(1) | Natural gas production figures are the production volumes of natural gas on entitlement interest basis, by geographic area for the years ended March 31, 2017, 2016 and 2015: Hydrocarbon production by geographic area
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the year ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | Crude Oil (mmbbls) | | | Natural Gas(1) (bcf) | | | Total (mmboe) | | | Crude Oil (mmbbls) | | | Natural Gas(1) (bcf) | | | Total (mmboe) | | | Crude Oil (mmbbls) | | | Natural Gas(1) (bcf) | | | Total (mmboe) | | | | | | | | | | | | India(2) | | | 31.42 | | | | 3.51 | | | | 32.01 | | | | 32.61 | | | | 4.32 | | | | 33.33 | | | | 28.07 | | | | 2.96 | | | | 28.56 | | | | | | | | | | | | Mangala(3) | | | 19.89 | | | | — | | | | 19.89 | | | | 21.63 | | | | — | | | | 21.63 | | | | 20.29 | | | | — | | | | 20.29 | | | | | | | | | | | | Others | | | 11.53 | | | | 3.51 | | | | 12.12 | | | | 10.98 | | | | 4.32 | | | | 11.70 | | | | 7.78 | | | | 2.96 | | | | 8.27 | | Sri Lanka(4) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | South Africa(5) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 31.42 | | | | 3.51 | | | | 32.01 | | | | 32.61 | | | | 4.32 | | | | 33.33 | | | | 28.07 | | | | 2.96 | | | | 28.56 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes:
(1) | Natural gas production figures are the production volumes of natural gas available for sale, excluding flared andre-injected gas and gas consumed in operations. |
(2) | For the computation of EI production, Ravva royalty fees have not been netted off. |
(3) | Mangala field is separately included as it contains more than 15% of our total proved reserves. |
(4) | Cairn along with Petro SA filed closure application with PASA to exit from South Africa operations and the same has been accepted and closure certificate has been granted by PASA on September 20, 2019. |
(2) | For the computation of EI production, Ravva royalty fees have not been netted off. |
(3) | Mangala field is separately included as it contains more than 15% of our total proved reserves. |
(4) | The Sri Lanka Block was relinquished as at March 31, 2016. |
(5) | Cairn India’s South Africa operations are still in exploration stage. |
The following table sets forth our average sales prices by geographic area andby-product type for the last three years: | | | | | | | India (US $) | | During the year ended March 31, 2015
| | | | | Average sale prices
| | | | | Oil, (per barrel)
| | | 76.8 | | Natural gas, (per mscf)
| | | 6.4 | | During the year ended March 31, 2016
| | | | | Average sale prices
| | | | | Oil, (barrel)
| | | 40.8 | | Natural gas, (mscf)
| | | 7.1 | | During the year ended March 31, 2017
| | | | | Average sale prices
| | | | | Oil, (barrel)
| | | 43.3 | | Natural gas, (mscf)
| | | 7.7 | |
The following table sets forth our average production costs by geographic area for the last three years:
| | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | Unit of Measurement | | | 2015 | | | 2016 | | | 2017 | | India | | | | | | | | | | | | | | | | | Oil and gas | | | ($ per boe) | | | | 22.9 | | | | 21.8 | | | | 20.4 | |
| | | | | | | | | | | | | | | Particulars | | | | During the year ended March 31, | | | | | | 2019 | | | 2020 | | | 2021 | | | | | | Average sale prices in India (in $) | | Oil | | per barrel | | | 66.0 | | | | 59.4 | | | | 38.67 | | Natural gas | | per mscf | | | 7.5 | | | | 5.5 | | | | 4.22 | |
The following table sets forth our average production costs by geographic area for the last three fiscal years: | | | | | | | | | | | | | | | For the year ended March 31, | | Geography | | 2019 | | | 2020 | | | 2021 | | | | ($ per boe) | | India - Oil and gas | | | 26.8 | | | | 22.4 | | | | 21.7 | |
The cost of production for oil and gas business consists of: | • | | expenditure incurred towards the production of crude oil and natural gas including statutory levies, such as cess, royalties (except Rajasthan block) and production payments payable pursuant to the production sharing contractsPSCs as well as operational expenditures such as costs relating to manpower, repairs and maintenance of facilities, power generation and fuel for such facilities, water injection, insurance, storage, transportation and freight of crude oil and natural gas, among others. The total production cost is divided by the net interest quantity of oil and gas produced to determine the cost of production per barrel of oil equivalent See “Item“Item 5. Operating and Financial Review and Prospects – Factors Affecting Results of Operations—Royalty and cess payments” for further details. |
Ø | Drilling and other exploratory and development activities |
The following table sets forth the number of net productive and dry exploratory and development wells drilled for the last three fiscal years. For more information about ouron-going exploration and production activities, see “Information on the Company — Business Overview — Business Overview—Our Business — Our Oil and Gas Business — Principal Facilities”. Net Productive and Dry Exploratory and Development Wells
| | | | | | | | | | | | | | | 2019 | | | 2020 | | | 2021 | | | (Number of wells) | | Net productive exploratory wells drilled: | | | | | India | | | 2 | | | | 4.97 | | | | 1.7 | | | | | | | | | | | | | | | Total productive exploratory wells drilled | | | 2 | | | | 4.97 | | | | 1.7 | | Net dry exploratory wells drilled: | | | | | | | | | | | | | India | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total dry exploratory wells drilled | | | — | | | | — | | | | — | | Total number of net exploratory wells drilled | | | 2 | | | | 4.97 | | | | 1.7 | | Net productive development wells drilled: | | | | | | | | | | | | | India | | | 59.4 | | | | 68.4 | | | | 13.5 | | | | | | | | | | | | | | | Total productive development wells drilled | | | 59.4 | | | | 68.4 | | | | 13.5 | | Net dry development wells drilled: | | | | | | | | | | | | | India | | | — | | | | — | | | | — | | Total dry development wells drilled | | | — | | | | — | | | | — | | Total number of net development wells drilled | | | 59.4 | | | | 68.4 | | | | 13.5 | |
| | | | | | | | | | | | | | | 2015 | | | 2016 | | | 2017 | | Net productive exploratory wells drilled | | | | | | | | | | | | | India | | | 28.2 | | | | — | | | | — | | Sri Lanka | | | — | | | | — | | | | — | | South Africa | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total productive exploratory wells drilled | | | 28.2 | | | | — | | | | — | | Net dry exploratory wells drilled: | | | | | | | | | | | | | India | | | 6.7 | | | | — | | | | 0.4 | | Sri Lanka | | | — | | | | — | | | | — | | South Africa | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total dry exploratory wells drilled | | | 6.7 | | | | — | | | | 0.4 | | Total number of net wells drilled | | | 34.9 | | | | — | | | | 0.4 | | Net productive development wells drilled: | | | | | | | | | | | | | India | | | 56.9 | | | | 20.3 | | | | — | | Sri Lanka | | | — | | | | — | | | | — | | South Africa | | | — | | | | — | | | | — | | | | | | | | | | | | | | | Total productive development wells drilled | | | 56.9 | | | | 20.3 | | | | — | | Net dry development wells drilled: | | | | | | | | | | | | | India | | | 0.7 | | | | — | | | | — | | Sri Lanka | | | — | | | | — | | | | — | | South Africa | | | — | | | | — | | | | — | | Total dry development wells drilled | | | 0.7 | | | | — | | | | — | | | | | | | | | | | | | | | Total number of net wells drilled | | | 57.6 | | | | 20.3 | | | | — | |
Ø | Present activities The following table summarizes the number of wells in the process of being drilled as of March 31, 2017.
Number of Wells Being Drilled as of March 31, 2017
| | | | | | | | | | | Gross | | | Net | | Wells drilling | | | | | | | | | India | | | 2 | | | | 0.7 | | South Africa | | | — | | | | — | | | | | | | | | | | Total wells drilling | | | 2 | | | | 0.7 | | | | | | | | | | |
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The following table summarizes the number of wells in the process of being drilled as of March 31, 2021. | | | | | | | | | | | Gross | | | Net | | | | (Number of wells) | | Number of wells being drilled | | | | | | | | | India | | | 1 | | | | 0.7 | | | | | | | | | | | Total wells drilling | | | 1 | | | | 0.7 | | | | | | | | | | |
Ø | Oil and gas properties, wells, operations and acreage Cairn India’s blocks containing proved reserves have leases which currently expire in May 14, 2020 for Rajasthan block, October 27, 2019 for Ravva block and June 29, 2023 for Cambay block.
The following tables show the number of gross and net productive oil and natural gas wells and total gross and net developed and undeveloped oil and natural gas acreage in which Cairn India had interests as of March 31, 2017.
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Cairn’s blocks containing proved reserves have leases which currently expire in May 14, 2030 for Rajasthan block, October 27, 2029 for Ravva block, June 29, 2023 for Cambay block and September 24, 2031 for KG-ONN block. Estimates of proved reserves disclosed as of March 31, 2021, and all preceding periods for each block represent only those quantities that were estimated to be recoverable prior to the expiration date of the respective PSC. No reserves were estimated or included for quantities that may be recoverable after the expiration date of the PSCs. The following tables show the number of gross and net productive oil and natural gas wells and total gross and net developed and undeveloped oil and natural gas acreage in which Cairn had interests as of March 31, 2021. Ø | Gross and Net Productive Wells and Gross and Net Developed and Undeveloped Acreage | | | | | | | | | | | | | | | | | | | As of March 31, 2017 | | | | Oil | | | Natural gas | | | | Gross | | | Net | | | Gross | | | Net | | Gross and net productive wells(1) | | | | | | | | | | | | | | | | | India | | | 429.00 | | | | 297.58 | | | | 46.00 | | | | 32.63 | | South Africa | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total gross and net productive wells | | | 429.00 | | | | 297.58 | | | | 46.00 | | | | 32.63 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | As of March 31, 2017 | | | | Gross (acres) | | | Net (acres) | | Gross and net developed acreage(2) | | | | | | | | | India | | | 33,051 | | | | 15,152 | | South Africa | | | — | | | | — | | | | | | | | | | | Total gross and net developed acreage | | | 33,051 | | | | 15,152 | | | | | | | | | | | | | | | As of March 31, 2017 | | | | Gross (acres) | | | Net (acres) | | Gross and net undeveloped acreage(3) | | | | | | | | | India | | | 4,496,227 | | | | 2,637,352 | | South Africa | | | 4,916,826 | | | | 2,950,096 | | | | | | | | | | | Total gross and net undeveloped acreage | | | 9,413,053 | | | | 5,587,448 | | | | | | | | | | |
Notes:
(1) | A gross well or acre is a well or acre in which a working interest is owned, while a net well or acre is deemed to exist when the sum of fractional ownership working interests in gross wells or acres equals one. |
(2) | Developed acreage is acreage assignable to productive wells; productive wells include producing wells and wells mechanically capable of producing. |
| | | | | | | | | | | | | | | | | | | As of March 31, 2021 | | | | Oil | | | Natural gas | | | | Gross | | | Net | | | Gross | | | Net | | | | (Number of wells) | | Gross and net productive wells(1) | | | | | | | | | | | | | | | | | India | | | 579 | �� | | | 384.6 | | | | 74 | | | | 47.5 | | | | | | | | | | | | | | | | | | | Total gross and net productive wells | | | 579 | | | | 384.6 | | | | 74 | | | | 47.5 | | | | | | | | | | | | | | | | | | |
(3) | | | | | | | | | | | As of March 31, 2021 | | | Gross | | | Net | | | | (acres) | | Gross and net acreage(2) | | | | | | | | | Developed acreage | | India | | | 56,730 | | | | 31,618 | | | | | | | | | | | Total developed acreage | | | 56,730 | | | | 31,618 | | | | | | | | | | | Undeveloped acreage | | India | | | 15,930,301 | | | | 15,594,758 | | | | | | | | | | | Total undeveloped acreage | | | 15,930,301 | | | | 15,594,758 | | | | | | | | | | |
Notes: (1) | Undeveloped acreage encompasses those leased acres on which wells have not been drilled or completed to a point that would permit the production of economic quantities of oil or gas regardless of whether such acreage contains proved reserves. Users of this information should not confuse undeveloped acreage with undrilled acreage held by production under the terms of the lease. |
Cairn India’sA gross well or acre is a well or acre in which a working interest is owned, while a net well or acre is deemed to exist when the sum of fractional ownership working interests in gross wells or acres equals one.
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(2) | Developed acreage is acreage assignable to productive wells; productive wells include producing wells and wells mechanically capable of producing. |
(3) | Undeveloped acreage encompasses those leased acres on which wells have not been drilled or completed to a point that would permit the production of economic quantities of oil or gas regardless of whether such acreage contains proved reserves. Users of this information should not confuse undeveloped acreage with undrilled acreage held by production under the terms of the lease. Cairn’s lease holdings comprises of sixcomprise earlier five blocks and new 53 blocks acquired under OALP and DSF-2 round in India of which the largest is the Palar-Pennar block in terms of acreage which accounts for approximately 51% of the total acreage. Rajasthan block, being the second largest block constitutes approximately 17% of the total acreage. Cairn India also has one block in South Africa.India. |
(i) | Crude Oil Cairn India sells crude oil from its various operating fields under production, under a variety of contractual obligations. Prior to start of every fiscal year under the various production sharing contracts
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Cairn sells crude oil from its various operating fields under production under a variety of contractual obligations. Prior to start of every fiscal year under the various PSCs between Cairn India and GoI, GoI nominates volumes that would beup-lifted by its nominee refinery based upon the expected production from the field during the year. Cairn India is free totie-up with other domestic refineries (including private refineries) for the surplus available volume that is not nominated by GoI. For fiscal year 2018, GoI has nominated approximately 52 kbopd (participating interest) of crude oil from various producing fields. Cairn India has reasonable endeavor crude oil sales agreements and there is no minimum committed quantity thus, resulting in no financial implication.
For fiscal year 2021, GoI has nominated approximately 92 kbpd of Rajasthan block and 25 kbpd of Ravva & Cambay block. Cairn has reasonable endeavor crude oil sales agreements and there is no minimum committed quantity, thus, resulting in no financial implication. (ii) | Natural Gas For Rajasthan block, GoI allocates gas to consumers from time to time. The delivery commitments for Cairn India’s share of gas sales (participating interest) for the month of August 2017 is approximately 5.4 mmscf per day which is based on estimated gas production from the fields.
For Cambay block, as on July 28, 2017, Cairn India’s share of gas sales commitment (participating interest) is approximately 2.9 mmscf per day for the month of August 2017. For Ravva block, there is no annual commitment for gas sales for fiscal year 2018.
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The delivery commitments for Cairn’s share of gas sales from Rajasthan Block (participating interest) for the month of June 2021 is approximately 103.8 mmscf per day which is based on estimated gas production from the fields. For Cambay block, Vedanta Limited - oil and gas business’s share of gas sales commitment (participating interest) for the month of June 2021 is approximately 2.8 mmscf per day. This delivery commitment changes on a monthly basis based on estimated gas production from the fields. For Ravva block, there is no annual commitment for gas sales for fiscal year 2022. Cairn India believes its domestic proved reserves will be sufficient to deliver the above mentioned contracted volumes. In case the actual delivered gas quantity does not meet committed gas quantity, then the financial implications are a discount of up to a maximum of 20% on the gas price offered to buyers based on the provisions of the respective gas sales agreement. Distribution, Logistics and Transport (i) | Rajasthan The Mangala processing terminal has been designed as a centralized hub facility to handle crude oil production from the fields in the Rajasthan block that have been discovered by Cairn India. Once crude oil reaches the Mangala processing terminal, generally via the pipeline, it is processed and transported to public-sector customers or private refineries that have purchased it. See “— Facilities –
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The Mangala processing terminal has been designed as a centralized hub facility to handle crude oil production from the fields in the Rajasthan block that have been discovered by Cairn. Once crude oil reaches the Mangala processing terminal, generally via the pipeline, it is processed and transported to public-sector customers or private refineries that have purchased it. See “— Facilities—Mangala Processing Terminal” for more details. (ii) | Cambay The82-acre onshore processing facility at Suvali, processes natural gas and crude oil from the Lakshmi and Gauri fields. It has a capacity to process 150 mmscfd of natural gas and 10 kbopd of crude oil and includes a three stage separator oil processing train, four storage tanks of combined capacity of 37,700 bbls as well as 4.8 MW captive power generation capacity. The processing plant and offshore infrastructure are certified to ISO 14001 and OHSAS 18001
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The 82-acre onshore processing facility at Suvali processes natural gas and crude oil from the Lakshmi and Gauri fields. It has a capacity to process 150 mmscfd of natural gas and 12 kbopd of crude oil and includes a three-stage separator oil processing train, four storage tanks with combined capacity of 40,000 bbls as well as 4.8 MW captive power generation capacity. The processing plant and offshore infrastructure are certified to ISO 14001 and ISO 45001 standards. The crude oil produced from Suvali Onshore Terminal is transported via truck tankers approximately 15 km to Adani Hazira Port Private Limited. Thereafter, the crude cargo is sold to coastal refineries via sea tankers. The processed natural gas is sold through the Gujarat State Petronet Limited pipeline facility to CLP India Private Limited and Gujarat Gas Corporation Limited. (iii) | Ravva Currently, there are eight unmanned offshore platforms and a225-acre onshore processing facility at Surasaniyanam for processing the natural gas and crude oil produced from the offshore field. The Ravva onshore terminal operates as per the internationally recognized environmental standard (ISO 14001) and the occupational health and safety standard (OHSAS18001). Onshore facility has the capacity to handle 70kbopd of crude oil, 95 mmscfd of natural gas and 110,000 bbls of water injection per day. The terminal also has the capacity to store 1.0 mmbbls of crude oil.
The crude produced from the wells in the Ravva block is sent to the onshore processing terminal via subsea pipelines. The oil is processed and stored in the storage tanks at the terminal. Thereafter, the crude oil is transported to local refineries (nominated by GoI) via 20 inch export line
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Currently, there are eight unmanned offshore platforms and a 225-acre onshore processing facility at Surasaniyanam for processing the natural gas and crude oil produced from the offshore field. The Ravva onshore terminal operates as per the internationally recognized environmental standard (ISO 14001) and the occupational health and safety standard (OHSAS18001). The onshore processing facility has the capacity to handle 90 kbopd of crude oil, 95 mmscfd of natural gas and 110,000 bbls of water injection per day. The terminal also has the capacity to store 1.0 mmbbls of crude oil. The crude oil produced from the wells in the Ravva block is sent to the onshore processing terminal via subsea pipelines. The crude oil is processed and stored in the storage tanks at the terminal. Thereafter, the crude oil is transported to local refineries (nominated by GoI) via a 20-inch export pipeline (approximately 16 km long) from the terminal to a ship tanker, which is moored to the single point mooring buoy located in the field. The single point mooring buoy and associated equipment are together termed as tanker mooring and loading facility. Natural gas from the wells after treatment is transported to buyer’s (GAIL) pipeline. Ø | Market share and Competition |
The oil and gas exploration and production industry in India has tremendous potential for investment. Acreages to explore and exploit hydrocarbon resources are offered under an open acreage licensing system by the MoPNG under the Hydrocarbon Exploration and Licensing Policy. The GoI has launched special bid rounds for small discoveries, thereby further enhancing competition to acquire acreage. For Vedanta Limited- oil and gas business, competition faces from Indian companies, including Indian National Oil Companies- ONGC and Oil India Limited (“OIL”) as well as private players like Reliance Industries Limited. The GoI has a major stake in ONGC and OIL. ONGC has been awarded the majority of the exploration blocks in the nine NELP licensing rounds and has also acquired 17 blocks under the four OALP auctions that have been held to date. OIL has won 21 blocks under the four OALP bid rounds. Many of these competitors have access to financial or other resources substantially in excess of those available to Vedanta Limited- oil and gas business and accordingly may be better positioned to acquire and exploit prospects, hire personnel and market production. In addition, many of Vedanta Limited’s competitors may be better able to withstand the effect of external changes in industry conditions such as worldwide crude oil and natural gas prices and levels of supply and the application of government regulations, which affect Vedanta Limited’s business and which are beyond Vedanta Limited’s control. Vedanta Limited – oil and gas business is a significant contributor to India’s domestic crude oil production, operating approximately 25% as derived from the provisional data published by Petroleum Planning and Analysis Cell of MoPNG statistics as of March 31, 2021. Our oil and gas business is not subject to seasonality as demand for oil and gas is consistent throughout the year. Our Iron Ore Business Overview Our iron ore business is carried out in the states of Goa and Karnataka. Our iron ore business includes exploration, mining and processing of iron ore. In fiscal year 2021, we produced approximately 5.02 million dmt of saleable iron ore fines and lumps. The sales for fiscal year 2021 were at 6.5 million dmt as compared to sales of 6.6 million dmt in fiscal year 2020. We currently operate a metallurgical coke plant and a pig iron plant with an installed capacity of 522,000 TPA and 832,000 TPA respectively in Goa and Maharashtra. The second metallurgical coke plant with an installed capacity of 120,000 TPA was acquired in first half of fiscal year 2020, at Sindudhurg, Maharashtra, which became operational on September 9, 2019. On August 26, 2011, the Supreme Court of India passed an order suspending mining activities in the Chitradurga and Tumkur districts of Karnataka. In view of this order, our activities at this mine were stopped with immediate effect. On April 18, 2013, this suspension was lifted by the Court and in December 2013, the operations were resumed after getting necessary regulatory clearances. Although we resumed operations in Karnataka based on the stage I forest clearance from the state government of Karnataka and a temporary working permission from the MoEF&CC, the temporary working permission expired on July 31, 2014. Karnataka operations were halted for the period from August 1, 2014 to February 27, 2015. We resumed our operations in Karnataka after all statutory clearances were in place from February 28, 2015. On August 22, 2011, we acquired a 51.0% ownership interest in WCL, a Liberian iron ore exploration company which was a wholly owned subsidiary of Elenilto Minerals & Mining LLC, for a cash consideration of $ 90 million. On December 20, 2012, we acquired the remaining 49.0% of the outstanding common shares of WCL from Elenilto Minerals & Mining LLC for a cash consideration of $ 34 million. In October 2015, we proposed to the state government of Jharkhand to set up a 1 mtpa pig iron plant in Jharkhand, for Dhobil mining lease. On May 6, 2016, Stage-I MoU was signed between the state government of Jharkhand and Vedanta Limited to set up a 1 mtpa hot metal plant. Further on November 1, 2017, Stage II MoU was signed. The exploration drilling in our lease area commenced in May 2017 and report was submitted to the state government of Jharkhand in October 2017. The exploration report was examined by a technical committee comprising experts from Geological Survey of India, IBM and state geology and mining departments. In March 2018, the technical committee approved report for the purposes of issuing a letter of intent to Vedanta Limited for the grant of a mining lease for the Dhobil iron ore mine. In March 2021 we moved to Hon’ble High Court of Jharkhand for an early decision on issuance of Letter of Intent for mining lease, Court had passed direction to State Government to take decision in 4 weeks, however no reply submitted by the State Government, matter is pending in High Court. On March 28, 2021, GoI has enacted amendments in MMDR Act 1957, in which one of the amendment is deletion of Section 10A2(b) of the Act under which our right to get Dhobil lease was saved. Further, an opinion has been obtained on the point that in the case the mining lease is not being given to us, whether in that case we are entitled for reimbursement of investments made by us and as per opinion Section 10A(2) (b) (inserted by the MMDR Amendment Act, 2021) which specifically provides that the holder of a prospecting license whose right to obtain a mining lease had lapsed on March 28, 2021, shall be reimbursed the expenditure incurred towards reconnaissance or prospecting operations, however this is subject to the rules to be framed under Section 13 (2) (u) of the MMDR Act by the Central Government, which is yet to be notified. Principal Products Iron ore Our iron ore reserves consist of both lump and fine ore. As of March 31, 2021, the percentage of lump ore in the reserves was approximately 20.0% in Karnataka. The mines in Karnataka consists of average 49.1% grade deposits. We sell lump ore from our mines in Karnataka primarily to domestic pig iron or steel producers. The majority of other iron ore produced by Goa mines was sold to purchasers in China, but during the fiscal year 2021, no Iron ore were mined from Goa mine pursuant to the Supreme Court’s order. Pig iron We produce basic, foundry and nodular grade pig iron in various sub grades for steel mills and foundries. Metallurgical coke We also produce metallurgical coke, which is primarily used for captive consumption for producing pig iron in India. Principal Facilities The following map shows details of the locations of our iron ore business in India and around the world. ![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040655563.jpg)
Mine in Karnataka - A. Narrain (ML No 2677) Our main operations in Karnataka is at the A. Narrain mine Meghalahalli, Chitradurga, ML 2677, which is located approximately 200 kms northwest of Bangalore. The open-pit mine is operated by us and is well connected by rail, with the nearest stations, Sasalu and Amruthapura, and M/s Mineral Enterprises served by Chikkajajur (MMEC) railway siding located 16 kms, 17 kms and 4 kms respectively, from the mine. The nearest port at Mangalore is approximately 430 kms from the mine and the nearest airport is located at Bangalore, approximately 230 kms from the mine. The leasehold area of the mine is 160.6 hectares, which is classified into two blocks, namely the south block, which is 123.5 hectares, and the north block, which is 37.1 hectares. These two blocks are joined by a narrow stretch of land approximately 30 meters in width and 660 meters in length along the eastern side of the leasehold area. We have operated the mine since 1994. The MoEF&CC granted us the environmental clearance for production of 6.0 mmtpa in fiscal year 2009 but due to conditions introduced by the Supreme Court, the production capacity of the mine was reduced to 2.29 mmtpa. However, in April 2018, the Central Empowered Committee enhanced the production capacity of the mine to 4.51 mmtpa. Our application to further enhance production capacity was favorably considered by Central Empowered Committee (Supreme Court appointed body), on March 4, 2020 and the annual mining capacity has been increased upto 5.89 MTPA. The State Government of Karnataka has allocated the production quantity of 4.82 MTPA from FY 2020 onwards. In FY 2021, the state government increased the production quantity of to 5.60 MTPA effective from 2021 onwards. The geological formation of this region belongs to the Archean-Proterozoic age. The geology of the mine consists of Archean formations locally termed “Dharwars” which contain rich and large iron ore deposits. The leasehold area forms part of the Chitradurga-Tumkur schist belt and part of a regional isoclinal fold. The strike direction of the ore body dips westerly at an angle of about 60 degrees to 70 degrees. Hematite is the principal ore mineral and limonite, goethite and magnetite constitute the associated minor minerals of the mine. The mineralized horizon extends over a length of about two kms. The footwall comprised decomposed quartzite and phyllite, and the stratigraphy is cross cut by late dolerite dykes and sills which are manifested by pink clayey zones in the mine area. Currently, the north and the south block of the mine have mechanized mining operations. The open-pit mines have a bench height of seven meters, haulage roads of 12 meters to 15 meters in width and an overall pit slope of less than 26 degrees. The mine is equipped with dry process facilities for processing all grades of ore. The lateritic overburden is removed either by blasting or ripping/dozing, loaded onto and transported by 30 ton trucks. The ore mined is processed at the mine’s processing facilities, which involves crushing and dry screening processes. The processed ore is then transported by road to the railway yard, for onward transport to customers in Karnataka, Goa and other places. Ore produced in Karnataka ranges from 56.0% to 62.0% iron content and comprises 80.0% fines and 20.0% lumps. Since the mine was taken over by us, exploration at the mine involved the drilling of a total of 73,951 meters in 660 boreholes as of March 31, 2020. No exploration took place in FY 2021. The deposit is extensively sampled in vertical and inclined drill hole grid intervals in side direction of 50 meters and in cross section average of 25 meters with most of the holes covering a depth of 50 meters to 200 meters. Power at the mine is supplied by a 725 KV and 320 KV generator. All power supplied to the mine and plant is through generators. The gross value of fixed assets, including capital works-in-progress, was ₹ 8483 million ($ 116 million) as of March 31, 2021. During the last year, a parcel of land relating to the Iron Ore business having carrying value of ₹ 1,211 million ($ 16 million) was reclassified from Land and Building to other financial asset due to an ongoing legal dispute relating to title of the land. During the previous year, the financial asset was fully impaired. The economic cut-off grade at the mine is determined by the requirement to meet various sales contracts and the need to maintain stockpiles to meet the contract specifications. The reserves in proved reserve category at the Karnataka mines are estimated based on drilled boreholes spaced at 50 meters along predefined section lines and occasionally off of the section lines, the probable reserves are estimated based on drilled boreholes spaced at 50 meters from the proved reserves and the possible reserves are estimated based on drilled boreholes spaced at 25 meters from the probable reserves. As the area is drilled at approximately 50 meter by 50 meter grids, the physical continuity of the ore is well demonstrated. Mine in Liberia - WCL WCL comprises three concession areas (Bomi Hills, Bea Mountain and Mano River). Due to an Ebola epidemic exploration in Liberia has been suspended in fiscal year 2015. The table below sets out proved and probable iron ore reserves as of March 31, 2021 at mines that we own or have rights to: | | | | | | | | | | | | | | | | | | | | | | | | | | | Proved Reserves | | | Probable Reserves | | | Total Proved and Probable Reserves | | Mine | | Quantity | | | Iron Grade | | | Quantity | | | Iron Grade | | | Quantity | | | Iron Grade | | | | (Million tons) | | | (%) | | | (Million tons) | | | (%) | | | (Million tons) | | | (%) | | A. Narrain | | | 17.47 | | | | 56.4 | | | | 58.75 | | | | 43.2 | | | | 76.22 | | | | 46.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total iron ore reserves | | | 17.47 | | | | 56.4 | | | | 58.75 | | | | 43.2 | | | | 76.22 | | | | 46.3 | |
Additional Information 1. | The oil and gas exploration and production industry in India is competitive. Acreages to explore and exploit hydrocarbon resources are put up for biddingreserve estimates have been prepared by the MoPNG, for Cairn India faces competition from Indian companies, including ONGCGeologists and Reliance IndustriesMining Engineers at Vedanta Limited and major integrated and large independent multinational companies.SRK Consulting (UK) Limited reviewed in accordance with JORC code. The GoI has launched special bid rounds for small discoveries, thereby further enhancing competition to acquire acreage. The GoI hasestimates were independently audited by SRK in 2021. |
2. | Ore reserves are estimated at a major stake in ONGC, which has been awarded the majority of the exploration blocks offered by the GoI in the nine NELP licensing rounds held so far. Many of these competitors have access to financial or other resources substantially in excess of those available to Cairn India and accordingly may be better positioned to acquire and exploit prospects, hire personnel and market production. In addition, many of our competitors may be better able to withstand the effect of external changes in industry conditions such as worldwide crude oil and natural gas prices and levels of supply and the application of government regulations, which affect our business and which are beyond our control. Cairn India is a significant contributor to India’s domestic crude oil production, operating approximately 26% as derived from the Ministry of Petroleum and Natural Gas statistics of March 2017.
Seasonality
Our oil and gas business is not subject to seasonality as demand for oil and gas is consistent throughout the year.
Our Iron Ore Business
Overview
Our iron ore business is carried out in the states of Goa and Karnataka. Our iron ore business includes exploration, mining and processing of iron ore. In fiscal year 2017, we produced approximately 10.90 million dmt of saleable iron ore fines and lumps. The sales for fiscal year 2017 were at 10.1 million dmt (including sales of ore purchased through ane-auction of the ore confiscated by the government prior to the suspension) as compared to sales of 5.2 million dmt in fiscal year 2016.
We currently operate a metallurgical coke plant with an installed rated capacity of 522,000 tpa and a pig iron plant with a rated capacity of 832,000 tpa. We manufacture pig iron through the blast furnace route. We have a patent for the technology for the manufacture of energy recovery based metallurgical coke.
In August 2011, the iron ore mining activities in Karnataka were temporarily suspended by the Supreme Court of India due to alleged environmental violations. The suspension was subsequently lifted in April 2013 and operations resumed in December 2013 after obtaining the necessary statutory clearances. Although we resumed operations in Karnataka after receiving the stage I forest clearance from the state government of Karnataka and a temporary working permission from the MoEF, the temporary working permission expired on July 31, 2014. Karnataka operations were suspended for the period from August 1, 2014 to February 27, 2015. From February 28, 2015, the operations in Karnataka were resumed after all statutory clearances are in place.
In fiscal year 2016, the Supreme Court of India also imposed an interim restriction on the maximum annual excavation from the mining leases in the state of Goa to 20 million tons subject to determination of final capacity by an expert committee appointed by the Court. Further, in its order, the Court held that all mining leases in Goa including ours expired in 2007, and no mining operations were carried out until August 2014, when the High Court of Bombay at Goa pronounced an order to renew mining leases in Goa. The MoEF and the state government also revoked their suspension orders subject to limits imposed by the Supreme Court of India. Registration of mining leases in Goa was completed and the Goa State Pollution Control Board in their meeting on July 10, 2015 considered renewal of consent to operate under the Air (Prevention and Control of Pollution) Act, 1981 and Water (Prevention and Control of Pollution) Act, 1974. On August 10, 2015, operations at the Codli mine resumed and operations at the remaining mines resumed from the second half of fiscal year 2016 after receiving the consent to operate and the approval of our mining plan applications.
On August 22, 2011, we acquired a 51.0% ownership interest in WCL, a Liberian iron ore exploration company which was a wholly-owned subsidiary of Elenilto Minerals & Mining LLC, for a cash consideration of $ 90.0 million. On December 20, 2012, we acquired the remaining 49.0% of the outstanding common shares of WCL from Elenilto Minerals & Mining LLC for a cash consideration of $ 33.5 million.
A number of initiatives were earlier undertaken to expand our mining and logistical capacity at our mines at Goa and Karnataka to 36 mmt, but these initiatives have been scaled back and are currently on hold due to regulatory issues and capping of production limits across the state. We have also made substantial progress on our logistics capacity, with a new railway siding already commissioned in Karnataka and progress made on widening of the existing roads and building dedicated road corridors in both Karnataka and Goa. We have also added capacity in river and port logistics, and now have a fleet of 33 barges and 2 transhippers and 1 floating crane station as on date.
In October 2015 we proposed to the state government of Jharkhand to set up a 1 mtpa pig iron plant in Jharkhand, for Dhobil mining lease. On May 6, 2016stage-I, a Memorandum of Understanding (“MOU”) was signed between the state government of Jharkhand and Vedanta Limited to set up a 1 mtpa hot metal plant. The exploration drilling commenced on May 19, 2017. After successfully completing the activities under the stage-I MOU, which included selecting the plant site, identifying water, power and raw material sources and preparing a detailed project report, we are in the process of signing the stage II MOU.
Principal Products
Iron ore
Our iron ore reserves consist of both lump and fine ore. As of March 31, 2017, the percentage of lump ore in the reserves was approximately 12.0% and 18.0% in Goa and Karnataka, respectively. While the ore in Goa contains an average iron content deposit of 50.0% to 55.0%, the mines in Karnataka are of higher grade deposits, ranging between 56.0% to 60.0% iron. We sell lump ore from our mines in Karnataka primarily to domestic pig iron or steel producers. The majority of other iron ore produced by Goan mines is sold to purchasers in China.
Pig iron
We produce basic, foundry and nodular grade pig iron in various grades for steel mills and foundries.
Metallurgical coke
We also produce metallurgical coke, which is primarily consumed in India.
Principal Facilities
Overview
The following map shows details of the locations of our iron ore business in India and around the world:
![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page90a.jpg)
Mines
Goa mines
Our iron ore operations in Goa consist of four major iron ore mines, namely Codli, Sonshi, Bicholim and Surla. In addition, we derive ore production from several satellite mines in North Goa. Our Goa leases were originally granted as mining concessions by the government during the Portuguese regime from 1955 onwards, and in 1987 these concessions were converted to mining leases. Before operations were suspended in September 2012, we operated a total of twenty one mining leases in Goa representing an area of approximately 1,695 hectares (includes one third-party lease on contract, representing an area of approximately 62 hectares).
We carry out exploration in grid patterns of 100 meters by 100 meters at the initial stage of exploration, followed by grid patterns of 50 meters by 50 meters. Core samples are analyzed and used to interpret the ore body for the preparation of geological cross sections and the classification of the ore as either crude ore,sub-grade ore or mineral reject. Drill core sampling is undertaken on entire holes and the drill core material is sampled at the sample preparation facilities.
The gross value of fixed assets for our Goa operations, including capitalworks-in-progress, was Rs. 48,254 million ($744.1 million) as of March 31, 2017.
(i) Codli mines:
The Codli group of mines is situated in south of Goa, approximately 600 kms south of Mumbai and 50 kms east of Panaji, the capital of Goa. It is anopen-pit operation and the nearest railway stations, Curchorem and Margao, are approximately 15 kms and 40 kms, respectively, from the mine. There is an airport 55 kms from the mine at Dabolim. The river loading points at Sanvordem (Capxem) and Curchorem are approximately 12 kms and 14 kms, respectively, from the Codli mines while the port is approximately 40 nautical miles from the river loading point.
The Codli mines cover an area of approximately 340 hectares and are operated under the terms and conditions stipulated in four contiguous leases, three of which are owned by us with the remaining lease being owned by a third-party. We own an additional two mining leases to the northwest of the current Codli mine operations where exploration is being undertaken.
Exploration at the Codli mines began in 1966 and the mine first commenced production in 1973. Production at the mine reached 3 mmtpa by 1995. This mine has been granted environmental clearance for a production level of 7 mmtpa.
At the Codli mines, the lower grade iron formation is folded and subsequently eroded into basinal areas amenable toopen-pit mining. Economically mineable material occurs over an area of about 3.1 kms by 1.6 kms and is located between 84 meters above sea level and 50 meters below sea level. The formations show a general northwest-southeast trend with shallow to moderate dips towards the northeast with local reversals. The footwall is comprised of manganiferous clay and decomposed quartzites and the stratigraphy of the ore body is cross cut by altered dolerite dykes and sills which are manifested by pink clayey zones in the mine area.
The Codli mines aremulti-pit, multi-lease fully mechanized mining units. The open-pits have a bench height of 7 meters, haulage roads of 25 meters width and an overall pit slope of 26 degrees. The Codli mines have 14 basins, of which 5 pits have been exhausted. The lateritic overburden is removed either by ripping or dozing, and loaded by excavators and/or wheel loaders into heavy earth moving machinery such as rigid dumpers and articulated dumpers. Hauling within the mine is also done by rigid and articulated dumpers. An ore stockpile is maintained at all times to continuously feed the processing plants.
We have extensive ore processing facilities for upgrading the ore, which include crushing, dry screening, scrubbing, log washing, classifying, hydrocycloning, and magnetic separation with a wet high- intensity magnetic separator. The four Codli processing plants are between 1 and 18 years old and throughput capacity of the four Codli processing plants is 10 mmtpa. The processed ore is transported by road to a riverhead jetty by 10 ton tipper trucks and then further transported by barges to the Goa ports or transhipper for onward shipment. One plant is provided with a dry circuit to process high grade ore, while the remaining four wet plants process low grade ores. The Codli processing plants undergo regular maintenance and annual repairs are conducted during the monsoon season.
As of March 31, 2017 we have undertaken an exploration and evaluation program at the Codli mines which involved drilling a total of 78,082 meters in depth in 1,156 holes. The Codli mine deposits are extensively sampled.
Power at the Codli mines is supplied through a government grid supply network with a maximum contracted demand of 5,000 kVA. The site’s full water requirements are met from the rainwater accumulated in exhausted pits. In fiscal year 2017, 3.82 million wmt of crude ore was produced from the Codli mines.
The economicvariable cut-off grade atbased on ore type; the Codli mines is determined by the requirement to meet various sales contracts. We operate on a 50.0% iron operationalminimum cut-off grade in practice, as compared to the statutorycut-off gradewas 30.0% Fe for Siliceous Ore and 45.0% Fe for normal ore.
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3. | The ore bodies are of 45.0% iron. Ore containing 45.0% to 50.0% iron is preserved for future use and ore containing 50.0% to 54.0% iron is beneficiated in order to make it saleable. The reserves at the Codli mines in the proved reserve category are defined by drill holes spaced at 50 meter intervals, the probable reserves are generally defined by drill holes spaced at a further 50 meter interval from the proved reserves. As the area is drilled at approximately 50 meter by 50 meter grids, the physicalrelatively significant size with good continuity of the oremineralized zones and little internal dilution, the contacts are well constrained, free digging and diluting material can also carry grade, a mining recovery of 98.0%; a mining dilution of 2.0%; is well demonstrated.considered.
We operate the Gauthona Dusrifal mine, the lease of which is held by M/s Timblo Private Limited, as an ore raising contractor since 1989. This mining concession was granted in 1958 to M/s Timblo Private Limited, which owned and operated the mine until 1988. Since 1983, we had a common boundary working agreement with M/s Timblo Private Limited and, in 1989, we acquired control of 40.8 hectares of the leasehold area. This mine is contiguous to the Codli mines. The mining method at the Gauthona Dusrifal mine is the same as that of the Codli mines described above. During fiscal years 2016 and 2017, there was no ore production from the Gauthona E Dusrifal mine.
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During the year ended March 31, 2016, the Group recognized an impairment charge in respect of the exploratory assets in West Africa (Western Cluster, Liberia) on account of low iron ore prices, geo-political factors, and also due to the fact that there are no plans for any substantive expenditure given the continued uncertainty in the project. Therefore, the Company did not receive any certification of reserves and resources for the current period. (ii) Sonshi mine
The Sonshi mine is situated in the north of Goa, approximately 34 kms from Panaji and approximately 40 kms north of the Codli mines. It comprises anopen-pit mine. The area is well connected by metalled roads and the nearest railway station is at Tivim, approximately 25 kms from the Sonshi mine. The river loading point, Amona is nine km from the site and the port is approximately 35 nautical miles from the river loading point. The airport is approximately 50 kms from the Sonshi mine.
The leasehold area of the Sonshi mine is 62 hectares. The leaseholder has submitted timely renewal applications to the state government and no rejections have been notified. The Sonshi mine was operating under deemed consent until the temporary suspension of mining activities relating to iron ore by the state government of Goa. Due to the narrow width of the leasehold area, we have entered into common boundary working agreements with adjoining lessees to facilitate mining operations. The original mining concession was granted in 1953 to Cosme Costa & Sons. We have not acquired the lease, but have been operating the Sonshi mine as an ore raising contractor since 1958. Production at the mine commenced in 1958. The agreements entered into by us with Cosme Costa & Sons for the raising and sale of iron ore has been renewed until March 31, 2018. The Sonshi mine has been granted environmental clearance for a production level of 3.0 mmtpa.
The area surrounding the Sonshi mine is covered with laterite capping underlain by lumpy ore zone. The ore deposit at the Sonshi mine forms the northern limb of the northwest-southeast trending syncline. The formations dip 50 degrees to 60 degrees northeast. The principal deposit of the Sonshi mine comprises three distinct ore bodies that are folded into a syncline. The youngest ore body has a width of 50 meters, while the other ore bodies dip steeply to the northeast and have widths of approximately 20 meters to 25 meters. The intervening parting between the ore bodies comprised 50 meters of manganiferous clay and a 30 meter wide limonitic zone separating one ore body from the footwall phyllite. The depth extent of these bands has been outlined with deep drilling. Hematite is the major economic mineral in each of the bands.
Theopen-pit mining operations at the Sonshi mine are fully mechanized. The hard laterite capping is loosened either by drilling, blasting or ripping/dozing. The softsub-lateritic zone is excavated and transported to respective laterite, clay and ore stacks. The material is then reloaded into smaller10-ton trucks and transported to the plants for processing and beneficiation, which involves crushing, scrubbing, log washing, classifying, double stage cycloning and thickening. The waste is transported to a dump stockpile six to seven km away. Processing operations for the Sonshi mine are similar to those of the Codli mines described above. The processed ore is transported to the Amona jetty, loaded in barges and sent to Mormugao port approximately 35 nautical miles away.
There is no processing planton-site. The extracted ore is transported by a fleet of contractors with10-ton trucks to the processing plants at Amona (approximately 9 kms away), the Surla Mine beneficiation plant (approximately 4 kms away) and at Cudnem (approximately 6 kms away). The combined throughput capacity of the processing plants is 8.4 mmtpa. The plants undergo regular maintenance and annual repairs are carried out during the monsoon season.
No exploration activity was carried out in the mine during fiscal year 2017. The Sonshi mine has been sampled in vertical and inclined drill holes with a total of 66,766 meters being drilled in 644 holes as of March 31, 2017.
Power at the mine is supplied through a government grid supply network and the maximum contracted demand is 1,000 KVA. A 625 KVA diesel generator is also available to supply power. In fiscal year 2017, 1.42 million wmt of crude ore was produced from the Sonshi mine.
The economiccut-off grade at the Sonshi mine is determined by the requirement to meet various sales contracts and the need to maintain stockpiles to meet the contract. We operate on a 50.0% iron operationalcut-off grade in practice, as compared to the statutorycut-off grade of 45.0% iron. Ore containing 45.0% to 50.0% iron is preserved for future use and ore containing 50.0% to 54.0% iron is beneficiated in order to make it saleable.
We acquired an adjoining mining lease for the Mareta Sodo mine in 2004 from Pandurang Timblo Industries. This mining concession was granted in 1955 and was operated intermittently until the mine was transferred to us in November 2004. This mine has been granted environmental clearance by the MoEF for production of 1 mmtpa. As of March 31, 2017, 17,702 meters have been drilled in 112 boreholes on the leased area. The mining method of the Mareta Sodo mine is the same as that of the Sonshi mine described above. Due to allegations of illegal mining in the state of Goa, the state government of Goa banned mining operations within the state in September 2012, and the MoEF also suspended environmental clearances within the state. In January 2015, the state government of Goa revoked the mining suspension order, and in March 2015 MoEF has likewise revoked the suspension of environmental clearances. Subsequently, the lease deeds were executed and registered as of August 2015 to resume production for all working leases, including the mining lease for the Mareta Sodo mine. In fiscal year 2017, 0.5 million wmt crude ore was produced from this mine.
(iii) Sesa Resources Limited, Bicholim and Surla:
Sesa Resources Limited and its subsidiary Sesa Mining Corporation Private Limited extract iron ore from 11 mining leases spread across a total of approximately 980 hectares in Goa. Sesa Resources Limited’s operations consist of two major iron ore mining areas, one in Bicholim and the other in Surla, both located in North Goa and which together account for approximately 90.0% of Sesa Resources Limited’s total estimated iron ore reserves as of March 31, 2017. The Bicholim mine consists of five contiguous mining leases covering an area of 479.3 hectares in the north of Goa. The Surla mine consists of three contiguous mining leases covering an area of 253.4 hectares in the recognized iron ore belt of Pale-Velguem-Bicholim-Shirgao in the north of Goa. Mining operations started at the Bicholim mine and the Surla mine in 1958. Processed ore from the Bicholim and Surla mines is transported by Sesa Resources Limited to loading jetties at Sarmanas and Surla/Sinori in north of Goa, and then loaded into barges and sent to Mormugao port in Goa, India, where it is then shipped to customers. Sesa Resources Limited’s mining assets include processing plants, barges, jetties, transhippers and loading capacities at the Mormugao port. In fiscal year 2017, the combined production of the Bicholim and Surla mines was 1.09 million wmt of crude ore.
(iv) Shipbuilding Division:
We also have a ship building division which commenced operations in 1984 for the construction and repair of inland mini bulk carriers owned by us as its primary activity as well as supporting our core activities including the export of iron ore and the import of coke and coal.
The facilities of the ship building division comprises a slipway, several sheds, cranes, a quayside with water depth of 3 meters, gas manifold system and docking equipment. The ship building division has designed and built various types of vessels such as barges, pusher tugboats, oil recovery vessels and landing crafts. The ship building division was the first to design and build hatch covers for barges in Goa for shipment of fines during the monsoon season. As of March 31, 2017, the ship building division was certified ISO 9001-2000 Quality Management System in 2000, ISO 14001-2004 Environment Management System in 2004 and OHSAS 18001-2007 for Occupational Health Management System. This division has not produced any ships during fiscal year 2017.
(v) Other leases/mines
In addition to the Codli mines and right to the third-party mining lease at the Sonshi mine, we have 11 additional mining leases, of which five arenon-operative leases. The operative mines are the Sanquelim mines with three contiguous leases with an environmental clearance of 0.2 mmtpa, the Orasso Dongor mine of 0.2 mmtpa, the Botvadeacho Dongor mine of 0.5 mmtpa and the Mareta sodo mine of 1.0 mmtpa. Thenon-operative leases are under exploration and we are yet to receive clearances for these mines.
The economiccut-off grade at these other mines is determined by the requirement to meet various sales contracts and the need to maintain stockpiles to meet the contracts. We operate on a 50.0% iron operationalcut-off grade in practice, as compared to the statutorycut-off grade of 45.0% iron. Ore containing 45.0% to 50.0% iron is preserved for future use and ore containing 50.0% to 54.0% iron is beneficiated in order to make it saleable.
Karnataka
Our main operations in Karnataka are at the A. Narrain mine which is located approximately 200 kms northwest of Bangalore. Theopen-pit mine is operated by us and is well connected by rail, with the nearest stations, Sasalu and Amruthapura, and M/s Mineral Enterprises server by Chikkajajur (MMEC) railway siding located 16 kms, 17 kms and 4 kms respectively, from the A. Narrain mine. The nearest port at Mangalore is approximately 430 kms from the mine and the nearest airport is located at Bangalore, approximately 230 kms from the mine.
The leasehold area of the mine is 160.6 hectares, which is classified into two blocks, namely the south block, which is 123.5 hectares, and the north block, which is 37.1 hectares. These two blocks are joined by a narrow stretch of land approximately 30 meters in width and 660 meters in length along the eastern side of the leasehold area. We have operated the mine since 1994. The MoEF granted us environmental clearance for production of 6.0 mmtpa in fiscal 2009. However, due to conditions introduced by the Supreme Court, the production capacity of the mine was reduced to 2.29 mmtpa.
We have applied to the Central Empowered Committee through Monitoring Committee to enhance production up to the environmental clearance limit.
The geological formation of this region belongs to the Archean-Proterozoic age. The geology of the A. Narrain mine consists of Archean formations locally termed “Dharwars” which contain rich and large iron ore deposits. The leasehold area forms part of the Chitradurga-Tumkur schist belt and part of a regional isoclinal fold. The strike direction of the ore body dips westerly at an angle of about 60 degrees to 70 degrees. Hematite is the principal ore mineral and limonite, goethite and magnetite constitute the associated minor minerals of the mine. The mineralized horizon extends over a length of about two km. The footwall comprised decomposed quartzite and phyllite, and the stratigraphy is cross cut by late dolerite dykes and sills which are manifested by pink clayey zones in the mine area.
Currently, the north and the south block of the A. Narrain mine have mechanized mining operations. Theopen-pit mines have a bench height of seven meters, haulage roads of 12 meters to 15 meters in width and an overall pit slope of less than 30 degrees. The A. Narrain mine is equipped with dry process facilities for processing all grades of ore.
The lateritic overburden is removed either by blasting or ripping/dozing, loaded onto and transported by 30 ton trucks. The ore mined is processed at the mine’s processing facilities, which involves crushing and dry screening processes. The processed ore is then transported by road to the railway yard, for onward transport to customers in Karnataka, Goa and other places. Ore produced in Karnataka ranges from 56.0% to 60.0% iron content and comprises 82.0% fines and 18.0% lumps.
Since the mine was taken over by us, exploration at the A. Narrain mine involved the drilling of a total of 59,025 meters in 605 boreholes as of March 31, 2017. The A. Narrain deposit is extensively sampled in vertical and inclined drill hole grid intervals in side direction of 50 meters and in cross section average of 25 meters with most of the holes covering a depth of 50 meters to 200 meters. Power at the mine is supplied by a 725 KV and 320 KV generator. All power supplied to the mine and plant is through generators.
The gross value of fixed assets, including capitalworks-in-progress, was Rs. 13,160 million ($ 202.9 million) as of March 31, 2017.
On August 26, 2011, the Supreme Court of India passed an order suspending mining activities in the Chitradurga and Tumkur districts of Karnataka. In view of this order, our activities at this mine were stopped with immediate effect. On April 18, 2013, this suspension was lifted by the Court and in December 2013, the operations were resumed after getting necessary regulatory clearances. Although we resumed operations in Karnataka based on the stage I forest clearance from the state government of Karnataka and a temporary working permission from the MoEF, the temporary working permission expired on July 31, 2014. Karnataka operations were halted for the period from August 1, 2014 to February 27, 2015. We resumed our operations in Karnataka after all statutory clearances were in place from February 28, 2015. The economiccut-off grade at the A. Narrain mine is determined by the requirement to meet various sales contracts and the need to maintain stockpiles to meet the contract specifications.
The reserves in proved reserve category at the Karnataka mines are estimated based on drilled boreholes spaced at 50 meters along predefined section lines and occasionally off of the section lines, the probable reserves are estimated based on drilled boreholes spaced at 50 meters from the proved reserves and the possible reserves are estimated based on drilled boreholes spaced at 25 meters from the probable reserves. As the area is drilled at approximately 50 meter by 50 meter grids, the physical continuity of the ore is well demonstrated.
WCL
WCL comprises of three concession areas (Bomi Hills, Bea Mountain and Mano River). In consideration of the suspension of exploration in Liberia in fiscal year 2015 due to an ebola epidemic, low iron ore prices,geo-political factors and no plans for any substantive expenditure resulting in continued uncertainty in the project, an impairment charge of $ 227.6 million was recognized in fiscal year 2016.
The table below sets out proved and probable iron ore reserves as of March 31, 2017 at mines that we own or have rights to:
| | | | | | | | | | | | | | | | | | | | | | | | | | | Proved Reserves | | | Probable Reserves | | | Total Proved and Probable Reserves | | | | Quantity | | | Iron Grade | | | Quantity | | | Iron Grade | | | Quantity | | | Iron Grade | | | | (Million tons) | | | (%) | | | (Million tons) | | | (%) | | | (Million tons) | | | (%) | | Goa: | | | — | | | | — | | | | | | | | | | | | | | | | | | Codli Group | | | 13.2 | | | | 52.7 | | | | 6.0 | | | | 55.7 | | | | 19.2 | | | | 53.7 | | Sonshi Group | | | 14.7 | | | | 59.8 | | | | 21.4 | | | | 59.2 | | | | 36.2 | | | | 59.5 | | Other | | | 6.7 | | | | 55.4 | | | | 11.4 | | | | 56.7 | | | | 18.1 | | | | 56.1 | | Karnataka - A. Narrain | | | 16.8 | | | | 55.7 | | | | 20.3 | | | | 56.2 | | | | 37.1 | | | | 56.0 | | Sesa Resources Limited | | | 40.2 | | | | 51.9 | | | | 31.0 | | | | 55.1 | | | | 71.1 | | | | 53.1 | | (including Sesa Mining Corporation Limited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total iron ore reserves | | | 91.6 | | | | 54.3 | | | | 90.1 | | | | 56.5 | | | | 181.7 | | | | 55.4 | |
Additional Information
For India
We commenced operations at the Amona plant in Goa in 1992 and have been engaged in the manufacture and sale of pig iron since then. Our metallurgical coke plant at Amona produces a range of coke fractions from over 70 mm for foundries, 20 mms to 70 mms for blast furnaces and 6 mms to 20 mms for the ferrous alloy industry. Approximately 80.0% to 90.0% of the total production of metallurgical coke is consumed by us for our pig iron production and the remainder is sold to customers primarily located in India. The cost of the input coal blend is the single most important cost component for the production of coke. Our production consists primarily of low ash coking coal and we import 100.0% of low ash coking coal each year. In order to ensure a stable raw material supply, we have long-term supply contracts for the procurement of such coal. Electric power for us is supplied by our power unit which generates power from the waste heat of our metallurgical coke plant and the blast furnace gas from us. Vazare Plant On July 28, 2019, Vedanta Limited acquired Sindhudurg plant of Global Coke Limited which was under liquidation as per the IBC for a cash consideration of ₹ 335 million ($ 4 million) The assets acquired mainly included land, building and plant & machinery of similar value as the cash consideration. The acquisition complements backward integration opportunity for Company’s existing pig iron division and also increase the Company’s footprint in met coke market in south western part of India. The following table sets out the total rated capacities as of March 31, 2021 at our Amona and Vazare facility: | (a) | The reserve estimates have been prepared by the Geologists and Mining Engineers in accordance with JORC code. The estimates were independently audited by Roscoe Postle Associates Inc. in 2016. During fiscal year 2017 we extracted 11.9 million tons of reserves, with no addition by drilling and the reserves were assessed by the management. |
| | | | | | | | | | | | | Particulars | | Rated capacity | | | Metallurgical Coke | | | Pig Iron | | | Power | | | | (tpa) | | | (tpa) | | | (MW) | | Amona Plant | | | 522,000 | | | | 832,000 | | | | 60 | | Vazare Plant | | | 120,000 | | | | — | | | | — | |
Production | (b) | Ore reserves are estimated at a variablecut-off grade based on ore type; the minimumcut-off grade was 30% Fe. |
| (c) | The ore bodies are of relatively significant size with good continuity of the mineralized zones and little internal dilution, the contacts are well constrained, free digging and diluting material can also carry grade. The iron ore is soft and there is hardly any loss or dilution while mining. Therefore no allowance for dilution is considered as it does not have material effect on reporting results. |
| (d) | The price used for India is $ 48.1 per ton for average iron grade of 58.0% iron content. |
During the year ended March 31, 2016, the Group recognized an impairment charge in respect of the exploratory assets in West Africa (Western Cluster, Liberia) on account of low iron ore prices,geo-political factors, and also due to the fact that there are no plans for any substantive expenditure given the continued uncertainty in the project. Therefore, the Company did not receive any certification of reserves and resources for the current period.
Amona plant
We commenced operations at the Amona plant in Goa in 1992 and have been engaged in the manufacture and sale of pig iron since then. Our metallurgical coke plant at Amona produces a range of coke fractions from over 70 mm for foundries, 20 mms to 60 mms for blast furnaces and 6 mms to 25 mms for the ferrous alloy industry. Approximately 80 to 90.0% of the total production of metallurgical coke is consumed by us for our pig iron production and the remainder is sold to customers primarily located in India. The cost of the input coal blend is the single most important cost component for the production of coke. Our production consists mainly of low ash coking coal and we import 100.0% of low ash coking coal each year. In order to ensure a stable raw material supply, we have long-term supply contracts for the procurement of such coal. Electric power for us is supplied by our power unit which generates power from the waste heat of our metallurgical coke plant and the blast furnace gas from us.
The following table sets out the total rated capacities as of March 31, 2017 at our Amona facility:
| | | | | | | | | | | | | | | Rated capacity | | | | Metallurgical Coke | | | Pig Iron | | | Power (mw) | | | | (tpa) | | | | | Amona Plant | | | 522,000 | | | | 832,000 | | | | 60 | |
Production
The table below sets out our total production of saleable ore for fiscal years 2015, 2016 and 2017:
| | | | | | | | | | | | | | | | | | | Year Ended March 31 | | Mine/Mine Type | | Product | | 2015 | | | 2016 | | | 2017 | | | | | | (Millions Dry Metric tons) | | Goa(open-pit)(1) | | Iron ore | | | — | | | | 2.0 | | | | 7.8 | | Sesa Resources Limited(open-pit)(1) | | Iron ore | | | — | | | | 0.2 | | | | 1.0 | | A. Narrain(open-pit) | | Iron ore | | | 0.6 | | | | 3.0 | | | | 2.1 | | | | | | | | | | | | | | | | | | | | | | Total iron Ore | | Iron ore | | | 0.6 | | | | 5.2 | | | | 10.9 | | | | | | | | | | | | | | | | | Amona Plant | | Metallurgical coke | | | 0.50 | | | | 0.48 | | | | 0.48 | | | | Pig iron | | | 0.61 | | | | 0.66 | | | | 0.71 | |
Note:
The table below sets out our total production of saleable ore for fiscal years ended on March 31, 2019, 2020 and 2021: (1) | On April 21, 2014, the Supreme Court of India lifted the suspension with certain exceptions. We have worked with the state government and obtained the necessary clearances and have resumed our operations in fiscal year 2016. |
(2) | Our iron ore mines in Liberia are in the exploration stage and therefore there has been no production from these mines in the last three fiscal years. |
| | | | | | | | | | | | | | | | | | | Year Ended March 31 | | Mine/Mine Type | | Product | | 2019 | | | 2020 | | | 2021 | | | | | | (Millions Dry Metric tons) | | Goa (open-pit) | | Iron ore | | | 0.24 | | | | — | | | | — | | Sesa Resources Limited (open-pit) | | Iron ore | | | — | | | | — | | | | — | | A. Narrain (open-pit) | | Iron ore | | | 4.12 | | | | 4.36 | | | | 5.02 | | | | | | | | | | | | | | | | | Total iron Ore | | Iron ore | | | 4.36 | | | | 4.36 | | | | 5.02 | | | | | | | | | | | | | | | | | Amona Plant | | Metallurgical coke | | | 0.50 | | | | 0.43 | | | | 0.45 | | | Pig iron | | | 0.69 | | | | 0.68 | | | | 0.60 | | Vazare Plant | | Metallurgical coke | | | — | | | | 0.04 | | | | 0.04 | |
Principal Raw Materials o | Iron ore operations.operations |
There are no direct raw materials used in our iron ore mining and processing operations. Indirect raw materials include power, fuel and lubricants. We procure these indirect materials from various vendors. The electricity required for our operations is supplied by the government grid and supplemented by our owned and hired diesel generator sets. The prices of fuel and necessary lubricants are volatile and the price of power is dependent on tariffs imposed by state governments. o | Pig iron operations.operations The principal raw materials for the manufacture of pig iron are iron ore, metallurgical coke, limestone and dolomite. Iron ore is largely sourced from mines in Karnataka and Goa. The iron ore is transported from Karnataka by truck and railway rakes and from Goa by truck.
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The principal raw materials for the manufacture of pig iron are iron ore, metallurgical coke, limestone and dolomite. Iron ore is largely sourced from mines in Karnataka and Goa. The iron ore is transported from Karnataka by truck and railway rakes and from Goa by truck barges. Iron ore requirements are met through supplies from our own mines, and through purchases from other mines in Karnataka and Goa. Our metallurgical coke requirements are met by supplies from our metallurgical coke division. Limestone and dolomite are purchased from mines in Karnataka and transported to us by trucks. o | Metallurgical coke. The principal raw materials for the manufacture of metallurgical coke are hard and semi-hard coking coals. These raw materials are imported from various international suppliers mainly from Australia. Power.Electricity for our metallurgical coke and pig iron manufacturing operations is supplied by captive power plant, which generates power from the waste gases of our metallurgical coke plant and the blast furnace.
Distribution, Logistics and Transport
Our mining operations are advantageously located in Goa and are complemented by an efficient transportation network. In order to achieve higher volume and loading capacities and vessels with higher drafts, we and Sesa Resources Limited own and operate transfer vessels, which are used formid-stream loading at Goa. We ship our products from ports on the west coast of India and so, the annual monsoon season in Goa impacts our distribution operations from June to September. We maintain a network of rail cars, barges and transhippers that are primarily used to facilitate the export of our ore to foreign customers. Our fleet includes 33 barges with capacities between 1,600 to 2,500 tons per barge. We also have two transhippers and a floating crane station with a combined rated capacity of up to 54,000 ton per day.
Sales from our Karnataka mines to Indian domestic customers take place on anex-mine basis, and the transportation is handled by the customer.
Sales and Marketing
Sesa Goa Iron Ore is India’s largest producer and exporter of iron ore in the private sector with operations in the states of Goa and Karnataka in India and a project site in Liberia, West Africa. At present, China is our major buyer in the export market, and high iron ore inventories at Chinese major ports are being looked at as a catalyst that will change the course for fiscal year 2018 and the year next for iron ore prices.
Pig iron. Currently, the majority of the pig iron produced by us is sold within India to foundries and steel mills. The sale of pig iron is generally done on a spot basis with prices valid for a month. The prices of pig iron are fixed on a delivered basis, with material generally being sent on afreight-to-pay basis.
Metallurgical coke. Currently, all of the metallurgical coke produced by us is sold primarily within India to foundries, pig iron producers, ferrous alloys producers and cement plants. Approximately 80.0% to 90.0% of our total metallurgical coke production during fiscal year 2017 was used for the production of pig iron. The balance was sold in the domestic Indian market.
The sale of metallurgical coke to other customers is done on a spot basis with prices valid for a month. Contracts with some ferrous alloy producers are on a quarterly orbi-monthly basis, where the quantity, grade and price are fixed.
We have a marketing office at Panaji in Goa with indenting agents to sell our pig iron and metallurgical coke products. Our sales and chartering needs are managed from the office at Goa.
Our ten largest customers accounted for approximately 40.6%, 28.5% and 39.7% of revenue for iron ore business in fiscal years 2015, 2016 and 2017, respectively. No customer accounted for greater than 10.0% of our revenue in fiscal year 2017 and 2016. One customer accounted for greater than 10.0% of our revenue in fiscal year 2015.
Market Share and Competition
The primary export market for Goa iron ore is China. The total sales of iron ore for fiscal year 2017 was 10.1 million dmt. Domestic sales of iron ore for fiscal year 2017 was 3.6 million dmt, and total exports for fiscal year 2017 was 6.5 million dmt. Out of the total sales in fiscal 2017, 26.7% was from Karnataka mines and the remaining 73.3% was from Goa. The limit set by the environmental clearances is 20 MT for Goa and 30 MT for Karnataka.
Our primary competitors in both the public and private sectors in India include National Mineral Development Corporation, Metals and Minerals Trading Corporation of India Limited, Rungta Mines Limited, Mineral Sales Private Limited and Essel Mining and Industries Limited. In addition, our international competitors include Fortescue Metal Group, Sierra Leone, Vale, BHP Billiton Limited, and Rio Tinto.
Since 2003, we have been India’s largest exporter of iron ore in the Indian private sector by volume, prior to the temporary suspension of mining activities relating to iron ore in the states of Goa and Karnataka, according to the Federation of Indian Mineral Industries. Total sales including sales of confiscated ore purchased throughe-auction, was 5.3 million dmt in fiscal year 2016 and 10.1 million dmt in fiscal year 2017.
Seasonality
Our iron ore mining operations are affected by changes in weather conditions, particularly heavy rains. Goa, where the majority of our iron ore mining operations are located, experiences monsoon seasons, which usually occurs from early June to early October. During the monsoon season, restricted barge movements result in significantly lower exports through the Mormugao port in Goa, where our iron ore is shipped to customers. We attempt to mitigate the effects of the monsoon season by concentrating on mine development and extracting larger quantities of overburden waste during the monsoon season in order to permit speedier extraction of iron ore during the dry season. In addition, during the monsoon season, we typically conduct annual maintenance at our processing plants and our other mining machinery.
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The principal raw materials for the manufacture of metallurgical coke are hard and semi-hard coking coals. These raw materials are imported from various international suppliers primarily from Australia. Power Electricity for our metallurgical coke and pig iron manufacturing operations is supplied by captive power plant, which generates power from the waste gases of our metallurgical coke plant and the blast furnace. Distribution, Logistics and Transport Sales from our Karnataka mines to Indian domestic customers take place on an ex-mine basis, and the transportation is handled by the customer. Sales and Marketing Due to regulatory restrictions our entire iron ore from Karnataka has to be sold domestically. Pig iron - Currently, the majority of the pig iron produced by us is sold within India to foundries and steel mills. The sale of pig iron is generally done on a spot basis with delivery schedule over the month. The prices of pig iron are fixed on a both delivered and ex-works basis, with material being sent on a freight-to-pay and prepaid basis. Metallurgical coke - Approximately 80.0% to 90.0% of our total metallurgical coke production during fiscal year 2021 was used for the production of pig iron. The balance was sold in the domestic Indian market to foundries, pig iron producers, ferrous alloys producers and zinc producers as well as export market. The sale of metallurgical coke to the other customers is done on a spot basis with delivery schedule over the month. We have a marketing office in Goa to sell our pig iron and metallurgical coke products. Our sales and chartering needs are managed from the office at Goa. Our ten largest customers accounted for approximately 42.7%, 45.28% and 56.64% of revenue for iron ore business in fiscal years, 2019, 2020 and 2021 respectively. No customer accounted for greater than 10.0% of our revenue in fiscal year 2019. One of the customer accounted for more than 10.0% of our revenue in fiscal year 2020 and two customers accounted for more than 10% of our revenue in fiscal year 2021. Market Share and Competition The total sales of iron ore for fiscal year 2021 was 6.5 million dmt. Domestic sales of iron ore for fiscal year 2021 was 4.4 million dmt, and total exports for fiscal year 2021 was 1.95 million dmt. Out of the total sales in fiscal year 2021, 69.1% was from Karnataka mines and the remaining 30.9% was from Goa. Our primary competitors in both the public and private sectors in India include National Mineral Development Corporation, , Rungta Mines Limited, Mineral Sales Private Limited and Essel Mining and Industries Limited. In addition, our international competitors include Fortescue Metal Group, Sierra Leone, Vale, BHP Billiton Limited, and Rio Tinto. Seasonality Our iron ore mining operations in Karnataka are not substantially affected by seasonality. Our Copper Business Overview Our copper business is principally one of custom smelting and includes a smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three captive power plants at Tuticorin in southern India, a refinery and twoa copper rod plantsplant and three blister/secondary material processing plant at Silvassa in western India, a precious metal refinery, a doré anode plant and a copper rod plant at Fujairah in the UAE. In addition, we own the Mt. Lyell copper mine in Tasmania, Australia. AsThe Government of Tamil Nadu has issued orders dated May 28, 2018 with a customdirection to permanently seal the existing copper smelter we buy copper concentrateplant unit atLME-linked prices Tuticorin. Separately, SIPCOT vide its letter dated May 29, 2018, cancelled 342.22 acres of the land allotted to us for copper less a TcRc that is negotiated with suppliers. We sell refined copper atLME-linked pricesthe proposed expansion project, which has been stayed by High court of Madras. Further the TNPCB issued orders on June 7, 2018 directing the withdrawal of the Consent to Establish, which was valid till March 31, 2023. The Company has filed appeal before the Appellate Tribunal of the TNPCB challenging the withdrawal of the said Consent to Establish. The Company had filed writ petitions before Madras High Court challenging the various orders passed against the company in 2018 and the domestichearing was concluded on January 8, 2020. On August 18, 2020, the Madras High Court delivered the judgement wherein it dismissed the Writ Petitions filed by the Company. The Company has approached the Supreme Court and export markets. We receive a discount from our suppliers, inchallenged the formsaid High Court order by way of a TcRc, whichSLP to Appeal and also filed an interim relief for care and maintenance of the plant. The matter was then 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. The matter is influenced by global copper concentrate demand, supplynow listed for hearing on August 17, 2021. Further, considering the voluminous nature of copper smeltingdocuments and refining capacity, LME trends,LME-linked price participationpleadings, the matter shall be finally heard on merits See “Item 8 - Financial Information - A. Consolidated Statements and other factors. We source our copper concentrate from various global suppliers and our mine.
In recent years, we have improved the operating performance of our copper business by improving operational efficiencies and reducing unit costs, including reducing power costs by constructing a captive power plant at Tuticorin. We intend toOther Financial Information - Legal Proceedings.” for further improve the operating performance of our copper business by continuing to reduce unit operating costs through improvements in recovery rates, lowering power and transport costs, achieving economies of scale and the achievement of other operational efficiencies.details.
Principal Products Our copper cathodes are square shaped with purity levels of 99.9% copper. These cathodes meet international quality standards and are registered as LME “A” grade. The major uses of copper cathodes are in the manufacture of copper rods for the wire and cable industry and copper tubes for consumer durable goods. Copper cathodes are also used for making alloys like brass, bronze and alloy steel, with applications in transportation, electrical appliances and machines, defense and construction. Our copper continuous cast rods meet all the requirements of international quality standards including the ASTM B 49: 2010 or the BS EN 1977:1998 standards. Our copper rods are currently used primarily for power and communication cables, transformers and magnet wires. We produce sulphuric acid at our sulphuric acid plant through conversion of sulphur dioxide gas that is generated from the copper smelter. A significant amount of the sulphuric acid produced at the Tuticorin smelter is consumed by our phosphoric acid plant in the production of phosphoric acid, and the remainder is sold to fertilizer manufacturers and other industries. We produce phosphoric acid at our phosphoric acid plant by chemical reaction of sulphuric acid and rock phosphate, which we import. Phosphoric acid is sold to fertilizer manufacturers and other industries. We produce anode slimes from the copper refining process that contain gold and silver which we currently sell primarily to Fujairah and balance to third parties. We sell the anode slimes to Fujairah Gold FZC as the doré anode plant has been shifted to our precious metal refinery at Fujairah. Gypsum and slag areby-products of our copper smelting operations which we sell to third parties. Supply of Copper Concentrate As a custom smelter, we source a significant majority of our copper concentrate from third party suppliers at the LME price less a TcRc. DuringThe smelter at Tuticorin has been closed during the fiscal year 2017, no2019, therefore Copper Anodes and Blister has been procured from external sources for production of copper concentrate was sourced from our own minecathode in Tasmania, Australia. All of the copper concentrate used in our operations, whether from our own mine or from third party suppliers, is imported through the port of Tuticorin and transported by road to our smelter at Tuticorin.Silvassa Refinery. Delivery to Customers The copper cathodes, copper rods, sulphuric acid, phosphoric acid and otherby-products such as gypsum are shipped for export or transported by road to customers in India. Principal Facilities Principal FacilitiesMt. Lyell Mine - Tasmania
Our Copper Mine
The following map shows the location of the Mt. Lyell mine in Tasmania: ![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page99.jpg)
Overview![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040655812.jpg)
The Mt. Lyell mine is located at Queenstown, Australia. It comprises of an underground copper mine and a copper processing facility and is owned and operated by CMT. The Mt. Lyell mine is owned and operated under the terms and conditions as stipulated in mining leases 9M/2013 (previously 1M95) and 10M/2013 (previously 5M95) granted by the state government of Tasmania. Mining lease 9M/2013 was granted on January 1, 1995 for a period of 15 years and the mining lease 10M/2013 was granted on February 1, 1995 for a period of 14 years and 11 months. Both leases have been renewed for a period of 18 years and are valid up to December 30, 2027. The mine is also covered by the Copper Mines of Tasmania (Agreement) Act 1999, which, in conjunction with an agreement between the state government of Tasmania and CMT entered into pursuant to that Act, limits CMT’s environmental liabilities to the impact of current operations, thereby insulating CMT from any historical legacy claims. The operation of Mt Lyell mine was suspended in January 2014, following a mudslide incident. Monte Cello acquired CMT in 1999 from Mt. Lyell Mining Company Limited when Mt. Lyell Mining Company Limited entered into voluntary administration due to hedging difficulties. We acquired Monte Cello, and CMT, from Twin Star’s subsidiary in 2000. The principal deposits in the Mt. Lyell region are all of the volcanic disseminated pyrite-chalcopyrite type, which accounts for 86.0% of the known ore in the region. The geology of the Mt. Lyell mine consists of a series of intercalated felsic to mafic-intermediate volcanics. Lithologies are highly altered quartz-sericite-chlorite volcanics with individual units delineated largely by the relative abundance of phyllosilicates. Volcaniclastic and rhyolitic lithologies occur sporadically throughout the sequence, as does pervasive iron mineralization in the form of haematite, magnetite and siderite. Chalcopyrite is the principal ore mineral and occurs chiefly in higher grade lenses enveloped by lower grade halos. The overall structure of Mt. Lyell is that of a steeply dipping overturned limb of a large anticline. The hanging wall (stratigraphic footwall) of the ore body consists of weakly mineralized chloritic schists with disseminated pyrite. The footwall is sharply defined by the Great Lyell Fault—Owen Conglomerate contact which truncates the ore body at its southern end. The Mt. Lyell mine is under care and maintenance following a rock falling on the ventilation shaft in June 2014. The western tharsis deposit lies to the west of the Prince Lyell ore body. Additional targets include Tasman and Crown, Glen Lyell, Copper Clays and NW Geophysics. The tailings dam is a valley-fill type and excess water is discharged via a spillway. The water quality is sampled before the water is released from the site. The tailings dam was raised as CMT’s accepted closure plan is to flood the tailings. The processing plant is approximately 3031 years old and has been partially refurbished following CMT’s acquisition with the addition of crushers, a float cell and a regrind mill at the surface. The condition of the process plant is ageing but is well maintained to ensure it remains in safe and efficient condition. Power at the mine is supplied through an electricity supply agreement with Aurora EnergyTasNetworks Proprietary Limited and Hydro Tasmania Proprietary Limited. The net value of fixed assets, including capitalwork-in-progress was approximately AUD 4.512.1 million ($5.9 9 million) respectively,and AUD 6 million as of March 31, 2017.2021 and March 31, 2020 respectively. At the time of finalization of reserve statement as on March 31, 2017,2021, no mineral reserves have been determined due to government statutory restrictions imposed post the mud slide incident in January 2014. Our Smelter and Refineries
2. | Our Smelter and Refineries |
Overview The following table sets forth the total capacities as of March 31, 2017 at our Tuticorin and Silvassa facilities:
| | | | | | | | | | | | | | | | | | | | | | | | | | | Capacity | | Facility | | Copper Anode(1) | | | Copper Cathode(2) | | | Copper Rods(2) | | | Sulphuric Acid(3) | | | Phosphoric Acid(3) | | | Captive Power | | | | (tpa) | | | (tpa) | | | (tpa) | | | (tpa) | | | (tpa) | | | (MW) | | Tuticorin | | | 400,000 | | | | 235,000 | | | | 96,000 | | | | 1,300,000 | | | | 230,000 | | | | 191.5 | | Silvassa | | | — | | | | 215,000 | | | | 172,000 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 400,000 | | | | 450,000 | | | | 268,000 | | | | 1,300,000 | | | | 230,000 | | | | 191.5 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes:
(1)(i) | Copper anode is an intermediate product produced by copper smelters and is not sold to customers. It is used for the production of copper cathode by copper refineries. Approximately one ton of copper anode is required for the production of one ton of copper cathode. |
(2) | Copper cathode is used as a starting material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods. |
(3) | Sulphuric acid is used as a starting material for phosphoric acid. Approximately 2.8 tons of sulphuric acid are required for the production of one ton of phosphoric acid. |
Tuticorin |
Our Tuticorin facility, established in 1997, is located in Tamil Nadu in southern India. Our Tuticorin facility currently consists of a 400,000 tpa copper smelter, a 235,000246,000 tpa copper refinery, a 96,000 tpa copper rod plant, a 1,300,000 tpa sulphuric acid plant, a 230,000 tpa phosphoric acid plant and three captive power plants with capacities of 7.5 MW, 24.0 MW and 160.0 MW. The coal based power plant of 160 MW is primarily used for captive consumption and we have also entered into a Tuticorin facility will meet most of the facility’s power purchase agreement withrequirements once the Tamil Nadu Electricity Board for selling power in excess over the captive consumption. Presently, the captive power plants have a total capacity of 191.5 MW, excluding the 15 MW power generating power plant shiftedproposed expansion to HZL for the Pantnagar operations. Further, we also have a 5 MW of power generated from a smelter waste heat boiler. Coal for the 160 MW power plant800,000 tpa is imported, and our other captive power plants at Tuticorin operate on furnace oil.complete.
The smelter at the Tuticorin facility utilizes IsaSmeltTMfurnace technology. The refinery uses IsaProcessTMtechnology to produce copper cathode and the copper rod plant uses Properzi Continuously Cast and Rolled, copper rod technology from Continuus-Properzi S.p.A.spa., Italy, to produce copper rods. InOn March 29, 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regardingabout a noxious gas leak by local residents. On April 1, 2013, weVedanta Limited (then Sterlite Industries India Limited) filed a petitionan application in the National Green TribunalNGT challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The National Green Tribunal passed an interim orderNGT ordered in Mayfavour of Vedanta Limited on August 8, 2013 allowing the copper smelterclearing all allegations raised against Vedanta Limited with respect to recommence operations subject to certain conditions. We recommenced operations on June 16, 2013. The expert committee constituted by the National Green Tribunal submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards and based on this report, the National Green Tribunal ruled on July 15, 2013 that the copper smelter could remain open and reserved its final order. The National Green Tribunal has also directed the company to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule.gas leak incident. However, the TNPCB filed a civil appeals in 2013 against the order of NGT.
TNPCB granted renewal of the CTO to the existing Copper Smelter which was valid till March 31, 2018. The application for renewal of CTO from April 1, 2018 for existing copper smelter, required as per procedure established by law, was rejected by TNPCB vide rejection order dated April 9, 2018. The Company then filed an appeal before the TNPCB Appellate Authority challenging the rejection order. During the pendency of the appeal, TNPCB vide its order dated May 23, 2018 ordered closure of existing copper smelter plant and disconnection of power supply with immediate effect. Further, the Government of Tamil Nadu, issued orders dated May 28, 2018 with a direction to seal the existing copper smelter plant permanently. Consequently, TNPCB issued another notice dated May 28, 2018 directing sealing and closure of the unit. The Company believes these actions by the authorities were not taken in accordance with the procedure prescribed under applicable laws. Subsequently, the Directorate of Industrial Safety and Health passed orders dated May 30, 2018, directing the immediate suspension and revocation of the Factory License and the Registration Certificate for the existing smelter plant. Then the Company had appealed before the NGT, Principal Bench. Hearing the appeal, the NGT has referred the matter to an Independent Committee presided by retired Chief Justice of the Meghalaya High Court along with one expert member each from MoEF&CC and Central Pollution Control Board (CPCB) which heard all the affected parties including Company and through the reports produced on the issue of environmental compliance as well as the impact on inhabitants as perceived or actual. The Independent Committee visited the plant in September 2018 and heard TNPCB as well as Vedanta Limited’s defence on the violations pointed out by TNPCB for rejection of CTO renewal application and heard interveners supporting and opposing reopening of Sterlite Copper and State authorities and TNPCB. The NGT through an order dated December 15, 2018 has set aside the impugned orders passed by State of Tamil Nadu and TNPCB and directed TNPCB to pass fresh orders of renewal of consent and authorization to handle hazardous substances, subject to appropriate conditions for protection of environment in accordance with law within three weeks from this order date. It has also allowed to restore electricity for operations of the plant. The order is subjected to Vedanta Limited complying with certain directions as specified in the order. Meanwhile, Madurai bench of Madras High Court ordered to maintain ‘Status quo’ till January 21, 2019 in response to a Public Interest Litigation (PIL) filed by one of the Tuticorin resident challenging the order of NGT. This Public Interest Litigation (PIL) was later withdrawn in light of appeal filed before Supreme Court by State of IndiaTamil Nadu and TNPCB. The State of Tamil Nadu and TNPCB approached Supreme Court in Civil Appeals on January 2, 2019 challenging the judgment of NGT dated December 15, 2018 and this appeal was clubbed with the previously filled appeal by TNPCB against the interimNGT order dated August 8, 2013. The Supreme Court heard all the parties during January and February 2019 on maintainability as well as merits. The Supreme Court vide its judgment dated February 18, 2019 set aside the judgments of the National Green Tribunal. OnNGT dated December 15, 2018 and August 8, 2013 solely on the National Green Tribunal upheld its interim orderbasis of May 31, 2013, and allowed our smeltermaintainability holding that the same were not maintainable before NGT. The Supreme Court did not venture into the merits of the matter. The Supreme Court gave the Company liberty to continue operation subject to implementing all the recommendations and suggestions given by the National Green Tribunal. We have implemented all the recommendations during fiscal year 2013. However, the TNPCB filedapproach Madras High Court for filing a notice of appealwrit petition against the orders challenged in aforesaid appeals before NGT. The Supreme Court also indicated mentioning the matter before Chief Justice of Madras High Court for an expeditious hearing considering that the Company’s plant has been shut for a long period and the Company is exporting a product which is an important import substitute. The Company then filed a writ petition before Madras High Court challenging the various orders passed against the Company in 2018 and 2013. The case was heard on March 1, 2019 wherein the Company pressed for interim relief for care and maintenance of the National Green Tribunal.plant. No interim relief was granted to the company. The appeals are pending beforeHigh Court Division Bench proceeded to hear the Green bench ofmatter on a continuous basis, as a specially ordered case. The hearings were concluded on January 8, 2020. On August 18, 2020, the Madras High Court delivered the judgement wherein it dismissed the Writ Petitions filed by the Company. The Company approached the Supreme Court and challenged the said High Court order by way of India. See “Item 8. Financial Information - A. Consolidated Statementsa SLP to Appeal. The SLP was admitted on August 31, 2020 wherein the court had directed the parties to file their counters and Other Financial Information – Legal Proceedings - Writ petitionsrejoinders if any. Subsequent to the same, the counter affidavits and the rejoinders were filed against us alleging violationby the parties and the matter was listed on November 16, 2020 wherein Vedanta Limited had informed the court for a need to look at a workable approach and an option to resume the plant operations (at least on a trial basis so that allegations of pollution could be checked). Pursuant to the same an IA was filed by the Company. The Matter was then listed on December 2, 2020 before Supreme Court Bench comprising of Justices Rohinton Nariman, Naveen Sinha & K M Joseph. 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. In a subsequent development, the State and TNPCB had filed an SLP as well, but on the limited point of expunging of certain air, waterparas in the Madras HC judgement, wherein adverse remarks were made against the state government officials and hazardous waste management regulations atTNPCB officials. Matter was listed on January 21, 2021 wherein we had also appeared. The State TNPCB SLP has been clubbed with our Tuticorin plant”main SLP matter. During hearing, judge also indicated that physical hearing will start soon. We mentioned the matter before the bench on March 18, 2021, wherein the bench posted the matter for additional information.final hearing on August 17, 2021. The company filed an IA for interim access to plant for care and maintenance and also sought the running of the Oxygen plant to support the nation during the COVID crisis. Vide orders dated April 27, 2021, the Supreme Court allowed the operation of the Oxygen Plant on a stand-alone basis under the supervision of a committee. The orders are valid till July 31, 2021 and may be extended depending on the situation prevailing then. The company has moved an application giving the status of the Oxygen Plant operations. Silvassa Our Silvassa facility, established in 1997, is located in the union territory of Dadra and Nagar Haveli in western India. Our Silvassa facility currently consists of a 215,000133,000 MT of blister/secondary material processing plant which is developed by converting its existing two rod plants, a 216,000 tpa copper refinery plant, and two copper rod plantsa new Copper Rod Mill with a totalan installed capacity of 172,000258,000 tpa of copper rods.that was commissioned in October, 2019. Its refinery uses IsaProcessTM technology in the production of copper cathode and its copper rod plants use ProperziContirod technology to produce copper cathode rods technology.wire rods. Our Silvassa facility draws on the state power grid to satisfy its power requirements. Capacities The following table sets forth the total capacities as of March 31, 2021 at our Tuticorin and Silvassa facilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | Capacity | | Facility | | Copper Anode(1) | | | Copper Cathode(2) | | | Copper Rods(2) | | | Sulphuric Acid(3) | | | Phosphoric Acid(3) | | | Captive Power | | | | (tpa) | | | (tpa) | | | (tpa) | | | (tpa) | | | (tpa) | | | (MW) | | Tuticorin(4) | | | 400,000 | | | | 246,000 | | | | 96,000 | | | | 1,300,000 | | | | 230,000 | | | | 191.5 | | Silvassa | | | 175,000 | (6) | | | 216,000 | | | | 258,000 | (5) | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 575,000 | | | | 462,000 | | | | 354,000 | | | | 1,300,000 | | | | 230,000 | | | | 191.5 | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Copper anode is an intermediate product produced by copper smelters and is not sold to customers. It is used for the production of copper cathode by copper refineries. Approximately one ton of copper anode is required for the production of one ton of copper cathode. |
(2) | Copper cathode is used as an input material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods. |
(3) | Sulphuric acid is used as a starting material for phosphoric acid. Approximately 2.8 tons of sulphuric acid are required for the production of one ton of phosphoric acid. |
(4) | Currently the operations are suspended as detailed above. |
(5) | Silvassa New CCR plant with a capacity of 258,000 tpa commissioned in October 2019. |
(6) | In the fiscal year 2020, with new technology intervention, the company has converted its two rod plants into blister/secondary material plant with an installed capacity of 133,000 MT of Anode production per annum. During the year, these plants have produced secondary material of 95,000 tons which further supported the refinery at Silvassa in Copper Cathodes |
Fujairah Fujairah Gold FZC is located in the Fujairah Free Zone 2. Our Fujairah facility is strategically located on the coast of the Arabian Sea. The precious metal refinery was commissioned in March 2009 and began production in April 2009, with a capacity of 20 tons of gold and 105 tons of silver. Outotec oyj,Oyj, Finland, supplied the technology for the precious metal refinery. Fujairah Gold FZC commissioned a copper rod plant at a project cost of $ 12.9813 million, with an annual capacity of 12.5 tons per hour with production having commenced in May 2010 and generated a production of 83,27857,993 metric tons of rod, 6,37335 kilograms of gold and 77,5145,180 kilograms of silver in fiscal year 2017.2021. Continuus Properzi S.p.A.,spa, Italy, has supplied the rod mill equipment for this project, and the copper cathode required for the copper rod plant is being sourced from the smelters of the Vedanta Group and third parties. The doré anode plant that was shifted from Tuticorin to Fujairah was commissioned in June 2012 for smelting of “anode slime” to “doré anode” which is the raw material for the precious metal refinery. Production Volumes The following table sets out our total production from Tuticorin and Silvassa for fiscal years ended March 31, 2015, 20162019, 2020 and 2017:2021: | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | Facility | | Product | | 2015 | | | 2016 | | | 2017 | | | | | | (tons) | | Tuticorin(1) | | Copper anode(2) | | | 361,839 | | | | 387,016 | | | | 400,620 | | | | Sulphuric acid(3) | | | 1,006,692 | | | | 1,070,786 | | | | 1,043,802 | | | | Phosphoric acid(3) | | | 189,353 | | | | 198,779 | | | | 200,119 | | | | Copper cathode(4) | | | 194,019 | | | | 201,864 | | | | 216,119 | | | | Copper rods(4) | | | 53,400 | | | | 68,685 | | | | 71,178 | | Silvassa | | Copper cathode(4) | | | 168,353 | | | | 182,183 | | | | 186,611 | | | | Copper rods(4) | | | 116,939 | | | | 142,115 | | | | 136,352 | | Total | | Copper anode | | | 361,839 | | | | 387,016 | | | | 400,620 | | | | Copper cathode | | | 362,372 | | | | 384,047 | | | | 402,730 | | | | Copper rods | | | 170,339 | | | | 210,799 | | | | 207,530 | | | | Sulphuric acid | | | 1,006,692 | | | | 1,070,786 | | | | 1,043,802 | | | | Phosphoric acid | | | 189,353 | | | | 198,779 | | | | 200,119 | |
Notes:
| | | | | | | | | | | | | | | | | Facility | | Product | | Units | | For the Year Ended March 31, | | | 2019 | | | 2020 | | | 2021 | | Tuticorin(4) | | Copper anode(1) | | Tons | | | 4 | | | | — | | | | — | | | Sulphuric acid(2) | | Tons | | | — | | | | — | | | | — | | | Phosphoric acid(2) | | Tons | | | 182 | | | | — | | | | — | | | Copper cathode(3) | | Tons | | | 2,873 | | | | — | | | | — | | | Copper rods(3) | | Tons | | | 2,282 | | | | — | | | | — | | Silvassa | | Copper cathode(3) | | Tons | | | 86,644 | | | | 77,487 | | | | 101,435 | | | Copper rods(3) | | Tons | | | 108,915 | | | | 100,216 | | | | 122,390 | | Fujairah | | Rod | | Metric ton | | | 82,627 | | | | 68,865 | | | | 57,993 | | | | Gold | | Kg | | | 814 | | | | 33 | | | | 35 | | | | Silver | | Kg | | | 10,640 | | | | 2,700 | | | | 5,180 | |
(1) | There was a planned annual shutdown of the Tuticorin smelter for 22 days in the first quarter of fiscal year 2015. |
(2) | Copper anode is an intermediate product produced by copper smelters and is not sold to customers. It is used for the production of copper cathode by copper refineries. Approximately one ton of copper anode is required for the production of one ton of copper cathode. |
(3)(2) | Sulphuric acid is used as a starting material for phosphoric acid. Approximately 2.8 tons of sulphuric acid are required for the production of one ton of phosphoric acid. |
(4)(3) | Copper cathode is used as a starting material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods. |
(4) | Currently the operations are suspended as detailed above. |
Since Mt. Lyell mine has been placed under care and maintenance following a rock falling on the ventilation shaft in June 2014, there was no copper extraction from these mines for fiscal years ended March 31 2015, 20162019, 2020 and 2017.2021. Principal Raw Materials Overview The principal inputs of our copper business are copper concentrate, rock phosphate, power, fuel and sulphuric acid. Other inputs include coke, lime, reagents and oxide ore. We have in the past been able to secure an adequate supply of the principal inputs for our copper production. Copper Concentrate Copper concentrate is the principal raw material of our copper smelter. In fiscal year 2017, we sourced 97.49% ofWe source our copper concenterateconcentrate requirements from third party suppliers, either through long-term contracts or on spot markets. The remainder of our copper concenterate requirements was fulfilled from Konkola Copper Mines. We purchase copper concentrate at the LME price less a TcRc that we negotiate with our suppliers but which is influenced by the prevailing market rate for the TcRc. We expectThe smelter at Tuticorin has been closed during the percentage we purchasefiscal year 2019, therefore copper anodes and blister has been procured from third party suppliers to also increaseexternal sources for production of copper cathode in future periods to the extent we seek to increase our copper smelting and refining capacity.Silvassa Refinery. In general, ourVedanta Limited’s long-term agreements run for a period of three to five years,years; and are renewable at the end of the period. The quantity of supply for each contract year is fixed at the beginning of the year and terms like TcRc and freight differential are negotiated each year depending upon market conditions. For copper blisters and anodes, the long term agreements are limited to a period of one year. In fiscal year 2017,2021, we sourced approximately 62.27%72.28% of our copper concentrateanodes / blister requirements through long-term agreements. WeVedanta Limited also purchasepurchases copper concentrate on a spot basis to fill any gaps in ourits requirements based on production needs for quantity and quality. These deals are struck on the best possible TcRc during the period and are specific for short-term supply. In fiscal year 2017, we sourced approximately 37.73% of our copper concentrate requirements through spot purchases.
Rock Phosphate In fiscal year 2017, the majority ofVedanta Limited’s rock phosphate wasis sourced primarily from Jordan at spot prices. Vedanta Limited is currently exploring the sourcing of rock phosphate from countries such as Morocco, Nauru, Togo, Algeria and Israel to diversify its supply base.
Power The electricity requirements of our copper smelter and refinery at Tuticorin are primarily met by theon-site captive power plants. This plant uses coal that is imported from third parties. Our other captive power plants at Tuticorin operate on furnace oil that is procured through long-term contracts with various oil companies. During fiscal year 2021, no power was consumed for production purpose as the plant at the Tuticorin has been closed since FY 2019. We have outsourced theday-to-day operations and maintenance of our captive power plants at Tuticorin. Our Silvassa facility relies on the state power grid for its power requirements. Distribution, Logistics and Transport Copper concentrate sourced from third parties is received at the port of Tuticorin and then transported by road to the Tuticorin facility. Once processed at the Tuticorin facility, copper anodes are either refined at Tuticorin or transported by road to Silvassa. The smelter at Tuticorin was closed since the fiscal year 2019 and has not reopened. Accordingly, we have been procuring Copper Anodes and Blister from external sources for production of copper cathode in Silvassa Refinery. Copper cathodes, copper rods, sulphuric acid, phosphoric acid and otherby-products are shipped for export or transported by road to customers in India. Sales and Marketing The 10 largest customers of our copper business accounted for approximately 32.8%45.5%, 30.6%40.6% and 47.8%47.61% of our copper business revenue in fiscal years 2015, 20162019, 2020 and 2017,2021 respectively. One of our customer accounted for greater than 10% of copper business revenue in fiscal year 2017. None of our customers accounted for greater than 10.0% of copper business revenue in fiscal years 2015 and 2016. Our copper sales and marketing head office is located in Mumbai, and we have field sales and marketing offices in most major metropolitan centers in India. We sell our copper rods and cathodes in both the domestic and export markets. In fiscal years 2015, 20162019, 2020 and 2017,2021 exports accounted for approximately 41.8%24.3%, 38.0%29% and 55.5%7.58% of the revenue of our copper business, respectively. Our export sales were primarily to China, Japan, Indonesia, Malaysia, Vietnam, Europe, Turkey, UAE, MexicoQatar, Belgium, Nepal and Taiwan. We also sell phosphoric acid and otherby-products in both the domestic and export markets. Domestic sales are normally conductedmade on the basis of a fixed price for a given month that we determine from time to time onprevailing LME prices as selected by the basis of average LME price for the month, as well as domestic supply and demand conditions.customer. The price for copper we sell in India is normally higher than the price we charge in the export markets due to the tariff structure on costs, smaller order sizes that domestic customers place and the packaging, storing and truck loading expenses that we incur when supplying domestic customers. Our export sales of copper are made on the basis of both long-term sales agreements and spot sales. The sales prices of our copper exports include the LME price plus a producer’s premium. We do not enter into fixed price long-term copper sales agreements with our customers. Market Share and Competition We own one of the two custom copper smelters in India and had a 36% primary market share of 20% by sales volume in India in fiscal year 2017, according to International Copper Association (India).India. The other major custom copper smelter in India is owned by Hindalco Industries Limited, with the remainder of the primary copper market in India primarily served by imports and Hindustan Copper Limited. Copper is a commodity product and we compete primarily on the basis of price and service, with price being the most important consideration when supplies of copper are abundant. Our metal products also compete with other materials, including aluminiumAluminium and plastics that can be used in similar applications byend-users. Copper is sold directly to consumers or on terminal markets such as the LME. Prices are established based on the LME price, though as a regional producer we are able to charge a premium to the LME price which reflects the cost of obtaining the metal from an alternative source. Projects and Developments We have ongoingVedanta Limited had undertaken expansion projects to setup a copperCopper smelter plant II at Tuticorin costing ₹ 44,240 million ($ 605 million) to increase its total copper capacity to 800,000 tpa, which costs Rs. 16,820tpa.
Vedanta Limited has incurred ₹ 8,645 million ($ 259.4118 million). on these projects as of March 31, 2021. However, the expansion of the smelter was temporarily put on hold due to pending environmental clearances. The application for renewal of the Environmental Clearance for the proposed Expansion Project has expired on December 31, 2018. We receivedmade a fresh application dated March 12, 2018 before the Expert Appraisal Committee of the MoEF&CC 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 May 23, 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 September 23, 2018. In the interim, the High Court ordered the Company to cease construction and all other activities on site for the proposed Expansion Project with immediate effect. Separately, State Industries Promotion Corporation of Tamil Nadu (“SIPCOT”) vide its letter dated May 29, 2018, cancelled 342.22 acres of the land allotted to us for the proposed Expansion Project. Further the TNPCB issued orders on June 7, 2018 directing the withdrawal of the CTE which was valid till March 31, 2023. Hearing the case of expansion project, Madras High Court vide its order dated October 3, 2018 has granted an interim stay in favour of the Company against order of SIPCOT dated May 29, 2018, cancelling 342.22 acres of the land allotted to us. The MoEF&CC 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 MoEFthe State Government/ District Collector, Thoothukudi. The existing EC has expired on December 31, 2018. We had applied for fresh environmental clearance in May 2015February 2018, but the application was not processed citing the pending litigation. Presently the EC application file has been closed by MoEF&CC. The Company has also filed Appeals before the TNPCB Appellate Authority challenging withdrawal of CTE by the TNPCB. The matter is pending for hearing and consent to establishment fromis listed for filing of counter by TNPCB foron August 4, 2021. During the copper smelter in November 2016. Onfiscal year 2020, the basisCompany has recognised a provision on impairment on its expansion project of clearances and consents received, we are in the process of restarting the project activities for the copper smelter plant. We incurred Rs. 5,635₹ 6, 692 million ($ 86.991 million) on these projects as of March 31, 2017. We funded these projects primarily from the proceeds of the convertible senior notes issued in fiscal year 2010..
Our Aluminium Business Our aluminium business is in Chhattisgarh and Odisha. We operate the business in the state of Chhattisgarh through BALCO, in which we have a 51.0% ownership interest, whereas our aluminium operations in Odisha were previously operated through Vedanta Aluminium, which was merged into Vedanta Limited pursuant to theRe-organization Transactions. Overview Our aluminium business in Chhattisgarh is owned and operated by BALCO. BALCO’s partially integrated aluminium operations are comprised ofcomprises two bauxite mines, the Chotia coal block, 14101,710 MW power plants, an alumina refinery the operations(operations of which havehad been suspended since September 2009,2009), a 245,000 tpa aluminium smelter, and a 325,000 tpa aluminium smelter (for which 50% capacity is commissioned as on March 31, 2017) and a fabrication facility, all of which are located in Korba in the State of Chhattisgarh in centralCentral India. BALCO’s operations benefit from relatively cost effective access to power, the most significant cost component in aluminium smelting due to the power intensive nature of the process. This is, to a considerable extent, as a result of BALCO being an energy-integrated aluminium producer. BALCO’s Bodai-Daldali bauxite mines provide a majorityis located in Kawardha district of the bauxite required for BALCO’s smelters. The bauxiteChhattisgarh. Bauxite is transferred to our alumina refinery in Lanjigarh, which converts bauxite to alumina and supplies the alumina back to BALCO. In return, BALCO for payment of apays conversion price by BALCO to us which is based on our actual cost of production plus a reasonable margin. The remainderBalance of the BALCO’s alumina requirements isare sourced from third parties.parties and from Vedanta Limited on sale basis at Arm’s length price. Mining operations at Bodai-Daldali bauxite mine located in the Kawardha district have been suspended since April 2020 as low ore quality has rendered operations becoming uneconomical. BALCO’s other bauxite mine is the Mainpat bauxite mine, which is anopen-pit bauxite open pit mine located in the Surguja district of the state of Chhattisgarh. The Mainpat mine has been in production since 1993. The miningMining lease of the Mainpat mine has been renewed and is valid until July 8, 2042. During fiscal year 2020, mining operations were disrupted and under temporary suspension since October 11, 2019 as ore quality rendered operations uneconomical. We own a 51.0% ownership interest in BALCO and have management control of the company. On March 19, 2004, we exercised an option to acquire the remaining ownership interest in BALCO, which is owned by the GoI. The exercise of this option has been contested by the GoI. See “-Options to Increase Interests in HZL and BALCO” for more information. Principal Products Primary aluminium is produced from the smelting of metallurgical grade alumina. BALCO produces primary aluminium in the form of ingots and wire rods for sale. Ingots are used extensively for aluminium castings and fabrication in the construction and transportation industries. Wire rods are used in various electrical applications, especially in the form of electrical conductors and cables. Rolled products, namely coils and sheets, are value-added products that BALCO produces from primary aluminium. Rolled products are used for a variety of purposes in different industries, including manufacturing of aluminium foil, manufacturing, printing, transportation, consumer durables, building and architecture, electrical and communications, packaging and general engineering industries. Delivery to Customers Ingots, wire rods and rolled products are transported by trucks to customers in India and by rail and trucks to ports for export. Principal Facilities Overview The following map shows details of the locations of BALCO’s facilities in the State of Chhattisgarh: ![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page105.jpg) ![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040656066.jpg)
Bauxite Mines
Chhattisgarh Mines – Mainpat and Bodai-Daldali BALCO has two captive bauxite mines, namely the Mainpat bauxite mine and the Bodai-Daldali bauxite mine, in the state of Chhattisgarh in centralCentral India. The Mainpat mine is anopen-pit bauxite mine located in the Surguja district of Chhattisgarh. The Mainpat mine has been in production since 1993 and has a leased hold area of 6.39 square kilometers. The bauxite extraction limit for the mine granted by MoEF&CC is 750,000 tpa. The miningMining lease of Mainpat mine has been renewed until July 8, 2042, and environmental clearances for the Mainpat mine has been renewed by the MoEF&CC and is valid until September 16, 2038. BALCO had applied for a renewal of forest clearancesclearance for the forest landco-terminus withfor the mining lease period, which is valid until July 8, 2047.2042. During fiscal year 2020, mining operations were disrupted and under temporary suspension since October 11, 2019 as ore quality rendered operations uneconomical. The Bodai-Daldali deposits are located approximately 260 kilometers from Korba in the Kawardha district of the state of Chhattisgarh. Bodai-Daldali was commissioned in 2004 by BALCO with a lease hold area of 6.36.26 square kilometers renewable mining lease that is valid until March 26, 2047. The bauxite extraction limit for Bodai-Daldali Mines granted by MoEF&CC is 1,250,000 tpa. The Chhattisgarh bauxite deposits are situated over a plateau with steep scarps on both sides, at an elevation of approximately 1,040 meters above the mean sea level for Mainpat, and approximately 940 meters above the mean sea level for Bodai-Daldali. The bauxite is generally one meter to three meters thick and lies within a laterite sequence overlying thick tertiary basalts of the Deccan traps. The cover of laterite and thin topsoil is up to 5 meters thick but is generally less than 2 meters. The bauxiteMajorly, the Bauxite outcrops around much of the plateau rims.
A typical profile of the Chhattisgarh deposits comprises topsoil and soft overburden above the laterite. The upper laterite consists of hard, loose or indurated bauxite pebbles and boulders with a clear contact with the underlying hard bauxites. The bauxite occurs in discontinuous lenses up to four meters in thickness with laterite infilling joints and fractures with the bauxite. The contact with the softer lower laterite is usually gradational and irregular. The bauxite ranges from hard to very hard with a natural moisture content of 5.0%3.0% to 10.0%, anin-situ density of 2.3 tons to 2.4 tons per cubic meter. It comprises primarily gibbsite with bohemite and minor diaspore. The reactive silica content is low and iron is present in the form of hematite and aluminous goethite. The average grade of the bauxite is approximately 43.6% aluminium oxide and silica levels of 5.1% as of March 31, 2017. All mining and transportation at both mines are undertaken by contractors. One thin top soil layer is removed by an excavator and is either transported to an adjacent storage point or an area that is being backfilled. The laterite layer is drilled and blasted. The overburden is then removed by backhoe, excavators and15-ton dumpers. Broken ore is hand-sorted, leaving waste material behind. Ore productivity is around 2 to 3 tons per person per day in the dry season which decreases to 1.25 to 1.75 tons per person per day in the wet season. The current exploration drilling program has been completed and the entire area is covered based on a50-meter square pattern and is reduced to a25-meter centers for detailed mine planning. Sampling is normally in 0.4 meter lengths and core is currently split and retained for future reference. Bauxite samples are tested for silica and aluminium oxide at laboratories situated on site and at the Korba plant. Selected sample arere-assayed as part of a quality control program. Since the commencement of operations, the Mainpat mine has produced approximately 7.58.13 million tons of bauxite. During fiscal year 2017 there was production totaling approximately 73,7102020, the mine produced 55,700 tons at 43.6% aluminium oxide. Power and water requirements at Mainpat are minimal and can be supplied by smallon-site diesel generators and from boreholes in the mine. As of March 31, 2017, BALCO estimates reserves at Mainpat to be 5.1 million tons and the remaining mine life of the Mainpat mine to be approximately 6 to 7 years based on (i) reserves; and (ii) planned production which is determined on the basis of alife-of-mine plan.bauxite until October 2019. Thereafter, mining operations were temporarily suspended as ore quality rendered operations uneconomical.
Total production at the Bodai-Daldali mine since the commencement of production has been 78.47 million tons of bauxite, with production in fiscal year 20172020 totaling approximately 1,065,300469,800 tons at 46.7%44.53% aluminium oxide.oxide and there is no production in fiscal year 2021. Power is supplied byon-site by state electricity board (CSPDCL) and diesel generatorsgenerators. Water requirement for mines is fulfilled by surface water from rain water harvesting and ground water provides the water requirements for the mine. As of March 31, 2017, BALCO estimates the reservespond developed at Bodai-Daldali to be 2.41 million tons and the remaining mine life to be approximately 2 years based on (i) reserves; and (ii) planned production which is determined on the basis of alife-of-mine plan. Thecut-off grade used to define the reserves at BALCO’s mines was 38.0%.
In fiscal year 2017, all mining and transportation of the bauxite was done by contractors and the total cost for this was Rs. 2,485 ($ 38.3) per ton of bauxite.
Based on current costs and historical prices, BALCO’s operations are forecasted to remain profitable and therefore the deposits at the Mainpat and Bodai-Daldali mines fulfill the requirements for being classified as reserves. The reserves as of March 31, 2017 at BALCO’s mines at Mainpat and Bodai-Daldali have been determined by verifying that the integrated operation is economic at an aluminium price of $ 1,723 per ton.mines.
