(316)
(3)
5,210
a)
b)
c)
Interest rate of 7.87 % (31 March 2021: 6.91%) was used to determine the amount of general borrowing costs eligible
for capitalisation in respect of qualifying asset for the year ended 31 March 2021.
Interest expense on income taxes is ` 0 crore (31 March 2021: ` 0 crore).
Interest expense on lease liabilities for the year ended 31 March 2022 is ` 14 crore (31 March 2021: ` 28 crore).
511
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
35 Other expenses
Particulars
Cess on crude oil
Royalty
Consumption of stores and spare parts
Share of expenses in producing oil and gas blocks
Repairs to plant and equipment
Repairs to building
Repairs others
Carriage
Mine expenses
Net loss on foreign currency transactions and translations
Other selling expenses
Insurance
Rent*
Rates and taxes
Exploration costs written off
Bad trade receivables and advances written off
Provision for doubtful advances/ expected credit loss
Miscellaneous expenses
Less: Cost allocated/directly booked in joint ventures
Total
*Rent represents expense on short‑term/low value leases.
36 Exceptional items
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
3,036
4,385
3,304
2,770
2,896
215
215
2,927
2,661
156
17
269
38
78
-
11
233
5,797
(331)
28,677
1,743
3,090
2,387
2,118
2,357
161
161
1,600
2,064
65
18
219
47
58
7
12
296
4,358
(275)
20,486
(` in crore)
Particulars
Property, plant and equipment,
exploration intangible assets
under development, capital work-
in-progress and other assets
(impaired)/ reversal or (written off)/
written back in:
Oil & Gas
-
1) Exploration cost written off a
2) Reversal of previously recorded
impairment b
- Aluminium c, d
- Others e, f
- Unallocated g
Provision for legal disputes
(including change in law), force
majeure and similar incidences in:
- Aluminium h, i
- Copper j
- Zinc, Lead and Silver - India k
- Other segment l
Other exceptional items -
Unallocated m
Total
512
Year ended 31 March 2022
Year ended 31 March 2021
Exceptional
items
Tax effect of
Exceptional
items
Exceptional
items after tax
Exceptional
items
Tax effect of
Exceptional
items
Exceptional
items after tax
(2,618)
2,697
(125)
(52)
(24)
(288)
(217)
(134)
(7)
-
(768)
1,020
(1,059)
(1,598)
1,638
44
17
8
80
19
47
2
-
178
(81)
(35)
(16)
(208)
(198)
(87)
(5)
-
(590)
-
-
(181)
(63)
-
95
(213)
-
(213)
(103)
-
-
63
22
-
(24)
18
-
75
-
-
-
(118)
(41)
-
71
(195)
-
(138)
(103)
(678)
154
(524)
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
a) During the year, the Group has continued with exploration and appraisal work program in its PSC block RJON‑
90/1 block and RSC blocks awarded under OALP (Open Acreage Licensing Policy). Based on the outcome of such
exploration and appraisal activities, an amount of ` 2,618 crore towards unsuccessful exploration cost has been
charged off to the consolidated statement of profit and loss during the year, as these have proven to be either
technically or commercially unviable.
b) During the year ended 31 March 2022, the Group has recognised an impairment reversal of ` 2,697 crore on its assets
in the oil and gas segment comprising:
1.
Impairment reversal of ` 2,581 crore relating to Rajasthan oil and gas block (“CGU”) mainly due to increase
in crude price forecast. Of this, ` 1,638 crore impairment reversal has been recorded against oil and gas
producing facilities and ` 943 crore impairment reversal has been recorded against exploration intangible assets
under development.
The recoverable amount of the Company’s share in Rajasthan Oil and Gas cash generating unit “RJ CGU” was
determined to be ` 10,285 crore (US $ 1,361 million) as at 31 March 2022.
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 Company’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 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 $ 86 per barrel
for the next one year and tapers down to long‑term nominal price of US $ 68 per barrel three years thereafter
derived from a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate
of 2% per annum. The cash flows are discounted using the post‑tax nominal discount rate of 9.88% 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 Company,
change in crude price assumptions by US $ 1/bbl and changes to discount rate by 1% would lead to a change in
recoverable value by ` 204 crore (US $ 27 million) and ` 311 crore (US $ 41 million) respectively.
2.
Impairment reversal of ` 116 crore relating to KG‑ONN‑2003/1 CGU mainly due to increase in crude price forecast
and increase in recoverable reserves.
The recoverable amount of the Company’s share in this CGU was determined to be ` 208 crore (US $ 27 million) based
on fair value less cost of disposal approach as described in above paragraph. Discounted cash flow analysis used
to calculate fair value less costs of disposal uses assumption for short-term oil price of US $ 86 per barrel for the
next one year and tapers down to long‑term nominal price of US $ 68 per barrel three years thereafter derived from
a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate of 2% per annum.
The cash flows are discounted using the post‑tax nominal discount rate of 10.63%. The sensitivities around change in
crude price and discount rate are not material to the financial statements.
c)
In relation to a mine in Aluminium business of the Company, the Company had deposited ` 125 crore with the
Government of India. Thereafter, the MoEF&CC and the Hon. Supreme Court declared the mining project inoperable
on environmental grounds. Later, in 2017, the mining license lapsed. Thereafter, the Company has sent several
communications to the authorities requesting a refund of the amount paid. Although several positive deliberations
happened, the Company is yet to receive the amount. Accordingly, the deposit has been fully provided for during the
current year.
d) During the year ended 31 March 2021, the Company has recognised a loss of ` 181 crore relating to certain items of
capital work‑in‑progress at the aluminium operations, which are no longer expected to be used.
e) During the year ended 31 March 2021, ESL Steel Limited conducted a detailed physical verification and evaluation of
project equipment and material being carried forward as capital work-in-progress at a carrying value of ` 835 crore.
An interim provision of ` 63 crore was recognised for the year ended 31 March 2021, relating to certain items of capital
work‑in‑progress, which are no longer expected to be used. The physical verification exercise is now complete and as
a result, additional provision of ` 46 crore has been recognised during the year ended 31 March 2022.
513
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
f) During the year ended 31 March 2022, ` 6 crore was written off being the cost of land located outside the plant for
which details of original owners/sellers etc., was not available and the physical possession or the registered ownership
of the same as such cannot be obtained.
g) During the year ended 31 March 2022, the Company has recognised a loss of ` 24 crore relating to certain items of
capital work‑in‑progress at one of its closed unit in Gujarat, which are no longer expected to be used.
h)
i)
j)
In December 2021, MoEF&CC has notified guidelines for thermal power plants for disposal of fly ash and bottom ash
produced during power generation process. Effective 01 April 2022, the notification has introduced a three‑year cycle
to achieve average ash utilisation of 100 per cent. The first three‑year cycle is extendable by another one year or two
years where ash utilisation percentage is in the range of 60-80 per cent or less than 60 per cent, respectively. Further,
unutilised accumulated ash, i.e. legacy fly ash stored with such power plants prior to the date of this notification
is required to be utilised fully over a ten year period with minimum twenty percent, thirty percent and fifty percent
utilisation of annual ash generation in year 1, year 2 and years 3-10 respectively. Such provisions are not applicable
where ash pond or dyke has stabilised and the reclamation has taken place with greenbelt or plantation. The Group
has performed detailed evaluations for its obligations under this notification and has recorded ` 288 crore as an
exceptional item for the year ended 31 March 2022, towards estimated costs of legacy fly ash utilisation including
reclamation costs.
During the year ended 31 March 2021, the Company recomputed its Renewable Power Obligation (RPO) pursuant to
Chhattisgarh State Electricity Regulatory Commission (CSERC) notification dated 13 July 2020 (published on 22 July
2020) which clarified that for Captive Power Plants commissioned before 01 April 2016, RPO should be pegged at the
RPO obligation percentage rates (both for solar and non‑solar) applicable for FY 2015‑16. Consequent to the aforesaid
notification, the Company’s obligation towards RPO relating to the period upto 31 March 2020 was reversed to the
extent of ` 95 crore.