The mining recovery factors applied to determine the reserves for both mines are 65.0%. from ore. The grade dilution factor is reconciliationreconciled between the actual mined / dispatched grades obtained andin-situ grade values. The grade correction / dilution factors applied for Mainpat and Bodai-Daldali Bauxite mines are Al2O3 – 97%, SiO2 – 103% and Al2O3 – 97%, SiO2 – 103% respectively.. The parameters for Mainpat Mines are derived from the reconciliation of actual production against the geological model, while the parameters for Bodai-Daldali are based on estimates. In fiscal year 2017, there was no stripping ratio at the Mainpat mine as there was no ore extraction during the year, while the stripping ratio at the Bodai-Daldali mine was 1:6.37. The stripping ratio for the remaining reserves at Mainpat is 2.55 tons of waste per ton of ore, while at the Bodai-Daldali mine, it is 1.74 tons of waste per ton of ore. Stripping ratio is the ratio of the volume of waste material required to be handled in order to extract some volume of ore.
Summary of Bauxite Mine Reserves
The following table sets out BALCO’s proven and probable bauxite reserves as of March 31, 2017:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mines | | Proven Reserves | | | Probable Reserves | | | Total Proven and Probable Reserves | | | SSL Interest | | | Reserve Life | | | | Quantity | | | Alumina | | | Silica | | | Quantity | | | Alumina | | | Silica | | | Quantity | | | Alumina | | | Silica | | | % | | | (years) | | | | (in million tons) | | | (%) | | | (%) | | | (in million tons) | | | (%) | | | (%) | | | (in million tons) | | | (%) | | | (%) | | | | | | | | Mainpat | | | 5.10 | | | | 43.34 | | | | 4.43 | | | | — | | | | — | | | | — | | | | 5.10 | | | | 43.34 | | | | 4.43 | | | | — | | | | 6-7 | | Bodai-Daldali | | | 2.41 | | | | 43.61 | | | | 5.16 | | | | — | | | | — | | | | — | | | | 2.41 | | | | 43.61 | | | | 5.16 | | | | — | | | | 1-2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 7.51 | | | | 43.43 | | | | 4.66 | | | | — | | | | — | | | | — | | | | 7.51 | | | | 43.43 | | | | 4.66 | | | | 51 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Additional information:
(1)(i) | The estimate of reserves, were audited by Geo Solutions Private Limited, presented incorporate the losses for mine dilution and mining recovery according to the JORC code.Korba Facility |
(2) | Thecut-off grade used with our reserve estimates for bauxite is 38.0%. |
(3) | The metallurgical recovery factor for bauxite at both Mainpat and Bodai-Daldali is 65.0%. |
(4) | The commodity price for evaluation of reserves is $ 1,723 per ton for bauxite and the currency conversion factor that was used to estimate our reserves was Rs. 64.97 per US dollar. |
(5) | The reserve quantities disclosed are for the entire mine and our share in the reserve quantities is 51.0%. |
Korba Facility
Overview BALCO’s Korbasmelting facility is located at Korba in the state of Chhattisgarh and consists of a 245,000 tpa aluminium smelter and a 325,000 tpa aluminium smelter, (for which 50% capacity is commissioned as on March 31, 2017), 14101,710 MW captive power plants, and an alumina refinery (non-operational)and fabrication facility. DuringOut of the year, CPP 6001,710 MW, 540 MW captive power plant was commissioned in March 2006 and 900 MW was commissioned andin fiscal year 2016. The remaining 270 MW power plant was transferred from power business to aluminum business on April 1, 2016.2016 (Presently, the 270 MW power plant is under suspension) and one unit of 300 MW was converted from IPP to CPP from April 1, 2017 vide order dated January 1, 2019. BALCO now has only one 300 MW power unit operating as Independent Power Plant (reported in the Power segment). The following table sets forth the total capacities as of March 31, 20172021 at BALCO’s Korba facility: | | | | | | | | | | | | | | | Capacity | | Facility | | Alumina | | | Aluminium | | | Power plant | | | | (tpa) | | | (tpa) | | | (MW) | | Korba | �� | | 200,000 | | | | 245,000 | | | | 1,140 | | Korba (under construction) | | | | | | | 162,500(1) | | | | | |
Notes:
| | | | | | | | | | | | | | | Capacity | | Facility | | Alumina | | | Aluminium | | | Power plant | | | | (tpa) | | | (tpa) | | | (MW) | | Korba | | | 200,000 | | | | 245,000 | | | | 1,710 | | Korba (New smelter) | | | — | | | | 325,000 | (1) |
(1) | For the 325,000 tpa smelter, 84 pots were operationalized during fiscal year 2015. An additional 84 pots were operationalized during fiscal year 2017 and the remaining 168 pots commenced commercial production from May 1, 2017. |
Refinery Commissioned in 1973, uses the conventional high pressurehigh-pressure Bayer process and has a capacity of 200,000 tpa of alumina. The operations of the refinery have stopped since September 2009. Smelters Previously, there were two aluminium smelters. The first smelter was commissioned in 1975, and used the Vertical Stud Soderberg technology to produce aluminium from alumina and had a capacity of 100,000 tpa. In response to global economic conditions and a decline in commodity prices, starting in February 2009, BALCO suspended part of its operations at the 100,000 tpa aluminium smelter at Korba. Operations at this aluminium smelter ceased on June 5, 2009. The second smelter usespre-baked GAMI technology and has a capacity of 245,000 tpa, was commissioned in November 2006. BALCO is in the process of settinghas set up a 325,000 tpa smelter at the Korba facility, forof which 84 pots of which commenced commercial production in September 2014. An additional 84 pots were operationalized in August 2016 and the remaining 168 pots commenced commercial production on May 1, 2017.
Fabrication Facility The fabrication facility at Korba has two parts, a cast house and a sheet rolling shop. Cast House The cast house uses continuous rod casters from Continuus-Properzi S.P.A and has a foundry which has twin-roll continuous casters with a SNIF degasser and hydraulically driven semi-continuous ingot casting machine to produce ingots and wire rods. Sheet Rolling Shop The sheet rolling shop has three parts: a hot rolling mill with a capacity of 75,000 tpa, an older cold rolling mill with a capacity of 30,000 tpa and a newer cold rolling mill commissioned in 2004 with a capacity of 36,000 tpa. Molten metal is cast into slabs and then eitherhot-rolled and sold ashot-rolled sheets or converted into cold-rolled sheets in the cold rolling mills. Alternatively, molten metal is directly used in strip casting and then fed to the cold rolling mills to convert it into cold-rolled sheets or coils. Power Plants Smelting requires a substantial continuous supply of power and interruptions can cause molten metal to solidify and damage or destroy the pots. Power for the Korba facility is for the most partmostly provided by the coal-based 540 MW captive power plant commissioned in March 2006. The surplus generation from the power plant is supplied to the State Electricity Board and other customers. 270 MW power plant was transferred from power business to aluminium business on April 1, 2016.2016 (presently the 270 MW power plant is under suspension). BALCO constructed a CPP 600900 MW coal-based thermal power facility in the state of Chhattisgarh. The power generated from CPP 600900 MW (3 units of 300 MW each) units is being utilized in the 325,000 tpa smelter. One of the 3 units of 300 MW was converted to CPP from April 1, 2017 vide order dated January 1, 2019. Thermal coal is a key raw material required for the operation of BALCO’s captive power plants. In fiscal year 2016, 83% of the allocatedThe major coal was supplied fromsupplier in India is Coal India Limited against a FSA for 810MW. BALCO also entered into a FSA for 26 lacs mtpa withand its subsidiaries (mainly, South Eastern Coalfields Limited for IPP 600 MW duringLimited) and coal mined from the captive Chotia coal block. The balance coal requirements is met from imports. The total volume of coal consumed annually by coal-fueled power plants is largely dependent on the amount of generation. During fiscal year 2016. On October 7, 2016, BALCO entered into another FSA of 3.25 mtpa for 1140 MW captive power plant (comprising of CPP 5402021, total coal consumed by 135 x 4 MW and CPP 600 MW) for a term of five years. BALCO realized 81% of contracted coal quantity of IPP 600300 x 3 MW power plants was 2.34 million and CPP 1140 MW each. Further, BALCO was successful in securing the Chotia coal block as part of an auction process conducted by the GoI.4.46 million tons respectively. Production Volumes The following table sets out BALCO’s total production from its Korba facility for fiscal years ended March 31, 2015, 20162019, 2020 and 2017:2021: | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | Facility | | Product | | | 2015(2) | | | 2016 | | | 2017(3) | | | | | | | (tons) | | Korba | | | Ingots/Busbar/Billets | | | | 104,650 | | | | 93,442 | | | | 202,769 | | | | | Rods | | | | 172,464 | | | | 217,650 | | | | 205,277 | | | | | Rolled products | | | | 46,807 | | | | 20,526 | | | | 19,033 | | | | | | | | | | | | | | | | | | | | | | | | Total(1) | | | | | | | 323,921 | | | | 331,618 | | | | 427,079 | | | | | | | | | | | | | | | | | | |
Notes:
| | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | Facility | | Product | | | 2019 | | | 2020 | | | 2021 | | | | | | | (tons) | | Korba | | | Ingots/Busbar/Billets | | | | 285,325 | | | | 315,813 | | | | 3,74,867 | | | | | Alloy Ingots | | | | 35,654 | | | | 44,693 | | | | 46,185 | | | | | Rods | | | | 224,133 | | | | 172,002 | | | | 1,18,691 | | | | | Rolled products | | | | 26,119 | | | | 28,831 | | | | 29,864 | | | | | | | | | | | | | | | | | | | Total(1) | | | | | | | 571,231 | | | | 5,61,338 | | | | 5,69,607 | | | | | | | | | | | | | | | | | | |
(1) | Reflects total of ingots, rods and rolled products. |
(2) | Includes production of 23,393 tons from the trial run of 325,000 tpa smelter. |
(3) | Includes production of 46,716 tons from the trial run of 325,000 tpa smelter. |
The following table sets out the total bauxite ore production for each of BALCO’s mines for fiscal years ended March 31, 2015, 20162019, 2020 and 2017:2021: | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | Mine (Type of Mine) | | Product | | | 2015 | | | 2016 | | | 2017 | | | | | | | (tons, except for percentages) | | Mainpat(Open-pit) | | | Bauxite ore mined | | | | — | | | | 455 | | | | 73,170 | | | | | Ore grade | | | | — | | | | 47.7% | | | | 43.6% | | Bodai-Daldali(Open-pit) | | | Bauxite ore mined | | | | 860,710 | | | | 1,033,300 | | | | 1,065,300 | | | | | Ore grade | | | | 46.8% | | | | 46.9% | | | | 46.7% | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | | | | 860,170 | | | | 1,033,755 | | | | 1,138,470 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | Mine (Type of Mine) | | Products | | | 2019 | | | 2020 | | | 2021 | | | | | | | (tons, except for percentages) | | Mainpat (Open pit) | | | Bauxite ore mined | | | | — | | | | 55,700 | | | | — | | | | | Ore grade | | | | — | | | | 42.60 | | | | — | | Bodai-Daldali (Open pit) | | | Bauxite ore mined | | | | 462,000 | | | | 469,800 | | | | — | | | | | Ore grade | | | | 45.70 | % | | | 44.53 | % | | | — | | | | | | | | | | | | | | | | | | | Total | | | | | | | 462,000 | | | | 525,500 | | | | — | | | | | | | | | | | | | | | | | | |
Principal Raw Materials The principal inputs of BALCO’s operations are alumina, power, carbon and certain other raw materials. BALCO has inIn the past, Vedanta Limited has been able to secure an adequate supply of the principal inputs for its aluminium business. Alumina is the primary raw material used in the production of aluminium. Our Lanjigarh refinery supplies majority of theBALCO sources its alumina requirements (after converting the bauxite supplied by BALCO to thefrom Lanjigarh refinery). BALCO currently sources all of its remaining aluminaand from third-party suppliers in international markets. The alumina sourced externally is metallurgical grade calcined alumina with a minimum alumina content of 98.6% on a dry basis. In fiscal years 2015, 20162019, 2020 and 2017,2021, BALCO purchased 317,7017.7 million tons, 299,3758.02 million tons and 447,8839.17 million tons of imported alumina at an average price of $ 374,500, $ 323373 and $ 314326 per ton respectively, on a cost, insurance and freight or CIF basis at the port of Vizag, Kakinada and Gangavaram,ports in Andhra Pradesh in India. Smelting primary aluminium requires a substantial, continuous supply of electricity. As a result, power is a key input at BALCO’s Korba facility, where it is provided by three coal-based captive power plants of 270 MW (currently under suspension), 540 MW and CPP 900 MW (one unit of 300 MW was converted from IPP to CPP from April 1, 2017 vide order dated January 1, 2019 taking it from 600 MW.MW to 900 MW). Our captive power plant has historically been dependent upon coal allocations from Coal India Limited. The company received another coal block known asBALCO acquired the Chotia coal block through ane-auction. The total reserves at the Chotia block are 17.217.9 million tons with an annual production capacity of one million tons. However, based on changes proposed in the mining methodology in Mining Plan 4th Revision (with effect from April 2019), the balance extractable reserve was re-assessed as 19.66MT and during FY 2019-20, 1.0MT coal was produced from Chotia II, reducing the on date extractable coal reserve to 18.66MT and no major coal production (only 0.002 MT produced) in this FY 21 due to ongoing pandemic situation. BALCO’s total coal requirement at full capacity is approximately 106 million tons. Hence, the Chotia coal block can meet 10% of the total coal requirement.tons for power generation for smelting. Power for BALCO’s captive bauxite mines isare provided byon-site diesel generators. BALCO has constructed a CPP 6001,200 MW coal-based thermal power facility, which wasall the four units were commissioned during fiscal year 2016 and the last unit commenced commercial production on May 1, 2016. TheOf the 1,200 MW facility, power generated from CPP 600three 300 MW units is utilized insupplied to the 325,000 tpa smelter.smelter and the power from the balance 300 MW units is sold to third parties (reported in power segment). Water is also an important input for BALCO’s captive power plants. BALCO sources its water requirements at Korba from a nearby canal, with the water transported by pipelines. BALCO is currently in a dispute with the National Thermal Power Corporation (“NTPC”) regarding the right of way for its water pipeline that supplies water to its 270 MW captive power plant, which has been built through National Thermal Power Corporation premises. Arbitration proceedings commenced in 2009BALCO invoked the arbitration clause and the order was reserved on June 30, 2014. BALCO and National Thermal Power Corporation submitted a joint survey report to the arbitrator.Sole Arbitrator has been appointed. On the issue of easmentary rights, the arbitratorLd. Arbitrator issued anits final award dated January 11, 2016 in favorfavour of BALCO and rejected all counter claims of the National Thermal Power Corporation. The National Thermal Power CorporationNTPC. NTPC has challenged the said award by filing an application under sectionSection 34 before the Hon’ble High Court of Delhi which was listed for admission on May 5, 2016 and the court has ordered for issuance of notice. The next hearing will take place on August 29, 2017. BALCO has also filed theSection 34 application under section 34 before the Hon’ble High Court of Delhi with respect to claims, which were rejected by the arbitrator whichLd. Arbitrator. The next hearing will take place on July 27, 2021 on both the applications. Presently, the 270 MW power plant is to be listed in due course. In addition, BALCOunder suspension and any adverse order will not affect smelter operations. However, the Company has a water supply arrangement ofagreement valid for 30 years from July 29, 2011 for 13 million cubic meters for 540 MW and on December 22, 2015, BALCO entered into a new water contract valid for 30 years with a local body for 25 million cubic meters per annum for the 540IPP of 300 MW power plant and 28 million cubic meters per annum for the 1200CPP of 900 MW power plant, ofcollectively, which 21 million cubic meters of water allotment has been received until March 31, 2017. See “Item 3. Key Information-D. Risk Factors—Risks Relating to Our Business- Our operations are subject to risks that could result in decreased production, increased cost of production and increased cost of or disruptions in transportation, which could adversely affect our revenue, results of operations and financial condition.”fully allotted. Carbon is an important raw material to the aluminium smelting process. Carbon is used in the process of electrolysis, in the form of cathodes and anodes, with the latter the biggest component of BALCO’s carbon costs.anodes. Anodes are made up of carbonaceous material of high purity. Forpre-baked anodes, green carbon paste made of calcined petroleum coke and coal tar pitch is compacted or pressed into the required form. These anodes are baked before their use in electrolytic cells, or pots. BALCO hasin-house facilities to manufacture carbon anodes to meet its entire carbon anode requirements. Calcined petroleum coke, coal tar pitch and fuel oil which are the key ingredients for the manufacture of carbon anodes, are sourced primarily from the Indian market.anodes. There is an adequate supply of these raw materials in India, though theirdomestically as well as globally. Their prices are generally determined by movements in global prices. At times, basedprices and local regulations. Based on commercial comparison, orders for import are also placed. advantages, we source from several suppliers in India and globally.BALCO also uses other raw materials such as fluorides and other chemicals. For these raw materials, there are several sources of supplies in the domestic and international markets and BALCO doeswe do not foresee any difficulty in securing supplies when needed. | • | | Distribution, Logistics and Transport |
Bauxite mined from the Mainpat and Bodai-Daldali mines is transported by road and rail to BALCO’s Korba facility.Lanjigarh alumina refinery for conversion to alumina. The alumina purchasedfrom Lanjigarh is delivered by rail to Korba. The alumina purchases from third party suppliers isare transported to the Korba facility by railocean shipping and ships.rail. BALCO’s aluminium products are transported from the Korba facility to domestic customers through a combination of road and rail and shipped for export. BALCO’s 10ten largest customers for aluminium accounted for approximately 47.0%53.07%, 58.4%53.6% and 59.7%53.2% of its revenue forfrom the aluminium business in fiscal years 2015, 20162019, 2020 and 2017,2021 respectively. OneTwo of the BALCO’s customers accounted for greatermore than 16%15% of BALCO’s revenue in fiscal year 20172021 and two2020. Two of BALCO’s customers accounted for greatermore than 23.19%10% of BALCO’s revenue in fiscal year 2016. No customer accounted for greater than 10.0% of BALCO’s revenue in fiscal year 2015.2019. BALCO’s sales and marketing head office is located in Mumbai, and it has field sales and marketing offices in most major metropolitan centers in India. Currently, BALCO sells its products primarily in the Indian market, with limited focus on exports. However, with the further commissioning of the new 325,000 tpa aluminium smelter, a significant part of the additional production will be sold in theto both domestic and export market.markets. BALCO’s key customers include conductor manufacturers, state road transport corporations, railways, defense contractors, electrical equipment and machinery manufacturers.
Domesticmanufacturers among other customers. We follow an LME-based pricing and product-wise premiums for both our domestic and global customers. Our sales of primary aluminium are based on the London Metal Exchange (“LME”) aluminium cash settlement price and mainly Japanese port premiums. The majority of sales is from long term contracts and Memorandum of Understanding with end users. Our objective is to achieve LME of the month of the scheduled shipment average. Customers book the monthly quantity by the first day of the month and we hedge the same on LME. BALCO’s export sales of aluminium are currently on aboth spot and long term contract basis at a price based on the LME price plus a premium.long-term basis.
Projects and Developments On October 7, 2006, BALCO entered into a memorandum of understanding with the state government of Chhattisgarh, India, and the Chhattisgarh State Electricity Board, under which, among other things, feasibility studies will be undertaken to build a thermal coal-based 12001,200 MW power facility, along with an integrated coal mine in the state of Chhattisgarh at an estimated cost of Rs.₹ 46,500 million ($ 717.0636 million). The project was disrupted in September 2009 due to the collapse of a chimney under construction during heavy rains and lightning at Korba. There were 40 fatalities in the accident and SEPCO Electric Power Construction Corporation, our contractor and thesub-contractor Gamon Dunkerley and Company Limited, are the subject of an investigation by the Chhattisgarh government. The matternext hearing will be listed in due course. The lower court is scheduled to be heard on October 27, 2017.awaiting the order of the High Court. We instituted an enquiry which was conducted by the Indian Institute of Technology Rourkee,Roorkee, an expert in the civil engineering field in India. The project was resumed in January 2010. BALCO has constructed 12001,200 MW (300 MW x 4) thermal power plant. ThreeAll the four units of 300 MW each were commissioned during fiscal yearFiscal Year 2016 and the last unit was commissioned and commenced commercial production on May 1, 2016. In addition, on August 8, 2007, BALCO entered into a memorandum of understanding with the state government of Chhattisgarh for a potential investment to build an aluminium smelter with a capacity of 650,000 tpa at Chhattisgarh at an estimated cost of Rs.₹ 81,000 million ($ 1,249.01,107 million). The first of two phases of this project commenced with the setting up of a 325,000 tpa aluminium smelter at an estimated cost of Rs.₹ 38,000 million ($ 586.0520 million), which usespre-baked GAMI technology. BALCO has received environmental clearances for both phases of the project. Construction has commenced and trial production started in February 2014 from the 325,000 tpa aluminium smelter and 84 pots started commercial production from September 2014. During fiscal year 2017, company started commercial production from another 84 pots from August 1, 2016. Balance 168 pots are operationalized from May 1, 2017. As of March 31, 2017, the estimated cost of building theThe 1,200 MW power facility was completed and capitalized in all aspects in April 2016 and 325,000 tpa aluminium smelter and 1200 MW power facility is Rs. 107,500was fully capitalized in May 2017.
On May 13, 2021, the Board approved the expansion of Rolled Product Capacity from existing 50 KTPA to 130 KTPA at a cost of ₹ 3,480 million ($ 1,657.7 million). As of March 31, 2017, Rs. 100,301 million ($ 1,546.7 million) was spent.48 Million) which will improve the plant’s VAP capacity and overall premium. Market Share and Competition BALCO isFor the fiscal year 2021, the estimated market share for Vedanta (including BALCO) in India for aluminium was approximately 47% among the four primary aluminium producers of aluminium in India, and together with our aluminium business in Odisha, has a combined primary market share of 38.7% in fiscal year 2017, according to Aluminium Association of India. BALCO’s key competitors (and their respective primary market shares by volume in India in fiscal year 2017) are Hindalco Industries Limited (42.9%) and National Aluminium Company Limited, a GoI enterprise (18.4%).based on internal estimates.
Aluminium ingots, wire rods and rolled products are commodity products and BALCO competes primarily on the basis of price and service, with price being the most important consideration when supplies are abundant. Aluminium competes with other materials, particularly plastic, steel, iron, glass, and paper, among others, for various applications. In the past, customers have demonstrated a willingness to substitute other materials for aluminium.
Coal mining operations Thermal coal is a key raw material required for the operation of BALCO’s captive power plants. In September 2014, the Supreme Court of India canceled all the coal blocks that had been awarded to companies in India by the Ministry of Coal between 1992 and 2012. Consequently, in February 2015, the GoI conducted an auction to award mining rights to successful bidders for all such coal blocks. During the fourth quarter of fiscal year 2015, BALCO was successful in securing one coal mine known as the Chotia coal block in the GoI coal block auctions. The Chotia coal block was acquired to support BALCO’s captive power plants. BALCO was also successful in its bid for the Gare Palma IV/1 coal block, but the GoI challenged and rejected the award and BALCO does not intend to file any further petitions to appeal for its bid on the coal block. The Chotia coal block is located in Korba district in the state of Chhattisgarh. The total reserves at the Chotia block are 17.217.9 million tons with an annual production capacity of one million tons. However, based on changes proposed in the mining methodology in Mining Plan 4th Revision (with effect from April 2019), the balance extractable reserve was re-assessed as 19.66MT and during FY 2019-20, 1.0MT coal was produced from Chotia II, reducing the on date extractable coal reserve to 18.66MT and no major coal production (only 0.002 MT produced) in this FY 2021 due to ongoing pandemic situation. The following tables contain details of our coal mining operations. | 1. | The Chotia coal mine is divided into twosub-blocks, Chotia I and Chotia II. Both of these blocks are assigned to the existing captive power facilities at our BALCO operations. The estimates provided below are based on the DMT report. |
| | | | | | | | | Blocks | | Gross CV range (Min – Max) | | | Sulphur (%) | | | | Kcal/kg | | | | | Chotia I | | 3,565 | 3,785 - 6,476 | | | | 0.30-0.60 | (Total)* | Chotia II | | 3,967 | 3,600 - 6,152 | | | | 0.30 | (Total)* |
| * | Sulphur data is not available for all seams. Total is based only on available seam data. |
| 2. | This coal, which is thermal grade coal, would be blended with low GCV coal before being fed to the Boiler. |
| 3. | The extractable coal indicated is considering all losses. This number reflects the final tonnage of the mine. There is no plan of putting wash plant either at the mine site or at the plant as the coal is of high GCV. |
| | | | | | | | | | | | | | | | | Mine and Location
| | Means of Access | | Ownership | | Operator | | Title, leases or Options | | History | | Mine type and mineralization style | | Power
source | | Facilities, use and condition | Chotia Coal Mine, Tehsil-Podiuprodha District Korba StateState: Chhattisgarh
| | Public-Public road
Coal-Coal transported by road to BALCO plant in Korba District
Distance-Distance between mines and BALCO plant is 73 Km
| | BALCO-100%BALCO-100.0% | | MDO-Mode-MDO-Mode
Dhansar Engineering Company Private LimitedCurrently no MDO exists as mining operations are temporarily suspended due to COVID19.
| | Mining-Mining lease granted.
Mining-Mining lease is valid for 20 years
Lease-Lease executed on October16,October 16, 2015
Valid till-October-Valid until-October 15, 2035
| | Mines commenced coal production in 2006 (by prior allottee, M/s Prakash Industries Ltd.) However, BALCO commenced coal mining operations in 2015 | | Open-Open Cast and Underground
Opencast-Opencast is operational since 2006
No infrastructure is developed by (by prior allottee, for underground hence no coal production from underground mine
Thermal coal is mined from barakar formation of permian age of Gondwana supergroup
One single product is there which is low moisture thermal coalM/s Prakash Industries Ltd.)
| | Electricity is available from Rural Feeder of Chhattisgarh State Electricity Board | | Site office, explosive magazine, diesel pump, store, weigh bridge, residential complex is available at site | | | | | | | | | | | | | | | | | | | | | | -No infrastructure is developed by prior allottee for underground hence no coal production from underground mine. Mining Plan has been revised by BALCO accordingly. | | | | | | | | | | | | | | | | | | | | | | | | | | -Thermal coal is mined from barakar formation of permian age of Gondwana supergroup | | | | | | | | | | | | | | | | | | | | | | | | | | -Low moisture thermal coal | | | | |
We source coal from the following principal sources: Our OwnCaptive Coal MineBlock at Chotia – BALCO sources coal from its own coal mine which has annual coal production capacity of one million tons and BALCO produced 0.120.002 million tons and 0.181.0 million tons during fiscal year 20162021and 2020 respectively and 2017 respectively.0.67 million tons during fiscal year 2019. Other Sources – BALCO sources coal from other sources such as the GoI’s coal mining companies, long-term coal supply agreements with various state governments under power purchase agreements (‘PPA’s) and from imports. In fiscal year 2017,2021, the total coal purchased from these other sources was 7.078.0 million tons. The total volume of coal consumed annually by our coal-fueled power plants is largely dependent on the amount of generation and ranges between 9 million to 10 million tons.
For the year ended March 31, 2017, Vedanta Limited produced 0.18 million tons of coal from our only coal mine which is situated in Korba.
Set forth below is a map depicting the location of our coal properties for our coal mining operations: ![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page113.jpg) ![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040656351.jpg)
Set forth below are maps depicting access to Chotia coal blocks: ![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page113b.jpg)
![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040656633.jpg)
(b) Our Aluminium Business in Odisha Overview
Our aluminium business in Odisha was previously operated by Vedanta Aluminium Limited, which was merged with us pursuant to theRe-organization Transactions. Our Odisha aluminium operations include a 2.0 million tpa alumina refinery at Lanjigarh, with an associated 90 MW captive power plant. In addition, we We have a greenfield 500,000 tpa aluminium smelter (“Plant 1”), together with an associated 1,215 MW (nine units with a capacity of 135 MW each). We also have another 1,250,000 tpa smelter (“Plant 2”) facilities in Jharsuguda along with associated 1,800 MW (three units of 600 MW each) coal-based captive power plant in Jharsuguda. We are also setting up another 1,250,000The 1.25 million tpa aluminium smelter (“Plant 2”) in Jharsuguda. 84 pots from the first line of this smelter were commissioned during fiscal year 2015 and of which 80 pots were capitalizedinitially commenced its production on December 1, 2015 and a further ramp up commenced from April 1, 2016. During fiscal year 2017, a1,176 pots have been capitalized as of March 31, 2021. The 1.25 million tpa capacity is under ramp-up and once fully operational, it will take the total of 424 pots were capitalized. capacity at Jharsuguda to 1.75 million tpa. The alumina refinery at Lanjigarh was commissioned in March 2010 and produced 1,207,9571.84 million tons of alumina in fiscal year 2017. Greenfield smelter project of 500,000 tpa2021. The smelters at Jharsuguda was implemented in two phases of 250,000 tpa each. Phase 1 was completed on November 30, 2009 and Phase 2 was completed on March 1, 2010. Thereported cast metal production forof 1.40 million tons in fiscal year 20172021. The net power generation was 530,198 tons from Plant 1 and 170,388 tons production from Plant 2 and the net generation of the captive power plant was 7,8248,395 million units and 6,43611,230 million units from the 12151,215 MW power plant and 18001,800 MW power plant respectively.respectively in fiscal year 2021. Primary aluminium is produced from the smelting of metallurgical grade alumina.alumina in smelters. We produce primary aluminium in the form of ingots, primary foundry alloys, wire rods, billets and wire rodsslabs for sale. Ingots are used extensively for aluminium castings and fabrication in the construction and transportation industries. Primary foundry alloys find usage in automotive industries mainly. Wire rods are used in various electrical applications especially in the form of electrical conductors and cables. Billets are used extensively in construction (windows and door frames), transportation, engineering, consumer durables, automotive forgings and many other applications. Wire rodsSlabs are used generally in various electrical applications especially in the form of electrical conductorsrolling mills for manufacturing aluminium foil and cables.sheet products. Ingots, billets and wire rodsOur products are transported by trucks and rakerakes to customers in IndiaIndia. Exports are delivered through ocean shipping, and by rakesinland movement to ports for export. is typically by rakes.Ø | Principal Facilities Overview
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The following map shows the details of the locations of the aluminium segment’s facilities in the State of Odisha: ![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page115.jpg) ![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040658224.jpg)
The following table sets forth the capacities as on March 31, 20172021 at our Lanjigarh and Jharsuguda facilities: | | | | | Facility | | Capacity
tpa(tpa) | | Facility
| | | | | Lanjigarh Alumina Refinery | | | 2,000,000 | | Jharsuguda Aluminium Smelter | | | 500,000 | | Jharsuguda Aluminium Smelter (under construction)(partially completed) | | | 1,250,000 | |
Alumina refinery and captive power plant The Lanjigarh alumina refinery is located in the Lanjigarh district in the state of Odisha, which is located approximately 450 km from BALCO’s Korba facility in the state of Chhattisgarh.Odisha. In March 2007, we began the progressive commissioning of a 1 mtpa greenfield alumina refinery, expandable to 1.4 mtpa of installed capacity and an associated 75 MW captive power plant, expandable to 90 MW. The captive power plant is fully operational and can meet the power requirements of the refinery. The second production stream of the Lanjigarh alumina refinery was commissioned in March 2010. Production of alumina at the refinery at Lanjigarh was temporarily suspended since December 5, 2012, due to inadequate availability of bauxite and the plant recommenced operations on July 12, 2013. We are currently Initially in discussions with government authorities for sourcing adequate supply of bauxite. Production at the alumina refinery does not affect production at the smelters. We2008, we planned to expand our alumina refining capacity at Lanjigarh to 56 mtpa by constructing a second alumina refinery, with a refining capacity of 3 mtpa along withand construct an associated 210 MW captive power plant. The expansion of the alumina refinery and related mining operations in and around the Niyamgiri was put on hold in October 20, 2010, when the MoEF&CC directed us to hold from further expansion. Environmental
Against this order, we filed a writ petition in the High Court of Odisha and the Court dismissed our petition. We subsequently made an application to the MoEF&CC. The environmental clearance for the Lanjigarh expansion project was received on November 20, 2015 for up to 4 mtpa, and an additional environmental clearance for up to 6 mtpa will be received after the completion of land acquisition of the balance area of 666.03 HA. Further, a consent to establish for 4 mtpa and a consent to operate for 2 mpta wasmtpa has also been obtained. However, construction activities continue to be on hold and the management is evaluating the timing for resuming construction activities in Lanjigarh. As approvals for expansion from 2 mtpa to 4 mtpa of the Lanjigarh refinery to 4 mtpa has been received, second stream operations have commenced at the aluminaAlumina refinery from April 2016 and the debottlenecked capacity has reached 2.0 million tons per annum2 mtpa (although this is contingent on the bauxite quality). However, on February 18, 2016, an individual challenged the environmental clearance granted for the alumina refinery expansion at Lanjigarh before the NGT, Kolkata, wherein MoEF&CC, Odisha State Pollution Control Board and us have been made parties. and the matter remains sub judice for hearing and no stay has been granted of the environmental clearance. We continue to explore the feasibility of expanding our alumina refinery capacity, subject to bauxite availability and regulatory approvals. See “Item“Item 8. Financial Information—Information - A. Consolidated Statements and Other Financial Information – Legal Proceedings”Proceedings” for further details. Jharsuguda
Aluminium smelter and Captive Power Plant The JharsugudaWe have a greenfield 500,000 tpa aluminium smelter is located in Jharsuguda in the state of Odisha in India. Operations in the Jharsuguda facility were implemented in two phases. The first phase has a production capacity of 250,000 tpa and was completed in November 2009. The second phase was commissioned in June 2010. A total of 9 units of thetogether with an associated 1,215 MW (nine units with a capacity of 135 MW each). We also have another 1,250,000 tpa smelter facilities in Jharsuguda along with associated 1,800 MW (three units of 600 MW each) coal-based thermal captive power plant of 135 MW eachin Jharsuguda. The 1.25 million tpa smelter initially commenced its production on December 1, 2015 and 1,176 pots have been commissioned.capitalized as of March 31, 2021. The captive power plant units meet1.25 million tpa capacity is under ramp-up and once fully operational, it will take the power requirementstotal capacity at Jharsuguda to 1.75 million tpa. In this respect, the Board has approved 100 KTPA smelter expansion on May 13, 2021, along with investment in the railway infrastructure to sustain the increased volume and operation. Further, the 120 KTPA Billet capacity expansion project has been approved at a cost of ₹ 1,940 Million ($ 27 million) which will improve the Jharsuguda smelterVAP capacity and all other power requirements of this facility. We are also setting up a 1,250,000 tpa aluminium smelter and capitalized 80 pots also during fiscal year 2016. During fiscal year 2017, a total of 424 pots were capitalized. Power to the new smelter will be provided by our 1,800 MW power plant in Jharsuguda.overall premium.
Production Volumes
The following table sets out total production from our Lanjigarh and Jharsuguda facilities for fiscal years 2015, 20162019, 2020 and 2017:2021. The numbers reported for Jharsuguda are cast metal production volumes. | | | | | | For the year ended March 31 | | | | | | | | | | | | | | | (tons) | | | | | For the year ended March 31 | | Facility | | Product | | | 2015 | | | 2016 | | | 2017 | | | Product | | 2019 | | | 2020 | | | 2021 | | | | | | | (tons) | | Lanjigarh | | | Calcined alumina | | | | 976,915 | | | | 970,893 | | | | 1,207,957 | | | Calcined alumina | | | 1,500,670 | | | | 1,810,702 | | | | 1,840,894 | | | Jharsuguda | | | Ingots | | | | 303,756 | | | | 333,249 | | | | 474,288 | | | Ingots | | | 773,440 | | | | 792,890 | | | | 863,117 | | | | | Billets | | | | 115,979 | | | | 110,400 | | | | 146,023 | | | Primary Foundry Alloys | | | 12,548 | | | | 21,611 | | | | 11,371 | | | | | Wire rods | | | | 133,603 | | | | 139,184 | | | | 119,471 | | | Billets | | | 414,119 | | | | 309,088 | | | | 264,693 | | | | | Hot metal | | | | — | | | | 8,892 | | | | 46,541 | | | Wire rods | | | 143,364 | | | | 161,694 | | | | 201,756 | | | | | | | | | | | | | | | Hot metal | | | 33,924 | | | | 30,713 | | | | 22,535 | | | | | | | 553,338 | | | | 591,725 | | | | 786,323 | | | Slab | | | 10,388 | | | | 26,648 | | | | 36,403 | | | | | | | | | | | | | | |
The principal inputs of the aluminium operations are bauxite, alumina, power, carbon and certain other raw materials. Bauxite
Currently, we do not have any dedicated mining source and are in the process of identifying bauxite mining sources across India. Currently, bauxite is being sourced mainlyprimarily through imports (45.7%), from the domestic market in the west coast (23%), BALCO mines (31.3%(44.5%) and OMC (55.5%).
We have entered into long term agreement with Odisha Mining Corporation (“OMC”) in accordance with state policy and supply of bauxite to the remainingLanjigarh refinery has started from Madhya Pradesh, Chhattisgarh, Jharkhandfirst quarter of fiscal year 2019. The long-term linkage agreement is for up to 70.0% of the saleable stock that has been signed between OMC and Andhra Pradesh.Vedanta Limited for a period of five years. The balance 30.0% will be sold through auction, through national e-auction to be conducted regularly on fixed intervals of six months. Alumina
Alumina is the primary raw material used in the production of aluminium. We currently sourceCurrently for Jharsuguda operations, alumina largelyis being sourced from third-party suppliers in international markets.Lanjigarh (60.0%), other domestic sources (2.6%) and remaining (37.4%) through imports from Indonesia, Australia, Vietnam and other countries. The alumina sourced externally is metallurgical grade calcined alumina with a minimum alumina content of 98.6% on a dry basis. In fiscal years 2015, 20162019, 2020 and 2017,2021, we purchased 0.371.60 million tons, 0.471.07 million tons and 0.771.02 million tons of alumina at an average price of $ 357501 per mt, $ 353367 per mt and $ 311305 per mt respectively on a cost, insurance and freight basis at the portports situated in the state of Andhra Pradesh. Smelting of primary aluminium requires a substantial and continuous supply of electricity. As a result, power is a key input at our Jharsuguda facility, wherefacility. The power is provided by nine coal-based captive power plantsunits of 135 MW each. To meet the additional power requirements of the second Smelter,each and three thermal power plant units of 600 MW each of Odisha based Thermal Power Plant at Jharsuguda has beenJharsuguda. All power plants are coal-based thermal power plants. The three 600 MW units were converted to captive power plants based on an order issued by the Odisha Electricity Regulatory Commission with effect from April 1, 2015. We have been sourcing coal through coal linkagelinkages from Coal India and its subsidiaries (primarily, Mahanadi coal field,Coalfields Limited and South Eastern Coalfields Limited among others). The balance of requirements are met from imports and e-auctione-auctions and from washeries. The linkage coal quantity from Mahanadi coal field is transported through bottom discharge wagons. The power plant at Jharsugada sources coal from sources such as the GoI’s coal mining companies, long-term coal supply agreements with various state governments under PPAs and from imports. In fiscal year 2017, the total coal purchased from these other sources was 7.11 million tons for 135 x 9 MW and 4.42 million tons for 600 x 3 MW power plants.Coal India Limited.
The total volume of coal consumed annually by coal-fueled power plants is largely dependent on the amount of generation. During fiscal year 2017,2021, total coal consumed by 135 x 9 MW and 600 x 3 MW power plants was 7.197.35 million tons and 4.59.12 million tons respectively. WaterWe secured the Jamkhani coal block in the captive coal block auctions conducted by the Ministry of Coal, GoI. It will cater to power generation for Jharsuguda smelting operations. We have now signed the Coal Mine Development and Production Agreement (“CMDPA”) with GoI and received Vesting Order for the coal block. The mine currently has a capacity of 2.6 mtpa. We expect it to improve our coal materialization performance for Jharsuguda.
The Company has secured the Radhikapur West coal block in tranche 11 of the coal block auction. The Company entered into the CMDPA with the GoI on January 11, 2021. This has a mine capacity of 6 mtpa, which can additionally help us to meet the group’s coal requirements. Water is also an important input for our captive power plants. We source our water requirements at Jharsuguda from Hirakud Dam situated over a distance of 33 km, with the water transported by pipelines. Water from the dam is stored at water reservoir inside the plant, from where the water is purified in a demineralize plant to make it fit for use in the power plant. Carbon
We have ourin-house facilities to manufacture carbon anodes to meet our entire carbon anode requirements. Calcined petroleum coke, coal tar pitch and fuel oil which are the key ingredients for the manufacture of carbon anodes, are sourced primarily from the domestic Indian market.anodes. There is an adequate supply of these raw materials in India, though theirdomestically as well as globally. Their prices are generally determined by movements in global prices. At times, basedprices and local regulations. Based on commercial comparison, orders for import are also placed.advantages, we source from several suppliers in India and globally. Other Raw Materials
We also use other raw materials such as fluorides and other chemicals. For these raw materials, there are several sources of supplies in the domestic and international markets and we do not foresee any difficulty in securing supplies when needed. Ø | Distribution, Logistics and Transport |
The alumina purchased from third party suppliers is transported to the Jharsuguda facility by rail andfrom ports. Our aluminium products are transported from the Jharsuguda facility to domestic customers through a combination of road and rail and shipped for export. Our 10 largest customers of our Odisha aluminium businessJharsuguda accounted for approximately 46.3%66.0%, 53.4%60.0% and 63.1%64% of Odisha aluminium business in fiscal years 2015, 20162019, 2020 and 20172021 respectively. OneTwo of our Odisha aluminium business customers accounted for 12.2%in fiscal years 2019 and 10.2%2020 and three of Odisha aluminium business revenueour customers in fiscal year 2016 and 2017, respectively. None of the customers2021 accounted for greater than 10.0% of our Odisha aluminium business in fiscal year 2015.revenue. The sales and marketing head office is located in Mumbai andCurrently, we have field sales and marketing offices in most major metropolitan centers in India. Currently, our aluminium business sellssell only primary products and hashave equal focus on both the Indian and the exports market. Our key customers include cables and conductor manufacturers, transport sector and electrical equipment and machinery manufacturers.
Domestic sales are normally conducted on the basis of We follow an LME-based pricing and product-wise premiums for both our domestic supply and demand conditions with the pricing methodology as LME based pricing, where the LME on the day of order confirmation by the customer forms the basis for billing. The domestic price for aluminium is normally higher than the price charged in the export markets due to the tariff structure, smaller order sizes that domestic customers place and the packaging, storing and truck loading expenses incurred when supplied to domesticglobal customers.
Our aluminium export sales are currently on both spot and long term basis at a price based on the LME price plus a premium. Long term contracts range from three months to one year and sales are maximizedbasis. Ø | Projects and Developments |
Initially in focus markets though2008, we are trying to establish our presence in all markets to minimizegeo-political risks. Projects and Developments
We plan to invest Rs. 106,000 million ($ 1,634.5 million)planned to expand our alumina refining capacity at Lanjigarh to 56 mtpa by (i) constructing a second alumina refinery with a capacity of 3 mtpa; and (ii) constructingconstruct an associated 210 MW captive power plant. The expansion of the alumina refinery at Lanjigarhand related mining operations in and around the Niyamgiri was put on hold sincein October 20, 2010, duewhen the MoEF&CC directed us to the order passed by the MoEF’s restricting ushold from any further expansion of this refinery.expansion.
Against this order, we filed a writ petition in the High Court of OrissaOdisha and the Court dismissed our petition. We subsequently made an application to the MoEF&CC to reconsider the grant of the environmental clearance for our alumina refinery. The MoEF&CC by its letter dated February 2, 2012, issued fresh terms of reference to us for preparation of the Environment Impact Assessment report. We submitted the Environment Impact Assessment report to the OrissaOdisha Pollution Control Board and simultaneously submitted various representations to the MoEF&CC as well as the Project Monitoring Group established under the Cabinet Committee on Investments. The expert appraisal committee of the MoEF&CC reconsidered the project and revalidated the terms of reference for 22 months effective January 2014. Therefore, the ban imposed on the expansion of our alumina refinery was lifted and we are pursuing the matter with the state government. The public hearing was held on July 30, 2014 subsequent to which the expert appraisal committee, in its meeting held on January 9, 2015, has recommended the project for environmental clearance and for the further expansion of our Lanjigarh refinery. In respect of the Lanjigarh Expansion project, environmental clearance for the Lanjigarh expansion project was received on November 20, 2015 for up to 4 mtpa, and an additional environmental clearance for up to 6 mtpa will be received after the completion of land acquisition of the balance area of 666.03 HA. Further, a consent to establish for 4 mtpa and a consent to operate for 2 mptamtpa has also been obtained. However, construction activities continue to be on hold and the management is evaluating the timing for resuming construction activities in Lanjigarh. As approvals for expansion of the Lanjigarh refinery to 4 mtpa has been received, second stream operations have commenced at the Alumina refinery from April 2016 and the debottlenecked capacity has reached 2.0 million tons per annum2 mtpa (although this is contingent on the bauxite quality). When we have further visibility onWe continue to explore the feasibility of expanding our alumina refinery capacity. subject to bauxite sources, a furtherramp-up to 4 million tons will be considered.availability and regulatory approvals. See “Item“Item 8. Financial Information- A. Consolidated Statements and Other Financial Information – Legal Proceedings”Proceedings” for details. As of March 31, 2017,2021, we spent Rs. 55,576₹ 46,001 million ($ 857.0629 million) on the Lanjigarh expansion project.project (up to 6 mtpa) including other auxiliary assets. Total Project cost for refinery expansion upto 5 MTPA is estimated at ₹ 108,120 million ($ 1,478 million).On February 3, 2021, the expansion plan to increase the capacity of the Lanjigarh alumina refinery to 5 MTPA was approved by Vedanta Limited Board, subject to requisite Government approvals and further on May 13, 2021, the Board approved the estimated cost of ₹ 46,810 Million ($ 640 million). The completion of this expansion plan will place the Lanjigarh alumina refinery as one of the world’s largest single-location alumina refinery complex. We are also investinghad invested an estimated Rs. 145,000₹ 150,380 million ($ 2,235.92,056 million) to set up a second 1,250,000 tpa aluminium smelter. Power for the new smelter will be provided by our 1,800 MW commercial power plant at Jharsuguda. As of March 31, 2017,2021, we have already spent Rs. 134,120₹ 147,372 million ($ 2,068.22,015 million) on this project. Our Commercial Power Generation Business Overview We have been building and managing power plants since 1997. As of March 31, 2017,2021, the total power generating capacity of our thermal power plants, wind power plants and gas based plants was 9,000.0approximately 9,000 MW, which includes our fourteentwelve thermal coal-based captive power plants (plant at Tuticorin is inactive) with a total power generation capacity of 5,239.65,520.5 MW. The following table sets forth information relating to our existing power plants as of March 31, 2017:2021: | | | | | | | | | Fiscal Year Commissioned | | Capacity | | | Location | | Fuel Used | | | (MW) | | | | | | 1988(1) | | | 270.0 | | | Korba | | Thermal Coal | 1997 | | | 24.0 | | | Tuticorin | | Liquid fuel | 1999 | | | 75.0 | | | Mettur Dam | | Thermal Coal | 2003 | | | 7.4 | | | Debari | | Liquid fuel | 2003 | | | 6.0 | | | Zawar | | Liquid fuel | 2003 | | | 14.8 | | | Chanderiya(2) | | Liquid fuel | 2003 | | | 4.8 | | | Cambay | | Gas based | 1999 and 2003 | | | 10.0 | | | Ravva | | Gas based | 2005 | | | 7.5 | | | Tuticorin | | Liquid fuel | 2005 | | | 15.0 | | | Pantnagar | | Liquid fuel | 2005 | | | 154.0 | | | Chanderiya | | Thermal coal | 2006 | | | 540.0 | | | Korba | | Thermal coal | 2007 | | | 75.0 | | | Lanjigarh | | Thermal coal | 2007 | | | 107.2 | | | Gujarat and Karnataka | | Wind(3) | 2007 | | | 30.0 | | | Amona | | Gas based | 2008 | | | 80.0 | | | Chanderiya | | Thermal coal | 2009 | | | 80.0 | | | Zawar | | Thermal coal | 2009 | | | 16.0 | | | Gujarat and Karnataka | | Wind(3) | 2009 | | | 675.0 | | | Jharsuguda | | Thermal coal | 2009 | | | 25.0 | | | Mettur Dam | | Thermal coal |
| | | | | | | | | Fiscal Year Commissioned | | Capacity | | | Location | | Fuel Used | | | (MW) | | | | | | 2010 | | | 540.0 | | | Jharsuguda | | Thermal coal | 2010 | | | 3.3 | | | Rajasthan Raageshwari Gas terminal | | Gas based | 2010 | | | 14.4 | | | Gujrat Viramgam Terminal | | Gas based | 2010 | | | 32.5 | | | Pipeline Above Ground Installations | | Gas based | 2011 | | | 1200.0 | | | Jharsuguda | | Thermal coal | 2011 | | | 48.0 | | | Rajasthan and Karnataka | | Wind | 2011 | | | 174.3 | | | Dariba | | Thermal coal | 2012 | | | 103.0 | | | Karnataka, Maharashtra, Rajasthan and Tamil Nadu | | Wind(3) | 2012 | | | 600.0 | | | Jharsuguda | | Thermal coal | 2012 | | | 30.0 | | | Amona | | Gas based | 2013 | | | 600.0 | | | Jharsuguda | | Thermal coal | 2013 | | | 80.0 | | | Tuticorin | | Thermal coal | 2013 | | | 6.5 | | | Mettur Dam | | Thermal coal | 2014 | | | 80.0 | | | Tuticorin | | Thermal coal | 2010 and 2014 | | | 60.0 | | | Rajasthan Mangala Processing terminal | | Thermal coal | 2015 | | | 31.3 | | | Gujrat Bhogat terminal | | Thermal coal | 2015 | | | 660.0 | | | Mansa- Talwandi Sabo Road, Mansa, Punjab | | Thermal coal | 2016 | | | 660.0 | | | Mansa- Talwandi Sabo Road, Mansa, Punjab | | Thermal coal | 2016 | | | 900.0 | | | Korba | | Thermal coal | 2017 | | | 660.0 | | | Mansa- Talwandi Sabo Road, Mansa, Punjab | | Thermal coal | 2017 | | | 300.0 | | | Korba | | Thermal coal | | | | | | | | | | | | | | | 9,000.0 | | | | | | | | | | |
Notes:
| | | | | | | | | Fiscal Year Commissioned | | Capacity (MW) | | | Location | | Fuel Used | 1988(1) | | | 270.0 | | | Korba | | Thermal Coal | 1997 | | | 24.0 | | | Tuticorin | | Liquid fuel | 1999 | | | 75.0 | | | Mettur Dam | | Thermal Coal | 2003 | | | 14.8 | | | Debari | | Liquid fuel | 2003 | | | 6.0 | | | Zawar | | Liquid fuel | 2003 | | | 14.8 | | | Chanderiya (2) | | Liquid fuel | 2003 | | | 4.8 | | | Cambay | | Gas based | 1999 and 2003 | | | 10.0 | | | Ravva | | Gas based | 2005 | | | 7.5 | | | Tuticorin* | | Liquid fuel | 2010 | | | 15.0 | | | Pantnagar | | Liquid fuel | 2005 | | | 154.0 | | | Chanderiya | | Thermal coal | 2006 | | | 540.0 | | | Korba | | Thermal coal | 2008 | | | 90.0 | | | Lanjigarh | | Thermal coal | 2007 | | | 107.2 | | | Gujarat and Karnataka | | Wind (3) | 2007 | | | 30.0 | | | Amona | | Gas based | 2008 | | | 80.0 | | | Chanderiya | | Thermal coal | 2009 and 2021 | | | 91.5 | | | Zawar | | Thermal coal | 2009 | | | 16.0 | | | Gujarat and Karnataka | | Wind (3) | 2009 | | | 675.0 | | | Jharsuguda | | Thermal coal | 2009 | | | 25.0 | | | Mettur Dam | | Thermal coal | 2010 | | | 540.0 | | | Jharsuguda | | Thermal coal | 2010 | | | 3.3 | | | Rajasthan Raageshwari Gas terminal | | Gas based | 2010 | | | 14.4 | | | Gujrat Viramgam Terminal | | Gas based | 2010 | | | 32.9 | | | Pipeline Above Ground Installations | | Gas based | 2011 | | | 1,200.0 | | | Jharsuguda | | Thermal coal | 2011 | | | 48.0 | | | Rajasthan and Karnataka | | Wind (3) | 2011 | | | 160.0 | | | Dariba | | Thermal coal | 2012 | | | 103.0 | | | Karnataka, Maharashtra, Rajasthan and Tamil Nadu | | Wind (3) | 2012 | | | 600.0 | | | Jharsuguda | | Thermal coal | 2012 | | | 30.0 | | | Amona | | Gas based | 2012, 2013 and 2014(4) | | | 120.0 | | | Bokaro | | Thermal coal | 2013 | | | 600.0 | | | Jharsuguda | | Thermal coal | 2013 | | | 80.0 | | | Tuticorin* | | Thermal coal | 2013 | | | 6.5 | | | Mettur Dam | | Thermal coal | 2014 | | | 80.0 | | | Tuticorin* | | Thermal coal | 2010 and 2014 | | | 60.0 | | | Rajasthan Mangala Processing terminal | | Gas based | 2015 | | | 39.9 | | | Gujrat Bhogat terminal | | Gas based | 2015 | | | 660.0 | | | Mansa- Talwandi Sabo Road, Mansa, Punjab | | Thermal coal | 2016 | | | 660.0 | | | Mansa- Talwandi Sabo Road, Mansa, Punjab | | Thermal coal | 2016 | | | 1,200.0 | | | Korba | | Thermal coal | 2016 | | | 0.1 | | | Chanderiya | | Solar | 2016 | | | 0.1 | | | HO, Udaipur | | Solar | 2017 | | | 660.0 | | | Mansa- Talwandi Sabo Road, Mansa, Punjab | | Thermal coal | 2017 | | | 12.0 | | | Debari | | Solar | 2017 | | | 4.0 | | | Dariba | | Solar | 2018 | | | 22.0 | | | Agucha | | Solar | 2020 | | | 0.666 | | | Chanderiya | | Solar | 2020 | | | 0.25 | | | Dariba | | Solar | 2020 | | | 0.072 | | | Debari | | Solar | 2020 | | | 0.15 | | | Zawar | | Solar | 2020 | | | 0.083 | | | Agucha | | Solar | 2020 | | | 1 | | | Kayad | | Solar | 2021 | | | 30 | | | Rajasthan Raageshwari gas terminal | | Gas based | 2021 | | | 100 | | | Bhadrak, Odisha | | Thermal coal | | | | | | | | | | Total | | | 9,319.02 | | | | | | | | | | | | | | |
(1)* | Power generation plant at Tuticorin is inactive |
Note: At HZL, we also have 35.3 MW of power capacity through waste heat recovery from roasters and Steam Turbo Generator (1) | Commissioned by BALCO prior to our acquisition of BALCO in 2001. The 270 MW power plant was transferred from power business to aluminium business on April 1, 2016. |
(2) | Transferred from Debari to Chanderiya in March 2009. |
(3) | Our wind power plants are not for captive use. |
(4) | ESL was acquired in 2018, however the commissioning date is pre acquisition date. |
Power productionSales volumes The following table sets out total power productionsales volumes in MU for the last three fiscal years: | | | For Fiscal Year Ended March 31, | | | | | | | | Facility | | 2015 | | | 2016 | | | 2017 | | | For Fiscal Year Ended March 31, | | | BALCO 270 MW(1) | | | 89 | | | | 169 | | | | 0 | | | BALCO 600 MW | | | 10 | | | | 1,025 | | | | 2,609 | | | | Jharsuguda 600 MW coal based thermal power plant(1) | | | 7,206 | | | | 7,319 | | | | 3,328 | | | | Facility | | | 2019 | | | 2020 | | | 2021 | | | | | 2,168 | | | | 1,726 | | | | 1,596 | | Jharsuguda coal based independent thermal power plant(1) | | | | 1,039 | | | | 776 | | | | 2,835 | | HZL Wind Power Plant | | | 444 | | | | 415 | | | | 448 | | | | 449 | | | | 437 | | | | 351 | | MALCO – 106.5 MW coal based thermal power plant | | | 897 | | | | 402 | | | | 190 | | | TSPL | | | 1,213 | | | | 2,792 | | | | 6,339 | | | | 9,858 | | | | 8,223 | | | | 6,479 | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 9,859 | | | | 12,122 | | | | 12,914 | | | | 13,514 | | | | 11,162 | | | | 11,261 | | | | | | | | | | | | | | | | | | | | |
(1) | Three JharsugadaJharsuguda 600 MW power plants and BALCO 270 MW power plant were transferred from the power to aluminium business on April 1, 2016.2015. |
(2) | One of the 300 MW IPP unit at BALCO was converted to CPP as on April 1, 2017 vide order dated January 1, 2019. The figures reported for 2019 are for 600 MW IPP operations until order date. The figures reported for 2020 and 2021 are for 300 MW IPP operations. |
(3) | As the MALCO plant has been put under care and maintenance from May 26, 2017, therefore no production of power after May 26, 2017. |
Power sale includes production under trial run in fiscal years 2015, 2016 and 2017 of 274 million units, nil units and nil units respectively. Jharsuguda Power sale excludes power transfer of 14512,276 MU, 11,750 MU and 4,75712,690 MU to its smelting facilities in fiscal years 20162019, 2020 and 2017,2021 respectively.
Commercial power plants We previously hadhave a 2400 MW coal based thermal power plant facility (comprising of four units of 600 MW each) in Jharsuguda in the state of Odisha. The power plant was earlier operated through Sterlite Energy and is now a part of Vedanta pursuant to theRe-organization Transactions. The plant has been built with an estimated investment of approximately Rs.₹ 82,000 million ($ 1,264.51,121 million). The first unit of commercial operation commenced inon November 10, 2010. The second unit was operational on March 30, 2011 and the third unit was operational inon August 19, 2011. The fourth unit was operationalcommenced operation on April 26, 2012. On June 17, 2015, we petitioned to OERCfiled a petition before Odisha Electricity Regulatory Commission (OERC) to convert the 24002,400 MW independent power plantIPP into a captive generating plant to cater to the power needs of the 1.25 mtpa smelter at Jharsuguda and consequently, the OERCOdisha Electricity Regulatory Commission (OERC) issued an order of conversion of three units into captive generating plants with effect from April 1, 2015, while retaining the IPP status of one unit (Unit 2) to fulfill the obligations under the PPApower purchase arrangements (PPA) with GRIDCO. As a result, three out of the four 600 MW units were converted to captive generating plants during fiscal year 2017. The coal based thermal power plant facility requires approximately 15 million tpa of coal.plants. We have applied to the Ministry of Coal for allotmentsallotment of coal blocks and long term coal linkages, which are long term supply contracts for delivery of coal meetingto meet contract specific contract specificationsrequirements for captive use. In January 2008, the Ministry of Coal jointly allocated the coal blocks in the Rampia and Dip Side Rampia in the state of Odisha to six companies, including Sterlite Energy. The six companies entered into an agreement to jointly promote a new company called Rampia Coal Mine and Energy Private Limited or RCMEPL,(RCMEPL), which was incorporated in February 2008.
The Company invested in M/s Rampia Coal Mines and Energy Private Limited,RCMEPL, a joint venture incorporated in India that was set up for the purpose of developing coal blocks. The Company acquired Rs. 24.3₹ 27.2 million equity shares of Rs₹ 1 each, representing 17.39% of the total equity shares. However, due to the cancellation of coal blocks by the Supreme Court of India, an impairment loss of Rs 24.3₹ 27.2 million was recognized in respect of such investment.investment in FY 2015. Power plantsIPPs in Odisha source coal from sources such as the GoI’s coal mining companies and long-term coal supply agreements with various state governmentsgovernment under PPAs and from imports. Inlinkage auction coal. During fiscal year 2017, the total2021, 2.34 million tons of coal was purchased from these sources was 2.62towards Vedanta Limited’s Jharsuguda IPP as compared to zero million tons.tons and 0.45 million tons purchased during fiscal year 2019 and 2020 respectively.
The totaltypical coal volume required for full scale operations of 600 MW IPP ranges between 2.5 million to 3.5 million tons. However, actual coal consumed annually by Odisha’s coal-fueled power plantsconsumption is largely dependent on the amount of generation and ranges between 1.39 million to 3.26 million tons.power generation. Additionally, we have been allotted a coal linkage of 2.6 mmtpa for the Jharsuguda projectis allotted to us to meet the coal requirements of the 600 MW unit,Unit#2 IPP, for which fuel supply agreement was entered into with Mahanadi Coalfields Limited with an assurance of supplying 80%up to 90.0% of the total quantity. In September 2006, Sterlite Energy entered into a power purchase agreementPPA with GRIDCO, which was amended in August 2009 and further amended onin December 2012, in which GRIDCO was granted the right to purchase up to 25.0% of the installed capacity ofpower sent out from the power plant after adjustments for auxiliary consumption by us, for approximately up to 561 MW from this project.us. Further, if the coal block is allocated within the state, GRIDCO shall at all timesthe time have the right on behalf of the state government of Odisha to receive from the Jharsuguda power project,additional 7.0% of the power generated (after adjustments for auxiliary consumption by the power plant), up to approximately 157 MW of from the Jharsuguda power project at variable cost, otherwise, if theno coal block is allocated within the state, orthen additional 5.0% of the power generated (after adjustments for auxiliary consumption by the power plant), up to approximately 112 MW of power at variable cost, if the coal block is allocated outside the state as determined by the Orissa Electricity Regulatory Commission (“OERC”).cost. GRIDCO will have the right to purchase power from us for a period of 25 years from the date of commercial operation of the last unit.unit i.e. April 26, 2012. The tariff for the PPA is revised once in every five years. This right is an option to purchase rather than a binding commitmentyears via the mandate of GRIDCO.OERC. In the event GRIDCO decides not to avail part or whole of the above mentioned right during any five year period, it shall give six months’ notice of the same to us prior to the commencement of such period. Power from the power plant to be purchased by GRIDCO willis required to be evacuated by GRIDCO from the bus bar (which is the discharge point of the power plant) of the project. For the evacuation of the remaining power, we have constructed a 400 KVLoop-In-Loop-Out I and a 400 KVLoop-In-Loop-Out II transmission line to connect to the transmission line being developed by Power Grid Corporation India Limited, or (“PGCIL”) near Jharsuguda. Sterlite Energy entered into an agreement with PGCIL in July 2010 to build the dedicated transmission system required for evacuating power from the power plant to the pooling units of PGCIL.
The tariff for the sale of power by us to GRIDCO will be determined by the OERC as follows: For the sale of power up to 25.0% of the installed capacity:: | (i) | a fixed capacity charge which shall be determined by the OERC as per the terms and conditions of tariff regulations issued from time to time and will be related to target availability. Recovery of fixed capacity charges below the level of target availability shall be done on a pro rata basis and calculated proportionately to the capacity requisitioned to by GRIDCO; and |
| (ii) | a variable energy charge, which shall comprise fuel cost and shall be calculated on the basis of theex-bus energy scheduled to be sent out from the generating station.cost. The energy charges shall be calculated as per the methodology prescribed by the OERC from time to time. |
For the sale of power for 7%7.0% or 5%5.0% depending on the allocation of coal blocks within the state of Odisha a variable energy charge is applicable, which shall comprise fuel cost and shall be calculated — on the basis of theex-bus energy scheduled to be sent out from the generating station. The energy charges shall be calculated as per the methodology prescribed by the appropriate commission,OERC, from time to time. On June 12, 2013, the Orissa Electricity Regulatory Commission pronounced a decision and working methodology on tariff determination in relation to the procurement of power by GRIDCO for the period from November 2010 to March 2014. Aggrieved by the order, the Company filed a review petition before the OERC whichthat was nevertheless disposed by the OERC on September 25, 2013. Aggrieved by the decision of OERC, Company filed an appeal with Appellate Tribunal for Electricity (APTEL) on October 28, 2013. The appeal was dismissed by APTEL on May 10, 2016 but directing the OERC to consider the post-merger debt equity related claim of Vedanta Limited on merits. Subsequently, we filed an appeal against the OERC’s decision with the appellate tribunal for electricity (“APTEL”)APTEL on October 28, 2013. APTEL in its interim order dated March 28, 2014 recognized the fact of transmission line constraints and directed the state load dispatch center for there-computation of the plant availability factor (PAF) and also advised to schedule the power of GRIDCO for transmission line constraint considerations in the future. Subsequently, GRIDCO filed a stay appeal in the Supreme Court against the order of the appellate tribunal which was dismissed by the Supreme Court on March 16, 2015. Consequently, APTEL directed GRIDCO to pay the amount due of Rs. 1,640 million. In compliance with the order, GRIDCO made the payment in fiscal year 2016. Additionally, GRIDCO filed an appeal against the OERC tariff order dated June 12, 2013 in APTEL on the transmission constraint issue. This appeal was dismissed by APTEL on May 10, 2016, as it upheld the decision on transmission constraints as passed in the original OERC order. Simultaneously, APTEL also dismissed our appeal filed on October 28, 2013, while upholding the issue of transmission constraints. The OERC through its order dated April 17, 2017 allowed that, for calculating plant availability factor achieved during the month (“PAFM”) of the IPP, the carrying capacity of the line at 400 MW in a sustainable mode should be taken into consideration. Accordingly, while calculating the PAFM of the installed capacity of Unit-II of IPP should be taken as 400 MW or actual injection whichever is higher. The aforesaid mechanism should be adopted for the period from November 2010 until the transmission line constrain was resolved. The said order confirmed the findings of transmission line constraint and provided for a mechanism for calculating PAFM and thus allowing Vedanta Limited to claim higher annual fixed charge. Aggrieved by the aforesaid order of OERC, GRIDCO filed an application to review the order. The hearings in review petition have been concluded and order has received on May 16, 2018 in which OERC dismissed the review petition of GRIDCO. Further GRIDCO has gone for appeal before APTEL on July 27, 2018. On March 6, 2019, appeal has been admitted the pleading in the matter has been completed. We believe that we have a good case to defend. Our principal defense is based on the premises that the order sought to be challenged is principally only an order fixing the modalities for calculation of PAFM due to capacity constraint. The decision on capacity constraint’s existence has already achieved finality and any further challenge to it is barred by res-judicata. The entire amount payable by GRIDCO withheld beyond the due date shall accrue a late payment surcharge at the rate of 1.25% per month from the due date to the actual date of payment. The Company has not made any accruals towards the said amount in the books. On September 12, 2016, GRIDCO raised a demand for payment towards Environment Management Fund (“EMF”) as per the data available to GRIDCO. The State Government notified the levy of a contribution towards EMF by Thermal Power Plant (“TPP”) at the rate of 6 paisa per unit of energy sold outside the state. The Company has challenged such notification on the ground that it has not been backed by any legislation and is a policy decision of the government that has no legal basis. GRIDCO has started recovering ₹ 30 million ($ 0.41 million) per month from December 2016 onwards towards arrears of EMF. To date, GRIDCO has kept ₹ 270 million ($ 4 million) on hold. The Company has made a provision in this respect. Further, in interim order dated November 7, 2017, the High Court of Odisha has granted the stay on payment of EMF levy. OERC through its order dated February 27, 2018 has approved the claim of the Company in relation to the revised debt equity structure post its merger with Sesa Goa in 2013. The OERC in its order has allowed GRIDCO to pay the total amount in six half yearly instalments without interest from FY 2009-2014. The Company has filed review petition with OERC in May 2018, primarily on the limited issue of non-grant of interest to it. The OERC has disposed the matter vide order dated January 8,2021 by dismissing our review petition summarily on the ground that ex-facie there are no grounds of review in the present matter and disallowing our claim of carrying cost for tariff period 2010-14. Subsequently, we have filed an appeal against the order dated January 8, 2021 and order dated February 26, 2018 before the APTEL. The listing of the matter is awaited. The Company, based on legal advice, firmly believes that its right to interest (time value of money) is protected under the Electricity laws and OERC has erred in allowing interest-free payment to GRIDCO. The Company also filed Multi Year Tariff (“MYT”) petition for fixation of tariff for the period starting fiscal year 2015 to fiscal year 2019. The hearing on the matter has concluded and the order has been issued by OERC on June 29, 2018. The tariff has been approved as per the CERC Tariff Regulation, 2014-2019 till October 9, 2014 and beyond this period based on OERC Tariff Regulation, 2014. The order does not have any significant impact on the basis of revenue recognition in the books except while allowing interest on working capital one month receivable has been considered instead of two months allowed as per PPA. We have file reviewed petition on limited issue of interest on working capital and rate of interest. The arguments have been concluded in the matter and order has been reserved. Based on Minutes of Meeting (“MOM”) signed in November 2016, GRIDCO has been raising debit note for short supply of power and withheld the amount payable to us. In October 2018 we have initiated another MOM with GRIDCO primarily to set off the current accumulated short supply of power with excess supply of power in the past and in future beyond the agreed volume and the penalty charging mechanism for short supply. GRIDCO has advised to take up the matter with OERC and incorporate these matters in the revised PPA. GRIDCO has acknowledged the quantity of power supplied in excess in the past. On June 7, 2019, as per order of OERC, we had a joint meeting with OERC & GRIDCO Officials in which one MOM has been signed in which the benchmarking price has been decided for short supply penalty (highest of Indian Energy Exchange (“IEX”) landed price for GRIDCO or Interstate generation system (“ISGS”) - Energy Charge Rate (“ECR”) plus incentive). Further it is agreed to give credit for Vedanta Limited’s Tariff while calculating short supply penalty. This MOM was presented before OERC on July 9, 2019. The final hearings in the matter were concluded on October 15, 2019. OERC passed its final order on June 22, 2020 wherein Vedanta Limited and GRIDCO have been directed to amend the PPA in line with the terms laid out by the OERC. Additionally, OERC has directed GRIDCO to reconcile the arrear amounts due to Vedanta Limited and settle the payments within two months from date of the judgement. The reconciliation is in process. On August 25, 2020, Vedanta Limited also filed an appeal before the APTEL in respect of certain limited issues arising out of the June 22, 2020 OERC Order. The matter is at the stage of completion of pleadings. Next date of listing of the matter is August 4, 2021 Additionally, on September 2016, we received a notice18, 2020, GRIDCO filed an application for review of the June 2020 OERC Order before the OERC. Arguments in the matter have been concluded and the same is reserved for orders. The matter was last listed for order on May 21, 2021 and next date of listing is awaited. We were not able to supply power to GRIDCO up to December 2019 due to non-supply of linkage coal from Mahanadi Coalfields Limited (“MCL”) despite the continuous follow-up from GRIDCO forand the recovery of Rs. 1,640 million paidCompany. However, effective January 2020, we have recommenced power supply to GRIDCO consequent to the ordersresumption of APTEL and Supreme Court, as our main appeal got dismissed by APTEL. Against GRIDCO’s demand for recovery, we filed an appeal for clarification with APTEL and same was dismissed for the reason that its previous order was self-explanatory. Aggrieved by this dismissal, we filed a civil appeal in Supreme Court, but later withdrew the appeal on March 10, 2017.linkage coal supply from MCL. The ten largest customers of our Odisha power business accounted for approximately 94%, 100% and 100%100.0% of Odisha power business in fiscal years 2015, 20162019, 2020 and 2017 respectively.2021. Three of the top customers accounted for 81%, 68%, and 100%approximately 100.0% of our Odisha power business in fiscal years 2015, 20162019, 2020 and 2017.2021. In July 2008, Sterlite Energy succeeded in an international bidding process and was awarded the project for the construction of a 1980 MW coal-based thermal commercial power plant at Talwandi Sabo in the state of Punjab in India. The project was bid asCase-2 tariff based competitive bidding, implying that the developer had to quote for capacity charges and efficiency. Fuel costs subject to quoted efficiency was to be a pass-through. All necessary approvals for the project have been obtained and commissioning of this project was carried out in stages. The estimated cost of the project was Rs.₹ 115,460 million ($1,780.4 1,579 million). The boiler light up and synchronization of the first unit was achieved in fiscal year 2014, and coal logistics were established in fiscal year 2014. The first and second 660 MW units of the Talwandi Sabo power plant were capitalized in fiscal years 2015 and 2016 respectively. The third 660 MW unit was capitalisedcapitalized on September 1, 2016 after successful completion of trial runs. In May 2008, Sterlite Energy entered into anon-shore and offshore engineering, procurement and construction contract with SEPCO Electric Power Construction Corporation (“SEPCO”), for Sterlite Energy’s Talwandi Sabo thermal power project for Rs.₹ 66,560 million ($1,026.4 910 million). A novation agreement in favor of TSPL was executed in November 2009. The contract was revised upwards by $74$ 74 million on November 15, 2012 to reflect theset-up and commissioning of three units of power at the Talwandi Sabo thermal power plant. SEPCO’s obligations under the contract include testing and delivery of plant and equipment, system design and engineering of plant and equipment in accordance with technical specifications, supervision of civil, structure and manufacturing work, custom clearance, port clearance, inland transportation of offshore as well as onshore plant and equipment, unloading, storage and preservation for all equipment and material required, ash disposal among others within the period specified in the contracts. The fixed contract price is payable in multiple installments according to a fixed payment schedule. SEPCO has provided performance guarantees with respect to various parameters, for instance, net unit heat rate of 2,222.80 kwph/kcal and net unit electric output of 611.82 MW. On February 3, 2016, TSPL terminated the SEPCO EPC contract, due to delays in setting up the project, and for certain defects and deviations not being resolved in a timely manner. However, on April 16, 2016 the parties reached an agreement for the settlement of the EPC contract issues. The revised value of the contract stands at USD$ 1,041.8 million for offshore supply and service, and Rs.₹ 21,371 million for onshore supply and service. As of March 31, 2017, Rs. 111,994 million ($ 1,727.0 million) was spent on this project. This project is financed by internal sources and through debt financing.
After commencing all units, TSPL requires around 10 million tpa of coal. TSPL has been allotted the linkages from Mahanadi Coal Fields Limited, Odisha for 7.72 million tpa. According to the fuel supply agreement with Mahanadi Coal Fields, 80% of the letter of assurance95.0% allocated coal quantity is 6.177.334 million tpa, of which 5.01 million tpa is to be supplied through domestic sources and the remaining 1.160.386 million tpa is supplied through imported sources. The balance coal shall be procured through other sources. The linkage coal quantity will be transported from a distance of approximately 16001,600 km by rail. TSPL sources coal from sources such as the GoI’s coal mining companies long-term coal supply agreements with various state governments under PPA’s and from imports. In fiscal year 2017,2021, the total coal purchased from these sources was 5.214.53 million metric tons. The total volume of coal consumed annually by our coal-fueled power plants is largely dependent on the amount of generation and ranges between 6.99 million to 8.16 million metric tons for PLFplant load factor (“PLF”) ranging from 60%60.0% to 70%70.0%. In TSPL, there is only one customer which accounted for entire 100%100.0% of TSPL power business in fiscal years 2015, 20162019, 2020 and 2017.2021. There are some dispute with customers which are subjudice. BALCOSee “Item 8. Financial Information - A. Consolidated Statements and Other Financial Information – Legal Proceedings” BALCO’s power business includes a 270only one unit of 300 MW power plant at BALCO’s Korba facility. The 270 MW power plant was transferred from power business to aluminium business on April 1, 2016.2016 and is no longer operational. BALCO hashad constructed an IPP 600 MW coal-based thermal power facility in the state of Chhattisgarh which had received approval to operate on January 14, 2015 from the regulatory authorities. One unit of 300 MW was commissioned during fiscal year 2016, and the second unit was commissioned in March 2016 and commenced commercial production on May 1, 2016. One unit of 300 MW has been converted from IPP to CPP from April 1, 2017 vide order dated January 1, 2019. HZL—
As of March 31, 2017,2021, wind power plants with ahas the combined power generation capacity of 274 MW have beenwhich was commissioned in earlier fiscal years in the States of Gujarat, Karnataka, Tamil Nadu, Maharashtra and Rajasthan in India at a total cost of Rs. 14,520₹ 14,540 million ($ 223.9199 million). The electricity from these wind power plants is sold to State Electricity Boards. Ø | MALCO Energy Limited – Mettur Power Plant |
Mettur power plant is a 106.5 MW coal based thermal power plant operated by MALCO Energy Limited in the state of Tamil Nadu. The plant has been set up in stages, with the first 75 MW set up in the year 1999 to cater to the requirements of the aluminium smelter operated by MALCO. The aluminium operations were closed since November 2008. An additional 25 MW unit was added in 2009. Further, a 6.50 MW steam turbine generator was added in 2013, increasing the total capacity to 106.5 MW. MALCO entered into an energy purchase agreement with Tamil Nadu Electricity Board in January 2009 for the supply of power until April 2009 and entered into an agreement with Power Trading Corporation Limited for the supply of power to Tamil Nadu Electricity Board from April 2009 until May 2011, which was subsequentlyre-entered with Tamil Nadu Electricity Board from June 2011 until May 31, 2016. MALCO had entered into an agreement with NTPC Vidyut Vyapar Nigam Limited for supply of power (66.3 MW) to Telangana State Southern Power Distribution Company Limited from June 2016 to May 2017. The tariff for power supply is same as provided in the energy purchase agreement. Currently, MALCO does not have any energy purchase agreement for the supply of power. Due to prevailing business conditions, the MALCO plant has been put under care and maintenance from May 26, 2017. MALCO sourcesused to source its entire coal through imports (from various countries including Indonesia, Russia and South Africa). In fiscal year 2017, the total2021, no coal was purchased from these sources was 0.22 million tons.sources. The total volume of coal consumed annually by our coal-fueled power plants is largely dependent on the amount of generation and ranges between 0.5 million to 0.55 million tons at 100%100.0% PLF. MALCO’sNo revenue was earned in MALCO from the power business during the fiscal years 2019, 2020 and 2021 since the plant is under care and maintenance.
Our Steel Business Overview ESL’s manufacturing facility is a greenfield integrated steel plant located near Bokaro, Jharkhand, India, which has a current capacity of 1.5 mtpa and the potential to increase to 2.5 mtpa. It primarily consists of one sinter plant, a vertical coke oven plant, two blast furnaces, an oxygen plant, a lime calcination plant, a steel melting shop, a wire rod mill, a bar mill, a captive power plant and a DI pipe plant. ESL is selling primarily TMT bars, wire rods, DI pipes, Pig iron and steel billets in open market and has established its presence in the domestic market. Principal Products – TMT Bars TMT Bars are thermo mechanically treated steel bars which are produced by controlled quenching and self-tempering process. ESL TMT bars are produced in Fe500, Fe500D and Fe500D CRS variety as per IS 1786/2008 grade. We sell our TMT Bars primarily to construction industry. – Wire rod Steel wire rod is rolled from steel billet in a wire rod mill and is used primarily for the manufacture of wire. The steel for wire rod is produced by all the modern steelmaking processes, including the basic oxygen and electric furnace processes. Steel wire rod is usually cold drawn into wire suitable for further processing such as cold rolling, cold heading, cold upsetting, cold extrusion, cold forging or hot forging. We sell our wire rod primarily to automobile and white goods industries. – DI pipe DI pipe is a pipe made of ductile cast iron commonly used for potable water transmission and distribution. The ductile iron used to manufacture the pipe is characterized by the spheroidal or nodular nature of the graphite within the iron. Protective internal linings and external coatings are often applied to DI pipes to inhibit corrosion, the standard internal lining is cement mortar and standard external coatings include bonded zinc, asphalt or water-based paint. Our DI pipe is primarily used in sanitation, sewerage and irrigation. – Pig iron Pig iron is an intermediate product of the iron industry, also known as crude iron, which is first obtained from a smelting furnace in the form of oblong blocks. Pig iron has a very high carbon content, typically ranging from 3.8% to 4.7%, along with silica and other constituents of dross, which makes it very brittle and not useful directly as a material except for limited applications. Pig iron is made by smelting iron ore into a transportable ingot of impure high carbon-content iron in a blast furnace as an ingredient for further processing steps. Pig iron is further processed and is used in steel plants. – Steel Billet A billet is a length of metal that has a round or square cross-section. Billets are created directly via continuous casting or extrusion or indirectly via hot rolling an ingot or bloom. Billets are further processed via profile rolling and drawing. Final products include TMT and wire rod. By Product Granulated slag Granulated blast-furnace slag is obtained by quenching molten iron slag from a blast furnace in water or steam, to produce a glassy, granular product that is then dried and grounded into a fine powder. Granulated slag is used in the production of quality-improved slag cement by cement industry. Principal Facilities The following map shows details of the locations of ESL’s facilities in the State of Jharkhand: ![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g0820040658598.jpg)
Coke is prepared from coking coal or bituminous coal by heating it strongly in the absence of air. As a result, the volatile matter and moisture escapes out. The resulting coke is a hard, strong, porous and coherent mass. Coke plant is often described as a process of destructive distillation since it involves the separation of volatile matter based on the difference of boiling point. For the purpose of coking, two coke ovens have been designed, i.e. vertical coke oven of 0.5 mtpa and horizontal coke oven of 0.5 mtpa. Currently only vertical coke oven has been commissioned. It is of non-recovery/waste-heat recovery type i.e. heat is recovered from the flue gases for power generation in the captive power plant. Coke is preferred to coal in the blast furnace operation because it is stronger and can take the burden of blast furnace charge, it creates a permeable bed for the flow of hot gases and molten metal, and it acts a better source of heat and reducing agent. The vertical coke oven has 4 batteries having 35 ovens each. The annual capacity of coke oven is 0.5 mtpa. Sintering is agglomeration of iron ore fine particles (ranging from 0mm to 8mm) along with flux fine particles at high temperature (ranging from 1200°C to 1300°C) using coke fine particles as solid fuel to raise the temperature. During agglomeration at high temperature all constituent materials fuse together and become a porous heterogeneous solid mass (lump) called Sinter. The formation of such lumps is caused by an incipient fusion of ore particles at the contact surface which binds together and formation of diffusion bond through recrystallization and crystal growth of hematite and magnetite which keeps the particles together without melting. There are two sets of 105 square meter sintering machines with annual output of 2.25 mt of sinter. Sinter produced is transferred to blast furnace for hot metal production. The blast furnace is a furnace lined with refractory brick, where iron ore, coke and fluxes are alternately charged and hot blast at 1000°C to 1200°C is blown into the furnace to chemically reduce iron oxides into liquid iron called hot metal. The end products are usually molten metal and slag phases tapped from the bottom, and flue gases exiting from the top of the furnace. We have three blast furnaces (two operational) for production of hot metal, namely BF-2 having furnace size of 1050 cubic meter, BF-3 having furnace size of 350 cubic meter and BF-1 having furnace size of 1050 cubic meter (semi-constructed). We are producing at the run rate of 1.5 mt of hot metal annually. Steel is an alloy of iron and carbon. Carbon percentage in steel is less than 2.0%. The molten hot metal coming from the blast furnace is oxidized in the basic oxygen furnace. The scrap is charged into the furnace first since it may contain moisture. Then the molten metal from the blast furnace is added. Fluxes like limestone and dolomite are also added. The oxygen is blown from top and the resulting hot metal after removal of slag is taken to argon rinsing station where ferro-alloys and aluminium are added to adjust the chemistry and to remove oxygen respectively. The molten metal is sent to ladle refining furnace if required in order to produce different grades of steel. The steel from ladle is taken to ladle turret and poured onto the tundish. Tundish pours the molten metal onto the mould and cast into steel billet. There are two types of rolling mills, i.e. bar mill and wire rod mill. ESL’s bar mill is a continuous mill with horizontal-vertical combination. Bar mill is having annual production capacity of 0.7 mtpa. In our bar mill, slit rolling process is adopted for 10mm, 12mm and 16mm of TMT bars. The designed maximum finishing rolling speed is 18 m/s. The mill is designed to make TMT bars of size ranging from 10mm to 40mm but TMT bars of diameter 8mm are also being made using the 125x125mm steel billets. TMT bar mill has 18 number of stands having horizontal vertical combination. ESL’s wire rod mill is a tandem rolling mill with stands in horizontal-vertical combination. Wire rod mill has annual production capacity of 0.5 mtpa. The designed maximum rolling speed is 110m/s. The mill is designed to make wire rods of size ranging from 5.5mm to 16mm using the 150x150x12000 mm steel billets. The billets after being de-scaled are sent to mills via output roller table. Our wire rod mill has 30 stands having horizontal vertical combination. The molten metal is taken from blast furnace and stocked in mixer. From the mixer the liquid metal is taken by ladle and transferred to induction furnace where the composition of the liquid metal is corrected to desired level. The composition depends upon the size and thickness of the ductile pipe to be made. After attaining the metal composition, the temperature is risen to a desired level based on the type of pipe to be made. From induction furnace the molten metal is transferred to magnesium-converter which enhance the ductility of iron. Then it is fed to centrifugal casting machine. After the pipe is cast, it is soon transferred to annealing furnace for stress relieving. As soon as the pipes come out of annealing furnace, it is fed in zinc coating machine for zinc coating. After zinc coating it is passed for hydro-testing for checking the leakage of water from cast and annealed pipe. The tested pipes are checked surface wise and cleared for cement mortal lining, thereafter, passed for bitumen or epoxy coating and finally dispatched after 12 hours of curing. ESL has its own captive thermal power plant of 80 MW capacity of current capacity, expandable to 120 MW. Captive power plant has three centralized fluorised bed commercial boiler of coal based and two steam turbo generator of 60 MW each. We also have two waste heat recovery boilers of 75 tons each which is fired by coke oven flue gases. The power requirement is met partially by captive power plant and remaining is purchased through grid. Production volumes The following table sets out ESL’s total production from Bokaro facility for fiscal years ended March 31, 2019, 2020 and 2021: | | | | | | | | | | | | | | | SI. No. | | Product | | 2019 (tons) | | | 2020 (tons) | | | 2021 (tons) | | 1 | | TMT | | | 441,251 | | | | 468,396 | | | | 337,583 | | 2 | | Wire rod | | | 426,873 | | | | 412,948 | | | | 360,874 | | 3 | | DI pipe | | | 149,946 | | | | 154,721 | | | | 134,606 | | 4 | | Pig iron | | | 141,548 | | | | 167,305 | | | | 188,979 | | 5 | | Steel billet | | | 39,478 | | | | 27,456 | | | | 165,273 | | | | | | | | | | | | | | | | | Total | | | 1,199,096 | | | | 1,230,826 | | | | 1,187,315 | | | | | | | | | | | | | | | | |
Principal Raw Materials The principal inputs of ESL’s operations are iron ore and coking coal. In the past ESL has been able to secure an adequate supply of the principal inputs for its business. – Iron ore Iron ore is sourced from merchant mines in Odisha and Jharkhand and is transported by railway and road. – Coking Coal Our metallurgical coke requirements are met by captive metallurgical coke plant and the principal raw materials for the manufacture of metallurgical coke are hard-high fluidity coals, semi-hard and pulverized coal injection coking coals. These raw materials are imported from various international suppliers primarily from Australia and US. The availability is subject to seasonal supply constraints on specific mines and grades. The prices are subject to volatile index movements of international coking coal prices. Distribution, Logistics and Transport Raw material mainly coking coal and pulverized coal injection are imported by vessel and then transported through rail from Indian port to plant. Domestic raw materials which is mainly iron ore is transported through rail and road. Finished and semi-finished goods are transported by road only. Sales and Marketing The 10 largest customers of our steel business accounted for approximately 91.6%30.37%, 78.5%34.6% and 100.0%32.8% of revenue for MALCO’s powerour steel business in fiscal years 2015, 2016 and 2017, respectively. One of MALCO’s customers accounted for 88.4%, 71.1%, and 42.7% of MALCO’s revenue in fiscal years 2015, 20162021, 2020 and 2017.2019 respectively. None of our customers accounted for greater than 10.0% of steel business revenue in fiscal years 2021, 2020 and 2019. The 10 largest customers are mainly from construction and original equipment manufacturing industry and are spread across India. We have marketing offices in Kolkata, West Bengal, as well as two sales offices in Delhi and Mumbai, along with regional managers for sales in four regions across India. In fiscal years 2021, 2020 and 2019, the export sale accounted for 8%, 0.4% and 0.7% respectively. Currently, sales is majorly focused on domestic market and the decision to export is taken where prices are lucrative. Pricing is fixed as per the domestic market trend and is at par with major producer’s month on month. We supply on order to order basis, with delivery schedule defined in purchase orders. Other Opportunities in PowerMarket Share and Competition
We also sell any excess power generated from our captive power plants to third parties pursuant to commercial arrangements. For example,The total crude steel production of all producers of crude steel in India for fiscal year 2021 stood at 99.6 million ton (“MT”). The share of Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, Tata Steel Limited, Arcelor Mittal, JSW Steel Limited, Jindal Steel and Power Limited together was 76.22% of the total production of crude steel for fiscal year 2021 i.e. 75.915 MT. Vedanta Aluminium entered into a letterLimited’s total production of intent dated November 16, 2011 that was revised on September 14, 2012, with GRIDCO for the sale of excess power from its captive power planthot metal in fiscal year 2021 stood at Jharsuguda. We also have an arrangement for the sale of excess power from our captive power plant at Tuticorin.1.286 MT.
Port Business We have a 100%100.0% interest in Vizag General Cargo Berth Private Limited (“VGCB”) as of March 31, 2021, a consortium between Vedanta Limited and Leighton which won the bid to mechanizemechanise the coal handling facilities and upgrade the general cargo berth for handling coal at the outer harborharbour of Vishakhapatnam port, located on the east coast of India. The capacity of the upgraded berth is 10.2 mmtpa. Vizag General Cargo Berth Private Limited has10.18 mtpa. VGCB had entered into an agreement on October 8,June 10, 2010 with the port authority, Vishakhapatnam Port Trust, to mechanizemechanise the coal handling facilities and upgrade the general cargo berth on a build-operate-transferdesign-build-finance-operate-transfer basis for 30 years commencing on the date of award of concession. The company started commercial operations effective as of March 15, 2013. Vishakhapatnam Port Trust receives a royalty of 38.1% of the gross revenue chargeable by Vizag General Cargo Berth Limited as per Tariff Authority for Major Ports which is based onTAMP tariff from thepre-determined tariff we receive for cargo handling activities as set out in the concession agreement.
Construction was completed on April 8, 2013 and commercial operations started in same year. The project cost was approximately ₹6,228 million (approximately $96 million). As of March 31, 2021, the total cost (Gross block) was ₹6,825 million ($ 93 million) including interest capitalisations. During the fiscal year 2021, VGCB had handled a volume of 4.36 million tons i.e. 26% lower volumes compared to fiscal year 2020. The EBITDA for VGCB for fiscal year 2021 is ₹ 389 million ($ 5 million). Sterlite Ports Limited, a 100%100.0% subsidiary of Vedanta Limited has received an award of letter dated March 31, 2016, for redevelopment of berths 8, 9, barge berths and mechanical ore handling plant at the Port of Mormugao, Goa on a design-build-finance-operate-transfer basis for 19 mmtpa capacity multi-cargo port terminal. A special purpose company, “Goa Sea Port Private Limited” was incorporated on July 5, 2016 as a wholly owned subsidiary of Sterlite Ports Limited. Goa Sea Port Private Limited entered into an agreement on September 22, 2016 with the Mormugao Port Trust, to operate the berth on a build-finance-operate-transferbuild-finance-operate transfer basis for 30 years commencing on the date of award of concession. During fiscal year 2020, Goa Sea Port Private Limited received a termination letter from MPT basis approval by their Board of Trustees, which terminated the concession agreement and offered to return the Bank Guarantee unconditionally and allowed us to participate in future bids. The datereason cited was non-fulfilment of conditions precedent by both the parties. As per conditions precedent, MPT was responsible for fulfillment of condition precedentsobtaining environment clearance for commencementthe project along with handover of the concessionproject site, which MPT was unable to fulfil due to delay in environmental clearance and issues related to Berth 8. Whereas, Goa State Port Private Limited was responsible for providing performance guarantee, Financing Plan and Financing Documents, Escrow Account besides fulfilling other conditions, which were not fulfilled as the project site was not handed over. Goa Sea Port Private Limited has accepted the termination of the Concession Agreement. Glass substrate business On December 28, 2017, the Group acquired 51.63% equity stake in AvanStrate Inc. (ASI) for a cash consideration of ₹ 1 million ($ 0.01 million) and acquired debts for ₹ 9,832 million ($ 130 million). Additionally, a loan of ₹ 469 million ($ 6 million) was extended to ASI. ASI is involved in the manufacturing of glass substrate. The financial results of ASI for the fiscal year 2021 have been included in the consolidated financial statements of the Group. As per the shareholding agreement entered with the other major shareholder holding 46.6% in ASI, the Group has call option, conversion option to convert part of its debt given to ASI into equity of ASI as well as it has issued put option to the other majority shareholder. These are exercisable as per the terms mentioned in the shareholding agreement. The fair values and business combination has been setaccounted for on a provisional basis under IFRS 3, as it relates to property, plant and equipment and other intangible assets, and the resultant bargain gain of ₹ 335 million ($ 4 million) has been recognized in the consolidated statements of profit or loss. Significant recovery in Panel and Glass Industry and successful start of new business during the last six months has led to increase in demand and profitability in the glass substrate business. Accordingly, the Group has assessed the recoverable value of all its assets and liabilities which do not require to record any impairment charge during the year ended March 31, 2021. ASI is one of the 4 manufacturers globally specializing in LCD glass substrates for LCD Panels. These glass substrate sheets are the main inputs in LCD Panels used in TV’s, computers, mobile phone screens and other display devices. Ferro Alloys business On September 15, 2017.21, 2020, the Company completed the acquisition of Ferro Alloys Corporation Limited (“FACOR”). FACOR was admitted under the corporate insolvency resolution process pursuant to the Insolvency and Bankruptcy Code, 2016, as amended (“Bankruptcy Code”). The NCLT, on January 30, 2020 approved the resolution plan for the acquisition resulting in FACOR becoming a wholly owned subsidiary of the Company. FACOR holds 90% in its subsidiary, Facor Power Limited (“FPL”). FACOR is a ferro alloys production company in Bhadrak, Orissa, India and it owns a ferro chrome plant with capacity of 72,000 TPA, two operational chrome mines and a 100 MW of capital power plant through FPL Pursuant to the aforesaid resolution plan, the consideration paid by Vedanta Limited for the acquisition of FACOR included a cash consideration of ₹ 552 million ($8 million) (comprising an infusion of equity and inter-corporate loan of ₹ 336 million ($ 5 million) and ₹ 216 million ($ 3 million), respectively) and the issuance of zero coupon, secured and unlisted non-convertible debentures of aggregate fair value of ₹ 2,358 million ($ 32 million) payable over four years in equal portions commencing in March 2021 (a small portion of the same is yet to be issued). Exploration and Development Activities We are engaged in ongoing exploration and development activities to locate additional ore bodies in India, Australia, South Africa, Namibia and Ireland. We spent approximately Rs. 13,501₹ 15,472 million ($ 208.2212 million) in fiscal year 20172021 on exploration.exploration and development. The focus of our exploration has been sediment hosted zinc deposits in India and oil and gas exploration in India and South Africa. Call Options over Shares Options to Increase Interests in HZL and BALCO
1. | Call Options Over Shares in HZL |
On April 11, 2002, we acquired a 26.0% interest in HZL from the GoI through our subsidiary, SOVL (which merged with us with effect from April 1, 2012). At the time of the acquisition, we owned 80.0% and Sterlite Technologies Limited owned the remaining 20.0% in SOVL. In February 2003, Sterlite Technologies Limited transferred its 20.0% interest to us. We subsequently acquired a further 20.0% interest in HZL through an open market offer. The total cash consideration paid by us for the acquisition of the 46.0% interest in HZL was Rs. 7,776.0₹ 7,776 million ($ 119.9112 million at the time of acquisition). Upon our acquisition of the 26.0% interest in HZL, we and the GoI entered into a shareholders’ agreement to regulate, among other things, the management of HZL and dealings in HZL’s shares. Under the shareholders’ agreement, the GoI granted us two call options to acquire all the shares in HZL held by the GoI at the time of exercise. We exercised the first call option on August 29, 2003 and acquired an additional 18.9% of HZL’s issued share capital at a cost of Rs. 3,239.0₹ 3,239 million ($ 48.944 million) on November 12, 2003, increasing our interest in HZL to 64.9%. The shareholders’ agreement provides that prior to selling shares in HZL to a third party, either party must first issue a sale notice offering those shares to the other party at the price it intends to sell them to the third party. However, a transfer of shares, representing not more than 5.0% of the equity share capital of HZL, by the GoI to the employees of HZL is not subject to such right of first refusal by us. The GoI has transferred shares representing 1.5% of HZL’s share capital to the employees of HZL. The shareholders’ agreement also provides that if the GoI proposes to make a sale of its shares in HZL by a public offer prior to the exercise of our second call option, then we shall have no right of first refusal. The second call option provides us a right to acquire the GoI’s remaining 29.5% shareholding in HZL, subject to the right of the GoI to transfer up to 3.5% of the issued share capital of HZL to employees of HZL, in which case the number of shares that we may purchase under the second call option will be reduced accordingly. This call option became exercisable on April 11, 2007 and remains exercisable for as long as the GoI has not sold its remaining interest pursuant to a public offer of its shares. Under the shareholders’ agreement, upon the issuance of a notice of exercise of the second call option by us to the GoI, we shall be under an obligation to complete the purchase of the shares, if any, then held by the GoI, within a period of 60 days from the date of such notice. The exercise price for the second call option will be equal to the fair market value of the shares as determined by an independent appraiser. In determining the fair market value of the shares, the independent appraiser may take into consideration a number of factors including, but not limited to, discounted cash flows, valuation multiples of comparable transactions, trading multiples of comparable companies, SEBI guidelines and principles of valuation, the minority status of the shares, the contractual rights of the shares and the current market price of the shares. Based solely on the market price of HZL’s shares on the NSE on July 28, 2017June 25, 2021 of Rs. 277.9₹ 339.55 ($ 4.3)4.58) per share, and not including the other factors that the independent appraiser may consider, one possible estimation of the exercise price to acquire all of the GoI’s 1,247,950,590 shares in HZL would be Rs. 346,805₹ 423,742 million ($ 5,347.85,715 million). By a letter dated July 21, 2009, we exercised the second call option. The GoI disputes the validity of the call option and has refused to act upon it. Consequently, we invoked arbitration and filed a statement of claim. The arbitral proceedings was stayed due to the Status quo order by Hon’ble Supreme Court but pursuant to the recent Supreme court order dated August 13, 2020 we had written to the arbitral tribunal for commencement of arbitration proceedings and tribunal is yet to confirm the date for resumption of arbitration proceedings. While the Arbitration was in process, a Public Interest Litigation (“PIL”) was filed seeking restraint on disposal of residual shares by GoI, the Supreme Court on January 19, 2016 ordered the status quo to be maintained with respect to the proposed disinvestment of government interest in HZL until further orders are passed by the Supreme Court. The Supreme Court, on August 13, 2020 removed the status quo order in place to the extent that arbitration proceedings can continue with respect to our claim call option rights under progressthe shareholder agreement. The matter before the tribunal has not been taken up yet. The GOI without prejudice to the position on the put or call option issue received approval from the central government cabinet for divestment and will be next heard on April 21, 2018.the government is looking to divest through the auction route. On January 9, 2012, we offered to acquire the GoI’s interests in HZL for Rs.₹ 154,920 million ($ 2,338.42,118 million). We have, by way of letters dated April 10, 2012 and July 6, 2012, sought to engage with the GoI on the same terms as the offer. This offer was separate from the contested exercise of the call options, and we proposed to withdraw the ongoing litigation in relation to the contested exercise of the options should the offer be accepted. To date, the offer has not been accepted by the GoI and therefore there is no certainty that the acquisition will proceed. 2. | Call Options over shares in BALCO |
On March 2, 2001, we acquired a 51.0% interest in BALCO from the GoI for a cash consideration of Rs. 5,533.0₹ 5,533 million ($ 83.573 million). On August 28, 2012,March 2, 2001, we entered into a shareholders’ agreement with the GoI and BALCO to regulate, among other things, the management of BALCO and dealings in BALCO’s shares. The shareholders’ agreement provides that as long as we hold at least 51.0% of the share capital of BALCO, we are entitled to appoint one more director to the board of BALCO than the GoI and are also entitled to appoint the managing director. There are various other matters reserved for approval by both the GoI and us under the shareholders’ agreement, including amendments to BALCO’s articles of association, the commencement of a new business,non-pre-emptive issues of shares or convertible debentures and the provision of loans or guarantees or security to other companies under the same management as BALCO. Under the shareholders’ agreement, if either we or the GoI wish to sell its shares in BALCO to a third party, the selling party must first offer the shares to the other party at the same price at which it is proposing to sell the shares to the third party. The other party shall then have the right to purchase all, but not less than all, of the shares so offered. If a shareholder does not exercise its right of first refusal, it shall have a tag along right to participate in the sale pro rata and on the same terms as the selling party, except that if the sale is by the GoI by way of a public offer, the tag along right will not apply. However, a transfer of shares representing not more than 5.0% of the equity share capital of BALCO by the GoI to the employees of BALCO is not subject to such right of first refusal by us. The GoI also granted us an option to acquire the remaining shares in BALCO held by the GoI at the time of exercise. The exercise price is the higher of: the fair value of the shares on the exercise date, as determined by an independent valuer; and the original sale price (Rs. 49.0(₹ 49 per share) ($ 0.81 per share) together with interest at a rate of 14.0% per annum compounded half yearly from March 2, 2001 to the exercise date, less all dividends received by the GoI since March 2, 2001 to the exercise date. On March 19, 2004, we exercised our option to acquire the remaining 49.0% of BALCO’s issued share capital held by the GoI at that time. Thereafter, the GoI sought several extensions to complete the sale of the shares. On June 7, 2006, the GoI contended that the clauses of the shareholders’ agreement relating to our option violated the provisions of section 111A of the erstwhile Companies Act, 1956 by restricting the right of the GoI to transfer its shares and that as a result the shareholders’ agreement was null and void. The GoI has also expressed an intention to exercise its right to sell 5.0% of BALCO to BALCO employees. Subsequently, the dispute was referred to arbitration and the arbitration tribunal rendered award rejecting our claim. We filed an application to the High Court of Delhi to set aside this award and the next date ofmatter will be listed for hearing in due course. The GoI without prejudice to the position on the put or call option issue as received approval from the central government cabinet for divestment and the government is on October 17, 2017.looking to divest through the auction route. Employees As of March 31, 2017,2021, we had 17,72817,041 employees. The number of our employees as of March 31, 2015, 20162019, 2020 and 20172021 is as follows: | | | | | | | | | | | | | | | | | | | | | | | Company | | | | Location | | | Primary Company Function | | | Total employees for the year ending March 31, | | | | | | 2015 | | | 2016 | | | 2017 | | Zinc | | | | | | | | | | | | | | | | | | | | | | | | | — HZL | | | India | | | | Zinc and lead production | | | | 5,214 | | | | 4,652 | | | | 4,421 | | Zinc International | | | | | | | | | | | | | | | | | | | | | | | | | — Black Mountain | |
| South
Africa |
| | | Zinc and lead Mining | | | | 792 | | | | 791 | | | | 789 | | | | — Skorpion | | | Namibia | | |
| Zinc and lead Mining and
refining |
| | | 842 | | | | 782 | | | | 708 | | | | — Lisheen | | | Ireland | | | | Zinc and lead Mining | | | | 335 | | | | 33 | | | | — | | Oil and gas | | — Cairn India | | | India | | | | Oil and Gas | | | | 1,585 | | | | 1,478 | | | | 1,479 | | Iron Ore | | — Western Cluster (Liberia) | | | Liberia | | | | Iron Ore | | | | 10 | | | | — | | | | — | | | | — Vedanta Limited | | | India | | | | Iron Ore | | | | 3,397 | | | | 2,903 | | | | 2,878 | | Copper | | | | | | | | | | | | | | | | | | | | | | | | | — Vedanta Limited | | | India | | |
| Copper smelting and
refining |
| | | 1,021 | | | | 1,011 | | | | 1,022 | | | | — CMT | | | Australia | | | | Copper mining | | | | 33 | | | | 24 | | | | 22 | | | | — Fujairah Gold FZC | | | UAE | | | | Precious metal refinery | | | | 92 | | | | 49 | | | | 92 | | Aluminium | | | | | | | | | | | | | | | | | | | | | | | | | — BALCO | | | India | | | | Aluminium production | | | | 3,002 | | | | 2,468 | | | | 2,477 | | | | — Vedanta Limited | | | India | | | | Aluminium production | | | | 2,675 | | | | 2,480 | | | | 3,291 | | Power | | | | | | | | | | | | | | | | | | | | | | | | | — Vedanta Limited | | | India | | |
| Commercial power
generation |
| | | 100 | | | | 109 | | | | 109 | | | | — TSPL | | | India | | |
| Commercial power
generation |
| | | 221 | | | | 240 | | | | 234 | | | | — MALCO Energy Limited | | | India | | |
| Commercial power
generation |
| | | 80 | | | | 75 | | | | 71 | | Others | | | | | | | | | | | | | 146 | | | | 126 | | | | 135 | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | | | | | | | | | | | 19,545 | | | | 17,221 | | | | 17,728 | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Business Segment | | Entity | | Location | | Primary Company Function | | Total employees for the Year Ended March 31, | | | 2019 | | | 2020 | | | 2021 | | Zinc India | | Hindustan Zinc Limited | | India | | Zinc and lead production | | | 4,171 | | | | 4,181 | | | | 3,711 | | Zinc International | | Black Mountain | | South Africa | | Zinc and lead Mining | | | 911 | | | | 820 | | | | 797 | | | Skorpion | | Namibia | | Zinc and lead Mining and refining | | | 583 | | | | 568 | | | | 141 | | Oil and gas | | Cairn | | India | | Oil and Gas | | | 1,549 | | | | 1,561 | | | | 1,408 | | | Vedanta Limited | | India | | Iron Ore | | | 2,616 | | | | 2,552 | | | | 2,487 | | Copper | | Vedanta Limited | | India | | Copper smelting and refining | | | 960 | | | | 842 | | | | 649 | | | CMT | | Australia | | Copper mining | | | 19 | | | | 22 | | | | 23 | | | Fujairah Gold FZC | | UAE | | Precious metal refinery | | | 69 | | | | 66 | | | | 58 | | Aluminium | | BALCO | | India | | Aluminium production | | | 2,608 | | | | 2,410 | | | | 1,946 | | | Vedanta Limited | | India | | Aluminium production | | | 4,048 | | | | 3,750 | | | | 3,452 | | Power | | Vedanta Limited | | India | | Commercial power generation | | | 131 | | | | 269 | | | | 261 | | | TSPL | | India | | Commercial power generation | | | 76 | | | | 69 | | | | 62 | | | MALCO Energy Limited | | India | | Commercial power generation | | | 13 | | | | 16 | | | | 26 | | Steel | | Electro Steel Limited | | India | | Steel | | | 2,159 | | | | 2,063 | | | | 1,851 | | Others | | — | | — | | — | | | 155 | | | | 169 | | | | 169 | | | | | | | | | | | | | | | | | | | | | Total | | | 20,068 | | | | 19,358 | | | | 17,041 | | | | | | | | | | | | | | | | | | | | |
The majority of our workforce is unionized. Employees of HZL and BALCO are members of registered trade unions such as Bharat Aluminium Mazdoor Sangh for BALCO and Hindustan Zinc Workers Federation for HZL and are affiliated with national trade unions such as the Indian National Trade Union Congress. We believe that relations with our employees and unions are good, though we have in the past and may in the future experience strikes and industrial actions or disputes. See “Item“Item 3. Key Information—D. Risk Factors—Risks Relating to Our Business—Our operations are subject to risks that could result in decreased production, increased cost of production and increased cost of or disruptions in transportation, which could adversely affect our revenue, results of operationspower generation, mining and financial condition”oil exploration” In addition to delivering high-quality assets andlow-cost operations, our sustainable development modelThe Vedanta Sustainability Framework (VSF) is integral to Vedanta Limited’sthe Company’s core business strategy andstrategy. It helps us conduct our business in line with our values, of entrepreneurship, growth, excellence, trustwhile delivering high-quality and sustainability.cost competitive products.
Our sustainable development model wasis made up of threefour pillars: responsible stewardship, building strong relationship andrelationships, adding and sharing values. During fiscal year 2015, we added a fourth dimension:values and strategic communications reflecting our dedication to transparency and to engaging in meaningful dialogue with all stakeholders. We have created a sustainable development framework to helpcommunications. The VSF facilitates the institutionalization of sustainability at each of our businesses put the sustainable development model into practice.businesses. It points todoes so, by adopting global best practicepractices that are reflected in our policies, standards as well as our own policies and guidance notes for the most critical issues. We are committed to ensuring that the framework is followed and managed in all our operations and new projects as part of our sustainability journey.notes. During fiscal year 2017,2021, we have continued to strengthen our sustainable development frameworkthe VSF with the release of performance standards on safety, environment and environment.social performance. Collectively we have 8 policies, over 87 standards and guidance notes along with a robust monitoring mechanism to help our businesses integrate sustainable operating methods in their operating model. We are using the Vedanta sustainability assurance program (“VSAP”) to ensure framework compliance, including a program of audits. In a geographically diverse business like ours, where attitudes to health and safety can vary, fostering a culture of zero harm is no easya challenge howeverto which we are committed toward this challenge and working tothrough which we will eliminate fatal accidents.accidents and harm. During fiscal year 2017,2021, we unfortunately had fiveeight fatal incidents and each is beingaccidents. Each was investigated and reported to Vedanta Limited board. During fiscalLimited’s Board of Directors, with the lessons learned advised to all our operating businesses including action plans to prevent such incidents. Last year 2016, we hadalso released six keynew safety standards to be implemented in the Group and these were incorporated in our Vedanta sustainability assurance program and audit program. These included standards for Group-wide implementationExcavation, Rail Safety, Emergency Response, Blasting, Inflow and this year an audit program is institutionalized to review the implementation of those safety standards. We have begun to see tangible outcomes of our safety standards implementation, with far fewer incidentsinrush, Shafts and lost time injuries.hoisting, and Underground electrical. The corporate team along with the business units are implementing various capacity building and behavioral based programs to introduce campaigns that aim to entrench a culture of safety and risk awareness. DuringThis fiscal year 2017, we rolled out tailingfocused our efforts in enhancing these specific areas for improved safety performance: (i) Visible Felt Leadership, (ii) Business Partner Engagement and (iii) Fatalities investigation and learning. In fiscal year 2021, we continued efforts to improve the implementation of our tailings management standard towards managingfor the tailingGroup. An independent, third-party audit of all our tailings dam facilities has been completed. The audit has reviewed the design and ash storage related business risk. Further, 968,625 hoursthe quality of safety training were delivered to employeesthe management systems of the tailings dam facilities. Recommendations from the review are under consideration and contractors in fiscal year 2017.implementation and we are closely tracking performance against the recommendations. We manage our environmental footprint to the most rigorous global standards and have developed specific objectives and targets, particularly with regard to water and energy management. AllWe have been able to recycle 110% of the fly-ash generated at our functionaloperations. We also have many control programs in place across our businesses, for example, all our operations are now ISO 14001 certified. Systemscertified; systems to reduce water and energy consumption, minimize land disturbance, andminimize waste production and contain pollution and conduct successful mine closures are in place. We are implementing biodiversity action plans at all Support during COVID-19 pandemic The COVID 19 pandemic has struck hard on the society and the planet is going through a severe humanitarian crisis. The pandemic has devastated the lives of people physically and economically. The country has been seeing an increasing rise in job losses, migration, loss of lives, medical crisis etc. Owing to our sites and are also researching into new and innovative ways to recycle waste frommoral response, our operations including fly ash, red mud, phosphor, gypsum etc.have prompted to protect our employees and our communities. Our response towards this crisis are aligned with the government’s response to emergency lockdown across the globe to prevent the spread of the pandemic. Our global presence and diversified landscape made tackling of the pandemic more challenging. However, we took immediate steps to form the best preventative measures at the group as well as business unit level to curb the spread of the infection and maintain business continuity. A Group Level Covid task force has been formalized under the strong leadership of Ms. Priya Agarwal, Group HSE Head, Comm, HR Head, CMO and CEO Nand Ghar. This Covid taskforce ensures strong compliance of SOPs/protocols, review with health teams of respective units to prevent the spread of the infection and to monitor and report the proceedings to the business CEO and Group task force. The Company is one of the leading mining industries in the country that aims ensure employee health and wellbeing through. Fortunately, we are equipped with resources that we can utilize to benefit and support the nation. During this ongoing pandemic, we have vetted out all our possible resources to support the government in fight against the Covid 19 pandemic. Our social team collaborated with multiple civil societies and organizations to reach out to the most affected masses of the society during the pandemic. We invested heavily in to benefit our communities to provide insurance, food, medical equipment, funds, logistics. Our business units across the country have joined the hands with the central and local administration to provide support to secure livelihood opportunities, basic human needs, medial needs of the marginalized communities. Our CSR initiative ‘Jeevika Samridhhi’ helped the farmers secure their livelihood by selling their produce in the company township during the lockdown while maintaining social distancing guidelines. Our Swasthya Sarthi initiative in Cairn Rajasthan works in collaboration with the local administration to provide free OPD and mobile van units equipped with necessary medical facilities to the interior villages of Barmer district that lack proper transportation and medical facilities. This initiative was started keeping pregnant women of the communities in focus. We maintain property insurance which protects against losses relating to our assets arising from fire, business interruption, earthquakes or terrorism and freight insurance which protects against losses relating to the transport of our equipment, product inventory and concentrates. However, our insurance does not cover other potential risks associated with our operations. In particular, weWe do not have insurance for certain types of environmental hazards, such as pollution or other hazards arising from our disposal of waste products.products or fraud, which is being evaluated. The occurrence of a significant adverse event, the risks of which are not fully covered by insurance, could have a material adverse effect on our financial condition or results of operations. Moreover, no assurance can be given that we will be able to maintain existing levels of insurance in the future at the same rates. See “Item“Item 3. Key Information-D. Risk Factors—Risks Relating to Our Business- Our insurance coverage may prove inadequate to satisfy future claims against us.” We and our directors and officers are subject to US securities and other laws. In order to attract and retain qualified board members and executive officers, we have obtained directors’ and officers’ liability insurance. There can be no assurance that we will be able to maintain directors’ and officers’ liability insurance at a reasonable cost, or at all. The Mines and Minerals (Development and Regulation) Amendment Act, 2015 (“MMDR Amendment Act”) was promulgated on March 27, 2015 to amend The Mines and Minerals (Development and Regulation) Act, 1957 (“MMDR Act”), the MineralMinerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 1960, as amended2016 (“MC Rules”), and the Mineral Conservation and Development Rules, 1988, as amended (“MCD Rules”), and it governs mining rights and the operations of mines in India. The MCD Rules outline the procedures for obtaining a prospecting license or the mining lease, the terms and conditions of such licenses and the model form in which they are to be issued. The GoI announced the National Mineral Policy in 1993.1993 which was revisited in 2008 and further in 2019. The MMDR Amendment Act has brought about significant changes in the legal regime for the mining sector including defining bauxite, iron ore, limestone and manganese ore as notified minerals, creation of a new category of mining license i.e. the prospectinglicense-cum-mining lease, grant of mining lease for a period of 50 years for all minerals other than coal, lignite and atomic minerals, establishment of District Mineral Foundation (“DMF”),DMF, auction of notified and other minerals by competitive bidding, includinge-auction etc. The MMDR Act was further amended by the Mines and Minerals (Development and Regulation) Amendment Act, 2016 which permits the transfer of captive mine leases (granted before January 12, 2015) without having to go through an auction process and also allows the dumping of waste outside of the mining area by including dumping sites within the definition of lease area. The amendment received presidential assent on May 6, 2016. The MLAA brought forth amendments in the MMDR Act. The MLAA has (i) liberalised the eligibility requirement to participate in coal auctions; (ii) removed the requirement for State Governments to obtain prior approval of Central Government to grant mining concessions; and (iii) enabled the transfer of approvals (other than coal, lignite and atomic minerals), whereby all the rights, approvals, clearances and licenses vested with the previous lessee will be extended to the successful bidder for a period of two years. During these two years, the successful bidder is required to obtain all the required clearances. Grant of a Mining Lease Only the government of the applicable state may grant a mining lease.lease for minerals other than coal, lignite and atomic minerals. The mining lease agreement governs the terms on which the lessee may use the land for the purpose of mining operations. If the land on which the mines are located belongs to private parties, the lessee must acquire the surface rights relating to the land from such private parties. If a private party refuses to grant the required surface rights to the lessee, the lessee is entitled to inform the state government and deposit with the state government compensation for the acquisition of the surface rights. If the state government deems that such amount is fair and reasonable, the state government has the power to order a private party to permit the lessee to enter the land and carry out such operations as may be necessary for the purpose of mining. For determining what constitutes a fair amount of compensation payable to the private party, state governments are guided by the principles of the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2014 or Land Acquisition Act, which generally governs the acquisition of land by governments from private individuals. In case of land owned by the government, the surface right to operate in the lease area is granted by the government upon application as per the norms of that state government. If the mining operations in respect of any mining lease results in the displacement of any persons, the consent of such affected persons, and their resettlement and rehabilitation as well as payment of benefits in accordance with the guidelines of the applicable state government, including payment for the acquired land owned by those displaced persons, needs to be settled or obtained before the commencement of the mining project. The maximum term of a mining lease is 30 years and the minimum term is 20 years. A mining lease may be renewed for further periods of 20 years or less at the option of the lessee. The MC Rules provide that if a lessee uses the minerals for its own industry, then such lessee is generally entitled to a renewal of its mining lease for a period of 20 years, unless it applies for a lesser period. However, with the changes brought in by way of the MMDR Amendment Act, for all minerals other than coal, lignite and atomic minerals, mining leases shall now be granted for a period of 50 years.years through auction process. All mining leases granted for such minerals before the MMDR Amendment Act shall be valid for 50 years. On expiry of the lease, instead of being renewed, the leases shall be put up for auction. The MC Rules provide that a holder of a captive mine is entitled to a first right of refusal when the lease is auctioned at the expiry of the lease period. The MMDR Amendment Act specifies that any lease granted before the commencement of the MMDR Amendment Act, shall be extended: (i) up to March 31, 2030 for minerals used for captive purposes (specificend-use) and up to March 31, 2020 for minerals used for other than captive purposes, or (ii) until the completion of renewal period, or (iii) for a period of 50 years from the date of grant of such lease, whichever is later. This provision shall not apply to mining leases for which renewal has been rejected, granted, or lapsed. Protection of the Environment The MMDR Act also deals with the measures required to be taken by the lessee for the protection and conservation of the environment from the adverse effects of mining. The National Mining Policy emphasizes that no mining lease would be granted to any party without a proper mining plan, including an environmental plan approved and enforced by statutory authorities and which provides for controlling environmental damage, restoration of mined areas and for planting trees according to prescribed norms. The MMDR Amendment Act now also provides for the creation of a DMF and a National Mineral Exploration Trust (“NMET”).NMET. The DMF is to be established by the state government for the benefit of persons in districts affected by mining related operations. The NMET was established by the central government for regional and detailed mine exploration through Notification No. G.S.R 633(E) dated August 14, 2015. Licensees and lease holders of leases granted other than through auction shall paycontribute to the DMF an amount not more thanone-thirdat a rate of 30% of the royalty prescribed by the central government, and theleases granted through auction at a rate of 10% of royalty. The contribution to NMET is to be made at two percent of royalty. Labor Conditions Working conditions of mine laborers are regulated by the Mines Act, 1952, as amended from time to time. The Act sets forth standards of work, including number of hours of work, leave requirements, medical examination, weekly days of rest, night shift requirements and other requirements to ensure the health and safety of mine workers. Royalties Royalties on the minerals extracted or a dead rent component, whichever is higher, are payable to the relevant state government by the lessee in accordance with the MMDR Act. The mineral royalty is payable in respect of an operating mine from which minerals are removed or consumed and is computed in accordance with a prescribed formula. The GoI has been granted broad powers to modify the royalty scheme under the MMDR Act but may not do so more than once every three years. In addition, the lessee must pay the occupier of the surface land over the mining lease an annual compensation determined by the state government. The amount depends on whether the land is agricultural ornon-agricultural. Mines Bill
The Mines (Amendment) Bill, 2011 proposes several amendments to the Mines Act, 1952, including significant enhancement to the monetary penalties and terms of imprisonment for violations.
Oil and Gas Laws
Regulation of Exploration and Production The Ministry of Petroleum and Natural Gas (MoPNG)(“MoPNG”) is the principal regulator of oil and natural gas exploration and production in India. The MoPNG established the Directorate General of HydrocarbonsDGH in 1993 to promote the sound management of Indian petroleum and natural gas resources with due regard to the environmental, safety, technological and economic aspects of petroleum activities. The Directorate General of HydrocarbonsDGH is responsible for,inter alia,, ensuring correct reservoir management practices, reviewing and monitoring exploratory programs, the development plans of oil companies, and monitoring the production and the optimal utilization of gas fields. The MoPNG oversees the Oil Industry Safety Directorate, which develops standards for safety, fire-fighting, training programs and information dissemination, and conducts periodic safety audits of all petroleum-handling facilities. It also oversees the Oil Industry Development Board, which provides financial and other assistance for the conductive development of the oil industry. The safety standards prescribed by the Oil Industry Safety Directorate, and the safety regulations prescribed by the Directorate General of Mines Safety in respect of onshore petroleum mining installations, must be complied with. The Oilfields (Regulation and Development) Act, 1948 Oil and natural gas exploration activities are governed by The Oilfields (Regulation and Development) Act, 1948. This legislation1948 provides for the regulationsregulation of oilfields and for the development of mineral oil resources, including natural gas and petroleum.resources. The Oilfields (Regulation and Development) Act empowers the GoI to frame rules on the granting of mining leases and petroleum exploration or prospecting licenses, the conservation and development of mineral oils, the production of oil, and the regulation of oilfields.
Petroleum Exploration License and Petroleum Mining Lease under the Petroleum and Natural Gas Rules, 1959 The Petroleum and Natural Gas Rules provide the framework for the granting of petroleum exploration licenses and petroleum mining leases. Rule 4 of the Petroleum and Natural Gas Rules prohibits the prospecting or exploitation of any oil or gasactivity unless a petroleum exploration license or petroleum mining lease has been granted under the Petroleum and Natural Gas Rules. A Petroleum Mining Lease entitles the lessee to an exclusive right to extract oil and gas petroleum from the relevant contract area. Petroleum Exploration Licenses and Petroleum Mining Leases are granted by the MoPNG for offshore areas and by the relevant state governments, with the prior approval of the Government, for onshore areas. In 2006, the Government amended the Petroleum and Natural Gas Rules so that a licensee or lessee is now under an obligationobligated to provide all data obtained under the license.license or lease. Such data shall be the property of the Government, provided that the licensee or lessee shall have the right to make use of such data, free of cost, for the purposes of petroleum operations under the license or lease. The Government also has the right to disclose to the public allnon-proprietary data without the consent of the licensee. The Government has the sole authority to determine what is proprietary. The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 The Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 regulates the exploration and exploitation of resources of the continental shelf and exclusive economic zone. The Essential Commodities Act, 1955 The Essential Commodities Act, 1955 makes provisions controlling the production, supply and distribution of certain essential commodities, which include petroleum and petroleum products. The Petroleum Act, 1934 read with the Petroleum Rules, 2002 The Petroleum Act, 1934 provides that no person shall produce, refine, blend, store orregulates the law relating to the import, transport, storage, production, refining and blending of petroleum except in accordance with the rules framed by the GoI under the Petroleum Act, 1934.and other inflammable substances. The Petroleum Rules, 2002 now regulate these activities. Mines Act, 1952 read with Oil Mines Regulation, 2017 The Oil Mines Regulations 2017, provides for greater focus on safety and precautionary measures to be adhered in conducting the petroleum operations namely compliance with specific Oil Industry Safety Directorate standards, recommended practices, guidelines and Indian Standards, preparation and implementation of a safety management plan, carrying out safety audits in mines and additional obligations of owners, agents or managers of mines. The Petroleum and Natural Gas Regulatory Board Act, 2006 The Petroleum and Natural Gas Regulatory Board Act, 2006 provides for the establishment of the Petroleum and Natural Gas Regulatory Board. The board regulates the refining, processing, storage, transportation, distribution, marketing and sale of petroleum products and natural gas (excluding production of crude oil and natural gas). It strives to protect the interests of consumers and entities engaged in specific activities relating to petroleum, petroleum products and natural gas and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country and to promote competitive markets. The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 The Petroleum and Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962 provides the framework governing the acquisition of right of user in land for laying pipelines for the transportation of petroleum and minerals and other matters connected therewith. This law is limited to the acquisition procedure, restrictions on use of land and compensation payable to the persons interested in the land. Hydrocarbon Exploration and Licensing Policy The Ministry of Petroleum and Natural Gas through its notificationO-32011/4/2013-ONG-I dated March 30, 2016 introduced a new exploration and licensing policy named Hydrocarbon Exploration and Licensing Policy (“HELP”). This is a fundamental change in the Indian oil and gas sector, which introduces a new contractual and fiscal model for the award of hydrocarbon acreages. Four main facets of HELP are: single license, open acreages, revenue sharing model and marketing and pricing freedom. The uniform license will enable the contractor to explore conventional as well as unconventional oil and gas resources including shale gas/oil, tight gas and gas hydrates under a single license. The concept of Open Acreage Policy (“OALP”) will enable exploration and production companies to choose the blocks from the designated area. Under the OALP, Vedanta Limited has been awarded 41 blocks in the fiscal year 2019 and 10 blocks in fiscal year 2020. Policy reforms to increase exploration activities and enhance production On February 28, 2019, GoI notified policy reforms to increase exploration activities, attract domestic and foreign investment in unexplored/unallocated areas of sedimentary basins, and enhance domestic production of oil and gas from existing fields. These policy reforms heralded a fundamental shift. For instance, going forward, exploration blocks in Category-II and Category–III Basins will be awarded on the basis of international competitive bids based exclusively on exploration work programme. It entails no revenue or production sharing with Government except in case of a windfall gain. Similarly, concessional royalty rates would be levied on early commencement of production. Marketing includingand pricing freedom has been given to those new gas discoveries whose FDP will be approved for the gasfirst time after the date of policy. The policy also ushered ease of doing business by establishing Empowered Coordination Committee and Dispute Resolution Mechanism. Policy framework to promote and incentivize enhanced recovery methods for oil and gas On October 10, 2018, GoI notified policy framework to promote and incentivize enhanced recovery (“ER”) methods for oil and gas. The Policy envisages fiscal incentives in form of partial waiver of applicable Cess/Royalty. Fields should be producedhaving a minimum three years of commercial production to avail ER incentives. However, fields with unconventional hydrocarbon (“UHC”) production would be eligible from Discoveriesthe start of commercial production. Fields going in Deepwater, Ultra Deepwaterfor Improved Recovery (“IR”) would be eligible on crossing the prescribed benchmark of increasing production beyond current recovery of 60% in case of oil and High Pressure-High Temperature areasbeyond current recovery of 80% in case of gas. The Ministrypolicy, having a sunset clause, will be effective for ten years from the date of Petroleumits notification. However, the fiscal incentives will be available for a period of 120 months from the date of commencement of production in ER/UHC projects. Streamlining working of PSCs in pre-NELP and Natural Gas through its notification No.NELP Blocks On August 14, 2018, GoI notified Policy Framework for Streamlining the Working of PSCs in respect of O-22013/27/2012-ONG-D-V(Vol-II)Pre-NELP dated March 21, 2016 introducedand NELP Blocks. Amongst others, this policy reform focuses on the policy forNorth Eastern region by providing extended exploration period and marketing includingand pricing freedom for theto future gas to be produced from discoveries in deepwater, ultra-deepwater and high pressure temperature areas. This policy is applicable to allas well as existing discoveries in deep water/ultra-deep water/high temperature-high pressure areas which arewere yet to commence commercial production as on July 1, 2018. Unconventional Hydrocarbons policy On August 20, 2018, GoI notified Policy framework for exploration and exploitation of January 1, 2016unconventional hydrocarbons under existing PSCs, coal bed methane (“CBM”) contracts and nomination fields. This policy allows access to all future discoveries in such areas. As perunconventional hydrocarbons under the existing PSCs, CBM contracts and Nomination fields. In the PSC regime, the policy envisages a separate ring-fencing for cost recovery of cost incurred on exploration, development and production from the producerstotal value of petroleum produced and saved from new commercial discoveries. The Government share of Profit Petroleum for new discoveries will be allowed marketing freedom including pricing freedom subject to a ceiling price on10% over and above the basispercentage of landed price of alternative fuels.Profit Petroleum shared with the Government under existing PSCs. (iii) | Regulations pertaining to our oil and gas blocks located in South Africa |
Petroleum Resources Development Act - Act—South Africa The Mineral and Petroleum Resources Development Act is the law governing exploitation of minerals and petroleum in South Africa. An exploration license has been granted to Cairn South Africa Pty Limited for exploration of petroleum resources in South Africa under the law. Petroleum Agency SAPASA is the nodal agency for all approvals. Cairn South Africa Pty Limited has not yet entered into the second phase of exploration, and accordingly the Deed for extension has not been executed. PASA has notified that the exploration right has expired. Accordingly, along with joint venture partner Petro SA, closure application with PASA was filed on September 19, 2018, to exit from South Africa operations. The application has been accepted and closure certificate has been granted by PASA on September 20, 2019. Our business is subject to environmental laws and regulations. The applicability of these laws and regulations varies from operation to operation and depends on jurisdiction in which we operate. Our operations require environmental and other permits covering, amongst other things, water use and discharges, stream diversions, solid waste disposal and air and other emissions. Major environmental laws applicable to our operations include The Environment (Protection) Act, 1986, Forest (Conservation) Act, 1980, or Forest Act and the Forest Conservation Rules, 2003, Hazardous Wastes (Management and Handling) Rules, 1989, Water (Prevention and Control of Pollution) Act, 1974, Water (Prevention and Control of Pollution) Cess Act, 1977, Air (Prevention and Control of Pollution) Act, 1981, The Coal Mines (Nationalization) Act, 1973, or Coal Nationalization Act, Coking Coal Mines (Nationalization) Act, 1972, Coal Mines (Taking Over of Management) Act, 1973, Coking Coal Mines (Emergency Provision) Act, 1971, Coal Bearing Areas (Acquisition and Development) Act, 1957, Coal Mines (Conservation and Development) Act, 1974 and the New Coal Distribution Policy, 2007. The Environmental Protection Act, 1986, the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981 provide for the prevention, control and abatement of pollution. Pollution control boards have been set up in states in India to exercise the powers under these statutes for the purpose of preventing and controlling pollution. Companies must obtain the clearance of state pollution control boards before emitting or discharging effluents into the environment. All new projects or activities and expansion and modernization of existing projects, require an environment clearance. The Hazardous Waste (Management and Handling) Rules, 1989 define waste oil and oil emulsions as hazardous wastes and impose an obligation on each occupier and operator of any facility generating hazardous waste to dispose of such hazardous wastes properly. It also imposes obligations in respect of the collection, treatment and storage of hazardous wastes. Each occupier and operator of any facility generating hazardous waste is required to obtain an approval from the relevant state Pollution Control Board for collecting, storing and treating the hazardous waste. In addition, the Merchant Shipping Act, 1958 provides for liability in respect of loss or damage caused outside the ship by contamination resulting from the escape or discharge of oil from the ship, wherever such escape or discharge occurs. Licensing Requirements Under the Electricity Act, 2003 (“Electricity Act”), the transmission, distribution of, and trading in electricity require licenses from the appropriate Central or State Electricity Regulatory Commissions (respectively, “CERCs” and “SERCs”, and collectively, “ERCs”), unless exempted, however generation of electricity does not require a license. (vi) | Employment and Labor Laws |
We are subject to various labor, health and safety laws which govern the terms of employment of our laborers at our mining and manufacturing facilities, their working conditions, the benefits available to them and the general relationship between our management and such laborers. These include the Industrial Disputes Act, 1947, Factories Act, 1948, Contract Labor (Regulation and Abolition) Act, 1970, Employee State Insurance Act, 1948, Payment of Wages Act, 1936, Minimum Wages Act, 1948, Workmen’s Compensation Act, 1923, Payment of Gratuity Act, 1972, Payment of Bonus Act, 1965, and Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. (vii) | Other Laws The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, or Land Acquisition Act.
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The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, or Land Acquisition Act The Land Acquisition Act was notified with effect from January 1, 2014. The law replaces the 120 year old legislation the Land Acquisition Act, 1894 and is a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons. As per the provisions of the Land Acquisition Act, the central government or appropriate state government is empowered to acquire any land from private persons for ‘public purpose’ subject to payment of compensation to the persons from whom the land is so acquired. There is also a mandatory requirement under the Act for social impact assessment accompanying every land acquisition, to consider the social costs and benefits arising of such acquisition and a participative process has been prescribed for such acquisition by imposing the condition of obtaining consent of the requisite majority prescribed under the Act i.e. consent of at least 80.0% of people whose land is acquired for private projects and of at least 70.0% of the landowners in the case of public-private partnership projects and discussions and objections at every stage of the acquisition proceedings. It also provides for compensation as high as four times more than the existing practice in rural areas and two times in urban areas. In December 2014, an ordinance (The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014) was promulgated to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The ordinance was re-promulgated in a modified form in April 2015, and again in May 2015. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015 was introduced in Lok Sabha on May 11, 2015 to replace the April ordinance and was referred to a joint Parliamentary Committee for detailed examination. Companies Act, 1956 and Companies Act, 2013 The Companies Act, 2013 to replace the Companies Act, 1956 which currently governs the formation, financing, functioning and winding up of companies, received assent in August 2013 and the 470 section legislation has been partially notified. The Companies Act, 2013 seeks to consolidate and amend the law relating to the companies and intends to improve corporate governance and to further strengthen regulations for corporates. The major features introduced by the 2013 Act include formulation of a corporate social responsibility policy and spending towards such activities, increased responsibility of independent directors and setting up of a National Financial Reporting Authority. Some new concepts such as one-person company, small companies, dormant company, class action suits, and registered valuers have also been included. C. Organizational Structure The following diagram summarizes the corporate structure of our consolidated group of companies and our relationship with Vedanta and other key entities as of March 31, 2021: ![LOGO](https://capedge.com/proxy/20-F/0001193125-21-218618/g165852g65u14.jpg)
*50.0% of the share in the RJ Block is held by a subsidiary of Vedanta Limited # | Post voluntary open offer in April 2021, the controlling stake of Vedanta Resources Limited has been increased to 65.18%. |
1. | We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL on July 21, 2009 although the exercise is currently subject to dispute. See “— B. Business Overview — Our Business — Options to Increase Interests in HZL and BALCO” for more information. |
2. | We have exercised our option to acquire the remaining 49.0% of BALCO owned by the GoI on March 19, 2004. The exercise of this option has been contested by the GoI. The GoI has the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “— B. Business Overview — Our Business — Options to Increase Interests in HZL and BALCO” for more information. |
3. | Ownership stake in Electrosteel increased to 95.49% during 3rd quarter of fiscal year 2020 from 90% in fiscal year 2019 through their subsidiary VSL subsequent to Exit offer as per original NCLT application. Further, with effect from January 1, 2014. The law replaces the 120 year old legislation the Land Acquisition Act, 1894 and is a unified legislation for acquisition of land and adequate rehabilitation mechanisms for all affected persons. As per the provisionsMarch 25, 2020, in view of the Land AcquisitionScheme of Amalgamation granted by Hon’ble NCLT, Kolkata, Vedanta Limited now directly holds 95.49% in Electrosteel Steels Limited. |
4. | Konkola Copper Mines Plc (“KCM”) ceased to be a related party with effect from May 21, 2019. A provisional liquidator was appointed to manage KCM’s affairs on May 21, 2019, after ZCCM Investments Holdings Plc (“ZCCM-IH”), an entity majorly owned by the Government of Zambia and a 20.6% shareholder in KCM, filed a winding up petition against KCM. KCM’s majority shareholder, VRHL and its parent company i.e. VRL, are contesting the winding up petition in the Zambian courts. VRHL applied for a stay of the winding up petition in the High Court of Zambia but was unsuccessful. VRHL subsequently filed an appeal against the High Court ruling. The appeal hearing took place on August 25, 2020 and the ruling was delivered on November 20, 2020. The Appeal Court ruled in favor of Vedanta and concluded that a dispute as defined in the Shareholders Agreement exist between the parties and that the disputes are arbitrable and referable to arbitration. The Appeal Court ordered a stay of the winding-up proceedings in accordance with section 10 of the Zambian Arbitration Act, 19 of 2000 and that the central government or appropriate state government is empoweredmatter be referred to acquire any land from private personsarbitration. Costs were awarded in Vedanta’s favour in both Courts in Zambia. On December 2, 2020 ZCCM filed an application for ‘public purpose’ subjectleave to paymentappeal the Court of compensationAppeal’s ruling to the persons from whomSupreme Court, Zambia. Vedanta has opposed the land is so acquired. There is alsoapplication, which was argued on March 17, 2021. The On April 29, 2021, the Court of Appeal dismissed ZCCM’s application for leave to appeal to the Supreme Court, costs were awarded in Vedanta’s favour. ZCCM has renewed its application for leave to appeal in front of a mandatory requirementsingle judge of the Supreme Court. The hearing date was set down for June 4, 2021. The judge will deliver his ruling in due course. |
Notwithstanding the Court of Appeal’s judgement, on December 28, 2020, KCM’s acting CEO announced a ‘reorganization and restructuring’ of KCM by the provisional liquidator into two subsidiary companies, KCM Smelter Co Limited and Konkola Mineral Resources Limited taking effect from February 1, 2021. VRHL has filed an application for directions on the provisional liquidator’s powers in light of the Court of Appeal’s ruling of November 20, 2020 and have asked for guidance from the High Court of Zambia whether these powers include the ability to reorganize and restructure KCM. The hearing of the preliminary issues took place on March 30, 2021 where by the judge reserved her ruling. The ruling was delivered on May 7, 2021. The Jjudge ruled that in light of the stay of the winding up proceedings ordered by the Court of Appeal in November 2020 and the referral of the matter to arbitration, court does not have the jurisdiction to consider an additional application requesting to give directions on the powers of the provisional liquidator. Therefore, leave to appeal was denied. VRHL and VRL have also commenced arbitration proceedings against ZCCM-IH with seat in Johannesburg consistent with their position that arbitration is the agreed dispute resolution process. ZCCM filed and served its Defense and Counterclaims on Vedanta on July 14, 2020, and Vedanta’s reply to the Defense and Counterclaims was served on ZCCM on January 31, 2021. ZCCM filed its response to Vedanta’s reply on April 15, 2021. An initial hearing of prioritized matters took place from May 31, 2021 to June 3, 2021 with the substantive dispute being heard in November 2021 and February 2022. On July 7, 2021, the arbitral tribunal granted a partial final Award in which it has ruled that ZCCM has breached, and is in continuing breach of, the dispute resolution provisions in the shareholders’ agreement between amongst others ZCCM, Vedanta and the Government of Zambia. The principal members of our consolidated group of companies are as follows: 1. | Vedanta Limited: The Company was originally incorporated in Goa on February 5, 1954 under the Act for social impact assessment accompanying every land acquisition, to consider the social costsPortuguese Commercial Code as a private limited company and benefits arising of such acquisition and a participative process has been prescribed for such acquisition by imposing the condition of obtaining consent of the requisite majority prescribedon June 25, 1965 under the Act i.e. consent of up to 80% of people whose land is acquired for private projects and of 70% of the landowners in the case of public-private partnership projects and discussions and objections at every stage of the acquisition proceedings. It also provides for compensation as high as four times more than the existing practice in rural areas and two times in urban areas. In December 2014, an ordinance (The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014) was promulgated to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. The ordinance wasre-promulgated in a modified form in April 2015, and again in May 2015. Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Second Amendment) Bill, 2015 was introduced in Lok Sabha on May 11, 2015 to replace the April ordinance and was referred to a joint Parliamentary Committee for detailed examination. Companies Act, 1956 and Companies Act, 2013
The Companies Act, 2013 to replacename “Sesa Goa Private limited” under the Companies Act 1956 which currently governs1956. It became a public limited company on April 16, 1981 pursuant to fresh certificate of incorporation issued by the formation, financing, functioningRegistrar of Companies, Goa, Daman and winding upDiu. Thereafter the name of companies, received assent in Augustthe company was changed from “Sesa Goa Limited” to “Sesa Sterlite Limited” pursuant to a fresh certificate of incorporation issued by the Registrar of Companies on September 18, 2013 pursuant to the Re-organization Transactions and the 470 section legislationname of the Company changed from “Sesa Sterlite Limited” to Vedanta Limited pursuant to a fresh certificate of incorporation issued by the Registrar of Companies on April 21, 2015. Our ADSs are listed on the NYSE. Vedanta, through its subsidiaries, owned 55.1% of our issued share capital as on March 31, 2021, and controls our management. However, post voluntary open offer in April 2021, the controlling stake of Vedanta Resources Limited has been partially notified.increased to 65.18%. The Companies Act, 2013 seeks to consolidate and amend the law relating to the companies and intends to improve corporate governance and to further strengthen regulations for corporates. The major features introduced by the 2013 Act include formulation of a corporate social responsibility policy and spending towards such activities, increased responsibility of independent directors and setting up of a National Financial Reporting Authority. Some new concepts such asone-person company, small companies, dormant company, class action suits, and registered valuers have also been included.
C. Organizational Structure
The following diagram summarizes the corporate structureremainder of our consolidated groupshare capital i.e. 34.82% is held by Life Insurance Corporation of companiesIndia, ICICI Prudential Asset Management Company, HDFC asset Management Company limited, Black Rock Inc, Vanguard Group Inc, Employee benefit trust and our relationshipother institutional and public shareholders. Vedanta Limited and Cairn India Limited (now Vedanta Limited—oil and gas business) announced the Cairn India Merger which became operative on April 11, 2017. All substantive approvals for effecting the merger of Cairn India Limited (now Vedanta Limited—oil and gas business) with Vedanta and other key entities as ofLimited were received on March 31, 2017:27, 2017.
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2. | ![LOGO](https://capedge.com/proxy/20-F/0001193125-17-258701/g408997page131.jpg)
(1) | We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL on July 21, 2009 although the exercise is currently subject to dispute. See “— B. Business Overview — Our Business — Options to Increase Interests in HZL and BALCO” for more information. |
(2) | We have exercised our option to acquire the remaining 49.0% of BALCO owned by the GoI on March 19, 2004. The exercise of this option has been contested by the GoI. The GoI has the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “— B. Business Overview — Our Business — Options to Increase Interests in HZL and BALCO” for more information. |
The principal members of our consolidated group of companies are as follows:
1. | Vedanta Limited. The company was originally incorporated in Goa on February 5, 1954 under the Portuguese Commercial Code as a private limited company and on June 25, 1965 under the name “Sesa Goa Private limited” under the Companies Act 1956. It became a public limited company on April 16, 1981 pursuant to fresh certificate of incorporation issued by the Registrar of Companies, Goa, Daman and Diu. Thereafter the name of the company was changed from “Sesa Goa Limited” to “Sesa Sterlite Limited” pursuant to a fresh certificate of incorporation issued by the Registrar of Companies on September 18, 2013 pursuant to theRe-organization Transactions and the name of the Company changed from “Sesa Sterlite Limited” to Vedanta Limited pursuant to a fresh certificate of incorporation issued by the Registrar of Companies on April 21, 2015. Our ADSs are listed on the NYSE. Vedanta, through its subsidiaries, owned 62.8 % of our issued share capital as on March 31, 2017, and controls our management. The remainder of our share capital is held by Bhadram Janhit Shalika (previously known as the SIL Employees Welfare Trust), Life Insurance Corporation of India and other institutional and public shareholders (37.2%). Vedanta Limited and Cairn India Limited announced the Cairn India Merger which became operative on April 11, 2017. All substantive approvals for effecting the merger of Cairn India Limited with Vedanta Limited were received on March 27, 2017. |
2. | BALCO.BALCO: BALCO is incorporated in New Delhi, State of Delhi, India and is headquartered at Korba in the State of Chhattisgarh. We own 51.0% of BALCO’s share capital and have management control of the company. The GoI owns the remaining 49.0%. We exercised an option to acquire the GoI’s remaining ownership interest in BALCO on March 19, 2004, which has been contested by the GoI. Further, the GoI retains the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information. BALCO owns and operates our aluminium business. |
3. | HZL. HZL is incorporated in Jaipur, State of Rajasthan, India and is headquartered in Udaipur in Rajasthan. HZL is listed on the NSE and BSE. We own 64.9% of HZL’s share capital through our wholly-owned subsidiary SOVL. SOVL was merged into SIIL with effect from April 1, 2011 pursuant to a merger approved by the High Court of Madras. The remainder of HZL’s share capital is owned by the GoI (29.5%) and institutional and public shareholders and employees of HZL (5.6%). We have management control of HZL, which owns and operates our zinc business, and a call option to acquire the GoI’s remaining ownership interest at a fair market value to be determined by an independent appraiser. We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “- B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO” for more information. |
4. | Skorpion.Skorpion, previously Anglo Base Namibia Holdings (Proprietary) Limited, previously Ambase Exploration (Namibia) Proprietary Limited was incorporated on June 16, 1998. The company has its headquarters at the Skorpion Zinc mine site, which is situated 25 km north of Rosh Pinah Namibia. The company’s registered office is situated at 24 Orban Street, Klein Windhoek, Namibia. The company holds the entire share capital in the following companies: Skorpion Zinc (Proprietary) Limited, Namzinc Proprietary Limited and Skorpion Zinc (Proprietary) Limited is an investment holding company, holding the entire share capital in Namzinc and Skorpion. Namzinc operates a zinc refinery, who procures oxide zinc ore from Skorpion, who in turn extracts the ore from an open pit zinc deposit. |
5. | BMM.BMM is an underground mining operation located at Aggeneys in the Northern Cape. It produces zinc, lead and copper concentrates which are predominantly exported to international customers through the port of Saldanha. Exxaro Resources (through its wholly owned subsidiary, Exxaro Base Metals & Industrial Mineral Holdings (Pty) Ltd) holds the remaining 26.0% interest in BMM. |
6. | Vedanta Lisheen Holdings Limited:Lisheen mine is located in County Tipperary, Republic of Ireland. When operational, it consisted of an underground mine, concentrator and backfill plant, with a related capacity of approximately 131,000 tons of zinc in concentrate annually. The Lisheen mine is no longer in operation due to its closure in December 2015. |
7. | MALCO Energy Limited: MALCO was incorporated in Mettur, Tamil Nadu. MALCO’s equity shares were listed and traded on the NSE and BSE, and were subsequently delisted on June 19, 2009. Vedanta, through Twin Star and Welter Trading held 94.8% of MALCO’s share capital and controls the management. The remaining 5.4% ownership interest in MALCO was held by public shareholders. Pursuant to theRe-organization Transactions, MALCO merged with and into us through the issue of our shares to the shareholders of MALCO on a 7 for 10 basis. MALCO’s power business was sold to Vedanta Aluminium for a cash consideration of Rs. 1,500 million ($ 25 million), which is now renamed as MALCO Energy Limited. |
8. | Talwandi Sabo Power Limited:TSPL was incorporated as a special purpose vehicle by Punjab State Power Corporation Limited for development of 1980 MW onbuild-own-operate basis. TSPL has a 1980 MW coal based thermal power plant facility (comprising of three units of 660 MW each) in Mansa in the state of Punjab. The first 660 MW and second 660 MW unit of the Talwandi Sabo power plant were capitalized in fiscal year 2015 and 2016 respectively. The third 660 MW unit was capitalized on September 1, 2016 after successfully completing trial runs. |
Volcan is the key entity that controls us. See “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders
D. Property, Plants and Equipment
See “- B. Business Overview—Our Business—Our Copper Business—‘Principal Facilities’Options to Increase Interests in HZL and ‘ProjectsBALCO” for more information. BALCO owns and Developments’,”operates our aluminium business.
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3. | HZL: HZL is incorporated in Jaipur, State of Rajasthan, India and is headquartered in Udaipur in Rajasthan. HZL is listed on the NSE and BSE. We own 64.9% of HZL’s share capital through our wholly-owned subsidiary SOVL. SOVL was merged into SIIL with effect from April 1, 2011 pursuant to a merger approved by the High Court of Madras. The remainder of HZL’s share capital is owned by the GoI (29.5%) and institutional and public shareholders and employees of HZL (5.6%). We have management control of HZL, which owns and operates our zinc business, and a call option to acquire the GoI’s remaining ownership interest at a fair market value to be determined by an independent appraiser. We have exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “- B. Business Overview—Our Business—OurOptions to Increase Interests in HZL and BALCO” for more information. |
4. | Skorpion: Skorpion, officially known as THL Zinc Business—‘Principal Facilities’Namibia Holdings (Proprietary) Limited, previously Anglo Base Namibia Holdings (Proprietary) Limited, previously Ambase Exploration (Namibia) Proprietary Limited was incorporated on June 16, 1998. The company has its headquarters at the Skorpion Zinc mine site, which is situated 25 km north of Rosh Pinah Namibia. The company’s registered office is situated at 24 Orban Street, Klein Windhoek, Namibia. Vedanta Limited holds the entire share capital in the Skorpion Zinc (Proprietary) Limited. Skorpion Zinc (Proprietary) Limited is an investment holding company, which holds the entire share capital in Namzinc (Proprietary) Limited and ‘ProjectsSkorpion (Proprietary) Limited. Namzinc operates a zinc refinery, who procures oxide zinc ore from Skorpion, who in turn extracts the ore from an open pit zinc deposit. |
5. | BMM: BMM consist of the Black mountain mine and Developments’,” “- B. Business Overview—Our Business—Our Aluminium Business—‘Principal Facilities’the Gamsberg mine. BMM is an underground mining operation located at Aggeneys in the Northern Cape. It produces zinc, lead and ‘Projectscopper concentrates which are predominantly exported to international customers through the port of Saldanha. Gamsberg is the open pit mine located 30 km from Black Mountain Mine and Developments’,”produces zinc concentrates which are predominantly exported to international customer through the port of Saldanha. The Company holds 74.0% and “- B. Business Overview—Our Business—Our Zinc International Business—‘Principal Facilities’Exxaro Resources (through its wholly owned subsidiary, Exxaro Base Metals & Industrial Mineral Holdings (Pty) Ltd) holds the remaining 26.0% interest in BMM. |
6. | Talwandi Sabo Power Limited: TSPL was incorporated as a special purpose vehicle by Punjab State Power Corporation Limited (“PSPCL”) for development of 1980 MW on build-own-operate basis. TSPL has a 1980 MW coal based thermal power plant facility (comprising of three units of 660 MW each) in Mansa in the state of Punjab. The first 660 MW and ‘Projectssecond 660 MW unit of the Talwandi Sabo power plant were capitalized in fiscal year 2015 and 2016 respectively. The third 660 MW unit was capitalized on September 1, 2016 after successfully completing trial runs. |
7. | Electrosteel Steels Limited: Electrosteel steels was incorporated as public limited company on December 20, 2006. It owns and operates a Greenfield integrated steel manufacturing facility near Bokaro, Jharkhand India with a capacity of 1.5 Mtpa. In its meeting held on June 22, 2017 of lenders along with State Bank of India, the Lead Banker filed an application to NCLT. NCLT vide its order dated July 21, 2017 admitted the application and on April 17, 2018 approved the resolution plan submitted by Vedanta Limited through its wholly owned subsidiary Vedanta Star Limited (“VSL”). On June 4, 2018, Vedanta Limited through its subsidiary, VSL acquired management control over ESL as the previous board of directors of ESL was reconstituted on that date. Further, on June 15, 2018, pursuant to the allotment of shares to VSL, the Group holds 90.0% of the paid-up share capital of ESL through VSL. During the 3rd quarter of fiscal year 2020, the Company has increased their holding to 95.49% through their subsidiary VSL subsequent to Exit offer as per original NCLT application. On March 25, 2020, NCLT, Kolkata granted the approval for the Scheme of Amalgamation of VSL with Electrosteel Steels Limited. With effect from March 25, 2020, in view of the Scheme of Amalgamation granted by Hon’ble NCLT, Kolkata, Vedanta Limited now directly holds 95.49% in Electrosteel Steels Limited. |
Volcan is the key entity that controls us. See “Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders” D. Property, Plants and Equipment See “- B. Business Overview—Our Business—Our Copper Business—‘Principal Facilities’ and ‘Projects and Developments’,” “- B. Business Overview—Our Business—Our Zinc Business—‘Principal Facilities’ and ‘Projects and Developments’,” “- B. Business Overview—Our Business—Our Aluminium Business—‘Principal Facilities’ and ‘Projects and Developments’,” and “- B. Business Overview—Our Business—Our Zinc International Business—‘Principal Facilities’ and ‘Projects and Developments’. ITEM 4A. | UNRESOLVED STAFF COMMENTS |
Not Applicable
ITEM 5. | UNRESOLVED STAFF COMMENTS |
Not applicable. ITEM 5: | OPERATING AND FINANCIAL REVIEW AND PROSPECTS |
The following discussion of our business, financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this Annual Report. Some of the statements in the following discussion are forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, such as those set forth under “Item 3. Key Information—D. Risk Factors” and elsewhere in this Annual Report. Our consolidated financial statements and the financial information discussed below have been prepared in accordance with IFRS as issued by the IASB. Overview We are a diversified natural resource company engaged in exploring, extracting and processing minerals and oil and gas. We produce zinc, lead, silver, oil and gas, copper, aluminium, iron ore, steel, glass substrate and commercial power and have a presence across India, South Africa, Namibia, UAE, Ireland, Australia, Japan, South Korea, Taiwan and Liberia. We have experienced significant growth through various expansion projects, acquisition of our zinc and aluminium businesses in 2002 and 2001 respectively, through the GoI’s disinvestment programs, the acquisition of the zinc business of Anglo American Plc in Namibia, South Africa and Ireland in fiscal year 2011, acquisition of oil and gas business in 2012, acquisition of 90.0% controlling stake in ESL under IBC, in line with the Resolution Plan approved by NCLT, Kolkata and further acquisition of additional 5.5% stake in ESL through open market in fiscal year 2020 and by successfully growing our acquired businesses. We have further strengthened our presence across commodities through an all share merger with Sesa Goa in August 2013 through the Re-organization Transactions. We believe our experience in operating and expanding our business in India will allow us to capitalize on attractive growth opportunities arising from India’s large mineral reserves, relatively low cost of operations and large and inexpensive labor and talent pools. Our revenue decreased from ₹ 909,012 million in fiscal year 2019 to ₹ 835,446 million in fiscal year 2020, representing a decrease of ₹ 73,566 million and increased to ₹ 868,630 million ($ 11,876 million) in fiscal year 2021, representing an increase of ₹ 33,183 million or 4.0%. The operating profit of ₹ 145,216 million in fiscal year 2019 decreased to an operating loss of ₹ 39,934 million in fiscal year 2020. However, operating profit for fiscal year 2021 was at ₹ 186,852 million ($ 2,555 million). The following tables are derived from our selected consolidated financial data and set forth: the revenue from external customers for each of our business segments as a percentage of our revenue on a consolidated basis; the operating profit for each of our business segments as a percentage of our operating profit on a consolidated basis; and the segment profit for each of our business segments as a percentage of our segment profit on a consolidated basis. | | | | | | | | | | | | | | | For the Year Ended March 31, | | Particulars | | 2019 | | | 2020 | | | 2021 | | | | (in percentages) | | Revenue: | | | | | | | | | | | | | | | | | Zinc – India | | | 22.7 | | | | 21.7 | | | | 25.2 | | Zinc – International | | | 3.0 | | | | 3.7 | | | | 3.1 | | Oil and Gas | | | 14.6 | | | | 15.2 | | | | 8.7 | | Iron Ore | | | 3.2 | | | | 4.1 | | | | 5.2 | | Copper | | | 11.8 | | | | 10.8 | | | | 12.5 | | Aluminium | | | 32.1 | | | | 31.8 | | | | 32.9 | | Power | | | 7.1 | | | | 7.0 | | | | 6.2 | | Steel | | | 4.6 | | | | 5.1 | | | | 5.4 | | Other | | | 0.9 | | | | 0.5 | | | | 0.8 | | | | | | | | | | | | | | | Total | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | | | | | | | | | | | | Operating Profit / (loss): | | | | | | | | | | | | | | | | | Zinc – India | | | 60.1 | | | | 161.6 | | | | 49.0 | | Zinc – International | | | 1.8 | | | | (6.4 | ) | | | 2.6 | | Oil and Gas | | | 25.1 | | | | (256.5 | ) | | | 6.0 | | Iron Ore | | | 2.7 | | | | 11.8 | | | | 8.5 | | Copper | | | (2.6 | ) | | | (32.8 | ) | | | (2.9 | ) | Aluminium | | | 3.8 | | | | 11.1 | | | | 32.0 | | Power | | | 6.4 | | | | 27.0 | | | | 4.45 | | Steel | | | 4.1 | | | | 8.6 | | | | 1.7 | | Other | | | (1.4 | ) | | | (24.4 | ) | | | (1.2 | ) | | | | | | | | | | | | | | Total | | | 100.0 | | | | (100.0 | ) | | | 100.0 | | | | | | | | | | | | | | | Segment Profit /(loss)(1): | | | | | | | | | | | | | | | | | Zinc – India | | | 44.1 | | | | 41.5 | | | | 42.5 | | Zinc – International | | | 2.9 | | | | 1.8 | | | | 3.0 | | Oil and Gas | | | 31.8 | | | | 34.6 | | | | 11.8 | | Iron Ore | | | 2.6 | | | | 4.0 | | | | 6.6 | | Copper | | | (1.0 | ) | | | (1.4 | ) | | | (0.6 | ) | Aluminium | | | 9.2 | | | | 9.5 | | | | 28.3 | | Power | | | 6.3 | | | | 7.8 | | | | 5.1 | | Steel | | | 3.3 | | | | 2.8 | | | | 3.2 | | Other | | | 0.8 | | | | (0.6 | ) | | | 0.2 | | | | | | | | | | | | | | | Total | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | | | | | | | | | | | |
(1) | Segment profit is presented as required by IFRS 8 and is calculated by adjusting depreciation, amortization and impairment from operating profit. Our segment profit may not be comparable to similarly titled measures reported by other companies due to potential inconsistencies in the method of calculation. We have included our segment profit because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our segment profit should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. Overview
We believe that the inclusion of supplementary adjustments applied in our presentation of segment profit are a diversified natural resource company engaged in exploring, extracting and processing minerals and oil and gas. We produce zinc, lead, silver, oil and gas, copper, aluminium, iron ore and commercial power and have a presence across Australia, India, Ireland, Liberia, Namibia, South Africa and UAE. We have experienced significant growth in recent years through various expansion projects, acquisitionappropriate because we believe it is an indicative measure of our zinc and aluminium businesses in 2002 and 2001 respectively, through the GoI’s disinvestment programs, the acquisition of the zinc business of Anglo American Plc in Namibia, South Africa and Ireland in fiscal year 2011 and by successfully growingbaseline performance as it excludes certain charges that our acquired businesses. We have further strengthened our presence across commodities through an all share merger with Sesa Goa in August 2013 through theRe-organization Transactions. We believe our experience in operating and expanding our business in India will allow usmanagement considers to capitalize on attractive growth opportunities arising from India’s large mineral reserves, relatively low cost of operations and large and inexpensive labor and talent pools. Our revenue decreased from Rs. 733,579 million in fiscal year 2015 to Rs. 639,493 million in fiscal year 2016, representing a decrease of 14.7% and increased to Rs. 717,207 million ($ 11,059.5 million) in fiscal year 2017, representing an increase of 12.2%. Operating loss decreased from Rs. 299,215 million in fiscal year 2015 to Rs. 268,822 million in fiscal year 2016, representing a decrease of 11.3%. Operating profit for fiscal year 2017 was Rs. 152,744 million ($ 2,355.3 million), representing an increase of 156.8% as compared to fiscal year 2016.
The following tables are derived from our selected consolidated financial data and set forth:
the revenue from external customers for eachbe outside of our business segmentscore operating results. In addition, our segment profit is among the primary indicators that our management uses as a percentagebasis for planning and forecasting of our revenue onfuture periods. See “Item. 3—Key Information—A. Selected Consolidated Financial Data” for a consolidated basis;
thetable reconciling operating profit for each of our business segments as a percentage of our operating profit on a consolidated basis; and
theto segment profit for each of our business segments as a percentage of our segment profit on a consolidated basis.
| | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | (in percentages) | | Revenue: | | | | | | | | | | | | | | | | | Zinc – India | | | 19.7 | | | | 21.6 | | | | 23.6 | | Zinc – International | | | 4.9 | | | | 4.0 | | | | 3.1 | | Oil and Gas | | | 20.0 | | | | 13.5 | | | | 11.4 | | Iron Ore | | | 2.6 | | | | 3.5 | | | | 5.7 | | Copper | | | 30.7 | | | | 32.7 | | | | 29.3 | | Aluminium | | | 17.3 | | | | 17.3 | | | | 19.1 | | Power | | | 4.6 | | | | 7.1 | | | | 7.7 | | Other | | | 0.2 | | | | 0.3 | | | | 0.1 | | | | | | | | | | | | | | | Total | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | | | | | | | | | | | | Operating Profit / (loss): | | | | | | | | | | | | | | | | | Zinc – India | | | 20.8 | | | | 22.1 | | | | 56.0 | | Zinc – International | | | 1.4 | | | | 0.3 | | | | 4.8 | | Oil and Gas | | | (132.1 | ) | | | (127.5 | ) | | | 9.3 | | Iron Ore | | | (1.1 | ) | | | (5.9 | ) | | | 5.5 | | Copper | | | 4.8 | | | | 7.3 | | | | 9.8 | | Aluminium | | | 4.6 | | | | 0.5 | | | | 7.7 | | Power | | | 1.5 | | | | 3.1 | | | | 7.0 | | Other | | | 0.1 | | | | 0.1 | | | | (0.1 | ) | | | | | | | | | | | | | | Total | | | 100.0 | | | | 100.0 | | | | 100.0 | | Segment Profit /(loss)(1): | | | | | | | | | | | | | | | | | Zinc – India | | | 32.3 | | | | 43.5 | | | | 44.3 | | Zinc – International | | | 5.1 | | | | 3.0 | | | | 4.3 | | Oil and Gas | | | 40.6 | | | | 22.2 | | | | 19.0 | | Iron Ore | | | (0.4 | ) | | | 2.8 | | | | 6.1 | | Copper | | | 8.0 | | | | 14.4 | | | | 7.9 | | Aluminium | | | 10.3 | | | | 5.5 | | | | 10.7 | | Power | | | 3.9 | | | | 8.2 | | | | 7.6 | | Other | | | 0.2 | | | | 0.4 | | | | 0.1 | | | | | | | | | | | | | | | Total | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | | | | | | | | | | | |
Note:
(1) | Segment profit is presented as required by IFRS 8 and is calculated by adjusting depreciation, amortization and impairment from operating profit. Our segment profit may not be comparable to similarly titled measures reported by other companies due to potential inconsistencies in the method of calculation. We have included our segment profit because we believe it is an indicative measure of our operating performance and is used by investors and analysts to evaluate companies in our industry. Our segment profit should be considered in addition to, and not as a substitute for, other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. We believe that the inclusion of supplementary adjustments applied in our presentation of segment profit are appropriate because we believe it is an indicative measure of our baseline performance as it excludes certain charges that our management considers to be outside of our core operating results. In addition, our segment profit is among the primary indicators that our management uses as a basis for planning and forecasting of future periods. “Item. 3—Key Information—A. Selected Consolidated Financial Data” for a table reconciling operating profit to segment profit for the periods presented. |
Factors Affecting Results of Operations Our results of operations are primarily affected by commodity prices, realization discount to Brent,input commodity inflation and deflation, our cost of production, our production output, government policy in India and exchange rates. Metal and Oil Prices, Copper TcRc and Power Tariff Overview Our results of operations are significantly affected by the commodity prices of natural resources that we produce, which are based on LME / London Bullion Market AssociationLBMA prices in our zinc and aluminium businesses,business, other benchmark prices in our oil, gas, and iron ore and steel businesses and by the TcRc of copper in our copper business. The TcRc of copper, the commodity prices of the metals that we produce and the benchmark price of oil, gas and iron ore can fluctuate significantly as a result of changes in the supply of and demand for zinc, lead, silver, oil, gas, iron ore, copper, aluminium and aluminiumsteel among others. While natural resources producers are unable to influence the market rate of the TcRc or commodity prices directly, events such as changes in smelting or commodity production capacities, temporary price reductions or other attempts to capture market share by individual natural resources producers including our consolidated group of companies, may have an effect on market prices. Moreover, the prices realized by us can, to some extent, be affected by the particular terms we are able to negotiate for the contractual arrangements we enter into with buyers. Price variations and market cycles have historically influenced and are expected to continue to influence our financial performance. During thefiscal year ended March 31, 2017,2021, the increase in commodity priceszinc, aluminium, copper, iron ore and silver positively impactedaffected our revenue and operating profit.profit which was offset by decrease in lead and dated brent price. During fiscal year 2017,2021, the average LME prices increased by 29.5% forof zinc, 6.2% for aluminium, 13.4% for lead, 16.7% for silver, 30.0% forcopper, iron ore and 2.3% forsilver increased by 0.8%, 3.2%, 17.8%, 75.0% and 38.8% and the lead and Dated Brent while the average price of copper decreased by 1.1%4.3% and 26.77%. respectively. Global growth and commodity demand remainsremain volatile and emerging markets continue to be the key drivers of growth. We are well positioned to capitalize on emerging market growth with a significant portion of our assets in India and Africa. With favorable demographics and urbanization driving consumption growth in India, we are well placed to meet the growing demand. For a further discussion of global market and economic conditions and the risks to our business, see “Item“Item 3. Key Information—D. Risk Factors—Risks Relating to Investments in Indian Companies, Global Economic Conditions and International Operations—Global economic conditions have been unprecedented and challenging and have had, and continue to have, an adverse effect on the Indian financial markets and the Indian economy in general, which has had, and may continue to have, a material adverse effect on our business, our financial performance and the prices of our equity shares and ADSs.” Despite a seriesThe COVID-19 pandemic and the widespread lockdowns imposed by countries in 2020 triggered the worst peacetime global contraction since the Great Depression in 1929. The subsequent and gradual easing of economic and political eventscontainment measures during the second half of the year, which resultedinitially caused a strong rebound. This initial spurt in volatilityeconomic activity, however, lost momentum in global markets,some regions of the commodity index was 25% higher atworld towards the end of fiscalthe year 2017 asdue to a result of improved macroeconomic conditions.renewed rise in infections. The recession and the pandemic-related restrictions also caused global trade to contract substantially, which hampered growth further, particularly in export-dependent economies. The US economy was supported by improvementssuffered a major drop in the US economyfirst half of the year, accompanied by a huge surge in unemployment. Owing to a vast array of monetary and fiscal measures, as well as financial reformsthe comparatively moderate government restrictions, the economy recovered in the second half of the year. In the first half of 2020, the pandemic and the introductionassociated containment measures also caused the economies of stimulus measures in China. AsEurozone to plunge into a result ofdeep recession that affected the rise in global economic activity, demand has increased for commodities, in particular the demand for iron ore, aluminium, coppermanufacturing and oil and gas, which lead to higher prices for those commodities. On the other hand, as a result of the prolonged global economic downturn witnessed over the past few years and limited investments made by mining companies, a lack of new mining projects is leading to supply pressures for some commodities, particularly zinc.services sectors equally. However, this decline varied greatly among different member states. Zinc and Aluminium The revenue of our zinc and aluminium businesses fluctuate based on the volume of our sales and the respective LME prices of zinc, lead and aluminium and the London Bullion Market AssociationLBMA price of silver. Our zinc business is fully integrated and its profitability is dependent upon the difference between the LME price of zinc and lead, London Bullion Market AssociationLBMA price of silver and our cost of production, which includes the costs of mining and smelting. For the portion of our aluminium business where the bauxite is sourced from BALCO’s own bauxite mines, profitability is dependent upon the LME price of aluminium less our cost of production, which includes the costs of bauxite mining or purchase of bauxite from third parties, transportation costs, the refining of bauxite into alumina and the smelting of alumina into aluminium. For the portion of our aluminium business where alumina is sourced from third parties, profitability is dependent upon the LME price of aluminium less the cost of the sourced alumina and our cost of production. Zinc LME prices remained volatile during the year FY 2020—21, starting off the year at $ 1843 per ton levels and gradually recovering to pre—COVID levels. Prices are currently at $ 2,795 per ton at March end. During fiscal year 2017, 56.1%2021, 81.7% and 40.0% of BALCO’sBALCO and Jharsuguda’s alumina requirementrequirements were met through imports and 48.2% of our Odisha Aluminium business’ alumina requirement were importeddomestic supplies from third parties, withand the restbalance were supplied by our Lanjigarh alumina refinery. The following table sets forth the daily average zinc and aluminium LME prices for each of the last three fiscal years: | | | For the Year Ended March 31, | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | Particulars | | | 2019 | | | 2020 | | | 2021 | | | | (in US dollars per ton/ounce) | | | (in $ per ton/ounce) | | Zinc LME | | | 2,177 | | | | 1,829 | | | | 2,368 | | | | 2,743 | | | | 2,402 | | | | 2,422 | | Aluminium LME | | | 1,890 | | | | 1,590 | | | | 1,688 | | | | 2,035 | | | | 1,749 | | | | 1,805 | | Lead LME | | | 2,021 | | | | 1,768 | | | | 2,005 | | | | 2,121 | | | | 1,952 | | | | 1,868 | | Silver London Bullion Market Association * | | | 18.1 | | | | 15.2 | | | | 17.8 | | | Silver LBMA * | | | | 15.4 | | | | 16.5 | | | | 22.9 | |
* | silver is denominated in $/ ounce |
The average LME aluminium prices for the year was $ 1,805 per ton, an increase of approximately 3% over FY 2020 average of $ 1,749 per ton. It was a bearish for aluminium LME with prices at $ 1,713 per ton in quarter 1 of 2020 and $ 1,527 per ton in quarter 2 of 2020, primarily driven by lower demand due to disruption in global economic activity on account of COVID-19 pandemic causing economic disruption, and consequently impacting the global demand for aluminium. With an increase in economic activities, the aluminium LME was bullish in the last two quarters with prices at $ 1,741 per ton in quarter 3 of 2020 and $1,930 per ton in quarter 4 of 2020. LME was stabilising post lockdown. The demand showed bearish sentiments due to COVID-19 pandemic and dropped by 3% in 2020 to approximately 63 million tons from approximately 65 million tons in 2019. While the demand in rest of the world has bounced back to pre-COVID era, the growth in China demand was appreciable since quarter 1 of FY 2021 and has led the recovery. The packaging & electrical sector being the torch bearer for this growth. The global demand for primary aluminium is expected to increase by approximately 9% in 2021 to approximately 69 million tons, the biggest boost coming from construction and transport sector across geographies backed by government stimulus. Steel The revenue of our steel business fluctuates based on the volume of our sales and the prices of steel in domestic market in fiscal year 2021. More than 99.0% of the sales in steel business happened in domestic market (99.0% in fiscal year 2020) and its prices are directly affected by the demand and supply of steel in the domestic market. Our major raw material are iron ore and coking coal. Iron ore is entirely sourced from domestic market. Coking coal is mostly imported and is generally purchased based on index price or spot prices. Any fluctuation in coking coal and iron ore prices impacts our cost of production. The steel prices are influenced by many factors including demand, supply, raw material cost, capacity utilization and improvement in manufacturing process. The profitability of our steel business is determined based on the sale price less the purchase price of raw material including manufacturing cost. The following table sets forth the prices for each of the last three fiscal years: | | | | | | | | | | | | | | | ($ per ton) | | | | For the year ended March 31, | | Particulars | | 2019 | | | 2020 | | | 2021 | | Pig irons | | | 404 | | | | 354 | | | | 382 | | Billet | | | 486 | | | | 418 | | | | 336 | | TMT | | | 564 | | | | 494 | | | | 539 | | Wire rod | | | 638 | | | | 519 | | | | 537 | | DI pipe | | | 593 | | | | 602 | | | | 545 | | | | | | | | | | | | | | | Average steel price ($ per ton) | | | 572 | | | | 495 | | | | 488 | | | | | | | | | | | | | | |
Average sales realization decreased 2% y-o-y from $ 495 per ton in fiscal year 2020 to $ 488 per ton in fiscal year 2021. 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 spend on infrastructure, the emphasis on developmental projects, demand-supply forces, the PMI in India and production and inventory levels across the globe specially China. Crude oil and natural gas MovementsMovement in the price of crude oil and discountsdiscount to oil prices based on quality parameters significantly affect the results of operation of our oil and gas business results of operations and declinesdecline in crude oil and natural gas prices may adversely affect our revenues and profits. Historically, international prices for oil have been volatile and have fluctuated widely due to many factors that are beyond our control, including, but not limited to overall economic conditions,condition, supply and demand dynamics for crude oil and natural gas, political developments, the ability of petroleum producing nations to set and maintain production levels and prices, the price and availability of other energy sources and weather conditions. LowerHistorically, prices of important LNG have been high. However, there has been steep reduction in prices due to development of LNG infrastructure and increases supply in the market lower oil prices may also reduce the economic viability of planned projects planned or those in early stages of development. In addition, a fall in the price of oil may result in the impairment of higher cost reserves and other assets which may result in decreased earnings or losses.
The following table sets out the average price of Dated Brent, an international benchmark of oil blend according to the US Energy Information Administration, for each of last three fiscal years: | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | (US$ per barrel) | | European Brent | | | 85.4 | | | | 47.5 | | | | 48.6 | |
| | | | | | | | | | | | | | | For the Year Ended March 31, | | Particular | | 2019 | | | 2020 | | | 2021 | | | | ($ per barrel) | | Dated Brent | | | 70.4 | | | | 60.9 | | | | 44.6 | |
Crude oil price averaged $ 44.6 per barrel, compared to $ 60.9 per barrel in previous year driven by multiple reasons arising due to the Covid-19 pandemic. The global oil market underwent a historic shock in 2020 triggered by COVID-19 pandemic. The impact of COVID-19 containment measures in many countries and territories severely reduced mobility. Reduced economic activity related to the COVID-19 pandemic has caused changes in energy demand and supply over the past year. World oil demand in FY 2021 contracted by 7.8 mb/d, to stand at 92.2 mb/d as compared to previous fiscal year. Fiscal year 2021 started with the steep decline in international crude oil benchmark prices because of the strict lockdown in countries across the world. There was slight improvement in prices in Q3 as the vaccine was developed and economic activities began to recover. Looking forward, we expect the recent events will continue to have an impact on the oil price volatility with downside risks until the global economies come out of lockdown and, all OPEC and partner countries act collectively. Realization discount to Brent The prices of various crude oil are based upon the price of the key benchmark crude oil such as Dated Brent, West Texas Intermediate, and Dubai/Oman. The crude oil prices move based upon market factors such as demand and supply. The regional producers price their crude oil on a premium or discount over the benchmark crude oil based upon differences in quality and competitiveness of various grades. For Rajasthan, and Cambay blocks, the crude oilsales to private refiners is benchmarked to Dated Brent with a fixed discount of 2.1% for FY 2021 and sales to PSU refiners continue to be based on Bonny Light,light, a West African low sulphur crude oil that is frequently traded in the region,region. For Ravva and Cambay blocks, the crude oil is also benchmarked to Bonny Light, with appropriate adjustments for crude quality. For fiscal year 2017,2021, the discount to Dated Brent averaged $5.7/bbl1.2% for Rajasthan and $0.8/bbl4.1% for Cambay and 1.5% for Ravva, due to the prevailing oil market conditions. Dated Brent reflects the values of North Sea cargo loading within the next 10-25 days, it incorporates the Brent, Forties, Oseberg and Ekofisk crude oil with the most competitive grade setting the price. European Brent spot prices and dated Brent prices are almost similar. Ravva crude is benchmarked to Tapis and Minas crude grades (South Asian crudes) and discount averaged $ 0.1/bbl to Dated Brent in fiscal year 2017. The crude oil price benchmarks are based on crude oil sales agreements. Movements in the discount range affect our revenue realization and any increase in quality differentials may adversely impact our revenues and profits.profit.
Iron Ore The revenue of the iron ore business fluctuates based on the volume of sales and the market price of iron ore. We sell iron ore under long-term contracts linked to spot index prices and on spot prices. The prices for iron ore are significantly dependent on the global and regional imbalances between the demand and supply of iron ore, worldwide steel-making capacity and transportation costs. The profitability of the iron ore business is dependent on its selling price, grade and cost of production which includes cost of extracting, processing iron ore and royalty. The following table sets forth the daily average iron ore prices (62%(62.0% iron) for each of the last three fiscal years: | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | (in US dollar per dmt) | | China imported iron ore fines (62% iron, cost and freight Tianjin Port) | | $ | 82.3 | | | $ | 51.5 | | | $ | 67.8 | |
| | | | | | | | | | | | | | | For the Year Ended March 31, | | Particulars | | 2019 | | | 2020 | | | 2021 | | | | (in $ per dmt) | | China imported iron ore fines (62.0% iron, cost and freight Tianjin Port) | | | 71.6 | | | | 94.84 | | | | 166.9 | |
Copper The revenue of our copper business fluctuates based on the volume of our sales and the LME price of copper. However, as our copper business is primarily one of custom smelting and refining, the profitability of our copper business is significantly dependent upon the market rate of the TcRc. We purchase copper concentrate at the LME linked price for the relevant quotational period less a TcRc that we negotiate with our suppliers but which is influenced by the prevailing market rate for the TcRc. The market rate for the TcRc is significantly dependent upon the availability of copper concentrate, worldwide copper smelting capacity and transportation costs. The TcRc that we are able to negotiate is also substantially influenced by the TcRc terms established by certain large Japanese custom smelters. The profitability of our copper business as to the portion of our copper business where we source copper concentrate from third parties, which accounted for almost 100% of our copper concentrate requirements, during fiscal year 2017, is thus dependent upon the amount by which the TcRc we are able to negotiate exceeds our smelting and refining costs. During fiscal year 2019, as the smelter operations at Tuticorin were shut, the company procured Anodes and Cathodes with negotiated Rc. The profitability of our copper operations is also affected by the prices we receive upon the sale ofby-products, such as sulphuric acid and gypsum and precious metals, which are generated during the copper smelting and refining process. The prices we receive forby-products can vary significantly, including as a result of changes in supply and demand and local market factors in the location theby-product is produced. The following table sets forth the average TcRc that we have realized for each of the last three fiscal years: | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | (in US cents per pound) | | Copper TcRc | | | 21.4 | | | | 24.1 | | | | 22.4 | |
The LME price of copper affects our profitability as we source copper concentrate substantially from third parties, which accounted for 97.5% of our copper concentrate requirements in fiscal year 2017. We do not expect to source any copper concentrate from our copper mine, Mt. Lyell in the near future, as the mine has been placed under care and maintenance since July 2014 due to a mud slide and an incident of a rock falling on the ventilation shaft. The following table sets forth the daily average copper LME price for each of the last three fiscal years:
| | | | | | | | | | | | | | | For the Year Ended March 31, | | Particulars | | 2019 | | | 2020 | | | 2021 | | | | (in US cents per pound) | | Copper TcRc | | | 6.0 | (1) | | | 2.8 | (1) | | | 3.3 | (1) | Copper LME | | | 6,337 | | | | 5,855 | | | | 6,897 | |
| | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | (in US dollars per ton) | | Copper LME | | | 6,558 | | | | 5,211 | | | | 5,152 | |
(1) | Above TcRc is computed net of premium paid on purchase of cathodes in fiscal year 2020 and fiscal year 2021 |
Power Under the Indian Electricity Act, the Central Electricity Regulatory Commission or the CERC determines tariffs for the supply of electricity by a generating company. In case of shortage of electricity supply, the CERC may fix the minimum and maximum tariff for sale or purchase of electricity, pursuant toWe operate 600 MW unit as an agreement entered into between a generating company and licensees, for up to one year. Under the guidelines issued by the Ministry of Power, the determination of the tariff for a particular project depends on the mode of participation in the project (i) through signing a memorandum of understanding, based on tariff principles prescribed by CERC (cost plus basis, comprising capacity charge, energy charge, unscheduled interchange charge and incentive payments) or (ii) competitive bidding, where the tariff is market based.
Our tariffs are based on the memorandum of understanding route for contracted quantity. The tariff for supply of power from our Jharsugudaindependent power plant at Jharsuguda. It has a power supply agreement with GRIDCO. BALCO used to GRIDCO accordingoperate 600 MW (2 X 300 MW) independent power plants. Now, it just operates 300 MW unit as an IPP. The other 300 MW unit has been converted to the PPA is determined on the basis of principles laid down under the tariff regulation notified by the CERC. The tariff for supply of power from our Mettura captive power plant (“CPP”), as per order received from CSERC dated January 1, 2019 for conversion of 300 MW capacity from IPP to the Tamil Nadu Electricity Board is determined by the energy purchase agreement with the Tamil Nadu Electricity Board.CPP from April 1, 2017. The agreement was entered for the period June 2016 to May 2017. Currently, MALCO does not have any energy purchase agreement for the supply of power. Due to prevailing business conditions, the MALCO plant has been put under care and maintenance from May 26, 2017. In case of our 1980
The 1,980 MW thermal power plant at Talwandi Sabo the project was set up throughfor commercial power sales. It has a tariff based competitive bidding process and therefore the capacity charges and efficiency have been determined in line with the bidding process and in accordance with guidelines set out in the PPA with Punjab State Power Corporation Limited (“PSPCL”). FuelPSPCL. The fuel cost subject to quoted efficiency will be a pass-through. Further, surpluspass-through and revenue is linked to the plant availability The average power sold to multiple customers isrealization price for TSPL for the years ended March 31, 2019, 2020 and 2021 are ₹ 4.1/unit, ₹ 3.7/unit and ₹ 3.0/unit respectively based on the pricing determined by demand and supply of the power markets.Plant Availability Factor. The average power realization price (excluding TSPL) for the years ended March 31, 20162019, March 31, 2020 and 20172021 was Rs. 2.9₹ 3.4, ₹ 3.6 and Rs.2.8₹ 3.1 per unit respectively. In fiscal year 2016, Jharsuguda power unit of 2400 MW was part of power business in which there was an option for sale in open access. Since April 2016, 1800 MW (three units of 600 MW each) has been converted to CPP in aluminium business. Balance IPP 600 MW power supply does not include open access therefore there is decrease in power rate realization based on PPA rate under long term contract. The average power realization price for TSPL for the years ended March 31, 2016 and 2017 was Rs. 4.3 and Rs 4.7 respectively per unit based on Plant Availability Factor (“PAF”). India Market Premium Generally, our products in India are sold at a premium to the LME market price due to a number of factors including the customs duties levied on imports by the GoI, the costs to transport metals to India and regional market conditions. See “Government Policy.“Government Policy.” As a result, we endeavor to sell large quantities of our products in India. Hedging We engage in hedging strategies to a limited extent to partially mitigate our exposure to fluctuations in commodity prices, as further described in “Note 23 “Financial Instruments” in the25: Financial Instruments” of Notes to the consolidated financial statements.Consolidated Financial Statements. Costs of Production Our results of operations are, to a significant degree, dependent upon our ability to efficiently run our operations and maintain low costs of production. Efficiencies relating to recovery of metal from the ore, oil and gas extraction, process improvements,by-product management and increasing productivity help drive our costs down. Costs associated with mining and metal production include, energy costs, ore extraction and processing costs at our captive mines, energy costs, labor costs and other manufacturing expenses. Costs of production also include cost of alumina for our aluminium business. The cost of production of our oil and gas business include expenditure incurred towards the production of crude oil and natural gas including statutory levies, such as cess, royalties (excluding the RajasthanRJ block) and production payments payable pursuant to the production sharing contracts.PSCs. Cess forms a major component of the cost of production and any increase/decreasechange in the rate of the cess will impact adversely/positively the result of the operations. The cost of production of copper for our custom smelting and refining operations consists of cost of converting copper concentrate into copper cathodes but does not include the cost of copper concentrate. We purchase copper concentrate at the LME price for copper metal for the relevant quotational period less a TcRc that we negotiate with our suppliers, but which is influenced by the prevailing market rate for the TcRc. We attempt to make the LME price a pass through for us as both the copper concentrate purchases, and sales of finished copper products are based on LME prices. The profitability of the copper custom smelting and refining business is therefore dependent upon the amount by which the TcRc that we negotiate with our external suppliers exceeds our smelting and refining costs. Energy cost is the most significant component of the cost of production in our metal production businesses. Most of our power requirements are met by captive power plants, which are primarily coal fueled. Thermal coal, diesel fuel and fuel oil, which are used to operate our power plants, and metallurgical coke, which is used in the zinc smelting process, are currently sourced from a combination of long term and spot contracts. Our iron ore business meets its most of its power requirement partiallyrequirements through its 60 MW captive power plant and partially from the grid run by the electricity department of the government and in the event the requirement of power is not satisfied through the grid, then we use generators. Our aluminium business,smelters, which hashave high energy consumption due to the power intensive nature of aluminium smelting operation, sources approximately 35% of its thermal coal requirement from Coal India Limited and its subsidiaries through linkages, linkage route fromauctions and E-Auctions. Mahanadi Coalfields Limited and South Eastern Coal Fields Limited, subsidiaries of Coal India Limited.Limited are the majority suppliers. The latest linkage auction coal from Tranche IV, 3.2 mtpa quantity, started to materialize from March 2019. We entered into five-year supply agreements in 2008also strategically bid for five unitscaptive coal blocks as and when they are offered for auctions by Ministry of 135 MW each, in 2009 for two additional units of 135 MW each and in 2014 for additional two units of 135 MW each for the Jharsuguda 1,215 MW captive power plant. The remaining coal is sourced through open market purchases and imports. The contract entered in 2008 was further renewed in 2014 until 2018. Shortages of coal at Coal, India Limited may require that a greater amount of higher priced imported coal be utilized.GoI. During the fourth quarter of fiscal year 2015, BALCO was successful in securing one coal mine in coal block auctions conducted by the GoI, namely the Chotia coalCoal block. The total reserves at the Chotia block are 17.219.66 million tons as on April 01, 2020, with the annual production capacity of one million tons.tons and during FY 2020, 1.0 million tons of coal was produced from Chotia II, reducing the on date extractable coal reserve to 18.66 million tons and no major coal production (only 1,937 tons produced) in FY 2021 due to ongoing pandemic situation. The productionproductions commenced at the Chotia mine during the fourth quarter of fiscal year 2016. Also, we emerged as the highest bidder for Jamkhani coal block in the coal block auctions held in fiscal year 2020, and we have signed the Coal Mine Development and Production Agreement (“CMDPA”) with the GoI. Currently, the Jamkhani coal block has a capacity of 2.6 million tons per annum and we look forward to operationalizing it. Also, Vedanta has secured the Radhikapur (West) coal block in tranche 11 of the coal block auction. Vedanta entered into the CMDPA with the GoI on January 11, 2021. This has a mine capacity of 6 mtpa, which can additionally help meet Group’s coal requirements. These acquisitions will substantially improve our coal security. We also intend to continue our participating in linkage coal auctions and secure coal at competitive rates.HZL continues to import significant coal requirement coal from third party suppliers and balance is sourced through linkage. HZL’s operations source their back—up power from liquid fuel-bases captive power plants or from local power companies. The liquid fuel is sourced from third—party suppliers on yearly contracts. For our zinc, and iron ore business and the portions of our copper and aluminium businessescaptive bauxite ore operations at BALCO, where we source the ore from our own mines, ore extraction and processing costs affect our cost of production. In our iron ore businesses, the ore extraction and processing costs to produce concentratessaleable ore are generally a small percentage of our overall cost of production of the finished metals. In our aluminium business, the bauxite ore extraction costalumina refinery at Lanjigarh, alumina is not significant but the refining cost to produce aluminaproduced from bauxite ore including transportation costs represents approximatelyone-thirdore. The cost of production of alumina is dependent on the cost of bauxite and cost of converting it to alumina. In fiscal year 2020, the cost of bauxite makes up for almost 55.0% of the cost of production, of aluminium. wherein bauxite logistics is a major component. Our bauxite sourcing is from several sources including Odisha mining corporation (“OMC”) captive mines at BALCO and other global suppliers. In iron ore, logistics represents approximately 25 %25.0% to 30 %30.0% of the total cost of production in the case of exports. In addition, a significant cost of production in our zinc and iron ore business is the royalty that HZL pays on the lead-zinc ore that is mined, which royalty is a function of the LME prices of zinc and lead and the iron ore pays on extraction of iron ore at the rate declared by the Indian Bureau of Mines. See “Government“Government Policy—Taxes, royalties and cess payments.payments.” In steel cost comprises of iron ore fines, lumps, pellets and mill scale, Coking coal comprises of hard coking, semi soft coking coal, high fluidity coal and fluxes which includes limestone and Dolomite etc. This cost also includes conversion cost of hot metal into saleable products such as Wire Road, TMT Bar, DI Pipe, Pig iron and billets. Iron ore and coking coal are major cost drivers. In the commercial power generation business, production costs are mainlyprimarily coal costs and the coal isare largely sourced from the domestic market. Labor costs are principally a function of the number of employees and increases in compensation from time to time. Improvements in labor productivity in recent years have resulted in a decrease in the per unit labor costs. We outsource a majority of BALCO’s mining operations, a substantial portion of HZL’s and iron ore’s mining operations, Cairn India’s oilOil and gasGas operations and a limited number of functions at our copper, zinc and aluminium smelting operations to third party contractors. The operations and maintenance activities at the Jharsuguda 2,4001215 MW and 2400 MW power facilities, BALCO’s 1200540 MW and 5401,200 MW and TSPL 1,980 MW power facilities are substantially outsourced to third party contractors. Other manufacturing expenses include, among other things, additional materials and consumables that are used in the production processes and routine maintenance to sustain ongoing operations. None of these represents a significant portion of our costs of production. Cost of production as reported for our metal products includes an offset for any amounts which we receive upon the sale of theby-products from the refining or smelting processes. We present costs of production for our metal products on the following basis: (i) cost of production beforeby-product revenue, which represents the direct costs relating to production and conversion costs of metal (such as energy costs, ore extraction costs and processing costs at our captive mines, labor costs and other manufacturing expenses); excluding depreciation, impairment charges and finance costs, and (ii) cost of production net ofby-product revenues which represents cost of production beforeby-product revenue offset by any amounts we receive upon sale ofby-products from such operations. Offsettingby-product revenues is useful to the management and investors to compare our cost competitiveness with our peers in the industry as it is a common metric used by our peers in the industry. Cost of production beforeby-product revenue and net ofby-product revenue is divided by the daily average exchange rate for the year to calculate US dollar cost of production per lb or per ton of metal as reported. (i) | cost of production before by-product revenue, which represents the direct costs relating to production and conversion costs of metal (such as energy costs, ore extraction costs and processing costs at our captive mines, labor costs and other manufacturing expenses); excluding depreciation, impairment charges and finance costs, and |
(ii) | cost of production net of by-product revenues which represents cost of production before by-product revenue offset by any amounts which we receive upon sale of by-products from such operations. Offsetting by-product revenues is useful to the management and investors to compare our cost competitiveness with our peers in the industry as it is a common metric used by our peers in the industry. Cost of production before by-product revenue and net of by-product revenue is divided by the daily average exchange rate for the year to calculate US dollar cost of production per lb or per ton of metal as reported. |
The following table sets forth our average realized TcRc and cost of production for each of our metals, power, oil and gas for each of the last three fiscal years: | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | Unit of Measurement | | 2015 | | | 2016 | | | 2017 | | | | (in US dollars per ton, except as indicated) | | TcRc(1) | | ¢/lb | | | 21.4 | | | | 24.1 | | | | 22.4 | | | | | | | Cost of production beforeby-product revenue(2) | | | | | | | | | | | | | | | Zinc India(3) | | $ | | | 1,215 | | | | 1,151 | | | | 1,259 | | Zinc International(4) | | $ | | | 1,533 | | | | 1,548 | | | | 1,610 | | Oil and Gas(5) | | $/boe | | | 22.9 | | | | 21.8 | | | | 20.4 | | Iron ore(6) | | $ | | | 134.9 | | | | 24.6 | | | | 18.0 | | Copper smelting and refining(7) | | ¢/lb | | | 14.0 | | | | 11.3 | | | | 11.9 | | Aluminium(8) | | $ | | | 1,790 | | | | 1,589 | | | | 1,466 | | Power – Jharsuguda 600 MW plant | | Rs./unit | | | 2.1 | | | | 2.1 | | | | 2.0 | | | | | | | Cost of production net ofby-product revenue(2) | | | | | | | | | | | | | | | Zinc India(3) | | $ | | | 1,111 | | | | 1,046 | | | | 1,154 | | Zinc International(4) | | $ | | | 1,393 | | | | 1,432 | | | | 1,417 | | Oil and Gas(5) | | $/boe | | | 22.9 | | | | 21.8 | | | | 20.4 | | Iron ore(6) | | $ | | | 134.9 | | | | 24.6 | | | | 18.0 | | Copper smelting and refining(7) | | ¢/lb | | | 4.2 | | | | 3.2 | | | | 5.0 | | Aluminium(8) | | $ | | | 1,785 | | | | 1,573 | | | | 1,463 | | Power - Jharsuguda 600 MW plant | | Rs./unit | | | 2.1 | | | | 2.1 | | | | 2.0 | |
Notes:
| | | | | | | | | | | | | | | Particulars | | For the Year Ended March 31, | | | Unit of Measurement | | 2019 | | | 2020 | | | 2021 | | | (in US dollars per ton, except as indicated) | | TcRc (1) | | ¢/lb | | | 6.0 | | | | 2.8 | | | | 3.3 | | | | | | | Cost of production before by-product revenue(2) | | | | | | | | | | | | | | | Zinc India(3) | | $/ton | | | 1,511 | | | | 1,495 | | | | 1,401 | | Zinc International(4) | | $/ton | | | 2,295 | | | | 1,797 | | | | 1,479 | | Oil and Gas(5) | | $/boe | | | 26.8 | | | | 22.4 | | | | 21.7 | | Iron ore(6) | | $/ton | | | 13.2 | | | | 17.1 | | | | 17.2 | | Copper smelting and refining(7) | | ¢/lb | | | 21.1 | | | | 23.2 | | | | 14.2 | | Aluminium(8) | | $/ton | | | 1,968 | | | | 1,690 | | | | 1,347 | | Steel | | $/ton | | | 455 | | | | 415 | | | | 386 | | Power – Jharsuguda 600 MW plant | | ₹/unit | | | 4.3 | | | | 3.9 | | | | 2.5 | | | | | | | Cost of production net of by-product revenue(2) | | | | | | | | | | | | | | | Zinc India(3) | | $/ton | | | 1,381 | | | | 1,371 | | | | 1,286 | | Zinc International(4) | | $/ton | | | 1,912 | | | | 1,665 | | | | 1,307 | | Oil and Gas(5) | | $/boe | | | 26.8 | | | | 22.4 | | | | 21.7 | | Iron ore(6) | | $/ton | | | 13.2 | | | | 17.1 | | | | 17.2 | | Copper smelting and refining(7) | | ¢/lb | | | 21.1 | | | | 23.2 | | | | 14.2 | | Aluminium(8) | | $/ton | | | 1,967 | | | | 1,690 | | | | 1,347 | | Steel(9) | | $/ton | | | 455 | | | | 415 | | | | 386 | | Power – Jharsuguda 600 MW plant(10) | | ₹/unit | | | 4.3 | | | | 3.9 | | | | 2.5 | |
(1) | Represents our average realized TcRc for the period.year and TcRc is computed net of premium paid on purchase of cathodes in fiscal year 2019, 2020 and 2021. |
(2) | Cost of production per unit is not a recognized measure under IFRS as issued by the IASB. We have included cost of production as it is a key performance indicator used by the management to assess the performance of our operations. We also believe it is a measure used by investors and analysts to evaluate companies in our industry. Our results of operations are, to a significant degree, dependent upon our ability to efficiently run our operations and maintain low costs of production. Efficiencies relating to recovery of metal from the ore, process improvements,by-product management and increasing productivity help drive our costs down. Our computation of cost of production should be considered in addition to, and not as a substitute for other measures of financial performance and liquidity reported in accordance with IFRS as issued by the IASB. Cost of production is a measure intended for monitoring the operating performance of our operations. This measure is presented by other metal companies, though our measure may not be comparable to similarly titled measures reported by other companies. |
(3) | Cost of production of zinc beforeby-product revenue increaseddecreased from Rs. 75,339$ 1,495 per ton for fiscal year 20162020 to Rs. 84,441$ 1,401 per ton for fiscal year 2017.2021. The increase was primarily drivendecrease is mainly due to higher production volume, lower power costs, lower met coke and cement costs partly offset by higher royalty. Royalty rates for zincadministration expense (Covid donation) and lead in India are the highest in the world and much higher compared to other base metals. In addition, a further amount of royalty was provided with effect from January 12, 2015 for District Mineral Foundation (DMF) and National Mineral Exploration Trust (NMET), DMF contribution has now been notified at 30% of the base royalty rate. The increase in the cost of production due to various regulatory headwinds like electricity duty and renewable power obligation were mostly offset by cost reduction initiatives with operational efficiencies and commercial spend reduction.diesel costs. The cost of production of zinc net ofby-product revenue increaseddecreased from Rs. 68,443$ 1,371 per ton in fiscal year 20162020 to Rs. 77,391$ 1,286 per ton in fiscal year 2017.2021. The increasedecrease was due to increase in costs as explained aboveaforementioned reasons partially offset by higherby-productlower sulphuric acid prices.credit on account of lower net sales realisation (“NSR”) in fiscal year 2021. |
(4) | Cost of production net ofby-product credit decreased from $ 1,4321,665 per ton to $ 1,4171,307 per ton, a decrease of 1.1%22.0%. This was mainly driven by the Company’s strong focus to reduce the cost, along with reduction through higher production lower TcRc, commercial cost savings andat Gamsberg, local currency depreciation.depreciation, optimising consumables usage, higher copper credits offset by higher TcRc’s and annual inflation. |
(5) | Cost of production for oil and gas, decreased to $ 20.421.7 per net boe in fiscal year 20172021 from $ 21.822.4 per net boe in fiscal year 2016,2020, primarily on account of cost efficiency program.decreased cess on ad-valorem basis due to decrease in average Brent price realisations. |
(6) | Cost of production for iron ore, decreased toincreased from $ 18.017.1 per ton in fiscal year 2017 from2020 to $ 24.617.2 per ton in fiscal year 2016.2021. We bought 0.6 million tonnes low grade iron ore in auctions held by Goa Government in Auction No -23 & 24. These ore along with opening stock of ore purchased in 22nd auction and fresh royalty paid ore moved out of mines post the supreme court order, were then beneficiated and around 2.1 million tonnes were exported. |
(7) | Cost of production for Copper has decreased from ¢/lb 23.2 to ¢/lb 14.2 primarily on account of higher production and reduced Tuticorin fixed overheads as compared to fiscal year 2020. |
(8) | Cost of production before adjusting by-product revenue decreased from $ 1,690 per ton in fiscal year 2020 to $ 1,347 per ton in fiscal year 2021. The decrease was supported by structural reforms and continued focus on operational excellence, coupled with lower input commodity prices, provided us a long-term cost advantage. |
(9) | Cost of production for steel business has reduced from $ 415 per ton to $ 386 per ton in the fiscal year 2021. This was primarily due to production recommencementsoftening of coking coal prices and significant gains in Goa after obtaining necessary approvals during the year and implementation of rigorous plan focusing on operational efficiency and commercial spend reduction. As partefficiencies, such as optimization of the Company’s cost reduction initiatives, logistics contracts have been optimized across transportation routes, modescoal mix in coke ovens and rates. Ironiron ore sourcing from nearby mines has been maximizedblending, shifting high grade ores to reduce freight cost.medium grades. Improved yields of the converters and finishing mills also added to the efficiency. |
(7)(10) | Cost of production, when compared before offsettingPower cost at Jharsuguda 600 MW plant has decreased from ₹ 3.9/unit to ₹ 2.5/unit mainly driven by decrease in coal prices and improved linkage materialisation during theby-product and free copper revenue increased by 0.6 ¢/lb to 11.9¢/lb from 11.3 ¢/lb in fiscal year 2016, mainly due to increased petro prices and increased clean energy cess on coal. When computed net ofby-product and free copper revenue, the cost 3.2 ¢/lb in fiscal year 2016 increased to 5.0 ¢/lb in fiscal year 2017, primarily due to lowerby-product credits, increased petro prices and increased in clean energy cess on coal. |
(8) | Cost of production before adjustingby-product revenue decreased from Rs. 103,988 per ton in fiscal year 2016 to Rs. 98,379 per ton in fiscal year 2017. The decrease was mainly due to lower alumina cost, volume ramp up, Indian Rupee depreciation, lower power cost driven by secured coal linkages and various cost saving initiatives. The cost of production net ofby-product credit reduced from Rs. 102,953 per ton in fiscal year 2016 to Rs. 98,147 per ton in fiscal year 2017, primarily due to the reasons discussed above.2021. |