A provisional liquidator (‘PL’) was appointed to manage the affairs of Konkola Copper Mines plc (KCM) on 21 May
2019, after ZCCM Investments Holdings Plc (ZCCM‑IH), an entity majority owned by the Government of Zambia and a
20.6% shareholder in KCM, filed a winding up petition against KCM. KCM’s majority shareholder, Vedanta Resources
Holdings Limited (VRHL), and its parent company, Vedanta Resources Limited (VRL), are contesting the winding up
petition in the Zambian courts and have also commenced arbitration against ZCCM‑IH, consistent with their position
that arbitration is the agreed dispute resolution process, together with an application to the South African courts to
stay the winding up proceedings consistent with the agreement to arbitrate.
Meanwhile, KCM has not been supplying goods to the Company and/ or its subsidiaries, which it was supposed to as
per the terms of the advance. The Company has recognised provisions for expected credit losses of ` 217 crore during
the year (31 March 2021: ` 213 crore). As of 31 March 2022, the Group carries provisions of ` 644 crore (31 March
2021: ` 423 crore). Consequently, receivables from KCM as at 31 March 2022 are Nil (31 March 2021: ` 221 crore).
k) During the year ended 31 March 2022, HZL has recognised an expense of ` 134 crore relating to amount charged in
respect of settlement of entry tax dispute under Amnesty Scheme launched by the Government of Rajasthan.
l)
Refer note 3(c)(A)(v).
m) Refer note 42(M)
37 Tax
(a) Tax charge/(credit) recognised in profit or loss (including on exceptional items)
Particulars
Current tax:
Current tax on profit for the year
Credit in respect of current tax for earlier years
Charge in respect of exceptional items (Refer note 36)
Total Current Tax (a)
514
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
6,892
(3)
(580)
6,309
2,067
(1)
-
2,066
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
Particulars
Deferred tax:
Reversal of temporary differences
Credit in respect of deferred tax for earlier years
Credit in respect of exceptional items (Refer note 36)
Deferred Tax (b)
Deferred Tax on distributable reserve of/ dividend from subsidiary (c )
Total Deferred Tax [(d)=(b+c)]
Total income tax expense/(benefit) for the year (a+d)
Profit before tax
Effective income tax rate (%)
Tax expense/(benefit)
Particulars
Tax effect on exceptional items
Tax expense- others
Net tax expense/(benefit)
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
2,627
(83)
402
2,946
-
2,946
9,255
32,964
28%
(598)
(3)
(154)
(755)
869
114
2,180
17,213
13%
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
(178)
9,433
9,255
(154)
2,334
2,180
b)
A reconciliation of income tax expense/ (credit) applicable to profit/ (loss) before tax at the Indian statutory income tax
rate to recognise income tax expense for the year indicated are as follows
Particulars
Profit before tax
Indian statutory income tax rate
Tax at statutory income tax rate
Non-taxable income
Tax holidays and similar exemptions
Effect of tax rate differences of subsidiaries operating at other tax rates
Deferred tax on distributable reserve of/dividend from subsidiary#
Unrecognised tax assets (net)*
Change in deferred tax balances due to change in tax law
Capital gains/Other income subject to lower tax rate
Credit in respect of earlier years
Other permanent differences
Total
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
32,964
34.944%
11,519
(137)
(1,953)
128
-
10
(114)
(344)
(86)
232
9,255
17,213
34.944%
6,015
(123)
(771)
(326)
869
(3,193)
(335)
(176)
(4)
224
2,180
*In June 2018, the Company acquired a majority stake in ESL Steel Limited (“ESL”), which has since been focusing on operational
turnaround. Based on management’s estimate of future outlook, financial projections and requirements of Ind AS 12 – Income taxes,
ESL recognised deferred tax assets of ` 3,184 crore during the year ended 31 March 2021. During the FY 2021-22, ESL has derecognised
deferred tax assets on losses expired in the current year amounting to ` 122 crore.
#During the previous year, consequent to the declaration of dividend (including from accumulated profits) by the subsidiaries, the
unabsorbed depreciation as per tax laws have been utilised by Vedanta Limited leading to a deferred tax charge of ` 869 crore for the
period ended 31 March 2021.
Certain businesses of the Group within India are eligible for specified tax incentives which are included in the table
above as tax holidays and similar exemptions. Most of such tax exemptions are relevant for the companies operating
in India. These are briefly described as under:
515
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
The location based exemption
In order to boost industrial and economic development in undeveloped regions, provided certain conditions are met,
profits of newly established undertakings located in certain areas in India may benefit from tax holiday under Section
80IC of the Income tax Act, 1961. Such tax holiday works to exempt 100% of the profits for the first five years from the
commencement of the tax holiday, and 30% of profits for the subsequent five years. This deduction is available only
for units established up to 31 March 2012. However, such undertaking would continue to be subject to the Minimum
Alternative tax (‘MAT’).
In the FY 2021, an undertaking at Pantnagar, which is part of Hindustan Zinc Limited (Zinc India), was the only unit
eligible for deduction at 30% of taxable profit.
The location based exemption: SEZ Operations
In order to boost industrial development and exports, provided certain conditions are met, profits of undertaking
located in Special Economic Zone (‘SEZ’) may benefit from tax holiday. Such tax holiday works to exempt 100% of the
profits for the first five years from the commencement of the tax holiday, 50% of profits for five years thereafter and
50% of the profits for further five years provided the amount allowable in respect of deduction is credited to Special
Economic Zone Re-Investment Reserve account. However, such undertaking would continue to be subject to the
Minimum Alternative tax (‘MAT’).
The Group has setup SEZ Operations in its aluminium division of Vedanta Limited (where such benefit has been
drawn).
Sectoral Benefit – Power Plants and Port Operations
To encourage the establishment of infrastructure certain power plants and ports have been offered income tax
exemptions of upto 100% of profits and gains for any ten consecutive years within the 15 year period following
commencement of operations subject to certain conditions under Section 80IA of the Income tax Act, 1961. The
Group currently has total operational capacity of 8.25 Giga Watts (GW) of thermal based power generation facilities
and wind power capacity of 274 Mega Watts (MW) and port facilities. However, such undertakings would continue to
be subject to MAT provisions.
The Group has power plants which benefit from such deductions, at various locations of Hindustan Zinc Limited,
Vedanta Limited (where such benefits has been drawn), Talwandi Sabo Power Limited and Bharat Aluminium
Company Limited (where no benefit has been drawn).
Further, tax incentives exist for certain other infrastructure facilities to exempt 100% of profits and gains for any ten
consecutive years within the 20 year period following commencement of these facilities’ operation, provided certain
conditions are met. HZL currently has certain eligible facilities. However, such facilities would continue to be subject to
the MAT provisions.
The Group operates a zinc refinery in Export Processing Zone, Namibia which has been granted tax exempt status by
the Namibian government.
In addition, the subsidiaries incorporated in Mauritius are eligible for tax credit to the extent of 80% of the applicable
tax rate on foreign source income.
The total effect of such tax holidays and exemptions was ` 1,953 crore for the year ended 31 March 2022 (31 March
2021: ` 771 crore).
(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, the depreciation of mining reserves and
the fair value uplifts created on acquisitions, net of losses carried forward by the Group and unused tax credits in
the form of MAT credits carried forward in the Group. Significant components of Deferred tax (assets) and liabilities
recognised in the consolidated balance sheet are as follows :
516
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Significant components of deferred tax (assets) and liabilities recognised in the Consolidated Balance Sheet are
as follows:
For the year ended 31 March 2022
Significant components of
Deferred tax (assets) and
liabilities
Opening
balance as at
01 April 2021
Charged /
(credited) to
statement of
profit or loss
Charged/
(credited)
to other
comprehensive
income
Charged /
(credited) to
equity
Exchange
difference
transferred
to translation
of foreign
operation
Closing
balance as at
31 March 2022
Property, Plant and
Equipment
Voluntary retirement
scheme
Employee benefits
Fair valuation of derivative
asset/liability
Fair valuation of other
asset/liability
MAT credit entitlement
Unabsorbed depreciation
and business losses
Other temporary
differences
Total
9,683
1,735
(54)
(174)
(37)
701
(8,232)
(4,698)
15
(201)
(21)
(31)
1,505
208
(834)
(264)
(3,645)
2,946
For the year ended 31 March 2021
-
-
(1)
(39)
-
(7)
-
74
27
Opening
balance as
at 01 April
2020
Charged /
(credited)
to
statement
of profit or
loss
Charged /
(credited)
to other
comprehensive
income
Charged /
(credited)
to equity
Significant components of
Deferred tax (assets) and
liabilities
Property, Plant and
Equipment
Voluntary retirement
scheme
Employee benefits
Fair valuation of derivative
asset/liability
Fair valuation of other
asset/liability
MAT credit entitlement
Unabsorbed depreciation
and tax losses
Taxes on distributable
reserve of subsidiary
9,182
279
(29)
(186)
(20)
(25)
(22)
9
970
(242)
(9,122)
(5,482)
862
784
1,582
(1,582)
Other temporary differences
Total
(899)
(4,004)
51
114
-
-
11
(26)
1
25
-
-
35
46
-
-
32
-
-
-
-
-
-
32
-
-
10
-
-
(16)
-
-
88
-
(11)
-
(42)
4
-
11,506
(39)
(377)
(97)
628
(6,746)
(4,490)
(11)
(1,035)
(6)
28
(650)
Deferred tax
on
Acquisition
through
business
combination
(Refer Note
4)
Exchange
difference
transferred
to
translation
of foreign
operation
(` in crore)
Closing
balance as
at 31 March
2021
50
172
9,683
-
-
-
-
-
-
-
-
(9)
-
(54)
(174)
(37)
(28)
701
3
-
-
(8,232)
(4,698)
-
10
60
(31)
107
(834)
(3,645)
517
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 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 Balance Sheet as follows:
Deferred tax assets
Deferred tax liabilities
Net Deferred tax (assets)/Liabilities
(` in crore)
Year ended
31 March 2022
Year ended
31 March 2021
(5,085)
4,435
(650)
(5,860)
2,215
(3,645)
Recognition of deferred tax assets on MAT credit entitlement is based on the respective legal entity’s present
estimates and business plans as per which the same is expected to be utilised within the stipulated fifteen year period
from the date of origination (Refer note 3(c)(A)(ii)).
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 recognised amount to ` 9,818 crore and
` 10,153 crore as at 31 March 2022 and 31 March 2021 respectively.
As at 31 March 2022
Unused tax losses/unused
tax credit
Within one year
Greater than one
year, less than
five years
Greater than
five years
No expiry date
Unutilised business losses
Unabsorbed depreciation
Unutilised R&D credit
Total
As at 31 March 2021
31
-
-
31
3,217
3,116
-
-
-
-
3,217
3,116
2,005
1,439
10
3,454
(` in crore)
Total
8,369
1,439
10
9,818
(` in crore)
Unused tax losses/unused
tax credit
Within one year
Greater than one
year, less than
five years
Greater than
five years
No expiry date
Total
Unutilised business losses
Unabsorbed depreciation
Unutilised R&D credit
Total
197
10
-
207
2,222
101
-
2,323
3,075
298
-
3,373
1,887
2,353
10
4,250
7,381
2,762
10
10,153
No deferred tax assets has 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 are ` 36,947
crore and ` 32,240 crore as at 31 March 2022 and 31 March 2021 respectively.
(d) Non‑current tax assets
Non‑current tax assets of ` 2,762 crore (31 March 2021: ` 2,748 crore) mainly represents income tax receivable from
Indian tax authorities by Vedanta Limited 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.
518
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
(e)
The tax department had issued demands on account of remeasurement of certain tax incentives, under Section
80IA and 80 IC of the Income‑tax Act, 1961. During the year ended 31 March 2020, based on the favourable orders
from Income Tax Appellate Tribunal relating to AY 09‑10 to AY 12‑13, the Commissioner of Income Tax (Appeals)
has allowed these claims for AY 14-15 to AY 15-16, which were earlier disallowed and has granted refund of amounts
deposited under protest. Against the Tribunal order, the department had filed an appeal in Hon’ble Rajasthan High
Court in financial year 17‑18 which is 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
Company. The amount involved in this dispute as of 31 March 2022 is ` 11,369 crore (31 March 2021: ` 11,271 crore)
plus applicable interest upto the date of settlement of the dispute.
38 Earnings Per Equity Share (EPS)
Particulars
Profit after tax attributable to equity share holders for Basic and Diluted EPS
Computation of weighted average number of shares (in crore)
Weighted average number of ordinary shares outstanding during the year excluding
shares acquired for ESOP for basic earnings per share
Effect of dilution:
Potential ordinary shares relating to share option awards
Adjusted weighted average number of shares of the Company in issue
Basic earnings per equity share (`)
Diluted earnings per equity share (`)
Nominal Value per Share (in `)
39 Distributions made and proposed
Particulars
A
B
C
A / B
A / C
Amounts recognised as distributions to equity share holders:
Interim dividend (31 March 2022 : ` 13.50/-, ` 18.50/- and ` 13/- per share, 31 March 2021 :
` 9.50/- per share)
(` in crore, except otherwise stated)
Year ended
31 March 2022
Year ended
31 March 2021
18,802
11,602
370.65
370.42
2.56
373.21
50.73
50.38
1.00
2.33
372.75
31.32
31.13
1.00
(` in crore, except otherwise stated)
Year ended
31 March 2022
Year ended
31 March 2021
16,681
16,681
3,519
3,519
Subsequent to the balance sheet date, the Board of Directors of the Company in their meeting held on 28 April 2022 have
approved first interim dividend of ` 31.50 per equity share, i.e. 3,150% on face value of ` 1/- per share for FY 2022-23
amounting to ` 11,710 crore.
40 Commitments, contingencies and guarantees
A. Commitments
The Group has a number of continuing operational and financial 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.
519
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
a)
Estimated amount of contracts remaining to be executed on capital accounts and not provided for:
Particulars
Oil & Gas sector
Cairn India
Aluminium sector
Lanjigarh Refinery (Phase II)
Jharsuguda 1.25 MTPA smelter
BALCO smelter expansion 0.57 MTPA to 1 MTPA
Zinc sector
Zinc India (mines expansion and smelter)
Gamsberg mining and milling project
Copper sector
Tuticorin Smelter 400 KTPA*
Others
Total
*currently contracts are under suspension under the force majeure clause as per the contract
b) Committed work programme (Other than capital commitment):
Particulars
Oil & Gas sector
(` in crore)
As at
31 March 2022
As at
31 March 2021
2,169
2,861
1,577
4,643
507
206
3,051
3,843
18,857
1,555
1,188
463
-
362
94
2,995
1,872
8,529
(` in crore)
As at
31 March 2022
As at
31 March 2021
Cairn India (OALP – New Oil and Gas blocks)
5,615
5,625
c) 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 with additional right to purchase power (5%/7%)
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 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 Company to supply power to GRIDCO
from 19 February 2022 onwards. Thereafter, Vedanta Ltd has resumed supplying power to GRIDCO as per their
requisition of power.
(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.
B. Guarantees
The aggregate amount of indemnities and other guarantees on which the Group does not expect any material losses,
was ` 6,564 crore (31 March 2021: ` 6,281 crore).
a)
b)
Guarantees and bonds advanced to the customs authorities in India of ` 492 crore relating to the export and
payment of import duties on purchases of raw material and capital goods (31 March 2021: ` 648 crore).