We present below the cost of production for our metal products on the following basis: (i) costCost of production beforeby-product revenue, which represents the direct costs relating to production and conversion costs of metal (such as energy costs, ore extraction costs and processing costs at our captive mines, labor costs and other manufacturing expenses), excluding depreciation, impairment charges and finance costs, and (ii) costCost of production net ofby-product revenues which represents cost of production beforeby-product revenue offset by any amounts we receive upon sale ofby-products from such operations. Offsettingby-product revenues is useful to the management and investors to compare our cost competitiveness with our peers in the industry as it is a common metric used by our peers in the industry. We explain the cost of production for each metal as set forth below: In the case of Zinc India operations, where we have integrated operations from production of zinc ore to zinc metal, cost of production beforeby-product revenue is the cost of extracting ore and conversion of the ore into zinc metal ingots. Payment of royalty and provision towards contribution to DMF and NMET is included in determining the cost of production. Cost of production net ofby-product revenue represents cost of production beforeby-product revenue, net of revenue earned from theby-product sulphuric acid, which is deducted from the cost of production consistent with the industry practice. The total cash cost beforeby-product revenue and net ofby-product revenue is divided by the total number of tons of zinc metal produced to calculate the cost of production beforeby-product revenue and net ofby-product revenue per ton of zinc metal. Our Zinc India segment primarily consists of zinc ingot production and lead is only aco-product of zinc while silver is aby-product arising from lead smelting process. Accordingly, the cost of production presented for Zinc India operations is only for zinc ingot production and the cost of production of lead and silver are not presented. Our Zinc International operations consist of the Skorpion mine and refinery in Namibia, Black Mountain mine, which includes new Gamsberg mine in South Africa and the Lisheen mine in Ireland which ceased operations in December 2015. Skorpion produces special high gradehigh-grade zinc ingots. As a result, the cost of production beforeby-product revenue with respect to the Skorpion mine consists of the total direct cost of mining zinc ore and producing zinc in the refinery through a leaching, refining and electrowinning process. Skorpion mine does not produce any materialby-products. Skorpion Zinc has been under Care and Maintenance since the start of April 2020, following cessation of mining activities due to geotechnical instabilities in the open pit. Activities to restart the mine are progressing well. Cost of production beforeby-product revenue of zinc at Black Mountain mine consists of direct mining costs, concentrate costs, TcRc and direct services cost. Cost of production net ofby-product revenue represents cost of production beforeby-product revenue, net of revenue from copper consistent with the industry practice. At Black Mountain mine lead is only aco-product of zinc while silver is aby-product of lead. Accordingly, the cost of production presented for Black Mountain mine is only for zinc production and the cost of production of lead and silver are not presented. The Lisheen mine which ceased operations in December 2015, produced zinc and lead concentrate. Therefore, the cost of production beforeby-product revenue with respect to the Lisheen mine consisted of direct mining costs, mill processing costs, other overhead costs, treatment charges and other direct cash costs. Cost of production net ofby-product revenue represents cost of production beforeby-product revenue, net of revenue from lead and silver consistent with the industry practice. Royalties paid are also included in the cost of production. The total cash cost beforeby-product revenue and net ofby-product revenue is divided by the total number of tons of zinc metal produced or zinc metal in concentrate produced to calculate the cost of production beforeby-product revenue and net ofby-product revenue per ton of zinc metal produced or zinc metal in concentrate produced. Gamsberg mine has been ramping up well in fiscal year 2021. Cost of production before by-product revenue of zinc at Gamsberg consists of direct mining costs, concentrate costs, TcRc and direct services cost. Gamsberg mine does not produce any material by-products. The cost of production in our oil and gas business consists of expenditure incurred towards the production of crude oil and natural gas including statutory levies, such as cess, royalties (except the Rajasthan block) and production payments payable pursuant to the production sharing contractsPSCs as well as operational expenditures such as costs relating to manpower, repairs and maintenance of facilities, power generation and fuel for such facilities, water injection, insurance, and storage, transportation and freight of crude oil and natural gas, among others. Cess forms a major component of the cost of production and any change in the rate of the cess will impact the result of the operations. The total production cost is divided by the entitlement interest quantity of oil and gas produced to determine the cost of production per barrel of oil equivalent. Cost of production beforeby-product revenue and net ofby-product revenue is divided by the daily average exchange rate for the year to calculate US dollar cost of production per lb or per ton of metal or per barrel of oil equivalent as reported. In the case of iron ore, cost of production relates to the iron ore mining and processing cost. Payment of royalty fees and provision towards contribution to DMF and NMET are included in determining the cost of production at Goa, whereas at Karnataka iron ore business royalties are under scope of buyer. The total cost is divided by the total number of tons of iron ore produced to calculate the cost of production per ton of iron ore. Our iron ore segment also includes met coke and pig iron. However, the cost of production presented for iron ore operations does not include met coke and pig iron. Our iron ore operations in Goa were recommenced in August 2015, after receiving necessary approvals from the state government. Our iron ore operations had been suspended duringtill fiscal year 2015 due to the continued mining ban in the state of Goa. Our costThe Supreme Court passed its final order in the matter on February 7, 2018 wherein it set aside the second renewal of productionthe mining leases granted by the State of iron ore showsGoa. The Supreme Court directed all lease holders operating under a significant decrease assecond renewal to stop all mining operations with effect from March 16, 2018 until fresh mining leases (not fresh renewals or other renewals) and fresh environmental clearances are granted under the costMines and Minerals (Development and Regulation) (MMDR) Act. We continue to engage with the Government for the resumption of production of fiscal year 2016 also factors in fixed administrative costs incurred in our Goa operations and Karnataka operations which will be now spread over to larger production compared to last year.mining operations. In the case of copper, cost of production beforeby-product and free copper revenue relates only to our custom smelting and refining operations (and not for our mining operations), and consists of the cost of converting copper concentrate into copper cathodes, including the cost of freight of copper anodes from Tuticorin to Silvassa. Cost of production net ofby-product and free copper revenue represents cost of production beforeby-product and free copper revenue, net of revenue earned from the sale ofby-product, sulphuric acid and copper metal recovered in excess of paid copper metal are deducted from the cash costs, in line with the cost reporting practice of custom smelters globally. The total cash costs beforeby-product and free copper revenue and net ofby-product and free copper revenue are divided by the total number of pounds of copper metal produced to calculate the cost of production beforeby-product and free copper revenue and net ofby-product and free copper revenue per pound of copper metal produced. The TNPCB through an order, dated April 9, 2018, rejected the consent renewal application of Vedanta Limited for its copper smelter plant at Tuticorin. It directed Vedanta Limited not to resume production operations without formal approval/consent (vide order dated April 12, 2018), and directed the closure of the plant and the disconnection of electricity (vide order dated May 23, 2018). The Government of Tamil Nadu also issued an order dated May 28, 2018 directing the TNPCB to permanently close and seal the existing copper smelter at Tuticorin; this was followed by the TNPCB on May 28, 2018. Vedanta Limited filed a composite appeal before the 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 Government in Hon’ble Supreme Court. The Supreme Court on February 18, 2019 set aside the NGT judgment dated December 15, 2018 on the grounds of maintainability, allowing Vedanta Limited the liberty to approach the High Court of Madras to challenge all the orders collectively, stating that no plea of alternative remedy shall be allowed. Based on the said order, Vedanta Limited has filed a writ petition before the Principal Bench of the High Court of Madras and has additionally filed an application seeking interim relief for care and maintenance of the plant. The High Court vide its judgement dated August 18, 2020 dismissed the writ petition filed by the Company. The Company has approached the Supreme Court and challenged the said High Court order by way of a SLP to Appeal and also filed an interim relief for care and maintenance of the plant. The matter was then listed on December 2, 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 March 17, 2021, wherein the matter was posted for hearing on August 17, 2021. Cost of production of aluminium includes theis weighted average cost of production in theof our Jharsuguda and BALCO and Odisha aluminium businesses.smelters. The cost of production beforeby-product revenue includes cost of purchased alumina and the cost of producing bauxite and conversion of bauxite/captive alumina into aluminium metal.produced at Lanjigarh. Cost of production net ofby-product revenue represents cost of production beforeby-product revenue, net of revenue earned from the sale ofby-products, such as vanadium, which is consistent with the industry practice. The total cash cost beforeby-product revenue and net ofby-product revenue is divided by the total quantity of hot metal produced to determine the cost of production beforeby-product revenue and net ofby-product revenue per ton of aluminium hot metal produced. Hot metal production output isvolumes are used instead of the cast metal production outputvolumes disclosed, elsewhere in this Annual Report, infor calculating this measure.cost of production. This is because, the hot metal production, which excludes the value addedvalue-added cost of casting, is the measure generally used in the aluminium metal industry for calculating measures of cost of production. In the case of steel, the cost of production after by-product revenue includes the cost of producing hot metal which includes Iron bearing raw material comprises of iron ore fines, lumps, pellets and mill scale, Coking coal comprises of hard coking, semi soft coking coal, high fluidity coal, limestone and Dolomite etc. This Cost also includes conversion cost of hot metal into saleable products such as Wire Road, TMT Bar, DI Pipe, Pig iron and billets. The total cost before by-product revenue and net of by-product revenue is divided by total quantity to determine the cost of production before by-product and net of by-product revenue per ton of steel produced. Cost of production before by-product revenue and net of by-product revenue is divided by the daily average exchange rate for the period to calculate US dollar cost of production per lb or per ton of metal or per barrel of oil equivalent as reported. Cost of production of power for Jharsuguda 2400600 MW power plant (and excluding(excluding 274 MW HZL wind power plant, the TSPL 1,980 MW, the 270 MW and IPP 600300 MW BALCO power plant and the 106.5 MW MALCO’s power plant) includes the cost of coal and other liquid fuels used for generating power and other overhead costs such as operating, maintenance and manpower costs. The total cost is divided by the total net units generated to calculate the cost of production per unit of energy produced. | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | | (Rs. in millions, except Production output and Cost of production) | | Zinc—India: | | | | | | | | | | | | | | | | | | | | | Segment revenue | | Rs. | 123,241 | | | Rs. | 132,811 | | | Rs. | 144,127 | | | Rs. | 137,945 | | | Rs. | 169,400 | | Less: | | | | | | | | | | | | | | | | | | | | | Segment profit | | | (64,227 | ) | | | (68,642 | ) | | | (70,605 | ) | | | (66,970 | ) | | | (95,499 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 59,014 | | | | 64,169 | | | | 73,522 | | | | 70,975 | | | | 73,901 | | Less: | | | | | | | | | | | | | | | | | | | | | Cost of tolling including raw material cost | | | (6,805 | ) | | | — | | | | — | | | | — | | | | (3,364 | ) | Cost of intermediary product sold | | | (1,806 | ) | | | (3,461 | ) | | | (3,230 | ) | | | (2,348 | ) | | | (1,771 | ) | Cost of lead metal sold | | | (6,962 | ) | | | (8,115 | ) | | | (8,991 | ) | | | (10,264 | ) | | | (10,677 | ) | Others(c) | | | (2,506 | ) | | | (4,146 | ) | | | (6,773 | ) | | | (1,185 | ) | | | (1,347 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting forby-product revenues | | Rs. | 40,934 | | | Rs. | 48,447 | | | Rs. | 54,528 | | | Rs. | 57,178 | | | Rs. | 56,743 | | | | | | | | | | | | | | | | | | | | | | | By-product revenue | | | (4,766 | ) | | | (3,821 | ) | | | (4,692 | ) | | | (5,234 | ) | | | (4,737 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting forby-product revenues | | Rs. | 36,168 | | | Rs. | 44,626 | | | Rs. | 49,836 | | | Rs. | 51,944 | | | Rs. | 52,006 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons) | | | 676,923 | | | | 749,167 | | | | 733,805 | | | | 758,938 | | | | 671,987 | | Cost of production beforeby-product revenue (per ton) (a) | | $ | 1,111 | | | $ | 1,069 | | | $ | 1,215 | | | $ | 1,151 | | | $ | 1,259 | | Cost of production net ofby- Product revenue (per ton) (a) | | $ | 981 | | | $ | 985 | | | $ | 1,111 | | | $ | 1,046 | | | $ | 1,154 | | Cost of production net ofby- Product revenue (per ton) (a) | | Rs. | 53,430 | | | Rs. | 59,568 | | | Rs. | 67,914 | | | Rs. | 68,442 | | | Rs. | 77,391 | | Zinc—International: | | | | | | | | | | | | | | | | | | | | | Segment revenue | | Rs. | 43,475 | | | Rs. | 40,156 | | | Rs. | 35,886 | | | Rs. | 25,631 | | | Rs. | 22,302 | | Less: Segment profit | | | (15,712 | ) | | | (12,829 | ) | | | (11,059 | ) | | | (4,561 | ) | | | (9,181 | ) | | | | | | | | | | | | | | | | | | | | | | | �� | | 27,763 | | | | 27,327 | | | | 24,827 | | | | 21,070 | | | | 13,121 | | Less: | | | | | | | | | | | | | | | | | | | | | TcRc | | | 3,344 | | | | 4,191 | | | | 4,943 | | | | 3,757 | | | | 973 | | Cost of lead metal sold | | | (5,336 | ) | | | (4,631 | ) | | | (4,486 | ) | | | (3,859 | ) | | | (4,038 | ) | Others(c) | | | (3,351 | ) | | | (2,900 | ) | | | (894 | ) | | | (2,419 | ) | | | 2,275 | | | | | | | | | | | | | | | | | | | | | | | Total before adjusting forby-product revenues | | Rs. | 22,421 | | | Rs. | 23,987 | | | Rs. | 24,390 | | | Rs. | 18,549 | | | Rs. | 12,331 | | | | | | | | | | | | | | | | | | | | | | | By-product revenue | | | (1,459 | ) | | | (2,464 | ) | | | (2,230 | ) | | | (1,390 | ) | | | (1,479 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting forby-product revenues | | Rs. | 20,962 | | | Rs. | 21,522 | | | Rs. | 22,160 | | | Rs. | 17,159 | | | Rs. | 10,852 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons) | | | 353,404 | | | | 304,945 | | | | 260,106 | | | | 183,035 | | | | 114,135 | | Cost of production beforeby-product revenue (per ton) (a) | | $ | 1,165 | | | $ | 1,300 | | | $ | 1,533 | | | $ | 1,548 | | | $ | 1,610 | | Cost of production net ofby-product revenue (per ton) (a) | | $ | 1,089 | | | $ | 1,167 | | | $ | 1,393 | | | $ | 1,432 | | | $ | 1,417 | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | Segments | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | | (₹ in millions, except Production output and Cost of production) | | Zinc—India: | | | | | | | | | | | | | | | | | | | | | Segment revenue | | | 168,694 | | | | 216,136 | | | | 206,562 | | | | 181,590 | | | | 219,316 | | Segment profit | | | (95,711 | ) | | | (122,596 | ) | | | (105,995 | ) | | | (87,140 | ) | | | (116,200 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 72,983 | | | | 93,540 | | | | 100,567 | | | | 94,450 | | | | 103,116 | | Cost of tolling including raw material cost | | | (3,364 | ) | | | — | | | | — | | | | — | | | | — | | Cost of intermediary product sold | | | (1,771 | ) | | | — | | | | — | | | | — | | | | — | | Cost of lead metal sold | | | (10,677 | ) | | | (15,027 | ) | | | (20,664 | ) | | | (19,450 | ) | | | (21,370 | ) | Others (c) | | | (408 | ) | | | (3,097 | ) | | | (6,386 | ) | | | (2,075 | ) | | | (7,478 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product revenues | | | 56,763 | | | | 75,416 | | | | 73,517 | | | | 72,925 | | | | 74,267 | | By-product revenue | | | (4,737 | ) | | | (5,791 | ) | | | (6,335 | ) | | | (6,059 | ) | | | (6,083 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting for by-product revenues | | | 52,026 | | | | 69,625 | | | | 67,182 | | | | 66,867 | | | | 68,185 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons) | | | 671,987 | | | | 791,461 | | | | 696,283 | | | | 688,286 | | | | 715,446 | | Cost of production before by-product revenue (per ton) (a) | | $ | 1,259 | | | $ | 1,479 | | | $ | 1,511 | | | $ | 1,495 | | | $ | 1,401 | | Cost of production net of by- Product revenue (per ton) (a) | | $ | 1,154 | | | $ | 1,365 | | | $ | 1,381 | | | $ | 1,371 | | | $ | 1,286 | | Cost of production net of by- Product revenue (per ton) (a) | | ₹ | 77,391 | | | ₹ | 87,971 | | | ₹ | 96,488 | | | ₹ | 97,150 | | | ₹ | 95,304 | | Zinc—International: | | | | | | | | | | | | | | | | | | | | | Segment revenue | | | 22,302 | | | | 34,458 | | | | 27,383 | | | | 31,275 | | | | 27,290 | | Segment profit | | | (9,181 | ) | | | (14,145 | ) | | | (6,962 | ) | | | (3,798 | ) | | | (8,100 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 13,121 | | | | 20,313 | | | | 20,421 | | | | 27,477 | | | | 19,190 | | Treatment and Refining Charges (TcRc) | | | 973 | | | | 332 | | | | 959 | | | | 5,646 | | | | 6,242 | | Cost of lead metal sold | | | (4,038 | ) | | | (3,160 | ) | | | (3,392 | ) | | | (3,031 | ) | | | (2,114 | ) | Others (c) | | | 2,275 | | | | (4,027 | ) | | | (1,789 | ) | | | (4,258 | ) | | | (4,164 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product revenues | | | 12,331 | | | | 13,458 | | | | 16,199 | | | | 25,834 | | | | 19,154 | | By-product revenue | | | (1,479 | ) | | | (1,950 | ) | | | (2,701 | ) | | | (1,893 | ) | | | (2,235 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting for by-product revenues | | | 10,852 | | | | 11,508 | | | | 13,498 | | | | 23,941 | | | | 16,919 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons) | | | 114,135 | | | | 111,390 | | | | 101,015 | | | | 202,859 | | | | 174,708 | | Cost of production before by-product revenue (per ton) (a) | | $ | 1,610 | | | $ | 1,875 | | | $ | 2,295 | | | $ | 1,797 | | | $ | 1,479 | | Cost of production net of by-product revenue (per ton) (a) | | $ | 1,417 | | | $ | 1,603 | | | $ | 1,912 | | | $ | 1,665 | | | $ | 1,307 | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | | (Rs. in millions, except Production output and Cost of production) | | Oil and Gas | | | | | | | | | | | | | | | | | | | | | Segment revenue | | | 175,518 | | | | 187,103 | | | | 146,945 | | | | 86,559 | | | | 82,041 | | Less: | | | | | | | | | | | | | | | | | | | | | Segment profit | | | (128,502 | ) | | | (139,453 | ) | | | (88,671 | ) | | | (34,273 | ) | | | (40,892 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 47,016 | | | | 47,650 | | | | 58,274 | | | | 52,286 | | | | 41,149 | | Less: | | | | | | | | | | | | | | | | | | | | | Unsuccessful Exploration Cost | | | (2,821 | ) | | | (653 | ) | | | (7,867 | ) | | | (294 | ) | | | (407 | ) | Other income | | | 1,025 | | | | 379 | | | | 103 | | | | 176 | | | | 70 | | Pre award cost | | | (194 | ) | | | (242 | ) | | | (1 | ) | | | (71 | ) | | | — | | Others(c) | | | (5,217 | ) | | | (5,575 | ) | | | (5,619 | ) | | | (4,606 | ) | | | (1,671 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting forby-product revenues | | Rs. | 39,810 | | | Rs. | 41,560 | | | Rs. | 44,890 | | | Rs. | 47,491 | | | Rs. | 39,141 | | | | | | | | | | | | | | | | | | | | | | | By-product revenue | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total after adjusting forby-product revenues | | Rs. | 39,810 | | | Rs. | 41,560 | | | Rs. | 44,890 | | | Rs. | 47,491 | | | Rs. | 39,141 | | | | | | | | | | | | | | | | | | | | | | | Net Production (in mmboe) | | | 33.00 | | | | 32.89 | | | | 32.01 | | | | 33.33 | | | | 28.55 | | Cost of production beforeby-product revenue (per boe)(a) | | $ | 22.2 | | | $ | 20.9 | | | $ | 22.9 | | | $ | 21.8 | | | $ | 20.4 | | Cost of production net ofby-product revenue (per boe)(a) | | $ | 22.2 | | | $ | 20.9 | | | $ | 22.9 | | | $ | 21.8 | | | $ | 20.4 | | Iron Ore | | | | | | | | | | | | | | | | | | | | | Segment revenue | | | 26,119 | | | | 16,558 | | | | 19,963 | | | | 22,774 | | | | 41,290 | | Less: | | | | | | | | | | | | | | | | | | | | | Segment profit | | | (4,530 | ) | | | 2,700 | | | | 891 | | | | (4,367 | ) | | | (13,091 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 21,589 | | | | 19,258 | | | | 20,854 | | | | 18,407 | | | | 28,199 | | Less: | | | | | | | | | | | | | | | | | | | | | Cost of Intermediary product sold | | | (9,309 | ) | | | (16,340 | ) | | | (15,953 | ) | | | (11,652 | ) | | | (12,880 | ) | Export Duty | | | (4,430 | ) | | | — | | | | — | | | | (250 | ) | | | (1 | ) | Others(c) | | | 500 | | | | 810 | | | | 214 | | | | 1,810 | | | | (2,097 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting forby-product revenues | | | 8,351 | | | | 3,728 | | | | 5,115 | | | | 8,316 | | | | 13,221 | | | | | | | | | | | | | | | | | | | | | | | By-product revenue | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total after adjusting forby-product revenues | | | 8,351 | | | | 3,728 | | | | 5,115 | | | | 8,316 | | | | 13,221 | | | | | | | | | | | | | | | | | | | | | | | Production output (in million dmt) | | | 3.71 | | | | 1.51 | | | | 0.62 | | | | 5.17 | | | | 10.9 | | Cost of production beforeby-product revenue (per dmt) (a) | | $ | 41.3 | | | $ | 40.9 | | | $ | 134.9 | | | $ | 24.6 | | | $ | 18.0 | | Cost of production net ofby-product revenue (per dmt) (a) | | $ | 41.3 | | | $ | 40.9 | | | $ | 134.9 | | | $ | 24.6 | | | $ | 18.0 | |
| | | | | | | | | | | | | | | | | | | | | Oil and Gas | | Segment revenue | | | 82,041 | | | | 95,359 | | | | 132,228 | | | | 126,608 | | | | 75,308 | | Segment profit | | | (40,156 | ) | | | (54,500 | ) | | | (76,525 | ) | | | (72,683 | ) | | | (32,166 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 41,885 | | | | 40,859 | | | | 55,703 | | | | 53,925 | | | | 43,142 | | Unsuccessful Exploration Cost | | | (407 | ) | | | (1 | ) | | | (497 | ) | | | (27 | ) | | | (71 | ) | Other income | | | 70 | | | | — | | | | 283 | | | | 254 | | | | 273 | | -Pre award cost | | | — | | | | — | | | | — | | | | — | | | | — | | Others(c) | | | (2,479 | ) | | | (93 | ) | | | (1,455 | ) | | | (4,446 | ) | | | (3,549 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product revenues | | | 39,069 | | | | 40,765 | | | | 54,034 | | | | 49,705 | | | | 39,795 | | By-product revenue | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total after adjusting for by-product revenues | | | 39,069 | | | | 40,765 | | | | 54,034 | | | | 49,705 | | | | 39,795 | | | | | | | | | | | | | | | | | | | | | | | Net Production (in mmboe) | | | 28.55 | | | | 29.42 | | | | 28.83 | | | | 31.35 | | | | 24.72 | | Cost of production before by-product revenue (per boe)(a) | | $ | 20.4 | | | $ | 21.5 | | | $ | 26.8 | | | $ | 22.4 | | | $ | 21.7 | | Cost of production net of by-product revenue (per boe)(a) | | $ | 20.4 | | | $ | 21.5 | | | $ | 26.8 | | | $ | 22.4 | | | $ | 21.7 | | Iron Ore | | Segment revenue | | | 41,213 | | | | 31,298 | | | | 29,114 | | | | 34,630 | | | | 45,284 | | Segment profit | | | (12,683 | ) | | | (3,100 | ) | | | (6,321 | ) | | | (8,312 | ) | | | (18,176 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 28,530 | | | | 28,198 | | | | 22,793 | | | | 26,318 | | | | 27,108 | | Cost of Intermediary product sold | | | (12,880 | ) | | | (12,501 | ) | | | (18,410 | ) | | | (18,119 | ) | | | (17,448 | ) | Export Duty | | | (1 | ) | | | (1298 | ) | | | (823 | ) | | | (1,162 | ) | | | (1,182 | ) | Others (c) | | | (2,426 | ) | | | (4,447 | ) | | | 449 | | | | (1,723 | ) | | | (1,241 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product revenues | | | 13,223 | | | | 9,952 | | | | 4,009 | | | | 5,314 | | | | 7,237 | | By-product revenue | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total after adjusting for by-product revenues | | | 13,223 | | | | 9,952 | | | | 4,009 | | | | 5,314 | | | | 7,237 | | | | | | | | | | | | | | | | | | | | | | | Production output (in million dmt) | | | 10.9 | | | | 7.1 | | | | 4.4 | | | | 4.4 | | | | 5.7 | | Cost of production before by-product revenue (per dmt) (a) | | $ | 18.0 | | | $ | 21.9 | | | $ | 13.2 | | | $ | 17.1 | | | $ | 17.2 | | Cost of production net of by-product revenue (per dmt) (a) | | $ | 18.0 | | | $ | 21.9 | | | $ | 13.2 | | | $ | 17.1 | | | $ | 17.2 | | Copper1 | | Segment revenue | | | 210,175 | | | | 246,766 | | | | 107,390 | | | | 90,526 | | | | 108,897 | | Segment profit | | | (12,667 | ) | | | (10,378 | ) | | | 2,339 | | | | 2,894 | | | | 1,753 | | | | | | | | | | | | | | | | | | | | | | | | | | 197,508 | | | | 236,388 | | | | 109,729 | | | | 93,420 | | | | 110,650 | | Purchased concentrate/rock | | | (179,803 | ) | | | (221,176 | ) | | | (104,033 | ) | | | (90,046 | ) | | | (105,188 | ) | Cost for downstream products | | | (1,931 | ) | | | (2,009 | ) | | | (1,241 | ) | | | (1,058 | ) | | | (851 | ) | Others (c) | | | (8,691 | ) | | | (5,148 | ) | | | (1,547 | ) | | | 498 | | | | (2,260 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product and free copper revenues | | | 7,083 | | | | 8,055 | | | | 2,908 | | | | 2,814 | | | | 2,351 | | By-product revenue | | | (2,020 | ) | | | (2,502 | ) | | | — | | | | — | | | | — | | Free Copper net sale | | | (2,085 | ) | | | (2,287 | ) | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | Total after adjusting for by-product and free copper revenues | | | 2,978 | | | | 3,265 | | | | 2,908 | | | | 2,814 | | | | 2,351 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons) | | | 402,730 | | | | 403,168 | | | | 89,517 | | | | 77,490 | | | | 101,435 | | Cost of production before by-product and free copper revenue (a) | | | ¢/lb 11.9 | | | | ¢/lb 14.1 | | | | ¢/lb 21.1 | | | | ¢/lb 23.2 | | | | ¢/lb 14.2 | | Cost of production net of by-product and free copper revenue (a) | | | ¢/lb 5.0 | | | | ¢/lb 5.7 | | | | ¢/lb 21.1 | | | | ¢/lb 23.2 | | | | ¢/lb 14.2 | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | | (Rs. in millions, except Production output and Cost of production) | | Copper: | | | | | | | | | | | | | | | | | | | | | Segment revenue | | Rs. | 217,374 | | | Rs. | 205,879 | | | Rs. | 226,298 | | | Rs. | 209,262 | | | Rs. | 210,176 | | Less: | | | | | | | | | | | | | | | | | | | | | Segment profit | | | (10,868 | ) | | | (11,429 | ) | | | (17,385 | ) | | | (22,205 | ) | | | (16,964 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 206,506 | | | | 194,450 | | | | 208,913 | | | | 187,057 | | | | 193,212 | | Less: | | | | | | | | | | | | | | | | | | | | | Purchased concentrate/rock | | | (193,200 | ) | | | (182,399 | ) | | | (196,428 | ) | | | (177,067 | ) | | | (179,803 | ) | Cost for downstream products | | | (2,163 | ) | | | (3,354 | ) | | | (3,441 | ) | | | (1,533 | ) | | | (1,931 | ) | Others(c): | | | (2,630 | ) | | | (1,295 | ) | | | (2,220 | ) | | | (2,181 | ) | | | (4,397 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting forby-product and free copper revenues | | Rs. | 8,513 | | | Rs. | 7,402 | | | Rs. | 6,824 | | | Rs. | 6,276 | | | Rs. | 7,081 | | | | | | | | | | | | | | | | | | | | | | | By-product revenues | | | (2,165 | ) | | | (1,208 | ) | | | (2,215 | ) | | | (2,377 | ) | | | (2,020 | ) | Free Copper net sale | | | (2,647 | ) | | | (2,385 | ) | | | (2,559 | ) | | | (2,138 | ) | | | (2,085 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting forby-product and free copper revenues | | Rs. | 3,701 | | | Rs. | 3,809 | | | Rs. | 2,050 | | | Rs. | 1,761 | | | Rs. | 2,976 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons) | | | 353,154 | | | | 294,434 | | | | 362,373 | | | | 384,047 | | | | 402,730 | | Cost of production beforeby-product and free copper revenue (a) | | ¢/lb | 20.1 | | | ¢/lb | 18.8 | | | ¢/lb | 14.0 | | | ¢/lb | 11.3 | | | ¢/lb | 11.9 | | Cost of production net ofby-product and free copper revenue (a) | | ¢/lb | 8.7 | | | ¢/lb | 9.7 | | | ¢/lb | 4.2 | | | ¢/lb | 3.2 | | | ¢/lb | 5.0 | | Aluminium: | | | | | | | | | | | | | | | | | | | | | Segment revenue | | | 99,633 | | | | 107,989 | | | | 127,130 | | | | 110,910 | | | | 136,862 | | Less: | | | | | | | | | | | | | | | | | | | | | Segment profit | | | (11,285 | ) | | | (16,131 | ) | | | (22,529 | ) | | | (8,467 | ) | | | (23,200 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 88,348 | | | | 91,858 | | | | 104,601 | | | | 102,443 | | | | 113,662 | | Cost for downstream products | | | (5,140 | ) | | | (4,230 | ) | | | (4,611 | ) | | | (3,998 | ) | | | (4,105 | ) | Others(c): | | | (3,613 | ) | | | (7,540 | ) | | | (7,707 | ) | | | (7,707 | ) | | | (3,115 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting forby-product revenues | | Rs. | 79,594 | | | Rs. | 80,087 | | | Rs. | 92,283 | | | Rs. | 90,738 | | | Rs. | 106,442 | | | | | | | | | | | | | | | | | | | | | | | By-product revenue | | | (299 | ) | | | (281 | ) | | | (223 | ) | | | (903 | ) | | | (252 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting forby-product revenues | | Rs. | 79,296 | | | Rs. | 79,807 | | | Rs. | 92,060 | | | Rs. | 89,835 | | | Rs. | 106,190 | | | | | | | | | | | | | | | | | | | | | | | Production output (hot metal) (in tons) | | | 774,851 | | | | 795,728 | | | | 843,219 | | | | 872,591 | | | | 1,081,955 | | Cost of production beforeby-product revenue (per ton) (a) | | $ | 1,887 | | | $ | 1,664 | | | $ | 1,790 | | | $ | 1,589 | | | $ | 1,466 | | Cost of production net ofby-product (per ton) (a) | | $ | 1,879 | | | $ | 1,658 | | | $ | 1,785 | | | $ | 1,573 | | | $ | 1,463 | | Cost of production net ofby-product (per ton) (a) | | Rs. | 102,337 | | | Rs. | 100,294 | | | Rs. | 109,177 | | | Rs. | 102,953 | | | Rs. | 98,147 | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | | (Rs. in millions, except Production output and Cost of production) | | Power | | | | | | | | | | | | | | | | | | | | | Segment revenue | | | 36,365 | | | | 37,638 | | | | 41,186 | | | | 49,826 | | | | 56,079 | | Less: | | | | | | | | | | | | | | | | | | | | | Segment profit | | | (11,551 | ) | | | (7,429 | ) | | | (8,424 | ) | | | (12,659 | ) | | | (16,442 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 24,814 | | | | 30,209 | | | | 32,762 | | | | 37,167 | | | | 39,637 | | Less: | | | | | | | | | | | | | | | | | | | | | Cost of power at TSPL, BALCO, HZL and MALCO Energy | | | (8,286 | ) | | | (9,456 | ) | | | (13,725 | ) | | | (19,284 | ) | | | (33,228 | ) | Others(c): | | | (2,555 | ) | | | (4,710 | ) | | | (3,589 | ) | | | (2,287 | ) | | | 80 | | | | | | | | | | | | | | | | | | | | | | | Total | | Rs. | 13,973 | | | Rs. | 16,043 | | | Rs. | 15,448 | | | Rs. | 15,596 | | | Rs. | 6,490 | | | | | | | | | | | | | | | | | | | | | | | Production output (in MU)(b) | | | 6,718 | | | | 7,625 | | | | 7,216 | | | | 7,464 | | | | 3,328 | | Cost of production beforeby-product revenue (per unit) | | Rs. | 2.1 | | | Rs. | 2.1 | | | Rs. | 2.1 | | | Rs. | 2.1 | | | Rs. | 2.0 | | Cost of production net ofby-product revenue (per unit) | | Rs. | 2.1 | | | Rs. | 2.1 | | | Rs. | 2.1 | | | Rs. | 2.1 | | | Rs. | 2.0 | |
Notes:
| | | | | | | | | | | | | | | | | | | | | Aluminium | | Segment revenue | | | 135,083 | | | | 228,435 | | | | 292,286 | | | | 265,773 | | | | 286,442 | | Segment profit | | | (21,024 | ) | | | (26,661 | ) | | | (22,058 | ) | | | (19,936 | ) | | | (77,523 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 114,059 | | | | 201,774 | | | | 270,228 | | | | 245,837 | | | | 208,919 | | Cost for downstream products | | | (4,105 | ) | | | (5,722 | ) | | | (7,733 | ) | | | (7,801 | ) | | | (7,438 | ) | Others (c) | | | (3506 | ) | | | (375 | ) | | | (1,118 | ) | | | (9,181 | ) | | | 6,615 | | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product revenues | | | 106,448 | | | | 195,677 | | | | 261,377 | | | | 228,855 | | | | 1,93,782 | | By-product revenue | | | (252 | ) | | | (76 | ) | | | (35 | ) | | | (27 | ) | | | (142 | ) | | | | | | | | | | | | | | | | | | | | | | Total after adjusting for by-product revenues | | | 106,196 | | | | 195,601 | | | | 261,342 | | | | 228,828 | | | | 193,640 | | | | | | | | | | | | | | | | | | | | | | | Production output (hot metal) (in tons) | | | 1,081,955 | | | | 1,608,420 | | | | 1,900,739 | | | | 1,911,266 | | | | 1,940,344 | | Cost of production before by-product revenue (per ton) (a) | | $ | 1,466 | | | $ | 1,888 | | | $ | 1,968 | | | $ | 1,690 | | | $ | 1,348 | | Cost of production net of by-product revenue (per ton) (a) | | $ | 1,463 | | | $ | 1,887 | | | $ | 1,967 | | | $ | 1,690 | | | $ | 1,347 | | Cost of production net of by-product revenue (per ton) (a) | | ₹ | 98,147 | | | ₹ | 121,595 | | | ₹ | 137,495 | | | ₹ | 119,726 | | | ₹ | 99,797 | | Steel | | Segment revenue | | | — | | | | — | | | | 41,955 | | | | 42,827 | | | | 46,676 | | Segment profit | | | — | | | | — | | | | (7,913 | ) | | | (5,879 | ) | | | (8,707 | ) | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | — | | | | 34,042 | | | | 36,948 | | | | 37,969 | | Selling and Dist. expenses | | | — | | | | — | | | | (1,083 | ) | | | (1,444 | ) | | | (2,004 | ) | Others | | | — | | | | — | | | | (249 | ) | | | 687 | | | | (1,961 | ) | | | | | | | | | | | | | | | | | | | | | | Total before adjusting for by-product revenues | | | — | | | | — | | | | 32,711 | | | | 36,191 | | | | 34,004 | | | | | | | | | | | | | | | | | | | | | | | Production output (in tons)(b) | | | — | | | | — | | | | 1,027,578 | | | | 1,230,825 | | | | 1,187,310 | | Cost of production before by-product revenue (per ton)(a) | | | — | | | | — | | | $ | 455 | | | $ | 415 | | | $ | 386 | | Cost of production net of by-product (per ton) (a) | | | — | | | | — | | | $ | 455 | | | $ | 415 | | | $ | 386 | | Cost of production net of by-product (per ton) (a) | | | — | | | | — | | | ₹ | 31,833 | | | ₹ | 29,404 | | | ₹ | 28,639 | | Power | | Segment revenue | | | 56,079 | | | | 56,518 | | | | 65,237 | | | | 58,599 | | | | 53,752 | | Segment profit | | | (16,438 | ) | | | (16,650 | ) | | | (15,275 | ) | | | (16,490 | ) | | | (14,070 | ) | | | | | | | | | | | | | | | | | | | | | | | | | 39,641 | | | | 39,868 | | | | 49,962 | | | | 42,109 | | | | 39,682 | | Cost of power at TSPL, BALCO, HZL and MALCO Energy | | | (33,228 | ) | | | (36,177 | ) | | | (45,499 | ) | | | (38,881 | ) | | | (31,935 | ) | Others (c) | | | 80 | | | | (381 | ) | | | (11 | ) | | | (238 | ) | | | (729 | ) | | | | | | | | | | | | | | | | | | | | | | Total | | | 6,493 | | | | 3,310 | | | | 4,452 | | | | 2,990 | | | | 7,018 | | | | | | | | | | | | | | | | | | | | | | | Production output (in MU)(b) | | | 3,328 | | | | 1,172 | | | | 1,039 | | | | 776 | | | | 2835 | | Cost of production before by-product revenue (per unit) | | ₹ | 2.0 | | | ₹ | 2.8 | | | ₹ | 4.3 | | | ₹ | 3.9 | | | ₹ | 2.5 | | Cost of production net of by-product revenue (per unit) | | ₹ | 2.0 | | | ₹ | 2.8 | | | ₹ | 4.3 | | | ₹ | 3.9 | | | ₹ | 2.5 | |
(a) | Exchange rates used in calculating cost of production were based on the daily Reserve Bank of India (“the RBI”),www.oanda.com, reference rates for the years ended March 31, 2013, 2014, 2015, 201631,2017, 2018, 2019, 2020 and 20172021 of Rs. 54.45, Rs. 60.50, Rs. 61.15, Rs. 65.46₹ 67.09, ₹ 64.45, ₹ 69.89, ₹ 70.86 and Rs. 67.09₹ 74.11 per $ 1.001 respectively. |
(b) | Production does not include units generated from the TSPL 6601,980 MW, the 274 MW HZL wind power plant, the 270 MW and IPP 600 MW BALCO power plant and MALCO Energy’s 106.5 MW power plant. |
(c) | “Others” include head office expenses, administration expenses, selling and distribution expenses, and exploration costs that have been expensed, changes in inventory, foreign exchange fluctuations, and expenses incurred for large corporate social responsibility initiatives undertaken, such as building hospitals and other operating income.income and export incentives. These costs are indirect costs and not related to the direct cash cost of production and hence have been excluded from calculating cost of production. |
Production Volume and Mix Production volume has a substantial effect on our results of operations. We are generally able to sell all of the products which we produce, so the revenue generally fluctuates as a result of changes in our production volumes. Production volumes depend on our production capacities, which have increased in recent years across all of our businesses. For our mining operations, production volumes also depend upon the quality and consistency of the ore. Per unit production costs are significantly affected by changes in production volumes in that higher volumes of production generally reduce the per unit production costs. Therefore, our production volumes are a key factor in determining our overall cost competitiveness. The following table summarizes our production volumes for our primary products for the last three fiscal years: | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | Product | | 2015 | | | 2016 | | | 2017 | | | | | | (tons except where otherwise stated) | | Zinc India | | Zinc | | | 733,803 | | | | 758,938 | | | | 671,987 | | | | Lead | | | 127,143 | | | | 144,919 | | | | 139,008 | | | | Silver (kilograms) | | | 327,508 | | | | 424,578 | | | | 452,543 | | Zinc International | | | | | | | | | | | | | | | — Skorpion | | Zinc | | | 102,188 | | | | 82,029 | | | | 85,427 | | — BMM | | Copper(1) | | | 5,678 | | | | 4,729 | | | | 5,016 | | | | Zinc(1) | | | 27,022 | | | | 29,272 | | | | 28,708 | | | | Lead(1) | | | 32,142 | | | | 34,114 | | | | 41,769 | | — Lisheen | | Zinc(1) | | | 130,897 | | | | 71,825 | | | | — | | | | Lead(1) | | | 19,265 | | | | 8,726 | | | | — | | Oil and gas (on net basis)(2) | | | | | | | | | | | | | | | | | Crude Oil (mmbbls) | | | 31.4 | | | | 32.6 | | | | 28.0 | | | | Natural Gas (bcf) | | | 3.5 | | | | 4.3 | | | | 3.0 | | Iron ore | | Saleable Ore Production (million dmt) | | | 0.6 | | | | 5.2 | | | | 10.9 | | Copper | | Copper cathode(3) | | | 362,373 | | | | 384,047 | | | | 402,730 | | | | Copper rods | | | 170,338 | | | | 210,799 | | | | 207,530 | | Aluminium(2) | | Ingots(4) | | | 408,406 | | | | 426,691 | | | | 671,885 | | | | Value Added Products(4)(5) | | | 468,853 | | | | 487,760 | | | | 494,977 | | | | Hot Metal | | | — | | | | 8,892 | | | | 46,541 | | Power | | Power (million units) | | | 9,859 | | | | 12,121 | | | | 12,914 | |
Notes:
| | | | | | | | | | | | | | | Segment | | Product | | For the Year Ended March 31, | | | | | | 2019 | | | 2020 | | | 2021 | | | | | | (tons except where otherwise stated) | | Zinc India | | Zinc | | | 696,283 | | | | 688,286 | | | | 715,446 | | | Lead | | | 197,838 | | | | 181,370 | | | | 214,399 | | | Silver (kilograms) | | | 679,183 | | | | 609,808 | | | | 705,676 | | Zinc International | | | | | | | | | | | | | | | — Skorpion | | Zinc | | | 65,948 | | | | 66,967 | | | | 659 | | — BMM | | Copper(1) | | | 6,102 | | | | 4,998 | | | | 4,888 | | | Zinc(1) | | | 27,558 | | | | 27,943 | | | | 30,131 | | | Lead(1) | | | 37,354 | | | | 37,628 | | | | 27,471 | | — Lisheen | | Zinc(1) | | | — | | | | — | | | | — | | | Lead(1) | | | — | | | | — | | | | — | | — Gamsberg(2) | | Zinc(1) | | | 17,128 | | | | 107,949 | | | | 144,577 | | | Lead(1) | | | — | | | | — | | | | — | | Oil and gas (on net basis) (3) | | Crude Oil (mmbbls) | | | 27.5 | | | | 28.2 | | | | 21.6 | | | Natural Gas (bcf) (4) | | | 7.8 | | | | 18.7 | | | | 18.4 | | Steel | | Pig Iron | | | 141,549 | | | | 167,305 | | | | 188,979 | | | Billet | | | 39,478 | | | | 27,456 | | | | 165,273 | | | TMT | | | 441,251 | | | | 468,396 | | | | 337,583 | | | Wire rod | | | 426,873 | | | | 412,948 | | | | 360,874 | | | DI Pipe | | | 149,946 | | | | 154,721 | | | | 134,606 | | Iron ore | | Saleable Ore Production (million dmt) | | | 4.4 | | | | 4.4 | | | | 5.0 | | Copper | | Copper cathode(5) | | | 89,517 | | | | 77,490 | | | | 101,435 | | | Copper rods | | | 111,197 | | | | 100,219 | | | | 122,390 | | Aluminium | | Ingots(6) | | | 1,106,966 | | | | 1,153,395 | | | | 1,302,054 | | | Value Added Products(7) | | | 818,124 | | | | 719,872 | | | | 667,878 | | | Hot Metal | | | 33,924 | | | | 30,713 | | | | 22,535 | | Power | | Power (million units) | | | 13,517 | | | | 11,162 | | | | 11,261 | |
(1) | Refers to mined metal content in concentrate. |
(2) | Gamsberg Includes trial run production of 9,619 tons in 2019. |
(2)(3) | While computing EI production, Ravva royalty fees have not been netted off. |
(3)(4) | Natural gas production figures are the production volumes of natural gas available for sale, excluding flared and re-injected gas and gas consumed in operations. |
(5) | Copper cathode is used as a starting material for copper rods. Approximately one ton of copper cathode is required for the production of one ton of copper rods. |
(4)(6) | Includes production capitalized in fiscal years 2015, 20162019, 2020 and 20172021 of 4461 kt, 51ktNil and 166kt31 kt respectively. Ingot Production also includes alloyed ingot volumes. |
(5)(7) | Value added products of Aluminium include production of billets, rods, slabs and rolled products. |
Periodically, our facilities are shut down for planned and unplanned repairs and maintenance which temporarily reduces our production volume. In addition, the mix of products we produce can have a substantial impact on our results of operations as we have different operating margins in each of our businesses, and within each business our operating margins vary between the lower margins of primary metals and the higher margins of value-added products such as copper rods and aluminium rolled products. For example, copper cathodes are converted in our copper rod plant into copper rods, a value-added product which has a higher margin than copper cathodes. As copper rods have higher margins, we endeavor to sell as large a percentage of copper rods as possible. As the production volume of our various products fluctuate primarily based on market demand and our production capacity for such products, the percentage of our revenue from those products will also fluctuate between higher and lower margin products, which will in turn cause our operating profit and operating margins to fluctuate. Profit Petroleum The GoI is the owner of the hydrocarbons wherein it has assigned the responsibility to the joint operation (contractor)(Contractor) to explore, develop and produce the hydrocarbons. Contractor is entitled to recover out of petroleumPetroleum produced, all the costs incurred according to the production sharing contractsPSCs in exploring, developing and producing the hydrocarbons, which is known as “cost petroleum”“Cost Petroleum”. Excess of revenue (value of hydrocarbons produced) over and above the cost incurred as above, is called “profit petroleum”“Profit Petroleum”, which is shared between the GoI and contractor partiesContractor Parties as per procedure laid down in production sharing contracts.PSCs. Profit petroleumPetroleum sharing between the GoI and the contractor is determined by post- tax ratePost- Tax Rate of returnReturn method in case of Ravva andCB-OS/2 and on the investment multipleInvestment Multiple method in case of Rajasthan blockand KG-ONN-2003-1 blocks as defined in their respective production sharing contracts.PSCs. The share of profit petroleum,Profit Petroleum, in any year, is calculated for the contractContract or development areaDevelopment Area on the basis of thepost-taxPost-Tax rateRate of return investment multipleReturn or Investment Multiple actually achieved by the companies at the end of the preceding year for the contract/development area.Contract/Development Area. The following table summarizes the current governmentGovernment’s share of profit petroleumProfit Petroleum for various blocks and development areas: | Block/Development Area | | Government share of profit petroleum as at March 31, | | | Government share of profit petroleum as at March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2019 | | | 2020 | | | 2021 | | Ravva | | | 60% | | | | 60% | | | | 60% | | | | 60.0% | | | | 70.0% | | | | 70.0% | | Cambay – Lakshmi | | | 45% | | | | 45% | | | | 45% | | | | 45.0% | | | | 45.0% | | | | 45.0% | | Cambay – Gauri | | | 55% | | | | 55% | | | | 55% | | | | 55.0% | | | | 55.0% | | | | 55.0% | | Cambay –CB-X | | | 60% | | | | 60% | | | | 60% | | | | 60.0% | | | | 60.0% | | | | 60.0% | | Rajasthan – Development Area1 | | | 40% | | | | 40% | | | | 40% | | | | 40.0% | | | | 40.0% | | | | 50.0%* | | Rajasthan – Development Area2 | | | 30% | | | | 40% | | | | 40% | | | | 40.0% | | | | 40.0% | | | | 50.0%* | | Rajasthan – Development Area3 | | | | 20.0% | | | | 20.0% | | | | 30.0%* | | KG-ONN-2003-1 | | | | 15% | | | | 15.0% | | | | 15.0% | |
With the increase in the operations and revenue in each block, the above mentioned percentage is subject to increase, leading to a higher governmentGovernment’s share of profit petroleum.Profit Petroleum. This will have an adverse impact on our result of operations as it will lead to an increase in our share of profit petroleumProfit Petroleum expense to be paid to the GoI. * | Pursuant to the Delhi High court order dated March 26, 2021, the Company have paid 10% additional share in Profit Petroleum from May 14, 2020 onwards. |
Government Policy India Customs Duties We sell our products in India at a premium to the LME price, due into a part to the customs duties payable on imported products. Our profitability is affected by the levels of customs duties as we price our products sold in India generally on an import-parity basis. We also pay a premium on certain raw materials that we import or which are sourced locally but which are priced on an import-parity basis as a result of customs duties, with copper concentrate, petroleum products, alumina, carbon and caustic soda being the primary examples. The following table sets forth the customs duties that were applicable for the periods indicated: | | | August 13, 2013 to February 29, 2016 | | | March 1, 2016 to Present | | | Products | | | March 1, 2016 to July 5, 2019 | | | July 6, 2019 to March 27, 2021 | | | March 28, 2021 to present | | Copper | | | 5.0% | | | | 5.0% | | | | 5.0% | | | | 5.0% | | | | 5.0% | | Copper concentrate | | | 2.5% | | | | 2.5% | | | | 2.5% | | | | 2.5% | | | | 2.5% | | Zinc | | | 5.0% | | | | 5.0% | | | | 5.0% | | | | 5% | | | | 5% | | Lead | | | 5.0% | | | | 5.0% | | | | 5.0% | | | | 5% | | | | 5% | | Silver | | | 10.0% | | | | 10.0% | | | | 10.0% | | | | 12.5% | | | | 7.5% | | Aluminium | | | 5.0% | | | | 7.5% | | | | 7.5% | | | | 7.5% | | | | 7.5% | | Steel | | | | 10.0% | | | | 10% | | | | 7.5% | |
We are also liable to pay an additionalFurther, social welfare surcharge as a duty of customs countervailing duty or CVD,has been introduced through the Finance Bill 2018 on imported goods at a rate of 12.5% (for the period from March 18, 2012 to February 28, 2015, the CVD was 12%) of the assessable value and10.0% on basic custom duty which is(rate of social welfare surcharge on silver was 3.0%, however via budget 2021, the rate has been changed to 10% and further, Agriculture and Infrastructure Development Cess (AIDC) has been introduced @ 2.5%.). However, education cess and secondary education cess that was together levied at a rate of 3.0% on imports in India. In addition, special additional duty is also levied @ 4% on imports in India.imported goods were abolished.
The GoI may reduce or abolish customs duties on copper and aluminium in the future, although the timing and extent of such reductions cannot be predicted. As we sell the majority of the commodities we produce in India, any further reduction in Indian tariffs on imports will decrease the premiums we receive in respect of those sales. Our profitability is dependent to a small extent on the continuation of import duties and any reduction would have an adverse effect on our results of operations and financial condition. The import duty at the rate of 2.5% is levied on copper concenterateconcentrate and rock phosphate. Excise In GST regime, on import of coal, following duties are levied under customs act which was applicable from July 01, 2017: Basic custom duty (BCD) at the rate of 2.0%2.5% which is also imposed on coalnon—creditable Integrated Goods and Service Tax (IGST) at the rate of 5% which is a creditable duty GSTC Cess @ 400/ MT cess- for which proportionate refund is available with respect to exported goods in the event cenvat credit is not availed. However, if cenvat credit is availed, then the excise duty rate on coal becomes 6%.ratio of export turnover /total turnover. Goods imported for the purposes of “petroleum operations” are exempt from customs duty under Notification No 50/2017 - Customs dated June 30, 2017; sr. no. - 404; condition number 48. Similar exemption was given in pre-GST regime vide Notification No 12/2012 - Customs dated17-03-2012, March 17, 2012; sr. no.No. - 358 and 359,359; condition nonumber 42 and 43 respectively. respectively (further amended by Notification No 12/2016- Customs dated March 1, 2016; sr. no. - 357A; condition no 40a. Goods which are imported for purposes other than petroleum operations such as software, IT related goods or any other material required for office purposes are liable to customs duty as per the applicable rates in force which may vary from approximately 24.0% to 27.0% depending upon the classification of goods as mentioned in the customs tariff2016-17. 2018 - 19. Export Incentives The GoI provides a variety of export incentives to Indian companies. Exports of copper, aluminium and zinc from India receive assistance premiums from the GoI. Export incentives do not outweigh the Indian market price premiums. Accordingly, notwithstanding the export incentives, we endeavor to sell large quantities of our products domestically. In fiscal years 20162019, 2020 and 2017,2021 exports accounted for 25.0%21.0%, 20.0% and 29.0%26% respectively, of our zinc India business’ revenue. The following table sets forth the export assistance premiums, as a percentage of the F.O.B value of exports, on zinc concentrate, zinc ingots and lead concentrate for the periods indicated: | | | | | | | | | | | | | | | October 9, 2012 to September 20, 2013 (percentage of F.O.B value of exports) | | | September 21, 2013 to November 21, 2014 (percentage of F.O.B value of exports) | | | November 22, 2014 to present (percentage of F.O.B value of exports) | | Zinc concentrate | | | 1.5% | | | | 1.3% | | | | 1.0% | | Zinc ingots | | | 2.0% | | | | 1.7% | | | | 1.9% | | Lead concentrate | | | 1.5% | | | | 1.3% | | | | 1.0% | |
| | | | | | | | | | | | | Products | | April 1, 2015 to November 11, 2016 | | | November 11, 2016 to February 3, 2020 | | | February 4, 2020 to present | | Zinc concentrate | | | 1.0% | | | | Nil | | | | Nil | | Zinc ingots | | | 1.9% | | | | 1.5% | | | | 1.3% | | Lead concentrate | | | 1.0% | | | | Nil | | | | Nil | |
In fiscal years 20162020 and 2017,2021, exports accounted for 38.0%29% and 55.5%7.58%, respectively, of our copper business revenue. The following table sets forth the export assistance premiums, in the form of Marked Linked Focus Product Scheme as a percentage of the F.O.B value of exports, on copper cathode and copper rods for the period indicated: | | | | | | | October 1, 2011 to
March 31, 2017
(percentage of
F.O.B value of
exports) | | Copper cathode
| | | 2.0% | | Copper rods #
| | | 2.0% | |
# | Applicable for export to Czech Republic only. |
Further, withrevenue from India. With effect from April 1, 2015, the New Merchandise Exports from India Scheme was introduced in place of Marked Linked Focus Product Scheme. In this scheme, no export incentive was notified for copper products.
In fiscal years 20162019, 2020 and 2017,2021, exports accounted for 39.7%60%, 61.5% and 47.0%60% respectively, of our aluminium business’ revenue. The following table sets forth the export assistance premiums, as a percentageAs per government policy, MEIS (Merchandise Exports from India Scheme) is about 2% of the F.O.BFOB value of exports,exports. However, we realized lesser upon actual sale (approximately 90% to 95% of amount due), thereby effectively translating to 1.8%—1.9% upon realization. Ministry of Commerce notified a capping of ₹ 20 million on aluminium ingots, aluminium rods and aluminium rolled products for the periods indicated: | | | | | | | | | | | | | | | April 1, 2014 to November 21, 2014 | | | November 22, 2014 to Present | | | November 15, 2016 to Present | | Aluminium ingots | | | 1.7% | | | | 1.9% | | | | 1.0% | | Aluminium rods | | | 1.7% | | | | 1.9% | | | | 1.5% | | Aluminium billets | | | | | | | 1.9% | | | | 1.0% | | Aluminium rolled products | | | 0% | | | | 0% | | | | 1.5% | |
MEIS from September 1, 2020 till further notification. In the case of sales to specified markets (as defined herein), export assistance premiums for these products would extend to 2%2.0% of the F.O.B value of exports made to the countries specified under the Merchandise Export from India Scheme (“MEIS”).MEIS. The MEISsaid scheme was implemented under the Foreign Trade Policy of India in2015-20. 2015 - 20. The purpose of this scheme is to provide Indian exporters certain incentives such as tax benefits, and thereby enhance India’s export competitiveness in certain specified markets, including, but not limited to Argentina, Austria, Bulgaria, Cambodia, Chile, and New Zealand (“specified markets”). As exports feel the impact of the pandemic, the Indian Government has extended the validity of Foreign Trade Policy 2015 - 2020 to March 31, 2021. The Government has further extended the Foreign Trade Policy till September 30, 2021. In order to boost exports and make Indian exports cost competitive, the Government has introduced a scheme for Remission of Duties and Taxes on Exported Products (“RoDTEP”). with effect from January 1, 2021, replacing the MEIS. It is a mechanism to reimburse various taxes/duties/ levies, at the central, state and local levels, which are incurred during manufacturing and distribution of exported products, (applicable to those which are currently not being refunded under any other mechanism). However, the rates are yet to be notified. The GoI may further reduce export incentives in the future, which would adversely affect our results of operations. In fiscal year 2015, export assistance premiums on aluminium rolled products were eliminated and duty exemption scheme of duty free import authorization was introduced to enable duty free import of inputs required for export production pursuant to Chapter 4 of the Foreign Trade Policy whereby advance authorization for inputs and exports items was given under the Standard Input Output Norm (“SION”) policy scheme. India export duties The GoI levies duty on the export from India of certain products mentioned under the second schedule of the Customs Tariff Act 1975, including iron ore and concentrates, at a specified rate (ad valorem on the free on boardFOB value of exports). The GoI levied export duty on iron ore fines and lumps @ 20%at a rate of 20.0% on FOB value and further increased to 30%30.0% with effect from December 31, 201.2011 to April 29, 2015. Effective from April 30, 2015, the export duty on iron ore fines with Fe content less than 58.0% is 10.0% and equal to or more than 58.0% Fe, duty rate is 30.0% and for iron ore fineslumps it is 30.0%. Effective from March 01,1, 2016 till date, the export duty on iron ore fines and lumps with Fe content less than 58.0% is nil and equal to or more than 58.0% Fe, duty rate is 30.0%. Taxes, royalties and cess payments Income tax on Indian companies during fiscal year 20172019 was charged at a statutory rate of 30.0% plus a surcharge of 12.0% on the tax and has an additional charge of 3.0%4.0% on the tax including surcharge, which results in an effective statutory tax rate of 34.6%34.944%. The education and secondary higher education cess has been replaced in Finance Act 2018 with health and education cess at a rate of 4.0% effective from April 1, 2018. Non-resident companies were charged at a statutory rate of 40.0% plus a surcharge of 5.0% on the tax and has an additional charge of 3.0%4.0% on the tax including surcharge, whichThe education and secondary higher education cess has been replaced in Finance Act 2018 with health and education cess at a rate of 4.0% effective from April 1, 2018. Hence, applicable effective corporate tax rate for fiscal year 2018 is 43.68%. GoI vide Taxation Laws (Amendment) Act, 2019 provided an option to existing domestic companies to pay tax at a concessional rate of 22% plus surcharge of 10% on tax and 4% on tax plus surcharge, this results in aninto effective statutory tax rate of 43.3% during fiscal year 2017.25.17%. The concessional tax rate is applicable subject to surrender of specified deductions/ incentives by the Company exercising the option. These incentives, among others, include deductions relating to (i) newly established units in Special Economic Zones, (ii) expenditure on scientific research and skill development projects, (iii) investment in new machinery/ plant in notified backward areas, (iv) depreciation of new machinery/ plant, and (v) various other Chapter VI-A provisions. i. | A corporate taxpayer is required to exercise its option of being governed under concessional tax regime before due date of filing of tax return. Option once exercised cannot be withdrawn and applicable to all subsequent tax years. This is effective from April 1, 2019 |
ii. | Further, the Amendment Act 2019, provides an option for New Domestic Manufacturing Companies (“NDMC”) to pay effective tax rate @ 17.16% (i.e. statutory tax rate of 15% plus surcharge @ 10% on the tax and an additional cess of 4% on the corporate tax including surcharge). This rate is applicable to NDMC provided the new company is set up on or after September 30, 2019 and commences manufacturing before March 31, 2023. Further, incentives mentioned at point (i) above will also not be available to NDMC. New manufacturing companies will not include companies: (a) formed by splitting up or reconstruction of an existing business, (b) engaged in any business other than manufacturing or production, and (c) using any plant or machinery previously used in India (except under certain specified conditions). |
Tax rate applicable under Minimum Alternate Tax (MAT) regime – Domestic Company Profits of companies in India are subject to either regular income tax or Minimum Alternate Tax (“MAT”),MAT, whichever is greater. The effective MAT rate during fiscal year 20172019 for Indian companies was 21.34% and for21.55%. For non-resident companies the MAT rate was 20.0% of the book profit as prepared under generally accepted accounting principles in India, or Indian GAAP. The excess of amounts paid as MAT over the regular income tax amount during the year may be carried forward and applied towards regular income taxes payable in any of the succeeding fifteen years (as amended by Finance Act 2017) subject to certain conditions. The Amendment Act 2019, reduced MAT base tax rate from 18.5% to 15% plus applicable surcharge and cess. The effective MAT rate for all Indian Company for fiscal year 2019, 2020 and 2021 would be 21.55%, 17.47% and 17.47% respectively. Further, companies opting for concessional tax regime would not be required to pay MAT. For non-resident foreign company’s effective MAT rate as per the Tax Amendment Act 2019 reduced from 20.01% to 16.38% of the book profit. Dividend Distribution Tax (“DDT”) The tax rates imposed on us in respect of dividends paid in prior periods have varied. According to the Finance Act, 2014, dividend distribution taxDDT is to be levied on gross distributable surplus amount instead of amount paid net of taxes. This has resulted in an increase in the dividend distribution taxDDT to more than 20%20.0% from 16.995% in the earlier year. Further, theThe Finance Act, 2015 has2018 increased the surcharge from 10.0% to 12.0%, which results in effective tax rate of 20.35% with effectcess from fiscal year 2016.3.0% to 4.0% which will result in an effective DDT rate of 20.6% from April 1, 2018. This tax is payable by the company declaring distributing or paying the dividends. Dividends from our Indian subsidiaries to us are also subject to this tax, though we do not pay income tax upon the receipt of any such dividends. The Income Tax Act provides that if a company receives a dividend from any of its Indian subsidiaries during the year and such subsidiary has paid a tax on its dividends, then the dividend distributed by the parent company to the extent of dividend received from the Indian subsidiary shall not be subject to dividend tax. Previously serviceThe Finance Act 2020 has repealed the DDT. Companies are now required to pay/distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax wasat applicable at 14.0% with effectrates which is applicable from JuneApril 1, 2015 until July 1, 2017. Further, an additional ‘Swacch Bharat Cess” at 0.5% with effect from November 14, 20152020.
Goods and “Krishi Kalyan Cess” at 0.5% with effect from June 1, 2016 on the value of taxable services were applicable until July 1, 2017. Accordingly, the effective service tax rate until July 1, 2017 was payable at 15.0%. We paid service tax as a service provider and service recipient.
Service Provider: we paid service tax as a service provider at a rate of 12.4% to 14.5% under the following categories:
Business support services;
Oil transfer services;
Port services; and
Management consultant services.
Service Recipient- we paid service tax as a service recipient under following categories:
Foreign service providers: we are responsible to pay service tax directly to tax authorities in case of foreign service providers who are not having any permanent establishment in India. In case service providers having a permanent establishment in India, they are responsible to recover the applicable service taxes and pay to tax authorities. We are also paying service tax as recipient of services on the parent company overheads payable to ultimate parent company, Vedanta Resources Plc;
Service tax on fees payable to directors of company: We are paying service tax on the fees payable tonon-executive/independent directors. The fee includes director sitting fee and/or any commission payable to the directors; Other services: In case of services received from any goods transport agency and payments towards any sponsorship, we are responsible to pay service tax directly to tax authorities as per the applicable rates; and
Domestic Service Providers: In case of certain services received fromnon-company domestic service providers, liability of payment of service tax has been casted on the recipient of services with effect from July 1, 2012 under Notification No. 30/2012-service tax dated June 20, 2012 as per the applicable rates.
We paid an excise duty of 12.5% with effect from March 1, 2015 until July 1, 2017 (for the period from March 17, 2012 to February 28, 2015, the excise duty was 12% and an additional charge of 3.0% on the excise duty based on all of our domestic production intended for domestic sale up to February 28, 2015). We charged the excise duty and additional charge to our domestic customers. We paid excise duty on metallurgical coke at the rate of 6.0% and on pig iron of 12.5%. HZL paid excise duty on silver at the rate of 8.5% effective from March 1, 2016 (8.0% prior to that) and an additional charge of 3.0% on the excise duty has been eliminated with effect from March 1, 2015. Goods procured for the purposes of “Petroleum Operations” and which were exempt from customs duty were also exempt from excise duty under notification 12 /2012-Central Excise dated March 17, 2012, Sr. No 336 provided conditions as provided have been satisfied, all goods supplied under international competitive bidding and were exempt from customs duty.
Goods and Service Tax: Effective from July 1, 2017, the present indirect tax regime envisages levy of multiple federal and state taxes with respect to the operations undertaken by businesses. The transition from the previous regime to goods and service tax (“GST”) regime is a tax reform, which is aimed at addressing the existing anomalies and strengthening the concept of unified market. GST is a supply driven concept and would therefore apply on supply of goods and services. On the whole, most central and state levies (such as excise duty, service tax, CVD and special additional duty, central sales tax and value added tax have beenwere subsumed into GST). Therefore,Consequently, the existing taxableTaxable events have beenwhich existed before GST era were replaced by a single taxableTaxable event of supply of goods and services under GST. Basic customs duty (BCD) and related customs cess continue to be applicable on import of goods. Taxes under GST apply as follows: Central goods and service tax and state goods and services tax are simultaneously levied on intra-state supply of goods and services. Integrated goods and service tax are levied on imports and inter-state supply of goods and services. In addition, GST compensation cess also applies on certain specified goods and services. The general rate of GST on our output supplies is 18.0%. However, supply of iron ore attracts GST at the rate of 5.0%, whereas silver attracts GST at 3.0%. Further, crude oil and natural gas attractwill be subject to GST from the date to be notified by GST council and therefore, until the time GST council notifies inclusion of these products in GST, they would continue to attract existing indirect tax levies. Goods procuredimported for the purposes of “petroleum operations” are subject to integrated goods and service tax at 5.0% as per Notification No. 50/2017-Customs, dated June 30, 2017,S.No- 404 conditionno-48. BCD continues to be exempt. A similarSimilar exemption notification has alsonotifications for domestic procurements have been issued to tax inter-state and intra-state supplies of goods for petroleum operations at an effective rate of 5.0%. Procurement of coal attracts GST compensation cess at Rs.₹ 400 per ton in addition to the GST rate of 5.0%. Effective July 1, 2017, CVD and SAD has been subsumed in integrated goods and service tax which is applicable at the rates as mentioned in below table: | | | | | Percentage of F.O.B Value of exports | | Integrated Goods and Service Tax rate from July 1, 2017 | | Copper | | | 18.0% | | Copper concentrate | | | 5.0% | | Zinc | | | 18.0% | | Lead | | | 18.0% | | Silver | | | 3.0% | | Aluminium | | | 18.0% | | Iron ore | | | 5.0% | | Steel | | | 18.0% | |
We are also subject to government royalties. We pay royalties to the state governments of Chhattisgarh, Rajasthan, Goa and Karnataka in India based on extraction of bauxite, lead-zinc and iron ore. The most significant of these is the royalty that HZL is required to pay to the state government of Rajasthan, where all of HZL’s mines are located at a rate of 10%10.0% with effect from September 01,1, 2014 (the rate was 8.4% from August 13, 2009 to August 31, 2014), of the zinc LME price payable on the zinc metal contained in the concentrate produced, 14.5% (the rate was 12.7% from August 13, 2009 to August 31, 2014) of the lead LME price payable on the lead metal contained in the concentrate produced and at a rate of 7.0% of silver LME price chargeable on silver-metal produced. In addition, a further amount of royalty effective from January 12, 2015, for DMF at 30%30.0% of base royalty and NMET at 2%2.0% of base royalty, has been notified. The royalties paid by BALCO on the extraction of bauxite are not material to our results of operations. The royalty payable for our iron ore business is at 15%15.0% of pit mouth value (PMV) declared by the Indian Bureau of Mines. Royalty is also being payable at Cairn India to the state governmentState Government of Rajasthan and Andhra Pradesh and Gujarat for the extraction of crude oil and natural gas. WeApart from the same, the Cess is also pay cesspaid to the GoI. Generally, in respect of oil and gas operations, royalty and cess payments are made by the joint operation partners in proportion to their participating interest and are cost recoverable. For the Rajasthan block,RJ Block, entire royalty payments are made by ONGC at the rate of 20.0% of well-head value for crude oil and 10% of well-head value for natural gas and are cost recoverable. Until February 2016, cess iswas paid at the rate of Rs.₹ 4,500 per mt for crude oil; pursuant to amendments in the Finance Act 2016, cess iswas paid at the rate of 20.0%ad-valorem from March 2016 onwards. National Calamity Contingent Duty (NCCD)(“NCCD”) is paid at the rate of Rs.₹ 50 per mt and Basic Excise Duty (“BED”) is paid at the rate of ₹ 1 per mt. Sales taxTax payments are made at the rate of 2.0% (central sales tax)Tax) on sale of both crude oil and at the rate of 2.0% (central sales Tax) and 10% (value added Tax) on natural gas. For the Ravva block, royaltyuntil October 27, 2019, Royalty is Rs.paid at the rate of ₹ 481 per mtMT for crude oil and cess is fixed at Rs.the rate of ₹ 900 per mtMT; pursuant to extension of Ravva PSC from October 28, 2019, royalty is paid at 10% of Well head value on crude oil and cess is paid at the rate of 20.0% ad-Valorem on crude oil. Royalty on natural gas is 10.0% of well-head value of gas.gas (typically 9% of natural gas revenue). Sales taxTax payments stand at 2.0% (central sales tax)Tax) or 5.0% (value added tax)Tax) on crude oil and 14.5% on natural gas. For the Cambay block, the entire royalty and cess payments are made by ONGC and are not cost recoverable. We only participate in the payment of NCCD at the rate of Rs.₹ 50 per mt and Basic Excise Duty (“BED”) is paid at the rate of ₹ 1 per mt. Sales taxTax payments (central sales tax)Tax) are made at a rate of 2.0% on crude oil and 15.0% (value added tax)Tax) on natural gas. Our royalties in Zinc International business are as follows: 3.0% of sale value of the products for Skorpion; 7.0% of turnover for BMM. The royalty rate applied on the turnover is 0.5% if the adjusted earnings before interest and tax (“adjusted EBIT”) is negative, and in the event the adjusted EBIT is positive, the royalty rate applied on the turnover is 0.5% plus the rate computed at 100/9 times the adjusted EBIT upon turnover. In any event, the maximum royalty rate is capped at 7.0%; and 3.5% of turnover for Lisheen. The turnover is identified as gross revenue less smelter deductions, treatment charges, freight and marine insurance charges on a semi-annual basis.
Tax Incentives Certain businesses of the Group within India are eligible for specified tax incentives. Most of such tax exemptions are relevant for the companies operating in India. These are briefly described as under: The location based exemption
(i) | 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 a tax holiday. Such a tax holiday works to exempt 100.0% of the profits for the first five years from the commencement of the tax holiday, and 30.0% of profits for the subsequent five years. This deduction is available only for units established up to March 31, 2012. However, such undertaking would continue to be subject to the Minimum Alternative tax (‘MAT’(“MAT”). The Group has such types of undertakings at Haridwar and Pantnagar, which are part of HZL. In the current year, Haridwar and Pantnagar units areunit is eligible for deduction at 30.0% of taxable profits. Sectoral Benefit - Power Plants and Port Operations
(ii) | 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 100.0% of profits and gains for any ten consecutive years within the 15 year period following commencement of operations subject to certain conditions. The Group currently has total operational capacity of 8.4 GW of thermal based power generation facilities and wind power capacity of 274 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 HZL (where such benefits has been drawn), Talwandi Sabo Power Limited, Vedanta Limited and Bharat Aluminium Company Limited (where no benefit has been drawn) and port facilities at Vizag General Cargo Berth Limited (where no benefit has been drawn). (iii) | Sectoral benefit – Oil and gas |
Provided certain conditions are met, profits of newly constructed industrial undertakings engaged in the oil and gas sector may benefit from a deduction of 100%100.0% of the profits of the undertaking for a period of seven consecutive years. This deduction is only available to blocks licensed prior to March 31, 2011. However, such businesses would continue to be subject to the MAT provisions. In the Group, Cairn India Limited (now merged with Vedanta Limited)Limited - oil and gas business) and Cairn Energy Hydrocarbons Limited benefited from such deductions till March 31, 2016. Special Economic Zone – SEZ
(iv) | Special Economic Zone – SEZ |
Provided certain conditions are met, profits of newly established undertakings located in SEZ may benefit from a tax exemption. Such a tax exemptions works to 100.0% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50.0% for next 5 years thereafter and 50.0% of the ploughed back export profit for next 5 years. Investment Allowance under Section 32 AC of the Income Tax Act
Incentive for acquisition and installation of new high value plant or machinery to manufacturing companies by providing an additional deduction of 15.0% of the actual cost of plant or machinery acquired and installed during the year. The actual cost of the new plant or machinery should exceed Rs. 250 million to be eligible for this deduction. The deduction under section 32AC is available up to financial year March 31, 2017.
In addition, the subsidiaries incorporated in Mauritius are eligible for tax credit to the extent of 80.0% of the applicable tax rate on foreign source income. Exchange Rates We sell commodities that are typically priced by reference to US dollar prices. However, a majority of our direct costs in our zinc, iron ore, aluminium and power businesses and our smelting and refining costs in our copper business are incurred in Indian Rupees and to a much lesser extent in Australian dollars, South African Rand and Namibian dollar. Also, all costs with respect to imported material for all our businesses are generally incurred in US dollars. As a result, an increase in the value of the US dollar compared to the Indian Rupee, and to a lesser extent the Australian dollar, South African Rand and Namibian dollar, is generally beneficial to our results of operations, except to the extent that the increase results in increased costs of copper concentrate, alumina and other imported materials for our businesses. A decrease in the value of the US dollar relative to the Indian Rupee, Australian dollar, South African Rand and Namibian dollar has the opposite effect on our results of operations. For more information on the fluctuations in the value of the Indian Rupee against the US dollar, see “Item 3A. Selected Consolidated Financial Data—Exchange Rates.”dollar. Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with IFRS as issued by the IASB. In the course of preparing these financial statements, our management has made judgments, 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. Actual results may differ from these estimates under different assumptions and conditions. For a discussion of our significant accounting policies, see “Note 3 to the consolidated financial statementsstatements” included in this Annual Report. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods affected. We believe the critical accounting estimates are those that are both important to reflect our financial condition and results and require difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. See “Note 3. V. “Critical“Note 3 (c): Significant accounting judgmentsestimates and estimation uncertainty” judgments” of Notes to the Consolidated financial statements”Financial Statements for a detailed discussion on the critical accounting estimates. Results of Operations Overview
Consolidated Statement of Profit or Loss The following table is derived from our selected consolidated financial data and sets forth our historical operating results as a percentage of revenue for the periods indicated: | | | | | | | | | | | | | | | For the Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | | (in percentages) | | Consolidated Statement of Profit or Loss: | | | | | | | | | | | | | Revenue | | | 100.0 | | | | 100.0 | | | | 100.0 | | Cost of sales | | | (135.8 | ) | | | (136.9 | ) | | | (74.5 | ) | | | | | | | | | | | | | | Gross profit | | | (35.8 | ) | | | (36.9 | ) | | | 25.5 | | Other operating income | | | 0.7 | | | | 0.7 | | | | 0.7 | | Distribution expenses | | | (1.4 | ) | | | (1.9 | ) | | | (2.3 | ) | Administration expenses | | | (4.3 | ) | | | (4.0 | ) | | | (2.6 | ) | | | | | | | | | | | | | | Operating profit | | | (40.8 | ) | | | (42.1 | ) | | | 21.3 | | Investment and other income | | | 7.0 | | | | 6.9 | | | | 6.3 | | Finance and other costs | | | (8.6 | ) | | | (9.3 | ) | | | (8.6 | ) | | | | | | | | | | | | | | Profit before taxes | | | (42.5 | ) | | | (44.5 | ) | | | 19.0 | | Income tax expense | | | 14.8 | | | | 16.1 | | | | (5.3 | ) | Profit/(loss) for the year | | | (27.7 | ) | | | (28.4 | ) | | | 13.7 | | Profit attributable to: | | | | | | | | | | | | | Equity holders of the parent | | | (17.5 | ) | | | (19.6 | ) | | | 7.6 | | Non-controlling interest | | | (10.2 | ) | | | (8.8 | ) | | | 6.1 | |
| | | | | | | | | | | | | | | For the year Ended March 31, | | | 2019 | | | 2020 | | | 2021 | | | (in percentages) | | Consolidated Statement of Profit or Loss: | | | | | | | | | | | | | Revenue | | | 100.0 | % | | | 100.0 | % | | | 100.0 | % | Cost of sales | | | (80.1 | %) | | | (99.3 | %) | | | (73.1 | %) | | | | | | | | | | | | | | Gross profit | | | 19.9 | % | | | 0.7 | % | | | 26.9 | % | Other operating income | | | 1.7 | % | | | 1.2 | % | | | 1.45 | % | Distribution expenses | | | (1.9 | %) | | | (2.2 | %) | | | (2.3 | %) | Administration expenses | | | (3.8 | %) | | | (4.5 | %) | | | (4.45 | %) | | | | | | | | | | | | | | Operating profit | | | 16.0 | % | | | (4.8 | %) | | | 21.5 | % | Investment and other income | | | 3.5 | % | | | 3.1 | % | | | 3.7 | % | Finance and other costs | | | (6.5 | %) | | | (6.5 | %) | | | (6.1 | %) | | | | | | | | | | | | | | Profit/(loss) before taxes | | | 13.0 | % | | | (8.2 | %) | | | 19.1 | % | Income tax expense | | | (4.6 | %) | | | 3.2 | % | | | (2.2 | %) | Profit/(loss) for the year | | | 8.4 | % | | | (5.0 | %) | | | 16.9 | % | Profit attributable to: | | | | | | | | | | | | | Equity holders of the parent | | | 5.5 | % | | | (7.3 | %) | | | 13.0 | % | Non-controlling interest | | | 2.9 | % | | | 2.3 | % | | | 3.9 | % |
Net revenue by Geographic Location The primary markets for our products are India and China. Other markets include number of countries mostly in the Asia, Middle East and Europe. We endeavor to sell as large a quantity of our products as possible in India due to the Indian market premium that we receive on sales in India. The following table sets forth our revenue from each of our primary markets and our revenue from each of our primary markets as a percentage of our total revenue for the periods indicated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2015 | | | 2016 | | | 2017 | | | | (Rs. in million) | | | % of revenue | | | (Rs. in million) | | | % of revenue | | | (Rs. in million) | | | (US dollars in millions) | | | % of revenue | | India | | | 481,451 | | | | 65.6 | | | | 443,287 | | | | 69.3 | | | | 441,954 | | | | 6,815.0 | | | | 61.6 | | China | | | 57,846 | | | | 7.9 | | | | 34,556 | | | | 5.4 | | | | 61,179 | | | | 943.4 | | | | 8.5 | | UAE | | | 40,705 | | | | 5.5 | | | | 32,759 | | | | 5.1 | | | | 48,070 | | | | 741.2 | | | | 6.7 | | Others(1) | | | 153,577 | | | | 21.0 | | | | 128,891 | | | | 20.2 | | | | 166,004 | | | | 2,559.9 | | | | 23.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 733,579 | | | 100.0 | | | 639,493 | | | 100.0 | | | 717,207 | | | 11,059.5 | | | 100.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 | | | 2020 | | | 2021 | | Region | | (₹ in million) | | | % of revenue | | | (₹ in million) | | | % of revenue | | | (₹ in million) | | | (US dollars in million) | | | % of revenue | | India | | | 591,599 | | | | 65.1 | % | | | 542,256 | | | | 64.9 | % | | | 536,212 | | | | 7,331 | | | | 61.7 | % | China | | | 37,868 | | | | 4.2 | % | | | 26,942 | | | | 3.2 | % | | | 52,213 | | | | 714 | | | | 6.0 | % | UAE | | | 10,150 | | | | 1.1 | % | | | 8,201 | | | | 1.0 | % | | | 6,984 | | | | 95 | | | | 0.8 | % | Malaysia | | | 48,657 | | | | 5.4 | % | | | 76,479 | | | | 9.2 | % | | | 71,092 | | | | 972 | | | | 8.2 | % | Others(1) | | | 220,738 | | | | 24.3 | % | | | 181,568 | | | | 21.7 | % | | | 202,129 | | | | 2,764 | | | | 23.3 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 909,012 | | | | 100.0 | % | | | 835,446 | | | | 100.0 | % | | | 868,630 | | | | 11,876 | | | | 100.0 | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Notes: (1) | Other markets primarily include Indonesia, Italy, Malaysia, Mexico, Netherlands, Norway, Oman, Qatar, South Korea, Spain, Singapore, Saudi Arabia, Switzerland, South Africa, Sweden, Taiwan, Turkey, UK, UAE, and USA. |
Customer Concentration The following table sets forth for the periods indicated: the percentage of our revenue accounted for by our 10 largest customers on a consolidated basis; and for each of our segments, the percentage of the revenue of such business accounted for by the 10 largest customers of such business.business | | | | | | | | | | | | | | | Year Ended March 31, | | | | 2015 | | | (%) 2016 | | | 2017 | | Consolidated | | | 31.4 | | | | 25.4 | | | | 30.3 | | Zinc – India | | | 40.5 | | | | 37.0 | | | | 37.4 | | Zinc – International | | | 95.7 | | | | 87.6 | | | | 95.9 | | Oil and Gas | | | 100.0 | | | | 100.0 | | | | 100.0 | | Iron Ore | | | 52.2 | | | | 30.3 | | | | 40.1 | | Copper | | | 32.8 | | | | 30.6 | | | | 46.0 | | Aluminium | | | 35.5 | | | | 40.7 | | | | 45.7 | | Power | | | 82.4 | | | | 88.0 | | | | 99.1 | |
| | | | | | | | | | | | | Particulars | | Year Ended March 31, | | | 2019 | | | 2020 | | | 2021 | | | (In percentage) | | Consolidated | | | 34.7 | % | | | 35.3 | % | | | 36.5 | % | Zinc – India | | | 30.6 | % | | | 39.3 | % | | | 40.4 | % | Zinc – International | | | 77.8 | % | | | 96.0 | % | | | 99.1 | % | Oil and Gas | | | 98.4 | % | | | 98.9 | % | | | 99.0 | % | Iron Ore | | | 42.7 | % | | | 45.4 | % | | | 57.2 | % | Copper | | | 45.5 | % | | | 40.6 | % | | | 47.7 | % | Aluminium | | | 48.8 | % | | | 50.8 | % | | | 55.9 | % | Power | | | 99.6 | % | | | 98.9 | % | | | 98.8 | % | Steel | | | 32.8 | % | | | 34.5 | % | | | 33.6 | % |
No single customer accounted for 10.0% orcontributed to more than 10% of our revenue on a consolidated basis for fiscal year ended March 31, 2019 and March 31, 2020. For fiscal year ended March 31, 2021, one customer contributed to more than 10% of revenue on consolidated basis amounting to ₹ 104,164 million arising from sales made in any of the years.Aluminium, Zinc and Copper segment. Comparison of years ended March 31, 20162020 and March 31, 20172021 Revenue and Operating Profit Consolidated Revenue increased from Rs. 639,493₹ 835,446 million in fiscal year 20162020 to Rs. 717,207 million₹ 868,630 ($ 11,059.511,876 million) in fiscal year 2017,2021, an increase of Rs. 77,714₹ 33,184 million or 12.2%4.0%. Revenue increased in fiscal year 2017 primarily2021, mainly due to the ramp uphigher commodity prices, higher volumes at Zinc India, Copper, Iron Ore and Aluminium business, inclusion of capacitiesFACOR in FY 2021, rupee depreciation, partially offset by lower power sales at our aluminiumTSPL, lower volume at Oil & Gas, Skorpion mine being under care and power business, recommencement of iron ore operationsmaintenance, lower oil prices and improved commodity prices.lower cost recovery in FY 2021. Operating profit increased from loss of Rs. 268,822₹ 39,934 million in fiscal year 2016 turned2020 to an operating profit of Rs. 152,744₹ 186,852 million ($ 2,355.32,555 million) in fiscal year 2017. 2021, an increase of ₹ 226,786 million. The increase in operating profit in fiscal year 20172021, was primarily due to lower amortization of Rs. 323,861 million ($ 4,994 million) following the impairment of oil and gas assets in fiscal year 2016, lower depreciation charges for our oil and gas business of Rs. 26,556 million ($ 409.5 million) due to lower entitlement interest volumes and an increase in reserves estimatesrevenue as stated above, lower cost of production at Zinc, Aluminium and Oil & Gas business, partially offset by closure of operations at Lisheen mine. These were partially offset by higher amortization of Rs 2,450 million ($ 37.8 million) on account of mining expenses resulting from increased ore excavation volumes at Zinc Indialower brent realisation and higher depreciation of Rs. 3,623 million ($ 55.9 million) due to capitalization of new capacities at our aluminium and powerlower cost recovery in Oil & Gas business. The improvement in operating profit excluding impairment was primarily due to the volume ramp up for our aluminium and power operations, recommencement of iron ore operations, cost efficiencies achieved across our businesses and improved commodity prices. Contributing factors to our consolidated operating profitprofit/ (loss) were as follows: Depreciation charge during the fiscal year 2021 was at ₹ 81,178 million ($ 1,110 million), lower as compared to ₹ 100,490 million in fiscal year 2020, primarily on account of of lower charge at Oil & Gas business due to impairment of asset in Q4 FY 2020, and Skorpion mine put under maintenance and care at the start of the financial year 2021. Exceptional losses for fiscal year 2021 was at ₹ 5,751 million ($ 79 million) which mainly include capital work in progress writte off of ₹ 2,440 million ($ 33 million) relating to Steel ₹ 629 million ($ 9 million) and aluminum ₹ 1,811 million ($ 25 million), cost incurred for obtaining Enviornment Clearance of ₹ 2,134 million ($ 29 million) partially offset by RPO liability reversal of ₹ 950 million ($ 13 million) at aluminium business. Cost of sales decreased from Rs. 875,756₹ 829,461 million in fiscal year 20162020 to Rs. 533,989₹ 635,225 million ($ 8,234.28,685 million) in fiscal year 2017, a2021, decrease of Rs. 341,767₹ 194,236 million, or 39.0%23.4%. The decrease is primarily due to softening of input commodity prices resulting in decrease in alumina, coke, coal and other major consumables, lower volume at Zinc International and Oil & Gas business, impairment charge of Rs. 1,162 million ($ 17.9 million)charges in fiscal year 2017FY 2020, partially offset by increase in comparison to Rs. 339,549 million in fiscal year 2016. Cost of sales excluding impairment for fiscal year 2017 was Rs. 535,151 million, compared to cost of sales excluding impairment of Rs. 536,207 for fiscal year 2016, a decrease of Rs. 1,055 million, or 0.2%. The Company deployed several measures to optimize cost spends including clean-sheet-costing for negotiations, alternate materials, new sources of supply, improving efficiencies in logisticsvolume at Zinc India, Aluminium, Steel, Copper and quality control.Iron ore business. Other operating income increased from Rs. 4,785₹ 9,863 million in fiscal year 20162020 to Rs. 5,186₹ 13,094 million ($ 79.9179 million) in fiscal year 2017,2021, an increase of Rs. 401.0₹ 3,231 million or 8.4%32.8%. The increase was primarily on account of increase in zinc oxide sales at Zinc India, royalty refund at BMM, insurance proceeds at Zinc International and Aluminium business, reversal of ARO liability at ASI, partially offset by lower export incentive at Aluminium business. Distribution expenses increased from Rs. 12,070₹ 18,205 million in fiscal year 20162020 to Rs. 16,361₹ 20,184 million ($ 252.3276 million) in fiscal year 2017,2021, an increase of Rs. 4,291₹ 1,979 million or 35.6%, mainly due to ramp up of iron ore following the recommencement of operations in Goa during fiscal year 2016.10.9%. As a result, distribution expense as a percentage of revenue increased from 1.9%2.2% in fiscal year 20162020 to 2.3% in fiscal year 2017.2021. The increase was primarily due to two fold increase in sales volumes in iron ore business, increase in export sales and its related packaging charges at ESL which is partially offset by decrease in carriage due to no concentrate sale in copper and decrease in railway freight at VGCB. Administration expenses decreasedincreased from Rs. 25,274₹ 37,577 million in fiscal year 20162020 to Rs. 19,299₹ 39,463 million ($ 297.6539 million) in fiscal year 2017, a decrease2021, an increase of Rs. 5,975₹ 1,886 million, or 23.6% mainly due to lower personnel and5.0%. As a result, administration expenses. Asexpenses as a percentage of revenue administration expenses decreased from 4.0%remains flat in fiscal year 2016 to 2.6%2021. The increase was primarily on account of increase in fiscal year 2017.Manpower and CSR expenditure at Zinc India, provision for doubtful debts at TSPL, inclusion of FACOR and higher management/ brand fee charges partially offset by impairment of Investment in Fujairah by MEL and FCTR on account of functional and transaction currency at Oil and gas business. Zinc India Revenue in the Zinc India segment increased from Rs. 137,945₹ 181,590 million in fiscal year 20162020 to Rs. 169,194₹ 219,316 million ($ 2,609.02,999 million) in fiscal year 2017, an2021, increase of Rs. 31,249₹ 37,726 million, or 22.7%20.8%. This increase was primarily driven by higher commoditymetal prices of zinc, lead, silver and higher premiums realized. The increasevolume of metal & Silver. Metal production was partially offsetup 7% to 930 kt in line with higher MIC availability, while silver production was up by lower integrated metal volumes. Our Rampura Agucha mine was16% to a record 706 MT in line with higher lead production and slightly better grades at SK. These record numbers were delivered despite losing 18 equivalent of production days in the midst of transitionyear due to COVID related lockdown and other disruptions resulting from open pit to underground mine production.rising infections. The share of mined metal production from underground mines increased to 52%.100.0% in fiscal year 2019. Rampura Agucha mine achieved 53.2%, Zawar mine 15.5% and RD Mine 4.8% and Sindesar Khurd outperformed and achieved the target of 3.75 million tons of26.5% mined metal production in fiscal year 2017 ahead of plan. Consequently, our silver production has also benefitted from higher volumes from this mine and recorded integrated production of 14.55 ounces, with a 7.3% increaseyear-on-year.2021. Specifically: Zinc ingot production decreasedincreased from 758,938688,286 tons in fiscal year 20162020 to 671,987715,446 tons in fiscal year 2017, a decrease2021, an increase of 11.5%. This decrease was primarily3.95% due to lower availability of mined metals in the first half of fiscal year 2017, caused by the cyclical pattern of the Rampura Agucha Open cast mine plan for the year. Substantially higher mined metal production in the second half of fiscal year 2017 resulted in an increase in mined metal inventory, despite metal in concentrate sales of 26,000 tons during fourth quarter of fiscal year 2017. The closing stock of metal in concentrate was approximately 80,000 tons, which will be converted into refined metal in fiscal year 2018.MIC availability. Zinc ingot salessale also decreasedincreased in line with the lowerhigher production from 760,400680,017 tons in fiscal year 20162020 to 696,000723,952 tons in fiscal year 2017, a decrease2021, an increase of 8.5%6.46%. Zinc ingot sales in the domestic market decreaseddeclined from 525,763486,311 tons in fiscal year 20162020 to 472,824436,943 tons in fiscal year 2017, a decrease of 10.1%.2021. Our domestic sales as a percentage of total sales decreased from 69.1%72.0% in fiscal year 20162020 to 67.9%60.36% in fiscal year 2017. We2021 primarily due to covid-19 related lockdown in March 2020. However, we always endeavor to sell large quantities of our products domestically, where we receive an Indian market premium. Our export sales also decreasedincreased from 234,637193,706 tons of zinc in fiscal year 20162020 to 223,176287,009 tons of zinc in fiscal year 2017, a decrease2021, an increase of 4.9%48.17%. The daily average zinc cash settlement price on the LME increased from $ 1,8292,402 per ton in fiscal year 20162020 to $ 2,3682,422 per ton in fiscal year 2017,2021, an increase of 29.5%0.8%. Lead ingot production decreasedincreased from 144,919181,370 tons in fiscal year 20162020 to 139,008214,399 tons in fiscal year 2017, a decrease2021, an increase of 4.1% in line with mined metal production.18.2% due to availability of MIC. Lead ingot sales decreasedincreased from 145,417179,663 tons in fiscal year 20162020 to 138,253216,439 tons in line with higher production in fiscal year 2017, a decrease of 4.9%, due to a decrease in production. Silver ingot production increased from 424,578 kilograms in fiscal year 2016 to 452,543 kilograms in fiscal year 2017,2021, an increase of 6.6% on account of higher grade and higher production from Sindesar Khurd mine. Sale of silver ingots increased from 425,685 kilograms in fiscal year 2016 to 448,891 kilograms in fiscal year 2017, an increase of 5.5%20.5%, is in line with silverof increase in production.
The daily average lead cash settlement price on the LME increaseddecreased from $ 1,7681,952 per ton in fiscal year 20162020 to $ 2,0051,868 per ton in fiscal year 2017,2021, a decrease of 4.3% Silver ingot production decreased from 609,808 kilograms in fiscal year 2020 to 705,676 kilograms in fiscal year 2021, an increase of 13.4%15.7% on account of Higher Lead production and SKM silver grade, In line with production, Sale of silver ingots increased from 586,387 kilograms in fiscal year 2020 to 734,844 kilograms in fiscal year 2021, an increase of 25.3%. The daily average silver London Bullion Market Association prices increased from $ 15.216.5 per ounce in fiscal year 20162020 to $ 17.822.9 per ounce in fiscal year 2017,2021, an increase of 16.9%38.4%. Operating profit in the Zinc India segment increased from Rs. 59,412₹ 64,531 million in fiscal year 20162020 to Rs. 85,491₹ 91,583 million ($ 1,318.31,252 million) in fiscal year 2017, an2021, increase of Rs. 26,079₹ 27,052 million, or 43.9 %,41.9%, whereas operating margin also increased from 43.1%35.5% in fiscal year 20162020 to 50.5%41.8% in fiscal year 2017.2021. Operating profit was positively affectedincreased due to higher revenue and lower costs of production majorly driven by higher zinc, leadproduction volume, lower power costs, lower met-coke and silver prices, higher realized premiums and Indian Rupee depreciation. However, these were marginallycement costs partly offset by lower metal volumeshigher admin expense (Covid-19 relief donation) and higher costs of production. The cost of production of zinc (net ofby-product revenue) increased from Rs. 68,443 per ton in fiscal year 2016 to Rs. 77,431 per ton in fiscal year 2017 and cost of production of lead (net ofby-product revenue) from Rs. 67,497 per ton in fiscal year 2016 to Rs. 73,996 per ton in fiscal year 2017. diesel costs. An increase in depreciation by Rs. 10,662₹ 2,007 million in fiscal year 20172021 as compared to fiscal year 2016 partially offset2020 due to higher ore production during the impactcurrent fiscal year and capitalization of operating profit margins.mining equipment. Zinc International Revenue from external customers in the Zinc International segment decreased from Rs. 25,631₹ 31,275 million in fiscal year 20162020 to Rs. 22,302₹ 27,290 million ($ 343.9373 million) in fiscal year 2017,2021, a decrease of Rs. 3,329₹ 3,985 million or 13.0%13%. The decrease in revenue was primarily driven by lower volumes due to the closure of the Lisheen mine in Ireland in December 2015 after 17 years in operation,Skorpion Zinc going under care and maintenance, shutdown and delay in concentrate shipment at Black Mountain Mines. This was partially offset by higher realized prices.price realisations. Specifically: ProductionSkorpion produced 659 tons of refined zinc metal at Skorpion registered an increase from 82,029 tons in fiscal year 2016 to 85,427 tons in fiscal year 2017, an increaseFY 2021. The mine has been under Care and Maintenance since start of 3,398 tons or 4.1%. This was mainlyApril 2020, following cessation of mining activities due to improved mine grades and recoveries. This was partially impacted by material handling challenges duegeotechnical instabilities in the open pit. The business is currently evaluating options to restart mining. Engagement with technical experts to explore opportunities of safely extracting the remaining ore being wetter than anticipated and breakdowns at the acid plant which has undergone a 30 day maintenance shutdown in June 2017 to return to its original capacity.is ongoing. The pit optimisation work is complete. Production of zinc metal in concentrate from the Lisheen and BMM mines decreasedincreased from 101,09727,943 tons in fiscal year 20162020 to 28,70830,131 tons in fiscal year 2017, a decrease2021, an increase of 71.6%2,188 tons or 7.8%. Production of lead metal in concentrate also decreasedincreased from 42,84037,628 tons to 41,76927,471 tons, a decrease of 1,07110,157 tons or 2.5%27%. This overall decrease in production was primarilymainly due to the closurelower grade of the Lisheen mine in December 2015 whereas BMM mined metal production was higher by 11.2% due to better ore gradeslead (2.3% vs 2.9%) and higherhence lead lower recoveries driven by improved efficiencies in backfill, long hole blasting(84.1% vs 85.6%) and better availability of ore hoisting. During the year, we made significant progress in shifting the6% lower throughput resulting from lower mining methodology fromcut-and-fill method to the more effective long-hole massive mining method.performance. Gamsberg operation continued to ramp up well with improved performance every quarter in FY 2021. Production of Zinc metal in concentrate from Gamsberg stood at 144,577 tons vs 107,949 tons produced in FY 2020, an increase of 36,628 tons or 34%. Healthy feedable stockpile of approximately 1.4 million tonnes has been created for consistent feed to the plant. Several best demonstrated performances on throughput, milled tonnes and improved recoveries were achieved in Q4 FY 2021. The daily average zinc cash settlement price on the LME increased from $ 1,8292,402 per ton in fiscal year 20162020 to $ 2,3682,422 per ton in fiscal year 2017,2021, an increase of 29.5%0.8%. The daily average lead cash settlement price on the LME increaseddecreased from $ 1,7681,952 per ton in fiscal year 20162020 to $ 2,0051,868 per ton in fiscal year 2017, an increase2021, a decrease of 13.4%.4.3% Operating profit in the Zinc International segment increased from Rs. 831operating loss of ₹ 2,573 million in fiscal year 20162020 to Rs. 7,336operating profit of ₹ 4,849 million ($ 113.166 million) in fiscal year 2017,2021, an increase of Rs. 6,505₹ 7,422 million, or 782.8%, largelymainly on account of higher zincprice realization and lead prices, lower TcRc’s, aone-off insurance claim refund at Scorpion zincimproved cost through optimising consumables usage, higher copper credits and a royalty refund at Black Mountain Mine. These were partially offset by the Lisheen mine closure and the delay of a concentrate shipment at Black Mountain Mine. local currency depreciation. Operating margin increased from 3.2%negative 8.2% in fiscal year 20162020 to 33.0%%17.8% in fiscal year 2017.2021. Oil and Gas Business Revenue from external customers in the oil and gas segment decreased from Rs. 86,559to ₹ 126,608 million in fiscal year 20162020 to Rs. 82,041₹ 75,308 million ($ 1,265.11,030 million) in fiscal year 2017,2021, a decrease of Rs. 4,518₹ 51,300 million or 5.2%40.5%. The decrease in revenue was primarily contributed by the fall in entitlement interest sales volumes, which was partially offset by higher averagelower Brent price realizationrealisation and higher average exchange rate.decrease in Entitlement Interest (“EI”) sale. Specifically: The daily average Brent oil price realization increasedrealisation decreased from $ 40.959.4 per boe, in fiscal year 20162020 to $ 43.338.67 per boe, in fiscal year 2017, an increase2021, a decrease of 5.9%.34.9%, Entitlement interest sales decreased from 90,78885,700 boepd in fiscal year 20162020 to 77,75967,283 boepd in fiscal year 2017,2021, a decrease of 13,02918,417 boepd or 14.5%. 21.5% Average exchange rate increased by 2.5% from Rs. 65.5 per $ 1.0 in fiscal year 2016 to Rs. 67.1 per $ 1.0 in fiscal year 2017.
Operating lossprofit in the oil and gas segment declinedincreased from Rs. 342,813loss of ₹ 102,424 million in fiscal year 20162020 to aoperating profit of Rs. 14,205₹ 10,892 million ($ 219.0149 million) in fiscal year 2017,2021, an increase of Rs. 357,018 million, or 104.1%.₹ 113,316 million. The increase in operating profit in current year was primarily due to cost optimization initiatives taken during the year, better Brent prices, reduced cess onimpairment recognition of ad-valorem₹ basis. In fiscal year 2016, an impairment loss of Rs. 322,998135,031 million was charged to income statement whereas($ 1,791 million) in fiscal year 2017, Rs. 845 million2020 which includes a) impairment reversal was recognised. Sales decreasedcharge relating to Rajasthan Oil & Gas block triggered by Rs. 4,518 million on account of a dropthe significant fall in entitlement interest sales. Depletionthe crude oil prices which includes impairment charge against oil and decommissioning charges were lower by 26,055 milliongas producing facilities and exploration intangible assets under development, b) impairment charge relating to KG-ONN-2003/1 block mainly due to reduction in reservescrude price forecast and costc) impairment charge relating to complete.exploration block KG-OSN-2009/3 where the Group had represented to DGH to grant a 12 month excusable delay along with unfettered and unrestricted access to the block. Based on the said representation, the DGH granted an extension of upto December 4, 2020. Iron Ore Revenue from external customers increased from Rs. 22,233₹ 34,500 million in fiscal year 20162020 to Rs. 40,880₹ 44,875 million ($ 630.4614 million) in fiscal year 2017,2021, an increase of Rs. 18,647₹ 10,375 million, or 83.9%30.1%. The increase was primarilymainly due totwo-fold increase in sales volume at Goa and improved margin at Goa, Karnataka and VAB during the year specifically: At Karnataka, production was 5 million tonnes, Sales in FY 2021 were 4.4 million tonnes, 24% lower y-o-y due to Covid-19 impact in the current financial year. With the order of Central Empowered Committee (a Supreme Court appointed body) in March 2020, the annual mining capacity has been increased upto 5.89 MTPA. In line with this, the Government of Karnataka allocated the production quantity of 5.60wet million tonnes for the current year FY 2021 onwards. At Goa, mining was brought to a halt pursuant to the Supreme Court judgement dated February 7, 2018 directing all companies in Goa to stop mining operations with effect from March 16, 2018. We continue to engage with the Government for a resumption of mining in Goa, higher iron prices and an increase inoperations Production of pig iron was 596,197 tonnes in FY 2021, down by 12% y-o-y due to Covid-19 impact and shut down of Plant for two months due to planned relining activity. The production whichof Metallurgical coke was partially offset by a decrease in lower production volumes from Karnataka. Saleable iron ore production increased from 5.2 million434,270 tons in fiscal year 20162020 compared to 10.9 million436,663 tons in fiscal year 2017 a sharp2021 an increase of 5.7 million tons due to the removal of a mining ban in the state of Goa during fiscal year 2016 and an additional allocation of 2.6 million tons in fiscal year 2017. In Karnataka, production recommenced on February 28, 2015, and in Goa production started slowly from August 2015 following the receipt of all requisite clearances and approvals.
The production of pig iron was higher by 8.2% from 654,360 tons to 708,341 tons whereas the production of metallurgical coke was reduced from 485,054 to 481,218, or by 0.8%1%. During the year, production of pig iron ramped up to a record production level with higher plant availability and available rated capacity of 785,000 tons. The reduction in metallurgical coke production was mainly due to breakdown in plants.
Operating lossprofit in the iron ore segment decreasedincreased from Rs. 15,793₹ 4,698 million in fiscal year 20162020 to operating profit of Rs. 8,403₹ 15,968 million ($ 129.6218 million) in fiscal year 2017,2021, an increase of ₹ 11,270 million. The increase was mainly due to two-fold increase in sales volume at Goa and improved margin at Goa, Karnataka and VAB during the year. Steel Revenue from external customer in the steel segment increased from ₹ 42,827 million in fiscal year 2020 to ₹ 46,676 million ($ 638 million) in fiscal year 2021, an increase of ₹ 3,849 million or 9.0%.in fiscal year 2021. Fiscal year 2021 has been a healthy year for ESL despite pandemic. Pig iron production increased from 167,305 tons in fiscal year 2020 to 188,979 tons in fiscal year 2021, an increase of 21,674 tons or 13.0%. The increase was mainly due to higher pig iron demand. The sale of pig iron increased from 157,596 tons in fiscal year 2020 to 192,142 tons in fiscal year 2021, an increase of 34,546 tons or 21.9%. The increase in sales was in line with production. Saleable Billet production has increased from 27,456 tons in fiscal year 2020 to 165,273 tons in fiscal year 2021, an increase of 137,817 tons or 502.0%. This increase was due to our focus on production of value-added products i.e. TMT bar, Wire Rod and DI pipe. The sale of billet increased from 22,460 tons in fiscal year 2020 to 157,673 tons in fiscal year 2021, an increase of 135,213 tons or 602.0%. The increase in sale was in line of production. TMT production decreased from 468,396 tons in fiscal year 2020 to 337,583 tons in fiscal year 2021, a decrease of Rs. 24,196 million.130,813 tons or 27.9%. The increase in operating profitdecrease was primarilymajorly due to higher Pig Iron and Saleable Billet production. The sale of TMT decreased from 453,806 tons in fiscal year 2020 to 355,666 tons in fiscal year 2021, a decrease of 98,140 tons or 21.6%. The decrease was in line of reduced production. Wire rod production reduced from 412,948 tons in fiscal year 2020 to 360,874 tons in fiscal year 2021, a reduction of 52,074 tons or 12.6%. The decrease was majorly due to higher Pig Iron and Saleable Billet production. Wire rod sale reduced from 402,242 tons in fiscal year 2020 to 375,346 tons in fiscal year 2021, a reduction of 26,896 tons or 6.7% in line with reduced production. The production of DI pipe reduced from 154,721 ton in fiscal year 2020 to 134,605 ton in fiscal year 2021, a reduction of 20,116 tons or 13.0%. The sale of DI pipe increased from 143,258 ton in fiscal year 2020 to 149,832 ton in fiscal year 2021, an increase of 6,574 tons or 4.6% driven by our focus on sale of value added products. Operating profit in steel segment decreased from ₹ 3,452 million in fiscal year 2020 to ₹ 3,180 million ($ 43 million) in fiscal year 2021. Average sales realisation decreased 1% y-o-y from $ 495 per tonne in FY 2020 to $ 488 per tonne in FY 2021. 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 dipped by $ 7 per tonne, we were able to increase from Goa, increaseour EBITDA margin to $ 95 per tonne for the year (against $ 78 per tonne in pig iron volume and higher prices which was partly offset by higher metallurgical coke prices.FY 2020) through better control over costs. Copper Revenue from external customers increased from Rs. 209,239₹ 90,517 million in fiscal year 20162020 to Rs. 210,021₹ 108,879 million ($ 3,238.61,489 million) in fiscal year 2017,2021, an increase of Rs. 782.4₹ 18,362 million, or 0.4%20.3%. This marginalThe increase was primarily due toon account of higher copper volume partially offset by lower pricesproduction and TcRc.rising Copper LME prices. Specifically: Copper cathode production increased from 384,04777,490 tons in fiscal year 20162020 to 402,732101,435 tons in fiscal year 2017,2021, an increase of 4.9%by 30.9%. In fiscal year 2017,The production was at a record level, throughin-house technological upgrades at the refinery that raised the previous design level densityhigher due to better performance of 310 ampere/m2 to 350 ampere/m2. This was partially offset by lower copper grades and a few unplanned outages spread over the year.refinery. Copper cathode sales increased from 166,9572,461 tons in fiscal year 20162020 to 192,2007,825 tons in fiscal year 2017,2021, an increase of 15.1%by 218.0%. The increase in sale was in line with production. Production of copper rods decreasedincreased from 210,799100,219 tons in fiscal year 20162020 to 207,530122,390 tons in fiscal year 2017, a decrease2021, an increase of 1.6%22.1%. Copper rod sales decreasedincreased from 210,28598,158 tons in fiscal year 20162020 to 207,073121,643 tons in fiscal year 2017, a decrease2021, an increase of 1.5%23.9% in line with the decreaseincrease in production. Sales of copper in the Indian market decreasedincreased from 238,91698,555 tons in fiscal year 20162020 to 233,699125,979 tons in fiscal year 2017, a decrease2021, an increase of 2.2%,27.8% and our exports increased from 138,3262,064 tons in fiscal year 20162020 to 165,5753,490 tons in fiscal year 2017,2021, an increase of 19.7%by 69.1%. Our domestic sales as a percentage of total sales decreased from 63.3%97.9% in fiscal year 20162020 to 58.5%97.3% in fiscal year 2017.2021. Daily average copper cash settlement price on the LME increased from $ 5,855 per ton in fiscal year 2020 to $ 6,897 per ton in fiscal year 2021, an increase of 17.8%. Operating profitloss in the copper segment decreased from Rs. 19,660loss of ₹ 13,086 million in fiscal year 20162020 to Rs. 15,026operating loss of ₹ 5,372 million ($ 231.773 million) in fiscal year 2017, a decrease2021, an increase of Rs. 4,634 million, or 23.6%. Operating margin also decreased from 9.4% in fiscal year 2016 to 7.2% in fiscal year 2017.₹ 7,714 million. The decrease in operating profitloss was primarilymainly due to lower TcRc, higher petroCopper LME prices, higher volumes and lowerby-product credit, the clean energy cess on coal consumed in thermal power plants and a one off benefit of the target plus export incentive scheme which was recognized inreduced Tuticorin fixed overheads as compared to fiscal year 2016. In particular:2020. TcRc rates increased from an average of 24.1 ¢/lb realized in fiscal year 2016 to an average of 22.4 ¢/lb realized in fiscal year 2017.
Cost of production net ofby-product and free copper revenue, which consists of cost of smelting and refining costs, decreased from 3.2 ¢/lb in fiscal year 2016 to 5.0 ¢/lb in fiscal year 2017, primarily due to lowerby-product credit, higher petro prices and an increased clean energy cess on coal.
Aluminium Revenue from external customers in the aluminium segment increased from Rs. 110,781₹ 265,445 million in fiscal year 20162020 to Rs. 136,667₹ 285,756 million ($ 2,107.43,907 million) in fiscal year 2017,2021, an increase of Rs. 25,886₹ 20,311 million, or 23.4%. This increase was7.7%, driven primarily due to a ramp up in volumeby rising LME Aluminium prices and higher average LME prices of aluminium. Specifically:sales in line with higher production volumes. Aluminium production increased from 923,3431,903,981 tons in fiscal year 20162020 to 1,213,4021,969,483 tons in fiscal year 2017,2021, an increase of 31.4%3.4%. Production of value addedvalue-added products decreased from 52.8%36.7% in fiscal year 20162020 to 40.8%33.1% in fiscal year 2017.2021. Aluminium sales increased from 926,9501,922,430 tons in fiscal year 20162020 to 1,209,4161,992,467 tons in fiscal year 2017,2021, an increase of 30.5% in line with the increase in production from new smelter in Korba and Jharsuguda. 3.6%. Sales of aluminium ingots increased from 429,3351,166,639 tons in fiscal year 20162020 to 676,5711,302,054 tons in fiscal year 2017,2021, an increase of 57.6%11.6%. This includes Primary Foundry Alloys (PFA) and Alloy Ingot volumes. Wire rod sales decreasedincreased by 0.8% from 357,203to 325,801 tons in fiscal year 20162020 to 323,439328,360 tons in fiscal year 2017, and rolled product sales2021. Billets sale decreased by 22.6% from 20,660346,324 tons in fiscal year 20162020 to 17,996268,219 tons in fiscal year 2017, a decrease of 12.9%, due to a temporary suspension of high-cost rolled product facility at BALCO in fiscal 2016, which recommenced in the second quarter of fiscal year 2017. Billets2021. Slabs sales increasedgrew from 110,85925,704 tons in fiscal year 20162020 to 144,87139,989 tons in fiscal year 2017, representing2021, an increase of 30.7%55.6%. Rolled product sales grew from 27,250 tons in fiscal year 2020 to 31,311 tons in fiscal year 2021, an increase by 14.9%. Hot metal sales during fiscal year 20172021 were 46,541 tons.22,535 tons, down by 26.6% from 30,712 tons in fiscal year 2020. Aluminium sales in the domestic market marginally increased from 635,192624,915 tons in fiscal year 20162020 to 635,951635,715 tons in fiscal year 2017, an increase of 0.1%2021, marginally increased by 1.7%. Our aluminium exports increased from 291,7581,298,516 tons in fiscal year 20162020 to 573,4651,335,837 tons in fiscal year 2017. Our domestic sales as a percentage of total sales decreased from 68.5% in fiscal year 2016 to 52.6% in fiscal year 2017.2021, increased by 2.9%. The daily average aluminium cash settlement price on the LME increased from $ 1,5901,749 per ton in fiscal year 20162020 to $ 1,6881,805 per ton in fiscal year 2017, an2021, increase of 6.2%by 3%. Operating profit in the aluminium segment increased from Rs. 1,416₹ 4,434 million in fiscal year 20162020 to Rs. 11,725₹ 59,736 million ($ 180.8817 million) in fiscal year 2017, a sharp2021, an increase of Rs. 10,309₹ 55,302 million. The increase in operating profit was primarily due to higher volume anda mix of factors across rising LME Aluminium prices, higher sales, realization resulting from an increase in average LME pricesimproved hot metal cost of aluminium.production, rupee depreciation and gain on account of true-up of RPO (Renewable Power Obligations) liabilities. Power Revenue from external customers in the power segment increaseddecreased from Rs. 45,523₹ 58,599 million in fiscal year 20162020 to Rs. 55,189₹ 53,752 million ($ 851.0735 million) in fiscal year 2017, an increase2021, a decrease of Rs. 9,666₹ 4,847 million or 21.2%8.3%. Power sales increased from 12,12111,162 million units in fiscal year 20162020 to 12,91511,261 million units in fiscal year 2017,2021, an increase of 6.5%0.9%. ThisThe fiscal year 2021 was primarilya significant year for the Jharsuguda power plant, where we achieved PLF of 58% against 11% in fiscal year 2020. The plant load factor (“PLF”) at BALCO was 66% and Talwandi Sabo (TSPL) power plant achieved plant availability of 81%. Malco power plant is under care and maintenance since May 26, 2017 due to the commencement of additional units at TSPL and BALCO during fiscal year 2017. With these units, our entire 9,000 MW of power capacity became operational as of March 2017. Effective from April 1, 2016, the Jharsuguda 1,800 MW and BALCO 270 MW units have been moved from the power segment to the aluminium segment. Specifically:low demand in southern India. At the Talwandi Sabo power plant, the third 660MW unit commenced commercial production in August 2016. The operating units operated at record 85%81% plant availability andin fiscal year 2021. It supplied 6,3396,479 million units of power in fiscal year 2021 as compared to 8,223 million units of power in fiscal year 2020 to the Punjab State Power Corporation Ltd. (PSPCL).PSPCL. TSPL’s PPA with PSEB compensates according toit based on the availability of the plant. The JharsugadaJharsuguda 600 MW power plant operated at a lower Plant Load Factor (PLF)PLF of 68%58.0% during fiscal year 2017, due2021, as compared to a weak power market. During11% in fiscal year 2017, power from one 600MW unit is being supplied to the grid and the remaining 1,800MW (comprising three 600 MW units) was supplied to the Jharsuguda II smelter with surplus power sold in the open market.2020. At BALCO, the 600300 MW IPP unit of the 1200MW300MW power plant operated at PLF of 58%66.0% in fiscal year 2017, due2021, as compared to weak power market. The second unit of 300 MW IPP commenced commercial production from May 1, 2017.71.0% in fiscal year 2020. The average power realization decreased from Rs. 2.91₹ 3.6 per unit in fiscal year 20162020 to Rs. 2.83₹ 3.0 per unit in fiscal year 2017,2021, a decrease of 3.0%.(excluding16% (excluding power from TSPL 1980 MW power plant). In fiscal year 2016, Jharsuguda power unit of 2400 MW was part of power business in which there was an option for sale in open access. Since April 2016, 1800 MW (three units of 600 MW each) has been converted to CPP in aluminium business. Balance IPP 600 MW power supply does not include open access therefore there is decrease in power rate realization based on PPA rate under long term contract. Cost of generation at the power business (excluding power from the TSPL 1980 MW power plant) decreased from Rs. 2.15₹ 2.5 per unit in fiscal years 2016year 2020 to Rs. 2.0₹ 2.4 in fiscal year 2017, marginal2021, a decrease of 2.1%3% on account of decrease in coal prices and improved linkage realisation. The average power realization at Talwandi Sabo power plant decreased from ₹ 3.7 per unit in fiscal year 2020 to ₹ 3.1 per unit and cost of generation decreased from ₹ 2.7 per unit in fiscal year 2020 to ₹ 2.1 per unit in fiscal year 2021, a decrease of 22.0%. Operating profit in the power segment increaseddecreased from Rs. 8,221₹ 10,789 million in fiscal year 20162020 to Rs. 10,757₹ 8,321 million ($ 165.9114 million) in fiscal year 2017, an increase2021, decrease of Rs. 2,536₹ 2,468 million or 30.8%22.9%, primarily as a resultlower sales realisation, partially offset by lower cost of sales from commissioned additional units at TSPL and BALCO.production. During fiscal year 2021, Operating margin increased from 18.1%18.4% in fiscal year 20162020 to 19.5%15.5% in fiscal year 2017.2021. TSPL realized ₹ 3,750 million ($ 51 million) from PSPCL I the fiscal year 2021 on account of GCV matter resolution basis the Hon’ble Supreme Court of India order. Other Operating profitloss in our other business segments decreased from operating profit of Rs. 244₹ 8,618 million in fiscal year 20162020 to operating loss of Rs.199₹ 2,470 million ($ 3.134 million) in fiscal year 2017.2021, mainly due to impairment charge on assets amounting ₹ 5,098 million ($ 68 million) recognised during the fiscal year 2020 at Avanstrate Inc. (“ASI”) which operate in glass substrate business. Investment and Other income Investment and other income decreasedincreased from Rs. 43,998₹ 25,714 million in fiscal year 20162020 to Rs. 45,428₹ 32,177 million ($ 700.5440 million) in fiscal year 2017,2021, an increase of Rs. 1,430₹ 6,463 million or 3.3%25.1%, primarilymainly due to significantmark-to-market (MTM) gainsinterest income on the affiliate loan to VRL, partially offset by lower investmentdecrease in average investments and Mark to Market (MTM) movement at Zinc India on account of a special dividend payout.India. Finance costs Finance costs increaseddecreased from Rs. 59,584₹ 54,557 million in fiscal year 20162020 to Rs. 61,600₹ 52,955 million ($ 949.8724 million) by Rs. 2,016₹ 1,602 million or 3.4%2.9% in fiscal year 2017. 2021. This was primarilydecrease is mainly on account of thelower blended cost of borrowings, partially offset by lower capitalisation of interest cost at aluminium and oil & gas business and increase in theaverage borrowings. The proportion of Indian Rupee borrowings from 52% of total borrowingsis 89.0% and USD borrowing are 11.0% in fiscal year 20162021 in comparison to 86% of total borrowings13.0% in fiscal year 2017, decrease in the proportion of USD borrowings from 48% of total borrowings in fiscal year 2016 to 12% of total borrowings in fiscal year, partially offset by a reduction in interest rates.2020. Tax expense The normalized ETR is 38% (excluding tax on dividend from HZL of $ 117 million and tax on exceptional items of $ 18 million, new tax regime impact and Deferred Tax credit changed from Rs. 103,060 millionAsset recognised on losses in fiscal year 2016 to tax credit of Rs. 38,027 million ($ 586.4 million) in fiscal year 2017. Our effective income tax rate, calculated as tax credit divided by our loss before taxes, was credit of 36.2% in fiscal year 2016 asESL compared to credit52% (excluding tax on distributable reserve/dividend from HZL $ 276 million, new regime impact ($ 233 million) and tax on exceptional items of 27.8% in fiscal year 2017. The effective tax rate has decreased by 8.4%. The tax charge has increased$ 781 million) which is primarily on account of due to increase in profits; however,profit from the effective taxentities which are taxable at lower rate has decreased due to increaseand adoption of new regime in benefit arising on accountone of investment allowance and increase innon-taxable income which was partially offset by phasing out of tax holiday benefits at Zinc India and Oil and Gas.the major subsidiary. Non-controlling interest On account of above mentionedabove-mentioned factors, lossprofit for the year decreasedincreased from Rs. 181,348loss of ₹ 42,100 million in fiscal year 20162020 to profit of Rs. 98,545₹ 1,46,990 million ($ 1,519.62010 million) in fiscal year 2017,2021, an increase of Rs. 279,893 million or 154.3%.₹ 89,090 million. LossProfit attributable tonon-controlling interest decreasedincreased from loss of Rs. 56,195₹ 19,148 million in fiscal year 20162020 to profit of Rs. 43,512₹ 34,107 million ($ 671.1466 million) in fiscal year 2017,2021, an increase of Rs. 99,707₹ 14,959 million or 177.4%78.1%.Non-controlling interest as a percentage of profit or loss increased from 31.0% in fiscal year 2016 to 44.2% in fiscal year 2017.
Comparison of years ended March 31, 20152019 and March 31, 20162020 Revenue and Operating Profit Consolidated Revenue decreased from Rs. 733,579₹ 909,012 million in fiscal year 20152019 to Rs. 639,493 million₹ 835,446 ($ 11,082 million) in fiscal year 2016,2020, a decrease of Rs. 94,086₹ 73,566 million or 12.8%8.1%. Revenue decreased in fiscal year 2016 primarily2020, mainly due to subdued commodity prices, lower Brent, volume at Zinc India and Oil & Gas business andlower LME pricespower sales at TSPL, partially offset by higher volume at Aluminium business, additional volumes from Gamsberg operations and premia across the metal businesses.higher sales at Iron Ore Karnataka & Steel business and rupee depreciation. Operating lossprofit decreased from Rs. 299,215₹ 145,216 million in fiscal year 20152019 to Rs. 268,822operating loss of ₹ 39,934 million ($ 529 million) in fiscal year 2016. 2020, a decrease of ₹ 185,150 million. The decrease in operating lossprofit in fiscal year 2020, was primarily due to impairment charges of Rs. 339,549 million mainly from our oil and gas business. Operating profit excluding impairment (which is derived by adding impairment charge to the operating profit solely for comparability purposes in fiscal year 2016 was at Rs. 70,727 a decrease of Rs. 36,496 million or 34.0%. The reduction in operating profit excluding impairment was primarily due to lower sales realization in our oil and gas business which was impacted by the significant fall in average oil prices and a decrease in the average LME pricesrevenue as stated above, increase in cost of zincproduction at Zinc businesses and other metals, which wereOil & Gas business partially offset by easing out of input commodity inflation, improved cost of production at Aluminium business, past exploration cost recovery at Oil & Gas business and rupee depreciation and higher depreciation charge during the ramp upfiscal year 2020 primarily on account of ourhigher charge at Oil & Gas business due to capitalisation of new wells partially offset by lower production; higher depreciation charge at Zinc India on account of higher ore production, additional capitalisation and increase in amortization rate due to increase in cost; higher charge at Zinc international due to increased production from Gamsberg and acquisitions of Steel business in June 2018. Exceptional losses for fiscal year 2020 was at ₹ 148,411 million ($ 1,968 million) which mainly include impairment charge ₹ 148,022 million ($ 1,963 million) relating to property, plant and equipment and exploration assets at Oil & Gas of ₹ 135,031 million ($ 1,791 million), Copper ₹ 6,692 million ($ 89 million), Avanstarte Inc. (“ASI”) of ₹ 5,098 million ($ 68 million) and provisions on iron ore business which was ramped up in August 2015 after obtaining all necessary approvals from the state government, strong operational performanceassets of ₹ 1,201 million ($ 16 million) and claims and receivables written off at Copper ₹ 521 million ($ 7 million), Fujairah Gold ₹ 1,507 million ($ 20 million), and Zinc India andinternational ramp-up₹ in power units. In line with Group’s accounting policy, the Group carried out a review42 million ($ 1 million) partially offset by RPO liability reversal of the useful life₹ 1,681 million ($ 22 million) at aluminium pertaining to previous years based on revision of its assets and considering the physical condition of the assets and benchmarking analysis, the Group has revised the useful life. The carrying value of the assets has been depreciated over the revised remaining useful life with effect from October 1, 2014. Depreciation charges increased on account of capitalization of power units at TSPL, BALCO and aluminium potramp-ups at Jharsugada and BALCO. The overall impact in fiscal year 2016 was a reduction by Rs. 27,669 million in depreciation as comparedliability pursuant to fiscal year 2015. Operating margin excluding impairment charge decreased from 14.6% in fiscal year 2015 to 11.1% in fiscal year 2016 primarily due to lower Brent and metal prices.Odisha Electricity Regulatory Commission notification. Contributing factors to our consolidated operating lossprofit/ (loss) were as follows: Cost of sales decreasedincreased from Rs. 995,968₹ 727,832 million in fiscal year 20152019 to Rs. 875,756₹ 829,461 million ($ 11,002 million) in fiscal year 2020, an increase of ₹ 101,629 million, or 14.0%. The increase is primarily due to increase in production volume at Gamsberg, additional volume from Steel business, higher cost of production at Zinc India and Oil & Gas business, impairment charge ₹ 146,821 million ($ 1,947 million) as explained above and higher depreciation charge on manufacturing assets during the year partially offset by deflation in commodity prices of alumina, coke, coal and other major consumables, past exploration cost recovery at Oil & Gas, true up of RPO liability at Aluminum business ₹ 1,681 million ($ 22 million) and rupee depreciation. Other operating income decreased from ₹ 15,468 million in fiscal year 2016,2019 to ₹ 9,863 million ($ 131 million) in fiscal year 2020, a decrease of Rs. 120,212₹ 5,605 million or 12.1%36.2%. The decrease was primarily dueon account of Zinc dust, Zinc oxide and other Assets sale (mainly dump truck) recognised at Zinc India business during Fiscal year 2019 and write back of liability pursuant to lower impairment charges of Rs. 66,889 million. Cost of sales excluding impairment forsettlement agreement with a contractor at BALCO in fiscal year 2016 was Rs. 536,207 million, a decrease2019, one time write back of Rs. 53,323 million, or 9.0%. The Company deployed several measures to optimize cost expenditures. These included clean-sheet-costing for negotiations, alternate materials, new sources of supply, improving efficiencies in logisticsroyalty and quality control. The decrease was also partially due to softened key input commodity prices including aluminium, coal and others; fuel costs across our business and lower exploration costs in our oil and gasrelated service tax at Iron ore business in fiscal year 20162019, lower export incentives at Aluminum business and Zinc India business on account of lower export sales during the fiscal year 2020, partially offset by gain recognised from sale of assets at MALCO, reversal of decommissioning provision estimates at Skorpion mine pursuant to decrease in mine closure liability. Distribution expenses increased from ₹ 17,069 million in fiscal year 2019 to ₹ 18,205 million ($ 241 million) in fiscal year 2020, an increase of ₹ 1,136 million or 6.7%. As a result, distribution expense as a percentage of revenue increased from 1.9% in fiscal year 2019 to 2.2% in fiscal year 2020.The increase was primarily due to increase in sales volume at Iron Ore business, increase in Gamsberg volume from 17kt to 108kt and increase due to annual inflation in distribution cost and exchange rate impacting the dollar linked shipping cost which was partially offset by decrease in port to destination expense and decrease in domestic freight charges and decrease in distribution cost on account of change in export mix, higher export made to Asian countries as compared to fiscal year 2015.2019 at Aluminum business, increase in railway fright at VGCB and MVPL on account of additional provision related to All Indian Engine Charges (AIECH) pertaining to previous years freight disputes with railways and VPT (Vishakhapatnam port trust). Other operating income decreasedAdministration expenses increased from Rs. 4,802₹ 34,363 million in fiscal year 20152019 to Rs. 4,785₹ 37,577 million ($ 498 million) in fiscal year 2016, an decrease of Rs. 17 million, or 0.4%.
Distribution expenses increased from Rs. 10,078 million in fiscal year 2015 to Rs. 12,070 million in fiscal year 2016,2020, an increase of Rs. 1,992₹ 3,214 million, or 19.8%, mainly due to the ramp up of iron ore operations following the recommencement of operations in Goa during fiscal year 2016.9.4%. As a result, distributionadministration expenses as a percentage of revenue increased from 1.4%3.8% in fiscal year 20152019 to 1.9%4.5% in fiscal year 2016.
Administration2020. The increase was primarily higher depreciation charge on admin assets during the year, discounting charges of ONGC receivable at Oil & Gas business, higher administrative expenses decreased from Rs. 31,550at Gamsberg as it commenced operations in March 2019, higher administrative and O&M charges at Steel business as acquired in June 2018, higher management/brand fees charges, higher rates, taxes and legal expenses, impairment charge recognised at iron ore business (IOB) of ₹ 1,201 million in($ 16 million) partially offset by capitalization of grass root exploration expenses, lower administrative personnel expense allocation and lower performance pay expense, lower consultancy & professional charges at Zinc India, Aluminum and Oil & Gas business, lower rent expense during the fiscal year 2015 to Rs. 25,274 million in fiscal year 2016, a decrease of Rs. 6,276 million, or 19.9% mainly due to higher bad debt provisions of Rs. 3,215 million in fiscal year 2015 as well as due to lower personnel2020 at Oil & Gas and administration expenses. As a percentage of revenue, administration expenses decreased from 4.3% in fiscal year 2015 to 4.0% in fiscal year 2016.ASI business.
Zinc India Revenue in the Zinc India segment decreased from Rs. 144,127₹ 206,562 million in fiscal year 20152019 to Rs. 137,945₹ 181,590 million ($ 2,409 million) in fiscal year 2016,2020, a decrease of Rs. 6,182₹ 24,972 million, or 4.3%12.1%. This decrease was primarily driven by lower LMEmetal prices and lower volume of zincmetal on account of Covid-19 related lockdown and premiums. The decreaselow grades at Kayad and Sindesar Khurd mines in H1 FY 2020 and silver which was also as compared previous year due to Covid-19 related lockdown, lower lead production in Q2 & Q3 due to temporary operational issues at Dariba smelters and lower silver grades which was partially offset by increased integrated metal volumes and higher silver production. Ourprices and rupee depreciation. The share of mined metal production from underground mines increased to 100.0% in fiscal year 2019. Rampura Agucha mine is in the midst of transition from open pit to undergroundachieved 53.6%, Zawar mine production.13.7% and RD Mine 4.9% and Sindesar Khurd outperformed and achieved the target of 3.0 million tons of27.8% mined metal production in fiscal year 2016 ahead of plan. Consequently, our silver production has also benefitted from higher volumes from this mine and recorded integrated production of 13.56 ounces, with a 58% increaseyear-on-year.2020. Specifically: Zinc ingot production increaseddecreased from 733,803696,283 tons in fiscal year 20152019 to 758,938688,286 tons in fiscal year 2016, an increase2020, a decrease of 3.4%. Production during the second half of fiscal year 2016 was lower than the first half,1.15% due mainly to reduced output from the Rampura Agucha open pit, particularly in fourth quarter of fiscal year 2016 as per the mine plan. This was partially offset by record production from all the underground mines, in particular the Sindesar Khurd and Kayad mines, which also resulted in higher lead and silver volumes.nationwide lockdown. Zinc ingot salessale also increaseddecreased in line with the higherlower production from 735,783694,141 tons in fiscal year 20152019 to 760,400680,017 tons in fiscal year 2016, an increase2020, a decrease of 3.3%2.03%. Zinc ingot sales in the domestic market increaseddeclined from 483,361512,893 tons in fiscal year 20152019 to 525,763486,311 tons in fiscal year 2016, an increase of 8.8%.2020. Our domestic sales as a percentage of total sales slightly increaseddecreased from 65.7%74.0% in fiscal year 20152019 to 69.1%72.0% in fiscal year 2016. We2020 primarily due to covid-19 related lockdown in March 2020. However, we always endeavor to sell large quantities of our products domestically, where we receive an Indian market premium. Our export sales also decreasedincreased from 252,422181,248 tons of zinc in fiscal year 20152019 to 234,637193,706 tons of zinc in fiscal year 2016, a decrease2020, an increase of 7.0%. The daily average zinc cash settlement price on the LME decreased from $ 2,1772,743 per ton in fiscal year 20152019 to $ 1,8292,402 per ton in fiscal year 2016,2020, a decrease of 16.0%12.4%. Lead ingot production increaseddecreased from 127,143197,838 tons in fiscal year 20152019 to 144,919181,370 tons in fiscal year 2016, an increase2020, a decrease of 14.0% in line with mined metal production.8.3% due to nationwide lockdown. Lead ingot sales increaseddecreased from 128,752197,661 tons in fiscal year 20152019 to 145,417179,663 tons in fiscal year 2016, an increase2020, a decrease of 12.9%9.1%, due to an increaseis in line of decrease in production. Silver ingot production increased from 327,508 kilograms in fiscal year 2015 to 424,578 kilograms in fiscal year 2016, an increase of 29.6% on account of higher production from Sindesar Khurd mine. Sale of silver ingots increased from 327,230 kilograms in fiscal year 2015 to 425,685 kilograms in fiscal year 2016, an increase of 30.1% in line with silver production.
The daily average lead cash settlement price on the LME decreased from $ 2,0212,121 per ton in fiscal year 20152019 to $ 1,7681,952 per ton in fiscal year 2016,2020, a decrease of 12.5%8.0%. Silver ingot production decreased from 679,183 kilograms in fiscal year 2019 to 609,808 kilograms in fiscal year 2020, a decrease of 10.2% on account of due to Covid-19 related lockdown, lower lead production in Q2 & Q3 due to temporary operational issues and lower silver grades Sindesar Khurd mine. In line with production, Sale of silver ingots decreased from 676,173 kilograms in fiscal year 2019 to 586,387 kilograms in fiscal year 2020, a decrease of 13.3%. The daily average silver London Bullion Market Association prices decreasedincreased from $ 18.115.4 per ounce in fiscal year 20152019 to $ 15.216.5 per ounce in fiscal year 2016, a decrease2020, an increase of 16.0%7.4%. Operating profit in the Zinc India segment decreased from Rs. 62,267₹ 87,227 million in fiscal year 20152019 to Rs. 59,412₹ 64,530 million ($ 856 million) in fiscal year 2016,2020, a decrease of Rs. 2,855₹ 22,697 million, or 4.6 %,26.0%, whereas operating margin remained mostly stablealso decreased from 43.3%42.2% in fiscal year 20152019 to 43.1%35.5% in fiscal year 2016.2020. Operating profit was negatively affected by lower zinc, leadrevenue as explained above and silverhigher costs of production majorly driven by higher mine development expense, lower volume resulted by lower grades, higher cement prices, and premiums as well as statutory headwinds in fiscal year 2016.higher electricity duty on captive power plants However, these were partiallymarginally offset by, higher volumes, lower coal cost of production and Indian Rupee& rupee depreciation. The cost of production of zinc increased (net ofby-product revenue) from Rs. 67,914 per ton in fiscal year 2015 to Rs. 68,443 per ton in fiscal year 2016 and cost of production of lead (net ofby-product revenue) from Rs. 65,663 per ton in fiscal year 2015 to Rs. 67,497 per ton in fiscal year 2016. A decrease An increase in depreciation by Rs. 780₹ 3,842 million in fiscal year 20162020 as compared to fiscal year 2015 partially offset2019 due to higher ore production during the impactcurrent fiscal year and capitalization of lower operating profit.Shaft & mining equipment. Zinc International Revenue from external customers in the Zinc International segment decreasedincreased from Rs. 35,886₹ 27,383 million in fiscal year 20152019 to Rs. 25,631₹ 31,275 million ($ 415 million) in fiscal year 2016, a decrease2020, an increase of Rs. 10,255₹ 3,892 million or 28.6%14.2%. The decreaseincrease in revenue was primarily due to the closure of the Lisheen mine in Ireland in December 2015 after 17 years in operation, maintenance shutdown and partial industrial action at Skorpion. This washigher sales volume from Gamsberg partially offset by higher volumes from Black Mountain Mines production.lower commodity prices of zinc, lead and copper. Specifically: Production of refined zinc metal at Skorpion registered a decreaseincreased from 102,18865,948 tons in fiscal year 20152019 to 82,02966,967 tons in fiscal year 2016, a decrease2020, an increase of 20,1591,019 tons or 19.7%1.5%. ThisProduction was mainly duepredominantly impacted by a multiple bench slope failure of approximately 400kt material on the western pushback of the open pit on May 9, 2019 and further in January 2020 by a wedge failure which extended the old slope failure to the temporary industrial action during second quarter, the planned refinery maintenance extended shutdown in the third quartersouth area of fiscal year 2016, a slower than anticipatedramp-up post the shutdown, and a decline inmine. Therefore, it was decided to put the mine grade. Duringunder care and maintenance, while studies continue to look feasible ways to make the fourth quarterpit safe for mining options which would allow for the extraction of fiscal year 2016, Skorpion’s production volumes were restored to normal levels following a planned maintenance shutdown in third quarter, recording 27,000 tons in fourth quarter.the remainder of the accessible ore. Production of zinc metal in concentrate from the Lisheen and BMM mines decreasedincreased from 157,91927,558 tons in fiscal year 20152019 to 101,09727,943 tons in fiscal year 2016, a fall2020, an increase of 36.0%385 tons or 1.4%. Production of lead metal in concentrate also decreasedincreased from 51,40737,354 tons to 42,84037,628 tons, a decreasean increase of 8,566274 tons or 16.7%0.7%. This decreaseoverall increase in mined metal production was primarily due to higher recoveries in spite of reduction in grades from the planned closure of the Lisheen mine in December 2015, whereas BMM mined metal production was higher by 7.1% due to better ore grades and change in mining methods.mine. Gamsberg operation which was commissioned in FY 2019 continued to ramp up well in FY 2020. Production of Zinc metal in concentrate from Gamsberg stood at 107,949 tons vs 17,128 tons produced in FY 2019. Mining has fully ramped up to 4 Mtpa capacity and ~1.8 Mt of healthy ore stockpile has been built ahead of plant. The daily average zinc cash settlement price on the LME decreased from $ 2,1772,743 per ton in fiscal year 20152019 to $ 1,8292,402 per ton in fiscal year 2016,2020, a decrease of 15.9%12.4%. The daily average Leadlead cash settlement price on the LME decreased from $ 2,0212,121 per ton in fiscal year 20152019 to $ 1,7681,952 per ton in fiscal year 2016,2020, a decrease of 12.5%8.0%. Operating profit in the Zinc International segment decreased from Rs. 4,268₹ 2,675 million in fiscal year 20152019 to Rs. 831operating loss of ₹ 2,573 million ($ 34 million) in fiscal year 2016, a2020, an decrease of Rs. 3,437₹ 5,248 million or 80.5%196.2%, largely on account of lower metal prices partially offset by higher production volumes planned closuredriving down the cost of the Lisheen mine as explained aboveproduction, lower oxide consumption, Sulphur efficiencies at Skorpion and lower LME prices. local currency depreciation. Operating margin decreased from 11.9%9.8% in fiscal year 20152019 to 3.2%negative 8.2% in fiscal year 2016.2020. Oil and Gas Business Revenue from external customers in the oil and gas segment decreased from Rs. 146,945to ₹ 132,228 million in fiscal year 20152019 to Rs. 86,559.0₹ 126,608 million ($ 1,679 million) in fiscal year 2016,2020, a decrease of Rs. 60,386.0₹ 5,620 million or 41,1%4.3%. The decrease in revenue was primarily contributed by the significant fall in averagelower Brent oil price realization partiallyrealisation which was marginally offset by higher entitlement interest sales volumes and higher average exchange rates.increase in Entitlement Interest (“EI”) sale. Specifically: The daily average Brent oil price realizationrealisation decreased from $ 75.866.1 per boe, in fiscal year 20152019 to $ 40.959.4 per boe, in fiscal year 2016,2020, a significant decrease of 46.2%.10.1%, Entitlement interest sales increased from 87,56079,049 boepd in fiscal year 20152019 to 90,78885,700 boepd in fiscal year 2016,2020 an increase of 3,2286,651 boepd or 3.7%8.4%. Average exchange rate increased by 7% from Rs. 61.1 per $ 1.0 in fiscal year 2015 to Rs. 65.5 per $ 1.0 in fiscal year 2016.
Operating lossprofit in the oil and gas segment decreased from Rs. 395,146₹ 36,467 million in fiscal year 20152019 to aoperating loss of Rs. 342,813₹ 102,425 million ($ 1,359 million) in fiscal year 2016,2020, a decrease of Rs. 52,333 million, or 13.2%. Impairment loss and lower sales realizations in fiscal year 2016 contributed to an operating loss of Rs. 342,813 million, which is partially offset by₹ 138,892 million. The decrease in depletion charges and lower unsuccessful exploration cost write offs in fiscal year 2016. Dueoperating profit was primarily due to impairment recognition of ₹ 135,031 million ($ 1,791 million) primarily includes a) impairment charge relating to Rajasthan Oil & Gas block triggered by the significant fall in the crude oil prices which includes impairment charge against oil and gas producing facilities and exploration intangible assets were impaired and anunder development, b) impairment loss of Rs. 322,998 million was chargedcharge relating to income statement. Sales decreased by Rs. 60,386 million on account of significant fall in realization from oil in line with Brent prices. Exploration cost written off was lower by Rs. 7,573 million in fiscal year 2016 as two major wells were declared dry in fiscal year 2015 and the well cost of these two wells were charged off. Depletion charges were lower by Rs. 23,386 millionKG-ONN-2003/1 block mainly due to reductionsreduction in depletable pools ascrude price forecast and c) impairment charge relating to exploration block KG-OSN-2009/3 where Group had represented to DGH to grant a result12-month excusable delay along with unfettered and unrestricted access to the block. Based on the said representation, the DGH granted an extension of impairment loss and change in reserves and cost to complete.upto December 4, 2020. Iron Ore Revenue from external customers increased from Rs. 19,039₹ 29,033 million in fiscal year 20152019 to Rs. 22,233₹ 34,500 million ($ 458 million) in fiscal year 2016,2020, an increase of Rs. 3,194₹ 5,467 million, or 16.8%18.8%. The increase was primarilymainly due to resumption of mining in Goa, higher sales volumes from Karnataka in the comparable period and antwofold increase in sales volume at Karnataka partially offset by lower pig iron production, which was offset by a decrease inprices during the realization price of pig iron.year. Specifically: Saleable iron ore production increased from 0.6was flat at 4.4 million tons in fiscal year 2015 to 5.2 million tons2020. Sales in fiscal year 2016, a sharp increase of 4.62020 were 5.8 million tons, 125% higher year on year due to an increase in production and stock liquidation at Karnataka by 1.6 wet million tons. At Goa, mining was brought to a halt pursuant to the removalSupreme Court judgement dated February 7, 2018 directing all companies in Goa to stop mining operations with effect from March 16, 2018. We continue to engage with the Government for a resumption of a mining banoperations. With the order of Central Empowered Committee (Supreme Court appointed body) in March, 2020. The annual mining capacity has been increased upto 5.89 MTPA. In line with this, the stateGovernment of Goa duringKarnataka allocated the production quantity of 4.82 wet million tons for the current year fiscal year 2016. In Karnataka, production recommenced on February 28, 2015, and in Goa production started slowly from August 2015 following the receipt of all requisite clearances and approvals.2020 onwards. The production of pig iron was higherless by 7.1%1.0% from 610,757685,659 tons in fiscal year 2019 to 654,360680,785 tons whereasin the fiscal year 2020 and the production of metallurgical coke was reduced from 499,919476,710 tons in fiscal year 2019 to 485,054, or434,270 tons in fiscal year 2020, a decrease by 3%9.0%. During the year, productionDue to nationwide lockdown imposed by Central government because of COVID 19 pandemic, we lost approximately 20,000 tons at of pig iron ramped up to a record production level with available rated capacityat Value Added business in month of 742,000 tons. The reduction in metallurgical coke production was mainly due to a breakdown in plants.March. Operating lossprofit in the iron ore segment increased from Rs. 3,422₹ 3,866 million in fiscal year 20152019 to Rs. 15,793operating profit of ₹ 4,698 million ($ 62 million) in fiscal year 2020, an increase of ₹ 832 million. The increase is primarily due to higher sales volume at Iron Ore Karnataka partially offset by impairment of ₹ 1,201 million ($ 16 million) on Iron ore financial asset due to an ongoing legal dispute relating to title of the land. Steel Revenue from external customer in the steel segment increased from ₹ 41,955 million in fiscal year 2016,2019 (10 months from June 1, 2018) to ₹ 42,827 million ($ 568 million) in fiscal year 2020, an increase of Rs. 12,371 million.₹ 872 million or 2.1%.in fiscal year 2020. Fiscal year 2020 has been a healthy year for ESL with highest ever production. Specifically: Pig iron production increased from 141,549 tons in fiscal year 2019 to 167,305 tons in fiscal year 2020, an increase of 25,756 tons or 18.2%. The increase was mainly due to higher pig iron demand. The sale of pig iron increased from 141,686 tons in fiscal year 2019 to 157,596 tons in fiscal year 2020, an increase of 15,910 tons or 11.2%. The increase in operating loss is primarilysales was in line with production. Saleable Billet production has reduced from 39,478 tons in fiscal year 2019 to 27,456 tons in fiscal year 2020, a decrease by 12,022 tons or 30.5%. This reduction was due to higher focus on production of value added products i.e. TMT bar, Wire Rod and DI pipe. The sale of billet decreased from 31,831 tons in fiscal year 2019 to 22,460 tons in fiscal year 2020, a decrease by 9,371 tons or 29.4%. The decrease in sale was in line of production. TMT production depicted an increase from 441,251 tons in fiscal year 2019 to 468,396 tons in fiscal year 2020. TMT recorded an increase by 27,145 tons or 6.2%. The increase was majorly due to higher billet availability and higher focus over VAP%. The sale of TMT increased from 442,144 tons in fiscal year 2019 to 453,806 tons in fiscal year 2020, an increase by 11,662 tons or 2.6%. The increase was in line of increased production and continued focus on value added products. Wire rod production reduced from 426,873 tons in fiscal year 2019 to 412,948 tons in fiscal year 2020, a reduction by 13,925 tons or 3.3%. Wire rod sale reduced from 421,188 tons in fiscal year 2019 to 402,242tons in fiscal year 2020, a reduction by 18,946 tons or 4.5% mainly driven by reduced Wire Rod demand. The production of DI pipe grew by 3.2% from 149,946 ton in fiscal year 2019 to 154,721 ton in fiscal year 2020. The sale of DI pipe reduced from 147,731 ton in fiscal year 2019 to 143,258 ton in fiscal year 2020 a reduction by 4,474 tons or 3.0% driven by weak DI pipe demand. Operating profit in steel segment decreased from ₹ 5,965 million in fiscal year 2019 to ₹ 3,452 million ($ 46 million) in fiscal year 2020. Average sales realization decreased 13% year on year from $ 572 per ton in FY 2019 to $ 495 per ton in fiscal year 2020. Prices of iron and steel are influenced by several macro-economic factors. However, despite fall of prices in steel market, ESL’s pricing remained competitive in Indian market as a primary producer of steel. Even though the impairment charges bookedNSR dipped by $ 77 per ton, we were able to maintain our EBITDA margin at $ 78 per ton for Bellary assets of Rs 1,154 million, Liberia (Western Cluster Limited) assets of Rs 14,900 million partially offset by improved Iron ore sales volume.the year (against $ 115 per ton in FY 2019) through better control over costs and operational efficiencies. Copper Revenue from external customers decreased from Rs. 225,198₹ 107,390 million in fiscal year 20152019 to Rs. 209,239₹ 90,517 million ($ 1,201 million) in fiscal year 2016,2020, a decrease of Rs. 15,959.0₹ 16,873 million, or 7.1%15.7%. ThisThe decrease was primarily due toon account of decrease in copper concentrate sale, lower copper volume production and falling Copper LME realization for the period, partially offset by increased volume and higher TcRc.prices. Specifically: Copper cathode production increaseddecreased from 362,37389,517 tons in fiscal year 20152019 to 384,04777,490 tons in fiscal year 2016, an increase of 6.0%2020, a decrease by 13.4%. In fiscal year 2016, production was at record level, despite a few unplanned outages during the year that included 3 day stoppage on the account of flood incident due to heavy rains. The smelter is now producing at a normalized plant capacity level. Fiscal year 2015 production was lower due to non-availability of customized anodes from the biennial 23 day planned maintenance shutdown in the first quarter of fiscal year 2015, therefore an adequate year on year performance was not available.open market. Copper cathode sales decreased from 190,8726,169 tons in fiscal year 20152019 to 166,9572,461 tons in fiscal year 2016,2020, a decrease of 12.5 %, due to higher rodby 60.0%. The decrease in sale was in line with production. Production of copper rods increaseddecreased from 170,338111,197 tons in fiscal year 20152019 to 210,799100,219 tons in fiscal year 2016, an increase2020, a decrease of 23.8%, reflecting the increase in the cathode production and higher market demand.9.9%. Copper rod sales increaseddecreased from 170,742109,805 tons in fiscal year 20152019 to 210,28598,158 tons in fiscal year 2016, an increase2020, a decrease of 23.2%11.0% in line with the increasedecrease in production. Sales of copper in the Indian market increaseddecreased from 194,747112,826 tons in fiscal year 20152019 to 238,91698,555 tons in fiscal year 2016, an increase2020, a decrease of 22.7%,13.0% and our exports decreased from 166,8683,148 tons in fiscal year 20152019 to 138,3262,064 tons in fiscal year 2016,2020, a decrease of 17.1%by 13%. Our domestic sales as a percentage of total sales increased from 53.9%97.3% in fiscal year 20152019 to 63.3%97.9% in fiscal year 2016.2020. Daily average copper cash settlement price on the LME decreased from $ 6,337 per ton in fiscal year 2019 to $ 5,855 per ton in fiscal year 2020, a decreased of 7.6%. Operating profitloss in the copper segment increased from Rs. 14,344₹ 3,786 million in fiscal year 20152019 to Rs. 19,660operating loss of ₹ 13,085 million ($ 174 million) in fiscal year 2016,2020, an increase of Rs. 5,316 million, or 37.1%. Operating margin also increased from 6.4% in fiscal year 2015 to 9.4% in fiscal year 2016.₹ 9,299 million. The increase in operating profitloss was primarilymainly due to an increaselower Copper LME prices, lower volume and impairment recognition of ₹ 6,692 million ($ 89 million) at copper business on CWIP & capital advance balances in volume in fiscal year 2016 as production in fiscal year 2015 was impacted by lower volumesrelation to the 4TLPA expansion plant where project activities for are on account of planned maintenance shutdown,halt since May 2018 and higher TcRc rates in line with the market conditions. In particular: TcRc rates increased from an average of 21.4 ¢/lb realized in fiscal year 2015 to an average of 24.1 ¢/lb realized in fiscal year 2016.
Cost of production net ofclaims and receivable written off at Copper by-product₹ 521 million ($ 7 million) and free copper revenue, which consists of cost of smelting and refining costs, decreased from 4.2 ¢/lb in fiscal year 2015 to 3.2 ¢/lb in fiscal year 2016, primarily due to higher volumes, lower input commodity costs (fuel and power) and higher average realization on the sale of sulphuric acid, aby-product,₹ from Rs. 2,779 per ton in fiscal year 2015 to Rs. 3,019 per ton in fiscal year 2016. 1,507 million ($ 20 million) at Fujairah Gold.Aluminium Revenue from external customers in the aluminium segment decreased from Rs. 126,900₹ 292,080 million in fiscal year 20152019 to Rs. 110,781₹ 265,445 million ($ 3,521 million) in fiscal year 2016,2020, a decrease of Rs. 16,119₹ 26,635 million, or 12.7%. This decrease was9.1%, driven primarily due to lower averageby falling LME prices of aluminium and premium on metal which was partially offset by increased volume. Specifically:Aluminium prices. Aluminium production increaseddecreased from 877,2591,959,015 tons in fiscal year 20152019 to 923,3431,903,981 tons in fiscal year 2016, an increase2020, a decrease of 5.3%2.8%. Production of value addedvalue-added products marginally decreased from 53.4%41.8% in fiscal year 20152019 to 52.8%36.7% in fiscal year 2016.2020. Aluminium sales increased from 877,5491,915,557 tons in fiscal year 20152019 to 926,9501,922,430 tons in fiscal year 2016, an2020, a slight increase of 5.6% in line with the increase in production from new smelters in Korba and Jharsuguda. 0.4%. Sales of aluminium ingots increased from 405,3001,105,350 tons in fiscal year 20152019 to 429,3351,166,639 tons in fiscal year 2016,2020, an increase of 8.1%5.5%. This includes Primary Foundry Alloys (PFA) and Alloy Ingot volumes. Wire rod sales increaseddecreased by 11.3% from 310,446367,252 tons in fiscal year 20152019 to 357,203325,801 tons in fiscal year 2016, and rolled product sales2020. Billets sale decreased by 7.1% from 46,165372,950 tons in fiscal year 20152019 to 20,660346,324 tons in fiscal year 2016,2020. Slabs was introduced as a decreaseproduct in fiscal year 2019 clocking a sales volume of 55.2%, due10,214 tons and we have grown its sales to a temporary suspension of high-cost rolled product facility at BALCO. Billets sales decreased from 115,63925,704 tons in fiscal year 2015 to 110,8592020. Rolled product sales grew from 25,867 tons in fiscal year 2016, representing a decrease of 4.1%2019 to 27,250 tons in fiscal year 2020, an increase by 5.3%. Hot metal sales during fiscal year 20162020 were 8,892 tons.30,712 tons, down by 9.5% from 33,924 tons in fiscal year 2019. Aluminium sales in the domestic market increased from 519,920616,513 tons in fiscal year 20152019 to 635,192624,915 tons in fiscal year 2016, an increase of 22.2%. Domestic sales2020, marginally increased in fiscal year 2016 due to improved domestic demand and improved market share.by 1.2%. Our aluminium exports decreased from 357,6291,299,044 tons in fiscal year 20152019 to 291,7581,298,516 tons in fiscal year 2016. Our domestic sales as a percentage of total sales increased from 59.2 % in fiscal2020, which is flat year 2015 to 68.5 % in fiscal year 2016.on year. The daily average aluminium cash settlement price on the LME decreased from $ 1,8902,035 per ton in fiscal year 20152019 to $ 1,5901,749 per ton in fiscal year 2016, a decrease of 15.9%2020, down by 14%. Operating profit in the aluminium segment decreased from Rs. 13,752₹ 5,481 million in fiscal year 20152019 to Rs. 1,416₹ 4,434 million ($ 59 million) in fiscal year 2016,2020, a sharp decrease of Rs. 12,336 million. Lower sales realization₹ 1,047 million or 19.1%. The decrease in operating profit was primarily due to a decrease in averagemix of factors across falling LME Aluminium prices and higher depreciation charge partially offset by improved hot metal cost of aluminiumproduction, depreciating rupee and lower premium were the key reasons for low operating profit.gain of ₹ 1,681 million ($ 22 million) on account of true-up of RPO (Renewable Power Obligations) liabilities. Power Revenue from external customers in the power segment increaseddecreased from Rs. 33,906₹ 64,559 million in fiscal year 20152019 to Rs. 45,523₹ 58,599 million ($ 777 million) in fiscal year 2016, an increase2020, a decrease of Rs. 11,617₹ 5,960 million or 34.3%9.2%. Power sales increaseddecreased from 9,85913,517 million units in fiscal year 20152019 to 12,12111,162 million units in fiscal year 2016, an increase2020, a decrease of 22.9 %. This17.4%. The fiscal year 2020 was primarilya significant year for the Talwandi Sabo (TSPL) power plant, where we achieved plant availability of 91.3%. The PLF at BALCO were also higher on account of better coal availability. Malco power plant is under care and maintenance since May 26, 2017 due to the commencement of additional units at TSPL and BALCO during the year. With these units, our entire 9,000 MW of power capacity became operational as of March 2016. Specifically:low demand in southern India. At the Talwandi Sabo power plant, the second 660MW unit commenced commercial production in December 2015. The two operating units operated at 80%record 91.3% plant availability andin fiscal year 2020. It supplied 2,7928,223 million units of power in fiscal year 2020 as compared to 9,858 million units of power in fiscal year 2019 to the Punjab State Electricity Board (PSEB), now “Punjab State Power Corporation Ltd”.PSPCL. TSPL’s PPA with PSEB compensates according toit based on the availability of the plant. The third 660MW unit was synchronized during March 2016 and was expected to achieve commercial production during second quarter of fiscal year 2017. The Jharsugada 2,400MWJharsuguda 600 MW power plant operated at a lower Plant Load Factor (PLF)PLF of 39%11.0% during fiscal year 2016, due2020, as compared to a weak power market and power evacuation constraints for open access power sales.15.0% in fiscal year 2019. At BALCO, the first 300MW300 MW IPP unit of the 1200MW1,200MW power plant commenced commercial productionoperated at PLF of 71.0% in July 2015.fiscal year 2020, higher as compared to 53.0% in fiscal year 2019 on account of better coal availability. The average power realization decreasedincreased from Rs. 3.25₹ 3.4 per unit in fiscal year 20152019 to Rs. 2.91₹ 3.6 per unit in fiscal year 2016,2020, a decreasemarginal increase of 10.4%.(excluding9% (excluding power from TSPL 1980 MW power plant). The decrease is on account of a drop in spot rates from Rs. 3.04 per unit in fiscal year 2015 to Rs. 2.46 per unit in fiscal year 2016 due to the reduced deficit in supply and demand in the nation. Cost of generation at the power business (excluding power from the TSPL 1980 MW power plant) increaseddecreased from Rs. 2.14₹ 2.9 per unit in fiscal years 2015year 2019 to Rs. 2.15₹ 2.5 in fiscal year 2016, marginal increase2020, a decrease of 0.5%16% on account of improved linkage realisation. The average power realization at Talwandi Sabo power plant decreased from ₹ 4.1 per unit in fiscal year 2019 to ₹ 3.7 per unit and cost of generation decreased from ₹ 3.1 per unit in fiscal year 2019 to ₹ 2.7 per unit in fiscal year 2020, a decrease of 13.0%. Operating profit in the power segment increased from Rs. 4,484₹ 9,306 million in fiscal year 20152019 to Rs. 8,221₹ 10,789 million ($ 143 million) in fiscal year 2016,2020, an increase of Rs. 3,737₹ 1,483 million or 83.3%15.9%, primarily as a resultmainly due to lower cost of sales from commissioned additional units at TSPLproduction due to improved coal prices and BALCO.supply in the domestic market which resulted in higher linkage materialisation. During fiscal year 2020, Operating margin increased from 13.2%14.4% in fiscal year 20152019 to 18.1%18.4% in fiscal year 2016.2020. TSPL realized ₹ 10,020 million ($ 133 million) from PSPCL on account of GCV matter resolution basis Hon’ble Supreme Court of India order. Other Operating profitloss in our other business segments increased from operating profit of Rs. 238₹ 138 million in fiscal year 20152019 to operating profit of Rs.244₹ 8,618 million ($ 114 million) in fiscal year 2016.2020, driven by lower sales volume, and impairment charge on assets amounting ₹ 5,098 million ($ 68 million) recognised during the fiscal year 2020 at Avanstrate Inc. (“ASI”) which operate in glass substrate business. Investment and Other income Investment and other income decreased from Rs. 51,154₹ 31,540 million in fiscal year 20152019 to Rs. 43,998₹ 25,714 million ($ 341 million) in fiscal year 20162020, a decrease of Rs. 7,156₹ 5,826 million or 14.0%18.5%, primarilymainly due to significantmark-to-market (MTM) gains accruingto mark to market loss on a treasury investment made by Vedanta’s overseas subsidiary through a purchase of an economic interest in fiscal year 2015a structured investment in Anglo American Plc from its ultimate parent, Volcan Investments Limited and one-time reclassification from other comprehensive income to profit and loss account at Zinc India during FY2019 which was partially offset by Mark to Market gain on other investment during the midst of falling interest rates in India.year. Finance costs Finance costs decreased from Rs. 63,398₹ 59,026 million in fiscal year 20152019 to Rs. 59,584₹ 54,557 million ($ 724 million) by Rs. 3,814₹ 4,469 million or 6.0%7.6% in fiscal year 2016. 2020. This was primarilydecrease is mainly on account of decrease in average borrowing due to the benefitsrepayment of debt at Vedanta Standalone, TSPL, BALCO and temporary borrowings at Zinc India, repayment of preference shares at CIHL in FY 2019 and lower average borrowing cost refinancing, the impactin line with market trends. The proportion of unamortized costs written off fromIndian Rupee borrowings is 87.0% and USD borrowing are 13.0% in fiscal year 2015 and using cash2020 in comparison to repay convertible bonds for our copper business during the second half of8.0% in fiscal year 2015.2019. Tax expense Tax creditexpense decreased from Rs. 108,320₹ 41,501 million in fiscal year 20152019 to Rs. 103,060tax credit of ₹ 26,677 million ($ 354 million) in fiscal year 2016.2020. Our effective income tax rate, calculated as tax creditexpense divided by our profit or loss before taxes, was credit of 34.8%39.3% in fiscal year 20152020 as compared to credit of 36.2%35.3% in fiscal year 2016.2019. The effective tax rate has increased by 2.4%4% which is driven by change in profit mix and tax recognized on distributable reserves of / dividend from subsidiary. The normalized ETR is 33% (excluding tax on undistributed reserves of HZL-₹ 15,816 million, tax on dividend from CIHL- ₹ 3,715 million, new tax regime impact- ₹ (16,512) million and tax on exceptional items of ₹ (55,470) million compared to 26% due to PBT mix within entities and primarily on account of increase of 5% in weightage of CEHC which is taxable at higher dividend distribution tax paid for HZL’s special interim dividends partially offset by tax holiday and tax efficient investment income. The tax credit in fiscal year 2016 includes deferred tax reversal on impairment chargerate of Rs. 124,592 million.43.68%. Non-controlling interest On account of the above mentionedabove-mentioned factors, lossprofit for the year decreased from Rs. 203,139₹ 76,229 million in fiscal year 20152019 to a loss of Rs. 181,348₹ 42,100 million ($ 558 million) in fiscal year 2016,2020, a decrease of Rs. 21,791 million or 10.7%.₹ 1,18,329 million. LossProfit attributable tonon-controlling interest decreased from loss of Rs. 74,789₹ 26,454 million in fiscal year 20152019 to loss of Rs. 56,195₹ 19,148 million ($ 254 million) in fiscal year 2016,2020, a decrease of Rs. 18,594₹ 7,306 million or 24.9%27.6%.Non-controlling interest as a percentage of profit or loss decreased from 36.8% in fiscal year 2015 to 31.0% in fiscal year 2016.
B. Liquidity and Capital Resources The following table is derived from our selected consolidated financial data and sets forth our cash flow for fiscal years 2013, 2014, 2015, 20162017, 2018, 2019, 2020 and 2017:2021: | | | For the Year Ended March 31, | | | For the Year Ended March 31, | | Particulars | | | 2017 | | 2018 | | 2019 | | 2020 | | 2021 | | 2021 | | | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | (₹ in millions) | | ($ in millions) | | | | (Rs. in millions) | | | (US$ in millions) | | | Cash Flow Data: | | | | | | | | | | | | | | Net cash provided by (used in): | | | | | | | | | | | | | | | | | | | | | | | | | Operating activities | | | 97,110 | | | | 56,199 | | | | 125,710 | | | | 107,352 | | | | 212,105 | | | | 3,270.5 | | | | 212,105 | | | 348,407 | | | 208,420 | | | 182,393 | | | 295,952 | | | 4,046 | | Investing activities | | | (153,176) | | | | (52,631) | | | | (43,939) | | | | (42,613) | | | | (79,910) | | | | (1,232.1) | | | | (79,910 | ) | | (52,153 | ) | | (133,147 | ) | | (116,866 | ) | | (167,358 | ) | | (2,288 | ) | Financing activities | | | 1,855 | | | | (6,280) | | | | (86,448) | | | | (52,714) | | | | (49,123) | | | | (757.4) | | | | (49,123 | ) | | (357,144 | ) | | (45,643 | ) | | (87,356 | ) | | (131,371 | ) | | (1,796 | ) |
Liquidity As of March 31, 2017,2021, we had cash and short term investments (excluding restricted cash and cash equivalents) totaling Rs. 621,887₹ 330,311 million ($ 9,589.64,517 million), and near-term debt redemption obligations of Rs. 90,690₹ 80,891 million ($ 1,398.51,106 million), and we had, on a standalone basis, cash and short term investments (excluding restricted cash and cash equivalents) totaling Rs. 21,749₹ 62,741 million ($ 335.4858 million). We expect that our current cash, short term investments and our cash flows from operations together with refinancing of some of our debt will be our principal sources of cash to satisfy our capital requirements for the next few years. Capital Requirements Our principal capital requirements include: capital expenditures, towards expansion of capacities in existing businesses including modernization of facilities, development of discovered oil fields and to sustain production or for enhanced recovery from reservoir and towards exploration and other ancillary business activities; the establishment of our commercial power generation business; consolidation of our ownership in our various subsidiaries; and acquisitions of complementary businesses that we determine to be attractive opportunities. We continue to consider increasing capacities of our existing businesses through greenfield and brownfield projects and through acquisitions as one of our major growth strategies, though we are actively monitoring global market and economic conditions and the outlook for commodity prices, as well as our current and anticipated liquidity positions, as we constantly evaluate our desired rate of growth in pursuing this strategy. Ministry of Environment, Forest and Climate Change revised emission norms for Coal based Thermal Power Plants (TPPs) in India vide its notification in December 2015. Most of the Company’s operations are complying with revised emission norms on the emission parameters like Particulate Matter (PM), Mercury, Nitrogen Oxide (“NOx”) etc. but compliance with sulphur dioxide emission norms is a challenge. Installation of FGD is required at all the Company’s Thermal Power Plants (TPP) to meet sulphur dioxide emission norms including captive Coal based Thermal Power Plants. The timelines for sulphur dioxide emission norms compliance has been extended to December 2024 for captive power plants at our Jharsuguda and Lanjigarh and December 2023 for captive power plants at our BALCO facilities. The Independent Power plants of BALCO and Jharsuguda are required to comply with the norms by December 2023 and December 2024 respectively. We have been working with the relevant government authorities at state and national level, in addition to potential suppliers and business partners to evaluate the best techno-commercial options over the past year. We have had multiple correspondences with regulatory agencies to update on the progress in this regard. We have issued the Letter of Intent for installation of FGD to competent bidders for our Jharsuguda, Lanjigarh and BALCO captive power facilities. The timeline for FGD installation at TSPL was December 2019. TSPL had issued letter of intent on SEPCO before this deadline. MOP issued notification dated July 2, 2020 to restrict imports from China. Power China SEPCO1 has communicated their inability to execute the FGD project quoting aforementioned MOP notification and prevailing COVID situation in India. TSPL is proceeding with further steps for retendering the FGD project. The Government of Punjab has written to the concerned authorities for extending the timelines for Punjab power plants till December 2022 to implement FGD. The Punjab Pollution Control Board (“PPCB”) issued Show cause Notice (SCN) on November 21, 2019, following which TSPL made a representation to Chairman, PPCB on November 28, 2019. PPCB has since disposed the notice and has forwarded TSPL’s request letter for time extension to Central Pollution Control Board (“CPCB”) till December 2022 and for further direction. CPCB issued SCN on January 31, 2020 for which TSPL submitted their detailed response to CPCB and representation was made to Chairman, CPCB on February 5, 2020 along with IIT Kanpur study report carried out by TSPL showing negligible contribution of its operation on Delhi’s particulate air pollution. The CPCB response is awaited on the same. Meanwhile, CPCB has imposed a nominal fine of ₹ 1.8 million per month per unit for all the plants till they install FGD, which the entity has applied for refund, post MoEF&CC vide notification dated March 31, 2021 extended the FGD installation time limit upto December 2024 APTEL vide order dated August 28, 2020 has approved the said notification including installation and operation of FGD and associated system for Sulphur Dioxide (“SO2”) emissions as well as installation and operation of SNCR and/or any other appropriate technology for Nitrogen Oxied (“NOx”) emissions as a change in law event as per the PPA. It has further stated that TSPL is entitled for additional expenditure for installation and operation of FGD and associated systems including all allied cost like taxes, duties etc. as a part of Additional Capital Cost to be incurred by TSPL and has directed the Commission to devise a mechanism for payment of above mentioned costs and other expenses in relation to procurement, installation, commissioning, operation and maintenance of FGD for SO2 as approved by the concerned authority, after prudence check. PSPCL has appealed against the order in SC and hearings are yet to commence. Our business is heavily dependent on plant and machinery for the production of our copper, zinc, oil and gas, iron ore and aluminium products, as well as investments in our mining and exploration operations and our commercial power generation business. Investments to maintain and expand production facilities are, accordingly, an important priority and have a significant effect on our cash flows and future results of operations. Our capital expenditures in fiscal year 2015, 20162019, 2020 and 20172021 were Rs 103,742₹ 89,754 million, Rs. 60,473₹ 78,227 million and Rs. 53,752₹ 68,833 million ($ 828.8)941 million), respectively, largely due to our capacity expansion and new projects across our oil and gas, copper, zinc, aluminium and power businesses. ESL has plans for an expansion project with an estimated investment of approximately ₹ 27,000 million ($ 369 million) for increasing the plant capacity from 1.5 MTPA to 3.0 MTPA in the existing premises. Project includes addition of major facilities like 0.5 MTPA coke plant, new 1.8 MTPA Pellet plant, New 1.1 MTPA blast furnace, 0.18 MTPA DI Pipe plant, railway siding infrastructure, Raw Material Handling System (“RMHS”) along with upgradation of existing plants through debottlenecking and digitalization. Project duration will be 16 to 18 months. HZL has expansion projects in the amount of approximately Rs. 108,600₹ 122,100 million ($ 1,674.61,690 million) to be spent on the expansion of its existing underground mines together with the development of the underground mine at Rampura Agucha, expansion of Sindesar Khurd, Zawar, Rajpura Dariba and Kayad mines. As of March 31, 2017, Rs. 55,7202021, ₹ 109,450 million ($ 859.21,496 million) has been spent on the expansion projects. Based on a long-term evaluation of assets and in consultation with global experts, the Company is evaluating plans to increase its mined metal capacity from 1.2 mtpa to 1.5 mtpa. The Board has approved the Phase I of this expansion which will increase mined metal and smelting capacity from 1.2 mtpa to 1.35 mtpa through brownfield expansion of existing mines at an estimated capital expenditure of around ₹ 45,000 million ($ 597 million). We commenced exploration campaigns in Rajasthan in our oil and gas business to test prospective reserves.To unlock the potential of the prospective reserves, we are carrying out exploration drilling, seismic activities construction activities and studies. The estimated cost of this project for joint operation partners is Rs. 36,329.1$ 804 million ($ 560.2 million) and the corresponding capital expenditure spent on the exploration campaign as of March 31, 2017,2021, is Rs. 32,430.3 million ($ 500.1 million).$ 722 million. We have ongoing projects in the amounts of approximately Rs. 301,405.1 million ($ 4,647.7 million) set up on the existing producing fields at Mangala, Bhagyam and Aishwariya.Aishwariya which approximately amounts to $ 5,673 million for joint operation partners. The plan involves ramping up or sustaining the production from all the fields for which additional wells and related surface facilities are being drilled and constructed. Further, we continue to focus on infrastructure creation and prudent reservoir management for water flood and enhanced oil recovery implementation. As of March 31, 2017, net Rs. 185,211.72021, $ 4,371 million ($ 2,856.0 million) was spent on the ongoing projects at Mangala, Bhagyam and Aishwariya. The Mangala Development pipeline is designed to evacuate the crude oil produced from the Rajasthan assets and provide access to markets. The pipeline ends at the coastal location of Bhogat. The entire length of the pipeline from the Mangala processing terminal to Bhogat is ready to receive crude oil. The estimated gross cost of developing the pipeline is Rs. 82,790.9 million ($ 1,276.7 million). As of March 31, 2017, Rs. 66,737.6 million ($ 1,029.1 million) has been spent on developing the Mangala Development pipeline.
We planned to invest Rs. 50,308.3 million ($ 775.8 million) to upgrade the existing Raageshwari gas terminal to provide increased capacity and also to unlock the opportunities in Mangala and Aishwariya Barmer hill development.development by investing $ 804 million by the joint operation partners. We are also looking at the options to construct a new gas pipeline to monetize the additional gas potential in the block. As of March 31, 2017 Rs. 13,299.52021, $ 634 million ($ 205.1 million) has been spent. Also, we are also intending to start the production from the blocks acquired under Open Acerage Licensing policy (OALP). As of March 31, 2021, $ 55 million has been spent. We have Rs. 16,820₹ 44,240 million ($ 259.4605 million) of ongoing expansion projects to set up a 400,000 tpa copper smelter plant. Specifically, the proposed capacity expansion at Tuticorin had been delayed since December 2009 due to a writ petition filed before the High Court of Madras which has been dismissed by an order dated April 28, 2016. We legitimately expectapproached for necessary approvals for setting up the project. We received environmental clearance from MoEF&CC in May 2015 and a consent to establish from TNPCB for the smelter in November 20162016. In December 2017, we restarted the construction activities of the proposed expansion project and we arethe same were in progress. In the processmeantime, the Madurai Bench of restarting the project activitiesHigh Court of Madras in a Public Interest Litigation filed against the MoEF&CC, State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and us, held vide its order dated May 23, 2018 that the application for renewal of the Environmental Clearance for the copper smelter plant. Expansion Project shall be processed after a mandatory public hearing and the said application shall be decided by the competent authority on or before September 23, 2018. In the interim, the High Court ordered us to cease construction and all other activities on site for the proposed Expansion Project with immediate effect. The MoEF&CC has delisted the expansion project since the matter is sub judice. Separately, SIPCOT vide its letter dated May 29, 2018, cancelled 342.22 acres of the land allotted for the proposed Expansion Project. Further the TNPCB issued orders on June 7, 2018 directing the withdrawal of the Consent to Establish (“CTE”) which is valid till March 31, 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 hearing and is listed for filing of counter by TNPCB on August 4, 2021. We have incurred Rs. 5,635₹ 8,645 million ($ 87.0118 million) on these ongoing expansions as of March 31, 2017.2021. BALCO is building a 1,200 MW coal-based captive power plant in Chhattisgarh consisting of four units of 300 MW each. Out of the four units, two units for captive consumption and one unit for external wheeling started commercial production at various dates in phased manner during fiscal year 2016. The fourth unit has been commissioned and commenced commercial production on May 1, 2016. BALCO is in the process of settingset up a 325,000 tpa aluminium smelter and 12001,200 MW power facility at an estimated cost of Rs.₹ 107,500 million ($ 1,657.71,470 million) which usespre-baked technology from the Guiyang Aluminium Magnesium Design & Research Institute, or GAMI, of China. The first metal tapping from the 325,000 tpa aluminium smelter started in fiscal year 2015, and commercial production started during fiscal year 2015. The capital expenditure spent on these projects asOn May 13, 2021, the Board approved the expansion of March 31, 2017 is Rs. 100,301Rolled Product Capacity from existing 50 KTPA to 130 KTPA at a cost of ₹ 3,480 million ($ 1,546.7 million).48 Million) which will improve the plant’s VAP capacity and overall premium.
We
Initially in 2008, we planned to invest Rs. 106,000 million ($ 1,634.5 million) to expand our alumina refining capacity at Lanjigarh to 5 mmtpa by constructing a second alumina refinery with a capacity of 3 mmtpa6 mtpa and constructing an associated 210 MW captive power plant. However, theThe expansion of the alumina refinery at Lanjigarh has beenand related mining operations in and around the Niyamgiri was put on hold sincein October 20, 2010, when the date of the MoEF’s direction toMoEF&CC directed us to ceasehold from further construction. In the last quarter of fiscal year 2016, environment clearance was received for the Lanjigarh expansion project and environmental clearance up to 6 mtpa will be received as an amendment to existing environmental clearance on the acquisition of required land. Further, a consent to establish for 6 mtpa and consent to operate for 2 mpta was also obtained. However, construction activity continues to be on hold and the management is evaluating possibilities of resumption of construction activities in Lanjigarh at the earliest.expansion. See “Item“Item 8. Financial Information—A. Consolidated Statements and Other Financial Information – Legal Proceedings”Proceedings” for details. As of March 31, 2017,2021, we spent Rs. 55,576₹ 46,001 million ($ 857.0629 million) we are also investing anon the Lanjigarh expansion project (up to 6 mtpa) including other auxiliary assets. Total Project cost for refinery expansion upto 5 MTPA is estimated Rs. 145,000at ₹ 108,120 million ($ 2,235.91,478 million). On February 3, 2021, the expansion plan to increase the capacity of the Lanjigarh alumina refinery to 5 MTPA was approved by Vedanta Limited Board, subject to requisite Government approvals and further on May 13, 2021, the Board approved the estimated cost of ₹ 46,810 Million ($ 640 million). The completion of this expansion plan will place the Lanjigarh alumina refinery as one of the world’s largest single-location alumina refinery complex. We had estimated of investing ₹ 150,380 million ($ 2,056 million) to set up a second 1,250,000 tpa aluminium smelter. Power to the new smelter will be provided by our 2,400 MW power plant at Jharsugada.Jharsuguda. As of March 31, 2017,2021, we have already spent Rs. 134,120₹ 147,372 million ($ 2,068.22,015 million) on this project. Further, the 120 KTPA Billet capacity expansion project has been approved at a cost of ₹ 1,940 Million ($ 27 million) which will improve the VAP capacity and the overall premium. The first 660 MW and second 660 MW unit of the Talwandi Sabo power plant were capitalized in fiscal year 2015 and 2016 respectively. The third 660 MW unit was capitalized on September 1, 2016 after successfully completing trial runs. The estimated cost We have scheduled repayment of this 1980 MW project is Rs. 115,460 million ($ 1,780.4 million). As of March 31, 2017, Rs. 111,994 million ($ 1,727.0 million) was spent on this project. Inborrowings during fiscal year 2017 and2022, outstanding at the end of fiscal years 2018 to 2019, we have scheduled loan repayment obligations,year 2021, denominated in a mix of Indian Rupees and US dollars of Rs. 413,436₹ 166,650 million ($ 6,375.32,279 million) and Rs. 138,760₹ 16,974 million ($ 2,139.7232 million), respectively, for various outstanding long-term loans.respectively. We plan to finance our capital expenditures and our loan repayment obligations out of our cash flows from operations and financing activities. Our failure to make planned expenditures could adversely affect our ability to maintain or enhance our competitive position and develop higher margin products.
Consistent with our strategy to consolidate our ownership interests in our key subsidiaries, we had exercised the second call option to acquire the GoI’s remaining ownership interest in HZL although the exercise is currently subject to dispute. See “Item“Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO”BALCO” for more information. The option value will be the fair market value determined by an independent appraiser and will entail significant capital requirements. Based solely on the market price of HZL’s shares on the NSE on July 28, 2017June 25, 2021 of Rs. 277.9₹ 339.55 ($ 4.3)4.58) per share, and not including the other factors that the independent appraiser may consider, one possible estimation of the exercise price to acquire all of the GoI’s 1,247,950,590 shares in HZL would be Rs. 346,805₹ 423,742 million ($ 5,347.85,715 million). If the GoI sells its remaining ownership interest in HZL through a public offer, we may look into alternative means of increasing our ownership interest in HZL. In addition, we have exercised our option to acquire the GoI’s remaining 49.0% ownership interest in BALCO, although the exercise of this option has been contested by the GoI and the GoI retains the right and has expressed an intention to sell 5.0% of BALCO to BALCO employees. See “Item“Item 4. Information on the Company—B. Business Overview—Our Business—Options to Increase Interests in HZL and BALCO”BALCO” for more information. We may in the future make acquisitions of mines, plants or minerals and metals businesses that complement or enhance our existing businesses. We have consistently paid dividends including tax on dividend amounting to Rs. 27,081₹ 106,953 million in fiscal year 2015, Rs. 32,2202019, ₹ 14,441 million in fiscal year 20162020 and Rs. 96,726 (1,491.5)₹ 91,216 ($ 1,247) million in fiscal year 2017.2021. Capital Resources We plan to finance our capital requirements through a mix of cash flows from operating and financing activities. We do not depend onoff-balance sheet financing arrangements. We believe that our working capital requirements can be sufficiently funded through our internal accruals and undrawn line of credit. Comparison of Years Ended March 31, 20162020 and March 31, 20172021 Net Cash from Operating Activities Net cash from operating activities was Rs. 212,105₹ 295,952 million ($ 3,270.54,046 million) in fiscal year 20172021 compared to net cash from operating activities of Rs. 107,352₹ 182,393 million in fiscal year 2016,2020, an increase of Rs. 104,753₹ 113,559 million. The net increase in cash from operating activities was mainlyprimarily due to the following reasons: net proceeds of short term investments was Rs. 96,762₹ 81,695 million ($ 1,492.11,117 million) in fiscal year 20172021 compared to net purchasesproceeds of short term investments of Rs. 50,697₹ 49,870 million in fiscal year 2016.2020. income tax paid was Rs. 53,067 million ($ 818.3 million) in fiscal year 2017 compared to outflow of Rs. 24,539 million in fiscal year 2016.
the cash generatedused from operating assets and liabilities (working capital) in fiscal year 20172021 was Rs. 2,364₹ 7,902 million ($ 36.2108 million) compared to cash used of Rs. 65,645₹ 23,822 million in fiscal year 2016.2020. interest paidreceived was Rs. 62,048₹ 20,351 million ($ 956.8278 million) in fiscal year 20172021 compared to outflowinflow of Rs. 55,372₹ 9,401 million in fiscal year 2016.2020. interestdividend received was Rs. 11,315₹ 18 million ($ 174.50 million) in fiscal year 20172021 compared to inflow of Rs. 13,061₹ 181 million in fiscal year 2016. 2020. dividend received was Rs. 7 million ($ 0.1 million) in fiscal year 2017 compared to inflow of Rs. 4 million in fiscal year 2016.
We believe our current working capital is sufficient for our present capital requirements. Net Cash Used in Investing Activities Net cash used in investing activities was Rs. 79,910₹ 167,358 million ($ 1,232.12,288 million) in fiscal year 2017 and Rs. 42,6132021 as compared to net cash used of ₹ 116,866 million in fiscal year 2016.2020. The net cash used in investing activities in fiscal year 20172021 was higher primarily due to: lower cash used towards expansion projectsacquisition of property, plant and exploration across our zinc, oil and gas, iron ore, copper, aluminium and power businessesequipment of Rs. 53,752₹68,833 million ($ 828.8941 million) in fiscal year 20172021 as compared to Rs. 60,473₹ 78,227 million in fiscal year 2016.2020. net cash inflow on account of structured investments was ₹ 26,420 million in fiscal year 2020 as compared to nil in fiscal year 2021. net cash outflow on account of short-term deposits was Rs. 25,118₹ 34,206 million ($ 387.3468 million) in fiscal year 20172021 as compared to net cash inflow from short term depositsoutflow of Rs. 17,139₹ 66,265 million in fiscal year 2016.2020. net cash outflow on account of loans given to related partiesparty was₹ 65,484 million ($ 895 million) in fiscal year 2021 as compared to nil in fiscal year 20172020. net cash outflow on account of acquisition of business was ₹ 448 million ($ 6 million) in fiscal year 2021 as compared to net cash outflow of Rs. 631₹ 335 million in fiscal year 2016.2020. Net Cash used in Financing Activities Net cash used in financing activities was Rs. 49,123₹ 131,371 million ($ 757.41,796 million) in fiscal year 20172021 and Rs. 52,714₹ 87,356 million in fiscal year 2016,2020, primarily on account of: net cash inflow from long-term and short-term debts (other than working capital and related party debt) was Rs. 155,174₹ 84,916 million ($ 2,392.81,161 million) in fiscal year 20172021 as compared to cash inflow of Rs. 22,945₹ 23,804 million in fiscal year 2016.2020. net cash inflow from acceptances was Rs. 12,564 million ($ 193.7 million) in fiscal year 2017 as compared to cash inflow of Rs. 1,757 million in fiscal year 2016.
net cash outflow for payment of dividend (including deemed dividend and payment of dividend by subsidiaries tonon-controlling interests) of Rs. 96,726₹ 91,216 million ($ 1,491.51,247 million) in fiscal year 20172021 as compared to Rs. 32,220₹ 14,441 million in fiscal year 2016.2020. net cash outflow from loans from related parties was Rs. 125,248 million ($ 1,931.3 million) in fiscal year 2017 as compared to cash outflow of Rs. 47,326 million in fiscal year 2016.
net cash outflow from working capital loans was Rs. 6,123₹95,925 million ($ 94.41,312 million) in fiscal year 20172021 as compared to cash inflowoutflow of Rs. 2,130₹ 113,658 million in fiscal year 2016.2020. Comparison of Years Ended March 31, 20152019 and March 31, 20162020 Net Cash from Operating Activities Net cash from operating activities was Rs. 107,352₹ 182,393 million ($ 2,420 million) in fiscal year 20162020 compared to net cash from operating activities of Rs. 125,710₹ 208,420 million in fiscal year 2015,2019, a decrease of Rs. 18,358₹ 26,027 million. The net decrease in cash from operating activities was mainlyprimarily due to the following reasons: net purchasesproceeds of short term investments was Rs. 50,697₹ 49,870 million ($ 661 million) in fiscal year 2016,2020 compared to net purchasesproceeds of short term investments of Rs. 4,869₹ 18,296 million in fiscal year 2015.2019. income tax paid was Rs. 24,539 million in fiscal year 2016 compared to outflow of Rs. 37,806 million in fiscal year 2015.
the cash generatedused from operating assets and liabilities (working capital) in fiscal year 20162020 was Rs. 65,645₹ 23,822 million ($ 314 million) compared to cash usedgenerated of Rs. 3,774₹ 32,790 million in fiscal year 2015.2019. interest paidreceived was Rs. 55,372₹ 9,401 million ($ 125 million) in fiscal year 2020 compared to inflow of ₹ 8,868 million in fiscal year 20162019. dividend received was ₹ 181 million ($ 2 million) in fiscal year 2020 compared to outflowinflow of Rs. 84,816₹ 306 million in fiscal year 2015.2019. We believe our current working capital is sufficient for our present capital requirements. interest received was Rs. 13,061 million in fiscal year 2016 compared to inflow of Rs. 18,453 million in fiscal year 2015.
dividends received was Rs. 4 million in fiscal year 2016 compared to inflow of Rs. 1 million in fiscal year 2015.
Net Cash Used in Investing Activities Net cash used in investing activities was Rs. 42,613₹ 116,866 million ($ 1,551 million) in fiscal year 2020 as compared to net cash used of ₹ 133,147 million in fiscal year 2016 and Rs. 43,939 million in fiscal year 2015.2019. The net cash used in investing activities in fiscal year 20162020 was lower primarily due to: lower cash used towards expansion projectsacquisition of property, plant and exploration across our zinc, oil and gas, iron ore, copper, aluminium and power businessesequipment of Rs. 60,473₹ 78,227 million ($ 1,038 million) in fiscal year 2020 as compared to ₹ 89,754 million in fiscal year 20162019. net cash inflow on account of structured investments was ₹ 26,420 million ($ 350 million) in fiscal year 2020 as compared to Rs. 103,742cash outflow of ₹ 18,152 million in fiscal year 2015.2019. net cash inflow was Rs. 17,139 million in fiscal year 2016 as compared to net cash inflow from short term deposits of Rs. 61,026 million in fiscal year 2015.
net cash outflow on account of loansshort-term deposits was ₹ 66,265 million ($ 879 million) in fiscal year 2020 as compared to related parties was Rs. 631cash inflow of ₹ 24,191 million in 2016fiscal year 2019 net cash outflow on account of acquisition of business was ₹ 335 million ($ 4 million) in fiscal year 2020 as compared to net cash outflow of Rs. 13₹ 50,750 million in fiscal year 2015.2019. Net Cash used in Financing Activities Net cash used in financing activities was Rs. 52,714₹ 87,356 million ($ 1,159 million) in fiscal year 2020 and ₹ 45,643 million in fiscal year 2016 and Rs. 86,448 million in fiscal year 2015,2019, primarily on account of: net cash inflow from long-term and short-term debts (other than working capital and related party debt) was Rs. 22,945₹ 23,804 million ($ 316 million) in fiscal year 20162020 as compared to cash inflow of Rs. 26,885₹ 81,972 million in fiscal year 2015.2019. net cash inflow from acceptances was Rs. 1,757 million in fiscal year 2016 as compared to cash inflow of Rs. 2,911 million in fiscal year 2015.
net cash outflow for payment of dividendsdividend (including deemed dividend and payment of dividendsdividend by subsidiaries tonon-controlling interests) of Rs. 32,220₹ 14,441 million ($ 192 million) in fiscal year 2020 as compared to ₹ 106,953 million in fiscal year 2016 as compared to Rs. 27,081 million in fiscal year 2015.2019. net cash outflow from loans from related parties was Rs. 47,326 million in fiscal year 2016 as compared to net cash outflow of Rs. 79,733 million in fiscal year 2015.
net cash outflow from working capital loans was Rs. 2,130₹ 113,658 million ($ 1,508 million) in fiscal year 2020 as compared to cash outflow of ₹ 6,265 million in fiscal year 2016 as compared to cash inflow of Rs. 1,641 million in fiscal year 2015. 2019. no net cash flow for buyback of shares of subsidiaries in fiscal year 2016 as compared to of cash outflow of Rs. 11,218 million in fiscal year 2015.
Outstanding Loans See “Note 17. “Borrowings”22: Borrowings” of Notes to the consolidated financial statements.Consolidated Financial Statements. Export Obligations See “Note 29. “Commitments,33: Commitments, guarantees, contingencies and guarantees - Commitments and contingencies - other disclosures—Export Obligations”Obligations” of Notes to the consolidated financial statements.Consolidated Financial Statements. Guarantees See “Note 29. “Commitments,33: Commitments, guarantees, contingencies and guarantees - Guarantees”other disclosures—Guarantees” of Notes to the consolidated financial statements.Consolidated Financial Statements. Capital Expenditure and Commitments Our principal financing requirements primarily include: capital expenditures, towards expansion of capacities in existing businesses including modernization of facilities; the establishment of our planned commercial power generation business; consolidation of our ownership in our various subsidiaries; and acquisitions of complementary businesses that we determine to be attractive opportunities. The following table shows our capital expenditures in fiscal years 2015, 20162019, 2020 and 2017:2021: | | | | | | | | | | | | | | | | | | | For Year Ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (in millions) | | | (US dollars in millions) | | Capital Expenditure | | | 103,742 | | | | 60,473 | | | | 53,752 | | | | 828.8 | |
| | | | | | | | | | | | | | | | | Particulars | | For Year Ended March 31, | | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (in millions) | | | (US dollars in millions) | | Capital Expenditure | | | 89,754 | | | | 78,227 | | | | 68,833 | | | | 941 | |
Capital Commitments See “Note 29. “Commitments,33: Commitments, guarantees, contingencies and guarantees” in theother disclosures” of Notes to the consolidated financial statementsConsolidated Financial Statements for disclosures on capital commitments. Contingencies See “Note 29. “Commitments,33: Commitments, guarantees, contingencies and guarantees” in theother disclosures” of Notes to the consolidated financial statementsConsolidated Financial Statements for disclosure on contingent liabilities. Off-Balance Sheet Arrangements See “Note 29“Note 33: Commitments, guarantees, contingencies and other disclosures” of Notes to the consolidated financial statements.”Consolidated Financial Statements for disclosure on off-Balance Sheet arrangements. Contractual Obligations The following table sets out our total future commitments to settle contractual obligations as of March 31, 2017:2021: | | | Payment Due by Period (in millions) | | | Payment Due by Period (in millions) | | | | | | | | | | | | | | | | | | | | | | | | | | | | More than | | | | | Total | | | Less than 1 Year | | | 1-3 Years | | | 3-5 Years | | | 5 Years | | | Contractual obligations | | | Total | | | Less than 1 Year | | | 1-3 Years | | | 3-5 Years | | | More than 5 Years | | | | (Rs.) | | | (US$) | | | (Rs.) | | | (US$) | | | (Rs.) | | | (US$) | | | (Rs.) | | | (US$) | | | (Rs.) | | | (US$) | | | (₹) | | | ($) | | | (₹) | | | ($) | | | (₹) | | | ($) | | | (₹) | | | ($) | | | (₹) | | | ($) | | Bank loans and borrowings | | | 746,787 | | | | 11,516 | | | | 413,436 | | | | 6,375 | | | | 138,760 | | | | 2,140 | | | | 142,903 | | | | 2,204 | | | | 51,687 | | | | 797 | | | | 571,351 | | | | 7,812 | | | | 190,081 | | | | 2,599 | | | | 169,493 | | | | 2,317 | | | | 85,044 | | | | 1,163 | | | | 126,733 | | | | 1,733 | | Interest commitments(1) | | | 115,039 | | | | 1,774 | | | | 40,537 | | | | 625 | | | | 40,621 | | | | 626 | | | | 17,307 | | | | 267 | | | | 16,574 | | | | 256 | | | | 156,424 | | | | 2,139 | | | | 45,055 | | | | 616 | | | | 51,386 | | | | 703 | | | | 31,682 | | | | 433 | | | | 28,301 | | | | 387 | | Othernon-current liabilities(2) | | | 217,993 | | | | 3,362 | | | | 214,871 | | | | 3,313 | | | | 1,153 | | | | 18 | | | | — | | | | — | | | | 1,969 | | | | 30 | | | | 300,205 | | | | 4,104 | | | | 286,685 | | | | 3,919 | | | | 12,518 | | | | 171 | | | | 220 | | | | 3 | | | | 782 | | | | 11 | | Capital commitments | | | 90,483 | | | | 1,395 | | | | 64,411 | | | | 993 | | | | 26,043 | | | | 402 | | | | 9 | | | | 0.14 | | | | 20 | | | | 0.34 | | | | 141,544 | | | | 1,935 | | | | 35,748 | | | | 489 | | | | 42,941 | | | | 587 | | | | 62,855 | | | | 859 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 1,170,302 | | | | 18,047 | | | | 733,255 | | | | 11,306 | | | | 206,577 | | | | 3,186 | | | | 160,219 | | | | 2,471 | | | | 70,250 | | | | 1,083 | | | | 1,169,524 | | | | 15,990 | | | | 557,568 | | | | 7,623 | | | | 276,338 | | | | 3,778 | | | | 179,801 | | | | 2,458 | | | | 155,816 | | | | 2,131 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Interest payments for long-term fixed rate debts have been calculated based on applicable rates and payment dates. Interest payments on floating rate debt have been calculated based on the payment dates and rates as applicable on March 31, 20172021 for each relevant debt instrument. |
(2) | Othernon-current liabilities consist of security deposits and retentions. |
Our total future commitments to settle contractual obligations as of March 31, 20172021 were Rs. 1,170,302 million₹ 1,169,524 ($ 18,047.015,990 million), representing a Rs. 245,644₹ 12,277 million increasedecrease as compared to our total future commitments to settle contractual obligations as of March 31, 2016.2020. We also have commitmentsNet defined benefit liability relating to purchase copper concentrate for our copper custom smelting operations. These commitments are based on future copper LME prices which are not ascertainable as of the date ofpost retirement benefit obligations recorded in accordance with IAS 19 - Employee Benefits is included in Note 27 in Item 18 in this Annual Report. Refer to “Note 27 in Item 18 in this Annual Report” for further details.
Safe Harbor See “Special“Special note regarding forward-looking statements”statements” Foreign exchange effects See “Note 23 “Financial25: Financial instruments - Financial risk - Foreign exchange risk” in therisk” of Notes to the consolidated financial statements.Consolidated Financial Statements. Recently issued accounting pronouncements See “Note 3.V.x. “Recently issued accounting pronouncements” in the3 (b): Application of new and revised standards” of Notes to the consolidated financial statements. Consolidated Financial Statements.ITEM 6. | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES |
A. Directors and Senior Management Our board of directors consists of nine directors. The following table sets forth the name, age and position of each of our chairman, directors, other executive officers and significant employees as of the date hereof: | | | | | | | Name# | | Age | | | Position | | | | Anil Agarwal(1) | | | 6568 | | | Non-Executive Chairman Emeritus | | | | Directors | | | | | | | Navin Agarwal(2) | | | 5660 | | | Executive ChairmanVice-Chairman and Whole Time Director* | Lalita D. GuptePadmini Somani(3)
| | | 6845 | | | Non-Executive Independent Director | Ravi KantDindayal Jalan(4)
| | | 7364 | | | Non-Executive Independent Director | Krishnamurthi VenkataramananPriya Agarwal(5)
| | | 7231 | | | Non-Executive Non – Independent Director | Aman MehtaUpendra Kumar Sinha(6)
| | | 7069 | | | Non-Executive Independent Director | Priya AgarwalMahendra Kumar Sharma(7)
| | | 2774 | | | Non-Executive Independent Director | Tom AlbaneseAkhilesh Joshi(8)
| | | 5967 | | | Chief Executive Officer and Whole Time Director*Non-Executive Independent Director | Tarun JainSunil Duggal(9)
| | | 5758 | | | Whole Time Director* | GR Arun Kumar(10)
| | | 46 | | | and Chief FinancialExecutive Officer and Whole Time Director* | | | | Other Executive Officers | | | | | | | Sharad Kumar Gargiya | | | 48 | | | Chief Commercial Officer | Madhu Srivastava | | | 47 | | | Chief Human Resources Officer | Dilip Golani | | | 5155 | | | Director, GroupPresident, Management Assurance Services | Mansoor SiddiqiVarun Kapoor
| | | 6444 | | | Group Director, ProjectsDirector- Investor Relations | Samir CairaeAndrew Lewin
| | | 53 | | | Chief Executive Officer - Diversified Metals (India) | Suresh Bose
| | | 4961 | | | Head, – Group Human Resources | Philip Turner
| | | 60 | | | Group Head - Health, Safety, Environment and Sustainability | Ajay Goel | | | 45 | | | Deputy Chief Financial Officer | Roma Balwani | | | 62 | | | Senior Director, Communications and Brand | Dhiraj Nayyar | | | 45 | | | Director, Economics and Policy | Vikash Jain | | | 44 | | | General Counsel (Interim) | Leena Verenkar | | | 50 | | | Head- Corporate Social responsibility | Anand Laxshmivarahan R | | | 43 | | | Chief Digital Officer (Interim) | Philip Campbell | | | 61 | | | Head- Asset Optimization | | | | Other Significant Employees
| | | | | | | | | | Zinc India | | | | | | | Sunil DuggalArun Misra
| | | 5556 | | | Chief Executive Officer, HZLHindustan Zinc Limited | Amitabh GuptaVinaya Jain
| | | 5546 | | | Chief Financial Officer, HZLFinance Head, Hindustan Zinc Limited | | | | Zinc International | | | | | | | Deshnee NaidooLaxman Shekhawat
| | | 4153 | | | Anchor, Zinc International Division and CMT | Pushpender Singla | | | 39 | | | Chief ExecutiveFinancial Officer, Zinc International Division and CMT | | | | Oil and Gas | | | | | | | Sudhir MathurPrachur Sah
| | | 5545 | | | Deputy Chief Executive Officer, Cairn Oil & Gas | Hitesh Vaid | | | 48 | | | Deputy Chief Financial Officer, and Acting Chief Executive Officer,Cairn Oil and Gas Business | | | | Iron Ore and Steel | | | | | | | Rajagopal Kishore KumarSauvick Mazumdar
| | | 5550 | | | Chief Executive Officer, Iron Oreand Steel Business | Azad ShawNavin Kumar Jaju
| | | 39 | | | Chief Financial Officer, Iron Ore Business | Navanath Vhatte | | | 58 | | | Chief Executive Officer, Electrosteel Steels Limited | | | | Copper | | | | | | | P. RamnathPankaj Kumar
| | | 5953 | | | Chief Executive Officer, Copper Operations at Tuticorin and Silvassa | Anup AgarwalAnand Soni
| | | 4441 | | | Chief Financial Officer, Copper Operations at Tuticorin and Silvassa | | | | Aluminium and Power | | | | | | | Abhijit PatiAjay Kapur
| | | 5355 | | | Chief Executive Officer, Aluminium and Power & MD- Commercial | VikasRahul Sharma
| | | 48 | | | Deputy Chief Executive Officer, BALCOAluminium Business | Ajay Kumar DixitAbhijit Pati
| | | 5855 | | | Chief Executive Officer Aluminaand Whole-time Director, BALCO | Bharat GoenkaChhavi Nath Singh
| | | 4061 | | | Chief Executive Officer (Interim), Jharsuguda. | Vikas Sharma | | | 57 | | | Chief Executive Officer and Whole-time Director, TSPL | Sonam Donkar | | | 41 | | | Chief Financial Officer, Aluminium Business | Gobinda Gopal Pal | | | 56 | | | Deputy Chief FinancialExecutive Officer, AluminiumAlumina Business |
Notes:
* | A “Whole Time Director” is a director who is employed full-time in rendering services to our Company with respect to which he is a director. An individual can be a Whole Time Director with respect to onlywhole-time employment of the Company. A Whole-Time Key Managerial Personnel cannot hold office in more than one company although he or she may accept the position ofNon-Whole Time Directorexcept in other companies.its subsidiary company. |
(a) | Lalita D. Gupte stepped down from her post of Non-Executive Independent Director of the Company from close of business hours on Friday, November 6, 2020; |
(b) | Krishnamurthi Venkataramanan ceased to be Non-Executive Independent Director of the Company from close of business hours on March 31, 2021 upon completion of his second and final term; |
(c) | GR Arun Kumar resigned from the post of Whole-Time Director & Chief Financial Officer of the Company and was relieved from his position effective from close of business hours on April 24, 2021; |
(1) | Anil Agarwal was appointed as the Chairman Emeritus of our Company with effect from April 1, 2014. He2014 and ceased to be a member of the Board with effect from April 1, 2014. Subsequently, he has been appointed as an additional Non-Executive Director designated as Chairman of the Company with effect from April 1, 2020 which was approved by the shareholders in the Annual General Meeting of the Company held on September 30, 2020. He is member of Nomination & Remuneration Committee. |
(2) | Navin Agarwal wasre-appointed appointed as an Executive Chairman with effect from April 1, 2014. He isNavin Agarwal was appointed as Whole Time Director with effect from August 17, 2013 to July 31, 2018 and further reappointed with effect from August 1, 2018 upto July 31, 2023. Subsequently, he has been re-designated as Executive Vice-Chairman of the Company with effect from April 1, 2020 and ceased to be a member of the Nomination and Remuneration Committee.Committee with effect from April 1, 2020. He is a permanent invitee of the Nomination and Remuneration Committee; |
(3) | Lalita D. Gupte wasPadmini Somani has been appointed as aan Additional Director designated as Non-Executive Independent Director with effect from March 29, 2014. Subsequently her appointment as an Independent Director has been fixedFebruary 5, 2021 for a period1st term of threetwo years effective asfrom February 5, 2021 till February 4, 2023 subject to the approval of January 29, 2015 to January 28, 2018 which was approved by the shareholders at the ensuing Annual General Meeting. She is also a member of the Company through postal ballot on March 30, 2015. Lalita D. Gupte is the Chairperson of the AuditCorporate Social Responsibility Committee effective February 5, 2021 and is the Chairpersonappointed as a member of the Stakeholders Relationship Committee effective April 1, 2017 and is a member of the Nomination and Remuneration Committee.01, 2021. |
(4) | Ravi Kant wasDindayal Jalan has been appointed as aan Additional Director designated as Non-Executive Director with effect from January 28, 2014. Subsequently his appointment as an Independent Director has been fixed for a period of three years effective as of January 29, 2015 to January 28, 2018 which was approved by the shareholders of the Company through postal ballot onfor a 1st term of two years effective from April 1, 2021 till March 30, 2015. Ravi Kant is31, 2023 subject to the approval of the shareholders at the ensuing Annual General Meeting. He has been appointed as a member of the Audit & Risk Management Committee, Nomination and& Remuneration Committee and was appointed as Chairperson of the Corporate Social Responsibility Committee with effect from July 12, 2017. |
(5) | Krishnamurthi Venkataramanan was appointed as aNon-Executive Director with effect from April 1, 2017. He was appointed as an Additional Director and Independent Director for a term of three years effective as of April 1, 2017 to March 31, 2020 which was approved by the shareholders of the Company at the Annual General Meeting held on July 14, 2017. Krishnamurthi Venkataramanan is a member of the Stakeholders Relationship Committee and Corporate Social ResponsibilitySustainability Committee effective April 1, 2017.2021. |
(6)(5) | Aman Mehta was appointed as aNon-Executive Director with effect from May 17, 2017. He was appointed as an Independent Director for a term of three years effective as of May 17, 2017 to May 16, 2020 which was approved by the shareholders of the Company at the Annual General Meeting held on July 14, 2017. Aman Mehta is a member of the Audit Committee, Corporate Social Responsibility Committee and Chairperson of the Nomination and Remuneration Committee effective July 12, 2017. |
(7) | Priya Agarwal was appointed as aNon-Executive Non-Independent Director with effect from May 17, 2017. She was appointed as aNon-Independent Director for a term of three3 years effective as offrom May 17, 2017 to May 16, 2020 and further reappointed for a term of 3 years effective from May 17, 2020 till May 16, 2023 which was approved by the shareholders of the Company at the Annual General Meeting held on July 14, 2017.September 30, 2020. As on date, Priya Agarwal is a member of the Corporate Social Responsibility Committee effective July 12, 2017.Committee. |
(8)(6) | Tom AlbaneseUpendra Kumar Sinha was appointed as the Chief Executive Officer and Whole Timea Non-Executive Independent Director with effect from April 1, 2014.March 13, 2018 till August 10, 2021 which was approved by the shareholders at the Annual General Meeting held on August 24, 2018. In June 2021, the Board of Directors, on recommendation of Nomination and Remuneration Committee of the Company, have considered and approved the re-appointment of Upendra Kumar Sinha as Non-Executive Independent Director on the Board of the Company for a 2nd and final term of 3 years effective from August 11, 2021 to August 10, 2024, subject to approval of the shareholders at the ensuing Annual General Meeting. Upendra Kumar Sinha is the Chairperson of the Stakeholders Relationship Committee and Nomination & Remuneration Committee and member of the Audit & Risk Management Committee and Corporate Social Responsibility Committee. He has been reappointeddesignated as the Chairperson of the Sustainability Committee effective from April 1, 2017 to August 31, 20172021. |
(7) | Mahendra Kumar Sharma was appointed as Non-Executive Independent Director with effect from June 1, 2019 till May 3, 2022 which was approved by the shareholders of the Companycompany at the Annual General Meeting held on July 14, 2017. Tom Albanese11, 2019. Mahendra Kumar Sharma is the chairperson of the Audit & Risk Management Committee and Corporate Social Responsibility Committee and member of the Nomination & Remuneration Committee and Stakeholders Relationship Committee. |
(8) | Akhilesh Joshi was appointed as an Additional Director designated as Non-Executive Independent Director on the Board of the Company for a 1st term of 1 year effective July 01, 2021 till June 30, 2022, subject to approval of the shareholders at the ensuing Annual General Meeting. He has been appointed as a member of the Risk Management Committee. |
(9) | Tarun Jain was appointed as a Whole Time Director with effect from April 1, 2014. Tarun Jain is a member of the Corporate Social Responsibility Committee, theAudit & Risk Management Committee and Stakeholders Relationship Committee.Sustainability Committee effective July 1, 2021 |
(10)(9) | GR Arun Kumar wasSunil Duggal has been appointed as Chief Financial Officer with effectan Additional Director designated as Whole-Time Director & CEO and KMP of the Company effective from October 1, 2016. He was appointed as a Whole Time Director with effect from November 22, 2016April 25, 2021 till July 31, 2023, subject to November 21, 2019 which was approved bythe approval of the shareholders of the Company at the ensuing Annual General Meeting held on July 14, 2017. GR Arun Kumar isMeeting. Sunil Duggal continued to be the member of Sustainability Committee and has been newly appointed as a member of the Risk Management Committee effective November 22, 2016 and is a member of Stakeholders Relationship Committee effective July 12, 2017.from April 25, 2021. |
Non-ExecutiveChairman Emeritus – | Anil Agarwal, who was appointed to the Board in May 2003 and is the Executive Chairman of Vedanta Resources Limited since March 2005 and chairs the Nominations Committee. He became the Non-Executive chairman of Vedanta Limited in April 2020. Mr. Agarwal founded the Vedanta groupGroup in 1976 was appointed as our Chairman Emeritusand has over four decades of entrepreneurial and mining experience. He has led the Group and has helped shape its strategic vision to contribute to a larger purpose towards uplifting communities. Under his leadership, Vedanta has grown from an Indian domestic miner into a global natural resources group with effect from April 1, 2014.entities listed in a number of markets and a world class portfolio of large, diversified, structurally low-cost assets that are capable of generating strong cash flows. Mr. Agarwal has this year signed the Giving Pledge, a movement of global philanthropists who commit to giving the majority of their wealth to philanthropy or charitable causes. The Anil Agarwal Foundation is based incommitted towards empowering communities, transforming lives and facilitating nation building through sustainable and inclusive growth. Nand Ghars have been created as model anganwadis which are focused on eradicating child malnutrition, providing education, healthcare, and empowering women with skill development. The Anil Agarwal Foundation has teamed up with the Bill & Melinda Gates Foundation to achieve United Kingdom.Nations Sustainable Development Goal 2, which aims to end all forms of hunger and malnutrition by 2030. Anil Agarwal is also the executive chairmanExecutive Chairman of Vedanta and a director of Sterlite Technologies Limited.Limited, Conclave PTC Limited, Black Mountain Mining (Proprietary) Limited and Anil Agarwal was previously our Chairman and Managing Director and Chief Executive Officer from 1980 until the expiration of his term in October 2004, and was ourNon-Executive Chairman until March 2014. Anil Agarwal was also the Chief Executive Officer of Vedanta from December 2003 to March 2005. He has over 42 years of experience as an industrialist and has been instrumental in the growth and development of the Company since its inception.Foundation. He is the son of Late Shri Dwarka Prasad Agarwal and is the brother of Navin Agarwal and father of Priya Agarwal. The business address of Anil Agarwal is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India. |
Directors – | Navin Agarwal has been with the Group since its inception and has four decades of strategic executive experience. Under his stewardship, Vedanta has enjoyed leadership position in all the major sectors in which it operates. Over the years, he has been instrumental in building a highly successful meritocratic organization, anchored by an extraordinary force of 100,000 employees. He spearheads our strategy through a mix of organic growth and value -generating 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 and global best practices. He drives Vedanta’s unwavering commitment to the highest standards of corporate governance and engagement with key stakeholders. His vision is to gradually unlock the enormous potential of the natural resources sector and make it an engine of growth for India. The overarching vision of empowering the nation by achieving self - sufficiency in the resource sector remains close to his heart. In recognition of his exceptional distinction in the fields of business and entrepreneurship and contribution to the natural resources sector, he was appointed as ourconferred with the ‘Industrialist of the Year’ award by the Bombay Management Association for 2018. He is a fervent advocate of sustainable development and is committed to the empowerment of women and promotion of culture and sports. He has been the Executive Chairman of Vedanta Limited from April 1, 2014 till March 31, 2020 and with effect from April 1, 2014. Prior to this2020, he was the executive vice chairman of SIIL. Navin Agarwal plays a key role in developing strategic thinking and the governance framework of the Group, and provides leadership for long-term planning, business development and capital planning. He has been part of the Group for the last 35 years since its inception and has extensive experience in the natural resources industry. Navin Agarwal plays a key role in the strategic and governance framework of the Group and provides leadership for its long-term planning, business development and capital planning.re-designated as Executive Vice - Chairman. He has been instrumental in the growth of the Group, through world-scale organic projectsserves as well as acquisitions. Navin Agarwal is also the deputy executive chairmanExecutive Vice Chairman of Vedanta and anon-executiveNon-Executive directorDirector of HZL Sterlite Iron & Steel Company Limited and Hare Krishna Packaging Private Limited. He has over 31 years of experience in general management and commercial matters. Navin Agarwal has completed the Owner/President management program at Harvard University and holds a bachelor’s degree in commerce from Sydenham College, Mumbai, India. Navin AgarwalHe is the son of Late Shri Dwarka Prasad Agarwal and is the brother of Anil Agarwal. The business address of Navin Agarwal is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India. |
– | Lalita D. GuptePadmini Somani is one of our independent directors and was appointed to our Board with effect from March 29, 2014.February 5, 2021. She has been active in the philanthropy and development space for over 20 years. She is the former joint managing director of ICICI Bank and was the chairperson of ICICI Venture Funds Management Company Limited until October 2016. Lalita D. Gupte joined the board of ICICI Limitedvision behind Salaam Bombay Foundation that she founded in 1994 as the executive director and remained on the board as the joint managing director until 2002, when it mergedworking with ICICI Bank. She was the joint managing director of ICICI Bank from 2002 until 2006.more than 3 million children across India. She has been recognized for her work in youth education, health, and skilling programs with vulnerable and marginalized populations. Having established the largest preventive school based program in tobacco control in India she has also received a number of awards and recognitions including from the WHO, and the Mayor’s citation from Michael Bloomberg. Padmini Somani holds bachelor’s degree in Economics from Sophia College for Women, Mumbai and completed her Master’s in Financial Economics from University of London. She has also been awarded the prestigious Silver Jubilee Pendent and more than three decadesrecently the “Distinguish Alumnus” Award and is an alumnus of experience in the financial sectorLondon School of Economics and has held various leadership positions in areas of leasing, planning and resources and corporate banking. Shethe London Business School. Padmini Somani serves as a directorDirector on the boardvarious boards of several companies, organizations, charities, and educational institutes including Godrej PropertiesEverest Industries Limited, Bharat ForgeMadhurima International Private Limited, Kirloskar BrothersNarotam Sekhsaria Foundation, Salaam Bombay Foundation, FSN E-Commerce Ventures Private Limited, ICICI Lombard General Insurance CompanyAmbuja Cement Foundation, Falak Investment Private Limited, Aga Khan Health Services India, Trapu Investments Private Limited, Trapu Cans Private Limited, GACL Finance Private Limited, Radha Madhav Investments Private Limited and Chairpersonas a Managing Director of India Infradebt Limited. She holds a bachelor’s degree in economics and a master’s degree in business management. She completed her advanced management program from INSEAD.Madhurima Limited (UK). The business address of Lalita D. GuptePadmini Somani is Mhaskar Building, 153 C Matunga, Sir Bhalchandra2001, Lodha Altamount, Altamount Road, Mumbai—400019,Mumbai – 400026, Maharashtra, India.
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– | Ravi KantDindayal Jalan is one of our independent directors and was appointed to our Board with effect from January 28, 2014. Ravi Kant has approximately five decades of experience in various companies. He was previously the managing director and vice chairman of Tata Motors Limited. He joined Tata Motors in 1999 and has been associated with Jaguar and Land Rover, Tata Daewoo Commercial Vehicles, Korea and Tata Motors, Thailand. Ravi Kant retired as the vice-chairman of Tata Motors Limited with effect from May 31, 2014. Prior to joining Tata Motors Limited, Ravi Kant was the director of Phillips India Limited, overseeing the consumer electronics division. He has also worked with LML Limited, Titan Watches and other consumer and metal companies in senior positions. He is the chairman of the Indian Institute of Management, Rohtak and Indian Institute of Information Technology, Allahabad and a visiting faculty member at China Europe International Business School in Shanghai. He serves on the board of Antar India Private Limited, Hawkins Cooker Limited and KONE Limited, Helsinki. Ravi Kant studied at Mayo College, Ajmer, the Indian Institute of Technology, Kharagpur and Aston University, Birmingham, United Kingdom, from where he completed his master’s degree in management in industry. He was conferred with an honorary doctorate of science by Aston University in Birmingham in July 2008. He is an Honorary Industrial Professor at the University of Warwick, United Kingdom. The business address of Ravi Kant is 114 B, NCPA Apartments, Nariman Point, Mumbai – 400 021, Maharashtra, India.
Krishnamurthi Venkataramananis one of our independent directors and was appointed to our Board with effect from April 1, 2017.2021. Dindayal Jalan is a Chartered Accountant and has over 40 years of extensive experience in managing business and finance of large metal & mining companies. He is currently an entrepreneur and independent director on 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 Limited. He started his corporate journey in 1978 with Aditya Birla Group’s Hindustan Gas & Industries Limited as a management trainee, rising upto the ranks of finance & commercial head. He was instrumental in transforming iron ore business & setting up a greenfield SME business for Essel Mining, an associate company. In 1996, he moved to Birla Copper to lead Finance & Commercial function. He was part of the chief executive officerCore team instrumental in setting up and managing directoroperationalizing the greenfield Copper Smelting project, into a robust operating business. He was responsible for raising finance, building the finance team, putting in place strong business process & systems, negotiating stable sources for long term raw material supplies, setting up commodity hedging desk and building a robust marketing organization. In the year 2001, he moved to Sterlite Industries (now Vedanta Limited) as CEO of Larsen & Toubro Limited from April 2012its Copper mining business in Australia for five years. He led turnaround of the business, working in a multicultural environment. In 2003, he was appointed as the CFO of Sterlite Industries. In 2005, he was elevated to, CFO of Vedanta Resources PLC, a FTSE 250, London listed company. In this role, he provided strategic leadership to the finance function with a clear focus on enhancing shareholder’s value by improving capital management, governance framework, systems and also served on the Board of Larsen & Toubro Limited from May 1999 until his retirement in September 2015. During his four decades of experience at Larsen & Toubro Limited, his responsibilities included leadingprocesses, developing a team of engineers and consultants and overseeing its engineering, procurement and construction value chain.robust Finance team. He is a graduate in chemical engineering and also a distinguished alumni awardee from Indian Institute of Technology, Delhi. K. Venkataramanan alsowas closely partnering with CEO to drive business performance. Dindayal Jalan serves as a director on the boards of several companies including Kirloskar PneumaticHDFC Trustee Company Limited Nilkamal Limited and Larsen & Toubro Hydrocarbon EngineeringBharat Aluminum Company Limited. The business address of Krishnamurthi VenkataramananDindayal Jalan is 401 Varsha, Janki Kutir, Juhu, Mumbai—400049,D-807, Ashok Tower, 63/74, SS Rao Road, Parel, Mumbai - 400012, Maharashtra, India.
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– | Aman MehtaPriya Agarwal is one of our independent directors and was appointed to our Board with effect from May 17, 2017. He has over 39 years of experience in various positions with HSBC group from where he retired in January 2004 as chief executive officer, Asia Pacific. Aman Mehta occupies himself primarily with corporate governance, with board and advisory roles in a range of companies and institutions in India as well as overseas. Formerly, he has been a supervisory board member of ING Group NV and a director of Raffles Holdings, Singapore. He is also a member of the governing board of the Indian School of Business, Hyderabad, India and a member of the international advisory board of Prudential of America. He is an economics graduate from Delhi University. Aman Mehta also serves as director on the boards of several companies including Wockhardt Limited, Tata Consultancy Services Limited, Godrej Consumer Products Limited, Max Financial Services Limited, PCCW Limited, Vedanta, and Hong Kong Telecommunications Limited. The business address of Aman Mehta is 115 A, 2nd Floor, Jor Bagh, New Delhi – 110 003, India.
Priya Agarwalis one of ourNon-Executive directors and was appointed to our Board with effect from May 17, 2017.2017 and reappointed with effect from May 17, 2020. She brings with her experience in public relations with Ogilvy and& Mather and in human resources with Korn Ferry International, Vedanta Resources and HDFC Bank and in strategic planning with Rediffusion Dentsu Young & Rubicam Private Limited.Y&R. She holds a bachelor’s degree in science, psychology and business managementScience (Psychology) with Business Management from the University of Warwick in the United Kingdom.UK. She anchors Corporate Social Responsibility, Public Relations & Communications for the Group. She is also a director of Anil Agarwal Foundation. She is the daughter of Anil Agarwal. The business address of Priya Agarwal is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India.
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– | Tom AlbaneseUpendra Kumar Sinha was appointed asis one of our Chief Executive OfficerIndependent Directors and Whole Time Director with effect from April 1, 2014. He is also the chief executive officer of Vedanta,non-executive chairman of Konkola Copper Mines and director of Vedanta Resources Holdings Limited and Franco Nevada Corporation. Prior to this, he was the chief executive officer of Rio Tinto from May 2007 to January 2013. Tom Albanese was previously appointed as the chief executive of the Industrial Minerals group in 2000 after which he was appointed as director of group resources in July 2006. Tom Albanese was conferred with the ‘Mining Foundation of the Southwest’ 2009 American Mining Hall of Fame Award for his dedication, knowledge, leadership and inspiration to his peers in the mining industry. Tom Albanese holds a bachelor’s degree in mineral economics and a master’s degree in mining engineering from the University of Alaska. The business address of Tom Albanese is DLF Atria, Phase 2, Jacaranda Marg, DLF City, Gurgaon – 122002, Haryana, India.
Tarun Jain was appointed to our Board as a Whole Time Director with effect from April 1, 2014.March 13, 2018. He has over three decades of experience and has served as the Chairman of 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 the directorvarious acts enhancing corporate governance and disclosure norms. Prior to joining SEBI, he was the Chairman and Managing Director of finance of SIIL. Tarun Jain joined the Group in 1984UTI Asset Management Company Private Limited and has over 32 yearsalso worked for the Department of experience inEconomic Affairs under the corporate finance, auditMinistry of Finance, India. Upendra Kumar Sinha also serves as director on the boards of several companies including Havells India Limited, Housing Development Finance Corporation Limited and accounting, taxAavishkaar Venture Management Services Private Limited, as a Board member at Aavishkaar Foundation, Senior Advisor at Max Healthcare Institute Limited and secretarial practice.Member Advisory Board at Gaja Corporate Advisors Private Limited. He is responsible for our strategic financial matters, including corporate finance, corporate strategy, business development and mergers and acquisitions. Tarun Jain is a graduate of the Institute of Cost and Works Accountants of India and a Fellow Member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India. Tarun Jain is also a directormember of Sterlite USA, BALCO, Vedanta Medical Research Foundationthe Army Group Insurance and Rajtaru Charity Foundation.member of Court of Governors at the Administrative Staff College of India, Hyderabad. The business address of Tarun JainUpendra Kumar Sinha is Vedanta 75, NehruK 94, 2nd Floor, Hauz Khas Enclave, New Delhi - 110 016, India.
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– | Mahendra Kumar Sharma is one of our independent directors and was appointed to our Board effective June 1, 2019. He has over four decades of experience. He retired in May 2007 as the Vice-Chairman of Hindustan Unilever Limited. As Vice Chairman he had responsibility for H.R, Legal & Secretarial, Corporate Affairs, Corporate Communications, Corporate Real Estate functions and new ventures, plantations, and export businesses of the Company. He displays passion for ensuring highest standards of corporate governance and adherence to responsible and ethical conduct in all aspects of business operations. He holds bachelor’s degree in Arts and Bachelors of Law Degree from Canning College, University of Lucknow, completed Post Graduate Diploma in Personnel Management from Department of Business Management, University of Delhi and Diploma in Labour Laws from Indian Law Institute, Delhi. In 1999 he was nominated to attend Advance Management Programme at Harvard Business School. Mahendra Kumar Sharma served on the seven member committee constituted by the GoI for redrafting the Companies Act and was also a member of the Naresh Chandra Committee constituted by GoI which formulated norms for Corporate Governance in India. He is currently the Non-Executive Chairman and Independent Director of United Spirits Limited – Indian subsidiary of Diageo, Atria Convergence Technologies Ltd, (an unlisted public company), an Independent Director of Wipro Limited, Asian Paints Limited, The Anglo Scottish Education Society which runs the Cathedral & John Cannon School in South Mumbai and Non-Executive Non-Independent Director of Ambuja Cements Limited. He also serves on the board of Gwalior Webbing Co. Private Limited, East India Investment Co. Private Limited and Indian School of Business, Hyderabad. He is also the member of National Management Committee and trustee of Indian Cancer Society and Cathedral Welfare Trust. The business address of Mahendra Kumar Sharma is Flat 192-A Wing, Centrum Towers, Barkat Ali Road, Vile Parle (East),Near Wadala East, Mumbai – 400 099,400037, Maharashtra, India. |
– | GR Arun KumarAkhilesh Joshiis our Chief Financial Officer with effect from October 1, 2016a first-class mine manager, who began his career at HZL in 1976 and was appointed as a member of the Board effective November 22, 2016. GR Arun Kumar joined Vedanta in 2013 as chief financial officer of Vedanta Aluminium in May 2013COO and was appointed as deputy chief financial officer of Vedanta in December 2013. In 2014, he moved into the role of executive vice president finance and deputy chief financial officer, as part of which he was responsible for enhancing the capability of the finance functionWhole-time Director in the areasperiod between 2008-2012. He took over as HZL’s CEO and Whole-time Director in the period between 2012-2015. He was designated as President of accounting, risk management, driving value creation, strategic planning,re-financing, board reporting and governance and direct taxation. As a chartered accountant, GR Arun Kumar has over 22 years of experience at global companies such as Hindustan Unilever and General Electric. Prior to joining Vedanta Aluminium, he was the chief financial officer—Asia Pacific (Appliances and Lighting) for General Electric, based out of Shanghai.Vedanta’s Global Zinc Business during 2015-2016. He is alsothe recipient of National Mineral Award 2006, by Govt. of India for his outstanding contribution in Mining Technology and Business Today Best CEO Award (Core Sector) 2013. Akhilesh Joshi serves on the boardboards of BFL, BMM, Sesa Community Development Foundation, Skorpion, Skorpioncompanies like Hindustan Zinc (Proprietary) Limited, Namzinc (Proprietary) Limited, Skorpion Mining Company (Proprietary) Limited, Lisheen, Vedanta Lisheen Mining Limited, Killoran Lisheen Mining Limited, Lisheen Milling Limited, Vedanta Exploration Ireland Limited, Killoran Lisheen Finance Limited, Sesa Resources Limited, Sesa MiningRajasthan State Mines and Minerals Ltd, Ferro Alloys Corporation Limited CMT, Thalanga Copper Mines Proprietary Limited, Sterlite Ports Limited, Maritime Ventures Private Limited, Paradip Multi Cargo Berth Private Limited, Vizag General Cargo Berth Private Limited and Goa Sea Port PrivateFacor Power Limited. GR Arun Kumar holds a bachelor’s degree in commerce from Loyola University, Chennai and is a fellow member of the Institute of Chartered Accountants of India. The business address of GR Arun KumarAkhilesh Joshi is DLF Atria, Phase 2, Jacaranda Marg, DLF City, Gurgaon54, Polo Ground, Udaipur - 313 002, Rajasthan, India.
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– | Sunil Duggal was appointed as the Interim CEO of Vedanta Limited effective April 6, 2020 and subsequently CEO effective August 1, 2020 and Whole-Time Director effective April 24, 2021. Prior to that he was the CEO & Whole-time Director of Hindustan Zinc Limited (HZL), a subsidiary of the Company from year 2015 and completed his tenure in 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 Dy. 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 & digitalisation of operational activities has added great value. He has an Electrical Engineering degree from Thapar Institute of Engineering & Technology, Patiala. He is an Alumni of IMD, Lausanne - Switzerland and IIM, Kolkata. He is serving as Vice Chairman – 122002, Haryana,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. He also serves as a Director of Skill Council for Mining Sector and Federation of India Mineral Industries. The business address of Sunil Duggal is Core-6, 3rd Floor, Scope Complex, 7, Lodhi Road, New Delhi – 110 003, India. |
Executive Officers Dilip Golanicurrently heads the Group’s Management Assurance Services function. He previously headed the sales and marketing division for HZL and group performance management function. Prior to joining the group in April 2000, Dilip Golani was member of the Unilever corporate audit team responsible for auditing Unilever group companies in Central Asia, Middle East and Africa region. Prior to that, he was responsible for managing operations and marketing functions for one of the exports businesses of Unilever India. Dilip Golani has 29 years of experience and has previously worked with organizations such as Union Carbide India Limited and Ranbaxy Laboratories Limited. Dilip Golani holds a bachelor’s degree in mechanical engineering and has completed his post-graduate studies in industrial engineering and management from National Institute of Industrial Engineering, Mumbai, India. The business address of Dilip Golani is Vedanta House, 75, Nehru Road, Vile Parle (East), Mumbai 400099,
– | Sharad Kumar Gargiya has been appointed as Chief Commercial Officer of Vedanta with effect from April 2020. He has been associated with Vedanta Group since October 1998 and has held key senior leadership roles as Chief financial Officer and Chief commercial officer across the group companies. He has been an integral part of the Vedanta group Executive committee and Group Management committee. He is member of the Group Ethics Committee since 2016 and an active member of Group insurance council for over 5 years. He is a versatile leader and has over 22 years of experience in leading high-performance teams, developing and executing strategic initiatives, driving business excellence, and cultural transformation. He has contributed significantly in unlocking the business value through his leadership and strategic roles at Telecom cable, Copper, Aluminum and Power business and Zinc. He has a proven track record of adopting best-in-class technologies and processes to increase efficiencies and optimize cost with a focus on building automation and digitalization of operational activities. The business address of Sharad Kumar Gargiya is Vedanta House, Nehru Road, Mumbai, Maharashtra, India. |
– | Madhu Srivastava was appointed as the Chief Human Resources Officer of Vedanta in December 2018. She has been associated with Vedanta for more than eight years and in her earlier role, she was the Chief Human Resources Officer of Cairn- -oil and gas business for close to three years. During this time, she was also leading the Talent Acquisition and Diversity and Inclusion functions for Vedanta. Under her leadership, the Vedanta Group has put in place the right Human Resource policies, progressive and benchmarked people practices and frameworks for talent acquisition talent management, performance management, and rewards and recognition. She has 21 years of experience across human resource as well as sales, marketing and operations, spanning the Fast-Moving Consumer Goods (“FMCG”), telecom, Information Technology Enabled Service (“ITES”), Banking, financial services and insurance (“BFSI”) and natural resources industries. Madhu 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. Post working with companies like GE Capital and Reliance in operations and marketing profiles, she started her Human Resources journey in 2006 by joining Genpact as Assistant Vice President, Talent Acquisition where she led middle management hiring. She then went on to lead the recruitments for Citibank’s India operations as Vice President, Human Resource before joining Vedanta in 2012. Madhu has completed her Post Graduate Diploma in Management (“PGDM”) in marketing and sales, from the Indian Institute of Management, Ahmedabad The business address of Madhu Srivastava is Core – 6, 3rd Floor, SCOPE Complex 7, Lodhi Road, New Delhi – 110003, India. |
Mansoor Siddiqiwas appointed as the Group Directorin-charge of projects in September 2011 and is currently in contracting capacity with Vedanta since February 2017. He was formerly chief executive officer, Aluminium and led the establishment of the Group’s large aluminium and power projects including BALCO smelters and captive power plants. He also played a key role in setting up the Group’s copper smelter at Tuticorin and copper refinery at Silvassa. Mansoor Siddiqi joined our Group in 1991. Prior to joining our Group, Mansoor Siddiqi held senior positions at Hindustan Copper Limited and has 41 years of experience in various areas of operations and project management. Mansoor Siddiqi holds a bachelor’s degree in technology from the Indian Institute of Technology, Delhi, and a post graduate diploma in management from the All India Management Association, Delhi. The business address of Mansoor Siddiqi is 16 Berkeley Street, London W1J 8DZ, United Kingdom.