Guarantees issued for Group’s share of minimum work programme commitments of ` 2,881 crore (31 March
2021: ` 2,889 crore).
c) Guarantees of ` 98 crore issued under bid bond (31 March 2021: ` 79 crore).
d)
Bank guarantees of ` 115 crore (31 March 2021: ` 115 crore) has been provided by the Group on behalf of Volcan
Investments Limited to Income tax department, India as a collateral in respect of certain tax disputes. Other
guarantees worth ` 2,978 crore (31 March 2021: ` 2,550 crore) 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.
520
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
C. Export Obligations
The Indian entities of the Group have export obligations of ` 950 crore (31 March 2021: ` 2,165 crore) 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 laid down by the Government of India.
In the event of the Group’s inability to meet its obligations, the Group’s liability would be ` 207 crore (31 March 2021:
` 353 crore) reduced in proportion to actual exports, plus applicable interest.
The Group has given bonds of ` 1,915 crore (31 March 2021: ` 1,775 crore) to custom authorities against these
export obligations.
D. Contingent Liabilities
a) 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 ` 334 crore (31 March 2021: ` 334 crore) 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 these
financial statements.
b) Ravva Joint Operations arbitration proceedings
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 Group’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.
The Group 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 ` 484 crore (US $ 64 million) plus
interest. (31 March 2021: ` 469 crore (US $ 64 million) plus interest).
c)
Proceedings related to the imposition of entry tax
Vedanta Limited and other Group companies, i.e. BALCO and HZL challenged the constitutional validity of the local
statutes and related notifications in the states of Odisha and Rajasthan pertaining to the levy of entry tax on the entry
of goods brought into the respective states from outside.
521
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Post some contradictory orders of High Courts across India adjudicating on similar challenges, the Supreme Court
referred the matters to a nine judge bench. Post 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 heard the matters and 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 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.
During the current year, HZL has, under an Amnesty Scheme, settled the entry tax matter by making a payment of
` 134 crore against total claims of ` 200 crore.
The total claims including interest and penalty against Vedanta Limited and its subsidiaries (net of provisions made)
are ` 825 crore (31 March 2021: ` 911 crore). Consequential interest after the date of order amounts to ` 534 crore (31
March 2021: ` 501 crore).
d) 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 ` 35 crore.
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 has started before the Supreme
Court. Considering the High Court judgement in Group’s favour we do not believe the state will succeed in their claims.
However, should the Supreme Court reverse the judgement, the Group will be liable to pay an additional amount of
` 1,017 crore (31 March 2021: ` 930 crore). As at 31 March 2022, an amount of ` 1,052 crore relating to principal has
been considered as a contingent liability (31 March 2021: ` 965 crore).
e) 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 (“CIE”) issued a demand notice
for electricity duty and interest thereon of ` 888 crore and ` 588 crore respectively for the period March 2015 to
March 2021.
The Group carries an accrual for electricity duty of ` 817 crore (31 March 2021: ` 878 crore), net of ` 226 crore (31
March 2021: ` Nil) paid under protest. BALCO has requested the CIE to allow payment of the principal amount over a
period of 5 years along with a waiver of interest demand. BALCO has received a reply from CIE that the matter will be
522
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
discussed with appropriate authorities. As at 31 March 2022, no confirmation has been received on this matter and
therefore an amount of ` 731 crore relating to interest is considered as a contingent liability.
f) Miscellaneous disputes- Income tax
The Group is involved in various tax disputes amounting to ` 1,359 crore (31 March 2021: ` 1,966 crore) 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 disallowances 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.
g) Miscellaneous disputes- Others
The Group is subject to various claims and exposures which arise in the ordinary course of its operations, from
indirect tax authorities and others, pertaining to the assessable values of sales and purchases or incomplete
documentation supporting the Company’s returns or other claims.
The approximate value of claims (excluding the items as set out separately above) against the Group companies total
` 4,655 crore (31 March 2021: ` 4,782 crore).
Based on evaluations of the matters and legal advice obtained, the Group believes that it has strong merits in its
favour. 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.
41 Other Matters
a)
The Group purchases bauxite under long‑term linkage arrangement with Orissa Mining Corporation Ltd (hereafter
referred as “OMC”) at provisional price of ` 1,000/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
the Group.
The last successful e‑auction based price discovery was done by OMC in April 2019 at ` 673/MT and supplied bauxite
at this rate from September 2019 to September 2020 against an undertaking furnished by the Group to compensate
any differential price discovered through future successful national e‑auctions. Though OMC conducted the next
e‑auction on 31 August 2020 with floor price of ` 1,707/MT determined on the basis of Rule 45 of Minerals Concession
Rules, 2016 (hereafter referred as the ‘Rules’), no bidder participated at that floor price and hence the auction was not
successful. However, OMC raised demand of ` 281 crore on the Group towards differential pricing and interest for
bauxite supplied till September 2020 considering the auction base price of ` 1,707/MT.
The Group had then filed a writ petition before Hon’ble High Court of Odisha in September 2020, which issued an
interim Order dated 08 October 2020 directing that the petitioner shall be permitted to lift the quantity of bauxite
mutually agreed on payment of ` 1,000/MT and furnishing an undertaking for the differential amount, subject to final
outcome of the writ petition.
OMC re‑conducted e‑auction on 09 March 2021 with floor price of ` 2,011/MT, which again was not successful. On
18 March 2021, Cuttack HC issued an order that the current arrangement of bauxite price @ ` 1000/MT will continue
for the FY 2021‑22. Further, on 06 April 2022, the honourable Cuttack HC directed that the current arrangement will
continue for the FY 2022-23 also.
Supported by legal opinions, management believes that the provisions of Rule 45 of the Rules are not applicable to
commercial sale of bauxite ore and hence, it is not probable that the Group will have any financial obligation towards
the aforesaid commitments over and above the price of ` 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 ` 1,000/MT.
523
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
b) 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
` 1,925 crore. Further, an additional demand was issued vide an office order dated 14 December 2020 for ` 311 crore.
The Group has challenged the show cause notice 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. State Government has also been
directed to not take any coercive action to recover such miscomputed dues. Based on the opinion of external counsel,
the Group believes that it has strong grounds of a successful appeal, and the chances of an outcome which is not if
favour of the Group is remote.
c)
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 the Company (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
Commissioner of Income Tax, Goa and Ministry of Corporate Affairs through a Special Leave Petition before the
Honourable Supreme Court and also by a creditor and a shareholder of the Company. The said petitions are currently
pending for hearing.
d)
Flue-gas desulfurisation (FGD) implementation:
The Ministry of Environment, Forest and Climate Change (MoEF&CC) 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 2023 to December 2024. 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 MoEF&CC
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 MoEF&CC 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 Supreme Court. The matter was listed on 03 February 2022 wherein
the Court issued notice and directed the respondents to file their respective counter affidavits in the matters. The
matter is yet to be listed.
e)
i)
Pursuant to the Government of India’s policy of disinvestment, the Group in April 2002 acquired 26% equity
interest in Hindustan Zinc Limited (HZL) from the Government of India. Under the terms of the Shareholder’s
Agreement (‘SHA’), the Group had two call options to purchase all the Government of India’s shares in HZL at
fair market value. The Group exercised the first call option on 29 August 2003 and acquired an additional 18.9%
of HZL’s issued share capital. The Group also acquired an additional 20% of the equity capital in HZL through
an open offer, 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 was 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 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. In
January 2016, the Supreme Court had 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 Investigation 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 filed for withdrawal of its arbitration proceedings.
524
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Integrated Report
Statutory Reports
Financial Statements
ii)
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 had a call option to purchase
the Government of India’s remaining ownership interest in BALCO at any point from 02 March 2004. The Group
exercised this option on 19 March 2004. However, the Government of India contested the valuation and validity of
the option and contended that the clauses of the SHA violate the erstwhile 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 ground 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 erstwhile Companies Act, 1956 and are not enforceable.