– | Dilip Golani currently heads the Vedanta Management Assurance Services function as President, Management Assurance Services. He previously headed the sales and marketing division for HZL and the Vedanta performance management function. Prior to joining the group in April 2000, Dilip Golani was a member of the Unilever corporate audit team responsible for auditing the Unilever group companies in Central Asia, Middle East and Africa region. Prior to that, he was responsible for managing operations and marketing functions for one of the exports businesses of Unilever India. He has over 30 years of experience and has previously worked with organizations such as Union Carbide India Limited and Ranbaxy Laboratories Limited. Dilip Golani holds a bachelor’s degree in Mechanical Engineering and has completed his post graduate studies in Industrial Engineering and Management from the National Institute of Industrial Engineering, Mumbai, India. The business address of Dilip Golani is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India. |
– | Varun Kapoor was appointed as Director – Investor Relations for Vedanta on January 2, 2021. Prior to this role, he was the Chief Strategy & Business Excellence of Cairn Oil and Gas business. He is working towards enhancing the quality, depth and diversity of our shareholder base and investors to ensure optimum valuation for the Company. Mr. Kapoor has more than 18 years of rich leadership and employee experience, having joined Cairn in 2008 and worked in various domains like Mergers & Acquisitions, Commercial & New Business, Gas SBU Asset Management, Business Strategy, Corporate Planning and Business Excellence. Prior to joining Cairn, Mr. Kapoor had experience in buy-side and sell-side equity research with top tier funds and banks like Fidelity, Deutsche Bank, S&P Crisil. He holds a PGDM from IIM Calcutta and a Masters & a Bachelor’s degree in Economics from Delhi University. The business address of Varun Kapoor is Core – 6, 3rd Floor, SCOPE Complex 7, Lodhi Road, New Delhi – 110003, India |
– | Andrew Lewin joined us as Group Health, Safety, Environment and Sustainability Head in February 2020. He has over 33 years of experience within mining and oil and gas industries. Previously, he was Managing Director at Spectrum Risk Consulting, Australia. He has also held a number of senior roles at BHP Billiton, Newmont Mining Corporation and other companies across USA, Australia and UK with responsibility for health, safety, environment and sustainability assurance. He has done PhD in Chemistry from University of Waterloo and Postgraduate Diploma in Health and Safety from Aston University, England. He also holds M.Sc. degree in Physics from The University of Manchester, and a B. Sc. (Hons) degree in Chemistry from University of Bristol. The business address of Andrew Lewin is Hindustan Zinc Limited, Yashad Bhawan, Udaipur- 313 004, Rajasthan, India. |
– | Roma Balwani was appointed as Senior Director of Communications and Brand with effect from December 2020. Prior to this she was holding position as Director of Communications and Brand since October 2019. Earlier she was Sr. Advisor from April 2019. Roma’s prior stint with Vedanta was as President- of Group Communications, Sustainability and Corporate Social Responsibility from April 2014 till August 2017. Prior to joining our company, she was Chief Communications Officer at Mahindra and Mahindra Limited. With over three decades of experience, she has won several Indian and International awards and accolades and she speaks at several Summits on Sustainable Development and Communications in India and overseas. She has the distinction of being included for 3 consecutive years in the Holmes Global Report, USA, a recognition in the Global Influence 100 listing of In-house Communicators. She is a Director on the board of John Cockerill, India (formerly “CMI FPE Ltd”). the Indian subsidiary of the Belgian company John Cockerill. Roma also chairs the CSR and NR committees as a board member. She did her graduation in economics from Mumbai University and post-graduation (Diploma) in marketing management from Sasmira’s Institute of Management Studies and Research, Mumbai and has completed executive management program at Harvard Business School, Massachusetts, USA. The business address of Roma Balwani is 75 Nehru Road, Vile Parle (East), Mumbai, Maharashtra 400099, India. |
– | Dhiraj Nayyar was appointed as Director, Economics and Policy in October 2019. Prior to this, he was the Chief Economist of Vedanta Limited since October 2018. Before joining Vedanta, he was Officer on Special Duty and Head, Economics, Finance and Commerce at NITI Aayog, GoI from October 2015 till October 2018. He has more than 15 years of experience in economics domain. In this role, functionally equivalent to Joint Secretary, GoI, 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 Government, Dhiraj 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. Dhiraj did BA Honours in economics from St. Stephen’s College, Delhi University, M.A. 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. The business address of Dhiraj Nayyar is Core – 6, 3rd Floor, SCOPE Complex, 7, Lodhi Road, New Delhi – 110003, India. |
– | Leena Verenkar was appointed as Head of Corporate Social responsibility (Vedanta) in October 2019. In addition to the current responsibilities, she also holds the charge as the Chief of Advocacy & Public relations and Head of Corporate Social responsibility for Sesa Iron Ore Business since 2015. Prior to this, she was Head of CSR of Iron Ore Goa since 2010. Leena started her career with our company in 1996, in the field of environment management and compliance and led the environment team for 12 years. She has more than 25 years of experience in environment management, community relations, advocacy and public relations. Leena holds master’s degree in microbiology from Goa University and in ecology and environment from Bhopal University, India. She has Fulbright Scholarship by US foundation in India and LEAD fellowship by Lead India. She is also recognized as Women Leader of the year by Economic Times and 100 most impactful CSR leaders (a global listing) by World CSR in 2017. Leena has been a recipient of Great Manager’s award in 2019. The business address of Leena Verenkar is Vedanta Limited, Sesa Goa Iron Ore, Sesa Ghor, 20 EDC Complex, Patto, Panjim, Goa- 403001, India. |
– | Anand Laxshmivarahan was appointed as Interim Chief Digital Officer (“CDO”) for Vedanta Limited in June 2020. His current responsibilities entail driving digital led interventions across the business with a focus on achieving organization’s goals on enhanced reserves, improved recovery, enhanced Health, Safety, Security and Environment (“HSSE”), operational and people excellence. Anand joined Vedanta in 2018 as Chief Digital Officer in the Oil & gas business. Anand is a Digital Transformation Leader with over 21 years of industry experience working with global multinationals in various key business and technical roles. He has two decades of exposure to systems and technologies within Oil & Gas and Manufacturing domains. His previous experiences include Oil & gas consulting working with global majors on Digital Transformation programs Prior to that he has had experiences working with industrial automation companies focusing on process control and automation systems within Manufacturing and Oil & gas. He has worked with companies like Wipro Technologies, Honeywell, General Electric and Siemens. Anand has completed his BE in Electronics and Telecommunication from Dr, Babasaheb Ambedkar Marathwada University, Maharashtra and Masters from Indian Institute of Management, Bangalore. The business address of Anand Laxshmivarahan R is ASF Center, Tower B, 362-363, Jwala Mill Road, Phase IV, Udyog Vihar, Gurugram, Haryana 122016, India. |
Samir Cairaewas appointed as Chief Executive Officer, Diversified Metals (India) in January 2016. He provides operational and strategic leadership for Vedanta Limited’s aluminium, copper, power and iron ore divisions in addition to the commercial and asset optimization functions. Prior to his appointment at Vedanta Limited, Samir Cairae held various senior leadership positions in global operations at the Lafarge group and Schlumberger Limited. He has wide experience in a number of corporate roles in strategy, mergers and acquisitions, industrial operations, in managing both growth and turnaround profit or loss roles in India, China, Philippines, France and has held senior positions in several complex businesses, including listed companies. In his last role before joining Vedanta Limited, he was heading the global industrial function for Lafarge’s 150 cement operations in over 45 countries and was based in Paris. Samir Cairae holds a graduate degree in electrical engineering from Indian Institute of Technology, Kanpur, and a master’s degree in management from the Hautes Etudes Commercials School of Management, Paris. The business address of Samir Cairae is DLF Atria, Phase 2, Jacaranda Marg, DLF City, Gurgaon – 122002, Haryana, India.
Suresh Bose was appointed as the Head of Group Human Resources with effect from September 2015. Suresh Bose has 25 years of extensive experience in human resources, of which 15 years have been with the Vedanta Group where he has worked across different business units (including aluminium, copper and corporate) in human resource specialist roles. Prior to joining Vedanta Limited, Suresh Bose has been associated with HMT Limited, Larsen & Toubro Limited, Ford India Private Limited and Mahindra & Mahindra Limited. He also brings international human resource work experience of four years from Armenia Gold Recovery Company, Armenia. Suresh Bose has a dual master’s degree in personnel management and industrial relations from Tata Institute of Social Sciences, Mumbai and Institute of Social Studies, Hague, Netherlands. The business address of Suresh Bose is DLF Atria, Phase 2, Jacaranda Marg, DLF City, Gurgaon – 122002, Haryana, India.
Philip Turnerwas appointed as Head of Group Health Safety Environment and Sustainability with effect from July 2017. He joined us as Head of Group Health and Safety in September 2014. He has over 35 years of experience within mining, heavy engineering and manufacturing organizations. He was previously General Manager Risk and Sustainability of JK Tech Pty Limited, Australia. He has also previously held a number of senior corporate and operational roles at Rio Tinto Group, Australia, Canada and United Kingdom including responsibility for health safety and environment and sustainability assurance. He has held senior roles at mining companies, North Limited and at BHP Petroleum’s offshore operations. He has a Master of applied science in risk engineering from Ballarat University, Australia, bachelor’s degree in science from Deakin University, Australia, Graduate Diploma in occupational hygiene from Deakin University, Australia and Graduate Diploma in occupational hazard management from Ballarat C.A.E. The business address of Philip Turner is DLF Atria, Phase 2, Jacaranda Marg, DLF City, Gurgaon – 122002,
– | Vikash Jain was appointed as the Vedanta General Counsel (Interim) for legal matters across the group in March 2021. In addition to the said responsibilities, he also continues to hold the charge as the General Counsel – Oil & Gas Business, Vedanta Limited. He joined our company in March 2016 as Vice President and General Counsel – Aluminium Business. He has over 25 years of experience in handling complex litigations, contract negotiations, regulatory issues, compliance assurance, mergers and acquisitions, foreign collaborations, joint ventures, advocacy, investors’ relations and Taxation (Direct & Indirect) etc. Prior to joining our company, he has experience working with organizations like Transocean, Jubilant Group, Hindustan Oil Exploration Company Limited, Endurance Group etc. He is a law graduate. He is also a qualified company secretary and an associate member of the Insurance Institute of India. He is also doing his Executive MBA from Indian School of Business, Hyderabad. The business address of Vikash Jain is Cairn Oil & Gas – Vedanta Limited, ASF Center, Udyog Vihar, Phase IV, Gurugram, Haryana, India. |
– | Ajay Goel has been appointed as Deputy Chief Financial Officer of Vedanta Limited, effective March 23, 2021 based at Delhi. In this role, Ajay is responsible for Financial Planning & Analysis, Accounting and Consolidation, Controllership, Audit, Tax, Secretarial & Compliance and Risk management. He is driving business performance monitoring and reporting with focus on benchmarking and analytics. Ajay is a national rank holder both as Chartered Accountant and Company Secretary. He brings 21 years of rich experience in global multinational companies like General Electric, Nestle, Coca Cola and Diageo. Ajay joins us from Diageo - USL and under his leadership, the company achieved highest standards of Corporate Governance, Reporting, Tax management, Treasury restructuring, Optimization of borrowing costs. The business address of Ajay Goel is Core – 6, 3rd Floor, SCOPE Complex 7, Lodhi Road, New Delhi – 110003, India |
– | Phillip Campbell has been an advisor, for Vedanta Asset Integrity and Lanjigarh Expansion since January 2020. Phil joined Vedanta as the Director of Lanjigarh Refinery in January 2018 and he has over 40 years of experience within the mining industry. Previously, Phil was Vice President – Mine and Refinery Operations at Maaden, Saudi Arabia. Phil has held senior roles at Queensland Alumina Limited, UC Rusal and Alcoa across the Middle East, Australia and Russia with responsibility for asset optimization and production management. Phillip has a Master’s degree in Metallurgy from the University of Wollongong. The business address of Phillip Campbell is 7 Clive Street Bicton 6157 WA, Australia. |
Other Significant Employees Zinc India Business Sunil Duggalwas appointed as the Chief Executive Officer and Whole Time Director of HZL in October 2015. He joined HZL in August 2010 as executive director, became chief operating officer in the April 2012 and was deputy chief executive officer from April 2014, before becoming chief executive officer and whole time director of HZL. A result oriented professional with over 32 years of experience of leading high performance teams and more than 18 years in leadership positions. He is known for his ability to keep a level head at all 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 efforts on sustainability front has helped build a robust safety and sustainability culture. He is also serving as vice chairman of International Zinc Association, president of Indian Lead Zinc Development Association, chairman of FIMI Non Ferrous Metals Committee andco-chair of the FICCINon-Ferrous Metals Committee 2017. Recently, he has been appointed as chairman, Skill Council for Mining Sector, India. Sunil Duggal holds a bachelor’s degree in electrical engineering from Thapar Institute of Engineering and Technology, Patiala. He has participated in a leadership development and management development program at the International Institute for Management Development, Lausanne, Switzerland and the Indian Institute of Management, Kolkata, India.
– | Arun Misra has been appointed as Chief Executive Officer, HZL effective August 2020. Prior to this he held the position of Deputy Chief Executive Officer, HZL since joining the company on November 20, 2019. In his previous role, he was associated with TATA Steel Limited as Vice President of raw materials. He has 32 years of rich and diverse experience in leading various strategic positions within TATA steel. Arun Misra has a bachelor’s degree in electrical engineering from IIT Kharagpur, a diploma in mining and beneficiation from University of New South Wales Sydney and a diploma in general management from CEDEP, France. The business address of Arun Misra is Hindustan Zinc Limited, Yashad Bhawan, Udaipur- 313 004, Rajasthan, India. |
Amitabh Gupta was appointed as the Chief Financial Officer of HZL in November 2011 and is responsible for its finance and accounting, legal and secretarial, treasury and investor relations, direct and indirect tax and information technology. Prior to this, he was the chief financial officer of Moser Baer Solar Limited. He has over 29 years of experience in finance and has worked at various companies including Cargill India, TeleTech India (Bharti Group) and Ranbaxy Laboratories Limited. He is a bachelor’s degree in Commerce from Shriram College of Commerce, New Delhi. He was awarded the Best Chief Financial Officer in the metal sector in India by CNBC-TV18 in 2014. Amitabh Gupta is a member of the Institute of Chartered Accountants of India and the Institute of Cost Accountants of India.
– | Vinaya Jain was appointed as senior vice president, and head finance of HZL in April 2021. He has an MBA from Duke University and is a gold medalist in engineering from IIT-BHU (Banaras Hindu University). He brings 25 years of rich experience in global multinational companies like General Motors and Infosys across India, the United States, Europe, and Africa in areas of Finance Business partnering, treasury, capital markets, M&A, and supply chain. He has held CFO roles at General Motors and Bira 91. The Business address of Vinaya Jain is Hindustan Zinc Limited, Yashad Bhawan, Udaipur- 313 004, Rajasthan, India. |
Zinc International Business Deshnee Naidoowas appointed as the Chief Executive Officer of Zinc International and Copper Mines of Tasmania (CMT) in February 2015. Deshnee Naidoo has over 18 years of experience in the resources industry including platinum, thermal coal and manganese. Prior to joining the Group, she was with Anglo American as chief financial officer - Thermal Coal in South Africa. She had previously held various technical and commercial positions across Anglo American. She was awarded the JCI/Anglo Platinum bursary in 1994 to receive a bachelor’s degree in science (chemical engineering) at University of Natal, Durban, South Africa. She joined Anglo American in 1998 as a trainee metallurgist at the Precious Metals Refinery and over a 16 year span she held various roles including process engineering (corporate office), process control, strategic long-term planning, corporate finance, chief executive officer’s office and chief financial officer - Thermal Coal at Anglo American in which her responsibilities entailed management of two commodity groupings (thermal coal and manganese) across three regions (South Africa, South America and Australia).
– | Laxman Shekhawat was appointed as Business Head, anchoring the Management Committee of Vedanta Zinc’s International Division and CMT to drive business growth on April 24, 2020. Previously, he held the role of Director of Operations of HZL from February 2019. He holds a Bachelor’s degree in Mining engineering and has been working with HZL since 1990. With an experience of over 30 years in mining and engineering, he has served in various leadership positions in mining and engineering companies for more than a decade. He is instrumental in developing and executing strategies to unlock the full potential of HZL mines and bring the best practices in mining portfolio. In 2017, he was awarded with prestigious “National Geoscience Award” by the President of India. The business address of Laxman Shekhawat is Green office, Aggeneys, Northern Cape, Republic of South Africa. |
– | Pushpender Singla is the executive director and business CFO at Vedanta Zinc International. He was appointed as the Chief Financial Officer (“CFO”) of Vedanta Zinc international and CMT Australia Business in October 2016. He was earlier appointed as the Deputy Chief Financial Officer of Vedanta Zinc international and CMT Business in November 2015. He has over 14 years of experience in the mining and metal industry across India, Australia and Africa and served Aluminum, Power, Copper and Zinc Business in Group. He joined the Group in February 2007. During his tenure within the Group, he has handled various functions including project finance, treasury, trade finance, business and financial control, commercial, marketing, legal, information technology and advocacy. He is Director of Vedanta companies in Africa, Australia and Ireland including Black Mountain Mining Pty Ltd. He is Director of, Vedanta Lisheen Holding Ltd, Killoran Lisheen Finance Limited, THL Zinc Namibia Holding (Pty) Ltd and Skorpion Zinc (Pty) Limited. He was Chairman as well as Director of International Zinc Association, Africa before it merged with IZA Global. He also represents as a Treasurer of CII Indian Business Forum (South Africa), an India South Africa Industry Body. Pushpender Singla has a bachelor’s degree in commerce from Maharaja Ganga Singh University, Bikaner, Rajasthan and is an associate member of the Institute of Chartered Accountant of India and South Africa Institute of Chartered Accountants (“SAICA”). The business address of Pushpender Singla is Vedanta Zinc International, 2 Maude Street, 11th Floor, The Forum Building, Sandton, 2196, South Africa |
Oil and Gas Business Sudhir Mathur was appointed as the Chief Financial officer of our oil and gas business in September 2012. On May 20, 2016, Sudhir Mathur was appointed as the acting Chief Executive Officer of oil and gas business with effect from June 5, 2016. He has over 31 years of experience working in various industries such as telecommunications, manufacturing, infrastructure and consulting. He began his career with PricewaterhouseCoopers in 1986. Prior to joining the Group, he was the chief financial officer, Aircel Cellular Limited and was responsible for strategy, finance, supply chain management and regulatory affairs. He has substantial expertise, knowledge and experience in several key areas of finance and strategic planning, with a proven track record in deploying significant capital to enable value creation. He has also played a pivotal role in his previous assignments in accelerating business growth. He has previously also held senior executive positions in Delhi International Airport Ltd., Idea Cellular, Ballarpur Industries Limited and Price Waterhouse Coopers India. Sudhir Mathur holds a bachelor’s degree in economics from Shri Ram College of Commerce and a master’s degree in business administration from Cornell University.
– | Prachur Sah joined the Vedanta as Director - New Ventures and Reserves of Cairn from August 21, 2018 and was made Deputy Chief Executive Officer of Cairn Oil & Gas on October 19, 2020. He has since played a key role towards realizing Cairn’s broader vision and is responsible for unlocking value through monetization of our new Exploration Blocks under OALP. Prior to joining Vedanta, Prachur had 19 years of rich and diverse experience at Schlumberger and has worked across geographies including Houston, South America, UAE and India. At Schlumberger, he held various roles in Operations, Transformation and Business Development, and left Schlumberger as the Managing Director for India, Bangladesh and Sri Lanka. He holds a bachelor’s degree in Electrical and Electronics from IIT – Mumbai and a master’s degree in Oil and Gas Management from Heriot Watt University, Edinburgh. The business address of Prachur Sah is ASF Center, Tower A, 362-363, Jwala Mill Road, Phase IV, Udyog Vihar, Gurugram, Haryana 122016, India. |
– | Hitesh Vaid leads the Finance function of Cairn Oil & Gas. As part of Oil and Gas leadership team, Hitesh Vaid plays a critical role in business partnering and realizing the full business potential through business delivery, focusing on financial achievement through cost optimization and control, process efficiency improvement, capex planning, cash management and financial accounting & reporting. Hitesh is a graduate in Commerce from Shri Ram College of Commerce (“SRCC”), Delhi University and qualified as Chartered Accountant from The Institute of Chartered Accountants of India. He brings in 17 years of work experience in the Oil & gas Business. Prior to joining Cairn in 2007, Hitesh worked with Bharat Petroleum Corporation Limited for 4 years as part of the Management Reporting team. The business address of Hitesh Vaid is ASF Center, Tower A, 362-363, Jwala Mill Road, Phase IV, Udyog Vihar, Gurugram, Haryana 122016, India. |
Iron Ore and Steel Business Rajagopal Kishore Kumarwas appointed as the Chief Executive Officer of our iron ore business with effect from February 2, 2015. Prior to this, he was appointed as the chief executive officer (base metals) Africa with Konkola Copper Mines Plc, Zinc International business and CMT since August 2013. He was earlier appointed as the chief executive officer of our Zinc International Division with effect from February 2011. Prior to this, Rajagopal Kishore Kumar headed our copper business at Konkola Copper Mines Plc since 2008 and Sterlite Copper India Limited since 2006. He has more than 29 years of experience in accounting, marketing, supply chain management, merger and acquisitions and business turnaround. Rajagopal Kishore Kumar joined our Company in April 2003 as vice president of marketing for HZL and became senior vice president of marketing for our copper division from June 2004 to December 2006, where he was responsible for copper marketing and concentrate procurement. Prior to joining our Company, Rajagopal Kishore Kumar was employed by Hindustan Unilever Limited for 12 years. Rajagopal Kishore Kumar holds a bachelor’s degree in commerce Kolkata University and is a member of the Institute of Chartered Accountants of India.
– | Sauvick Mazumdar is holding the position of Chief Executive Officer of Iron and Steel Business since 10th May 2021. Before this, he was Chief Executive Officer – Sesa Goa, to which he was appointed on July 12, 2019. Prior to that role he the Deputy Chief Executive Officer of Iron Ore Business and Vice President since October 1, 2016. Sauvick joined the organization in the year 1994 and is a home grown leader who rose to the ranks from a GET to CEO. He is a well-seasoned executive with 24+ years of extensive experience, having built a solid reputation for achieving business growth through strategic direction, diverse perspectives and positive leadership. He is presently responsible for the overall operations and expansion projects of the Iron Ore & Ferro Alloys business within India — Goa & Karnataka along with Value Added Business (Pig Iron, Met coke, and Power), Jharkhand, Bellary, overseas projects at Liberia and Ferro Alloys business at FACOR in Odisha. Sauvick 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. The business address of Sauvick Mazumdar is Vedanta Limited, Sesa Goa Iron Ore, Sesa Ghor, 20 EDC Complex, Patto, Panjim, Goa- 403001, India. |
Azad Shaw was appointed as the Chief Financial Officer of our iron ore business in October 2016. He has 17 years of post-qualification experience and joined Vedanta group in 2001. He has handled various roles in our Group including leadership positions in finance verticals at BALCO and HZL before moving to our iron ore business. Azad Shaw is a member of the Institute of Chartered Accountants of India.
– | Navin Kumar Jaju has been appointed as the Chief Financial Officer of Iron Ore Business in April 2020. He joined Vedanta in March 2005. Navin Kumar Jaju has over 15 years of experience in Finance, Accountancy, Audit, Taxation, Treasury and Corporate Governance. In his current role as a Chief Financial Officer he oversees the Finance, Information Technology and Secretarial functions of Sesa Goa Iron Ore. Prior to joining the Iron ore Business of Vedanta, Navin Kumar Jaju has worked in our Group Companies like HZL and BALCO and Corporate Office. He is a B. Com graduate from St. Xavier’s College and a Chartered Accountant from the Institute of Chartered Accountants of India. The business address of Navin Jaju is Vedanta Limited, Sesa Goa Iron Ore, Sesa Ghor, 20 EDC Complex, Patto, Panjim, Goa- 403001, India. |
– | Navanath Vhatte has been appointed as Chief Executive Officer and Whole Time Director of ESL Steel Limited w.e.f. 10th May 2021. Mr. Vhatte is associated with Vedanta since 1993 and has held various senior management positions. Prior to moving ESL as CEO-ESL Steel Limited, he was heading the Value Addition Business (VAB) of VEDL. In this role, he was responsible for the growth of the VAB along with Plant Operations, Sales of Pig Iron, Met Coke and Power. His leadership and strategic approach have helped VAB to become the largest merchant pig iron producer in India at the lowest cost among peer groups. Mr. Vhatte championed the successful expansion of Pig Iron, Met Coke and Power Plant raising the unit capacity to 800 K Mt of Pig Iron. Previously, he has 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. Mr. Vhatte holds Diploma in Electrical Engineering (DEE) from Government Polytechnic Maharashtra, and Graduation in Elect. Engineering (AMIE)from Institute of Engineers and MBA in Finance from IGNOU. The business address of Mr. Vhatte is ESL Steel Limited (Formerly known as Electrosteel Steels Limited) Vill. Siyaljori, Post - Jogidih, O.P. - Bangaria, P.S. - Chandankyari, Bokaro - 828303, Jharkhand. |
Copper Business P. Ramnathwas appointed the Chief Executive Officer of our copper operations in Tuticorin, Silvassa and Fujairah Gold FZC in September 2011 and has over 30 years of experience in chemicals, specialty chemicals, manufacturing and paper industries. Prior to joining our Group, he worked at Jubilant Life Sciences, Praxair India, SNF Ion Exchange, Bakelite Hylam Limited and Reliance Industries Limited. He is also a director of Malco Energy Limited. Prior to joining us, he was the chief operating officer of JK Paper Limited. P. Ramnath holds a bachelor’s degree in technology from Osmania University, Hyderabad and holds a post graduate diploma from the Indian Institute of Management, Bengaluru
– | Pankaj Kumar was appointed the Chief Executive Officer of our copper operations in Tuticorin, Silvassa and Fujairah Gold FZC and director of MEL in March 2019. In his career of over 30 years, Pankaj has worked with large conglomerates like Tata Steel, Mittal Steel, Adani ports, Gujrat Guardian Limited and United Breweries Limited. Prior to joining us at Sterlite Copper as Chief Executive Officer he was the Chief Operating Officer at Hindustan Zinc Limited. Pankaj holds a bachelor’s degree of Technology (Hons.) in Mechanical Engineering from Indian Institute of Technology Kharagpur and Post Graduate diploma in Business Management with specialization in Operations Management and Information Technology from XLRI - Xavier School of Management, Jamshedpur, India. The business address of Pankaj Kumar is SIPCOT, Industrial Complex, Madurai Bypass Road, Thoothukudi, Tamil Nadu- 628002, India. |
Anup Agarwal was appointed as the Chief Financial Officer of our copper operations in Tuticorin and Silvassa in January 2015. Anup Agarwal is a Bachelor of Commerce from S. P. Mahavidyalaya, Bijainagar, Rajasthan, a member of the Institute of Chartered Accountants of India and the Institute of Cost and Works Accountants of India. He has 20 years of post-qualification experience in the manufacturing industry and joined Vedanta group in 2002. He has handled various roles in our Group including leadership positions in finance verticals at BALCO, Jharsuguda and Talwandi Sabo Power Limited before moving to our copper operations in Tuticorin and Silvassa.
– | Anand Soni has been appointed as the Chief Financial Officer of our copper operations in Tuticorin and Silvassa in June 2020. He has 18 years of post-qualification experience and joined Vedanta group in May 2002. He has handled various business roles in the Group including general management positions in finance verticals at Vedanta’s Aluminium & power division and Konkola Copper Mines Plc, Zambia before moving to our copper business. Anand has a bachelor’s degree in commerce from the University of Rajasthan and is an associate member of the Institute of Chartered Accountants of India & the Institute of Company Secretaries of India. The business address of Anand Soni is SIPCOT, Industrial Complex, Madurai Bypass Road, Thoothukudi, Tamil Nadu- 628002, India. |
AluminiumAluminum and Power Business
Abhijit Pati was appointed as Chief Executive Officer of our aluminium business in March 2015. Prior to this role, he was the president and chief operating officer of our aluminium and power business at Orissa since April 2012. He has over 29 years of experience in aluminium industry. Prior to joining us, he was the vice president with Hindalco Industries Limited. He started his career as a budding engineer with Indian Aluminium Company in the year 1989. He was awarded with the ‘Exceptional Contributor Award’ from the Aditya Birla Group Chairman, Mr. Kumar Mangalam Birla for significant contribution to turn around Hirakud Aluminium Smelter in the year 2006 and won the prestigious British Sword of Honor for the Hirakud Smelter in the year 1999. He is a member of the National Energy Commission, GoI. He is two times gold medalist from prestigious institutes like Calcutta University and International Management Institute, New Delhi. Abhijit Pati is a first class honours bachelor’s degree in chemical engineering from Calcutta University and a master’s in business administration from International Management Institute, New Delhi.
– | Ajay Kapur was appointed as Chief Executive Officer, Aluminium and Power in March 2019 and took on an additional role as Managing Director of Commercial on 24 November 2020. Ajay leads the Aluminium and Power business for Vedanta comprising of 2.3mtpa installed smelter capacity, 8GW of Power and 2mtpa of Alumina Refinery. Prior to his appointment at Vedanta Limited, Ajay was Managing Director and Chief Executive Officer for Ambuja Cements. He started his career as an Executive Assistant to then founder and Managing Director. He went on to handle various strategic positions at Ambuja cements with his last position as Managing Director and Chief Executive Officer. Ajay Kapur holds a graduate degree in economics from St. Xavier’s College, Mumbai, MBA from KJ Somaiya Institute, Mumbai and is an alumnus of Wharton’s Advanced Management Program. The business address of Ajay Kapur is Vedanta House, Nehru Road, Mumbai, Maharashtra, India. |
– | Chhavi Nath Singh is Chief Executing Officer (Interim) of our Aluminium business- Jharsuguda in July 2019. He had joined Vedanta in 2016 as Chief Operating Officer of Talwandi Sabo Power Ltd. He has a rich experience of 38 years in Power Industry and played a pivotal role in stabilization of TSPL operations, He has also worked for companies like National Thermal Power Corporation Ltd., Essar Power and JSW Energy Ltd. He has a post graduate degree (“PGDBM”) from Management Development Institute, Gurgaon and a bachelor’s degree in mechanical engineering from Motilal Nehru National Institute of Technology, Allahabad (formerly Motilal Nehru Regional Engineering College). The business address of Chhavi Nath Singh is Vedanta Limited, Jharsuguda, PMO Office, Bhurkahamunda PO- Sripura District Jharsuguda, Odisha- 768202, India. |
– | Abhijit Pati was appointed as Chief Executive Officer & Whole Time Director of Bharat Aluminium Company Limited (Balco). on July 25, 2019, prior to this he was CEO of our Aluminium business, Jharsuguda from March 2015. Earlier he was the president and Chief Operating Officer of our aluminium and power business at Odisha since April 2012. He has over 32 years of experience in aluminium industry. Prior to joining us, he was the vice president with Hindalco Industries Limited. He started his career as a budding engineer with Indian Aluminium Company in the year 1989. He was awarded with the ‘Exceptional Contributor Award’ from the Aditya Birla Group Chairman, Mr. Kumar Mangalam Birla for significant contribution to turn around Hirakud Aluminium Smelter in the year 2006 and won the prestigious British Sword of Honor for the Hirakud Smelter in the year 1999. He is a member of the Bureau of Energy Efficiency under Ministry of Power, GoI. He is also holding the position of Vice President in Aluminium Association of India and member of Governing body. He is two times gold medalist from prestigious institutes like Calcutta University and International Management Institute, New Delhi. Abhijit Pati has a first class honours bachelor’s degree in chemical engineering from Calcutta University and a master’s in business administration from International Management Institute, New Delhi. |
– | Vikas Sharmawas appointed the Chief Executive Officer of TSPL - our power business in July 2019 He was appointed as Whole Time Director designated as CEO & WTD effective from Oct 2019, prior to his stint at TSPL he was appointed as Chief Executing Officer & Whole Time Director of BALCO in March 2017. Vikas2017.Vikas Sharma has experience of over 2831 years in various national and multi-national companies. He has experience of serving 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. Vikas Sharma joined Vedanta Group as location head of Chanderiya Smelter of HZL in 2012 and was gradually elevated to the chief operating officerChief Operating Officer of smelters division of HZL in June 2014. During his tenure at HZL,Vedanta, he played integral role in the growth of the companyCompany and made significant contribution in smelter production.safety, productivity and people development. Vikas Sharma holds bachelor’s degree with honorsHonors in mechanical engineeringMechanical Engineering from Engineering College Kota, University of Rajasthan and a master’sMaster’s in business administrationBusiness Administration in marketingMarketing from Sikkim Manipal University, Gangtok, India. The business address of Vikas Sharma is Village Banawala, Mansa - Talwandi Sabo Road, Distt. Mansa, Punjab - 151302, India. |
– | Ajay Kumar DixitRahul Sharma was appointedjoined the Vedanta Group in 1998, and is the deputy Chief Executive Officer of AluminaAluminium Business since February 2017. He is also supporting in the TSPL business. He joined the Group as chief executive officer of our power business in May 2015. He has 36 years of experience in the power industry and joined Vedanta Limited in May 2015.24 November 2020, Prior to this role, he was theworked as Chief Executive Officer – Energy with Siemens, responsible(Acting) of Alumina Business from April 2019 and as Director of Corporate Strategy (Aluminium and Power). He joined Vedanta in 1998. Rahul Sharma has diversified experience of over 25 years and has held leadership positions at Vedanta Limited and Sterlite Technologies Limited. Prior to joining Vedanta, he was Chief Marketing Officer (Domestic and International) and Business Head of System Integration Business at Sterlite Technologies Limited. He is one of the principal figures of India’s Metal & Mining industry and has been playing and has been playing a significant role in driving various policies and creating a strategic framework for the overall operationsnumerous government reforms for development of South Asia. He has wide experienceexploration, mining and non-ferrous metal sector in the fieldcountry in the most sustainable manner. Rahul is also the office bearer of entire energy chain comprisingvarious eminent industry associations, including the current President of power generation, automation, transmissionAluminium Association of India (AAI), Chairman of Indian Captive Power Producers Association (“ICPPA”), and distribution. He alsoCo-Chair of FICCI’s Mining Committee. For his exemplary leadership he has experiencebeen conferred with various awards and accolades including People’s CEO of the year award 2020 and `Business Leader of the year award at International Conference on Non-Ferrous Metals-2017 for his contribution to India’s Metal and Mining industry. Rahul is an alumnus of IIM –Ahmedabad Executive General Management program, has an MBA in manufacturingMarketing and setting up plantsa B.E. in South Asia, Middle EastElectronics and Africa. Ajay Kumar Dixit holds a bachelor’s degree in electrical engineering fromCommunication The business address of Rahul Sharma is Core – 6, 3rd Floor, SCOPE Complex, 7, Lodhi Road, New Delhi College of Engineering.– 110003, India.
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– | Bharat GoenkaSonam Donkar was appointed as Deputy Chief Financial Officer of our aluminium business in July 2017August 2020 for taking care of the overall finance function for the aluminium business.function. Sonam is part of Vedanta group since October 2018. Prior to joining us, Bharatshe has worked with Hindustan Unilever Limited. He hasFortune 500 giants like PepsiCo, Dell Computers, Standard Chartered Bank & Ballarpur Industries for more than 20 years of15 years. She has extensive experience in various roles across different countriesdiverse industries- Manufacturing, IT, FMCG & Banking covering the core finance areas of accounting, planning, technology,treasury, information technology, controllerships, finance business partnering in areas of operations, supply chain, procurement, and customers. Bharat Goenkacustomers, among others. Sonam is a memberqualified Cost Accountant from CIMA London and MBA from IIM Bangalore. The business address of the InstituteSonam Donkar is Core – 6, 3rd Floor, SCOPE Complex, 7, Lodhi Road, New Delhi – 110003, India.
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– | Gobinda Gopal Pal is Dy. Chief Executive Officer of Chartered Accountantsour Alumina business- Lanjigarh since April, 2021. He had joined Vedanta in 2011 as Head- Pot Line of Vedanta Ltd, Jharsuguda. He has a rich experience of 33 years in Aluminium Industry and played a pivotal role in various O&M Vertical ( Aluminium Business), Senior management Profiles. He has also worked for companies like National Aluminium Company, MOZAL Aluminium, Bharat Aluminium Company (BALCO). He has a Bachelor degree as “BE-Metallurgy” from REC, Durgapur. The business address of Gobinda Gopal Pal is Vedanta Limited, Lanjigarh, Project Office, District -Kalahandi, Odisha- 766027, India. |
None of our directors, other executive officers and significant employees are elected or appointed under any arrangement or understanding with any major shareholder, customer, supplier or otherwise. B. Compensation Compensation of Executive Directors, Executive Officers and Significant Employees The aggregate compensation we paid our executive directors, executive officers and significant employees for fiscal year 2021 was ₹ 1,126 million ($ 15.0 million), which includes ₹ 970 million ($ 13.1 million) paid towards salary, bonuses, allowances and other cash payments, ₹ 106 million ($ 1.4 million) paid and payable for the fair value of share options and cash based units granted to our executive directors, executive officers and significant employees and ₹ 51 million ($ 0.7 million) paid towards benefits such as contributions to the provident fund and superannuation fund. The total compensation paid to our most highly compensated executive director, executive officer or significant employees during fiscal year 2021 was ₹ 148 million ($ 2 million) of which ₹ 142 million ($ 1.9 million) constituted salary, bonuses, allowances, and perquisites, and ₹ 6 million ($ 0.1 million) was contribution to provident and superannuation funds. The following table sets forth the compensation paid to our executive directors, executive officers and significant employees in fiscal year 2021, where the disclosure of compensation is required on an individual basis in India or is otherwise publicly disclosed by us: (₹ and $ in millions) | | | | | | | | | | | | | | | | | | | | | Name | | Salary, Bonuses, Allowances and Perquisites | | | Fair Value of Share Options granted | | | Contribution to Provident and Superannuation Funds | | | Total (₹) | | | Total ($) | | Navin Agarwal (1) | | | 142.2 | | | | 0.0 | | | | 5.9 | | | | 148.0 | | | | 2.00 | | Sunil Duggal(2) | | | 76.8 | | | | 12.2 | | | | 2.6 | | | | 91.6 | | | | 1.25 | | GR. Arun Kumar(3) | | | 53.1 | | | | 10.4 | | | | 2.1 | | | | 65.6 | | | | 0.90 | | Madhu Srivastava | | | 19.2 | | | | 3.3 | | | | 0.6 | | | | 23.1 | | | | 0.32 | | Dilip Golani | | | 32.1 | | | | 6.5 | | | | 2.3 | | | | 40.9 | | | | 0.56 | | James Cartwright(4) | | | 25 | | | | 5.1 | | | | — | | | | 30.1 | | | | 0.41 | | Anup Agarwal(3) | | | 16 | | | | 3.6 | | | | 0.9 | | | | 20.5 | | | | 0.28 | | Sharad Kumar Gargiya(5) | | | 14.0 | | | | 1.6 | | | | 0.5 | | | | 16.1 | | | | 0.22 | | Vineet Bose (6) | | | 14.9 | | | | 0 | | | | 0.5 | | | | 15.4 | | | | 0.21 | | Dhiraj Nayyar | | | 8.8 | | | | 0.5 | | | | 0.4 | | | | 9.7 | | | | 0.13 | | Leena Verenkar | | | 4.9 | | | | 1 | | | | 0.8 | | | | 6.7 | | | | 0.09 | | Andrew Lewin | | | 26.8 | | | | 0 | | | | 1.1 | | | | 27.9 | | | | 0.38 | | Arun Misra | | | 32.6 | | | | 1.6 | | | | 1.9 | | | | 36.1 | | | | 0.49 | | Swayam Saurabh(3) | | | 19.9 | | | | 1.3 | | | | 0.6 | | | | 21.8 | | | | 0.30 | | Navin Jaju(7) | | | 9.1 | | | | 1.7 | | | | 1.2 | | | | 12 | | | | 0.16 | | Deshnee Naidoo(8) | | | 5.3 | | | | 0 | | | | 0.8 | | | | 6.1 | | | | 0.08 | | Pushpender Singla | | | 21.2 | | | | 2.9 | | | | 0 | | | | 24.1 | | | | 0.33 | | Ajay Kumar Dixit(9) | | | 9.5 | | | | 0 | | | | 0 | | | | 9.5 | | | | 0.13 | | Ajay Kapur | | | 82.7 | | | | 6.2 | | | | 8.4 | | | | 97.3 | | | | 1.33 | | Abhijit Pati | | | 35.1 | | | | 6.5 | | | | 2.1 | | | | 43.7 | | | | 0.60 | | Vikas Sharma | | | 23.2 | | | | 4.5 | | | | 1.1 | | | | 28.8 | | | | 0.39 | | Rahul Sharma | | | 21.4 | | | | 3 | | | | 1.8 | | | | 26.2 | | | | 0.36 | | Mahesh Iyer | | | 4.8 | | | | 0.9 | | | | 0.4 | | | | 6.1 | | | | 0.08 | | Ashok Sonthalia(10) | | | 4.3 | | | | 0 | | | | 0.4 | | | | 4.7 | | | | 0.06 | | Pankaj Kumar | | | 19.4 | | | | 3.4 | | | | 1.1 | | | | 23.9 | | | | 0.33 | | Amit Agrawal(11) | | | 1 | | | | 0 | | | | 1.7 | | | | 2.7 | | | | 0.04 | | Anand Soni(12) | | | 8.7 | | | | 1.9 | | | | 0.3 | | | | 10.9 | | | | 0.15 | | Pankaj Malhan | | | 13.8 | | | | 0.8 | | | | 0.4 | | | | 15 | | | | 0.21 | | Jalaj Kumar Malpani(13) | | | 4.5 | | | | 0 | | | | 1.7 | | | | 6.2 | | | | 0.08 | | Sauvick Mazumdar | | | 13.9 | | | | 3.4 | | | | 1 | | | | 18.3 | | | | 0.25 | | Azad Shaw(14) | | | 11.6 | | | | 0 | | | | 1.8 | | | | 12.4 | | | | 0.17 | | Laxman Shekhawat | | | 30.1 | | | | 4.1 | | | | 0.2 | | | | 34.4 | | | | 0.47 | | Prachur Sah(15) | | | 42.4 | | | | 4.3 | | | | 1.1 | | | | 47.8 | | | | 0.65 | | Vivek Rathi(16) | | | 10.2 | | | | 0 | | | | 0.7 | | | | 10.9 | | | | 0.15 | | Anand Laxshmivarahan R | | | 6.2 | | | | 0.6 | | | | 0.2 | | | | 7 | | | | 0.10 | | Roma Balwani | | | 16.4 | | | | 0 | | | | 0 | | | | 16.4 | | | | 0.22 | | Ajay Goel(17) | | | 2.96 | | | | 0 | | | | 0.01 | | | | 2.97 | | | | 0.04 | | Varun Kapoor(18) | | | 7.4 | | | | 0.9 | | | | 0.5 | | | | 8.8 | | | | 0.12 | | Vikash Jain(19) | | | 19.5 | | | | 2.7 | | | | 1.2 | | | | 23.4 | | | | 0.32 | | Hitesh Vaid(20) | | | 10.1 | | | | 1.4 | | | | 0.8 | | | | 12.3 | | | | 0.17 | | Chhavi Nath Singh(21) | | | 22.9 | | | | 6.5 | | | | 0 | | | | 29.4 | | | | 0.40 | | Sonam Donkar | | | 8.4 | | | | 0.4 | | | | 0.6 | | | | 9.4 | | | | 0.13 | | Gobinda Gopal Pal | | | 17.3 | | | | 3.2 | | | | 1 | | | | 21.5 | | | | 0.29 | | | | | | | | | | | | | | | | | | | | | | | Total | | | 969.7 | | | | 106.4 | | | | 50.7 | | | | 1125.7 | | | | 15.4 | | | | | | | | | | | | | | | | | | | | | | |
(1) | Additionally, during the fiscal year 2021, sitting fees and commission paid to Navin Agrawal from HZL was ₹ 0.275 million and ₹ 1.5 million respectively. Also, he received remuneration from Vedanta Resources Limited amounting to ₹ 8.5 million for fiscal year 2017 was Rs. 1,488.7 million ($ 23.0 million), which includes Rs. 1,222.4 million ($ 18.9 million) paid towards salary, bonuses, allowances2021 and other cash payments, Rs. 191.7 million ($3.0 million) paid and payable for thecash-based units amounting to fair value of share options granted₹ 44 million under Vedanta Resources Limited Cash Based Plan/ Long Term Incentive Plan (“Vedanta CBP/ LTIP”). |
(2) | Sunil Duggal assumed the position of Vedanta CEO (Chief Executive Officer) on August 1, 2020. |
(3) | GR Arun Kumar, Anup Agarwal and Swayam Saurabh left the services of the company subsequent to our executive directors, executive officers and significant employees, and Rs. 74.5 million ($ 1.1 million) paid towards benefits such as contributionsMarch 31, 2021. |
(4) | James Cartwright left the services of the company on January 31, 2021. |
(5) | Sharad Kumar Gargiya assumed the role of CCO (Chief Commercial Officer) on August 1, 2020. |
(6) | Vineet Bose left the services of the company on March 6, 2021. |
(7) | Navin Jaju assumed the role of CFO (Chief Financial Officer) - Iron Ore Business (IOB) on July 1, 2020 |
(8) | Deshnee Naidoo left the services of the company on May 31, 2020. |
(9) | Ajay Kumar Dixit left the services of the company on May 15, 2020 |
(10) | Ashok Sonthalia left the services of the company July 31, 2020. |
(11) | Amit Agarwal left the services of the company on May 23, 2020. |
(12) | Anand Soni was named CFO (Chief Financial Officer) of Sterlite Copper on July 1, 2020. |
(13) | Jalaj Kumar Malpani left the services of the company on August 1, 2020. |
(14) | Azad Shaw left the services of the company on May 31, 2020. |
(15) | Prachur Sah was appointed CEO (Chief Executive Officer) of Cairn on October 19,2020. |
(16) | Vivek Rathi left the services of the company on October 26, 2020. |
(17) | Ajay Goel was appointed to the provident fund and superannuation fund.post of Deputy Chief Financial Officer, of Vedanta Limited on March 23, 2021. The total compensationsalary was paid to our most highly compensated executive director, executive officer or significant employees during fiscal year 2017as arrears in April. |
(18) | Varun Kapoor was Rs. 201.1 million ($ 3.1 million) of which Rs. 127.6 million ($ 2.0 million) comprised salary, bonuses and allowances, Rs. 50.7 million ($ 0.8 million) comprised fair value of share options granted and Rs. 22.9 million ($ 0.4 million) comprised benefits such as contributionappointed to the provident fund and superannuation fund.post of director investor relations, on February 1, 2021. |
(19) | The following table sets forthVikash Jain was appointed to the compensation paidpost of General Counsel, Cairn on December 15, 2020.
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(20) | Hitesh Vaid was appointed to our executive directors, executive officers and significant employeesthe post of Deputy CFO (Deputy Chief Financial Officer) Cairn, on October 27, 2020. |
(21) | Chhavi Nath Singh remains in fiscal year 2017, where the disclosureservices of compensation is required on an individual basis in India or is otherwise publicly disclosed by us:the company. |
The aggregate compensation paid or payable to our non-executive directors for fiscal year 2021 was ₹ 46.4 million ($ 0.6 million), which comprised ₹ 7.3 million ($ 0.1 million) in sitting fees and ₹ 39.1 million ($ 0.5 million) in commissions. In December 2016, our Company introduced an Employee Stock Option Scheme by awarding our Company options to our selected employees. Under this scheme, the vesting of options is based on our Company’s performance as against our industry competitors and based on total shareholder return, for which the vesting percentage is determined over a three year performance period from the date of grant. The stock options awarded under this scheme in 2016 got vested upon approval from Nomination and Remuneration Committee on January 31, 2020 where the Relative Total Shareholder Return (“TSR”) based vesting has been NIL. In September 2017, the Employee Stock Option Scheme was launched with an additional performance condition of sustained earnings before interest, taxes, depreciation and amortization (“EBITDA”) for which the vesting percentage is determined over a three year financial year performance period, and was launched again, with similar performance conditions in November 2018. The stock options awarded under this scheme in 2017 got vested upon approval from Nomination and Remuneration Committee on November 6, 2020 where the Relative Total Shareholder Return (“TSR”) based vesting has been NIL and business performance (EBIDTA) based vesting varied across businesses between 0% to 42.5%. In November 2019, the plan was redesigned and launched with additional performance condition of sustained individual performance while the business performance parameter was revised with volume, cost, NSR (“Net Sales Realizable”), free cash flow (“FCF”) and EBITDA as applicable for businesses. The Vedanta Limited Conditional Cash Awards (Cash Plan) was introduced in November 2018 under the parent scheme “Employee Stock Option Scheme 2016” linked to Vedanta Limited’s share price for the selected employees who are not covered under the Vedanta Limited Employee Stock Option Scheme. The Vedanta Limited Conditional Cash Awards (Cash Plan) is based on the same performance conditions as the Vedanta Limited Employee Stock Option Scheme 2018 while Vedanta Limited Conditional Cash Awards (Cash Plan) 2019 is based on same performance conditions as Vedanta Limited Employee Stock Option Scheme 2019 and the employees covered under the plan receive cash as per vesting and performance conditions instead of shares for which the vesting percentage is determined over three-year performance period from the date of grant of such units. In March 2021, a new employee stock option plan (ESOS 2020) was introduced. The Vedanta Limited ESOS 2020 shall vest in 31 months from the date of the grant based on business performance (Volume, Cost, NSR; EBITDA, FCF, ESG, Carbon Footprint, management discretion, and sustained individual performance over the three financial years falling within the performance period. As a global benchmark, we have introduced a 10% multiplier on account of zero fatalities and an additional multiplier on individual performance ratings to create differentiation at the time of vesting. These options will be awarded to employees under the Vedanta Limited ESOS with effect from March 31, 2021 for which the vesting condition will be the performance period of 31 months from March 31, 2021 to November 6, 2023. | | | | | | | | | | | | | Name | | Salary, Bonuses, | | | Fair Value of Share Options granted | | | Contribution to | | | Allowances and | | | | Provident and | | | Perquisites | | | | Superannuation Funds | | | | (Rs. in millions) | | Navin Agarwal | | | 126.80 | | | | 48.33 | | | | 15.13 | | Tom Albanese | | | 127.56 | | | | 50.66 | | | | 22.92 | | Din Dayal Jalan(1) | | | 37.38 | | | | 8.29 | | | | — | | Tarun Jain | | | 86.30 | | | | 20.14 | | | | 7.42 | | G. R. Arun Kumar | | | 25.44 | | | | 3.96 | | | | 1.24 | | Dilip Golani | | | 32.97 | | | | 7.21 | | | | 1.58 | | Mansoor Siddiqi | | | 29.93 | | | | 2.19 | | | | — | | Roma Balwani | | | 17.53 | | | | 3.26 | | | | — | | Mukesh Bhavnani(2) | | | 52.61 | | | | — | | | | 0.19 | | Samir Cairae | | | 89.71 | | | | 1.57 | | | | 6.48 | | Suresh Bose | | | 9.46 | | | | 1.98 | | | | 0.58 | | Akhilesh Joshi(3) | | | 32.25 | | | | 3.58 | | | | — | | Amitabh Gupta | | | 27.33 | | | | 3.79 | | | | 1.59 | | Sunil Duggal | | | 36.31 | | | | 5.53 | | | | 1.59 | | Deshnee Naidoo | | | 24.57 | | | | 2.92 | | | | 2.50 | | Mayank Ashar(4)(5) | | | 194.36 | | | | — | | | | 2.30 | | Sudhir Mathur(5) | | | 30.44 | | | | 3.48 | | | | 0.97 | | Rajagopal Kishore Kumar | | | 38.70 | | | | 7.68 | | | | 2.98 | | Azad Shaw(6) | | | 8.93 | | | | 1.65 | | | | 0.50 | | P. Ramnath | | | 23.25 | | | | 4.85 | | | | 2.56 | | Anup Agarwal | | | 12.54 | | | | 1.78 | | | | 0.57 | | Abhijit Pati | | | 26.63 | | | | 5.02 | | | | 1.41 | | Ramesh Nair(7) | | | 18.70 | | | | — | | | | 0.97 | | Vikas Sharma(8) | | | 1.31 | | | | — | | | | 0.03 | | Niranjan Kumar Gupta(9) | | | 23.09 | | | | — | | | | 1.03 | | Ajay Kumar Dixit | | | 43.70 | | | | 1.97 | | | | — | | Philip Turner | | | 44.63 | | | | 1.88 | | | | — | |
Notes:
(1)– | Until September 30, 2016 |
(3) | Until September 30, 2016 |
(5) | Represents fair value of options granted under the Cairn India Performance Option Plan (including the Phantom Cairn India Performance Option Plan) |
(6) | Appointed in October 2016 |
(8) | Appointed on March 6, 2017 |
The aggregate compensation paid or payable to ournon-executive directors for fiscal year 2017 was Rs. 32.4 million ($ 0.5 million), which comprised Rs. 2.9 million ($ 0.04 million) in sitting fees and Rs. 29.4 million ($ 0.5 million) in commissions.
The Vedanta Performance Share Plan was launched in November 2014 and December 2015. Under this scheme, the vesting of options is based on the company’s performance as against its industry competitors and based on total shareholder return, for which the vesting percentage is determined over a three year performance period from the date of grant. During fiscal year 2016, Vedanta introduced the Deferred Share Bonus Plan, under which a portion of the annual bonus is deferred into shares and the awards granted under this scheme are not subject to any performance conditions and the vesting schedule is staggered over a period of two or three years. The Vedanta Performance Share Plan 2016 was launched in November 2016 with the same performance conditions as the Vedanta Performance Share Plans covering only selected executive directors. In December 2016, Vedanta Limited introduced an Employee Stock Option Scheme by awarding Vedanta Limited options to its selected employees. Under this scheme, the vesting of options is based on the company’s performance as against its industry competitors and based on total shareholder return, for which the vesting percentage is determined over a three year performance period from the date of grant. The Vedanta Cash Plan was introduced in March 2017 and is linked to Vedanta’s share price for the selected employees who are not covered under the Vedanta Performance Share Plan and Vedanta Limited’s Employee Stock Option Scheme. The Vedanta Cash plan is based on the same performance conditions as the Vedanta Performance Share Plans and the employees covered under the plan receive cash as per vesting and performance conditions instead of shares for which the vesting percentage is determined over three-year performance period from the date of grant of such units.
Additionally, Cairn India provided the Cairn India Performance Option Plan for national employees (wherein options are vested post achievement of vesting and performance conditions). Under the Cairn India Performance Option, the options will vest and become exercisable at the end of the performance period which has been set by the remuneration committee at the time of grant, although such period will not be less than three years. However, the percentage of an option which vests on this date will be determined by the extent to whichpre-determined performance conditions have been satisfied. Pursuant to the Cairn India Merger, the Cairn India Performance Option Plan have been converted to Cash Award which are based on the TSR performance and Cairn India share price as of March 27, 2017.
Outstanding Awards or Options As of March 31, 2017, our directors, executive officers and significant employees as a group held options under the Vedanta Performance Share Plan and Deferred Share Bonus Plan to acquire an aggregate of 2,204,095 ordinary shares of Vedanta representing approximately 0.73% of Vedanta’s share capital. The awards are exercisable at the end of the three-year performance period commencing from the date of each grant at an exercise price of $ 0.10 per ordinary share. The awards expire six months after their date of vesting. For more information, see “- Vedanta Performance Share Plan and Deferred Share Bonus Plan.”
As of March 31, 2017,
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As of March 31, 2021, our directors, executive officers and significant employees as a group held options under the Vedanta Limited Employee Stock Option Scheme to acquire an aggregate of 4,525,705 ordinary shares of Vedanta Limited representing approximately 0.12% of Vedanta Limited’s share capital. The awards are exercisable at the end of the three-year performance period commencing from the date of each grant at an exercise price of ₹ 1 per ordinary share. The awards expire six months after their date of vesting. For more information, see “Vedanta Limited Employee Stock Option Scheme.” As of March 31, 2021, our executive officers and significant employees as a group held options under the Vedanta Conditional Cash Awards which is Vedanta’s Cash Based Plan to acquire an aggregate of 245,144 units converted to cash. The employees shall be eligible for the awards at the end of the three-year performance period commencing from the date of each grant. For more information, see “Vedanta Limited Cash Based Plan”. As of March 31, 2021, our executive officers and significant employees as a group held options under the Vedanta Resources Limited Conditional Cash Awards which is Vedanta Resources Long Term Incentive Plan to acquire an aggregate of 1,361,664 units converted to cash. The employees shall be eligible for the awards at the end of the three-year performance period commencing from the date of each grant. The payment upon vesting will be made by Vedanta Resources Limited, UK. For more information, see “Vedanta Resources Limited Cash Based Plan/ Long Term Incentive Plan”. We maintain employee benefit plans in the form of certain statutory and welfare schemes covering substantially all of our employees As of March 31, 2020 and March 31, 2021, the total amount set aside by us to provide pension, retirement or similar benefits was ₹ 2,678 million and ₹ 2,600 million ($ 36 million), respectively. In accordance with Indian law, all of our employees in India are entitled to receive benefits under the provident fund, defined contribution plan and defined benefit plan (owned trust) to which both the Company and the employee contribute monthly at a pre-determined rate (currently 12.0% of the employee’s base salary). These contributions are made to the provident fund and we also participate in defined contribution schemes in Australia, Namibia, South Africa and Ireland. We have no further obligation under these schemes apart from our regular contributions, except in case of funds classified as defined benefit plan. We contributed an aggregate of ₹ 1,101 million and ₹ 1,460 million ($ 20 million) to all these schemes in fiscal years 2020 and 2021, respectively. In accordance with Indian law, we provide for gratuity pursuant to a defined benefit retirement plan covering all of our employees in India. The gratuity plan provides a lump sum payment to vested employees at retirement, disability or termination of employment, in an amount based on the employee’s last drawn salary and the number of years of employment with us. The assets of the plan, to the extent the plan is funded, are held in separate funds managed by the Life Insurance Corporation and a full actuarial valuation of the plan is performed on an annual basis. Our liability for the gratuity plan was ₹ 1,892 million and ₹ 1,739 million ($ 24 million) as at the end of fiscal years 2020 and 2021, respectively. – | Post-Retirement Medical Benefits |
The scheme is framed with a view to provide medical benefits to the regular employees of BALCO and BMM and their spouses subsequent to their retirement on completion of tenure including retirement on medical grounds and voluntary retirement on contributory basis. This scheme is unfunded. Our liability for the post-retirement medical benefits was ₹ 786 million and ₹ 861 million ($ 12 million) as at the end of fiscal years 2020 and 2021, respectively. – | Superannuation Fund and National Pension Scheme |
It is our current policy for all of our non-unionized employees in a managerial position and above to pay into a superannuation fund a sum equal to 15.0% of their annual base salary which is payable to the employee in a lump sum upon his retirement or termination of employment. 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 GoI. Vedanta Limited and each relevant entity holds a corporate account with one of the pension fund managers authorized by the GoI 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. We contributed an aggregate of ₹ 210 million and ₹ 212 million ($ 3 million) in both of schemes in fiscal years 2020 and 2021, respectively. Our liability for compensated absences is determined on an undiscounted basis for short term liabilities and on an actuarial basis for long term liabilities, for the entire unused vacation balance standing to the credit of each employee at each calendar year-end. Contributions to such liability are charged to income in the year in which they accrue. Liability for the compensated absences was ₹ 1,792 million and ₹ 1,661 million ($ 23 million) as at the end of fiscal years 2020 and 2021, respectively. – | Vedanta Limited Employee Stock Option Scheme to acquire an aggregate of 964,100 ordinary shares of (“Vedanta Limited representing approximately 0.03% of Vedanta Limited’s share capital. The awards are exercisable at the end of the three-year performance period commencing from the date of each grant at an exercise price of Rs. 1 per ordinary share. The awards expire six months after their date of vesting. For more information, see “- Vedanta Limited Employee Stock Option Scheme.ESOS”) As of March 31, 2017, our executive officers and significant
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The shareholders of the Company by way of postal ballot on March 30, 2015 approved the Vedanta Limited ESOS and issue of securities to the employees of the Company and its holding or subsidiary companies. No options were granted to the employees under such scheme. Thereafter, the shareholders of the Company by way of postal ballot on December 12, 2016 approved a revised scheme, Vedanta Limited ESOS 2016 and issue of securities to the employees of the Company and its holding or subsidiary companies. Awards under the plan may be granted to any employee of Vedanta Limited or any of its holding or subsidiary companies who is not within six months of such employee’s normal retirement date. The awards are indexed to and settled by Vedanta Limited shares. The awards provide for a fixed exercise price denominated in Vedanta Limited’s functional currency at ₹ 1 per share. The Vedanta Limited ESOS 2016 is consistent with the reward philosophy, which aims to provide superior rewards for outstanding performance, and to provide a high proportion of “at risk” remuneration for the employees. On January 1, 2020, Nomination and Remuneration Committee of Vedanta Limited approved the vesting of options awarded in the said scheme granted on December 16, 2016 upon completion of performance period on three years. The TSR based vesting was NIL while tenure-based vesting was executed basis sustained employment with the company and Vedanta good leaver policy. The total options which vested were 1,688,957. The Vedanta Limited ESOS 2017 shall vest three years from the date of the grant based on the Group’s relative total shareholder return (TSR) performance against the peer group of resource companies, sustained EBITDA over the three financial years falling within the performance period and continued employment with the Company. These options will be awarded to employees as a group held options under the Vedanta Limited ESOS with effect from September 1, 2017 for which the vesting condition will be the performance period of 36 months from September 1, 2017 to August 31, 2020. On November 6, 2020, Nomination and Remuneration Committee of Vedanta Limited approved the vesting of options awarded in the said scheme granted on September 1, 2017 upon completion of performance period of three years. The TSR based vesting was NIL, business performance (EBIDTA) based vesting varied across businesses between 0% to 42.5%, while tenure-based vesting was executed basis sustained employment with the company and Vedanta good leaver policy. The total options which vested were 1,513,755. The Vedanta Limited ESOS 2018 shall vest three years from the date of the grant based on the Company’s relative TSR performance against the peer group of resource companies, sustained EBITDA over the three financial years falling within the performance period and continued employment with the Group. These options will be awarded to employees under the Vedanta Limited ESOS with effect from November 1, 2018 for which the vesting condition will be the performance period of 36 months from November 1, 2018 to October 31, 2021. The Vedanta Limited ESOS 2019 shall vest three years from the date of the grant based on the Company’s relative TSR performance against the peer group of resource companies, sustained business performance (volume, cost, NSR and EBITDA depending on respective entities) and sustained individual performance over the three financial years falling within the performance period and continued employment with the Company. These options will be awarded to employees under the Vedanta Limited ESOS with effect from November 29, 2019 for which the vesting condition will be the performance period of 36 months from November 29, 2019 to November 28, 2022. The Vedanta Limited ESOS 2020 shall vest 31 months from the date of the grant based on business performance (Volume, Cost NSR; EBITDA, FCF, ESG, Carbon Footprint), the performance achievement for each business, which will be evaluated against internal business plan and respective peer comparison on Volume, Cost & NSR, management discretion, and sustained individual performance over the three financial years falling within the performance period subject to continued employment with the company. As a global benchmark, we have introduced a 10% multiplier on account of zero fatalities and an additional multiplier on individual performance ratings to create differentiation at the time of vesting. These options will be awarded to employees under the Vedanta Limited ESOS with effect from March 31, 2021 for which the vesting condition will be the performance period of 31 months from March 31, 2021 to November 6, 2023. – | Vedanta Limited Cash Based Plan to acquire an aggregate of 77,440 units converted to cash. The employees shall be eligible for the awards at the end of the three year performance period commencing from the date of each grant. For more information, see “-(“CBP”) |
In fiscal year 2019, we introduced conditional cash awards under Employee Stock Option Scheme 2016 (ESOS 2016). These are notional units granted to employees and no shares/options issued, the performance conditions will be same as that in stock options granted in fiscal year 2019 i.e. TSR, continued employment with the Group and business performance based on EBITDA set against business plan for the year. The employee will be paid cash in lieu of units vested once the performance conditions are achieved and once the performance period is completed. These units will be awarded to employees under the CBP with effect from November 1, 2018 for which the vesting condition will be the performance period of 36 months from November 1, 2018 to October 31, 2021. In fiscal year 2020, the cash-based plan has been redesigned in line with Vedanta Limited ESOS 2019. These are notional units granted to employees and no shares/ options are issued, the performance conditions will be same as that in stock options granted in fiscal year 2020 i.e. Group’s relative TSR performance against the peer group of resource companies, sustained business performance (volume, cost, NSR and EBITDA depending on respective entities) and sustained individual performance over the three financial years falling within the performance period and continued employment with the Group. The employee will be paid cash in lieu of units vested once the performance conditions are achieved and once the performance period is completed. These options will be awarded to employees under the CBP with effect from November 29, 2019 for which the vesting condition will be the performance period of 36 months from November 29, 2019 to November 28, 2022. In fiscal year 2021, the cash-based plan has been redesigned in line with Vedanta Limited ESOS 2020. These are notional units granted to employees and no shares/ options are issued, the performance conditions will be same as that in stock options granted in fiscal year 2021 i.e. they shall vest 31 months from the date of the grant based on the business performance (Volume, Cost NSR; EBITDA, FCF, ESG, Carbon Footprint), the performance achievement for each business will be evaluated against internal business plan and respective peer comparison on Volume, Cost & NSR, management discretion, and sustained individual performance over the three financial years falling within the performance period subject to continued employment with the organization. As a global benchmark, we have introduced a 10% multiplier on account of zero fatalities and an additional multiplier on individual performance ratings to create differentiation at the time of vesting. These options will be awarded to employees under the CBP with effect from March 31, 2021 for which the vesting condition will be the performance period of 31 months from March 31, 2021 to November 6, 2023. – | Vedanta Resources Limited Cash Based Plan” As of March 31, 2017, a significant employees of Cairn India as a group held options under the Cairn India Performance Option Plan to acquire an aggregate of 52,784 ordinary shares of Cairn India representing approximately 0.003% of Cairn India’s share capital. The awards are exercisable on the third anniversary from the date of each grant at a price of Rs. 10 per share. The awards expire three months after their vesting date. For more information, see “- Cairn India Performance Option Plan (including Phantom Cairn India Performance Option Plan)”.
Employee Benefit Plans
We maintain employee benefit plans in the form of certain statutory and welfare schemes covering substantially all of our employees. As of March 31, 2016 and March 31, 2017, the total amount set aside by us to provide pension, retirement or similar benefits was Rs. 1,924 million and Rs. 1,893 million ($ 29.2 million), respectively.
Provident Fund
In accordance with Indian law, all of our employees in India are entitled to receive benefits under the provident fund, defined contribution plan and defined benefit plan (owned trust) to which both the Company and the employee contribute monthly at apre-determined rate (currently 12.0% of the employee’s base salary). These contributions are made to the provident fund and we also participate in defined contribution schemes in Australia, Namibia, South Africa and Ireland. We have no further obligation under these schemes apart from our regular contributions, except in case of funds classified as defined benefit plan. We contributed an aggregate of Rs. 1,106 million and Rs. 1,195 million ($ 18.4 million) to all these schemes in fiscal years 2016 and 2017, respectively.
Gratuity
In accordance with Indian law, we provide for gratuity pursuant to a defined benefit retirement plan covering all of our employees in India. The gratuity plan provides a lump sum payment to vested employees at retirement, disability or termination of employment, in an amount based on the employee’s last drawn salary and the number of years of employment with us. The assets of the plan, to the extent the plan is funded, are held in separate funds managed by the Life Insurance Corporation and a full actuarial valuation of the plan is performed on an annual basis. Our liability for the gratuity plan was Rs. 1,618 million and Rs. 1,280 million ($ 19.7 million) as at the end of fiscal years 2016 and 2017, respectively.
Post-Retirement Medical Benefits
The scheme is framed with a view to provide medical benefits to the regular employees of BALCO and BMM and their spouses subsequent to their retirement on completion of tenure including retirement on medical grounds and voluntary retirement on contributory basis. This scheme is unfunded. Our liability for the post retirement medical benefits was Rs. 306 million and Rs. 613 million ($ 9.5 million) as at the end of fiscal years 2016 and 2017, respectively (balance as at March 31, 2017 includes an amount of post- retirement medical benefit of Rs. 232 million reclassified from defined benefit obligation relating to gratuity plan).
Superannuation Fund
It is our current policy for all of ournon-unionized employees in a managerial position and above to pay into a superannuation fund a sum equal to 15.0% of their annual base salary which is payable to the employee in a lump sum upon his retirement or termination of employment. We contributed an aggregate of Rs. 408 million and Rs. 213 million ($ 3.3 million) in fiscal years 2016 and 2017, respectively.
Compensated Absence
Our liability for compensated absences is determined on an undiscounted basis for short term liabilities and on an actuarial basis for long term liabilities, for the entire unused vacation balance standing to the credit of each employee at each calendaryear-end. Contributions to such liability are charged to income in the year in which they accrue. Liability for the compensated absences was Rs. 1,233 million and Rs. 1,213 million ($ 18.7 million) as at the end of fiscal years 2016 and 2017, respectively.
Vedanta Performance SharePlan/ Long Term Incentive Plan (“Vedanta PSP”) and Deferred Share Bonus Plan (“DSBP”CBP/ LTIP”)
We are a participating company in the Vedanta PSP and DSBP which was adopted by Vedanta to grant share options to its employees or employees of its subsidiaries. Awards under the plan may be granted to any employee of Vedanta or any of its subsidiaries who is not within six months of such employee’s normal retirement date.
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In fiscal year 2019, Vedanta Resources introduced Conditional Cash Awards linked to Vedanta Limited. This plan is also known as Long Term Incentive Plan. These are notional units granted to employees and no shares/options are issued. The performance conditions will be same as that in stock options granted in fiscal year 2019, i.e., TSR of Vedanta Limited, continued employment with the Group and business performance based on EBITDA of Vedanta Limited set against business plan for the year. The employee will be paid cash in lieu of units vested as per the achievement of performance conditions upon completion of performance period. These options will be awarded to employees under the Vedanta CBP/ LTIP with effect from November 1, 2018 for which the vesting condition will be the performance period of 36 months from November 1, 2018 to October 31, 2021. In fiscal year 2020, the cash-based plan has been redesigned in line with Vedanta Limited ESOS 2019. These are notional units granted to employees and no shares/options are issued, the performance conditions will be same as that in stock options granted in fiscal year 2020 i.e. Group’s relative TSR performance against the peer group of resource companies, sustained business performance (volume, cost, NSR and EBITDA depending on respective entities of Vedanta Limited) and sustained individual performance over the three financial years falling within the performance period and continued employment with the Group. The employee will be paid cash in lieu of units vested once the performance conditions are achieved and once the performance period is completed. These options will be awarded to employees under the Vedanta CBP/ LTIP with effect from November 29, 2019 for which the vesting condition will be the performance period of 36 months from November 29, 2019 to November 28, 2022. In fiscal year 2021, the cash-based plan has been redesigned in line with Vedanta Limited ESOS 2020. These are notional units granted to employees and no shares/options are issued, the performance conditions will be same as that in stock options granted in fiscal year 2021 i.e. they shall vest 31 months from the date of the grant based on the business performance (Volume, Cost NSR; EBITDA, FCF, ESG, Carbon Footprint), the performance achievement for each business which will be evaluated against internal business plan and respective peer comparison on Volume, Cost & NSR, management discretion, and sustained individual performance over the three financial years falling within the performance period subject to continued employment with the company. As a global benchmark, we have introduced a 10% multiplier on account of zero fatalities and an additional multiplier on individual performance ratings to create differentiation at the time of vesting. These options will be awarded to employees under the Vedanta CBP/ LTIP with effect from March 31, 2021 for which the vesting condition will be the performance period of 31 months from March 31, 2021 to November 6, 2023. The following table summarizes, as of March 31, 2021, the options granted to our directors, executive officers and significant employees under the Vedanta Limited ESOS Scheme: | | | | | | | | | | | | | | | | | | | Shares underlying the Vedanta Limited ESOS, | | Name | | Grant date - November 1, 2018(1) | | | Grant date - November 29, 2019(2) | | | Grant Date - March 31, 2021 (3) | | | Total | | Sunil Duggal | | | 156,130 | | | | 181,970 | | | | 177,778 | | | | 515,878 | | GR Arun Kumar | | | 124,340 | | | | 170,440 | | | | — | | | | 294,780 | | Ajay Kapur | | | — | | | | 273,860 | | | | 176,000 | | | | 449,860 | | Sharad Gargiya | | | — | | | | 31,090 | | | | 36,060 | | | | 67,150 | | Ajay Kumar Dixit | | | 82,930 | | | | 121,720 | | | | — | | | | 204,650 | | Dilip Golani | | | 80,220 | | | | 90,910 | | | | — | | | | 171,130 | | Abhijit Pati | | | 79,890 | | | | 89,910 | | | | 53,333 | | | | 223,133 | | Vikas Sharma | | | 56,400 | | | | 55,630 | | | | 53,333 | | | | 165,363 | | Chhavi Nath Singh | | | 42,400 | | | | 60,190 | | | | — | | | | 102,590 | | Anup Agarwal | | | 43,600 | | | | 55,330 | | | | — | | | | 98,930 | | James Cartwright | | | — | | | | 93,370 | | | | — | | | | 93,370 | | Sauvick Mazumdar | | | 37,600 | | | | 58,790 | | | | 42,222 | | | | 138,612 | | Pankaj Kumar | | | 42,300 | | | | 49,110 | | | | 31,111 | | | | 122,521 | | Madhu Srivastava | | | 36,140 | | | | 59,050 | | | | 43,481 | | | | 138,671 | | Rahul Sharma | | | 32,900 | | | | 52,310 | | | | 66,667 | | | | 151,877 | | Azad Shaw | | | 30,630 | | | | 34,580 | | | | — | | | | 65,210 | | Ashok Sonthalia | | | 28,200 | | | | 41,500 | | | | — | | | | 69,700 | | Vineet Bose | | | 27,750 | | | | 38,480 | | | | — | | | | 66,230 | | Arun Misra | | | — | | | | 68,760 | | | | 88,889 | | | | 157,649 | | Swayam Saurabh | | | — | | | | 58,760 | | | | — | | | | 58,760 | | Vivek Rathi | | | — | | | | 34,580 | | | | — | | | | 34,580 | | Hitesh Vaid | | | 15560 | | | | 20750 | | | | 28,889 | | | | 65,199 | | Prachur Sah | | | 70260 | | | | 69160 | | | | 77,778 | | | | 217,198 | | Ajay Goel | | | — | | | | — | | | | 20,000 | | | | 20,000 | | Vikash Jain | | | 32,900 | | | | 41,500 | | | | 31,111 | | | | 105,511 | | Sonam Donkar | | | — | | | | 17,290 | | | | 26,667 | | | | 43,957 | | Anand Soni | | | — | | | | 22,630 | | | | 22,986 | | | | 45,616 | | Anand Laxshmivarahan | | | 8,090 | | | | 13,840 | | | | 18,752 | | | | 40,682 | | Mahesh Iyer | | | 12,040 | | | | 17,290 | | | | 17,778 | | | | 47,108 | | Navin Jaju | | | 19,640 | | | | 26,280 | | | | 24,444 | | | | 70,364 | | Navnath Vhatte | | | 26000 | | | | 30610 | | | | 31111 | | | | 87,721 | | Varun Kapoor | | | 10,480 | | | | 15,220 | | | | 12,444 | | | | 38,144 | | Gobinda Pal | | | 37,600 | | | | 48,570 | | | | 42,222 | | | | 128,392 | | Pankaj Malhan | | | — | | | | 34,580 | | | | — | | | | 34,580 | | Leena Verenkar | | | 11,750 | | | | 15,220 | | | | 13,617 | | | | 40,587 | | Dhiraj Nayyar | | | — | | | | 20,750 | | | | 22,222 | | | | 42,972 | | Laxman Shekhawat | | | 51,700 | | | | 55,330 | | | | — | | | | 107,030 | | Total | | | 1,197,450 | | | | 2,169,360 | | | | 1,158,895 | | | | 4,525,705 | |
(1) | The awards are indexed to and settled by Vedanta shares. The awards provide for a fixed exercise price denominated in Vedanta’s functional currency at 10 US cents per share. Vedanta is obligated to issue theunderlying shares upon achieving a satisfactory performance as per the applicable scheme. In accordance with the terms of agreement between Vedanta and us, the grant date fair value of the awards is recovered by Vedanta from us. The amount recovered by Vedanta has been recognized as compensation expense over the requisite service period of three years. The Vedanta PSP is consistent with our reward philosophy, which aims to provide superior rewards for outstanding performance, and to provide a high proportion of “at risk” remuneration for executive directors and senior employees. The maximum value of Vedanta ordinary shares which may be conditionally awarded in any financial year to a participant in the Vedanta PSP who is an executive director is restricted to 150% of that executive director’s annual base salary.
The Vedanta PSP 2014 shall vest three years from the date of the grant based on the Group’s relative TSR performance against the peer group of resource companies and continued employment with the Group. These options will be awarded to employees under the Performance Share Plan with effect from November 17, 2014 for which the vesting condition will be the performance period of 36 months from April 1, 2014 to March 31, 2017. The Vedanta PSP 2015 shall vest three years from the date of the grant based on the Group’s relative TSR performance against the peer group of resource companies and continued employment with the Group. These options will be awarded to employees under the PSP with effect from December 30, 2015 for which the vesting condition will be the performance period of 36 months from December 30, 2015 to December 29, 2018. The Vedanta PSP 2016 shall vest three years from the date of the grant based on the Group’s relative TSR performance against the peer group of resource companies and continued employment with the Group. These options will be awarded to employees under the PSP with effect from November 11, 2016 for which the vesting condition will be the performance period of 36 months from November 11, 2016 to November 10, 2019. The DSBP is not subject to any performance conditions and the vesting schedule is staggered over a period of two or three years.
Vedanta Limited Employee Stock Option Scheme (“Vedanta Limited ESOS”)
The shareholders of the Company by way of postal ballot on March 30, 2015 approved the Vedanta Limited ESOS and issue of securities to the employees of the Company and its holding or subsidiary companies. No options were granted to the employees under such scheme. Thereafter, the shareholders of the Company by way of postal ballot on December 12, 2016 approved a revised scheme, Vedanta Limited ESOS 2016 and issue of securities to the employees of the Company and its holding or subsidiary companies. Awards under the plan may be granted to any employee of Vedanta Limited or any of its holding or subsidiary companies who is not within six months of such employee’s normal retirement date. The awards are indexed to and settled by Vedanta Limited shares. The awards provide for a fixed exercise price denominated in Vedanta Limited’s functional currency at Rs. 1 per share. The Vedanta Limited ESOS 2016 is consistent with the reward philosophy, which aims to provide superior rewards for outstanding performance, and to provide a high proportion of “at risk” remuneration for the employees. The Vedanta Limited ESOS 2016 shall vest three years from the date of the grant based on the Group’s relative TSR performance against the peer group of resource companies and continued employment with the Group. These options will be awarded to employees under the ESOS with effect from December 15, 2016 for which the vesting condition will be the performance period of 36 months from December 15, 2016 to December 14, 2019.
Vedanta Cash Based Plan (“Vedanta CBP”)
The grant under the long term Vedanta CBP is a combination of individual contribution and business performance. The vesting of such units will be a factor ofpre-determined performance criteria based on Vedanta’s performance relative to the competition and continued employment with the Company. The Vedanta CBP shall vest three years from the date of grant based on Group’s relative TSR performance against the peer group of resource companies and continued employment with the Group. These options will be awarded to employees under the Vedanta CBP with effect from March 2, 2017 for which the vesting condition will be the performance period of 36 months from March 2, 2017 to March 1, 2020.
Cairn India Performance Option Plan (including Phantom Cairn India Performance Option Plan) (“CIPOP”)
Cairn India provided the CIPOP to its eligible employees or eligible employees of its subsidiaries. The CIPOP is consistent with Cairn India’s total compensation philosophy, which aims to attract, motivate and retain world class talent. Rewards are commensurate with share price performance and achievement of key performance metrics and aligning the management’s interests with shareholder returns and long-term performance of the company.
Awards under the CIPOP in July 2014 shall vest on the third anniversary of the grant based on the vesting and performance condition of relative TSR (performance of Cairn India’s ordinary share price against the peer group of oil and gas companies and NSE Nifty index)(October 31, 2021), employee performance rating and continued employment with Cairn India. These options were awarded to employees with effect from July 22, 2014 which vested on the third anniversary (July 22, 2017). Pursuant to the Cairn India Merger, the CIPOP have been converted to cash award based on the TSR ranking, sustained business performance based on EBITDA as well as tenure served by employees as per the scheme. The options shall expire after six months from the date of vesting.
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(2) | The underlying shares shall vest three years from the date of grant (November 29, 2022), based on the TSR ranking, sustained business performance (volume, cost, NSR and Cairn IndiaEBITDA depending on respective entities) and sustained individual performance subject to continued employment in the organization as per the scheme. The options shall expire after six months from the date of vesting. |
(3) | The underlying shares shall vest 31 months from the date of the (November 6, 2023), based on the business (Volume, Cost NSR; EBITDA, FCF, ESG, Carbon Footprint), management discretion, and sustained individual performance subject to continued employment in the organization as per the scheme. The option shall expire after six months from the date of vesting. |
The following table summarizes, as of March 31, 2021, the options granted to our directors, executive officers and significant employees under the Vedanta Limited Conditional Cash Awards (CBP) and Vedanta Resources Limited Cash Based Plan/ Long Term Incentive Plan: | | | | | | | | | | | | | Name | | Shares Underlying the CBP, Grant date - November 1, 2018(1) | | | Shares Underlying the CBP, Grant date - November 29, 2019(2) | | | Shares Underlying the CBP, Grant date - March 31, 2021(3) | | Navin Agarwal(4) | | | 435,960 | | | | 513,260 | | | | 412,444 | | Pushpender Singla | | | 30,610 | | | | 32,380 | | | | 35,556 | | Andrew Lewin | | | — | | | | — | | | | 62,222 | | Anand Soni | | | 28,820 | | | | — | | | | — | | Laxman Shekhawat | | | — | | | | — | | | | 55,556 | | Total | | | 495,390 | | | | 545,640 | | | | 565,778 | |
(1) | The underlying cash-based units shall vest three years from the date of grant (October 31, 2021), based on the TSR ranking, sustained EBITDA as well as tenure served by employees as per the scheme |
(2) | The underlying cash-based units shall vest three years from the date of grant (November 29, 2022), based on the TSR ranking, sustained business performance (volume, cost, NSR and EBITDA depending on respective entities) and sustained individual performance subject to continued employment in the organization as per the scheme. |
(3) | The underlying cash-based units shall vest three years from the date of grant (November 6, 2023), based on the business (Volume, Cost NSR; EBITDA, FCF, ESG, Carbon Footprint), management discretion, and sustained individual performance subject to continued employment in the organization as per the scheme. |
(4) | Navin Agarwal has been awarded units under Vedanta Resources Limited share priceCash Based Plan/ Long Term Incentive Plan 2018, 2019 and 2020, the units will vest as of March 17, 2017.per Vedanta Limited CBP 2018, 2019 and 2020. The cash awardspayment upon vesting will be paid on the third anniversary of the grant. As of March 31, 2017, our executive directors, executive officers and significant employees as a group held options under themade from Vedanta PSP to acquire an aggregate of 1,882,000 equity shares of Vedanta representing approximately 0.62% of Vedanta’s share capital. The following table summarizes, as of March 31, 2017, the options granted to our directors, executive officers and significant employees under the Vedanta PSP Scheme:Resources Limited, UK.
| | | | | | | | | | | | | | | | | | | Shares Underlying the Vedanta PSP Schemes Grant date | | Name | | November 17, 2014(1) | | | December 30, 2015(2) | | | November 11, 2016(3) | | | Total | | Navin Agarwal | | | 140,000 | | | | 130,000 | | | | 125,000 | | | | 395,000 | | Tom Albanese | | | 170,000 | | | | 200,000 | | | | 140,000 | | | | 510,000 | | Tarun Jain | | | 95,000 | | | | 85,000 | | | | — | | | | 180,000 | | Din Dayal Jalan | | | 50,000 | | | | 44,000 | | | | — | | | | 94,000 | | GR Arun Kumar | | | 16,500 | | | | 30,000 | | | | — | | | | 46,500 | | Dilip Golani | | | 27,500 | | | | 30,000 | | | | — | | | | 57,500 | | Mansoor Siddiqi | | | 16,500 | | | | — | | | | — | | | | 16,500 | | Roma Balwani | | | 13,000 | | | | 13,000 | | | | — | | | | 26,000 | | Samir Cairae | | | — | | | | 32,000 | | | | — | | | | 32,000 | | Suresh Bose | | | 6,500 | | | | 15,000 | | | | — | | | | 21,500 | | Akhilesh Joshi | | | 30,000 | | | | 30,000 | | | | — | | | | 60,000 | | Amitabh Gupta | | | 16,500 | | | | 25,000 | | | | — | | | | 41,500 | | Sunil Duggal | | | 22,000 | | | | 40,000 | | | | — | | | | 62,000 | | Deshnee Naidoo(4) | | | 14,000 | | | | 25,000 | | | | — | | | | 39,000 | | Mayank Ashar | | | — | | | | — | | | | — | | | | — | | Sudhir Mathur | | | — | | | | — | | | | — | | | | — | | Rajagopal Kishore Kumar | | | 30,000 | | | | 40,000 | | | | — | | | | 70,000 | | Azad Shaw | | | 8,500 | | | | 8,000 | | | | — | | | | 16,500 | | P. Ramnath | | | 22,000 | | | | 30,000 | | | | — | | | | 52,000 | | Anup Agarwal | | | 8,500 | | | | 10,000 | | | | — | | | | 18,500 | | Abhijit Pati | | | 22,000 | | | | 35,000 | | | | — | | | | 57,000 | | Vikas Sharma | | | 12,000 | | | | 17,500 | | | | — | | | | 29,500 | | Ajay Kumar Dixit | | | — | | | | 35,000 | | | | — | | | | 35,000 | | Philip Turner | | | 10,000 | | | | 12,000 | | | | — | | | | 22,000 | | Total | | | 730,500 | | | | 886,500 | | | | 265,000 | | | | 1,882,000 | |
Notes:
(1) | The underlying shares shall vest three years from the date of grant i.e. on November 17, 2017, based on the achievement of performance conditions and completion of tenure with the Group. The options shall expire after six months from the date of vesting. |
(2) | The underlying shares shall vest three years from the date of grant i.e. on December 30, 2018, based on the TSR ranking as well as tenure served by employees as per the scheme. The options shall expire after six months from the date of vesting. |
(3) | The underlying shares shall vest three years from the date of grant i.e. on November 11, 2019, based on the TSR ranking as well as tenure served by employees as per the scheme. The options shall expire after six months from the date of vesting. |
(4) | Granted the options on January 1, 2015 under the Vedanta PSP 2014. The underlying shares shall vest three years from the date of grant i.e. on January 1, 2018, based on the TSR ranking as well as tenure served by employees as per the scheme. The options shall expire after six months from the date of vesting. |
The following table summarizes, as of March 31, 2017, the options granted to our directors, executive officers and significant employees under the Vedanta Limited ESOS Scheme, Vedanta CBP Scheme and CIPOP:
| | | | | | | | | | | | | Name | | Shares Underlying the Vedanta Limited ESOS Scheme December 15, 2016(1) | | | Vedanta CBP Scheme March 2, 2011(2) | | | CIPOP July 22, 2014(3) | | Navin Agarwal | | | — | | | | — | | | | — | | Tom Albanese | | | — | | | | — | | | | — | | Tarun Jain | | | 183,000 | | | | — | | | | — | | Din Dayal Jalan | | | — | | | | — | | | | — | | GR Arun Kumar | | | 75,000 | | | | — | | | | — | | Dilip Golani | | | 75,000 | | | | — | | | | — | | Mansoor Siddiqi | | | — | | | | 22,290 | | | | — | | Roma Balwani | | | 26,500 | | | | — | | | | — | | Mukesh Bhavnani | | | — | | | | — | | | | — | | Samir Cairae | | | 90,000 | | | | — | | | | — | | Suresh Bose | | | 32,200 | | | | — | | | | — | | Akhilesh Joshi | | | — | | | | — | | | | — | | Amitabh Gupta | | | 70,900 | | | | — | | | | — | | Sunil Duggal | | | 100,000 | | | | — | | | | — | | Deshnee Naidoo | | | — | | | | 19,490 | | | | — | | Mayank Ashar | | | — | | | | — | | | | — | | Sudhir Mathur | | | — | | | | — | | | | 52,784 | | Rajagopal Kishore Kumar | | | 72,000 | | | | — | | | | — | | Azad Shaw | | | 23,900 | | | | — | | | | — | | P. Ramnath | | | — | | | | 22,290 | | | | — | | Anup Agarwal | | | 29,600 | | | | — | | | | — | | Abhijit Pati | | | 76,000 | | | | — | | | | — | | Vikas Sharma | | | 45,000 | | | | — | | | | — | | Ajay Kumar Dixit | | | 65,000 | | | | — | | | | — | | Philip Turner | | | — | | | | 13,370 | | | | — | | Total | | | 964,100 | | | | 77,440 | | | | 52,784 | |
Notes:
(1) | The underlying shares shall vest three years from the date of grant (December 15, 2019), based on the TSR ranking as well as tenure served by employees as per the scheme. The options shall expire after six months from the date of vesting. |
Limitations on Liability and Indemnification Matters (2) | The underlying cash based units shall vest three years from the date of grant (March 2, 2020), based on the TSR ranking as well as tenure served by employees as per the scheme. |
(3) | The underlying shares shall vest three years from the date of grant (July 22, 2017), based on the achievement of vesting and performance conditions. The options shall expire after three months from the date of vesting. |
Limitations on Liability and Indemnification Matters
The Companies Act, 2013 provides an enabling provision for providing indemnity to directors and officers. The terms of the service contract with the Whole Time Directors provides that the Company shall indemnify and keep the director indemnified from and against all claims, demands, actions, suits and proceedings, penalties and punitive damages, attorney’s fees and such reasonable expenses arising out of any claim / litigation whatsoever that may be brought or made against the Director in relation to performance of duties assigned or arising out of naturalThe Companies Act, 2013 provides an enabling provision for providing indemnity to directors and officers. The terms of the service contract with the Whole Time Directors provides that the Company shall indemnify and keep the director indemnified from and against all claims, demands, actions, suits and proceedings, penalties and punitive damages, attorney’s fees and such reasonable expenses arising out of any claim / litigation whatsoever that may be brought or made against the Director in relation to performance of duties assigned or arising out of normal course of the business of the Company.
The Companies Act, 2013 also provides that where any insurance is taken by a company on behalf of its Managing Director, Whole Time Director, Manager, Chief Executive Officer, Chief Financial Officer or Company Secretary for indemnifying any of them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust for which they may be guilty in relation to the company, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel; provided that if such person is proved to be guilty, the premium paid on such insurance shall be treated as part of the remuneration. C. Board Practices Compensation of the Board Under the Indian Companies Act, 2013, our shareholders must approve the salary, bonus and benefits of all directors at an annual general meeting of the shareholders or through a postal ballot. Navin Agarwal is entitled to be paid a fixed salary inclusive of Base Pay,base pay, commission and retirement benefits (Provident Fund, Gratuity and Superannuation) in addition to which he is eligible for performance incentives (based upon the scheme) to be determined by our Board and perquisites including a housing allowance, medical and insurance reimbursement, club membership fees reimbursement and leave travel concessions for himself and his family and also a commission based on our net profits for a particular fiscal year as determined by our Board, subject to a maximum allowable under Indian Law. Din Dayal Jalan was entitled to be paid a fixed term fees, in addition to which he was eligible for performance incentives (based upon the scheme) to be determined by our Board and perquisites including a housing allowance, medical and insurance reimbursement and club membership fees reimbursement.
Tom Albanese is entitled to be paid a Base Pay, Pension Allowance of 20% on Base Pay, in addition to which he is eligible for performance incentives (based upon the scheme) to be determined by our Board and perquisites including rent free accommodation, club membership, travel trip with spouse, medical and other benefits as per the executed service agreement.
Tarun Jain is entitled to be paid a fixed salary inclusive of Base Pay, House Rent Allowance, Personal Allowance, and retirement benefits (Provident Fund, Gratuity and Superannuation), in addition to which he is eligible for performance incentives (based upon the scheme) to be determined by our Board and perquisites including medical and insurance reimbursement, club membership fees reimbursement and leave travel concessions for himself and his family. Tarun Jain is entitled to receive a bonus equal to 20% of his base pay.
GR Arun Kumar iswas entitled to be paid a basic salary, House Rent Allowance, Personal Allowance,house rent allowance, personal allowance, and retirement benefits, (Provident Fund, Gratuity and Superannuation), in addition to which he iswas eligible for performance incentives (based upon the scheme) to be determined by our Board and perquisites including medical and insurance reimbursement, club membership fees reimbursement and leave travel concessions for himself and his family. GR Arun Kumar iswas entitled to receive a bonus equal to 20%20.0% of his basic salary. GR Arun Kumar resigned from the position of Whole-Time Director & CFO with effect from close of business hours on April 24, 2021. Sunil Duggal is entitled to be paid a basic salary, personal allowance and retirement benefits, in addition to which he is eligible for performance incentives (based upon the scheme) to be determined by our Board and perquisites including vehicle maintenance reimbursement, car benefit and furnishing insurance reimbursement, club membership fees reimbursement and leave travel concessions for himself and his family. Composition of the Board Our Board currently consists of nine directors. FourFive of our nine directors, namely, Ravi Kant, Lalita D. Gupte, K.VenkataramananMahendra Kumar Sharma, Padmini Somani, Dindayal Jalan, Upendra Kumar Sinha and Aman MehtaAkhilesh Joshi satisfy the “independence” requirements of the NYSE rules. Naresh Chandra another Independent Director ceased to be memberThe following table provides a snapshot of the composition of the Board on his demise effective July 9, 2017. Navin Agarwal entered into a service contract with us which will expire on July 31, 2018. With effect from April 1, 2014, Tom Albanese, Tarun Jain and Din Dayal Jalan were appointed on our Board. Tom Albanese entered into a service contract with us, which expired on March 31, 2017. Tom Albanese wasre-appointed from April 1, 2017 to August 31, 2017 and entered into a service contract accordingly. Tarun Jain entered into a service contract with us, which expires on March 31, 2018. The service contract entered into by Din Dayal Jalan with us expired on September 30, 2014 and was further extended from October 1, 2014 to September 30, 2016. With effect from October 1, 2016, Din Dayal Jalan ceased to be a memberas of the Board. date hereof:
| | | | | Name | | Date of current term | | Expiration /Renewal of current term | Anil Agarwal(1) | | April 1, 2020 | | — | Navin Agarwal (2) | | August 1, 2018 | | July 31, 2023 | Mahendra Kumar Sharma(3) | | June 1, 2019 | | May 3, 2022 | Padmini Somani (4) | | February 5, 2021 | | February 4, 2023 | Dindayal Jalan(5) | | April 1, 2021 | | March 31, 2023 | Priya Agarwal(6) | | May 17, 2020 | | May 16, 2023 | Upendra Kumar Sinha(7) | | March 13, 2018 | | August 10, 2021 | Akhilesh Joshi(8) | | July 1, 2021 | | June 30, 2022 | Sunil Duggal(9) | | April 25, 2021 | | July 31, 2023 |
(1) | Anil Agarwal was appointed as an Additional Non-Executive Director designated as Chairman with effect from April 1, 2020 which was approved by shareholders at the Annual General Meeting held on September 30, 2020. |
(2) | Navin Agarwal was re-appointed as a Whole Time Director with effect from August 1, 2018 till July 31, 2023. He was re-designated as Executive Vice Chairman with effect from April 1, 2020. |
(3) | Mahendra Kumar Sharma was appointed as a Non-Executive Independent Director effective from June 1, 2019 till May 3, 2022 which was approved by the shareholders at the Annual General Meeting. |
(4) | Padmini Somani was appointed as a Non-Executive Independent Director effective from February 5, 2021 to February 4, 2023 subject to approval of the shareholders at the ensuing Annual General Meeting. |
(5) | Dindayal Jalan was appointed as a Non-Executive Independent Director effective from April 1, 2021 to March 31, 2023 subject to approval of the shareholders at the ensuing Annual General Meeting. |
(6) | Priya Agarwal was appointed as Non-Executive Non – Independent Director with effect from May 17, 2017 for a period of 3 years till May 16, 2020. She was further re-appointed for another term of 3 years effective from May 17, 2020 till May 16, 2023 which was approved by the shareholders at the Annual General Meeting held on September 30, 2020. |
(7) | Upendra Kumar Sinha was appointed as a Non-Executive Independent Director for a term effective from March 13, 2018 till August 10, 2021. In June 2021, the Board of Directors, on recommendation of Nomination and Remuneration Committee of the Company, have considered and approved the re-appointment of Upendra Kumar Sinha as Non-Executive Independent Director on the Board of the Company for a 2nd and final term of 3 years effective from August 11, 2021 to August 10, 2024, subject to approval of the shareholders at the ensuing Annual General Meeting. |
(8) | Akhilesh Joshi has been appointed as an Additional Director designated as Non-Executive Independent Director on the Board of the Company for a 1st term of one year effective July 01, 2021 till June 30, 2022, subject to approval of the shareholders at the ensuing Annual General Meeting. |
(9) | Sunil Duggal has been appointed as an Additional Director designated as Whole-Time Director & CEO and KMP of the Company effective from April 25, 2021 till July 31, 2023, subject to the approval of the shareholders of the Company at the ensuing Annual General Meeting. |
Either we or the director may terminate the respective service contract upon 90 days’ notice to the other party or payment in lieu of the notice period. None of the service contracts provide for benefits upon termination of their employment. Ravi Kant and Lalita D. Gupte have been appointed for a fixed term of three years effective as of January 29, 2015 to January 28, 2018 which has been approved by the shareholders through postal ballot on March 30, 2015. Naresh Chandra ceased to be member of the Board on his demise with effect from July 9, 2017. Anuradha Dutt has been appointed for a fixed term of three years effective as of April 27, 2015 to April 26, 2018 which has been approved by the shareholders in the Annual General Meeting on July 11, 2015. She ceased to be a member of Board with effect from March 31, 2017. GR Arun Kumar was appointed on our Board as a Whole Time Director with effect from November 22, 2016 for a period of three years up to November 21, 2019. Krishnamurthi Venkataramanan was appointed as an Additional Director effective April 1, 2017 and as The Non-Executive Director for a fixed term of three years with effect from April 1, 2017 to March 31, 2020. Aman Mehta was appointed as an Additional Director effective May 17, 2017 and asNon-Executive Independent Director for a fixed term of three years with effect from May 17, 2017 to May 16, 2020. Priya Agarwal was appointed as an Additional Director effective May 17, 2017 and asNon-Executive Director for a fixed term of three years with effect from May 17, 2017 to May 16, 2020. K. Venkataramanan, Aman Mehta and Priya Agarwal appointment was approved by the shareholders at the Annual General Meeting held on July 14, 2017. TheyDirectors serve as directors on our Board until their resignation or removal from office by a resolution of our shareholders, until they cease to be directorsor upon cessation by virtue of the provision of law or they are disqualified by law or under our articles of associationupon incurring disqualification from being directors. Ravi Kant, Lalita D. Gupte, Anuradha Dutt, K. Venkataramanan, Aman MehtaMahendra Kumar Sharma, Padmini Somani, Dindayal Jalan, Upendra Kumar Sinha, Akhilesh Joshi, Anil Agarwal and Priya Agarwal do not have any service contracts with the Company. Committees of the Board Our equity shares are currently listed and traded on the NSE and the BSE, and our ADSs are currently listed and traded on the NYSE. In addition to compliance with the NYSE corporate governance rules applicable to us as a foreign private issuer, we maintain our corporate governance arrangements in accordance with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI (LODR) Regulations 2015”) and the Indian regulations as per the requirements of Companies Act, 2013. In particular, we have established an Audit & Risk Management Committee, a Nomination and& Remuneration Committee, a Corporate Social Responsibility Committee, a StakeholdersStakeholders’ Relationship Committee, Risk Managementa Committee of Directors, a Share & Debenture Transfer Committee, and a Share and Debenture TransferSustainability Committee in accordance with the Indian corporate governance requirements. The composition and general responsibilities of each of these committees are described below. Ø | Audit & Risk Management Committee |
During fiscal year 2017,2021, the Audit Committee held 79 meetings. TheAs on March 31, 2021, the Audit & Risk Management Committee currently consistsconsisted of Lalita D. GupteMahendra Kumar Sharma as the Chairperson, Krishnamurthi Venkataramanan and Ravi Kant and Aman MehtaUpendra Kumar Sinha as members.
Lalita D. Gupte was appointedceased to be the Chairperson of the Audit Committee effective close of business hours of November 6, 2020 and accordingly, the said Committee was re-constituted at the Board Meeting held on November 6, 2020 with effect fromMahendra Kumar Sharma as the Chairperson and Krishnamurthi Venkataramanan and Upendra Kumar Sinha as members. Krishnamurthi Venkataramanan ceased to be the member of the Committee effective close of business hours of March 29, 2014. Ravi Kant31, 2021 and accordingly, Dindayal Jalan was appointed as athe member of the Audit Committee with effect from March 29, 2014. Theeffective April 1, 2021. Akhilesh Joshi was appointed as member of the Committee has been reconstituted oneffective July 12, 2017 with Lalita D. Gupte continuing to be the Chairperson and Ravi Kant and Aman Mehta as members.01, 2021. Each of Lalita D. Gupte, Ravi KantMahendra Kumar Sharma, Upendra Kumar Sinha, Akhilesh Joshi and Aman MehtaDindayal Jalan satisfy the “independence” requirements of Rule10A-3 of the Exchange Act and the NYSE rules. Lalita D. GupteDindayal Jalan is designated as our “audit committee financial expert”, within the requirements of the rules promulgated by the SEC relating to listed-company audit committees. The key responsibilities of the Audit Committee are to assist the Board in fulfilling its oversight responsibilities in relation to: financial reporting; the effectiveness of the system of risk management and robustness of internal financial controls and risk management framework including cyber security, adequacy and effectiveness of the Company’s legal, regulatory and ethical compliance and governance programs, monitoring the qualifications, expertise, resources and independence of both the internal and external auditors; and assessing the auditors’ performance and effectiveness each year. The principal duties and responsibilities of our Audit Committee are as follows: Oversight of financial reporting to serve as an independent and objective party to monitor ourOversight of Company’s financial reporting process and internal control systems;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; Discuss and review earnings press releases and the financial information and guidance provided to analysts and ratings agencies; Review of key significant issues, tax and legal reports, and management’s report; Review of management’s analysis of significant issues in financial reporting and judgments 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 20 F and Japanese Filings. Auditors Appointment of statutory, internal, secretarial, cost and tax auditors, recommending their fees and reviewing their audit reports; Review 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. Internal audit and Internal financial controls Review of internal audit observations and monitoring the implementation of any corrective actions identified; Reviewing the internal financial control framework; Review of the performance of the internal audit function and 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. Risk Management 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 appraise the audit efforts of our independent accountants and exercise ultimate authorityyear-end audit; Oversight over the relationship between us and our independent accountants; andeffective implementation of the risk management framework across various businesses; Assurance of appropriate measures in the organisation to provide an open avenueachieve prudent balance between risk and reward in both ongoing and new business activities; Annual review of communication among the independent accountants, financialrisk appetite and seniorrisk 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. Governance Reviewing minutes, summary reports of subsidiary company 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 board of directors.management’s response; The
Reviewing feedback from the Audit Committee has the power to investigate any matter brought to its attention within the scope of its duties. It also has the authority to retain counsel and advisors to fulfill its responsibilities and duties.Committee’s performance evaluation; Ø | Nomination and Remuneration Committee |
During fiscal year 2017,2021, the Nomination and Remuneration Committee held 74 meetings. The Nomination and RemunerationAs on March 31, 2021, the Committee comprisescomprised of Aman MehtaUpendra Kumar Sinha as the ChairmanChairperson of the Committee and Krishnamurthi Venkataramanan, Mahendra Kumar Sharma and Anil Agarwal as members of the Committee. Navin Agarwal is a permanent invitee to this Committee.
Subsequent to the cessation of Lalita D. Gupte Ravi Kant and Navin Agarwal as members. Naresh Chandrafrom the close of business hours of November 6, 2020, the Committee was appointed asre-constituted. Krishnamurthi Venkataramanan ceased to be the Chairman of the Nomination and Remuneration Committee with effect from March 29, 2014. Naresh Chandra ceased as a member of the Committee effective July 9, 2017 on his demise. The Nominationclose of business hours of March 31, 2021 and Remuneration Committee has beenre-constituted on July 12, 2017 with Aman Mehtaaccordingly, Dindayal Jalan was appointed as Chairman and Lalita D. Gupte, Ravi Kant and Navin Agarwal as membersthe member of the Committee.Committee effective April 1, 2021. Section 178 of the Companies Act, 2013 and SEBI (LODR) Regulations 2015, requires a Nomination and Remuneration Committee to consist of three or morenon-executive directors out of which not less than one half of the members shall be Independent Directors, provided the Chairperson of the Company ismay be appointed as a member of the Nomination and Remuneration Committee andbut shall not chair such Committee. Our Nomination and Remuneration Committee complies with this requirement which comprises of four members of which three members are Independent Directors and one is an ExecutiveNon-Executive Director who is our Executive Chairman.Non-Executive Chairman of the Company. The chairperson of the Committee is aNon-Executive Independent Director. The Nomination and Remuneration Committee is responsible for making recommendations to the Board on the structure, size, and composition of the Board, ensuring that the appropriate mix of skills, experience, diversity and independence is present on the Board for it to function effectively. The Nomination and Remuneration Committee also leads the process for new Board appointments, advises the Board on succession planning arrangements and oversees the development of management talent within the Vedanta Group. Another key objective of the Nomination and Remuneration 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 Nomination and Remuneration 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 Vedanta Group’s strategic and business objectives. The Nomination and Remuneration 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 Nomination and Remuneration Committee takes into account the business performance, developments in the natural resources sector and, considering that the majority of the Group’s operations are based in India, similar information for high-performing Indian companies. The Nomination and Remuneration Committee also carries out the entire process of board evaluation. The principal duties and responsibilities of the Nomination and Remuneration Committee are as follows: 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 Nomination and Remuneration Committee) 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 formulatethe 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 and recommending policiesdirector. 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 Directors, Key Managerial Personnellevel and other employeescomposition 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 the appropriate performance benchmarks; and; Ensure 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 Boardworking of Directors;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 Nomination and Remuneration Committee; 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 identify persons whobe granted, terms of vesting, grant options/rights to eligible employees, in consultation with management; and allotment of shares/other securities when options/rights are qualified to become Directorsexercised etc. and whorecommend changes as may be appointed in senior management, and recommend their appointment and/or removal tonecessary. Evaluation of the Board, of Directors; its Committees and individual directors To develop, subject to formulate criteriaapproval by the Board, a process for evaluatingan annual self-evaluation of the performance of Independentthe 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 criteria for evaluation of independent Directors and the Board and carry out evaluation of Directors;every Director’s performance and present the results to the Board; to consider whether to extend or continueTo review the termperformance of appointment ofall the IndependentExecutive Directors, on the basis of detailed performance parameters set for each of the performance evaluationsexecutive Directors at the beginning of such Independent Director;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 and Governance Review succession planning for Executive and Non-Executive Directors and other Senior Management; Establishing policies and procedures to deviseassess the requirements for induction of new members to the Board; To maintain regular interaction and collaborate with the leadership including the Human Resource team to review the overall Human Resource vision and people development strategy of the Company; To review and reassess the adequacy of the Nomination and Remuneration Committee’s charter as required and recommend changes to the Board; To develop and recommend a diversity policy for theon Board of Directors;diversity. Under the NYSE listing standards, listed companies must have a remuneration committee composed entirely of independent board members as defined by the NYSE listing standards. However, foreign private issuers such as us, are permitted to follow their respective home country rules in this regard. As a foreign private issuer, we are permitted to follow home country corporate governance practices and since we comply with the Indian regulations in relation to the independence requirements of the remuneration committee, we are not required to follow the NYSE listing standards for an all independent remuneration committee. The broad terms of reference of the Nomination and Remuneration Committee are to appraise the performance of Managing and/or Executive Directors, determine and recommend to the Board the compensation payable to them. This committee is responsible for recommending the fixation and periodic revision of remunerations (including commissions and/or incentives, etc.) of whole-time directors and executive directors. This is done after taking into account our profits and performance, external competitive environment and our growth plans and the company policy on rewarding achievements and performance. Payment of remuneration to the Executive Chairman Managing Director and Whole Time Director is governed by the respective agreements executed between them and the Company and are governed by the board and shareholder resolutions. The remuneration structure comprises of salary, commission linked to profits, perquisites and allowances, and retirement benefits (pension, superannuation, and gratuity). and performance incentives (based upon the scheme) to be determined by our Board. Share and Debenture Transfer Committee
Ø | During fiscal year 2017, the Share and Debenture Transfer Committee held 18 meetings.
The transfer of equity shares of the Company is approved by the Share and Debenture Transfer Committee, which meets regularly to approve share transfers. The Share and Debenture Transfer Committee members were Din Dayal Jalan, GR Arun Kumar and Rajiv Choubey. The Committee wasre-constituted in June 2016 with GR Arun Kumar, Pooja Yadava and Bhumika Sood as members.
Committee for Issue of Duplicate Share Transfer
On April 28, 2016, the Board constituted the Committee for Issue of Duplicate Share Transfer comprising of Tarun Jain, Tom Albanese and Din Dayal Jalan to periodically approve issuance of duplicate certificates and new certificates issued further to split, consolidation, renewal, demat, remat of shares, debenture, or other securities issued by the Company from time to time. This Committee wasre-constituted in November 2016 with Tarun Jain, Thomas Albanese and GR Arun Kumar as members.
Corporate Social Responsibility Committee During fiscal year 2017,
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During fiscal year 2021, the Corporate Social Responsibility Committee held 2 meetings. Section 135 of the Companies Act, 2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014, including any amendments thereof, mandates companies with revenue, net worth, or profitability beyond a prescribed limit to form a Corporate Social Responsibility Committee. This Committee should comprise of three or more directors with at least one of them being an independent Director. We comply with this requirement as three of our four members of the committee (all of whom are directors on the Board) are independent directors. As on March 31, 2021, the Committee comprised Mahendra Kumar Sharma as the Chairperson of the Committee and Krishnamurthi Venkataramanan, Priya Agarwal and Upendra Kumar Sinha as members of the Committee. Padmini Somani was inducted as the member of the Committee effective February 5, 2021 and Krishnamurthi Venkataramanan ceased to be the member of the Committee effective close of business hours of March 31, 2021. The principal duties and responsibilities of our Corporate Social Responsibility (CSR) Committee are as follows: CSR Policy Formulate and recommend to the Board the CSR policy indicating the activities to be undertaken; Review the CSR policy and associated frameworks, processes and practices. CSR Activities 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; Evaluate and monitor expenditure towards CSR Activities in compliance with the Companies Act, 2013. Section 135 of the Companies Act, 2013 along with Companies (Corporate Social Responsibility Policy) Rules, 2014 mandates companies with revenue, net worth or profitability beyond a prescribed limit to form a corporate social responsibility committee. This committee should comprise of three or more directors with at least one of them being an independent director. The Corporate Social Responsibility Committeere-constituted effective July 12, 2017 with Ravi Kant as the Chairman and Aman Mehta, K. Venkataramanan, Tarun Jain and Priya Agarwal as members. We comply with this rule as three of the five members of this committee (all of whom are directors on the Board) are independent directors.
The principal duties and responsibilities of our Corporate Social Responsibility Committee are as follows:
to formulate and recommend to the Board a corporate social responsibility policy which shall indicate the activities to be undertaken by the company as specified in Schedule VII of the Companies Act, 2013;
to recommend the amount of expenditure to be incurred on the activities referred above;
to review the performance of the company in the area of corporate social responsibility;
to provide guidance on the impact of business activities on environment and society; and
to monitor the corporate social responsibility policy of the company from time to time.
Ø | StakeholdersStakeholders’ Relationship Committee
During fiscal year 2017, the Stakeholders Relationship Committee held 2 meetings.
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During fiscal year 2021, the Stakeholders’ Relationship Committee held 1 meeting. As on March 31, 2021, the Stakeholders’ Relationship Committee comprised of Upendra Kumar Sinha as the Chairperson of the Committee and Mahendra Kumar Sharma, Krishnamurthi Venkataramanan and GR Arun Kumar as the members. Lalita D. Gupte ceased to be the Chairperson of the Committee effective from the close of business hours of November 6, 2020 and accordingly, the Committee was re-constituted with Mahendra Kumar Sharma as the Chairperson of the Committee. Krishnamurthi Venkataramanan ceased to be the member of the Committee effective close of business hours of March 31, 2021 and accordingly, Dindayal Jalan was appointed as the member of the Committee effective April 1, 2021. GR Arun Kumar ceased to be the member of the Committee effective close of business hours of April 24, 2021 and accordingly, Sunil Duggal was appointed as the member of the Committee effective April 25, 2021. Three members of the Committee are Independent Directors, and one member is Whole Time Director. The principal duties and responsibilities of the Stakeholders’ Relationship Committee follows: Shareholder grievances Review and timely resolution of grievances of Security holders related to issue, allotment, transfer/transmission, dematerialization and rematerialization etc. of shares and /or other securities of the Company; Review and timely redressal of all the Security holders grievance 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 Investor Education and Protection Fund (IEPF) Authority; Review and closure of all investor cases. Enhancing shareholder experience/services 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 addresses, permanent account numbers and 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 Registrars and Transfer Agents of the Company. Shareholding Pattern Review shareholding distribution; Review movement in shareholding pattern; Comparative details on demat and physical holding. The Stakeholders Relationship Committee members were previously Lalita D. Gupte, Din Dayal Jalan and Anuradha Dutt as Chairperson until the Committee wasre-constituted on September 30, 2016 by inducting Tarun Jain as a member. The Stakeholders Relationship Committee was furtherre-constituted on April 1, 2017 with Lalita D Gupte as Chairperson and K. Venkataramanan and Tarun Jain as members. This Committee was furtherre-constituted effective July 12, 2017 with Lalita D Gupte continuing to be the Chairperson and K. Venkataramanan, Tarun Jain and GR Arun Kumar as members.
Two of the members are Independent Directors and the other member is a Whole Time Director. The principal duties and responsibilities of the Stakeholders Relationship Committee are to oversee the reports received from the registrar and transfer agent and to facilitate the prompt and effective resolution of complaints from our shareholders and investors and carrying out any other function as prescribed under in the SEBI Listing Regulations.
Ø | Risk ManagementSustainability Committee
During fiscal year 2017, the Risk Management Committee held 3
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During fiscal year 2021, the Sustainability Committee held 2 meetings. As a Group we have sought to embed a standardised, high-performance sustainability culture across all our businesses. Our emphasis remains on our philosophy of ‘Zero Harm, Zero Waste and Zero Discharge’. Sustainability being one of our core values and pillar, means giving utmost priority to health and safety, being environmentally responsible and supporting all our communities. The well-being and security of our people, the community and the environment is considered in each of the things that we do. As on March 31, 2021, the Sustainability Committee comprised of Krishnamurthi Venkataramanan as the Chairperson of the Committee and Upendra Kumar Sinha and Sunil Duggal as the members. Krishnamurthi Venkataramanan ceased to be the Chairperson of the Committee effective close of business hours of March 31, 2021 and accordingly, the Committee was re-constituted with Upendra Kumar Sinha as the Chairperson of the Committee effective April 1, 2021. Dindayal Jalan was inducted as the member of the Committee effective April 1, 2021. Akhilesh Joshi was appointed as member of the Committee effective July 1, 2021. The duties and responsibilities of the Committee are: Overseeing the Company’s sustainability performance and ensuring adequacy of the Company’s sustainability framework in line with international standards; Advising the Board on sustainability 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; Outlining initiatives required to institutionalize a sustainability culture through involvement of the employees at all levels; Evaluating emerging sustainability 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 responsibilities, having regard to the law and the expected international standards of sustainability and stakeholder governance. Pursuant to regulation 21 of the LODR Regulations 2015, the Company has constituted a Risk Management Committee. The Board at its meeting held on November 22, 2016re-constituted the Risk Management Committee. The Risk Management Committee currently consists of four members, including three Executive Directors and one member from the Senior Management/ Executive Committee namely Thomas Albanese, Tarun Jain, GR Arun Kumar, Dilip Golani and Delodatta Padgaonkar (Risk Officer).
The purpose of the Risk Management Committee is to assist the Audit Committee and the Board in fulfilling its corporate governance oversight responsibilities with regard to the identification, evaluation, and mitigation of operational, strategic and external environment risks. The RMC has overall responsibility for monitoring and approving the risk policies and associated practices of the Company.
The principal duties and responsibilities of our Risk Management Committee are as follows:
to annually review and approve the risk management policy and associated frameworks, processes and practices of the Company and to recommend to the Audit Committee or the Board for approval or changes;
to ensure that the Company is taking appropriate measures to achieve prudent balance between risk and reward in both ongoing and new business activities;
Ø | Internal Committees to evaluate significant risk exposures of the Company and assess management’s action to mitigate the exposures in a timely manner;
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The Board has constituted few internal committees, for ensuring smooth functioning of the Board. With the constitution of these committees, the Board ensures that prompt and timely decisions are taken on the matters important for the Company and are delegated to the respective committees. Minutes of each committee meeting are placed before the Board for its noting. The Board also formulates several project specific sub-committees from time to time which ensures speedy implementation and execution of the projects. The Board is updated on each of the meetings of sub-committees as well. As on March 31, 2021, there are two internal Board committees which are detailed below: 1) Committee of Directors The Committee of Directors (“COD”) supports the Board by considering, reviewing, and approving all borrowing 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. The Committee meets as and when deemed necessary. The Committee during the fiscal year 2021 met five (5) times. As on March 31, 2021, the Committee comprised Navin Agarwal and GR Arun Kumar. GR Arun Kumar ceased to be the member of the Committee effective close of business hours of April 24, 2021 and accordingly, Sunil Duggal was appointed as the member of the Committee effective April 25, 2021. 2) Share and Debenture Transfer Committee As on March 31, 2021, the Committee consisted of three members, GR Arun Kumar – Whole-Time Director & Chief Financial Officer, Anup Agarwal – SVP Corporate Finance and Jagdeep Singh – Senior Corporate Counsel. During the fiscal year 2021, the Committee met one (1) time and passed a total of nine (9) resolutions through circulation. GR Arun Kumar and Anup Agarwal ceased to be the Chairperson and member of the Committee respectively effective close of business hours on April 24, 2021 and March 31, 2021, respectively. Ajay Goel – Deputy Chief Financial Officer and Dindayal Jalan, Non-Executive Independent Director have been appointed as the member and the Chairperson of the Committee effective April 1, 2021 and April 25, 2021, respectively. The role of Share and Debenture Transfer Committee primarily includes the following: Allotment of shares, debentures or any other securities; Review and approval of transfer, transmission, deletion and transposition of shares, debentures or any other securities. to establish and implement a comprehensive reporting system; and
to assess risk on an ongoing basis and minimizing the procedures.
D. Employees See “Item 4 - Information on the Company - B. Business Overview - Our Business - Employees.” E. Share Ownership for Directors, Executive Officers and Significant Employees See “Item 4. Information on the Company—B. Business Overview—Our Business—Employees.”
E. Share Ownership for Directors, Executive Officers and Significant Employees:
The following table sets forth information with respect to the beneficial ownership of our equity shares as of June 25, 2021, by each of our directors, executive officers, and significant employees and all our directors, executive officers and significant employees as a group. As used in this table, beneficial ownership means the sole or shared power to vote or direct the voting or to dispose of or direct the sale of any security. A person is deemed to be the beneficial owner of securities that can be acquired within 60 days upon the exercise of any option, warrant or right. Equity shares subject to options, warrants or rights that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding the options, warrants or rights. The amounts and percentages as of June 25, 2021 are based on an aggregate of 3,717,504,871 equity shares outstanding as of that date. | | | | | | | | | Name of the Beneficial owner | | Number of Shares Beneficially Owned | | | As of June 25, 2021 | | | Number | | | Percent | | Anil Agarwal | | | 2,422,689,293 | (1) | | | 65.18 | % | Navin Agarwal | | | — | | | | — | | Priya Agarwal | | | — | | | | — | | Upendra Kumar Sinha | | | — | | | | — | | Mahendra Kumar Sharma | | | — | | | | — | | Padmini Somani | | | — | | | | — | | Dindayal Jalan | | | 11,000 | | | | * | | Akhilesh Joshi | | | 200 | | | | * | | Sunil Duggal | | | — | | | | — | | Sharad Kumar Gargiya | | | 180 | | | | * | | Madhu Srivastava | | | 4,051 | | | | * | | Dilip Golani | | | 600 | | | | * | | Varun Kapoor | | | — | | | | — | | Andrew Lewin | | | — | | | | — | | Ajay Goel | | | 1,250 | | | | * | | Roma Balwani | | | — | | | | — | | Dhiraj Nayyar | | | — | | | | — | | Vikash Jain | | | 3,370 | | | | * | | Leena Verenkar | | | 3,200 | | | | * | | Anand Laxshmivarahan R | | | — | | | | — | | Philip Campbell | | | — | | | | — | | Arun Misra | | | — | | | | — | | Vinaya Jain | | | — | | | | — | | Laxman Shekhawat | | | 520 | | | | * | | Pushpender Singla | | | 900 | | | | * | | Prachur Sah | | | — | | | | — | | Hitesh Vaid | | | 10 | | | | * | | Sauvick Mazumdar | | | — | | | | — | | Navin Kumar Jaju | | | 2,442 | | | | * | | Navanath Vhatte | | | — | | | | — | | Pankaj Kumar | | | — | | | | — | | Anand Soni | | | 835 | | | | * | | Ajay Kapur | | | — | | | | — | | Abhijit Pati | | | — | | | | — | | Chhavi Nath Singh | | | 3,450 | | | | * | | Vikas Sharma | | | — | | | | — | | Rahul Sharma | | | 600 | | | | * | | Sonam Donkar | | | — | | | | — | | Gobinda Gopal Pal | | | 9,788 | | | | * | | All our directors, executive officers, and significant employees as a group | | | 2,422,731,689 | | | | 65.18 | % |
* | Represents beneficial ownership of less than 1.0%. |
(1) | Vedanta is the beneficial owner of 2,422,689,293 equity shares of the Company. See “Item 7 – Major Shareholders and Related Party Transactions” for further details on beneficial ownership of our equity shares as of July 28, 2017 by each of our directors, executive officers and significant employees and all our directors, executive officers and significant employees as a group. As used in this table, beneficial ownership means the sole or shared power to vote or direct the voting or to dispose of or direct the sale of any security. A person is deemed to be the beneficial owner of securities that can be acquired within 60 days upon the exercise of any option, warrant or right. Equity shares subject to options, warrants or rights that are currently exercisable or exercisable within 60 days are deemed outstanding for computing the ownership percentage of the person holding the options, warrants or rights. The amounts and percentages as of July 28, 2017 are based on an aggregate of 3,717,194,239 equity shares outstanding as of that date.shares. | | | | | | | | | | | Number of Shares Beneficially Owned | | | | As of July 28, 2017 | | Name of the Beneficial owner | | Number | | | Percent | | Anil Agarwal(1) | | | 1,863,458,132 | | | | 50.13 | % | Navin Agarwal | | | — | | | | — | | Tom Albanese | | | — | | | | — | | Din Dayal Jalan | | | — | | | | — | | Ravi Kant | | | — | | | | — | | Lalita D. Gupte | | | — | | | | — | | Tarun Jain | | | — | | | | — | | Krishnamurthi Venkataramanan | | | — | | | | — | | Aman Mehta | | | — | | | | — | | Priya Agarwal | | | — | | | | — | | Anuradha Dutt | | | — | | | | — | | Dilip Golani | | | 600 | | | | * | | Mansoor Siddiqi | | | — | | | | — | | Rajesh Padmanabhan | | | — | | | | — | | Suresh Bose | | | 865 | | | | * | | Samir Cairae | | | — | | | | — | | Roma Balwani | | | — | | | | — | | GR Arun Kumar | | | 8,000 | | | | * | | Mukesh Bhavnani | | | — | | | | — | | Akhilesh Joshi | | | 200 | | | | * | | Amitabh Gupta | | | — | | | | — | | Sunil Duggal | | | — | | | | — | | Deshnee Naidoo | | | — | | | | — | | Mayank Ashar | | | — | | | | — | | Sudhir Mathur | | | 22,948 | | | | * | | Rajagopal Kishore Kumar | | | — | | | | — | | P. Ramnath | | | 60 | | | | * | | Anup Agarwal | | | 475 | | | | * | | Ramesh Nair | | | 1,788 | | | | * | | Niranjan Kumar Gupta | | | 3,000 | | | | * | | Abhijit Pati | | | — | | | | — | | Vikas Sharma | | | — | | | | — | | Ajay Kumar Dixit | | | 1,000 | | | | * | | Philip Turner | | | — | | | | — | | All our directors, executive officers and significant employees as a group | | | 1,863,497,068 | | | | 50.13 | % |
Notes:
* | Represents beneficial ownership of less than 1.0%. |
(1) | Vedanta is the beneficial owner of 1,863,458,132 equity shares of the Company. See “Item 7. Major Shareholders and Related Party Transactions.” for further details on beneficial ownership of our equity shares. |
(2) | ITEM 7. | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS |
A. Major Shareholders
The following table sets forth information regarding beneficial ownership of our equity shares as of July 28, 2017 held by each person who is known to us to have 5.0% or more beneficial share ownership based on an aggregate of 3,717,194,239 equity shares outstanding as of that date.
Beneficial ownership is determined in accordance with the SEC rules and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Equity shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for the purposes of computing the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of computing the percentage ownership of any other person.
| | | | | | | | | Name of Beneficial Owner | | Number of Shares Beneficially Owned | | | Percentage Beneficially Owned | | Vedanta(1) | | | 1,863,458,132 | | | | 50.13 | % |
Note:
(1) | Vedanta is the beneficial owner of 1,863,458,132 equity shares of the Company, consisting of: |
| (i) | 1,280,084,749 equity shares and 24,823,177 ADSs held by Twin Star representing 99,292,708 underlying equity shares; |
| (ii) | 401,496,480 equity shares held by Finsider; |
| (iii) | 44,343,139 equity shares held by Westglobe; and |
| (iv) | 38,241,056 equity shares held by Welter Trading. |
VolcanAnil Agarwal is the majority shareholder of Vedanta, which in turn is the sole shareholder of VRHL, which in turn is the sole shareholder of each of Twin Starprotector and VRFL. VRFL is the sole shareholder of VRCL, which in turn is the sole shareholder of each of Welter Trading and Richter. Richter is the sole shareholder of Westglobe and the majority shareholder of Finsider. Volcan is wholly beneficially owned by the Trust. Conclave is the trustee of the Trust and the sole registered shareholder of Volcan. Mr. Anil Agarwal, the Executive Chairman of Vedanta and protector of the Trust, may be deemed to have beneficial ownership of securities that are deemed beneficially owned by the Trust and with effect from October 16, 2014, Mr. Anil Agarwal is one of the beneficiaries of the Trust. Vedanta, Volcan, the Trust, Conclave and Mr.Accordingly, Anil Agarwal is deemed to be a beneficial owner of securities that are parties to a relationship agreementbeneficially owned by the Trust.
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ITEM 7. | Major Shareholders and Related Party Transactions |
A. Major Shareholders The following table sets forth information regarding beneficial ownership of our equity shares as of June 25, 2021 held by each person who is known to us to have 5.0% or more beneficial share ownership based on an aggregate of 3,717,196,639 equity shares outstanding as of that date which excludes 308,232 pending allotment as they are under dispute. Beneficial ownership is determined in accordance with the SEC rules and includes shares over which the indicated beneficial owner exercises voting and/or investment power or receives the economic benefit of ownership of such securities. Equity shares subject to options currently exercisable or exercisable within 60 days are deemed outstanding for the purposes of computing the percentage ownership of the person holding the options but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. | | | | | | | | | Name of Beneficial Owner | | Number of Shares Beneficially Owned | | | Percentage Beneficially Owned | | Vedanta (1) | | | 2,422,689,293 | | | | 65.18 | % | Life Insurance Corporation Limited | | | 244,010,659 | | | | 6.56 | % |
(1) | Vedanta is intended to ensure that Volcan, as Vedanta’s controlling shareholder, complies with the independence provisionsbeneficial owner of 2,422,689,293 equity shares of the UK Financial Conduct Authority’s listing rules. See “B. Related Party Transactions—Related Parties—Vedanta” for more information on relationship agreement.Company, consisting of: |
1,620,820,572 equity shares held by Twin Star. This includes 24,823,177 ADS converted into 99,292,708 equity shares of Re.1/- each on August 11, 2020; 401,496,480 equity shares held by Finsider; 44,343,139 equity shares held by Westglobe; and 38,241,056 equity shares held by Welter Trading 210,445,341 equity shares held by Vedanta Holdings Mauritius II Limited; and 107,342,705 equity shares held by Vedanta Holdings Mauritius Limited. Vedanta is the majority shareholder of the Company. Vedanta was delisted from the official list of the London Stock Exchange on October 1, 2018 and was subsequently re-registered as a private limited company as Vedanta Resources Limited. Volcan and its wholly owned subsidiary i.e. Volcan Investments Cyprus Limited are the sole shareholders of Vedanta, which in turn is the sole shareholder of VRHL, which in turn is the sole shareholder of each of Twin Star and VRFL. VRFL is the sole shareholder of VRCL, which in turn is the sole shareholder of each of Welter Trading and Richter. Richter is the sole shareholder of Westglobe and the majority shareholder of Finsider. Vedanta Holdings Mauritius Limited is wholly owned by Vedanta Holdings Jersey Limited. Vedanta Holdings Mauritius II Limited is wholly owned by Finsider. Volcan is 100.0% beneficially owned and controlled by the Trust. Conclave is the trustee of the Trust and the sole registered shareholder of Volcan. Mr. Anil Agarwal, the Executive Chairman of Vedanta and protector of the Trust, may be deemed to have beneficial ownership of securities that are beneficially owned by the Trust and since October 16, 2014, Mr. Anil Agarwal is one of the beneficiaries of the Trust. Vedanta, Volcan, the Trust, Conclave and Mr. Anil Agarwal were previously parties to a relationship agreement that was intended to ensure that Volcan, as Vedanta’s controlling shareholder, complies with the independence provisions of the UK Financial Conduct Authority’s listing rules. Subsequent to the Vedanta’s delisting from the Official List of the London Stock Exchange, the Relationship Agreement was automatically terminated. Significant Changes in Percentage of Ownership The following table sets forth the significant changes in the shareholding interests of our Company by our principal shareholders in our equity shares in the last three fiscal years. Except as disclosed below, there were no significant changes in the percentage of ownership in our Company in the last three fiscal years. Percentages set forth below are based on the number of equity shares outstanding as of the dates set forth below. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of March 31, | | | As of July 28, | | Name and Type of Shares | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | Number | | | Percent | | | Number | | | Percent | | | Number | | | Percent | | | Number | | | Percent | | Vedanta | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Equity shares | | | 1,863,458,132 | | | | 62.85 | % | | | 1,863,458,132 | | | | 62.85 | % | | | 1,863,458,132 | | | | 62.85 | % | | | 1,863,458,132 | | | | 50.13 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As of March 31, | | | As on June 25, | | Type of Shares | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | Number | | | Percent (%) | | | Number | | | Percent (%) | | | Number | | | Percent (%) | | | Number | | | Percent (%) | | Equity shares(1) | | | 1,863,458,132 | | | | 50.13 | | | | 1,863,458,132 | | | | 50.13 | | | | 1,863,458,132 | | | | 50.13 | | | | 2,422,689,293 | | | | 65.18 | | Equity Shares(2) | | | 236,640,744 | | | | 6.37 | | | | 236,693,725 | | | | 6.37 | | | | 236,693,725 | | | | 6.37 | | | | 244,010,659 | | | | 6.56 | | Equity Shares(3) | | | — | | | | — | | | | 186,896,030 | | | | 5.03 | | | | 186,896,030 | | | | 5.03 | | | | — | | | | — | |
(1) | Vedanta is the beneficial owner of equity shares. |
(2) | Life Insurance Corporation Limited is the beneficial owner of equity shares. |
(3) | ICICI Prudential Equity Arbitrage Fund is the beneficial owner of equity shares. |
As of July 28, 2017June 25, 2021, there were approximately 514,663643,032 holders of our equity shares of which 402673 shareholders have registered addresses in the US. As of the same date, 228,630,140161,104,800 equity shares representing 57,157,53540,276,200 of our ADSs, representing 6.15%4.33% of our outstanding equity shares were held by a total of 97 registered holders of record with addresses in and outside of the US. Since certain of these equity shares and ADSs were held by brokers or other nominees, the number of record holders in the US may not be representative of the number of beneficial holders or where the beneficial holders are resident. Each of our equity shares is entitled to one vote on all matters that require a vote of shareholders, and none of our shareholders has any contractual or other special voting rights. B. Related Party Transactions The following is a summary of the material transactions we have engaged with our controlling shareholder, Vedanta, and its subsidiaries and other related parties, including those where our management or we have a significant equity interest. In addition, the following contains a discussion of how we intend to handle conflicts of interest and allocations of business opportunities between us and our affiliates, directors and executive officers. For a further discussion of related party transactions, See “Note 3135 to our consolidated financial statements” included elsewhere in this Annual Report. Related Parties (i) Volcan and the Agarwal Family As of July 28, 2017June 25, 2021, Volcan holds 62.37%and its wholly owned subsidiary hold 100.0% of the share capital and 69.39%100.0% of the voting rights of Vedanta. Volcan is 100%100.0% beneficially owned and controlled by the Trust. Conclave is the trustee of the Trust and sole registered shareholder of Volcan, and consequently controls all voting and investment decisions of the Trust. Mr. Anil Agarwal, our Chairman and non-executive director and the Executive Chairman of Vedanta, and our Chairman Emeritus, is the protector of the Trust and with effect fromsince October 16, 2014, is one of the beneficiaries of the Trust. While Vedanta was listed on the London Stock Exchange, Vedanta, Volcan, the Trust, Conclave and Mr. Anil Agarwal arewere parties to a relationship agreement that iswhich was intended to ensure that Volcan, as Vedanta’s controlling shareholder, compliescomplied with the independence provisions of the Financial Conduct Authority’s listing rules in the UK. Vedanta
Vedanta, Volcan, the Trust, Conclave and Mr. Anil Agarwal are parties to a relationship agreement. The principal purpose of the This relationship agreement is to facilitate the carryingwas automatically terminated on of Vedanta’s business independently of Volcan and its direct and indirect shareholders, and their respective associates, or the “Volcan Parties” as required by the listing rules of the Financial Conduct Authority of the United Kingdom, and to ensure that transactions between the parties to the agreement are conducted at arm’s length and on a normal commercial basis. Any deviationdelisting from the agreement is duly approved by the Independent directorsOfficial List of Vedanta. The relationship agreement will terminate in respect of Volcan at such time as each of the Volcan Parties, acting individually or jointly by agreement, cease to be a controlling shareholder of Vedanta for the purposes of the listing rules of the Financial Conduct Authority or if Vedanta isde-listed from the London Stock Exchange (“LSE”). In addition, the relationship agreement will terminate in respect of Conclave and Mr. Anil Agarwal if either of them individually or acting jointly ceases to be a controlling shareholder of Vedanta or Volcan. Currently, a controlling shareholder of a company for the purposes of the listing rules of the UK Financial Conduct Authority is any person (or persons acting jointly by agreement whether formal or otherwise) who is entitled to exercise, or to control the exercise of 30.0% or more of the rights to vote at general meetings of such company or is able to control the appointment of directors who are able to exercise a majority of the votes at Board meetings of such company.
Under the relationship agreement:
Volcan and Conclave undertake with Vedanta that:
| (a) | no member of the Volcan Group nor any of their associates will take any action that would have the effect of preventing Vedanta from complying with its obligations under the listing rules of the UK Financial Conduct Authority; and |
| (b) | no member of the Volcan Group nor any of their associates will propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the listing rules of the UK Financial Conduct Authority. |
the parties agree to ensure that Vedanta is capable, at all times, of carrying on its business independently of the Volcan Parties as required by the listing rules of the Financial Conduct Authority;
Vedanta’s board of directors and nominations committee and any other committee of Vedanta’s Board of directors (other than the audit committee or the remuneration committee or any committee which may be established by the board of directors in connection with a specific transaction, the constitution of which is approved by the board of directors) to which significant powers, authorities or discretions are delegated shall at all times comprise a majority of directors who are independent of the Volcan Parties and who are free from any business or other relationship with the Volcan Parties which could materially interfere with the exercise of the director’s judgment concerning Vedanta;
Vedanta’s remuneration committee and audit committee shall at all times consist only ofnon-executive directors;
Volcan is entitled to nominate for appointment to the board of directors of Vedanta such number of persons as is one less than the number of directors who are independent of the Volcan Parties and who are free from any business or other relationship with the Volcan Parties which could materially interfere with the exercise of the director’s judgment concerning Vedanta;
neither Mr. Anil Agarwal nor anynon-independent directors shall be permitted, unless the independent directors agree otherwise, to vote on any resolutions of Vedanta’s board of directors or of a committee of the board to approve the entry into, variation, amendment, novation or abrogation or enforcement of any contract, arrangement or transaction with any of the Volcan Parties;
Volcan shall not exercise voting rights attaching to its shares in Vedanta or any resolution to approve the entry into, variation, amendment, novation or abrogation of any transactions or arrangements between Vedanta and the Volcan Parties;
the Volcan Parties represented and warranted to Vedanta that at the time of the execution of the relationship agreement they did not own, directly or indirectly, any interests in the smelting, refining, mining or sale of any base metals or mineral otherwise than through Vedanta or any member of the Vedanta group;
the Volcan Parties agreed to, directly or indirectly, acquire or otherwise invest in any company, business, business operation or other enterprise which engages in the smelting, refining or mining of base metals or minerals only through Vedanta or other member of the Vedanta group. However, this agreement does not prevent, restrict or limit:
| (a) | the acquisition or ownership by the Volcan Parties of not more than 5.0% in aggregate of any class of shares, debentures or other securities in issue from time to time of any company which engages in the smelting, refining or mining of base metals or minerals which is for the time being listed on any stock exchange; or |
| (b) | the acquisition or ownership, directly or indirectly, by the Volcan Parties of any interest in, a base metal or mineral property or asset (together with any associated property, plant and equipment), which is not adjacent or geographically proximate to an existing property or operation of Vedanta group so as to give them operational synergies, where the acquisition cost (including assumed indebtedness), including any related capital expenditures committed at the date of acquisition for the following 12 months, is equal to $ 50 million or less, for which purpose any acquisitions of two or more related or adjacent base metal or mineral properties or assets shall be aggregated when calculating the acquisition cost, provided that the relevant interested party (i) is not an officer or director of a Vedanta group company; and (ii) before acquiring such property or asset, first made the opportunity to acquire such property or asset available to the Vedanta group, with a reasonable period for the independent directors of Vedanta to consider the opportunity, on terms no less favorable than those on which they are proposed to be acquired by the interested party and a majority of the independent directors has determined that the Vedanta group should not make the acquisition; and |
all transactions, arrangements and relationships between Vedanta and the Volcan Parties must be conducted at arm’s length and on a normal commercial basis.
(ii) Key Management Personnel See “Note 31.“Note 35: Related Party TransactionsTransactions” of Notes to the consolidated financial statements.”Consolidated Financial Statements. Related Party Transactions SIIL(i) Outsourcing Services Agreement with Vedanta
Vedanta Limited entered into a (i) representative office agreement; (ii) consultancy agreement; and (iii) a service agreement with Vedanta on various dates. PursuantApril 1, 2010, under which we agreed to provide accounting, treasury and related services at the request of Vedanta from time to time. In consideration of above, Vedanta agreed to pay us service charges aggregating to an amount of $ 0.2 million per year. Since the effectiveness of theRe-organization Transactions, these agreements have beenwe renewed and are nowthis agreement with Vedanta on May 20, 2014 for a period of 5 years. This agreement was valid until March 2018. For more information, please see “Item 10. Additional Information – C. Material Contracts.”2018 and Vedanta agreed to pay us service charges aggregating to an amount of $ 0.4 million per year with an annual increase of 10.0%. This agreement was further renewed for a period of 5 years from April 1, 2018 and is valid till March 2023. Further, Vedanta has agreed to pay us service charges aggregating to an amount of cost plus arm’s length mark-up per year. Relationship agreement between Cairn India, TMHL(ii) Brand License Agreement with Vedanta and the Company
Cairn India, TMHL, Vedanta andDuring fiscal year 2018, the Company entered into a relationshipbrand license agreement on December 8, 2011. This relationshipwith Vedanta under which Vedanta agreed to grant the Company a license to use the trademark “Vedanta” and its logo. In consideration of the grant of license by Vedanta, the Company has agreed to pay 0.75% of revenue of the Company. The agreement required each of Vedantawas valid until March 2020.
During the current year, the agreement was renewed between the parties and Cairn India to exercise all of their respective powers and, so far as they are respectively able to do so, procure that the directors of Cairn India exercise their respective powers to ensure that: (i) the business of Cairn India is at all times carried on independently of any other member of Vedanta; (ii) all dealings between Cairn India and the rest of Vedanta are approved by the Cairn India audit committee; and (iii) the business of Cairn India is managed for the benefit of its shareholders as a whole. The partiescertain additional services were also agreed to use their reasonable endeavors to ensure that they can comply with their respective obligations under applicable law or under the rulesbe provided by VRL. In consideration of the stock exchanges on which their securities are traded. This relationship agreement required Cairn India to provide Vedanta with such information as it may require in order to comply with its legal, regulatoryservices, the brand and reporting obligations for so long as Vedanta’s holding in Cairn India isstrategic service fee was re-negotiated at least 10%2% of turnover of the issued equity share capital of Cairn India, it isCompany. The agreement will be reviewed every three years for revision on such terms and conditions as may be agreed between the parties that, subject to certain limitations and subject to applicable law, Vedanta had the right to require Cairn India to take such steps as may be reasonably required by it in connection with any sale or disposal of Cairn India shares by any member of Vedanta. Cairn India was required to comply with such best practices, principles, standards, policies and provisions that Vedanta reasonably required and approved from time to time. As a result of the merger of the Cairn India Merger which became operative on April 11, 2017, the relationship agreement has been terminated.parties. Vedanta Resources Jersey II Limited and TMHL
During fiscal year 2014, pursuant to executing a deed of assignment between Vedanta and Vedanta Resources Jersey II Limited, all the existing rights of the loan agreements mentioned below from (i) to (iii) were assigned to Vedanta Resources Jersey II Limited and the new lender in the place of Vedanta is Vedanta Resources Jersey II Limited.
| (i) | During fiscal year 2011, TMHL entered into a loan facility agreement with Vedanta of $ 100 million which was extended until November 2012 and further extended until November 2013 with amended facility up to $ 350 million. During fiscal year 2014, the amount under this facility agreement has been extended until November 19, 2017 with an interest rate of LIBOR plus 362 basis points. During fiscal year 2016, the entire loan amount under this facility was repaid. |
| (ii) | During fiscal year 2012, TMHL entered into two loan facility agreements of $ 750 million each with Vedanta. The final repayment dates of the loans are May 24, 2016 and June 24, 2021 respectively, or on demand from the lender with 30 days notice. The loans are unsecured. Interest rates for the two loan facility agreements of $ 750 million are 7.95% and 9.45% per annum. During fiscal year 2015, TMHL repaid $ 750 million bearing an interest rate of 9.45% to Vedanta Resources Jersey II Limited. During fiscal year 2016, the repayment date of the balance $750 million was extended to May 24, 2018 and $578.5 million bearing an interest rate of 9.45% was repaid to Vedanta Resources Jersey II Limited. The outstanding balance under this facility at March 31, 2016 was $171.5 million. During fiscal year 2017, the entire loan amount under this agreement was repaid. |
| (iii) | During fiscal year 2012, TMHL entered into a loan facility agreement of $ 1,625 million with Vedanta. The final repayment date is November 28, 2018 or on demand from the lender with 30 days notice. The loan is unsecured. The interest rate on this loan is 8.15% per annum. During fiscal year 2015, TMHL repaid $ 281.06 million to Vedanta Resources Jersey II Limited and the outstanding balance under this facility at March 31, 2016 was $ 424.6 million. During fiscal year 2017, the entire loan amount under this agreement has been repaid. |
| (iv) | During fiscal year 2014, TMHL entered into a loan agreement with Vedanta Resources Jersey II Limited for $ 1,200 million and $ 300 million at an interest rate of 7.25% and 8.375% per annum respectively. The final repayment dates are January 31, 2019 and May 31, 2023 or on demand from the lender with 30 days notice. The loans are unsecured. During fiscal year 2015, TMHL repaid the outstanding balance of $ 285 million under the $ 300 million loan agreement to Vedanta Resources Jersey II Limited and the outstanding balances of these loans as of March 31, 2016 was $ 1,200 million. During fiscal year 2017, the entire loan amount under this agreement has been repaid. |
| (v) | During fiscal year 2015, TMHL entered into a loan agreement with Vedanta Resources Jersey II Limited for $ 100 million at an interest rate of 3 months LIBOR plus 301 basis points per annum. The final repayment date is August 11, 2016 or on demand from the lender with 5 days notice. The loan is unsecured. During fiscal year 2016, the repayment date of this agreement was extended to August 11, 2018 and the outstanding balance under this facility as of March 31, 2016 was $ 70.8 million. During fiscal year 2017, the entire loan amount under this agreement has been repaid. |
Vedanta Resources Jersey Limited and TMHL
| (i) | During fiscal year 2017, TMHL entered into a loan agreement with Vedanta Resources Jersey Limited for $ 200 million at an interest rate of 6.76% per annum. The final repayment date is August 16, 2019 or on demand from the lender with 5 days notice. The loan is unsecured. During fiscal year 2017, the amount advanced under this facility was $ 28.4 million and the entire loan amount has been repaid. |
For a further discussion of related party transactions, see “Note 31.“Note 35: Related Party Transactions” of Notes to the Consolidated Financial Statements. (iii) During the year ended March 31, 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 March 31, 2021 was ₹ 49 million ($ 1 million). The loan is unsecured in nature and carries an interest rate of 7.15% per annum. The loan was due in March 2021 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 $10 million at an interest rate of 2.1% per annum. During the year, these companies have recognised a provision of ₹ 979 million ($ 13 million) (including accrued interest of ₹ 200 million) against said loans. (iv) Twin Star Holding Limited and THL Zinc Limited During fiscal year 2019, THL Zinc Limited entered into a loan agreement with Twin Star Holding Limited for $ 20 million at an interest rate of 2.25% per annum. The agreement was valid until February 2019. During the fiscal year 2020, the agreement was renewed with an increased rate of interest of 7.78% and was extended until October 2022. The loan is unsecured. The outstanding balance as on March 31, 2021 was $ 40,000. (v) Structured investments purchased from Volcan Investments Limited During the financial year ended March 31, 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 ₹ 38,124 million (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 ₹ 44,847 million (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 realization was net of applicable transaction costs of ₹ 926 million (GBP 10 million, USD $ 12 million), which in January 2021, CIHL agreed to bear. Accordingly, this amount has been recorded in the consolidated financial statements.” statements of profit and loss in the current year.Cairn India’s production sharing contract(vi) Vedanta Limited - oil and gas business’s PSC and Open Acreage Licensing Policy (“OALP”) guarantee to Government
Vedanta Resources Limited as a parent company, has provided parent company financial and performance guaranteesguarantee to the GoI for erstwhile Cairn India’s obligationIndia group’s (“Cairn”) obligations under the production sharing contracts. The guarantee providesPSC provided for onshore block RJ-ON-90/1, for making available financial resources equivalent to Cairn India’sCairn’s share for its obligationobligations under production sharing contracts,the PSC, personnel and technical services in accordance with industry practices and any other resources in case Cairn India is unable to fulfill its obligations under production sharing contracts. Following the mergerPSC. During the current year, the Board of Cairn withDirectors of the Company Vedantahas 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 ₹ 366 million ($ 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 Limited (“CEHL”). Similarly, VRL has also provided parent company financial and performance guarantee to GoI for the Company’s obligations under the production sharing contracts.Revenue Sharing Contract (“RSC”) in respect of 51 Blocks awarded under the OALP by the GoI. During the current year, the Board of Directors of the Company has approved a consideration to be paid for this guarantee consisting of one-time charge of ₹ 1,829 million ($ 25 million), i.e., 2.5% of the total estimated cost of initial exploration phase of approx. ₹ 73,140 million ($ 1 billion) and an annual charge of 1% of spend, subject to a minimum fee of ₹ 731 million ($ 10 million) and maximum fee of ₹ 1,463 million ($ 20 million) per annum. Accordingly, the Company has recorded a guarantee commission expense of Nil and ₹ 1,332 million ($ 18 million) for the year ended March 31, 2020 and 2021 respectively and Nil and ₹ 1,610 million ($ 22 million) is outstanding as a pre-payment at March 31, 2020 and March 31, 2021 respectively. (vii) Loans to parent companies In June 2020, as part of its cash management activities, the Company through its overseas subsidiaries extended certain loans and guarantee facilities, for a period upto 12 months, to VRL and its subsidiaries (collectively “the VRL group”) which were drawn over a period of time carrying interest ranging from 3% to 7% and guarantee fee at 1%. In October 2020, certain terms of the loan facilities were modified primarily comprising extension of the tenor, increase in quantum and making it repayable in instalments by December 2023, which resulted in substantial modification of the instruments. Further, the guarantee was also extinguished. The difference in the fair value of the loan was debited to equity as a transaction with the shareholder. The provisions of IFRS 9 – ‘Financial Instruments’ as applicable for assets which are credit impaired on initial recognition were applicable to loans aggregating to ₹ 8,923 million (US$ 122 million) to one of the subsidiaries of VRL. Subsequently, in February 2021, the contractual rate of interest on these instruments were increased with retrospective effect to 14% to 17.5% to enable the Group to earn the fair market rate of interest, as was determined on the date of the origination of the transaction. With an understanding to revise it further based on prevailing market conditions. Thereafter, in March 2021, since the credit default swap rates had stabilized, 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 IFRS 9 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 ₹ 5,361 million (US$ 73 million) is reflected in the statements of changes in equity and cash flow as a transaction with the shareholder. The accounting effects of these transactions have been recorded for the first time in these financial statements and were not recorded in the interim financial statements of the Group as at and for the six months ended September 30, 2020. As of March 31, 2021, loans of ₹ 70,653 million (US$ 966 million) are outstanding. The loans are now entirely held by a single subsidiary of VRL, which holds 37.1% shares (increased to 43.6% subsequent to the year-end) in the Company and is required to maintain the said level of shareholding during the tenure of the loans. The said entity also has a contractual ceiling on its borrowings, which is lower than the market value of its investments and other assets. Further, an accretive interest of ₹ 146 million (US$ 2 million) over and above the contractual interest has been accounted for in the statement of profit and loss. Subsequent to the year end, in April 2021, the VRL group has repaid ₹ 15,140 Million (US$ 207 million) of the aforesaid loans. In May 2021, the overseas subsidiaries of the Company, entered into a novation agreement with the said subsidiary of VRL and agreed to novate ₹ 21,942 million (US$ 300 million) to another subsidiary of VRL with a revised rate of interest of 10.1%. Being a non - adjusting post balance sheet event, accounting effects of the same have not been recorded. (viii) Conflicts of Interest and Allocations of Business Opportunities From time to time, conflicts of interest have in the past and will in the future arise between us and our affiliates, including our controlling shareholder, Vedanta, and other companies controlled by Vedanta, our directors and our executive officers. See “Item“Item 3. Key Information—Information - D. Risk Factors—Factors - Risks Relating to Our Relationship with Vedanta.” With respect to transactions between us and our affiliates, directors and executive officers that involve conflicts of interests, we have in the past undertaken and will continue in the future to undertake such transactions in compliance with the rules for interested or related party transactions of the London Stock Exchange on which Vedanta is listed, the NYSE, on which our ADSs are listed and the NSE and BSE. The rules applicable to London Stock Exchange companies, which would apply to transactions between us and the controlling shareholders of Vedanta, namely Volcan and the Agarwal family, require that the details of a related party transaction be notified to a regulatory information service and disclosed to the Financial Conduct Authority as soon as possible after the terms of the transaction are agreed upon. There is also a requirement that a circular containing information about the related party transaction must be sent to all shareholders and that their approval of the related party transaction must be obtained either before the transaction is entered into or, if the transaction is conditional on shareholder approval, before the transaction is completed. The related party and its associates must be excluded from voting on the related party transactions. The requirement of shareholder approval does not apply to transactions where the gross assets of the transaction as a percentage of the gross assets of the listed company, the profits attributable to the assets of the transaction as a percentage of the profits of the listed company, the consideration for the transaction as a percentage of the aggregate market value of all the ordinary shares (excluding treasury shares) of the listed company and the gross capital of the company or business being acquired as a percentage of the gross capital of the listed company, does not exceed 5%. However, the listed company must, before entering into the related party transaction, inform the Financial Conduct Authority of the details of the proposed related party transaction, provide the Financial Conduct Authority with a written confirmation from a sponsor that the terms of the proposed related party transaction with the related party are fair and reasonable as far as the shareholders of the listed company are concerned and undertake in writing to the Financial Conduct Authority to include details of the related party transaction in the listed company’s next published annual accounts, including, if relevant, the identity of the related party, the value of the consideration for the transaction or arrangement and all other relevant circumstances. Related party transactions where all the above percentage ratios are 0.25% or less have no requirements under the rules applicable to London Stock Exchange companies. Where several separate transactions occur between a company and the same related party during a12-month period, the transactions must be aggregated for the purpose of applying the percentage ratio tests.
As part of our listing with the NYSE, we were required to confirm to the NYSE that we will appropriately review and oversee related party transactions on an ongoing basis. These related party transactions include transactions between us and our controlling shareholder, Vedanta, and its affiliates. The NYSE reviews the public filings of its listed companies as to related party transactions. Under the rules of the NYSE, we are required to have an independent audit committee comprised entirely of independent directors. We have had an independent audit committee comprised entirely of independent directors since our ADSADSs offering in June 2007. One of the functions of the independent audit committee is to review any related party transactions by us or any of our subsidiaries or affiliates. In addition, under the rules of the NYSE, we are required to obtain shareholder approval for any issuance of our equity shares, or securities convertible into or exercisable for our equity shares, to any related party, except that such approval would not be required for sales of our equity shares to our controlling shareholder or its affiliates in an amount not to exceed 5%5.0% of the number of our equity shares outstanding prior to such issuance and at a price equal to or greater than the higher of the book or market value of our equity shares. Under the listing regulations we have entered into with the NSE and BSE, we are required to ensure that our disclosures in relation to material and significant related party transactions in our Annual Reports are in compliance with applicable GAAPaccounting standards in India. Specifically, we are required to place before the audit committee and publish in our Annual Reports a statement in summary form of the related party transactions entered into by us during the previous fiscal year, providing details of whether such transactions were undertaken in the ordinary course of business and details of material individual transactions with related parties or others which were not on an arm’s length basis, together with our management’s justification for such transactions. Under the listing regulations, 2015, our audit committee is required to review and discuss with the management the disclosures of any related party transactions, as defined under Indian GAAP,provided in our annual financial statements. Under theAs per Companies Act, 2013, a company needsthe related party transactions require approval of the Audit CommitteeBoard of Directors in case the transaction is not at arm’s length or in the ordinary course of business. Further approval of the shareholders would be required whenever the prescribed threshold limits exceed. Further, the member of the company shall not vote on allsuch resolution to approve any contract or arrangement which may be entered into by the company, if such member is a related party. However, the approval of the Board / Shareholders will not apply if the related party transactions and any amendments. This is irrespective of whether they are in the ordinary course of business and consummated at arm’s length or they do not breach the share capital or transaction value thresholds prescribed in the board rules.length.
If the transaction is entered into the ordinary course of business, and is also at arm’s length, neither a board approval nor a special resolution of a disinterested shareholder is required. For transactions which are neither in the ordinary course of business nor at arm’s length, the company will need an approval of the board, irrespective of the share capital or transaction value.
The company needs to pass a shareholders’ special resolution at a general meeting, if the criteria below mentioned are satisfied. Members of the company, who are related parties, are not permitted to vote on the special resolution.
| (i) | Related party transactions are neither in the ordinary course of business nor at arm’s length, and |
| (ii) | The Company’spaid-up share capital is not less than the prescribed limit, or transaction(s) amount exceed a specified threshold. |
We also have used and will continue to use independent appraisers in appropriate circumstances to help determine the terms of related party transactions. We have had and will continue to have an audit committee comprised entirely of independent directors which is responsible for reviewing any related-party transaction by us or any of our subsidiaries or affiliates. We are continually seeking to identify and pursue business opportunities. However, Vedanta, as our controlling shareholder, has the power to determine in its sole discretion what corporate opportunities we may pursue and whether to pursue a corporate opportunity itself or through one of its other subsidiaries, which may benefit such companies instead of us and which could be detrimental to our interests. See “Item 3. Key Information—D. Risk Factors—Risks Relating to Our Relationship with Vedanta—Vedanta may decide to allocate business opportunities to other members of the Vedanta group instead of to us, which may have a material adverse effect on our business, results of operations, financial condition and prospects.” Vedanta has in the past allocated and expects in the future to allocate corporate opportunities among itself and its various subsidiaries based on a number of factors, including the nature of the opportunity, the availability of funds at the relevant subsidiary to pursue the opportunity and which subsidiary it believes can most successfully take advantage of the opportunity. C. Interest of Experts and Counsel
Not applicable
ITEM 8. | FINANCIAL INFORMATION |
A. Consolidated Statements and Other Financial Information Please see “Item 18 – Financial Statements” for a list of the financial statements filed as part of this Annual Report. Legal Proceedings Except as described below, there are no governmental, legal or arbitration proceedings (including any such proceedings, which are pending, or to our knowledge, threatened) which proceedings we believe could reasonably be expected to have a material adverse effect on our results of operations, cash flows or financial position. See – “Note 2933 to our consolidated financial statements” included elsewhere in this Annual Report for more information. – | Proceedings against the GoI which has disputed our exercise of the call option to purchase its remaining ownership interest in BALCO |
There are certain proceedings that are currently ongoing with respect to the exercise of a call option to acquire the remaining shares of BALCO held by the GoI, in accordance with the terms of the shareholders’ agreement between the GoI and us. The amount claimed under this proceeding is presently unquantifiable. The arbitrationarbitral tribunal formed under the directions of the High Court of Delhi pronounced an award on January 22, 2011. The award held certain clauses of the shareholders’ agreement to be void, ineffective and inoperative as being in violation of sub section (2) of Section 111A of the erstwhile Companies Act, 1956. We filed an application before the High Court of Delhi to set aside this award under Section 34 of the Arbitration and Conciliation Act, 1996. Our application is scheduled for hearing on October 17, 2017. See “Item 4.“Item 4 – Information on the Company—Company - B. Business Overview—Overview - Our Business—Business - Options to Increase Interests in HZL and BALCO.BALCO”. Proceedings against
– | Proceedings by the GoI which has disputed our exercise of the call option to purchase its remaining ownership interest in HZL |
We commenced arbitration proceedings against the GoI with respect to exercise of our call option to acquire the remaining shares of HZL held by the GoI, in accordance with the terms of the shareholders’ agreement between the GoI and us. The GoI denied our right to exercise the option on the basis that the shareholders’ agreement contravenes the provisions of Section 111A of the erstwhile Companies Act, 1956 and is therefore void. The next dateWhile the Arbitration was in process, a PIL was filed seeking restraint on disposal of hearingresidual shares by the arbitral tribunal is on April 21, 2018. In a related proceeding,GoI the Supreme Court on January 19, 2016 ordered the status quo be maintained with respect to the proposedany further disinvestment of government interest in HZL until further orders are passed by the Supreme Court. The Supreme Court, on August 13, 2020 however removed the status quo order in place to the extent that arbitration proceedings can continue with respect to our claim call option rights under the shareholder agreement. Pursuant to the Supreme Court order we had written to the arbitration tribunal for commencement of arbitration proceedings and tribunal is yet to confirm the date for resumption of arbitration proceedings. The PIL seeking restraint on further disinvestment is tentatively listed for July 19, 2021. The matter will be listed for hearing before the Supreme Court in due course. See “Item 4.“Item 4: Information on the Company—Company - B. Business Overview—Overview - Our Business—Business - Options to Increase Interests in HZL and BALCO.BALCO” .– | Legal proceedings related to mining operations in the State of Goa |
Pursuant to findings in the Justice M.B. Shah Commission Report dated March 15, 2012 on the allegations of illegal mining in the State of Goa, the state government banned iron ore mining operations in Goa on September 10, 2012 and the Ministry of Environment and Forest (“MoEF”)MoEF&CC suspended environmental clearances of all mining leases within the State of Goa. A writ petition was filed before the Supreme Court of India to initiate action based on the Justice M.B. Shah Commission Report and an interim order was passed by the Supreme Court of India on October 5, 2012 suspending mining operations within Goa. The Supreme Court of India passed an interim order on November 11, 2013 directing that the Directorate of Mines and Geology verify the inventory of the excavated mineral ores and the Monitoring Committee be constituted to sell the materials through ane-auction.e-auction The Monitoring Committee ise-auctioning the ore and the proceeds from the auction will go to be deposited with the state government. The auction of inventorized ore is yet to be completed. On April 21, 2014, the Supreme Court passed judgment in the matter lifting the ban with certain stipulations, including directions on mining by the lessees after November 22, 2007 as being illegal, and dumping outside the leased area as being impermissible. The Supreme Court also ordered that an interim buffer zone be fixed at one kilometer from the boundaries of National Parks and Sanctuaries, set anad-hoc cap on annual excavation at 20 million tons other than from dumps until such time as the final report of Expert Committee on Iron ore is submitted, and also ordered the appropriation of the sale value ofe-auctioned inventorized ores by the state government as per stipulated conditions, and the payment of 10%10.0% of the sale proceeds to the GoanGoa Iron Ore Permanent Fund. The Supreme Court has held that all mining leases in the State of Goa, including those of the Company, had expired in 2007 and consequently, no mining operations can be carried out until renewal/execution of mining lease deeds by the state government. The petition filed by us in May 2014 for the review of the aforesaid judgment in the Supreme Court of India on certain limited issues was subsequently withdrawn by us in September 2014. On August 13, 2014, the High Court of Bombay, Goa Bench passed a common order directing the State of Goa to renew the mining leases for which stamp duty was collected in accordance with the Goa Mineral Policy (2013) and to decide the other applications for which no stamp duty was collected within three months thereof. InOn January 15, 2015, the government of Goa revoked the order suspending mining operations in the State of Goa and MOEFMoEF&CC has revoked suspension of environmental clearances in March 2015. Subsequently, the lease deeds for all working leases were executed and registered as of August 2015. We obtained the consent to operateCTO under the Air (Prevention of Pollution) Act and Water (Prevention of Pollution) Act from the Goa State Pollution Control Board and mining plan approval from the Indian Bureau of Mines for these leases, and the Company resumed operations of its mines on August 10, 2015.
On September 10, 2014,the Goa Foundation challenged the High Court order directing the renewal of mining by way of a Special Leave Petition (SLP)SLP before the Supreme Court of India, challenging the judgment of the High Court dated August 13, 2014 directing renewal of mining leases. No stay has yet been granted by the Supreme Court. Another set of SLPs on an identical issue were filed by a local activist. Two writ petitions have also been filed before Supreme Court by Goa Foundation and Sudip Tamankar in September 2015 for setting aside the second renewal of iron ore mining leases in Goa made under section 8 (3) of MMDRMines and Minerals (Development and Regulation) “(MMDR”) Act and challenging the revocation of suspension on mining in State of Goa. The Supreme Court passed its final order in the matter on February 7, 2018 wherein it set aside the second renewal of the mining leases granted by the State of Goa. The Supreme Court directed all lease holders operating under a second renewal to stop all mining operations with effect from March 16, 2018 until fresh mining leases (not fresh renewals or other renewals) and fresh environmental clearances are granted under the MMDR Act. The State Government of Goa and company have filed a review petition against the said judgment dated February 7, 2018. The review petition has been heard in chambers and the order is being awaited. Subsequent to the aforesaid judgement, Vedanta Limited filed a representation before the state government seeking an extension on the validity of leases in consonance with provisions of MMDR Amendment Act which provided that all leases granted prior to the commencement of MMDR Amendment Act were deemed to be granted for a tenure of fifty (50) years. The state government did not consider the representation citing the Supreme Court judgment in place in respect of the issue. Vedanta Limited challenged state government’s stand before the High Court of Bombay at Goa by way of a writ petition which was also rejected basis the earlier Supreme Court. Company has now challenged the order of High Court before the Supreme Court, in which notice has been issued to parties and the State Government has filed a supportive affidavit. The SC has also allowed the impleadment of Goa Foundation and Sudip Tamankar and they have filed their replies. The matter will now be taken up for hearing on July 20, 2021. Separately, the Expert Committee on Iron ore has filed their reports on dump handling and ceiling on annual extractions before the Supreme Court recommending the immediate enhancement of the annual extraction ceiling to 30 million MT, and subsequently to 37 million MT after the development of infrastructure. We have filed an application before the Supreme Court of India, requesting clarification on whether any contributions to the Goa Permanent Iron Ore Fund should be made as per the Supreme Court’s orders, as the Central government has introduced a provision to set up social fund known as District Mineral Foundation in states for similar objectives. The Expert Committee Reporton Iron ore’s report is yet to be accepted byand the matter is pending before the Supreme Court and the next hearing is listed on August 24, 2017, which is to be heard along with the application on contributions to the Goa Permanent Fund.Court. – | Certain prosecution proceedings brought by SEBI against us, Mr. Anil Agarwal and Mr. Tarun Jain |
In April 2001, SEBI ordered that prosecution proceedings be brought against us, alleging that we have violated the regulations prohibiting fraudulent and unfair trading practices and it also passed an order prohibiting us from accessing the capital markets for a period of two years. This SEBI order was overruled by the SEBI Appellate tribunalTribunal on October 22, 2001 on the basis of lack of sufficient material evidence to establish that we had, directly or indirectly, engaged in market manipulation and that SEBI had exercised its jurisdiction incorrectly in prohibiting us from accessing the capital markets. On November 9, 2001, SEBI appealed to the High Court of Bombay. The next date of hearing has not yet been fixed. In addition to the prosecution proceedings, SEBI also initiated criminal proceedings in 2001 before the Court of the Metropolitan Magistrate, Mumbai, against us, Mr. Anil Agarwal and Mr. Tarun Jain (who was the chief financial officerChief Financial Officer of MALCO at the time of the alleged price manipulation). The matter is tentatively listed for August 27, 2021. When SEBI’s order was overruled on October 22, 2001, we filed a petition before the High Court of Bombay to stay those criminal proceedings on the grounds that the SEBI Appellate tribunalTribunal had overruled SEBI’s order on price manipulation. An order was passed by the High Court of Bombay in our favor on December 2, 2005, granting an interim stay of the criminal proceedings. – | Criminal proceedings against certain directors and employees of BALCO |
Criminal proceedings were initiated by Mr. Ajay Padia before the Court of the Judicial Magistrate First Class, Pune against Mr. Anil Agarwal, Mr. Navin Agarwal, Mr. Tarun Jain and certain of our other former directors and employees in 2002 alleging that an assurance that was given by the above mentioned directors regarding payment of all amounts owed to him for the damaged material supplied by BALCO was not honored. An application under Section 482 of the Indian Criminal Procedure Code was filed in the High Court of Bombay for quashing the proceedings in the Judicial Magistrate First Class and to dispose the matter directing that alternative remedies were available before the Sessions Court, Pune, which was the appropriate Court. The High Court of Bombay stayed the criminal proceedings and the application was listed for disposal. The next date of hearing has nottentatively been fixed.fixed for September 18, 2021. – | Penalties levied by the Enforcement Directorate on certain of our directors and us |
On August 3, 2004, the Enforcement Directorate levied penalties on certain of our directors and us aggregating to Rs.₹ 347 million ($ 5.44 million). It was alleged that we transferred an amount equivalent to $ 49of ₹ 2,080 million ($ 28.44 million) to Twinstar Holdings Limited and invested in Sterlite and MALCO through Twinstar Holdings Limited without the permission of the RBI. We have submitted that Twinstar Holdings Limited obtained the required approvals from the Foreign Investment Promotion Board (“FIPB”) for the investment. We appealed to the appellate tribunal against the Enforcement Directorate’s order for foreign exchange seeking a waiver of thepre-deposit amount, which was equal to 100%100.0% of the penalty levied, which appeal was allowed by the tribunal. The Enforcement Directorate appealed against this decision of the tribunal to the High Court of Delhi, which referred the matter back to the tribunal to consider the issue afresh. The next date of hearing is scheduled for September 12, 2017.Appellate Tribunal on August 06, 2019 passed a favorable order directing a stay on the pre-deposit amount. The matter will be heard on merits in due course. – | Criminal proceedings against former directors of Sesa Industries Limited |
Ms. Krishna Bajaj filed a complaint against the former directors of Sesa Industries Limited (which has since been amalgamated with Sesa Goa) before the Magistrate at Mumbai in 2000, in relation to shares issued on a preferential basis by Sesa Industries Limited in 1993 to Sesa Goa’s shareholders, alleging that the shares of Sesa Industries Limited were not listed within 12 to 18 months of the offer as stated in the offering document. The four directors appeared before the court on June 16, 2009 and pleaded not guilty to the charges. The four directors filed a criminal application in the High Court of Bombay challenging the Magistrate’s order of framing charges before the High Court of Bombay. The High Court of Bombay admitted the criminal application and stayed the proceedings pending before Magistrate at Mumbai. – | Writ petitions filed against us alleging violation of certain air, water and hazardous waste management regulations at our Tuticorin plant |
Various writ petitions were filed before the High Court of Madras alleging that sulphur dioxide emissions from our copper smelting operations at Tuticorin were causing air and water pollution and hazardous waste and sought a cancellation of our permits and environmental approval to operate our smelter. A writ petition was filed in December 2009 before the High Court of Madras challenging the grant of environmental clearance for the expansion of our copper smelter at Tuticorin. ButTuticorin, however no order or direction for injunction was granted. By way of its order dated April 28, 2016, the High Court of Madras dismissed the petition and rejected the claims of the petitioner. Separately, in March 2013, the TNPCB ordered the closure of the copper smelter at Tuticorin due to complaints regarding a noxious gas leak by local residents. On April 1, 2013, we filed a petition with the National Green TribunalNGT challenging the order of the TNPCB on the basis that the plant’s emissions were within permissible limits. The National Green TribunalNGT passed an interim order inon May 31, 2013 allowing the smelter to recommence operations subject to certain conditions, and consequently we recommenced operations on June 16, 2013. The expert committee constituted by the National Green TribunalNGT submitted a report on the operation of the plant on July 10, 2013 stating that the plant’s emissions were within the prescribed standards. Based on this report, the National Green TribunalNGT ordered on July 15, 2013 that the smelter could recommence its operations. On August 8, 2013, the National Green TribunalNGT confirmed its May 31, 2013 order and held that there was no health impact owing to the operations with directions to comply with the recommendations made by the committee to further improve the working of the plant within a time bound schedule. We implemented all the recommendations during fiscal year 2013. However, the TNPCB filed a civil appealsCivil Appeals in 2013 against the National Green Tribunal’sNGT’s interim order dated May 31, 2013 and the final order dated August 8, 2013. V Gopalaswamy, the General Secretary of a political party, MDMK, also filed civil appeals in 2013, which are pending before2013. These appeals have been allowed by the Supreme Court and the NGT judgment dated August 8, 2013 has been set aside on grounds of India. The MoEFmaintainability. However, the Supreme Court has rejectedgiven the forest clearance grantedCompany, liberty to the Niyamgiri mining project and our expansion plans of refinery in Lanjigarh are on hold
In 2004, a writ petition was filed by a private individual against us, the Government of Odisha, the Republic of India, the Orissa Mining Corporation (“OMC”), and others beforeapproach the High Court of Odisha, alleging thatMadras challenging the grantorders of a mining lease by the OMC to us to mine bauxite in the Niyamgiri Hills at Lanjigarh, in the State of Odisha, would violate the provisions of the Forest (Conservation) Act, 1980 of India. The petition alleged that the felling of trees, construction of the alumina refinery by us and the development of the mine was in violation of the Forest (Conservation) Act, 1980 and wouldTNPCB. We have an adverse impact on the environment. The petition sought, among other things, to restrain the grant of the mining lease to mine bauxite, to declare the joint venture agreement entered into between us and the OMC void, a court direction for the immediate cessation of construction of the Lanjigarh alumina refinery and an unspecified amount of compensation from us for damage caused to the environment. This petition was also filed before the Supreme Court of India by certainnon-governmental organizations and individuals. The Supreme Court granted us the clearance to mine in and around the Niyamgiri Mines on terms and conditions as specified in the Court order. Consequent to the order of the Supreme Court, the proceedings beforenow approached the High Court of Odisha became redundantMadras, Principal Bench challenging the impugned orders of TNPCB passed in 2013. The High Court vide its judgement dated August 18, 2020 dismissed the writ petition filed by the Company. The Company approached the Supreme Court and challenged the said High Court order by way of a SLP to Appeal. The SLP was admitted on August 31, 2020 wherein the court had directed the parties to file their counters and rejoinders if any. Subsequent to the same, the counter affidavits and the rejoinders were filed by the parties and the matter was listed on November 16, 2020 wherein Vedanta Limited had informed the court for a need to look at a workable approach and an option to resume the plant operations (at least on a trial basis so that allegations of pollution could be checked). Pursuant to the same an Interlocutory Application was filed by Vedanta Limited. The Matter was then listed on December 02, 2020 before Supreme Court. The 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. Further, considering the voluminous nature of documents and pleadings, the matter shall be finally heard on merits. The case is now listed on August 17, 2021. The State of Tamil Nadu and TNPCB had filed a SLP as well, but on the limited point of expunging of certain paragraphs in the Madras High Court judgement, wherein adverse remarks were made against the State Government officials and TNPCB officials. The matter was listed on January 21, 2021 wherein we had also appeared. The SLP of the State of Tamil Nadu and TNPCB has been clubbed with our main SLP matter.
– | Proceedings related to the existing copper smelting operations and the proposed expansion project at the Tuticorin plant |
The CTO for our existing 400,000 TPA copper smelter plant at Tuticorin which was due to expire on March 31, 2018. We filed an application dated January 31, 2018, before the TNPCB for renewal of consent to operate, as per procedure established by law. The TNPCB rejected the said renewal application by its order dated April 9, 2018 (Rejection Order). The Company had filed an appeal before the TNPCB Appellate Authority challenging the Rejection Order, which the Company withdrew after the NGT Order dated December 15, 2018 on account of redundancy of proceedings before the TNPCB Appellate Authority. During the pendency of the aforesaid appeal, TNPCB through its order dated May 23, 2018, ordered the disconnection of electricity supply and closure of the existing copper smelter plant with immediate effect. TNPCB passed the said closure order without any prior notice to us, which was due to be served as per the requirements under Section 21(4) of the Air (Prevention and Control of Pollution) Act, 1981 and Rule 34 of the Water (Prevention and Control of Pollution) Rules 1975. Thereafter, the Government of Tamil Nadu, proclaiming and endorsing TNPCB’s Rejection Order, issued orders dated May 28, 2018, with a direction to seal the existing copper smelter plant unit permanently (“TN Government Order”), without providing any prior notice to us. The Company filed an appeal before NGT, Principal Bench at New Delhi challenging the closure order passed by TNPCB as well as the issues were already determined. Thereafter,TN Government Order for sealing of the MoEFexisting plant and the appeal was allowed vide NGT’s judgement dated December 15, 2018. The NGT judgment was challenged before the Madurai Bench of the High Court of Madras (by a writ petition filed by an intervenor, Fathima Babu), which ordered to maintain status quo regarding the closure of the plant at Tuticorin until the State decided on August 24, 2010 declined to grantfiling of the forest clearance for the Niyamgiri Mines to the OMC, and rendered the environmental clearancenon-operational. On March 8, 2011, the OMCappeal. The Company challenged the order of the MoEF by a special leave petition inHigh Court before the Supreme Court. Meanwhile, the State also approached the Supreme Court against the final orders of India. the NGT ordering the reopening of the plant at Tuticorin.
The Supreme Court in its orderon February 18, 2019 set aside the NGT judgment dated April 18, 2013 ordered the Government of Odisha to place any unresolved issues and claims of the local communities under the Forest Rights Act and applicable rules before the Gram Sabha, the council representing the local community. The Gram Sabha was ordered to consider these claims and communicate its decision to the MoEF through the Government of Odisha within three months of the order. The Government of Odisha completed the process of conducting Gram Sabha meetings and submitted its reportDecember 15, 2018 on the proceedingsgrounds of maintainability, allowing Vedanta Limited the liberty to approach the MoEF.High Court of Madras to challenge all the orders collectively, stating that no plea of alternative remedy shall be allowed. Further the MoEF, basedBased on the report submitted by the Government of Odisha rejected the grant of stage II forest clearance for the Niyamgiri project of OMC on January 8, 2014, which is one of the sources of supply of bauxite to the alumina refinery at Lanjigarh in terms of the joint venture agreement with the government of Odisha (through the OMC). Under the terms of the joint venture agreement, 150 million tons of bauxite was required to be made available to us. We are considering to source bauxite from alternate sources to support the existing and the expanded refinery operations. The OMCsaid order, Vedanta Limited has issued a show cause notice dated February 20, 2015 on Vedanta to show reason for why the joint venture agreement for the supply of 150 million tons of bauxite will not be cancelled in view of the failure to achieve certain milestones set out in the joint venture agreement. We have replied to the notice substantiating all facts on the project followed by anin-person meeting. We have stated that Vedanta has achieved all its milestones and that the joint venture agreement should not be terminated. During fiscal year 2016, OMC has terminated the joint venture agreement for which the Company is pursuing the appropriate course of action.
On October 20, 2010, the MoEF ordered us to maintain the status quo on the expansion of our refinery at Lanjigarh. Against this order, we filed a writ petition inbefore the Principal Bench of the High Court of OdishaMadras and has additionally filed an application seeking interim relief for care and maintenance of the plant. The High Court vide its judgement dated August 18, 2020 dismissed the writ petition filed by the Company. The Company approached the Supreme Court and challenged the said High Court order by way of a SLP to Appeal. The SLP was admitted on August 31, 2020 wherein the court had directed the parties to file their counters and rejoinders if any. Subsequent to the same, the counter affidavits and the rejoinders were filed by the parties and the matter was listed on November 16, 2020 wherein Vedanta Limited had informed the court for a need to look at a workable approach and an option to resume the plant operations (at least on a trial basis so that allegations of pollution could be checked). Pursuant to the same an Interlocutory Application was filed by Vedanta Limited. The Matter was then listed on December 02, 2020 before Supreme Court. The 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. Further, considering the voluminous nature of documents and pleadings, the matter shall be finally heard on merits. The case is now listed on August 17, 2021. The State of Tamil Nadu and TNPCB had filed a SLP as well, but on the limited point of expunging of certain paragraphs in the Madras High Court judgement, wherein adverse remarks were made against the State Government officials and TNPCB officials. The matter was listed on January 21, 2021 wherein we had also appeared. The SLP of the State of Tamil Nadu and TNPCB has been clubbed with our main SLP matter.
Separately, our environmental clearance for the proposed copper smelter plant 2 (expansion project) expired on December 31, 2018. Our application for renewal of such environmental clearance was rejected by the MoEF&CC. Thereafter, we made a new application dated March 12, 2018, before the Expert Appraisal Committee of the MoEF&CC 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 dismissed our petition. We made anof Madras in a public interest litigation filed against us by the MoEF&CC and State Industries Promotion Corporation of Tamil Nadu (“SIPCOT”) held through its order dated May 23, 2018, that the application to the MoEF to reconsider the grantfor renewal of the environmental clearance for our alumina refinery. Bythe expansion project shall be processed after a mandatory public hearing and the said application shall be decided by the competent authority on or before September 23, 2018. In the interim, the High Court ordered us to cease construction and all other activities on site for the proposed expansion project with immediate effect. Separately, SIPCOT through its letter dated February 2, 2012,May 29, 2018, cancelled 342.22 acres of the MoEF issued fresh terms of referenceland allotted to us for preparationthe proposed expansion project, which has been stayed by High Court of Madras. Further, the TNPCB issued orders on June 7, 2018, directing the withdrawal of the environment impact assessment report. We submitted this reportconsent to establish for the expansion project, which is valid until March 31, 2023. Hearing the case of expansion project, Madras High Court vide its order dated October 3, 2018 has granted an interim stay in favour of the Company against order of SIPCOT (State Industries Promotion Corporation of Tamil Nadu) dated May 29, 2018, cancelling 342.22 acres of the land allotted to us. The MoEF&CC 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. The Company has also filed Appeals before the TNPCB Appellate Authority challenging withdrawal of CTE by the TNPCB. The matter is pending for hearing and is listed on August 4, 2021 for filing Counter to the Odisha Pollution Control Board and simultaneously submitted various representations to the MoEF as well as the Project Monitoring Group established under the Cabinet Committee on Investments. The Expert Appraisal Committee of the MoEF reconsidered the project and revalidated the terms of reference for 22 months effective January 2014. Thereafter the suspension imposed on the expansion of our alumina refinery was lifted. The public hearing was held on July 30, 2014 and the expansion of our Lanjigarh refinery was consideredAppeals by the Expert Appraisal Committee in its meeting dated January 9, 2015 for the grant of environmental clearance. TNPCB. – | Challenge relating to the environmental clearance granted for our expansion plans of refinery in Lanjigarh |
On November 20, 2015, the MoEF&CC granted an environmental clearance in line with the Expert Appraisal Committee’s recommendation for the alumina refinery expansion up to 4 mtpa and environmental clearance of up to 6 mtpa, which will be received as an amendment to the existing environmental clearance after the completion of land acquisition of the balance area of 666.03 HA. Further, a Consent to establish for 64 mtpa and Consent to OperateCTO for 2 mtpa has also been granted. On February 18, 2016, an individual challenged the environmental clearance granted for the alumina refinery expansion at Lanjigarh before the National Green Tribunal,NGT, Kolkata, wherein MoEF Orissa&CC, Odisha State Pollution Control Board and Vedanta Limitedwe have been made parties. WePleading in the matter is complete and pending for hearing of arguments, however, the same has not been posted owing to the paucity of judges in the Tribunal. It is pertinent to note that the Hon’ble NGT has not passed any interim order staying the project as prayed by the appellant. – | Proceedings relating to levy of environmental compensation on account of fly-ash generation |
BALCO has three thermal power plants in Korba, Chhattisgarh with a total capacity of 2010 MW out of which 1740 MW is operational. The MoEF&CC has issued several notifications laying down the terms for disposal of ash produced from the thermal power plants. However, compliance with manner of disposal as specified in these notifications is not practically attainable on account of lack of demand from user agencies. Consequently, in accordance with the conditions of BALCO’s Environmental Clearance, left over ash generated from the power plants is disposed off in ash dykes after giving preference to supplying the same to user agencies. The NGT took cognizance of the matter and vide its order dated February 12, 2020 ordered for levy of environmental compensation on companies failing to comply with the aforesaid notifications. BALCO filed our responsea SLP before the Supreme Court by way of challenging the NGT order on the grounds that it is not in consonance with the Supreme Court’s previous orders dated December 12, 2018 and February 4, 2019 and the methodology for determination of compensation is not reasonable. The Supreme court vide its order dated September 11, 2020 have stayed the impugned NGT order dated February 12, 2020. No demand letter has been received from the State/ Central Pollution Control Board for environmental compensation by BALCO as on date. Vedanta Limited (Jharsuguda and Lanjigarh units) and TSPL have also challenged the aforesaid NGT order by way of separate Civil Appeals before the Supreme Court. The Civil appeals filed by Vedanta Limited are tagged along with the case of M/S Aravali Power Co. Private Limited V. Vedprakash And Anr and the matter is tentatively listed on September 12, 2017. In the meantime, another individual has filed an interlocutory application to be impleadedfor July 27, 2021. Vedanta Limited Jharsuguda and TSPL have also not received any demand notices yet. However, in thea similar matter before the National Green Tribunal, Kolkata. Proceedings against us challenging environmental consents received for our expansion project of pig iron, metallurgical coke, sinter plants and power plant in Goa
On March 6, 2012, the High Court of Bombay dismissed a public interest litigationSLP filed by Mr. Ramachandra Vaman Naik and others for quashing an approval issuedNTPC (where demand has been raised), Supreme Court granted stay of recovery of environmental compensation. In yet another matter, in a SLP filed by the MoEF and the Goa State Pollution Control Board for the expansion project of a pig iron plant, sinter plant, metallurgical coke plant and power plant in Goa. On July 26, 2012, Mr. Naik challenged this order by filing a special leave petition beforeNational Aluminium Company Limited (“NALCO”) (where no demand has been raised), the Supreme Court for an interimgranted stay of the order and for a stay on the construction and operationrecovery, if any, in pursuance of the plants in Goa. No stay has been granted in these matters and all respondents have filed their counter–affidavits. The Supreme Court, on November 7, 2016, transferred the matter to the National Green Tribunal, New Delhi for a de novo hearing and disposal. The Supreme Court also set aside theimpugned order passed by the High Court without expressing any opinion on the merits of the case. The matter before the National Green Tribunal, New Delhi has been listed for hearing on August 23, 2017. NGT.– | Proceedings against us challenging environmental consents received for our expansion project of pig iron, metallurgical coke, sinter plants and power plant in Goa |
Separately, anAn application was filed by the village panchayat head of Navelim, Goa before the National Green TribunalNGT against the Goa State Pollution Control Board (“GSPCB”), MoEF&CC, State of Goa, others and us alleging that (i) Goa State Pollution Control BoardGSPCB had issued its approval in a piecemeal manner to us, even though the environmental clearance order issued by the MoEF&CC and the approval are for all four plants thereby violating the MoEF&CC order, (ii) theno-objection certificate issued in relation to this project in 2007 was forged and fabricated, and (iii) the CN5 bridge at Maina-Navelim junction falls outside the notified industrial area, and crosses a public road belonging to the village panchayat. The application sought cancellation of the approval and the order of the MoEF.MoEF&CC. On March 1, 2013, the National Green TribunalNGT gave directions to issue notices to all the parties. We responded on April 11, 2013, denying all contentions and submissions made by the village head and requested that the application be dismissed. Pleadings in the matter have been completed. Subsequently on February 10, 2014, the matter was transferred from the Principal Bench of the National Green TribunalNGT at New Delhi to the Western Bench of the National Green TribunalNGT at Pune. On July 31, 2014,Pune, where the National Green Tribunal held that owingmatter is yet to an identical issue pending before the Supreme Court of India, the proceeding before the National Green Tribunal is adjourned and ordered us to inform the National Green Tribunal of the determination of the Supreme Court of India.be listed.
– | Shenzhen Shandong Nuclear Power Construction Co. Limited has commenced arbitration proceedings against us |
On February 19, 2012, Shenzhen Shandong Nuclear Power Construction Co. Limited (“SSNP”) filed a petition before the Bombay High Court under section 9 of the Arbitration and Conciliation Act, 1996, allegingnon-payment of their dues towards construction of a 210 MWco-generation power plant for a refinery expansion project at Lanjigarh, and filed a claim of Rs. 16,686₹ 16,420 million ($ 257.3225 million). This was subsequent to SSNP’s notice for termination of the contract dated February 25, 2011 and legal notice dated February 23, 2012 for recovery of its alleged dues. SSNP also made a request for interim relief. Under the petition, SSNP sought for a restraining order on encashment of the advance bank guarantee, injunction from disposing or creating third party right over plant and machinery at the project site and security for the amount due under the contract. On April 25, 2012, the High Court of Bombay dismissed SSNP’s petition. SSNP appealed against this order and the High Court of Bombay by its order ofdated December 12, 2012 ordered us to deposit a bank guarantee for an amount of Rs.₹ 1,870 million ($ 28.825 million) until completion of the arbitration proceedings. On April 9, 2013, we filed a counterclaim for delays in operations caused for which we argued that SSNP was responsible. Subsequently, SSNP filed an application for an interim award of Rs.₹ 2,020 million ($ 31.128 million) before the arbitral tribunal, which was not granted. The arbitral award was pronounced on November 9, 2017, wherein the Tribunal awarded an aggregate amount of ₹ 2,210 million ($ 30 million) to SSNP payable within a period of 120 days carrying an interest at the rate of nine per cent (9.0%) from the date of filing of the claim and along with a cost of ₹ 5 million ($ 0.07 million). The tribunal further directed that beyond the said period of 120 days, the award amount shall carry an interest at the rate of fifteen per cent (15.0%) till the realization of the award amount. Vedanta Limited challenged the award before the High Court of Delhi under section 34 of Arbitration Act. This was dismissed by the court, post which the Company filed an appeal under section 37 before the division bench of the High Court of Delhi. The court granted a stay subject to the deposit of the award amount. Accordingly, we deposited an amount of ₹ 1,522 million with the court, requesting the court to direct SSNP to return the bank guarantee post which the balance amount shall be deposited. The division bench, on August 30, 2018, dismissed our appeal u/s 37 of Act and vacated all interim orders passed by the court. We challenged the said order of High Court before Supreme Court by way of a SLP. In the meantime, SSNP also filed an execution application before the High Court for appropriation of money which was deposited with the court, against which we filed an appeal to get a stay of execution. The Supreme Court disposed of the SLP passing its final argumentsorder, on October 11, 2018, partially modifying the Arbitral Award on the interest aspect as under: (i) A uniform rate of 9.00% will be applicable for the INR component of the award amount in entirety till the date of realization (ii) The interest payable on the EUR component of the award amount will be as per LIBOR + 300 basis points on the date of Award, till the date of realization. SSNP had filed a clarification application before the Supreme Court praying for the original award pronounced by the Tribunal on November 9, 2017 which was withdrawn by SSNP and now stands disposed of. Vedanta Limited then filed a reply to the Execution Petition filed by SSNP in the Delhi HC for giving effect to the its earlier order and requesting SSNP to hand over the drawings, documents and the Bank Guarantee. The court, in its order dated August 08, 2019, accepted the Company’s argument that the Euro component can be paid in INR subject to the arguments of SSNP on the next date. With respect to our submission for return of drawings and documents as a precondition to the release of payments, SSNP submitted an affidavit on September 12, 2019. The matter are completed. The nextwas then listed on October 21, 2019 for hearing date is on July 30, 2017 for clarifications. Proceedings against TSPL relating to its delay in commissioning various unitsand as per the order ₹ 347 Million has been released out of the deposit made with the Registry in the first week of November. In the meantime, SSNP also approached Vedanta Limited for a settlement which was rejected, stating that the same shall not be accepted unless the settlement offer is made by SSNP in writing.
On January 6, 2020, the court recorded our submissions on refund of excess security deposited with the Registry by Vedanta Limited and on the issue of release of drawings and documents as sought by Vedanta Limited. The court directed SSNP to file an affidavit within two weeks’ to show that such drawings and documents have been supplied by them, thereafter two weeks’ time was given to Vedanta Limited to file a reply to the same. Vedanta Limited has filed a petition to recover the surplus deposit amount lying with the Registry. In the same order, accounts officers of the court was directed to examine the calculation filed by the parties and submit the report to the court. The matter to be heard on August 02, 2021. In the meantime, SSNP filed an Execution First Appeal before the Division Bench, Delhi High Court against the aforesaid order dated January 6, 2020, wherein SSNP has prayed for modification of the arbitral award. The execution first appeal has been part heard on November 26, 2020 and December 17, 2020 and is pending for adjudication. The aggregate award amount now stands revised at ₹ 2,981.6 million ($ 40 million) as on March 31, 2021. – | Proceedings against TSPL relating to its delay in commissioning various units of the power plant |
TSPL entered into a long term power purchase agreement with the Punjab State Power Corporation Limited (“PSPCL”)PSPCL for supply of power. TSPL has a contractual obligation to complete the commissioning of various units of the power plant according to the scheduled timelines agreed in terms of the agreement. According to the terms of the agreement, there are obligations and performances to be met by both PSPCL and TSPL. PSPCL was obligated to fulfill certain conditions including procuring interconnection and transmission facilities, arranging supply of adequate quantity of fuel for the project etc. However, due to the delay in fulfilment of certain obligations and other force majeure reasons, there were delays in implementing the project as compared to the scheduled timelines under the agreement. TSPL received letter from PSPCL, seeking payment of liquidated damages of Rs. 3,176.4₹ 3,176 million ($ 49.043 million) for each delay in commissioning of Units I, II and III totaling Rs. 9,529.2₹ 9,529 million ($ 146.9130 million). Subsequently, PSPCL invoked the bank guarantee of Rs.₹ 1,500 million ($ 23.121 million) towards payment of the liquidated damages on account of delay in completion of the commissioning of Unit I. TSPL filed a petition with the Punjab State Electricity Regulatory Commission (“PSERC”) for quashing of the wrongful claim of liquidated damages and grant of extension of time to complete the commissioning of various units of the power plant. On October 22, 2014, PSERC ordered the matter to be settled through arbitration and allowed the stay on encashment of the bank guarantee until the matter is finally adjudged by the arbitrator. PSPCL submitted an appeal in Appellate Tribunal for Electricity (APTEL)(“APTEL”) against the PSERC order and on May 12, 2015, APTEL disposed the appeal by directing that the matter will be adjudicated by an arbitral tribunal. The arbitral proceedings have concluded on February 15, 2017 and the orderaward was made in TSPL’s favor. Meanwhile, PSPCL has filed an application challenging the award under section 34 of the Arbitration and Conciliation Act, 1996. TSPL had filed an application on September 28, 2018 for dismissal of PSPCL’s application on maintainability stage. However, the application filed by TSPL has been reserved. dismissed by the court on January 12, 2021. TSPL has challenged the Order dated January 12, 2021 before Punjab & Haryana High Court which is yet to be listed. Further, the Section 34 matter before District Court, Patiala has been scheduled for filing of reply by TSPL and is pending for adjudication.– | Proceedings against TSPL relating to mega power project benefits |
TSPL submitted its bid for setting up a 1980 MW thermal power plant in the state of Punjab under a tariff based international competitive bidding process under aCase-2 Model bidding mechanism onin June 2008, which was ultimately awarded to Sterlite Energy Limited (now Vedanta Limited). A PPA was entered between TSPL and PSEB (Punjab State Electricity Board) on September 2008, which is now known as PSPCL. According to the PPA, any increase or decrease in the capital cost of the project on the occurrence of any “Change in Law” (as defined therein) after thecut-off date of June 16, 2008, had to be passed on to PSPCL, if it resulted in change in economic position of TSPL. At the time of bidding, TSPL was not eligible for the ‘mega power project’ status, however towards the end of 2009, the government policy on mega power projects was amended and various conditions were relaxed making TSPL eligible for the grant of mega power project benefits. TSPL was then granted the mega power project status in 2010 in terms of which TSPL has availed customs and excise duty exemption for import of capital goods during construction of the power plant. As TSPL had become entitled to the mega power project status after thecut-off date, according to PSPCL, the mega power project benefits received by TSPL had to be passed on to PSPCL pursuant to the PPA’s “Change in Law” clause. TSPL’s position was that as of thecut-off date, similar benefits were available to it under India’s foreign trade policy as anon-mega power project and accordingly, that its economic position had not altered pursuant to the grant of mega power project status to warrant the passing on of such benefits to PSPCL. TSPL has also produced a number of approval letters issued by various Director General of Foreign Trade offices across India, which extended such benefits tonon-mega power projects including government power projects or other public sector undertakings. PSERC passed a 2:1 majority judgement dated December 2, 2014, holding against TSPL. TSPL thereafter filed an appeal onin January 2015 along with a stay application before the APTEL. The appeal was admitted, however, the stay application was rejected by APTEL. Against this rejection of stay application, TSPL filed an appeal in Supreme Court on July 28, 2015, the2015. The Supreme Court granted stay order against any recovery of mega power project benefits by PSPCL. The stay granted by the Supreme Court was vacated on February 6, 2017, which led to a deduction of Rs.₹ 2,140 million ($ 29 million) from TSPL’s monthly billing by PSPCL. Upon appeal, Supreme Court directed PSPCL to refund Rs.₹ 500 million ($ 7 million) from the amount deducted from TSPL’s bill subject to final outcome of appeal before APTEL. Following this order, APTEL also granted a stay against further deductions from the monthly billing against a bank guarantee furnished by TSPL. APTEL dismissed the appeal filed by TSPL and disallowed TSPL’s contentions in its final judgement order dated July 4, 2017. TSPL filed an appeal before the Supreme Court against the adverse final judgement of APTEL. This appeal was admitted by Supreme Court on July 10, 2017 and a stay order was granted against PSPCL’s proposed deduction of Rs.₹ 900 million ($ 12 million) from TSPL’s bills and against the encashment of bank guarantee amounting to Rs.₹ 380 million ($ 5 million) which was furnished by TSPL to PSPCL under APTEL’s order. TSPL filed a clarification application before the Supreme Court of India, which was allowed and PSPCL was directed to refund ₹ 500 million ($ 7 million). However, the ongoing monthly deductions on account of mega benefit claim has not been stayed by the Supreme Court. On this account, PSPCL has already made deductions of approximately ₹ 7,850 million ($ 107 million) till March 31, 2021. The appeal is scheduledpending for further hearing in Supreme Court on November 8, 2017. TSPLand next date is of the firm belief that no benefit hasyet to be passed on to PSPCL on account of grant of mega power project status as the economic position of TSPL has not changed owing to such mega power project status which is the trigger point for applicability of ‘Change in Law’ provision of the PPA.notified.
– | TSPL dispute related to Coal GCV measurement and coal washing |
Upon PSPCL’s refusal to pay energy charges to TSPL as per the provisions of a PPA between PSPCL and TSPL dated September 1, 2008.2008, TSPL filed a petition on May 22, 2014, in PSERC against PSPCL claiming charges for washing, unloading, surface transportation, transit loss, finance charges and gross calorific value (GCV)(“GCV”) loss related to the procurement of coal. PSPCL’s contention was that fuel charges should only include charges billed by the fuel supply company namely Mahanadi Coalfields Limited, whereas TSPL contended that all costs of fuel procurement are to be considered by PSPCL under the PPA, since the obligation to supply fuel for the project is that of PSPCL under Case II Scenario IV bidding procedure of Ministry of Power. PSPCL’s obligation of signing fuel supply agreement with Mahanadi Coalfields Limited and to supply fuel for project was later upheld by APTEL in another case between TSPL and PSPCL and that judgement is subsisting since its operation has not been disturbed in PSPCL’s appeal to Supreme Court of India. PSERC issued the final order on November 23, 2015 denying all the claims made by TSPL. TSPL filed an appeal before APTEL challenging the order of PSERC. On July 3, 2017, APTEL partially allowed the appeal awarding unloading and shunting charges to TSPL although it ruled against TSPL on other claims. PSERC remand proceedings commenced pursuant to APTEL’s order dated July 3, 2017, for computation of unloading and shunting charges allowed to TSPL isand PSERC passed its final order on May 6, 2019. TSPL filed an appeal against the APTEL order dated July 3, 2017 before the Supreme Court. On March 7, 2018, the Supreme Court allowed TSPL’s appeal and directed PSPCL to pay charges for washing, surface transportation and to measure GCV of coal at TSPL site. The Supreme Court also dismissed the cross appeal filed by PSPCL, thereby affirming APTEL’s order allowing unloading and shunting charges to be paid by PSPCL. However, PSPCL misinterpreting the Supreme Court order, paid only ₹ 160 million ($ 2 million) on September 17, 2018 on account of washing charges. TSPL has filed a Contempt Petition in the processSupreme Court. The Supreme Court vide its order dated August 7, 2019 allowed the claims of challengingTSPL and directed PSPCL to pay within six weeks. PSPCL paid ₹ 10,021 million to TSPL. However, PSPCL did not pay the decisioncomplete amount and withheld balance amount due on account of yield loss and interest etc. TSPL had filed a second contempt petition for the remaining amounts. PSPCL has filed counter affidavit in reply to the second contempt petition. TSPL has filed rejoinder to the counter affidavit. On March 7, 2020, PSPCL filed an application to submit an additional document (namely, expert opinion regarding coal washing). On August 14, 2020, PSPCL filed an affidavit seeking extension of time for reconciliation of amounts due towards energy charges. On October 14, 2020, PSPCL filed an application for permission to file additional documents/ additional facts. On February 04, 2021, PSPCL filed an affidavit stating that all the payments have been made in compliance of the Supreme Court Order and as per computations of PSPCL. On March 6, 2021, PSPCL also filed a note of arguments stating that they have paid only 83% of the claimed amount by TSPL. Finally, on March 9, 2021, Hon’ble Supreme Court has disposed off the matter in favour of TSPL directing PSPCL to clear all the arrears as on date as understood by TSPL in two instalments i.e. on or before March 31, 2021 and May 31, 2021 including interest or any other component which is admissible as per the contract inter se the parties and as per the orders of the Hon’ble Supreme Court. The claim amount involved is Rs. 5,900Subsequently, PSPCL has paid ₹ 3,750 million ($ 91.051 million). till March 31, 2021 on the basis of the Supreme Court order. – | Petitions filed against BALCO in relation to the alleged encroachment of land on which our Korba smelter is located |
BALCO has 1,804.67 acres of government land out of which 1,751 acres is forest land which were given on lease by the state government. The lease deed has not been executed till date. The High Court of Chhattisgarh on February 2010 held that BALCO is in legal possession of 1,804.671,805 acres of government land based on which the cabinet of Chhattisgarh recommended the execution of lease deed in favor of BALCO but after approvals for forest land were sought. With respect to the approvals for forest land, petitions have been filed in public interest before the Supreme Court of India by various individuals and Sarthak, anon-governmental organization alleging that BALCO is using forest land fornon-forest activities. The Supreme Court of India referred the matter to the Central Empowered Committee (“CEC”), which recommended an ex post-facto diversion of forest land with payment of net present value onof land for which forest compensation was not paid prior to the year 1980. Subsequently, it was alleged that BALCO had cut trees in violation of the Court order and the petitioner filed a contempt petition and the matter was again referred to the Central Empowered Committee.CEC. The Central Empowered CommitteeCEC submitted its report on June 30, 2012 to the Court recommending that a detailed survey should be conducted through Forest Survey of India (MoEF)(MoEF&CC) using high quality remote sensing technique to find out whether any tree felling and/ornon-forest use has taken place after February 29, 2008 in the revenue forest land and/or deemed forest in possession of BALCO. In order to expedite the proceedings, BALCO filed an application in the Court seeking direction to pay the net present value onof forest land as per the recommendation of the Central Empowered CommitteeCEC providing anex-post facto diversion of the 1,751 acres forest land held by BALCO. The dateCEC has submitted its report dated February 22, 2019 on the ground trothing exercise conducted by the Forest Survey of hearingIndia (FSI) jointly with BALCO between October 29, 2019 and October 31, 2019. Matter is currently pending before the Supreme Court and is to be listed in due course. In the meantime, BALCO had filed an application before the Tehsildar, Korba for eviction of illegal occupants on BALCO’s land. The application was rejected on the grounds of the land matter being sub-judice before the Supreme Court. BALCO has filed an interlocutory application before the Supreme Court against the order of the Tehsildar and the matter is yet to be listed for hearing. BALCO has also filed another IA in this matter has not yet been fixed. Proceedingsagainst the directions issued by BALCO relatingthe Chhattisgarh Government under the Rajiv Gandhi Ashray Yojna for allotment of land to direction by GoI not to declare us as the successful bidder in thee-auctionillegal occupants of Gare Palma IV/1 coal mine
BALCO participated in thee-auction for Gare Palma IV/1 coal mine, and as the highest bidder during the auction, it attained preferred bidder status. Per the Coal Mines (Special Provisions) Act, 2015, following the determination of preferred bidder status, the Coal Ministry was to confirm the status based on the Nominated Authority’s recommendation. Based on the Coal Ministry’s recommendation, the Nominated Authority issued an order dated March 20, 2015 stating that BALCO should not be declared the successful bidder in respect of Gare Palma IV/1 Coal Mine since the final price did not reflect fair value. Instead, the Gare Palma IV/1 coal mine was allotted to Coal India Limited on March 23, 2015.
BALCO filed a writ petitionland. The matter is also pending before the Delhi HighSupreme Court challenging the orders dated March 20, 2015 and March 23, 2015, arguing that the price bid by the company was ten times the floor price. However, BALCO secured a coal linkage of 3.2 million tons per annum for its 540 MW and 600 MW captive power plant for a term of 5 years. On September 30, 2016, BALCO has withdrawn its application challenging the rejection of its bid.is to be listed in due course.
– | Forest development tax levied by the Government of Karnataka |
In October 2008, we filed a writ petition in the High Court of Karnataka against the Government of Karnataka and others, challenging the imposition of a forest development tax (“FDT”) at a rate of 8.0% (a subsequent demand was made for the payment of tax at the rate of 12.0%) on the value of iron ore sold by us from the mining leases in the forest area, pursuant to the notification by the Government of Karnataka and the memorandum/common order issued by the Deputy Conservator of Forests. In August 2009, the High Court of Karnataka permitted the Government of Karnataka to levy the forest development tax and ordered that the demand be restricted to 50.0% of the forest development tax as an interim arrangement pending disposal of the writ petition. We filed an application before the High Court of Karnataka, seeking modification of the order in August 2009. However, the application was not taken up for hearing. Subsequently, we filed a special leave petitionSLP before the Supreme Court of India against the High Court’s order. In November 2009, the Supreme Court of India ordered the High Court of Karnataka to dispose the application for modification of the order given in August 2009 and ordered us to furnish a bank guarantee towards payment of the forest development tax. In April 2010, we were ordered by the High Court of Karnataka to pay 25.0% of the demand in cash and furnish a bank guarantee for the remaining 25.0%. On January 3, 2016, the High Court of Karnataka passed its final order quashing the forest development tax notification, holding that the rate of forest development tax levied to be 8%8.0% and directing a refund of the amounts collected from mining lessees other than state government owned companies. The state government of Karnataka appealed against the order before the Supreme Court of India, and another mining lessee also filed a counter appeal in the matter. The matter is pending before the Supreme Court and in the interim, the Supreme Court has stayed the refund of the forest development tax amount as ordered by the High Court. Meanwhile, the Government of Karnataka legislated the Karnataka Forest Development (Amendment) Act, 2016 (the ‘Amendment Act’) to validate the earlier law making certain amendments with retroactive effect. The Amendment Act has also changed the nomenclature of “ForestForest Development Tax”Tax (“FDT”) to “ForestForest Development fee”Fee (“FDF”) with retroactive effect, since the court had previously declared that FDT was a tax and not a fee, as claimed by Government of Karnataka. We challenged the validity of the Amendment Act by way of a writ petition before the Karnataka High Court. The Karnataka High Court initially ordered that whileof Karnataka. The High Court of Karnataka, on October 4, 2017, struck down the writ petition was pending, no coercive action will be taken fornon-paymentAmendment Act directing refund of the forest development tax in terms of the Amendment Act. Recently, in a similar matter the Karnataka High Court directed to submit bank guarantees in respect of 25.0% of the demand in relation to future transactions. This order was subsequently modified byamounts collected. On March 13, 2017, the Supreme Court, and requiring purchasers to pay 50.0%in the appeal filed by state of Karnataka against the order of the Forest Development fees by cash andHigh Court, has stayed the remaining 50% by bank guarantee. Therefund of the amount collected as FDF. On March 21, 2018, the Supreme Court has also directed that appeals against both the Karnataka High Court to hearFDT and dispose theFDF matters will be heard together. The matter within six months from the date of its order dated February 13, 2017.will be listed for hearing in due course. – | Demands against HZL by Department of Mines and Geology |
The Department of Mines and Geology of the State of Rajasthan issued several show cause notices in August, September and October 2006, aggregating Rs.₹ 3,339 million ($ 51.546 million) to HZL, claiming unlawful occupation and unauthorized 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. 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 canceling the lease. However, the Central Government and State Government are yet to file their replies. In a similar matter, DMG had issued a demand notice with respect to HZL’s Rajpura Dariba Mines which was challenged by HZL before Revisionary Authority and secured a favourable order. The next dateState Government has filed a writ petition before the High Court of Jodhpur against the said RA order. Subsequently the State filed an early hearing has not yet been fixed. application, but it was held that the State’s application cannot be admitted till the Central Government files its affidavit. The matter is to be listed in due course.– | Demand against BALCO for electricity duty |
In February 2010, BALCO received a notice from the Chief Electrical Inspector, Government of Chhattisgarh demanding that BALCO to pay Rs.₹ 2,404 million ($ 37.132 million) from June 2005 to March 2009, towards electricity duty for the generation of power by BALCO’s 540 MW power plant. The notice alleged that BALCO did not submit the eligibility certificate required for exemption from payment of electricity duty. The said exemption was claimed pursuant to a memorandum of understanding entered with the state government and according to the industrial policy 2001-2006. The state level committee recommended that an eligibility certificate be issued to us that will exempt us from paying duty on electricity. TheBALCO filed an application was filed before Directorate of Industries for the issuance of an eligibility certificate and granting usan exemption from payment of electricity duty in year 2005 and is currently under review.also 2007 but the same was rejected by its letter dated February 28, 2019. Thereafter, BALCO submitted its representation dated April 18, 2019 before the Industries Department and the Energy Department for re-consideration of BALCO’s application with subsequent reminders dated June 26, 2019 and September 06, 2019 and the same are pending for consideration as on date. The amount of duty on electricity payable for the period subsequent to March 31, 2009 until March 31, 20172021 is Rs. 6,241₹ 12,027 million ($ 96.2164 million). – | Claim against HZL for environment and health cess by the State of Rajasthan |
The state of Rajasthan issued a notification in June 2008 notifying the Rajasthan Environment and Cess Rules, 2008, imposing environment and health cess on major minerals including lead and zinc. HZL and other mine operators resisted this notification and the imposition thereunder before the High Court of Rajasthan on the ground that the imposition of such cess and all matters relating to the environment fall under the competence of the central government as opposed to the state government. In October 2011, the High Court of Rajasthan disposed the writ petitions and held the Rajasthan Environment and Cess Rules, 2008 that imposes a levy of cess on mineral as being constitutionally valid. An amount of Rs.₹ 150 per metric ton of ore produced would be attracted under the statute if it is held to be valid. HZL challenged this order by a special leave petitionSLP in December 2011 before the Supreme Court of India. The Supreme Court of India issued a notice for stay. Further direction was issued by theThe Supreme Court issued further direction on March 23, 2012 not to take any coercive action against HZL for recovery of cess. The matter is still pending and is not yet listed for hearing. The Statestate government has rescinded the prospective liability towards environment and health cess by notification dated January 6, 2017. – | Claims for contributions towards the District Mineral Foundation |
The District Mineral Foundation was introduced by the MMDRAMMDR Amendment Act, whereby all mining lease holders are required to pay contributions towards the District Mineral Foundation.DMF. The contribution amounts were to be percentage of royalties as prescribed by the Central Governmentcentral government and were effective from January 12, 2015. In September 2015, a notification was issued by the Ministry of Mines prescribing the rate for the District Mineral Foundation contribution. Subsequently, state rules were formulated for Rajasthan with effect from May 2016 and HZL received demand notices for the deposit of contributions to the District Mineral Foundation from January 12, 2015. In its order dated August 8, 2016, the High Court of Rajasthan stayed the demand retroactively for the period under challenge. On December 16, 2015, the Federation of Indian Mineral Industries also filed a writ petition before the High Court of Delhi, obtaining an order for no coercive action. The writ petition was subsequently transferred to the Supreme Court, wherein the court also allowed individual companies to implead themselves in the matter and HZL also filed an application to implead in the matter. As per the order of the Supreme Court, all matters pending before any of the High Courts will maintain status quo. The next date of hearing in the Supreme Court is August 29, 2017.Court. In October 2015, another notification was issued by the Ministry of Coal whereby rates were prescribed for certain minerals such as coal and lignite, although an additional provision also required for the application of such rates from the earlier date of the notification or the respective state rules. Vedanta Limited and BALCO challenged the notifications for liability on account of fuel before the High Court of Delhi. Concurrently, Vedanta Limited’s challenges are pendingThe Supreme Court through order dated October 13, 2017, held that contribution to DMF in case of minerals other than coal shall take effect from September 17, 2015 and in the case of coal from October 20, 2015 or from the date on which the DMF was established by the state, whichever is later. Pursuant to the Supreme Court order, HZL has challenged the demand for payment between the disputed periods, i.e. from the date when the State of Rajasthan established DMF until the date when the High Court of Rajasthan has granted a stay. In parallel, BALCO has filed a petition before the High Court of Delhi whereas BALCO’s challenge is pendingchallenging the constitutionality of section 9B (5) and section 9B (6) of the MMDR Act. HZL has also filed an intervention application in the said petition.
HZL has also filed another writ petition before the High Court of Chhattisgarh.Jodhpur challenging the discriminatory rates of contribution for major and minor minerals as well as mining leases granted post and prior to the date of amendment of the Act. Both the writ petitions have been clubbed by the court. The stay granted by the High Court has been vacated vide order dated January 21, 2021. HZL filed an SLP before the Supreme Court against such stay vacation, which was later withdrawn with liberty to push for expeditious disposal of matter in the High Court. Further, a second stay application had been filed in the second writ petition filed by HZL in the discriminatory rate matter. The matter is to be listed in due course. Claim
– | Demands against HZL by Department of Mines and Geology - Demand for royalty |
The Department of Mines and Geology of the State of Rajasthan issued a show cause notice to HZL vide an office order dated January 31, 2020 wherein HZL was called upon to present its case against BALCOthe DMG’s demand for energy development cessroyalty for associated minerals i.e. Silver and Cadmium, by-product Sulphur, waste tailing and demand for DMFT and NMET contributions. InHZL challenged the computation mechanism in the royalty on the ground that the state has not complied with the previous orders of High Court of Rajasthan where a similar computation mechanism was challenged and court had directed the government to review the supporting documents, rules and judicial precedents. Pending compliance of its previous orders, the High Court vide its order dated February 19, 2020 directed that HZL shall be afforded an opportunity of hearing by the Additional Chief Secretary, Department of Mines, Government of Rajasthan and no coercive action should be taken on account of the order passed by the Additional Chief Secretary until the same is placed for confirmation before the court. The Department of Mines and Geology of the State of Rajasthan has filed an affidavit dated November 04, 2020 commenting on the representations submitted by HZL and has also issued a show cause notice on May 20, 2020 in connection with the removal of silver and cadmium without payment of royalty based on an investigation done by the State Directorate of Revenue Intelligence (“SDRI”), HZL is in the process of filing the response highlighting the errors on facts done by SDRI and will provide a statement to demonstrate full payment of royalty on silver and cadmium produced and sold by HZL. A no coercive action order has been passed vide order dated December 2006,17, 2020. The matter is to be listed in due course.