The Group has challenged the validity of the majority award before the Hon’ble High Court at 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 to partially set aside the arbitral award
in respect of certain matters involving valuation. 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 09 January 2012, the Group offered to acquire the Government of India’s interests in HZL and BALCO for
` 15,492 crore and ` 1,782 crore respectively. This offer was separate from the contested exercise of the call
options, and the 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.
g) The Group does not have any material transactions with companies struck off as per Companies Act, 2013.
42 Related party Disclosures
List of related parties and relationships
A. Entities controlling the Company (Holding Companies)
Volcan Investments Limited (Volcan)
Volcan Investments Cyprus Limited
Intermediate Holding Companies
Vedanta Resources Limited (VRL)
Finsider International Company Limited#
Richter Holdings Limited#
Twin Star Holdings Limited#
Vedanta Resources Cyprus Limited#
Vedanta Resources Finance Limited#
Vedanta Resources Holdings Limited#
Welter Trading Limited#
Westglobe Limited#
Vedanta Holdings Mauritius II Limited#
Vedanta Holdings Mauritius Limited#
Vedanta Holdings Jersey Limited#
Vedanta Netherlands Investments BV#
Vedanta UK Investments Limited#
B. Fellow subsidiaries
(with whom transactions have taken place)
Sterlite Iron and Steel Company Limited
Sterlite Power Transmission limited
Sterlite Technologies Limited
Sterlite Power Grid Ventures Limited
Twin Star Technologies Limited
C. Post retirement benefit plans
BALCO Employees Provident Fund Trust
HZL Employee Group Gratuity Trust
HZL Superannuation Trust
Hindustan Zinc Ltd Employees Contributory Provident
Fund Trust
Sesa Group Employees Gratuity Fund and Sesa Group
Executives Gratuity Fund
Sesa Group Employees Provident Fund
Sesa Group Executives Superannuation Scheme Fund
Sesa Mining Corporation Limited Employees
Gratuity Fund
525
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
Sesa Mining Corporation Limited Employees Provident
Fund Trust
Sesa Resources Limited Employees Gratuity Fund
Sesa Resources Limited and Sesa Mining Corporation
Limited Employees Superannuation Fund
Sesa Resources Limited Employees Provident
Fund Trust
FACOR Superannuation Trust ##
FACOR Employees Gratuity Scheme ##
D. Associates and Joint Ventures (with whom
transactions have taken place)
RoshSkor Township (Pty) Limited
Gaurav Overseas Private Limited
Goa Maritime Private Limited
E. Others (with whom transactions have taken place)
Enterprises over which key management personnel/
their relatives have control or significant influence
Cairn Foundation
Fujairah Gold Ghana
Janhit Electoral Trust
Sesa Community Development Foundation
Vedanta Foundation
Vedanta Medical Research Foundation
Runaya Refining LLP
Minova Runaya Private Limited
Caitlyn India Private Limited
Fujairah Metals LLC
# These entities are subsidiary companies of VRL and VRL through its subsidiaries holds 69.68% in Vedanta Limited.
## Acquired during the previous year ended 31 March 2021.
Ultimate Controlling party
Vedanta Limited is a majority‑owned and controlled subsidiary of Vedanta Resources Limited (‘VRL’). Volcan
Investments Limited (‘Volcan’) and its wholly owned subsidiary together hold 100 % of the share capital and 100 %
of the voting rights of VRL. Volcan is 100 % beneficially owned and controlled by the Anil Agarwal Discretionary Trust
(‘Trust’). Volcan Investments Limited, Volcan Investments Cyprus Limited and other intermediate holding companies
except VRL do not produce Group financial statements.
F.
The Group carries out transactions with its related parties, including its parent Vedanta Resources Limited, and the
companies over which it has significant influence. A summary of significant related party transactions for the year
ended 31 March 2022 are noted below.
Transactions and balances with own subsidiaries are eliminated on consolidation.
Particulars
Income:
(i)
Revenue from operations
(ii) Other income
a)
b)
c)
Interest and guarantee commission J
Outsourcing service fees
Dividend income
d) Miscellaneous income
Expenditure and other transactions:
(i)
Purchase of goods/services
(ii) Management fees and brand fees charged K
(ii) Reimbursement for other expenses (net of
recovery)
(iii) Corporate social responsibility expenditure/
Donation
(iv) Contribution to post retirement employee
benefit trust/fund
Entities
controlling the
Company/ Fellow
subsidiaries
Associates/Joint
ventures
1,395
721
4
1
-
75
1,617
13
-
-
-
-
-
-
-
-
-
-
-
-
(` in crore)
Others
Total
59
1,454
-
-
-
1
165
-
0
45
114
721
4
1
1
240
1,617
13
45
114
526
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Entities
controlling the
Company/ Fellow
subsidiaries
Associates/Joint
ventures
-
-
-
-
11,346
-
-
147
(1,623)
1
-
(0)
13
5,457
294
67
168
-
115
-
-
-
-
-
-
-
-
-
-
-
0
-
-
5
10
-
-
-
-
-
Particulars
(v) Remuneration to relatives of key management
personnel
(vi) Commission/sitting fees
-
-
-
To independent directors
To key management personnel
To relatives of key management personnel
(vii) Dividend paid
-
-
-
To holding companies
To key management personnel
To relatives of key management personnel
(viii) Interest and guarantee commission expense I
Other Transactions during the year:
(i)
(ii)
(iii)
Loans given/(repayment thereof) J
Financial guarantees relinquished during the
year
Investment purchased/(redeemed) during the
year
(iv) Loan taken/(repayment thereof)
Balances as at period end:
(i)
(ii)
Trade receivables
Loan given J
(iii) Other receivables and advances (including
brand fee prepaid) I, K
(iv) Trade payables
(v) Other payables (including brand fee payable) K
(vi) Financial guarantee given
(vii) Bank guarantee given H
(viii) Sitting fee, remuneration, commission and
consultancy fees payable to KMP and their
relatives
Remuneration of key management personnel
Particulars
Short-term employee benefits
Post employment benefits *
Share based payments
(` in crore)
Others
Total
23
23
4
2
0
-
0
1
-
-
4
-
-
5
-
2
31
38
0
-
8
4
2
0
11,346
0
1
147
(1,623)
5
0
(0)
18
5,462
306
98
206
0
115
8
(` in crore)
For the year ended
31 March 2022
34
1
1
36
* Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all the employees together.
527
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 G.
The Group carries out transactions with its related parties, including its parent Vedanta Resources Limited, and the
companies over which it has significant influence. A summary of significant related party transactions for the year
ended 31 March 2021 are noted below.
Transactions and balances with own subsidiaries are eliminated on consolidation.
Entities
controlling the
Company/Fellow
subsidiaries
Associates/Joint
ventures
(` in crore)
Others
Total
736
670
4
2
76
985
90
-
-
-
-
-
-
1,770
-
-
133
7,165
3,147
3,146
-
47
7,066
927
97
208
-
1
115
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
1
-
-
-
-
-
-
4
-
-
-
55
-
(0)
63
59
13
3
1
0
-
0
0
-
-
-
11
-
-
-
2
21
87
-
5
-
6
740
670
4
2
131
985
90
63
59
13
3
1
0
1,770
0
0
133
7,165
3,147
3,157
-
47
7,071
930
118
295
-
6
115
6
Particulars
Income:
(i)
Revenue from operations
(ii) Other income
a)
b)
c)
Interest and guarantee commission J
Outsourcing service fees
Dividend income
Expenditure and other transactions:
Purchase of goods/ services
(i)
(ii) Management fees and brand fees charged K
(iii) Reimbursement for other expenses
(net of recovery)
(iv) Corporate social responsibility expenditure/
(v)
Donation
Contribution to post retirement employee
benefit trust/fund
(vi) Remuneration to relatives of key management
personnel
(vii) Commission/sitting fees
-
-
-
To independent directors
To key management personnel
To relatives of key management personnel
(viii) Dividend paid
-
-
-
To holding companies
To key management personnel
To relatives of key management personnel
(ix) Guarantee commission expense I
Other Transactions during the year:
(i)
(ii)
Loans given/(Net of repayment of
` 1,117 crore) J
Financial guarantees (taken)/given during
the year
(iii) Financial guarantees relinquished during
the year
Investments (redeemed) during the period
Balances as at year end:
(iv)
(i)
Trade receivables
Loan given J
(ii)
(iii) Other receivables and advances (including
brand fee prepaid) I,K
(iv) Trade payables
(v) Other payables (including brand fee payable) K
(vi)
Investments
(vi) Financial guarantee given
(vii) Bank guarantee given H
(viii) Sitting fee, remuneration, commission and
consultancy fees payable to KMP and their
relatives
528
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Remuneration of key management personnel
Particulars
Short-term employee benefits
Post employment benefits *
Share based payments
(` in crore)
For the year ended
31 March 2021
28
1
0
29
*Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all the employees together.
H.
Bank guarantee given by Vedanta Limited on behalf of Volcan Investments Limited in favour of Income Tax
department, India as collateral in respect of certain tax disputes of Volcan Investments Limited.
I. Cairn PSC and OALP guarantee to Government
Vedanta Resources Limited (“VRL”), as a parent company, has provided financial and performance guarantee to the
Government of India for erstwhile Cairn India group’s (“Cairn”) obligations under the Production Sharing Contract
(‘PSC’) provided for onshore block RJ‑ON‑90/1, for making available financial resources equivalent to Cairn’s share for
its obligations under the PSC, personnel and technical services in accordance with industry practices and any other
resources in case Cairn is unable to fulfil its obligations under the PSC.
During the year ended 31 March 2021, the Board of Directors of the Company approved a consideration to be paid for
this guarantee at an annual charge of 1.2% of net exploration and development spend, subject to a minimum annual
fee of ` 37 crore ($ 5 million), applicable from April 2020 onwards to be paid in ratio of participating interests held
equally by the Company and its step‑down subsidiary, Cairn Energy Hydrocarbons Ltd (“CEHL”).
Similarly, VRL has also provided financial and performance guarantee to the Government of India for the Company’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. During the year ended 31 March 2021, the Board of Directors
of the Company approved a consideration to be paid for this guarantee consisting of one‑time charge of ` 183 crore
($ 25 million), i.e. 2.5% of the total estimated cost of initial exploration phase of approx. ` 7,330 crore ($ 1 billion) and an
annual charge of 1% of spend, subject to a minimum fee of ` 73 crore ($ 10 million) and maximum fee of ` 147 crore
($ 20 million) per annum.
Accordingly, the Group has recorded a guarantee commission expense of ` 147 crore ($ 20 million) (31 March 2021:
` 133 crore ($ 18 million)) for the year ended 31 March 2022 and ` 126 crore ($ 17 million) (31 March 2021: ` 161 crore
($ 22 million) is outstanding as a pre-payment as at 31 March 2022.
J.
During the year ended 31 March 2021, as part of its cash management activities, the overseas subsidiaries of the
Company extended certain loans and guarantee facilities to Vedanta Resources Limited (“VRL”) and its subsidiaries
(collectively “the VRL group”). Further, certain terms of the facilities were modified which resulted in substantial
modification of the instruments. The guarantee was also extinguished.
Thereafter, in March 2021, since the credit default swap rates had stabilised, the Group revised the interest rate to
9.6% using a level 2 valuation approach by applying the prevailing US Dollar treasury rates and the Company specific
credit default swaps. The Group also benchmarked the said rate to the coupon rate on bonds issued to non-related
third parties by the VRL group during the same period. As per the accounting requirements of Ind AS 109 – ‘Financial
Instruments’ with respect to modification of loans, the net excess of loan amount over the present value of the
modified contractual cash flows discounted at the original effective interest rate aggregating to ` 536 crore (US $ 73
million) is reflected in the statements of changes in equity and cash flow as a transaction with the shareholder.
During the year ended 31 March 2022, the VRL group repaid ` 1,623 crore (US $ 217 million) of the aforesaid loans,
along with interest thereon. Furthermore, during the period, the overseas subsidiaries of the Company, executed
agreements with Twin Star Holdings Limited, “”TSH””, to novate ` 2,234 crore (US $ 300 million) due for repayment in
June 2022 to another subsidiary of VRL, which is guaranteed by VRL, at a higher interest rate of 10.1% mainly reflecting
the impact of novation. This transaction did not have any material impact on the financial results for the current period.
As of 31 March 2022, loans having contractual value of ` 5,661 crore (US $ 749 million) (31 March 2021: ` 7,081 crore
(US $ 966 million)) were outstanding from the VRL group.
529
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
K.
L.
M.
In 2017, the Group had executed a three‑year brand license agreement (“the Agreement”) with Vedanta Resources
Ltd (‘VRL’) for the use of brand ‘Vedanta’ which envisaged payment of brand fee to VRL at 0.75% of turnover of the
Company. Later, certain subsidiaries of the Company executed similar agreements with VRL to pay brand fee ranging
between 0.75% - 1.50% of their respective turnover. During the previous year ended 31 March 2021, the Agreement
with the Company and some of its subsidiaries was renewed and certain additional services were also agreed to
be provided by VRL. Based on updated benchmarking analysis conducted by independent experts, the brand and
strategic service fee was re-negotiated at 2% of the turnover, while for the remaining subsidiaries the previous rates
remain unchanged. Accordingly, the Group has recorded an expense of ` 1,553 crore (31 March 2021: ` 939 crore)
for the year ended 31 March 2022. During the current year, the Agreement was renewed to extend for further period
of fifteen years. The Group generally pays such fee in advance, at the beginning of the year based on estimated
annual turnover.
Cairn India Holdings Limited held bonds issued by Vedanta Resources Limited, the carrying value of which at 01 April
2020 was ` 228 crore (US $ 31 million), with maturities ranging from June 2021 to May 2023 at coupon ranging from
7.13% to 8.25% p.a. During the previous year, investments in these bonds have been disposed off in the open market
for a consideration of ` 215 crore (US $ 29 million).
During the financial year ended 31 March 2019, as part of its cash management activities, CIHL purchased an
economic interest in a structured investment for the equity shares of Anglo American Plc (“AA Plc”), a company
listed on the London Stock Exchange, from Volcan for a total consideration of ` 3,812 crore (GBP 428 million/USD
541 million) determined based on an independent third‑party valuation. In July 2019, the transaction was unwound
and the investments were redeemed for a total consideration of ` 4,485 crore (GBP 519 million/USD 639 million),
representing the actual price Volcan realised from selling the shares of AA Plc. CIHL was informed that the said
realisation was net of applicable transaction costs of ` 93 crore (GBP 10 million/USD 12 million), which in January
2021, CIHL agreed to bear. Accordingly, this amount has been recorded in the consolidated statement of profit and
loss in the previous year as an exceptional item.
N.
During the year ended 31 March 2021, the Group had renewed loan provided to Sterlite Iron and Steel Company
Limited to finance project in earlier years. The loan balance as at 31 March 2022 was ` 5 crore (31 March 2021:
` 5 crore). The loan is unsecured in nature and carries an interest rate of 7.15% per annum. The loan was due in
March 2022 and the agreement was renewed for a further period of 12 months.
In 2016, a subsidiary of the Company had executed an agreement with Twin Star Holding Limited, the intermediate
parent of the Group, to provide an unsecured loan of ` 67 crore (US $ 10 million) at an interest rate of 2.1% per annum.
The loan balance of the loan as at 31 March 2022 and 31 March 2021 is ` 74 crore and ` 73 crore respectively. During
the previous year, the Group has recognised a provision of ` 98 crore (Including accrued interest of ` 20 crore) against
said loans.
O.
During March 2022, the Company and its subsidiary BALCO have executed Power Delivery Agreement (‘PDA’) with
Serentica Renewables India 3 Private Limited (“Serentica 3”) and Serentica Renewables India 1 Private Limited
(‘Serentica 1’) respectively, which are fellow subsidiaries created by Volcan Investments Limited for building renewable
energy power projects (“the Projects”) of approximately 180 MW and 200 MW respectively, on a group captive basis.
Under the terms of the PDA, the Company and BALCO are expected to infuse equity of approximately ` 230 crore and
` 250 crore for twenty six percent stake in Serentica 3 and Serentica 1 respectively for procuring renewable power
over twenty five years from date of commissioning of the Projects. No significant project‑related activities have been
carried out subsequent to signing of the PDA.
530
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
1
2
3
4
5
6
7
8
9
Integrated Report
Statutory Reports
Financial Statements
43 Interest in other entities
a) Subsidiaries
The Group consists of a parent company, Vedanta Limited, incorporated in India and a number of subsidiaries held directly
and indirectly by the Group which operate and are incorporated around the world. Following are the details of shareholdings in
the subsidiaries.
Sl.
No.
Subsidiaries
Principal activities
Country of
Incorporation
Immediate holding
company
The Company's/Immediate
holding company's percentage
holding (in %)
31 March 2022
31 March 2021
-
-
Cairn Energy India Pty
Limited1
Exploration for and
development and
production of oil & gas
Australia
Cairn India Holdings
Limited
Copper Mines of
Tasmania Pty Limited
("CMT")
Thalanga Copper Mines
Pty Limited ("TCM")
Bharat Aluminium
Company Limited
("BALCO")
Copper Mining
Australia
Monte Cello BV
100.00
100.00
Copper Mining
Australia
Monte Cello BV
100.00
100.00
Aluminium mining and
smelting
India
Vedanta Limited
51.00
51.00
Desai Cement Company
Private Limited a
Cement
ESL Steel Limited
Facor Reality and
Infrastructure Limited b
FACOR Power Ltd3
Manufacturing of Steel &
DI Pipe
Real estate
Power Generation
Ferro Alloy Corporation
Limited (FACOR) 3
Manufacturing of Ferro
Alloys and Mining
India
India
India
India
India
India
10 Goa Sea Port Private
Infrastructure
Limited 4
11 Hindustan Zinc Alloys
Private Limited c
Zinc Mining & Smelting
India
12 Hindustan Zinc Limited
Zinc Mining & Smelting
India
("HZL")
13 MALCO Energy Limited
Power Generation
("MEL")
14 Maritime Ventures Private
Infrastructure
Limited 4
15
16
17
18
19
20
21
Paradip Multi Cargo Berth
Private Limited 4
Infrastructure
Sesa Mining Corporation
Limited 4
Sesa Resources Limited
("SRL")
Sterlite Ports Limited 4
Talwandi Sabo Power
Limited ("TSPL")
Vedanta Zinc Football &
Sports Foundation j
Iron ore mining
Iron ore mining
Infrastructure
Power Generation
Sports Foundation
Vizag General Cargo Berth
Private Limited
Infrastructure
India
India
India
India
India
India
India
India
India
Sesa Mining
Corporation Limited
Vedanta Limited
100.00
-
95.49
95.49
FACOR
FACOR
Vedanta Limited
100.00
100.00
90.00
100.00
90.00
100.00
Sterlite Ports Limited
100.00
100.00
Hindustan Zinc
Limited
Vedanta Limited
64.92
-
64.92
64.92
Vedanta Limited
100.00
100.00
Sterlite Ports
Limited
100.00
100.00
Vedanta Limited
100.00
100.00
Sesa Resources
Limited
Vedanta Limited
Vedanta Limited
Vedanta Limited
Hindustan Zinc
Limited
Vedanta Limited
100.00
100.00
100.00
100.00
100.00
100.00
64.92
100.00
100.00
-
100.00
100.00
51.63
51.63
22
AvanStrate Inc. ('ASI')
Manufacturing of LCD
Glass Substrate
Japan
Cairn India Holdings
Limited
23
Cairn India Holdings
Limited
24
AvanStrate Korea Inc
Investment company
Jersey
Vedanta Limited
100.00
100.00
Manufacturing of LCD
Glass Substrate
Korea
Avanstrate (Japan)
Inc.
100.00
100.00
531
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Sl.
No.
Subsidiaries
Principal activities
Country of
Incorporation
Immediate holding
company
25 Western Cluster Limited
Iron ore mining
Liberia
Bloom Fountain
Limited
The Company's/Immediate
holding company's percentage
holding (in %)
31 March 2022
31 March 2021
100.00
100.00
26
Bloom Fountain Limited
Operating (Iron ore) and
Investment Company
Mauritius
Vedanta Limited
100.00
100.00
27
28
CIG Mauritius Holdings
Private Limited d
CIG Mauritius Private
Limited d
Investment Company
Mauritius
Mauritius
Investment Holding
Company and to provide
services and resources
relevant to oil & gas
exploration, production
and development
Cairn Energy
Hydrocarbons Ltd.
CIG Mauritius
Holding Private Ltd.
100.00
100.00
100.00
100.00
29
THL Zinc Ltd
Investment Company
Mauritius
THL Zinc Ventures
Limited
THL Zinc Ventures Limited Investment Company
Mauritius
Vedanta Limited
30
31
Amica Guesthouse
(Proprietary) Limited
Accomodation and
catering services
Nambia
32 Namzinc (Proprietary)
Limited
Owns and operates a zinc
refinery
Nambia
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
Skorpion Zinc
(Proprietary) Limited
Skorpion Zinc
(Proprietary) Limited
Skorpion Zinc
(Proprietary) Limited
THL Zinc
Namibia Holdings
(Proprietary) Ltd
Nambia
THLZ Zinc Ltd
100.00
100.00
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Republic of
Ireland
Scotland
Vedanta Lisheen
Holdings Limited
Vedanta Lisheen
Holdings Limited
Vedanta Lisheen
Holdings Limited
50% each held by
Killoran Lisheen
Mining Limited &
Vedanta Lisheen
Mining Limited
Vedanta Lisheen
Holdings Limited
Vedanta Lisheen
Holdings Limited
Cairn India Holdings
Limited
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
-
-
Scotland
Cairn India Holdings
Limited
100.00
100.00
Scotland f
Cairn India Holdings
Limited
100.00
100.00
Scotland
Cairn India Holdings
Limited
-
-
33
34
35
36
37
Skorpion Mining Company
(Proprietary) Limited
('NZ')
Skorpion Zinc
(Proprietary) Limited
('SZPL')
THL Zinc Namibia
Holdings (Proprietary)
Limited (“VNHL”)
Killoran Lisheen Finance
Limited e
Killoran Lisheen Mining
Limited
38
Lisheen Milling Limited
Exploration,
development,treatment,
production and sale of
zinc ore
Operating (zinc) and
investing company
Nambia
Nambia
Mining and Exploration
and Investment company
Investment company
Development of a zinc/
lead mine
Manufacturing h
39
Lisheen Mine Partnership Development and
40
41
42
43
44
45
Vedanta Exploration
Ireland Limited e
Vedanta Lisheen Mining
Limited
Cairn Energy Discovery
Limited 1
Cairn Energy Gujarat
Block 1 Limited
Cairn Energy
Hydrocarbons Limited
Cairn Exploration (No. 2)
Limited 1
operation of a zinc/lead
mine
Exploration activities
Zinc and lead mining
Oil and gas exploration,
development and
production
Oil and gas exploration,
development and
production
Oil and gas exploration,
development and
production
Oil and gas exploration,
development and
production
532
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
Subsidiaries
Principal activities
Country of
Incorporation
Immediate holding
company
The Company's/Immediate
holding company's percentage
holding (in %)
31 March 2022
31 March 2021
Sl.
No.
46
47
48
Black Mountain Mining
(Proprietary) Limited
Cairn South Africa Pty
Limited g
Cairn Lanka Private
Limited
49
AvanStrate Taiwan Inc
Exploration, development,
production and sale of
zinc, lead, copper and
associated mineral
concentrates
Oil and gas exploration,
development and
production
Oil and gas exploration,
development and
production
Manufacturing of LCD
Glass Substrate
50
Lakomasko BV
Investment company
51 Monte Cello BV (“MCBV”) Holding company
52
THL Zinc Holding BV
Investment company
53
Vedanta Lisheen Holdings
Limited
54
Fujairah Gold FZC
Investment company
Manufacturing of
Copper Rod and
Refining of Precious
Metals (Gold & Silver)
55
Sterlite (USA) Inc. i
Investment company
South Africa
THL Zinc Ltd
74.00
74.00
South Africa
Cairn Energy
Hydrocarbons Ltd.
-
100.00
Sri Lanka
CIG Mauritius Private
Ltd.
100.00
100.00
Taiwan
The
Netherlands
The
Netherlands
The
Netherlands
The
Netherlands
United
Arab
Emirates
United States
of America
Avanstrate (Japan)
Inc.
100.00
100.00
THL Zinc Holding BV
100.00
100.00
Vedanta Limited
100.00
100.00
Vedanta Limited
100.00
100.00
THL Zinc Holding BV
100.00
100.00
Malco Energy Limited
100.00
100.00
Vedanta Limited
-
100.00
(a) Acquired on 15 November 2021
(b) Passed a resolution for striking off on 08 March 2022
(c) Incorporated on 17 November 2021
(d) Under Liquidation
(e) Dissolved on 09 June 2021
(f) Principal place of business is in India
(g) Cairn South Africa Pty Limited has been deregistered w.e.f. 06 April 2021.
(h) Activity of the Company ceased in February 2016
(i) Liquidated on 20 December 2021
(j) Incorporated on 21 December 2021
1 Cairn Exploration (No. 2) Limited and Cairn Energy Discovery Limited have been dissolved w.e.f. 22 September 2020. Cairn Energy India (Pty)
Ltd. was deregistered on 26 August 2020.
2 The Group also has interest in certain trusts which are neither significant nor material to the Group.
3 The Group has filed an application at NCLT Cuttack on 16 September 2021 for the merger of Ferro Alloy Corporation Limited (“FACOR”) and
FACOR Power Limited.
4 The Group has filed an application at Mumbai NCLT on 25 September 2021 and at Chennai NCLT on 29 September 2021 for the merger of
Maritime Ventures Private Limited, Sterlite Ports Limited, Paradip Multi Cargo Berth Private Limited, Goa Sea Port Private Limited with Sesa
Mining Corporation Limited.
533
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 b) Joint operations
The Group participates in several unincorporated joint operations which involve the joint control of assets used in oil and
gas exploration and producing activities which are as follows:
Oil & Gas blocks/fields
Operating Blocks
Area
Ravva block-Exploration, Development and Production Krishna Godavari
CB-OS/2 – Exploration
CB-OS/2 – Development & production
RJ-ON-90/1 – Exploration
RJ-ON-90/1 – Development & production
Cambay Offshore
Cambay Offshore
Rajasthan Onshore
Rajasthan Onshore
KG-OSN-2009/3 – Exploration
Krishna Godavari Offshore
(%) Participating Interest
As at
31 March 2022
As at
31 March 2021
22.50
60.00
40.00
100.00
70.00
100.00
22.50
60.00
40.00
100.00
70.00
100.00
Non-Operating Blocks
KG-ONN-2003/1
Krishna Godavari Onshore
49.00
49.00
c)
Interest in associates and joint ventures
Set out below are the associates and joint ventures of the Group as at 31 March 2022 which, in the opinion of the
management, are not material to the Group. The country of incorporation or registration is also their principal place of
business, and the proportion of ownership interest is the same as the proportion of voting rights held.
Sl.
No.
1
2
3
4
5
6
7
8
Associates and Jointly controlled entities
Country of incorporation
Gaurav Overseas Private Limited
Raykal Aluminium Company Private Limited
Rampia Coal Mines and Energy Private Limited(a)
Madanpur South Coal Company Limited
Goa Maritime Private Limited
Rosh Pinah Health Care (Proprietary) Limited
Gergarub Exploration and Mining (Pty) Limited
RoshSkor Township (Pty) Limited
India
India
India
India
India
Namibia
Namibia
Namibia
% Ownership interest
As at
31 March 2022
As at
31 March 2021
50.00
24.50
-
17.62
50.00
69.00
51.00
50.00
50.00
24.50
17.39
17.62
50.00
69.00
51.00
50.00
(a) Struck off by the Ministry of Corporate affairs on 19 April 2021.
44 Oil & gas reserves and resources
The Group’s gross reserve estimates are updated atleast 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 year end, are as follows:
Gross proved and probable
hydrocarbons initially in place
Gross proved and probable
reserves and resources
Net working interest proved and
probable reserves and resources
Particulars
Country
(mmboe)
(mmboe)
(mmboe)
As at
31 March 2022
As at
31 March 2021
As at
31 March 2022
As at
31 March 2021
As at
31 March 2022
As at
31 March 2021
Rajasthan MBA Fields
Rajasthan MBA EOR
Rajasthan Block Other
Fields
Ravva Fields
CBOS/2 Fields
Other fields
Total
India
India
India
India
India
India
2,307
-
3,603
704
298
826
2,307
-
3,603
704
298
352
230
386
390
23
25
98
266
388
470
27
34
44
7,738
7,264
1,152
1,229
161
270
273
5
10
82
801
186
271
329
6
14
26
832
534
Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022 Integrated Report
Statutory Reports
Financial Statements
The Group’s net working interest proved and probable reserves is as follows:
Particulars
Reserves as of 01 April 2020*
Additions/revision during the year
Production during the year
Reserves as of 31 March 2021**
Additions/revision during the year
Production during the year
Reserves as of 31 March 2022***
Proved and probable reserves
Proved and probable reserves
(developed)
Oil
(mmstb)
304
(11)
(32)
261
(19)
(32)
210
Gas
(bscf)
301
(14)
(28)
259
(34)
(36)
189
Oil
(mmstb)
164
30
(32)
162
5
(32)
135
Gas
(bscf)
143
51
(28)
166
(9)
(36)
121
* Includes probable oil reserves of 132.23 mmstb (of which 21.94 mmstb is developed) and probable gas reserves of 114.73 bscf (of which 42.64
bscf is developed)
** Includes probable oil reserves of 111.14 mmstb (of which 23.08 mmstb is developed) and probable gas reserves of 128.41 bscf (of which 52.06
bscf is developed)
*** 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)
mmboe = million barrels of oil equivalent
mmstb = million stock tank barrels
bscf = billion standard cubic feet
1 million metric tonnes = 7.4 mmstb
1 standard cubic meter =35.315 standard cubic feet
MBA = Mangala, Bhagyam & Aishwarya
EOR = Enhanced Oil Recovery
45 Subsequent events
There are no other material adjusting or non‑adjusting subsequent events, except as already disclosed.
As per our report of even date
For and on behalf of the Board of Directors
For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration No. 301003E/E300005
Navin Agarwal
Executive Vice-Chairman and
Whole-Time Director
DIN: 00006303
Sunil Duggal
Whole-Time Director and Group
Chief Executive Officer
DIN: 07291685
per Sudhir Soni
Partner
Membership No. 41870
Place: Mumbai
Date: 28 April 2022
Ajay Goel
Acting Group Chief Financial Officer
PAN AEAPG8383C
Prerna Halwasiya
Company Secretary and Compliance Officer
ICSI Membership No. A20856
Place: New Delhi
Date: 28 April 2022
535
Integrated Report and Annual Accounts 2021-22Notesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
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Vedanta LimitedNotesforming part of the consolidated financial statements as at and for the year ended 31 March 2022
NOTES
NOTES
VEDANTA LIMITED
1st Floor, ‘C’ wing, Unit 103, Corporate Avenue, Atul Projects, Chakala,
Andheri (E), Mumbai - 400 093, Maharashtra
CIN: L13209MH1065PLC291394 | www. vedantalimited.com
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