– | Proceedings relating to HZL’s transfer of mining leases |
On February 25, 2020 the State of Rajasthan issued orders to HZL alleging that the disinvestment of HZL and various other mergers amounts to transfer of HZL’s leases in favour of Vedanta. HZL has been directed to regularise the lease under section 12A(6) of the MMDR Act read in conjunction with Mineral (Transfer of Mining lease Granted otherwise than through Auction for Captive Purpose) Rules, 2016 applicable to captive mines, failing which the leases would be terminated. HZL has since filed revision applications before the Central Government under Section 30 of the MMDR Act challenging the said order by State of Rajasthan. HZL also approached the High Court of Chhattisgarh onRajasthan for necessary protection orders until the matter is heard by the Revisionary Authority, Ministry of Mines. The revision application is currently being processed and next date of hearing is two months from July 17, 2020. The State of Rajasthan has been directed by the Revisionary Authority, Ministry of Mines not to take coercive action until final disposal of the matter HZL has also challenged the validity of Rule 24 of Mineral Concession (“MCR”) Rules, 1960 and has obtained a writ filed by status quo order. – | Claim against BALCO for energy development cess |
BALCO quashedchallenged the provisions relating to imposition of Energy Development Cess levied on generators and distributors of electrical energy developmentat the rate of 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 Rs. 6,102.9 million ($ 94.1 million) on ourconsumption are not taken into account and the cess is discriminatory since captive power plants are required to pay at the rate of 10 paise while the State Electricity Board is required to pay at the rate of 5 paise. The High Court of Chhattisgarh by its order dated December 15, 2006 declared the provisions imposing ED Cess on CPPs as discriminatory and orderedtherefore ultra vires the Constitution. BALCO sought a refund of the cess amounting to ₹ 345 million ($ 5 million) it had already collected by the state government. paid till March 2006 under protest. The State of Chhattisgarh filed a special leave petition inSLP before the Supreme Court againstand the order of the High Court. The Supreme CourtSC whilst issuing notice has issued notice and stayed the refund of the cessCess already collected pendingdeposited and the disposalSupreme Court has also directed the State of Chhattisgarh to raise the bills but no coercive action be taken for recovery for the same. In case the Supreme Court overturns the decision of the special leave petition. The matter is expectedHigh Court, Balco may be liable to be heard in due course. pay an additional amount of ₹ 9,650 million ($ 132 million) as on March 31, 2021.– | Show cause notice from the Indian tax authorities for not withholding tax on payments made while acquiring a subsidiary |
WeIn March 2014, Vedanta Limited (notice was served on Cairn India Limited which subsequently merged with Vedanta Limited, accordingly now referred to as Vedanta Limited) received a show cause notice from the Indian tax authoritiesTax Authorities (‘Tax Authorities’) for not withholding tax on payments made while acquiring a subsidiary
In March 2014, Cairn India Limited received a notice from the Indian Tax Authorities alleging failure by Cairn India Limited to withhold tax on the consideration paid to Cairn UK Holdings Limited (“CUHL”) on a transaction which took place in the year2006-07. The said transaction relates to the acquisition of the shares of Cairn India Holdings Limited (“CIHL”), a 100% subsidiary of Cairn India Limited, from CUHL during the financial year 2006-2007 as a part of group reorganization by the then ultimate parent company Cairn Energy Plc. Based upon the retrospective amendment(s) made in the year 2012 by inserting explanation 5 of section 9(1)(i) of the Income Tax Act, 1961, the tax authorities by its order dated March 11, 2015, raised a demand of approximately Rs. 204,947.3 million ($ 3,160.3 million) (comprising tax of approximately Rs. 102,473.6 million ($ 1,580.2 million) and interest of an equivalent amount) for notdeducting withholding tax on the consideration paidpayments made to CUHL, for acquiring shares of CIHL.CIHL, as part of their internal reorganisation. The tax authoritiesTax Authorities have stated in the said ordernotice that a short termshort-term capital gain of Rs. 245,035 million ($ 3,778.5 million)has accrued to CUHL on transfer of the shares of CIHL to Cairn IndiaVedanta Limited, in the financial year 2006-2007,2006–2007, on which tax should have been withheld by Cairn India Limited.the Company. Pursuant to this, various replies were filed with the Tax Authorities. After several hearings, the Income Tax Authority, in March 2015, issued an order holding the Company as ‘assessee in default’ and raised a demand totaling ₹ 204,947 million ($ 2,802 million) (including interest of ₹ 102,473 million ($ 1,401 million)). The Company understands that ahad filed an appeal before the First Appellate Authority, Commissioner of Income Tax (Appeals) which vide order dated July 03, 2017 confirmed the tax demand against the Company. The Company has challenged the Commissioner of Income Tax’s (Appeals) order before the Income Tax Appellate Tribunal (“ITAT”).
Vedanta Limited also filed a writ petition before the Delhi High Court wherein it has raised several points for assailing the aforementioned Income Tax Authority’s order. The matter came up for hearing on February 05, 2020 before Delhi High Court but got adjourned and the next date of hearing is July 29, 2021. Separately CUHL, on whom the primary liability of tax lies, had received an Order from the ITAT in the financial year 2016-17 holding that the transaction is taxable in view of the clarification made in the Act but also acknowledged that being a retrospective transaction, interest would not be levied. Hence affirming a demand of ₹ 102,473 million ($ 1,401 million) excluding the interest portion that had previously been claimed. The tax department has appealed this order before the Delhi High Court. As a result of the above order from ITAT, the Group considers the risk in respect of the interest portion of claim to be remote. Further, as per the recent recovery notice dated October 12, 2018 received from the Tax Recovery Officer (TRO) appointed for CUHL, tax demand of CUHL of approx. ₹ 49,960 million ($ 663 million) along with interest is outstanding. Further, in the said notice, tax department had also instructed to remit the preference shares redemption amount including dividend payable thereon to the TRO. Accordingly, amount aggregating to ₹ 6,070 million ($ 81 million) has been paid to the TRO on October 26, 2018 thus reducing the liability to ₹ 43,890 million ($ 582 million). Vedanta Limited has also been raised bypaid interim dividend of ₹ 50 million ($ 1 million) to the tax authorities on CUHL with respectTRO. Accordingly, the Group has revised the contingent liability to taxability of alleged capital gain earned by CUHL.₹ 43,840 million and ₹ 43,830 million ($ 599 million) as at March 31, 2020 and March 31, 2021 respectively. In the event, the case is finally decided against the Company, the demand payable along with interest as per the above mentioned order would be ₹ 204,947 million ($ 2,802 million), of which only ₹ 43,840 million ($ 599 million) million is considered as possible. Separately, but in connection with this regard,litigation, Vedanta Resources Plc.Limited has filed a noticeNotice of claimClaim against the GoI under theUK-India bilateral investment treaty UK India Bilateral Investment Treaty (the BIT). The International Arbitration Tribunal passed a favourable order on jurisdiction and Transparency and hearing on merits have been completed in order to protect its legal positionMay 2019 and shareholder interests. Management was advised that Vedanta Resources Plc. has a good case to defend as per provisions ofUK-India bilateral investment treaty, the benefit of which would ultimately accrue to Cairn India Limited. Further, Cairn India Limited has sought independent advice on this issue and has been advised that there could be no liability on Cairn India Limited for the failure to withhold the taxes in the year2006-07 based on provisions of law prevailing at the time of transaction as the aforesaid retrospective amendment has cast an impossible obligation on Cairn India Limited to deduct tax by having to predict and anticipate that the retrospective amendmentorder will be made bypassed in due course. The Government of India has challenged the legislature on a future date. Cairn India Limited has approachedJurisdiction orders of Arbitration Tribunal before the High Court of DelhiSingapore and Transparency matter before Supreme court of Singapore against the saidadverse order of Singapore HC. The Singapore Supreme Court heard the Transparency matter on April 8, 2021 and also filed an appeal beforedismissed the Commissionergovernment appeal. As the Cairn Energy Plc Arbitration award regarding retrospective tax will have a direct influence upon Vedanta’s case, due to the primarily liability of Income Tax (Appeals)paying the tax is CUHL’s and in this case there is expected to defend its position.be no tax liability in the hand of CUHL, the claim of amounts assessed as in default against Vedanta Limited should be eliminated. The next hearing date is scheduledclassification and full financial implications will be reviewed based on August 17, 2017.further developments in the case. The AmalgamationIn Cairn UK ITAT ruling andRe-organization Scheme has been challenged as well as in Vodafone and Cairn Arbitration award it was held that the amendment was retrospective and not clarificatory in nature. Thus, going by the Indianrecent ruling of Supreme court in royalty case, it was impossible for Vedanta Limited (successor in the business of Cairn India Limited) to deduct tax and hence it can’t be held responsible for default under section 201.
– | The Amalgamation and Re-organization Scheme has been challenged by the Indian tax authorities and others |
Subsequent to the effectiveness of the Amalgamation andRe-organization Scheme, special leave petitionsSLPs challenging the orders of the High Court of Bombay at Goa were filed before the Supreme Court of India by the Commissioner of Income Tax, Goa and the Ministry of Corporate Affairs in July 2013 and in April 2014, respectively. Further, a creditor and a shareholder have challenged the Amalgamation andRe-organization Scheme in the High Court of Madras in September 2013. NextFurther, the Ministry of Mines, GoI have challenged the Amalgamation and Reorganisation Scheme before the High Court of Madras and the High Court of Bombay, Goa Bench, respectively. The Supreme Court of India has admitted the SLPs and the matter was last listed on July 1, 2019 and the next date of hearing is scheduled on August 22, 2017.yet to be notified. – | Arbitration proceedings on issues related to the cost recovery of the Ravva block |
Arbitration proceedings on issues related to the cost recovery of the Ravva blockONGC Carry
We along with other joint operation partners (the “Contractor Parties”) are involved in a dispute against GoI relating to the recovery of contractual costs in terms of calculation of payments that the Contractor Parties were required to make in connection with the Ravva field.
The Ravva production sharing contractProduction Sharing Contract (PSC) obliges the Contractor Partiescontractor 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 production sharing contractPSC (the‘‘ONGC Carry’’)Carry). The question as to how the ONGC Carry wasis to be recovered and calculated, along with other issues, was submitted to an international arbitration tribunalInternational Arbitration Tribunal in August 2002 which rendered a decision on the ONGC Carry in favorfavour of the Contractor Partiescontractor 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 favorfavour of GoIGOI in October 2004 (the “Partial Award”)(Partial Award). The GoIGOI then proceeded to challenge the ONGC Carry decision before the Malaysian courts, as Kuala Lumpur was the seat of the arbitration. On October 11, 2011, theThe Federal Court of Malaysia adjudicated the matter and upheld the Partial Award. Per the decision of the arbitral tribunal with regards to Partial Award, the Contractor Parties and the GoI were required to arrive at a quantification of the sums relating to each of the issues under the Partial Award. Also, the arbitral tribunal retained the jurisdiction for determination of any remaining issues in the matter. Pursuant to the decision of the Federal Court, the Contractor Parties approached the Ministry of Petroleum and Natural Gas (“MoPNG”) to implement the Partial Award while reconciling the statement of accounts as outlined in the Partial Award. GoI failed to implement the Partial Award by way of reconciling accounts as provided in the Partial Award ever since the Federal Court of Malaysia adjudicated in the Contractor Parties’ favor.
However, on July 10, 2014, MoPNG issued a show cause notice alleging that since the Partial Award has not been enforced the profit petroleum share of the GoI has been short-paid. MoPNG threatened to recover that amount from the sale proceeds payable by the oil marketing companies to the Contractor Parties. The Contractor Parties replied to the show cause notice taking various legal contentions. On March 9, 2015, a personal hearing took place between MoPNG and the Contractor Parties whereby the Contractor Parties expressed their concerns against such alleged unilateral recoveries and filed further written submissions on March 12, 2015.
BecauseAs the Partial Award did not quantify the sums, the Contractor Partiestherefore, contractor parties approached the same arbitral tribunalArbitration Tribunal to pass a final awardFinal Award in the subject matter since the arbitral tribunalit had retained the jurisdiction to do so. The arbitral tribunalArbitral Tribunal was reconstituted and the final awardFinal Award was passed in Cairn India’s favorOctober 2016 in October 2016. Concurrently,the 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 January 20, 2017,February 28, 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 next listed for hearing on August 31, 2021. Base Development Cost Ravva joint operations had received a claim from the MoPNG, GoI for the period from 2000-2005 for ₹ 9,455 million ($ 129 million) for an alleged underpayment of profit petroleum (by recovering higher Base Development Costs (“BDC”) against the cap imposed in the PSC) to the GoI, out of which, Vedanta Limited’s (Cairn India Limited which subsequently merged with Vedanta Limited, accordingly now referred to as Vedanta Limited) share will be ₹ 2,126 million ($ 29 million) plus interest. Joint venture partners initiated the arbitration proceedings and Arbitration Tribunal published the Award allowing claimants (including Vedanta Limited) to recover the development costs spent to the tune of ₹ 20,377 million ($ 278 million) and disallowed over run of ₹ 1,613 million ($ 22 million) spent in respect of BDC along with 50% legal costs. The High Court of Kuala Lumpur as well as Court of Appeal dismissed GOI’s application of setting aside the part of the Award. GOI challenge to the same before the Federal Court of Malaysia was also dismissed on May 17, 2016. The Company has challengedfiled an application for enforcement of award before Delhi High Court. In connection with the finalabove two matters, the Company has received an order dated October 22, 2018 from the GOI directing oil marketing companies (OMCs) who are the offtakers for Ravva to divert the sale proceeds to Government’s account. GOI alleges that the Ravva Joint Operations (consisting of four joint venture partners) has short paid profit petroleum of ₹ 23,015 million ($ 315 million) (the Company share approximately - ₹ 6,817 million ($ 93 million)) on account of the two disputed issues of ONGC Carry and BDC matters, out of which ₹ 4,691 million ($ 64 million) pertains to ONGC Carry and ₹ 2,126 million ($ 29 million) pertains to BDC Matter. Against an interim application, filed by Vedanta Limited along with one its other joint venture partner, seeking stay of such action from GOI, before the Delhi High Court, where enforcement petitions for both matters are pending, the Court directed the OMCs to deposit above sums to the Court for both BDC and ONGC Carry matters. However, Vedanta Limited (and other joint venture partner) has been given the liberty to seek withdrawal of the proportionate amounts (fallen due as of the date of Court order) from the Court upon furnishing a bank guarantee of commensurate value. During the proceedings of the above matter, the GOI has also filed an interim application seeking deposit by the said OMCs of an amount of ₹ 6,377 million ($ 87 million) (Vedanta’s share of ₹ 4,105 million ($ 56 million) towards interest on the alleged short payment of profit petroleum by the petitioners i.e. Vedanta Limited (and other joint venture partner). The Hon’ble Delhi High Court vide its order dated February 19, 2020 allowed the petition for enforcement of the arbitration award in relation to BDC including declaratory relief and rejected the Malaysian courts.objections of GOI. The next hearing is scheduledGOI has filed an SLP against this order before the Supreme Court. The Hon’ble Court on September 15, 2017. 16, 2020 pronounced the order in favour of Vedanta, rejecting all objections of the GOI and allowed enforcement of the Arbitration Award. With the Supreme Court order, the Ravva BDC Matter stands closed. The Hon’ble Delhi High Court vide its order dated May 28, 2020 has directed that all future sale proceeds of Ravva Crude with effect from June 5, 2020 be paid directly to Vedanta Limited by the OMCs. In connection with the proceedings on the above matters, GOI has also filed an interim application seeking deposit by the said OMCs towards interest on the alleged short payment of profit petroleum by the petitioner (i.e. the Company and the other joint venture partner). The interim application filed by GOI and the matter in respect of the ONGC Carry has been listed for hearing on August 31, 2021. While the Company does not believe the GoIGOI will be successful in its challenge, if the arbitral award isArbitral Awards in above matters are reversed and such reversal isreversals are binding, we couldthe Company would be liable for approximately US $ 63.9₹ 4,691 million (Rs. 4,143.9($ 64 million) plus interest. – | Proceedings, notices and enquires initiated by the Central Excise |
The Central Excise department of the GoI had issued in July 2010 anex-parte notice for reversal of Cenvat credit of Rs.₹ 3,150 million ($ 48.642 million) along with interest of Rs.₹ 88 million ($ 1.41 million) for thenon-compliance of Rules 4(5a) and 4(6) of the Cenvat Credit Rules, in respect ofnon-return of job work challans for the period March 1, 2009 to September 30, 2009 within a stipulated time. In addition, it also alleged that we violated the advance license conditions from 2005 to 2009. In 2010, we filed four writ petitions WP No.(“WP”) no. 8123, 8135, 9744 and 9755 in the High Court of Madras against the Central Excise department. An associated contempt petition was also filed by us. All the above petitions were heard on July 29, 2010 and the High Court of Madras in relation to WP No. 8123 remanded the matter to be heard and determined afresh by a new set of officers of the Central Excise department. The High Court of Madras granted a stay in relation to WP No. 8135 in so far as relates to job work challan matter and until a fresh enquiry was made. Further, the High Court of Madras dismissed WP No. 9744 and 9755 and the contempt petition. The Central Excise department deputed the Assistant Commissioner of Central Excise to conduct an enquiry for the allegednon-compliance of Rules 4(5a) and 4(6) of the Cenvat Credit Rules in respect ofnon-return of job work challans. The Assistant Commissioner of Central Excise served a show cause notice on September 9, 2011. We filed a response before the Assistant Commissioner of Central Excise. After conducting a personal hearing, the Assistant Commissioner passed a favorable order on January 1, 2012 and dropped the entire demand for duty and interest. The department went into appeal before the Commissioner (Appeals) against this order, but the appeal was restricted only to the demand of interest. The Commissioner (Appeals) allowed the appeal on February 25, 2013 on the condition that interest would become applicable only in those cases where goods have not been sent back or cleared from the premises within 180 days from the date of dispatch from the Tuticorin unit. The verification whether any interest is payable or not has been completed and department raised the interest liability of Rs. 2.4₹ 2 million ($ 0.03 million) which we have challenged before Tribunal on April 7, 2015 and the case has yet to be listed for hearing. We filed two writ appeals no. 704 and 705 of 2011 in the High Court of Madras challenging the orders passed with respect to the writ petitions no. 8135 and 9744 of 2010. The writ petitions were admitted on August 1, 2011 and the Court ordered other party to maintain the status quo. In the meanwhile, the Commissioner of Customs, Tuticorin issued a show cause notice in January 2015 based on alleged violation of advance license conditions from 2005 to 2009 expressly mentioning that this show cause notice shall be kept pending and not be adjudicated unless and until directions are obtained from the High Court enabling such adjudication. We filed writ petition no. 626 of 2015 against this show cause notice, which was tied up with writ appeals no. 704 and 705 of 2011 and heard together. Thereafter, regular hearings took place in the High Court, and on March 12, 2015 the High Court gave an interim order, allowing one of the prayers in writ in form of injunction to the Directorate General of Foreign Trade actions in pursuit of the show cause notice received from customs department. During the course of the hearings, writ appeal no. 704 was withdrawn as it has become infructuous as it relates to the job work challan matter which has already been concluded. Writ appeal no. 705 of 2011 and writ petition no. 626 of 2015 were heard on March 11, 2016 and both were dismissed by the final judgment of the High Court dated August 1, 2016, as the High Court held that it did not find any impediment to customs authorities issuing show cause notice on the basis of materials gathered and input received from excise authorities. The High Court also required the Company to respond to the show cause notice dated January 13, 2015 within two weeks from receipt of the order and directed the Commissioner of Customs to conduct proceedings as expeditiously as possible. We have filed a special leave petitionSLP against the High Court’s order before the Supreme Court on August 24, 2016. The stay hearing before the Supreme Court on the special leave petition,SLP, took place on April 21, 2017 wherein the Supreme Court held that the commissioner of customs, Tuticorin may pass a final order against the notice but that it had to be kept in sealed cover. To dateDuring hearing before Commissioner of Customs on September 5, 2017, we requested for cross-examination of witnesses and make available certain relevant documents, which was denied. Thereafter, we have filed an appeal before the matterCustoms, Excise and Service Tax Appellate Tribunal (CESTAT) against such rejection. On January 10, 2018, CESTAT allowed cross-examination of witnesses; however, our request to make available relevant documents was rejected. We filed CMA 649 and 650 of 2018 in the High Court of Madras, Madurai Division Bench challenging the order passed by CESTAT. We requested High Court to order Excise authorities to share the communication issued to Customs basis which SCN was issued by Customs. Hearing concluded on June 13, 2019 before High Court and judgement is reserved. Further, we have written a letter to Commissioner on June 14, 2019 requesting to keep adjudication proceedings in abeyance till receipt of High Court Order. The High Court has yetpronounced the order wherein our request to be listed forshare the communication issued to Customs by excise authority has been turned down. Meanwhile, cross examination of the witnesses has also been completed by Customs Commissioner, Tuticorin and final hearing and no order has been passed bybut kept in sealed cover as per the Commissionerdirections of Customs, Tuticorin.the Supreme Court. Matter will be listed before Supreme Court in due course. – | Petitions have been filed in the Rajasthan High Court relating to sales tax |
We have filed two writ petitions before the High Court of Rajasthan, seeking to quash the two letters issued by Finance (Tax) department, Jaipur and to set aside the show cause notice issued by the Rajasthan Sales Tax Department, demanding Rajasthan VAT on sales of crude oil alleging that the sales are intra-state sale (as opposed to an inter-state sale). The matter was last heard on May 17, 2016 and the judgement dated July 13, 2016 allowed our petition and held that sale of crude oil should be regarded as interstate sale subject to central states tax and that Rajasthan VAT should not be applicable. Subsequently, the Rajasthan Sales Tax Department has filed an appeal before the division bench of the High Court of Rajasthan on September 9, 2016, challenging the previous order. On April 4, 2018, division bench dismissed the petition filed by the Rajasthan Sales Tax Department. Thereafter, the Rajasthan Sales Tax department has filed an SLP before Supreme Court of India against the judgment of the Division Bench of the Rajasthan High Court, the said SLP of the department was dismissed due to failure of the department to cure the defects in filing despite specific order from the Supreme Court. However, on the request of Rajasthan Sales Tax Department, the SLP has been restored vide order dated July 5, 2019 and on February 13, 2020 all the defects have been removed. The matter is scheduled forwas admitted on February 28, 2020. For hearing on August 30, 2017. merit, matter will be listed in due course.Proceedings related to the Imposition of Entry Tax
– | Proceedings related to the imposition of entry tax |
Vedanta Limited and other groupGroup companies i.e. Bharat Aluminium Company Limited (BALCO) and Hindustan Zinc Limited (HZL) challenged the constitutional validity of the local statutes and related notifications in the states of Chhattisgarh, Odisha and Rajasthan levyingpertaining to the levy of entry tax on the entry of goods brought into the Statesrespective states from outside and other notifications, as being in violationoutside. Post some contradictory orders of certain provisions of the Indian Constitution. BALCO paid the entry tax of Rs. 2,194.7 million ($ 33.8 million) under protest to the state government of Chhattisgarh until March 31, 2015. The matter was referred toHigh Courts across India adjudicating on similar challenges, the Supreme Court of India. With respectreferred the matters to a nine judge bench. Post a detailed hearing, although the challenge against the constitutionality of the Odisha Entry Tax Act, on February 18, 2008, the Odisha High Court held that (i) the Odisha entry tax is not compensatory, (ii) there should not be any entry tax on goods coming into Odisha which are not manufactured in Odisha, and (iii) that the Odisha Entry Tax Act is valid. This challenge was with regard to levy of entry tax on indigenous goods. The High Court order was challenged before the Supreme Court of India wherein the court ordered us to pay the entry tax amount towards earlier dues amounting to Rs. 35 million ($ 0.5 million) and amounts accruing from October 2009 on a monthly basis i.e. Rs. 0.8 million per month, until the matter is finally disposed. These amounts have been fully paid under protest.
In a related matter in respect of challenging the levy of entry tax on imported goods, on April 9, 2013 the Supreme Court of India ordered the deposit of 50% of the entry tax amount accrued until September 30, 2012, which amounted to Rs.1,196.2 million ($18.4 million). The amounts were paid as per the court order. However, as the entry tax demand was also partially on the SEZ operation, the same was challenged separately before the High Court of Odisha, Cuttack wherein we paid 50 % of the demand under protest as per the court order. The matter is pending adjudication. Meanwhile, the Government of Odisha notified its SEZ Policy 2015 in December 2015, exempting entry tax levy on SEZ operations and we are seeking exemptions relying on the same.
Furthermore, there was a demand of entry tax on March 26, 2012 for Rs. 727 million ($11.2 million) and interest of Rs. 492 million ($7.6 million) for the period from August 2007 to January 2012 on power business of the then SEL. We have paid the amount in accordance with the interim order of Supreme Court of India which was given pursuant to the holding of the Odisha High Court.
We are in compliance with the interim orders passed by the Supreme Court of India on both indigenous and imported goods. The main matter on the issue of levy of entry tax was listed for July 19, 2016 onwards before a nine-judge bench of the Supreme Court of India to take into account the various opinions of the High Courts.
The Supreme Court in its order 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 challenge. The issue pertaining to imported goods is being heardadjudication by regular benches hearing the matters.
Following the order of the nine judge bench, the regular benchesbench of the Supreme Court.Court proceeded with hearing the matters. The interim order on domestic goods isregular bench remanded the entry tax matters relating to continue for a period of four weeks from the date of order of the respective states and the parties are free to seek relief from the High Courts. The Supreme Court remanded the issue of discrimination pertaining to indigenousagainst domestic goods backbought from other States to the respective High Courts with an order that 50%for final determination but retained the issue of jurisdiction for levy on imported goods, for determination by the regular bench of the demand be payable.Supreme Court. Following the order of the Supreme Court, we filed a writ petition in the High Court of Rajasthan and Odisha. Hindustan Zinc Limited and BALCO have alsoGroup filed writ petitions in respective High Courts.
On October 09, 2017, the Supreme Court has held that states have the jurisdiction to levy entry tax on imported goods. With this Supreme Court judgment, 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. With respect to Rajasthan, the State Government has filed a counter petition in the Rajasthan High Court, whereby it has admitted that it does not intend to levy the entry tax on imported goods. The issue pertaining to the levy of Rajasthanentry 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 High Courtdoes not include a SEZ. In addition, the Government of ChhattisgarhOdisha further through its SEZ Policy 2015 and the operational guidelines for administration of this policy dated August 22, 2016, exempted the entry tax levy on SEZ operations. Hindustan Zinc Limited has opted for RJ Amnesty Scheme and settled its demand. The total claims against Vedanta Limited and its subsidiaries are ₹ 13,664 million and ₹ 14,119 million ($ 193 million) net of provisions made as at March 31, 2020 and March 31, 2021 respectively. – | Writ petition filed in the Delhi High Court by Cairn India Limited relating to extension of tenure of the Production Sharing Contract for the Rajasthan block Cairn India Limited (now Vedanta Limited - oil and gas business) relating to extension of tenure of the PSC for the RJ block |
Vedanta Limited filed a writ petition before the High Court of Delhi against the Ministry of PetroleumMoPNG, the DGH and Natural Gas (“MoPNG”), the Directorate General of Hydrocarbons (“DGH”) and Oil and Natural Gas Corporation Limited (“ONGC”)ONGC regarding the extension of the tenure for the Production Sharing Contract (“PSC”)Rajasthan Block PSC for theRJ-ON-90/1 Block (“RJ Block”). Rajasthan Block. The RJRajasthan Block PSC is valid until May 14, 2020. Consistent with the terms of the Rajasthan Block PSC, given that the RJRajasthan Block is also producing natural gas, Cairn IndiaVedanta Limited has been requesting an extension of the tenure of the RJRajasthan Block PSC for a period of up to 10 years, i.e., until May 14, 2030. ONGC, Cairn India Limited’s joint venture partner in the RJ Block, is technically aligned on the recoverable resources potential of the RJ Block beyond the PSC period, until the proposed extension period up to 2030. Cairn IndiaVedanta Limited hashad been making regular requests to the MoPNG for extension of the tenure of the RJRajasthan Block PSC since the past few years. However, apart from seeking further technical and financial details, the MoPNG has not yet made a final decision in the matter. With regards to theIn view of MoPNG’s delay, a writ petition was filed by Cairn India Limited(now Vedanta Limited) on December 11, 2015, seeking relief from the High Court of Delhi. During
The High Court of Delhi on May 31, 2018 allowed the writ petition, directing GoI to extend the Rajasthan Block PSC for a period of ten years beyond the current contract term in accordance with Article 2.1 of the Rajasthan Block PSC on the same terms and conditions. The GOI appealed the decision of the Single Bench before the Division Bench High Court hearing held on December 14, 2015, the MoPNG and DGH contended that no decision had been taken in the matter as the requisite data had not been provided by Cairn India Limited and ONGC. ONGC further contended that it had sought certain commercial particulars from Cairn India Limited which had not been furnished by Cairn India Limited. Through its order dated December 14, 2015, theof Delhi. The High Court of Delhi ordered all parties to exchangethat the requisite information and documents to enableapplication filed by Vedanta Limited in May 2018 for seeking extension of the GoI to makeRajasthan Block PSC for ten years shall be decided/processed by the GOI under the Pre-NELP Extension Policy dated April 07, 2017 within a decisionperiod of two months, notwithstanding the time prescribed in the matter.Pre-NELP Extension Policy. The High Court of Delhi imposed timelinesalso stayed the order passed by the Single Judge and placed on record that the partiesquestion of applicability of the Pre-NELP Extension Policy was presently left open. Against this backdrop, the GOI granted its approval for a ten-year extension of the exchangeRajasthan Block PSC pursuant to its letter dated October 26, 2018 under the Pre-NELP Extension Policy, subject to certain conditions. Due to the extenuating circumstances surrounding the COVID-19 pandemic and pending the execution of information, namely the GoI, DGHRajasthan Block PSC addendum for extension of the tenure of the Rajasthan Block upon compliance with all stipulated conditions therein, the GOI has from time to time permitted Vedanta Limited to continue its operations in the Rajasthan Block with effect from May 15, 2020 and ONGCis currently valid till July 31, 2021. The matter was heard on several hearings and orders were reserved on February 02, 2021. Vide order dated March 26, 2021, the High Court has allowed the appeal of GOI against the single judge order. While the Company has paid additional 10% Profit Petroleum to seek data and information within four weeks, the GOI w.e.f. May 15, 2020, it has filed a SLP in the Hon’ble Supreme Court of India against the order dated March 26, 2021 – | Writ petition filed in the High Court of Delhi by Cairn India Limited (now Vedanta Limited - oil and gas business) relating to export of crude oil from RJ Block |
Cairn India Limited to provide the requisite information within two weeks thereafter, ONGC to review(now Vedanta Limited - oil and revert with commercial alignment on the projects within six weeks thereon and the GoI to take a decision within three months from the date of consensus between Cairn India Limited and ONGC. Following the December 14, 2015 court order, information has been exchanged between Cairn India Limited and ONCG for obtaining ONGC’s commercial alignment. Notwithstanding the above, MoPNG’s and ONGC’s stance so far has been that due to insufficient data provided by Cairn India Limited, ONGC has not been able to conclude its commercial assessment. In view of this, the High Court of Delhi through its order dated April 5, 2016, ordered ONGC to give a final opportunity to Cairn India Limited to furnish the requisite documents within two weeks from the date of the aforesaid order and thereafter to make a final decision on commercial alignment within an additional two weeks, in order to enable the GoI to take its decision in the matter as per the timeline stated in the High Court of Delhi’s order dated December 14, 2015. Pursuant to the High Court of Delhi order, Cairn India Limited and ONGC have continued the information exchange for the purposes of ONGC’s review. On March 22, 2017, the Cabinet Committee on Economic Affairs approved a new policy for the granting extensions topre-NELP (New Exploration Licensing Policy) PSCs, including the RJ block PSC. By way of its letter dated April 12, 2017, the Directorate General of Hydrocarbons gave notice of thePre-NELP PSC Extension Policy and specified that Cairn India Limited should apply for an extension pursuant to thePre-NELP PSC Extension Policy. The GoI has also filed an affidavit communicating the new extension policy. Cairn India Limited has filed an affidavit challenging applicability of the extension policy. The GoI has sought to file a reply to the same. The matter is now listed for hearing on September 21, 2017.
Writ petition filed in the Delhi High Court by Cairn India Limited relating to export of crude oil from RJ Block
Cairn India Limitedgas business) has filed a writ petition before the High Court of Delhi against the Directorate General of Foreign Trade (“DGFT”), the Ministry of Petroleum and Natural Gas (“MoPNG”),MoPNG, and Indian Oil Corporation Limited (“IOCL”) for the export of crude oil from the RJ Block.
Due to its nature and composition, RJ Block crude has the potential to be valued higher by refineries in other markets, beyond the prices being received from the GoI nominated buyers, namely IOCL and other domestic, private refiners Reliance Industries Limited and Essar Oil Limited.refiners. Since 2009, Cairn India Limited (now Vedanta Limited - oil and gas business) has been receiving bids from international buyers and refiners offering prices that are an additional $ US$3-4 per bbl more than the domestic sale prices for RJ Block crude. In accordance with the provisions of the RJ Block PSC and the applicable GoI policies for crude oil export, Cairn India Limited (now Vedanta Limited - oil and gas business) repeatedly requested IOCL and MoPNG to allow it to export RJ Block crude oil, to which there has been no firm response. Cairn India Limited (now Vedanta Limited - oil and gas business) also made written requests to the DGFT to intervene in the matter, which again proved unsuccessful. In view of the aforesaid, Cairn India Limited (now Vedanta Limited - oil and gas business) filed a writ petition in the High Court of Delhi on December 11, 2015 to obtain relief in the form of orders to the DGFT, MoPNG and IOCL for approvals and authorizations to permit and facilitate the export of RJ Block crude oil, to the extent GoI nominated buyers are unable to cover the entire production. Through its order dated December 14, 2015, the High Court ordered the MoPNG, DGFT and IOCL to obtain necessary instructions on whether the GoI was willing to pick up the entire crude oil production from the RJ Block, or in the alternative was ready to grant permission to Cairn India Limited (now Vedanta Limited - oil and gas business) to directly export the crude oil not covered by the GoI nominees. The GoI’s stance thus far has been to deny Cairn India Limited’s request for export, although it has yet to present its complete arguments to the High Court of Delhi justifying such denial. Relying on the lack of consent from the GoI, DGFT also rejected Cairn India Limited’s request for export permission on February 16, 2016. During the course of arguments, the High Court of Delhi disagreed with GoI’s observations on the construct of Article 18 and observed that there was no embargo on export in the PSC nor in the policy. On October 18, 2016, the High Court set aside the writ petition on the grounds of it being without merits.petition. Cairn India Limited has(now Vedanta Limited - oil and gas business) filed an appeal against the said order before the division bench of the High Court of Delhi which was also dismissed on November 28, 2018. Vedanta Limited has now filed a SLP before the Supreme Court of India against the dismissal of the writ petition by the Delhi High Court. The matter was heard on April 22, 2019 by the Supreme court and the court directed that notice be issued to GoI and has given four weeks’ time to GoI to revert with its response, post which the matter will be listed for hearing to decide upon the admission of the SLP. No reply has yet been filed by GoI.
Cairn DGH arbitration issue The GOI granted its approval for a ten-year extension of the Rajasthan Block PSC vide letter dated October 26, 2018 under the Pre-NELP Extension Policy, subject to certain conditions. The conditions relate to the completion of certain technical activities in the Rajasthan Block before the expiry of the primary tenure of the Rajasthan Block PSC, prescribes mechanism and criteria for exploration cost recovery, submission of audited accounts/end of year statements and audit observations. The GOI has subsequently on December 3, 2019 removed the condition of the submission of audited accounts as imposed under the letter of extension dated October 26, 2018. In connection with one of the conditions for the Rajasthan Block PSC extension, the DGH raised certain queries on May 12, 2020 relating to the notification of certain audit exceptions raised for fiscal year 2016 to 2017 relating to the share of Vedanta Limited and its subsidiary. Vedanta Limited has disputed these queries together with the other audit exceptions for fiscal years 2016 to 2018 on the basis that such audit findings and exceptions are not in accordance with the Rajasthan Block PSC nor are they sustainable and thereby do not prevail nor result in the creation of any liability on Vedanta Limited and its subsidiary. Vedanta Limited is of the belief that it has reasonable grounds to defend its proposition and which are further supported by independent legal opinions on the same. Vedanta Limited had proposed for the relevant issues pertaining to these audit findings and exceptions to be referred for expert determination in accordance with the provisions of the Rajasthan Block PSC. On May 14, 2020, Vedanta Limited invoked the dispute resolution process in accordance with the Rajasthan Block PSC process and issued notice for arbitration to which the GOI has responded on June 29, 2020. The arbitration tribunal stands constituted and Vedanta also filed its application for interim relief. The interim relief application was heard by the Tribunal on December 15, 2020 wherein it was directed that 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, GOI should continue to extend the tenure of the Rajasthan Block PSC on terms of current extension. The GOI has challenged the said order before the Delhi High Court which is next listed for hearing on July 5, 2021. 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 April 7, 2017, the Office Memorandum dated February 1, 2013, as amended and audit exceptions notified for FY 2016-18. Separately, on September 23, 2020, GOI filed an application for interim relief before Delhi High Court seeking payment of all disputed dues. The Delhi High Court has not passed any order against any of the parties and the matter is listed for hearing on August 4, 2021. – | Proceedings related to the steel operations CTO revocation by MoEF&CC |
The consent to operate for our steel plant at Bokaro was due to expire on December 31, 2017. ESL filed an application in August 2017, before the JSPCB for renewal of consent to operate, as per procedure established by law. ESL filed writ petition in High Court of Jharkhand for issuance of directions to JSPCB to consider the consent to operate application at the earliest. The High Court of Jharkhand observed that ESL cannot be made to suffer on account of non-action on the part of the JSPCB and directed JSPCB to take a final decision on the consent to operate. and vide its interim order dated July 16, 2018 allowed the operation of the steel plant under supervisory control of JSPCB. On August 25, 2018, High Court of Jharkhand granted a stay against order dated August 23, 2018 of JSPCB where they denied the extension of consent to operate. The court in the interim asked MoEF&CC to decide on the issue of show cause notice dated June 6, 2012 within 4 weeks. Pursuant to the order of the High Court of Jharkhand, on August 25, 2018, MoEF&CC vide order dated September 20, 2018, passed an order for revocation of the environmental clearance of ESL. ESL challenged the said order of MoEF&CC by way of writ petition before the High Court of Jharkhand. The High Court of Jharkhand vide its order dated September 27, 2018 stayed the operation, implementation and execution of the order of revocation of environmental clearance and further stated that the impugned order has serious repercussions on ESL which is a running unit and has caused prejudice on account of violations of principles of natural justice. High Court of Jharkhand also allowed ESL to apply for statutory clearance without prejudice to its rights and contentions. Pursuant to this order ESL has applied for forest diversion proposal on October 4, 2018 without prejudice to its rights and contentions. The MoEF&CC vide its letter dated December 17, 2019 granted an ex-post facto in-principle approval for diversion under Forest Conservation Act, 1980 with certain penal and other conditions for compliance. ESL has also made an application for restoration/revision of environmental clearance, which has been considered by EAC committee of MoEF&CC. 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 High Court of Jharkhand has extended the interim protection granted in the pending writ petitions till September 16, 2020. The High Court of Jharkhand on September 19, 2020 pronounced and revoked the interim stay for plant continuity with effect from September 24, 2020. ESL filed an SLP before the Supreme Court against the order dated September 16, 2020 for grant of interim status quo order and plant continuity. Vide order dated September 22, 2020, the Supreme Court issued notice and allowed plant operations to continue till further orders. Public hearing has been concluded on December 16, 2020, and ESL has applied for grant of Environment Clearance to MOEF&CC on January 01, 2021 and presented before EAC on February 11, 2021. The revised proposal has been submitted on March 14, 2021 post inputs from February 11, 2021 meeting and presented before EAC on March 30, 2021. A revised proposal will be submitted post adding the inputs of the March 30, 2021 meeting. The application is under perusal at the MoEF&CC. – | Proceedings in respect of claim of Operational Creditors |
The resolution plan submitted by Vedanta Limited for the acquisition of ESL under the IBC was approved by NCLT, Kolkata with nil payment to Operational Creditors. The Operational Creditors unsuccessfully challenged NCLT’s approval of the plan before the NCLAT before approaching the Supreme Court in a further appeal. The Supreme Court vide its order dated November 27, 2019, without staying the implementation of the resolution plan, remanded the matter back to NCLT, Kolkata for it to assess solely on the issue of whether the matter should be sent back to the Committee of Creditors to reconsider nil payment to all Operational Creditors. The Operational Creditors filed applications in this matter to which we have submitted our reply. The matter is currently pending before NCLT, Kolkata. – | Proceedings relating to the cost pass through for installation and operation costs of flue gas desulphurization (“FGD”) |
MoEF&CC issued Environment (Protection) Amendment Rules 2015 vide notification dated December 7, 2015 to implement new emission norms including regulation of sulphur and nitrogen oxide emissions in all thermal power plants in India. The timeline for TSPL to implement these norms as notified by CPCB was December 31, 2019. TSPL approached PSPCL since additional costs under change in law are payable by PSPCL as per the PPA, but no positive response was received from PSPCL. Thereafter, TSPL filed a petition before PSERC regarding approval and consequent tariff adjustment due to change in law event. PSERC passed an adverse order in the matter considering that the said notification is not a change in law event. TSPL thereafter filed an appeal before APTEL. The amounts involved for the capital cost of installation and operation of the FGD units are estimated at ₹ 10,000 million ($ 136.72 million) and a recurring ₹ 700 million ($ 9.57 million) per year. APTEL vide order dated August 28, 2020 has approved the said notification including installation and operation of FGD and associated system for Sulphur Dioxide (“SO2”) emissions as well as installation and operation of SNCR and/or any other appropriate technology for NOx emissions as a change in law event as per the PPA. It has further stated that TSPL is entitled for additional expenditure for installation and operation of FGD and associated systems including all allied cost like taxes, duties etc. as a part of Additional Capital Cost to be listedincurred by TSPL and has directed the Commission to devise a mechanism for payment of above mentioned costs and other expenses in relation to procurement, installation, commissioning, operation and maintenance of FGD for SO2 as approved by the concerned authority, after prudence check. Further, TSPL has filed a caveat before Supreme Court of India. PSPCL has now filed an appeal from the order of the APTEL before the Supreme Court. In the meantime, TSPL has applied to the Central Pollution Control Board (“CPCB”), Ministry of Power and the Central Electricity Authority (“CEA”) to grant an extension of the deadline to implement new emission norms. Separately, the Punjab State Government has also written to the central government requesting for extension of deadline for power plants in Punjab including TSPL’s plant. Further, the Supreme Court in a related matter, has also recorded the submissions made by the central government as well as the affidavits filed by various power plants that a more feasible date for FGD installations would be December 2022. The State Pollution Control Board (“SPCB”) had issued a show cause notice dated November 21, 2019 for non-compliance of directions issued by CPCB u/s 5 of the Environment (Protection) Act, 1986 and accorded a personal hearing to TSPL. Upon TSPL’s hearing submission the SPCB vide its letter dated November 27, 2019, disposed of the said show cause notice with recommendations to the CPCB to accept TSPL’s request for granting the extension for the installation of the FGD up to December 31, 2022. Later, on January 31, 2020, the CPCB issued a show cause notice for non-compliance with its directions u/s 5 of Environment (Protection) Act, 1986. TSPL has replied to the notice and submitted that the timelines issued were not feasible in nature as technical specifications were issued only in June 2018. TSPL, in its reply, has also requested for an extension of timeline for installation of FGD till December 31, 2022. CPCB vide its letter dated May 08, 2020 (received on June 03, 2020) has levied an Environmental Compensation of ₹ 1.8 million per unit per month ($ 0.02 million) for non-compliance to emission norms. On June 05, 2020, TSPL responded to the notice requesting CPCB to revoke the said notice and grant time extension. However, TSPL has deposited an environmental compensation of five months to the CPCB in protest. Further, pursuant to a notice dated October 16, 2020 and a corrigendum dated November 04, 2020, CPCB has extended the timeline for installing the FGD to February 28, 2021 for Unit 1 and December 31, 2020 for Unit 2 and October 31, 2020 for Unit 3. TSPL has also requested CPCB to refund the compensation paid by TSPL and grant timeline extension of 30 months from the date of commencement of work of the FGD project. TSPL has also filed an application for impleadment in the case of M.C. Mehta v UOI & Ors. and an application for directions before the SC for providing ad interim stay on the compensation and grant timeline extension for installation of FGD which is yet to be listed. TSPL is in the process of retendering for FGD Project. However, as per the notification issued by MoEF&CC dated March 31, 2021, the timeline for complying with the emission norms has been extended to December 31, 2024. TSPL has vide letter dated April 14, 2021 requested CPCB to refund us the compensation paid by TSPL for the months of May 2020 to September 2020. – | Arbitration proceedings related to ONGC’s obligation to share contract costs in respect of the Rajasthan Block PSC. |
The dispute pertains to inter-party issues between ONGC, Vedanta Limited (“Operator”) and Cairn Energy Hydrocarbons Limited (“CEHL”) (ONGC, Vedanta Limited and CEHL collectively referred to as “Contractor Parties”) in relation to key components of the parties’ contractual relationships, including their respective right to recover Contractor’s Contract Costs incurred as a result of Petroleum Operations and ONGC’s contractual obligation to contribute its Participating Interest (“PI”) share of such costs in the RJ Block and the subsequent finalization of accounts for the RJ Block. GoI has taken the position, among other things, that the Operator’s annual accounts and statements are not final. The same is due to the Contractor Parties’ divergent views on the RJ Block accounts and non-adoption of the accounts by the Management Committee (“MC”) of the RJ Block. The GoI has directed the Contractor Parties to “finalize Cost Oil”, in the absence of which disputed profit petroleum (“PP”) payments should be payable to GoI. These issues arise from the interpretation and application of the RJ Operating Agreement (“OA”), the Rajasthan Block PSC. On March 01, 2019, Vedanta Limited served a notice of arbitration in accordance with the dispute resolution mechanism prescribed in the Rajasthan Block PSC and OA to ONGC and ONGC has responded to the same on April 12, 2019. The Arbitral Tribunal has been constituted in accordance with and pursuant to the Rajasthan Block PSC. A statement of claim was filed by Vedanta on January 31, 2020 whilst ONGC filed its statement of defence on August 30, 2020. In parallel, on May 10, 2019, ONGC filed an interim application under Section 9 of the (Indian) Arbitration Act seeking interim relief before the High Court of Delhi claiming royalty of approximately $ 394 million. The matter has been listed several times since May 2019 and no interim relief sought by ONGC had been granted. The matter is pending for adjudication. Vedanta Limited had entered into two development contracts in 2018 with Baker Hughes companies in relation to the MBA fields in Rajasthan block. On the notice of force majeure by Baker in respect of the services contract, Vedanta Limited as per its contractual right terminated the active call outs under the said contract. There is a dispute between the parties relating to the amount payable and whether only active call outs stand terminated or both contracts are terminated. Baker invoked arbitration under both the contracts in November 2020 claiming a total amount of $ 127 million, which is disputed by Vedanta Limited. Both the parties have appointed their respective arbitrators. For appointment of the presiding arbitrator, the matter is before the Hon’ble Supreme Court of India. GRIDCO Power purchase agreement amendment matter (Short supply issue) Vedanta Limited has set up a 4x600MW Thermal Power Plant (TPP) at Jharsuguda, Odisha. In the year 2012, Vedanta Limited executed a power purchase agreement (“PPA”) with GRIDCO vide Consolidated PPA dated December 19, 2012 whereby it was obligated to supply certain quantum of power from its TPP to GRIDCO. Thereafter, in 2015, Vedanta Limited had filed a petition before Orissa Electricity Regulatory Commission (“OERC”) seeking conversion of its 4 IPP units to Captive Generating Plants (“CGP’s”). The said prayer was partly allowed by OERC by its order dated January 27, 2016 and the parties were directed to make necessary changes to the PPA incorporating the directions thereof and submit the revised PPA for approval of the Commission. Meanwhile, a meeting was held between the parties on November 01, 2016 whereby it was agreed inter alia that in case there is a shortfall in supply of power by Vedanta Limited to GRIDCO, then GRIDCO shall be entitled to levy penalty on Vedanta Limited at such rate as agreed in the minutes. In furtherance to the said MoM, GRIDCO started raising debit notes on Vedanta Limited for such shortfall in supply of power and has as such raised the debit notes on Vedanta Limited till the month of December 2019 amounting to a total value of ₹ 27,780 million ($ 368 million). Vedanta Limited has disputed these debit notes on various grounds. GRIDCO filed a petition in the year 2018 seeking amendment to the PPA in compliance with the OERC order dated January 27, 2016. However, GRIDCO further prayed for incorporation of a penalty clause in line with the minutes dated November 1, 2016. Vedanta Limited filed its preliminary reply inter alia submitting that there are certain issues which need to be resolved between the parties mutually and accordingly, the Commission may direct the parties to convene a meeting to sort out the issues and submit the revised PPA to the Commission for its approval. The Commission was pleased to allow the aforementioned prayer and in furtherance to the same, a meeting was held between Vedanta Limited and GRIDCO in the presence of Director (RA), OERC on June 7, 2019. In the said meeting, certain modalities for payment of compensation by Vedanta Limited for short supply of power on the principle of no profit and no loss were agreed between the parties and minutes were signed. Therefore, the minutes dated November 1, 2016 stood superseded by the minutes dated June 7, 2019. However, subsequently GRIDCO disputed the said minutes as being non-implementable and raised additional issues as well. GRIDCO is not making payment of undisputed outstanding receivables of Vedanta Limited towards monthly energy bills on account of the fact that it has an alleged counter claim of ₹ 27,780 million ($ 368 million) towards debit notes being raised by it in accordance with the earlier minutes dated November 1, 2016. However, Vedanta Limited has disputed the said minutes and has also maintained that these minutes stand superseded by minutes dated June 7, 2019 which were signed between both the parties in presence of Director (RA), OERC. In fact, Vedanta Limited in its preliminary reply had also sought a direction from OERC seeking payment of 100% payment of undisputed invoices and at least 75% of disputed invoices as per the provisions of the PPA. Post signing of minutes dated June 7, 2019, we have also submitted before the Commission that we are committed to comply with the modalities agreed in the said minutes. The total clean receivables of Vedanta Limited as on March 31, 2020 stands at ₹ 9,020 million ($ 123.33 million). The final hearings in the matter were concluded on October 15, 2019. The OERC passed its final order on June 22, 2017.2020 wherein Vedanta Limited and GRIDCO have been directed to amend the PPA in line with the terms laid out by the OERC. Additionally, OERC has directed GRIDCO to reconcile the arrear amounts due to Vedanta Limited and settle the payments within two months from date of the judgement. The reconciliation is still going on. On August 25, 2020, Vedanta Limited also filed an appeal before the APTEL in respect of certain limited issues arising out of the June 2020 OERC Order. The matter is at the stage of completion of pleadings. Next date of hearing of the matter is August 4, 2021. Additionally, on September 18, 2020, GRIDCO filed an application for review of the June 2020 OERC Order before the OERC. Arguments in the matter have been concluded and the same is reserved for orders. The matter was last listed for order on May 21, 2021 and next date of listing is awaited. Legal actions by Indian Income tax Authorities for additional income tax Income tax returns submitted by companies are subject to a comprehensive review and challenge by the tax authorities. There are appellate procedures available to both the tax authorities and taxpayers and it is not uncommon for significant or complex matters in dispute to remain outstanding for several years before they are finally resolved by the High Court or the Supreme Court of India. There are certain income tax legal proceedings which are pending against us. Potential liabilities, if any have been adequately provided for and we do not currently estimateinterest and penalty, if any material incremental tax liability in respect of these matters.would be additional. The Company and certain of its operating subsidiaries have been issued demands by the income tax authorities, principally in respect of tax holidays and disallowances of expenditures relating to exempt income, amounting to Rs. 37,405₹ 19,093 million and Rs. 63,348₹ 19,442 million ($ 976.7266 million) as at March 31, 20162020 and March 31, 2017,2021, respectively. Legal actions by third parties, Indian sales tax, excise and related tax authorities for additional sales tax, excise and indirect duties The Group is subject to various claims and exposures which arise in the ordinary course of conducting and financing its business from the excise, indirect tax authorities and others.other authorities. These claims and exposures mostly relate to the assessable values of sales and purchases or to incomplete documentation supporting the companies’ returns or other claims. Theclaims.The approximate total value of claims against the Group companies is₹ 70,88939,960 million and₹ 83,33947,820 million ($ 1,285.1654 million) as at March 31, 20162020 and March 31, 20172021 respectively.
Dividend Distribution Policy Under Indian law, a company declares dividends (including interim dividends) upon a recommendation by its board of directors and approval by a majority of the shareholders at the annual general meeting of shareholders held within six months of the end of each fiscal year. However, while final dividends can be paid out by a company only after such dividends have been recommended by the board of directors and approved by shareholders, interim dividends can be paid out with only a recommendation by the board of directors, though such action is subject to subsequent sanction by the shareholders at the annual general meeting held within six months from the end of fiscal year. The shareholders have the right to decrease but not to increase the dividend amount recommended by the board of directors. The Board of Directors may declare interim dividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be declared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend. Under the Companies Act, 2013, dividends in respect of a fiscal year may be paid out of the profits of a company in that fiscal year or out of the undistributed profits of previous fiscal years or both, after providing for depreciation in the manner provided for in the Companies Act, 2013. The Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 20152014 provide that in the event of adequacyinadequacy or absence of profits in any year, a company may declare dividends out of its free reserves subject to the following conditions: If profits for that year are insufficient to declare dividends (including interim dividends), the dividends for that year may be declared and paid out from accumulated profits on the following conditions:
The rate of dividend declared shall not exceed the average of the rates at which dividend was declared by it in the three years immediately preceding that year; The total amount to be drawn from such accumulated profits shall not exceedone-tenth of the sum of itspaid-up share capital and free reserves as appearing in the latest audited financial statement; The amount so drawn shall first be utilized to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared; The balance of reserves after such withdrawal shall not fall below 15.0% of its paid up share capital as appearing in the latest audited financial statement. The Company may, before the declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company. Dividends (including interim dividends) must be paid within 30 days from the date of the declaration and any dividend which remains unpaid or unclaimed after that period must be transferred within seven days from the date of expiry of the said period of thirty (30) days to a special unpaid dividend account held at a scheduled bank. We must transfer any money which remains unpaid or unclaimed for seven years from the date of such transfer to the Investor Education and Protection Fund established by the GoI. As per Regulation 43A of the SEBI LODR, the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and / or retaining profits earned by the Company. The policy is available on the website of the Company www.vedantalimited.com. Dividends paid to non-resident holders of ADSs are not subject to tax rates imposed on ustill March 31, 2020 in respectthe hands of dividends paid in prior periods have varied.the recipient. However, the company that is distributing the dividend is liable to pay a “DDT” at the rate of 15.0% (on a gross basis) plus a surcharge of 10.0% and an education cess at the rate of 3.0%. According to the Finance (No. 2) Act, 2014, dividend distribution taxDDT is to be levied on gross distributable surplus amount instead of amount paid net of taxes. This resulted in an increase in the dividend distribution taxDDT to more than 20%20.0%, from 16.995% fromin the earlier years which was applicable to the dividends declared, distributed or paid on or after October 1, 2014. The Finance Act, 20152018 increased the surchargerate of cess from 10%3.0% to 12%,4.0% which will result in an effective DDT rate of 20.6% from April 1, 2018. Under Section 115O(1A) of the Income Tax Act 1961, an Indian company, subject to certain conditions, can set off the dividend income received from its subsidiaries against the amount of dividend declared and distributed by it to its shareholders, therefore reducing the applicable tax rate for fiscal year 2016 was 20.358%. DDT to the extent of such set-off. Any distribution of additional ADSs or equity shares to resident or non-resident shareholders will not be subject to any Indian tax. Further the Finance Act 2016 has provided that any income earned by an individual, Hindu Undivided Family (HUF)(“HUF”) or a firm, who is a resident in India, by way of dividend declared, distributed or paid by any domestic company in excess of Rs.1,000,000₹ 1 million in aggregate shall be chargeable to tax at the rate of 10%10.0% on a gross basis on such amount exceeding Rs.1,000,000. Under Section 115 O (1A)₹ 1,000,000. With the introduction of Finance Act 2017, this provision will be applicable only to specified assessees (specified assessee means a person other than domestic company, charitable trusts registered under section 12 A or 10 (23C) of the Finance Act 2009,2017). The Finance Act 2020 has repealed the DDT. Dividend received will be taxable in the hands of recipient. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates effective from April 1, 2009, an Indian company, subject to certain conditions, can set off the dividend income received from its subsidiaries against the amount of dividend income declared by it to its shareholders, thereby reducing the dividend distribution tax to the extent of suchset-off.2020. Future dividends will depend on our revenue, cash flows, financial condition (including capital position) and other factors. ADSADSs holders will be entitled to receive dividends payable in respect of the equity shares represented by the ADSs. Cash dividends in respect of the equity shares represented by the ADSs will be paid to the depositary in Indian Rupees and, except as otherwise described under the deposit agreement governing the issuance of our ADSs, will be converted by the depositary into US dollars.Dollars. The depositary will distribute these proceeds to ADSADSs holders. The equity shares represented by the ADSs will rank equally with all other equity shares in respect of dividends. ADSADSs holders will bear all of the currency exchange rate risk of the conversion of any dividends from Indian Rupees to US dollars,Dollars, and a decline in the value of the Indian RupeeRupees as compared to the US dollarDollar would reduce the US dollarDollar value of any dividends we pay that are received by ADSADSs holders. The Company’s Board of Directors approved the Dividend Distribution Policy for the Company at its meeting held on May 15, 2017. The Board of Directors shall recommend dividends in compliance with this policy, the provisions of the Companies Act, 2013 and Rules made thereunder and other applicable legal provisions. 1. Dividend Payout In every financial year, the Company aims to distribute to its equity shareholders: | i. | The entire dividend income (net of taxes) it receives from its subsidiary, Hindustan Zinc Limited.Limited (this does not apply to anyone-time special dividends received from Hindustan Zinc Ltd.Limited which will be at the discretion of the Board); and |
| ii. | Minimum 30%30.0% (including taxes, cess, and levies, if any relating to the dividend) of attributable profit after tax (before exceptional items) of the Company excluding its share of profits in Hindustan Zinc Limited for the year. Such profits will be net of dividend payout to preference shareholders, if any. |
2. While considering a dividend, the following financial parameters, and internal and external factors shall also be evaluated by the Board: While considering a dividend, the following financial parameters, and internal and external factors shall also be evaluated by the Board: Current financial year’s profits and retained earningsearnings; Availability of cash and liquid investments to pay dividendsdividends; Deleveraging plans of the CompanyCompany; Capital expenditures and organic/ inorganic plans of the CompanyCompany; Company’s future prospects including its continued ability to sustain its profits; and External factors such as uncertain or recessionary economic and business conditions, regulatory environment, prevailing and expected commodity prices in the market. 3. Circumstances under which the shareholders of the Company may or may not expect dividends: Generally, it would be the Company’s policy to pay dividends in the manner specified above. However, the Board may not approve a dividend in certain situations such as: When the Company does not have any profitsprofits; When there are prolonged strikes or lockouts, natural calamities, regulatory actions, major accidents or other events significantly impacting production volumes; When prices of the Company’s products have fallen suddenly, impacting future profits in substantial manner, or When the Company’s liquidity is jeopardized for any reason, impairing its ability to pay the dividend. 4. How retained earnings shall be utilized: The retained earnings may be utilized either for business purposes mentioned in its Memorandum and Articles of Association or shall be distributed to the equity shareholders. 5. Adoption of parameters for dividend payouts with respect to various classes of shares: Presently, the authorized share capital of the Company is divided into equity shares of Rs.1₹ 1 each and preference shares of Rs.10₹ 10 each. As and when the Company issues other kinds of shares, the Board may suitably amend this PolicyPolicy. 6. Review of Policy This policy will be reviewed periodically by the Board and if revised, the Company will announce such changes. This Policy will come into effectis effective from fiscal year 2018. B. Significant Changes MergerVoluntary open offer
Vedanta Resources Limited (“the Acquirer”) together with Cairn IndiaTwin Star Holdings Limited On June 14, 2015, (“PAC 1”), Vedanta Holdings Mauritius Limited (“PAC 2”) and Cairn IndiaVedanta Holdings Mauritius II Limited announced a merger under the Indian law. On completion, minority shareholders of Cairn India Limited were to receive for each equity share held one equity share in Vedanta Limited of face value Rs.(“PAC 3” together with PAC 1 each and one 7.5% Redeemable Preference Share in Vedanta Limited with a face value of Rs. 10 each. No shares werePAC 2 to be issued to Vedanta Limited or any of its subsidiaries forreferred as “PACs”) in their shareholdingcapacity as the persons acting in Cairn India Limited.
On September 10, 2015, BSE Limited andconcert with the National Stock Exchange of India Limited issued the ‘No adverse observation’ letter to the Cairn India Merger. Thereafter on July 22, 2016, Vedanta Limited and Cairn India Limited announced the revised terms to the recommended merger between Vedanta Limited and Cairn India Limited.
The Cairn India Merger was made operative on April 11, 2017. Significant effects of the merger were as follows:Acquirer had:
(i) | i. | made a Public shareholdersAnnouncement for the Voluntary Open Offer dated January 9, 2021 (“Public Announcement”) for acquisition of Cairn Indiaup to 371,750,500 Equity Shares representing 10% of the fully diluted voting share capital of Vedanta Limited received for each equity share held by them in Cairn India Limited on(“Target Company”) from the record datePublic Shareholders of April 27, 2017, one equity share of face value of Rs. 1 each and four 7.5%Non-ConvertibleNon-Cumulative Redeemable Preference Shares in the Company of Rs.10 each.Target Company; |
(ii) | ii. | Further,made a Corrigendum to the Cairn India Limited shareholders, who became shareholders of the Company, also received the second interim dividend of Rs. 17.70 per equity share.Public Announcement dated January 14, 2021; |
(iii) | iii. | The equity listed capital ofmade a Detailed Public Statement for the Company increased from Rs. 2,964,694,239 (2,964,694,239 shares of Rs. 1 each) to Rs. 3,717,194,239 (3,717,194,239 shares of Rs, 1 each).Voluntary Open Offer dated January 14, 2021 (“DPS”), published on January 15, 2021; |
(iv) | iv. | The Promotersfiled the Draft Letter of Company remained unchanged, but the overall stake of the Promoters in the Company decreased from 62.86% to 50.13%.Offer dated January 19, 2021 (“DLOF”) with SEBI; and |
(v) | v. | The preference share capital has increased from NILmade a Corrigendum to Rs. 30,100,000,000 (3,010,000,000 sharesDetailed Public Statement and the Draft Letter of Rs. 10 each).Offer dated February 17, 2021, published on February 18, 2021. |
The Acquirer and PACs had further made an Announcement cum Corrigendum to Public Announcement, Detailed Public Statement and the Draft Letter of Offer dated March 16, 2021, published on March 17, 2021, specifying the various developments/ amendments w.r.t the Offer including the upward revision of Offer price from ₹ 160 per share to ₹ 235 per share and upward revision of Offer size from 371,750,500 equity shares representing 10% of the Voting Share Capital to 651,000,000 equity shares representing 17.51% of the Voting Share Capital. | vi. | The Company’s authorized share capital including equity and preference shares, increased from 51,620,100,000 to 74,120,100,000. |
Further, the Acquirer and the PACs had made the Letter of Offer, along with the Form of Acceptance cum Acknowledgement (“LOF”) dated March 16, 2021, published on March 17, 2021 and the opening offer public advertisement dated March 20, 2021 (“Offer Opening Advertisement”) was published on March 22, 2021. The above announcements were duly intimated to the Stock Exchanges, filed and submitted with SEBI and the Target Company within the prescribed timelines under Takeover Regulations. Further, the recommendations of the Committee of Independent Directors (“IDC”) of Vedanta Limited pertaining to the said open offer was published on March 18, 2021 in accordance with the Takeover Regulations. The tendering period for the said offer commenced from March 23, 2021 and closed on April 7, 2021. The post offer advertisement dated April 20, 2021 was published on April 21, 2021 pursuant to and in compliance with the Takeover Regulations detailing the pre and post offer shareholding of the Acquirers, PACs and the Public. Pursuant to the above offer, 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 the current 55.1% to 65.2%. The Complete details in this regard can be accessed at www.vedantalimited.com. ITEM 9. | THE OFFER AND LISTING |
A. Offer and Listing Details The ADSs of SIIL evidenced by American Depositary Receipts, or ADRs, commenced trading on the NYSE on June 20, 2007 at an initial offering price of $13.44$ 13.44 per ADS. The ADRs evidencing ADSs were issued by our Depositary, Citibank, N.A., pursuant to a deposit agreement. Our ADSs evidenced by ADRs, commenced trading on the NYSE, on September 9, 2013 at a price of $ 10.25 per ADS, after theRe-organization Transactions became effective on August 17, 2013. In July 2009, in connection with the offering of ADSs, each representing one equity share of par value Rs.2,₹ 2, SIIL issued 131,906,011 new equity shares in the form of ADSs, at a price of $ 12.15 per ADS, aggregating approximately $ 1,602.71,603 million. Out of 131,906,011 equity shares, 41,152,263 equity shares were issued to Twin Star, which is a wholly-owned subsidiary of Vedanta. As of March 31, 2017, 2,965,004,871June 25, 2021, our issued and paid up capital was 3,717,504,871 out of which 3,717,196,639 is listed with the exchanges. Out of our equity shares that were outstanding (including the 217,019,900161,104,800 equity shares underlying our 54,254,97540,276,200 ADSs outstanding as of such date) after giving effect to the bonus issue and share split which includes 310,632308,232 equity shares pending allotment as they are under dispute. All our equity shares are registered shares. We have entered into listing agreements with the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) (which were effective until November 30, 2015) andexecuted a Uniform Listing Agreement with the NSE and the BSE pursuant to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 effective December 1, 2015, pursuant2015. Subsequent to whichthis, we are required to comply with certain regulations in addition to the requirements under the Companies Act, 2013. Our outstanding equity shares are currently listed and traded on the NSE and BSE.BSE in India. For information regarding conditions in the Indian securities markets, see “Item“Item 3. Key Information – D. Risk Factors – Risks Relating to Investments in Indian Companies, Global Economic Conditions and International Operations.” The following table shows: the reported high and low trading prices for our ADSs in US dollars on the NYSE; and the imputed high and low trading prices for our equity shares, translated into US dollars, based on the Indian Rupee prices for such equity shares as quoted in the official list of each of the NSE and BSE and the noon buying rate of the Federal Reserve Bank of New York on the last business day of each period presented;presented: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NYSE Price Per ADS | | | Average NYSE Daily ADS Share Trading | | | NSE Price Per Equity Share | | | Average NSE Daily Equity Share Trading | | | BSE Price Per Equity Share | | | Average BSE Daily Equity Share Trading | | Fiscal Year | | High ($) | | | Low ($) | | | Volume | | | High ($) | | | Low ($) | | | Volume | | | High ($) | | | Low ($) | | | Volume | | | | | | | | | | | | 2013 | | | 9.06 | | | | 6.42 | | | | 642,788 | | | | 2.26 | | | | 1.59 | | | | 6,169,332 | | | | 2.26 | | | | 1.63 | | | | 664,307 | | 2014(1) | | | 13.59 | | | | 4.76 | | | | 537,824 | | | | 3.56 | | | | 1.17 | | | | 6,757,850 | | | | 3.55 | | | | 1.17 | | | | 947,611 | | 2015 | | | 21.36 | | | | 11.43 | | | | 197,421 | | | | 5.11 | | | | 2.86 | | | | 6,112,054 | | | | 5.11 | | | | 2.86 | | | | 778,407 | | 2016 | | | 14.43 | | | | 3.52 | | | | 226,508 | | | | 3.52 | | | | 0.88 | | | | 12,085,613 | | | | 3.52 | | | | 0.88 | | | | 1,483,779 | | 2017 | | | 17.34 | | | | 5.00 | | | | 255,136 | | | | 4.29 | | | | 1.31 | | | | 13,400,496 | | | | 4.29 | | | | 1.31 | | | | 1,289,988 | | 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1st Quarter | | | 14.43 | | | | 10.63 | | | | 180,191 | | | | 3.67 | | | | 2.67 | | | | 4,932,104 | | | | 3.67 | | | | 2.67 | | | | 479,437 | | 2nd Quarter | | | 11.01 | | | | 4.59 | | | | 219,576 | | | | 2.71 | | | | 1.17 | | | | 8,293,535 | | | | 2.71 | | | | 1.17 | | | | 930,878 | | 3rd Quarter | | | 7.06 | | | | 4.77 | | | | 260,412 | | | | 1.80 | | | | 1.23 | | | | 12,925,332 | | | | 1.75 | | | | 1.23 | | | | 1,599,676 | | 4th Quarter | | | 5.72 | | | | 3.52 | | | | 245,436 | | | | 1.48 | | | | 0.88 | | | | 22,377,976 | | | | 1.48 | | | | 0.88 | | | | 2,952,316 | | 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1st Quarter | | | 7.88 | | | | 5.00 | | | | 181,096 | | | | 1.97 | | | | 1.26 | | | | 16,364,315 | | | | 1.97 | | | | 1.26 | | | | 1,723,696 | | 2nd Quarter | | | 10.59 | | | | 7.78 | | | | 198,747 | | | | 2.72 | | | | 1.99 | | | | 13,760,158 | | | | 2.71 | | | | 1.98 | | | | 1,424,610 | | 3rd Quarter | | | 14.40 | | | | 10.57 | | | | 319,657 | | | | 3.66 | | | | 2.55 | | | | 12,999,902 | | | | 3.66 | | | | 2.55 | | | | 1,142,668 | | 4th Quarter | | | 17.34 | | | | 12.60 | | | | 325,404 | | | | 4.29 | | | | 3.31 | | | | 10,477,609 | | | | 4.29 | | | | 3.31 | | | | 871,354 | | 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1st Quarter | | | 17.19 | | | | 13.78 | | | | 511,800 | | | | 4.29 | | | | 3.37 | | | | 12,887,198 | | | | 4.30 | | | | 3.37 | | | | 1,147,010 | | Last Six Months | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | January 2017 | | | 15.17 | | | | 12.60 | | | | 231,606 | | | | 3.88 | | | | 3.18 | | | | 9,424,273 | | | | 3.88 | | | | 3.18 | | | | 770,776 | | February 2017 | | | 15.89 | | | | 14.62 | | | | 286,482 | | | | 4.12 | | | | 3.64 | | | | 10,447,974 | | | | 4.12 | | | | 3.65 | | | | 854,762 | | March 2017 | | | 17.34 | | | | 14.59 | | | | 439,120 | | | | 4.29 | | | | 3.81 | | | | 11,563,707 | | | | 4.29 | | | | 3.82 | | | | 981,691 | | April 2017 | | | 17.19 | | | | 14.22 | | | | 386,890 | | | | 4.32 | | | | 3.52 | | | | 12,575,843 | | | | 4.33 | | | | 3.53 | | | | 1,155,646 | | May 2017 | | | 15.78 | | | | 13.78 | | | | 672,153 | | | | 3.85 | | | | 3.38 | | | | 14,703,964 | | | | 3.85 | | | | 3.38 | | | | 1,325,242 | | June 2017 | | | 15.60 | | | | 14.24 | | | | 459,325 | | | | 3.91 | | | | 3.51 | | | | 11,250,795 | | | | 3.91 | | | | 3.51 | | | | 952,889 | | July 2017 (through July 28, 2017) | | | 17.72 | | | | 15.60 | | | | 394,166 | | | | 4.43 | | | | 3.91 | | | | 9,292,589 | | | | 4.42 | | | | 3.90 | | | | 789,816 | |
Notes:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NYSE Price for ADS | | | Average NYSE daily ADSs share trading | | | NSE Price per Equity Shares | | | Average NSE daily Equity share trading | | | BSE Price per Equity Shares | | | Average BSE daily Equity share trading | | Fiscal year | | High ($) | | | Low ($) | | | Volume | | | High ($) | | | Low ($) | | | Volume | | | High ($) | | | Low ($) | | | Volume | | | | | | | | | | | | 2014(1) | | | 13.59 | | | | 4.76 | | | | 537,824 | | | | 3.56 | | | | 1.17 | | | | 6,757,850 | | | | 3.55 | | | | 1.17 | | | | 947,611 | | 2015 | | | 21.36 | | | | 11.43 | | | | 197,421 | | | | 5.11 | | | | 2.86 | | | | 6,112,054 | | | | 5.11 | | | | 2.86 | | | | 778,407 | | 2016 | | | 14.43 | | | | 3.52 | | | | 226,508 | | | | 3.52 | | | | 0.88 | | | | 12,085,613 | | | | 3.52 | | | | 0.88 | | | | 1,483,779 | | 2017 | | | 17.34 | | | | 5.00 | | | | 255,136 | | | | 4.29 | | | | 1.31 | | | | 13,400,496 | | | | 4.29 | | | | 1.31 | | | | 1,289,988 | | 2018 | | | 21.99 | | | | 13.78 | | | | 481,231 | | | | 5.46 | | | | 3.34 | | | | 10,521,105 | | | | 5.46 | | | | 3.35 | | | | 882,330 | | 2019 | | | 19.05 | | | | 8.34 | | | | 627,981 | | | | 4.53 | | | | 2.11 | | | | 13,824,166 | | | | 4.53 | | | | 2.11 | | | | 964,153 | | 2020 | | | 11.18 | | | | 3.24 | | | | 675,972 | | | | 2.59 | | | | 0.80 | | | | 13,907,340 | | | | 2.59 | | | | 0.80 | | | | 806,054 | | 2021 | | | 12.91 | | | | 3.24 | | | | 950,631 | | | | 3.17 | | | | 0.85 | | | | 29,049,720 | | | | 3.16 | | | | 0.85 | | | | 2,021,830 | | 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1st Quarter | | | 11.18 | | | | 8.68 | | | | 486,575 | | | | 2.83 | | | | 2.22 | | | | 10,245,483 | | | | 2.83 | | | | 2.21 | | | | 558,415 | | 2nd Quarter | | | 10.22 | | | | 7.04 | | | | 577,980 | | | | 2.51 | | | | 1.77 | | | | 11,463,948 | | | | 2.52 | | | | 1.78 | | | | 789,605 | | 3rd Quarter | | | 9.10 | | | | 7.66 | | | | 666,532 | | | | 2.28 | | | | 1.91 | | | | 13,568,672 | | | | 2.28 | | | | 1.91 | | | | 829,925 | | 4th Quarter | | | 9.41 | | | | 3.24 | | | | 979,322 | | | | 2.20 | | | | 0.80 | | | | 20,030,160 | | | | 2.20 | | | | 0.80 | | | | 1,031,398 | | 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1st Quarter | | | 6.00 | | | | 3.24 | | | | 1,152,072 | | | | 1.50 | | | | 0.82 | | | | 35,222,049 | | | | 1.50 | | | | 0.83 | | | | 18,33,089 | | 2nd Quarter | | | 7.52 | | | | 5.62 | | | | 595,558 | | | | 1.92 | | | | 1.41 | | | | 19,025,080 | | | | 1.92 | | | | 1.41 | | | | 8,48,146 | | 3rd Quarter | | | 8.90 | | | | 4.92 | | | | 1,090,116 | | | | 2.34 | | | | 1.25 | | | | 43,838,364 | | | | 2.34 | | | | 1.25 | | | | 4,387,077 | | 4th Quarter | | | 12.91 | | | | 8.65 | | | | 968,775 | | | | 3.17 | | | | 2.19 | | | | 18,652,576 | | | | 3.16 | | | | 2.19 | | | | 1,028,380 | | 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | January 2021 | | | 10.28 | | | | 8.65 | | | | 831,176 | | | | 2.61 | | | | 2.20 | | | | 18,436,834 | | | | 2.60 | | | | 2.20 | | | | 1,310,735 | | February 2021 | | | 11.77 | | | | 9.16 | | | | 974,493 | | | | 2.90 | | | | 2.18 | | | | 17,880,486 | | | | 2.90 | | | | 2.18 | | | | 1,130,931 | | March 2021 | | | 12.91 | | | | 11.36 | | | | 1,077,720 | | | | 3.17 | | | | 2.80 | | | | 19,593,368 | | | | 3.16 | | | | 2.81 | | | | 661,802 | | April 2021 | | | 14.13 | | | | 11.23 | | | | 1,023,210 | | | | 3.60 | | | | 2.83 | | | | 15,429,694 | | | | 3.60 | | | | 2.84 | | | | 785,166 | | May 2021 | | | 16.32 | | | | 13.85 | | | | 1,074,195 | | | | 4.09 | | | | 3.47 | | | | 22,703,868 | | | | 4.09 | | | | 3.47 | | | | 953,623 | | June 2021 (through June 25, 2021) | | | 15.58 | | | | 13.30 | | | | 889,570 | | | | 3.81 | | | | 3.27 | | | | 10,419,976 | | | | 3.81 | | | | 3.27 | | | | 630,345 | |
(1) | The first trading day on the NYSE was September 9, 2013 and on the BSE and the NSE was August 27, 2013 since theRe-organization Transactions became effective. Since this date, the information relating to the high and low market prices and the average daily trading volumes of the ADSs and the shares are of Vedanta Limited. |
B. Plan of Distribution Not applicable C. Markets Our ADSs are listed on the NYSE under the symbol VEDL. Our equity shares are listed on the NSE with stock code VEDL and on the BSE with stock code 500295. Prior to the change of name to Vedanta Limited, the ADSs were listed on the NYSE under the symbol “SSLT” and equity shares were listed on the NSE with stock code SSLT/EQ and on the BSE with stock code 500295. D. Selling Shareholders Not applicable E. Dilution Not applicable F. Expenses of the Issue Not applicable ITEM 10. | ADDITIONAL INFORMATION |
A. Share Capital Not applicable B. Memorandum and Articles of Association General Our Company identification numberIdentification Number is L13209MH1965PLC291394. Our registered office is presently situated at 1st1st Floor, C‘C’ Wing, Unit 103, Corporate Avenue, Atul Projects, Chakala, Andheri (East), Mumbai Mumbai—400093, Maharashtra, India. The register of members is maintained at the registered office of the Company, office of the registrarRegistrar and share transfer agent, Karvy Computer Share Transfer Agent KFin Technologies Private Limited in Hyderabad. The corporate legal framework governing companies in India is now subject tohas undergone a change with the Companies Act, 2013, which replaces some of the provisions of the Companies Act, 1956. The sectionsenactment of the Companies Act, 2013 are being notified in a phased manner. While some(including any statutory modification/ amendments made thereto). The Companies Act, 2013 has replaced the Companies Act, 1956. Majority of the provisions of the Companies Act, 2013 have been notified as law, other provisions of the Companies Act, 2013 are yet to be notified as effective by the GoI. Pending notification of the Companies Act, 2013 in its entirety, certain provisions of the Companies Act, 1956, which have not ceased to be effective by enactment of the corresponding provisions of the Companies Act, 2013 continue to be effective, along with the notified provisions of the Companies Act, 2013. notified. Accordingly, the legal framework governing us is the Companies Act, 1956 read with2013, and rules made thereunder and the notified sectionsSEBI Regulations including any statutory modification/amendments. Various statutory authorities and departments of the Companies Act, 2013, as amended (the “Indian Companies Act”).GoI have also extended and granted several temporary relaxations on compliances requirements on account of the COVID – 19 pandemic. The summary below does not include details of such temporary relaxations. Our activities are regulated by our Memorandum and Articles of Association. Our current Memorandum and Articles of Association were amended following the enactment of Companies Act, 2013. In addition to our Memorandum and Articles of Association, our activities are regulated by certain legislation, including the Indian Companies Act, the Securities Contract Regulation Act and the Securities Contracts (Regulation) Rules, 1957, as amended. Our Memorandum of Association permits us to engage in a wide variety of activities, including all of the activities that we are currently engaged in or intend to be engaged in, as well as other activities that we currently have no intention of engaging in.activities. Our objects are set out at clause 3 of our Memorandum of Association. Pursuant to the National Company Law Tribunal, Mumbai bench order dated March 23, 2017, the main objects clause of ourOur Memorandum and Articles of Association has beenwere amended to includefollowing the objects as required for the purposeenactment of carrying on the business activities of Cairn India. Below listed are the amended clauses:Companies Act, 2013. Sub-clause 12E: To carry on in India and elsewhere in the world the business or businesses of surveying, prospecting, drilling and exploring for, acquiring, developing, producing, maintaining, refining, storing, trading, supplying, transporting, marketing, distributing, importing, exporting and generally dealing in minerals and other natural oils, petroleum and all other forms of solid, liquid and gaseous hydrocarbons and other minerals and their products andby-products and all their branches.
Sub-clause 12F: To search for, purchase, take on lease or licence, obtain concessions over or otherwise acquire, any estate or interest in, develop the resources of, work, dispose of, or otherwise turn to account, land or sea or any other place in India or in any other part of the world containing, or thought likely to contain, oil, petroleum, petroleum resource or alternate source of energy or other oils in any form, asphalt, bitumen or similar substances or natural gas, chemicals or any substances used, or which is thought likely to be useful for any purpose for which petroleum or other oils in any form, asphalt, bitumen or similar substances, or natural gas is, or could be used and to that end to organize, equip and employ expeditions, commissions, experts and other agents and to sink wells, to make borings and otherwise to search for, obtain, exploit, develop, render suitable for trade, petroleum, other mineral oils, natural gas, asphalt, or other similar substances or products thereof.
Clause V: The Authorized Share Capital of the Company is Rs. 74,120,100,000 divided into 44,020,100,000 number of equity shares of Rs. 1 each and 3,010,000,000 redeemable preference shares of Rs. 10 each.
Share Capital Prior to the Cairn India Merger, ourOur authorized share capital was Rs.51,270 millionis ₹ 74,120,100,000 divided into 51,270 million equity44,020,100,000 Equity Shares of ₹ 1 (Indian Rupees One only) each and 3,010,000,000 preference shares of par value Rs. 1 per equity share. After giving effect to the Cairn India Merger, our authorized share capital changed to Rs. 44,020 million divided into 44,020 million equity shares of par value Rs. 1 per equity share. As of March 31, 2017 our issued share capital was Rs. 2,965.0 million, divided into 2,965,004,871 equity shares of par value Rs. 1 per equity share. 310,632 equity shares of our total issued capital has not been issued and allotted by us as they are under dispute. In April 2017, pursuant to the Cairn India Merger, equity shares totaling Rs. 752.5 million were issued to thenon-controlling₹ shareholders of Cairn India Limited. After issuance of equity shares to thenon-controlling shareholders of Cairn India Limited, our issued share capital changed to Rs. 3,717.5 million, divided into 3,717,194,239 equity shares of par value Rs. 1 per equity share which does not include 310,632 equity shares of our total issued capital pending allotment by us as they are under dispute.10/- (Indian Rupees Ten only) each.
As of March 31, 2017, 2,965,004,8712021, 3,717,504,871 equity shares, par value Rs.₹ 1 per equity share, were issued and outstanding (including 310,632308,232 equity shares which have been issued but pending allotment), of which 217,019,900160,903,244 equity shares were held in the form of 54,254,97540,225,811 ADSs. Each ADSADSs represents four equity shares. Changes in Capital or our Memorandum of Association and Articles of Association Subject to the Indian Companies Act, and our Articles of Association, we may, by passing2013, an ordinary resolution or amay be passed at any general meeting for which notice for the meeting is served within the required period. A special resolution requires that the votes cast in favour of the resolution, whether on a show of hands, or electronically or on a poll, as applicable,the case may be, by members who, being entitled so to do, vote in person or by proxy or by postal ballot, are required to be not less than three times the number of the votes, if any, cast against the resolution by members so entitled and voting. Some of the matters to be considered for special resolution includes alteration in articles of association, reduction in share capital, to approve variation of rights of special classes of shares, to issue further shares without pre-emptive rights to non-members or to convert loans or debentures into shares. The amendments in Companies Act 2013 provides that the items of business that were earlier required to be transacted by means of postal ballot, may be transacted at a general meeting or through postal ballot: increase our share capital with such rights and privileges, or modifyby a company which is required to provide the rights and privileges associated with the existing shares, as directedfacility to members to vote by electronic means under section 108, in the general meeting,manner provided in that section.The Company may at its discretion transact by means of a postal ballot in respect of any item of business, other than ordinary business and any business in respect of which directors or as determined by the Board; issue shares with a preferential right to dividends, and in repayment ofpaid-up share capital on the winding up of the Company, and withauditors have a right to vote only on resolutions placed before the Company which directly affect the rights attached to such preference shares owned andbe heard at any resolution for the winding up of the company or for the repayment or reduction of equity or preference share capital and his voting right on a poll shall be in proportion to the share in thepaid-up preference share capital of the Company;
meeting. sub-divide or consolidate our shares, or any of them, and the resolution whereby any sharesub-divided or consolidated may determine that, as between the holders of the shares resulting from suchsub-division or consolidation, one or more of such shares shall have some preference or special advantage as regards dividend, capital or otherwise over or as compared with the others;
issue preference shares which are redeemable, which are to be redeemed on such terms and conditions and in such manner determined by the Board in accordance with the Act;
split all or any part of our shares into a larger number of shares each with a smaller par value;
convert any of ourpaid-up shares into stock, and reconvert any stock into any number ofpaid-up shares of any denomination;
issue sweat equity shares of a class of shares already issued subject to the terms and conditions prescribed in Section 54 of the Companies Act, 2013;
cancel shares which, at the date of passing of the resolution, have not been taken or agreed to be taken by any person, and diminish the amount of the authorized share capital by the amount of the shares so cancelled;
reduce our issued share capital; or
alter our Memorandum of Association or Articles of Association.
Under our Articles of Association and pursuant to the applicable provisions of the Indian Companies Act, 2013, the shares (including any shares forming part of any increased share capital of the company) shall be under the control of the Board of directors of the company, who may allot or otherwise dispose of the same to such persons in such proportion, on such terms and conditions and at such times as the directors think fit and subject to the sanctions of the shareholder in general meeting with full power, to give any person the option to call for or be allotted shares of any class of the company either (subject to the provisions of Section 52 and 53 of the Companies Act, 2013) at a premium or at a par such option being exercisable for such time and for such consideration as the directors thinks fit. Directors Under our Articles of Association there is no provision for a director to hold any qualification shares. According to the Indian Companies Act, 2013, the age limit for retirement of whole time directors is 70 years. Thereyears, provided that appointment of a person who has attained the age of 70 years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person. In case where no such special resolution is passed but votes cast in favour of the motion exceed the votes, if any, cast against the motion and the Central Government is satisfied, on an application made by the Board, that such appointment is most beneficial to the company, the appointment of the person who has attained the age of seventy years may be made. In addition, under the Companies Act, 2013 every listed entity is required to appoint at least one women director. Further, the amended SEBI LODR Regulations requires that the Board of top 500 listed entities shall have at least one independent woman director by April 1, 2019 and top 1000 listed entities by April 1, 2020. Subsequent to the amendment in SEBI LODR Regulations, no listed entity shall appoint a person or continue the directorship of any person as a non-executive director who has attained the age limit requirement forof seventy five years unless a special resolution is passed to that effect and the retirement ofnon-executive directors.explanatory to the notice to justify the appointment with effect from April 1, 2019. Any director who is directly or indirectly interested in a contract or arrangement or proposed contract or arrangement entered into or to be entered into by us or on our behalf is required to disclose the nature of his interest at a meeting of the Board and such interested director shall not participate in any discussion of, or vote on, any contract, arrangement or proposal in which he is interested. In addition, we are prohibited from making loans,the company may advance any loan directly or indirectly, or providingprovide any guarantee or security, directly or indirectly, in connection with any loans made by a third party, to our directors or any other concern where directors are interested.interested subject to compliance with the applicable provisions. A director is required to disclose his personal interest to the board of directors on an annual basis and at the first meeting of the board of directors after the interest arises. Alteration of Shareholder Rights Pursuant to Section 48 of the Companies Act, 2013, and subject to the provisions of the articles of association of a company and the relevant rules as issued by the Ministry of Corporate Affairs, where the share capital of a company is divided into different classes of shares, the rights of any class of shareholders can only be altered or varied with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or by a special resolution passed at a separate meeting of the holders of the issued shares of that class, or pursuant to a judicial order sanctioning a compromise or arrangement between the company and such class of shareholders. General Meetings of Shareholders There are two types of general meetings of shareholders, an annual general meeting and an extraordinary general meeting. We must convene our annual general meeting within 9 months from the date of closing of the first financial year of the Company and in any other case within a period of 6 months from the date of closing of the financial year and must ensure that the intervening period between two annual general meetings does not exceed 15 months. The Registrar of Companies may extend this period in special circumstances at our request. As per the amendments in SEBI LODR Regulations, the top 100 listed entity as per market capitalization shall hold AGM within a period of 5 months from the date of closing of financial year. Further one-way live webcast of the proceedings of the AGM is also required to be provided with effect from April 1, 2019. Extraordinary general meetings may be convened at any time by our directors at their discretion or at the request of our shareholders holding in the aggregate not less than 10.0% of ourpaid-up capital as on that date which carries voting rights. A notice in writing or through electronic mode to convene a general meeting must set out the date, time, place and agenda of the meeting and must be provided to shareholders at least 21 days prior to the date of the proposed meeting. The requirement of the 21 days’ notice in writing may be waived if consent to shorter notice in writing or electronic mode is received fromprovided that a general meeting may be called after giving shorter notice than that specified in this sub-section if consent, in writing or by electronic mode, is accorded thereto- (i) in the case of an annual general meeting, by not less than 95.0%ninety-five per cent of the members entitled to vote thereat; and (ii) in the case of any other general meeting, by members of the company - (a) Holding, if the company has a share capital, majority in number of members entitled to vote and who represent not less than ninety-five percent of such part of the paid-up share capital of the company as gives a right to vote at such meeting. the meeting; or (b) having, if the company has no share capital, not less than ninety-five percent of the total voting power exercisable at that meeting: Provided further that where any member of a company is entitled to vote only on some resolution or resolutions to be moved at a meeting and not on the others, those members shall be taken into account for the purposes of this sub section in respect of the former resolution or resolutions and not in respect of the latter. Under the Indian Companies Act, 2013, general meetings are to be held either at the registered office or at another place within the city, town or village in which the registered office is situated. Business may be transacted at a general meeting only when a quorum of shareholders is present. Thirty members personally present, entitled to attend and to vote on the business to be transacted, will constitute a quorum.quorum, if the number of members as on the date of the meeting is exceeding five thousand The annual general meetings deal with and dispose of all matters prescribed by our Articles of Association and by the Indian Companies Act, 2013, including the following ordinary business matters: theThe consideration of our annual financial statements and report of our directors and auditors; the election andre-appointmentAppointment of directors;directors in place of those retiring; theThe appointment of auditors and the fixing of their remuneration; and theThe approval of dividends; and the transaction of any other business of which notice has been given.
Division of Shares The Indian Companies Act, 2013 provides that a company maysub-divide its share capital if its Articles of Association authorize the company to do so by adopting an ordinary resolution in its general meeting. Our Articles of Association allow us in a general meeting to alter our Memorandum of Association and subdivide all or any of our equity shares into a larger number of shares with a smaller par value than originally fixed by the Memorandum of Association. Dividends Under the Indian Companies Act, 2013, unless the board of directors recommends the payment of a dividend, the shareholders at a general meeting have no power to declare any dividend. The boardBoard of directorsDirectors of a company may also declare interim dividends that do not needdividend during any financial year or at any time during the period from closure of financial year till holding of the annual general meeting out of the surplus in the profit and loss account or out of profits of the financial year for which such interim dividend is sought to be approveddeclared or out of profits generated in the financial year till the quarter preceding the date of declaration of the interim dividend. Provided that in case the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of interim dividend, such interim dividend shall not be declared at a rate higher than the average dividends declared by the shareholders.company during the immediately preceding three financial years. A company pays dividends recommended by the board of directors and approved by a majority of the shareholders at the annual general meeting of shareholders held within 6 months offor the end of each fiscalfinancial year. The shareholders have the right to decrease but not increase the final dividend amount recommended by the board of directors.amount. Listed companies are required to declare and disclose the dividends paid on a per share basis only. The dividend recommended by the board of directorsDividend are generally declared per equity share and approved by the shareholders at a general meeting isare to be paid and distributed and paid to shareholdersin cash in proportion toof the paid uppaid-up value of their equity shares. The Indian Companies Act provides that shares of a company of the same class must receive equal dividend treatment. Dividends can be paid in cash or by cheque or in any electronic mode to the registered shareholder at a record date or book closure fixed on or prior to the annual general meeting or to his order or his banker’s order. No shareholder is entitled to a dividend while any lien in respect of unpaid calls on any of such shareholder’s shares is outstanding. These distributions and payments are required to be paid to shareholders within 30 days of the annual general meeting where the resolution for declaration of dividends is approved. The dividend so declared is required to be deposited in a separate bank account within a period of 5 days from the date of declaration of such dividend. All dividends unpaid or unclaimed within a period of 30 days from the date of declaration of such dividend must be transferred within seven7 days of the end of such period to a special unpaid dividend account held at a scheduled bank. The company shall, within a period of 90 days of making any transfer of an amount to the unpaid dividend account, prepare a statement containing the names, their last known addresses and the unpaid dividend to be paid to each person and place it on the website of the company and also on any other website approved by the Central Government for this purpose. Any dividend which remains unpaid or unclaimed for a period of seven years from the date of the transfer to an unpaid dividend account must be transferred along with interest accrued to the Investor Education and Protection Fund along with a statement containing such details. Also, all shares in respect of which unpaid or unclaimed dividends have been transferred shall also be transferred by the company in the name of this fund along with a statement containing such details as may be prescribed. Under the Companies Act, 2013, dividends in respect of a fiscal year may be paid out of the profits of a company in that fiscal year or out of the undistributed profits of previous fiscal years or both, after providing for depreciation in a manner provided for in the Companies Act, 2013. No dividend shall be declared or paid by a company for any financial year except out of the profits of the company for that year arrived at after providing for depreciation in accordance with the provisions of sub-section (2), or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with the provisions of that sub-section and remaining undistributed, or out of both provided that in computing profits any amount representing unrealized gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded. The Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2015 provide that in an event of adequacy or absence of profits in any year, a company may declare dividend out of its reserves subject to the fulfillment of the following conditions, such as: (i) | If profits for that year are insufficient to declare dividends (including interim dividends), the dividends for that year may be declared and paid out from reserves on the following conditions: |
The rate of dividend declared shall not exceed the average of the rates at which dividend was declared by it in the three years immediately preceding that year; The total amount to be drawn from free reserves shall not exceedone-tenth of the sum of itspaid-up share capital and free reserves as appearing in the latest audited financial statement; The amount so drawn shall first be utilized to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared; The balance of reserves after such withdrawal shall not fall below 15.0% of its paid up share capital as appearing in the latest audited financial statement; and (ii) | No company shall declare dividend unless carried over previous losses and depreciation not provided in previous year or years are set off against profit of the company for the current year. |
The Company may, before the declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company. Voting Rights Subject to any special terms as to voting on which any shares may have been issued, on voting by show of hands, every shareholder entitled to vote who is present in person (including any corporation present by its duly authorized representative) shall on a show of hands have one vote and in case of voting through poll, every shareholder present in person or by proxy shall on a poll have one vote for each share of which he is the holder. In the case of joint holders, only one of them may vote and in the absence of election as to who is to vote, the vote of the senior of the joint holders who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders. Seniority is determined by the order in which the names appear in the register of members. According to the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations, 2015 (“SEBI (LODR) Regulations, 2015”) effective December 1, 2015, for listed companies, voting at general meetings has to be done by remote electronic voting(“e-voting”).voting. For those shareholders who are unable to vote through this facility, the facility of physical voting through ballot paperspapers/ electronic voting is provided at the meeting. Upon a poll, the voting rights of each shareholder entitled to vote and present in person or by proxy shall be proportionate to the capitalpaid-up on each share against our totalpaid-up capital. In the case of a tie vote, the chairman of the meeting, who is generally the chairman of our Board of directors, has the right to cast atie-breaking vote. A shareholder may appoint any person (whether or not a shareholder) to act as his proxy to vote on polls conducted at any meeting of shareholders (or of any class of shareholders) in respect of all or a particular number of the shares held by him. A shareholder may appoint more than one person to act as his proxy and each such person shall act as proxy for the shareholder for the number of shares specified in the instrument appointing the person a proxy. Any person appointed as proxy shall act on behalf of a shareholder not exceeding fifty members and holding in the aggregate not more than 10.0% of the aggregatetotal share capital carrying voting rights. The shareholder holding more than 10.0% of the total share capital of the Company carrying voting rights may appoint a single person as proxy and in that case, the person appointed as proxy for such shareholder cannot act as proxy for any other person or shareholder. The instrument appointing a proxy must be delivered to our registered office at least 48 hours prior to the meeting or in case of a poll, not less than 24 hours before the time appointed for taking the poll. If a shareholder appoints more than one person to act as his proxy, each instrument appointing a proxy shall specify the number of shares held by the shareholder for which the relevant person is appointed as his proxy. A proxy does not have a right to speak at meetings and not entitled to vote except on poll. A corporate shareholder is also entitled to nominate a representative to attend and vote on its behalf at general meetings. Such a representative is not considered a proxy and he has the same rights as the shareholder by whom he was appointed to speak at a meeting and vote at a meeting in respect of the number of shares held by the shareholder, including on a show of hands and a poll. Subject to compliance with provisions of the Articles of Association, the Companies (Share Capital and Debentures) Rules, 2014, and the Indian Companies Act, 2013, the Company is allowed to issue equity shares with different rights subject to compliance with the provisions of the abovementioned rules and the Indian Companies Act.rights. Quorum Our Articles of Association provide that a quorum for a general meeting is at least thirty shareholders personally present, if the number of members as on the date of the meeting is exceeding five thousand, to vote, in accordance with the Companies Act, 2013. Shareholder Resolutions An ordinary resolution requires the affirmative vote of a majority of our shareholders entitled to vote in person or electronically or by proxy or by a poll at a general meeting. A resolution shall be a special resolution when, the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution. A special resolution requires the affirmative vote of not less than three times the number of the votes, if any cast against the resolution by members so entitled and voting in person or electronically or by proxy at a general meeting and casting a vote. The Indian Companies Act, 2013 provides that to amend the Articles of Association, a special resolution approving such an amendment must be passed in a general meeting. Certain amendments, including a change in the name of the company, to approve reduction of share capital, to approve variation of rights of special classes of shares, to issue further shares withoutpre-emptive rights tonon-members or to convert loans or debentures into shares, to commence any new line of business and dissolution of the company require a special resolution. Further,The amendments in Companies Act, 2013 provides that the Companies (Management and Administration) Rules, 2014 requires certain resolutions such as those listed below to be voted on only by a postal ballot:
alterationitems of the objects clause of the Memorandum;
alteration of the articles of association in relation to insertion or removal of provisions which arebusiness that were earlier required to be includedtransacted by means of postal ballot, may be transacted at a general meeting by a company which is required to provide the facility to members to vote by electronic means under section 108, in the articles of a companymanner provided in order to constitute it as a private company;
change in place of registered office outside the local limits of any city, town or village;
change in objects for which a company has raised money from public and still has any proceeds unutilized;
issue of shares with differential rights regarding voting or dividend or otherwise under Section 43(a)(ii) of the Companies Act, 2013;
variation in the rights attached to a class of shares or debentures or other securities as specified under Section 48 of the Companies Act, 2013; that section.buyback of shares;
election of a director under Section 151 of the Companies Act, 2013;
sale of whole or substantially the whole of an undertaking of a company as specified under Section 180(1)(a) of the Companies Act, 2013;
giving loans or extending guarantee or providing security in excess of the limit specified under Section 186(3) of the Companies Act, 2013.
In addition to the above, theThe Company may at its discretion transact by means of a postal ballot in respect of any item of business, other than ordinary business and any business in respect of which directors or auditors have a right to be heard at any meeting.
Distribution of Assets on aWinding-up In accordance with the Indian Companies Act, 2013, all surplus assets remaining after payments are made to employees, statutory creditors, tax and revenue authorities, secured and unsecured creditors and the holders of any preference shares (though not in that order), shall be distributed among our equity shareholders in proportion to the amount paid up or credited aspaid-up on such shares at the commencement of thewinding-up. Transfer of Shares Under the Indian Companies Act, 2013, the shares of a public company are freely transferable, unless such a transfer contravenes applicable law or the regulations issued by SEBI.law. The transferor is deemed to remain the holder until the transferee’s name is entered in the register of members. In the case of shares held in physical form, we will register any transfer of equity shares in the register of members upon lodgment of the duly completed share transfer form, the relevant share certificate, or if there is no certificate, the letter of allotment, in respect of shares to be transferred together with duly stamped share transfer forms. In respect of electronic transfers, the depositary transfers shares by entering the name of the purchaser in its register as the beneficial owner of the shares. In turn, we then enter the name of the depositary in our records as the registered owner of the shares. The beneficial owner is entitled to all the rights and benefits and is subject to the liabilities attached to the shares held by the depositary on his or her or its behalf.
Equity shares held through depositaries are transferred in the form of book entries or in electronic form in accordance with the regulations laid down by SEBI. These regulations provide the regime for the functioning of the depositaries and the participants and set out the manner in which the records are to be kept and maintained and the safeguards to be followed in this system. SEBI requires that trading and settlement of our equity shares for trading and settlement purposesto be in book-entry form for all investors, except for transactions that are not made on a stock exchange and transactions that are not required to be reported to the stock exchange. Transfers of equity shares in book-entry form require both the seller and the purchaser of the equity shares to establish accounts with depositary participants appointed by depositaries established under the Depositories Act, 1996. Charges for opening an account with a depositary participant, transaction charges for each trade and custodian charges for securities held in each account vary depending upon the practice of each depositary participant. The depositary transfers equity shares by entering the name of the purchaser in its books as the beneficial owner of the equity shares. In turn, we will enter the name of the depositary in our records as the registered owner of the equity shares. The beneficial owner is entitled to all the rights and benefits as well as the liabilities with respect to the equity shares that are held by the depositary. The register and index of beneficial owners maintained by our depositary is deemed to be a register and index of our members and debenture holders under the Depositories Act, 1996. Transfers of beneficial ownership held through a depositary are exempt from stamp duty. For this purpose, we have entered into an agreement for depositarydepository services with the National Securities DepositaryDepository Limited and the Central DepositaryDepository Services India Limited.(India) Limited through which the electronic form of Register of Member is maintained. The Finance Act, 2019 enumerates certain amendments to the Indian Stamp Act, 1899 which was effective from January 9, 2020, later deferred the implementation to July 1, 2020 on levying stamp duty related to issue and transfer of securities. The requirement to hold the equity shares in book-entry form will apply to the ADSADSs holders when the equity shares are withdrawn from the depositarydepository facility upon surrender of the ADSs. In order to trade the equity shares in the Indian market, the withdrawing ADSADSs holder will be required to comply with the procedures described above. Our Articles of Association provide for certain restrictions on the transfer of equity shares, including granting power to the board in certain circumstances, to refuse to register or acknowledge a transfer of equity shares or other securities issued by us. Under the SEBI (LODR) Regulations, 2015, pertaining to NSE and BSE on which our equity shares are listed, in the event we have not effected the transfer of shares within 15 days or where we have failed to communicate to the transferee any valid objection to the transfer within the stipulated time period of 15 days, we are required to compensate the aggrieved party for the opportunity loss caused during the period of delay. The NCLT was constituted with effect from June 1, 2016 and by virtue of Section 466Further as per the provisions of the Companies Act, 2013 the Company Law Board was dissolved.
Ifif a company without sufficient cause refuses to register a transfer of equity shares within a period of 30 days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, is delivered to the Company, the transferee may within a period of 60 days of such refusal or where no intimation has been received from the Company, within 90 days of the delivery of the instrument of transfer or intimation of transmission, may appeal to NCLT.
The NCLT may, in its discretion, issue an interim order suspending the voting rights attached to the relevant equity shares before completing its investigation of the alleged contravention. If there is any default in complying witha person contravene the order of the NCLT under Section 58 of the Companies Act, 2013, the company shall be punishable with fine which shall not be less than Rs. 100,000 but which may extend to Rs. 500,000 and every officer of the company who is in defaulthe shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years orand with fine which shall not be less than Rs.₹ 100,000 but which may extend to Rs. 300,000, or with both.₹ 500,000. In addition, the Indian Companies Act, 2013 provides that the NCLT may direct a rectification of the register of members for a transfer of equity shares which is in contravention of SEBI regulations or any similar law,Securities and Exchange Board of India Act, 1992, the Securities Contracts (Regulation) Act, 1956, upon an application by the company, a participant, a depositarydepository incorporated in India, an investor or SEBI. Further, with effect from April 1, 2019 SEBI Regulations mandate that 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 Disclosure of Ownership Interest Section 89 of the Companies Act, 2013 (the Companies Act) requires that beneficial owners of shares of companies who are not registered as holders of those shares must make a declaration to the company specifying the nature of his or her or its interest, particulars of the registered holder of such shares and such other particulars as may be prescribed. Failure by a person to comply with Section 89 will not affect the company’s obligation to register a transfer of shares or to pay any dividends to the registered holder of any shares in respect of which the declaration has not been made. For the purpose of this section beneficial interest in a share includes, directly or indirectly, through any contract, arrangement or otherwise, the right or entitlement of a person alone or together with any other person to (i) exercise or cause to be exercised any or all of the rights attached to such share; or (ii) receive or participate in any dividend or other distribution in respect of such share. Any investor,person, who fails to comply with these requirementsmake a declaration without any reasonable cause, shall be punishable with fine which may extend to Rs.₹ 50,000 and ifwhere such failure continues, a further fine be extended up to Rs.₹ 1,000 may be levied for each day after the first day during which the failure continues. While it is unclear whether Section 89 applies to holders of ADSs of the Company, investors who exchange ADSs for the underlying equity shares of the Company will be subject to the restrictions under Section 89. The ADSADSs holders in addition isare required to comply with the notifications and disclosures as per the deposit agreement between ADSADSs holders, the Company and the depository. On receiptA significant beneficial owner in relation to a reporting company means an individual who acting alone or together, or through one or more persons or trust, possesses one or more of the declaration,following rights or entitlements in such company, namely:-
| (i) | holds indirectly, or together with any direct holdings, not less than ten percent of the shares; |
| (ii) | holds indirectly, or together with any direct holdings, not less than ten percent of the voting rights in the shares; |
| (iii) | has right to receive or participate in not less than ten per cent. of the total distributable dividend, or any other distribution, in a financial year through indirect holdings alone, or together with any direct holdings; |
| (iv) | has right to exercise, or actually exercises, significant influence or control, in any manner other than through direct-holdings alone |
Every Company is required to filetake necessary steps to identify an individual who is a return of such declarationsignificant beneficial owner in the prescribed form with the Registrar. Ifrelation to the Company failsand such individual is required to comply with the provisionsapplicable provisions. Under the Companies (Significant Beneficial Owners) Rules 2018, amended time to time, requirements of Section 89, thendeclaring and filing the Company and every defaulting officer may be punishable with fine which shall not be less than Rs. 500 but which may extend to Rs. 1,000 and if such failure continues, a further fine of Rs. 1000 may be levied for each day after the first day during which the failure continues.significant beneficial ownership details has been provided. Share Register and Record Dates We maintain our register of members in both electronic and physical modes at our registered office and all transfers of shares should be notified to us at such address. Our register of members is open tofor inspection during business hours by shareholders without charge and by other persons upon payment of a fee as prescribed under the applicable law. The register and index of beneficial owners maintained by a depositarydepository under the Depositories Act, 1996 is deemed to be an index of members and register and index of debenture holders. We recognize as shareholders only those persons whowhose names appear on our register of members and we do not recognize any person holding any equity share or part thereof on trust, whether express, implied or constructive. To determine which shareholders are entitled to specified shareholder rights, we may close the register of members. For the purpose of determining who our shareholders, are, our register of members may be closed for periods not exceeding in aggregate 45 days in each year but not exceeding 30 days at any one time and we are required to ensure that there is a gap of at least 30 days between the two record dates. In order to determine our shareholders’ entitlement to dividends, it is our general practice to close the register of members for approximately 10 to 20 days before the annual general meeting. The date on which this period begins is the record date. Under the SEBI (LODR) Regulations, 2015 pertaining to NSE and BSE on which our equity shares are listed, we may, upon givingare required to give at least seven7 working days’ advance notice to the stock exchange, set a record date and/or close the register of members. The trading of our equity shares and the delivery of shares certificates may continue while the register of members is closed. Annual Report At least 21 clear days before an annual general meeting, we must circulate our annual report, which comprises of either a detailed or abridged version of our audited financial accounts, our directors’ report, our corporate governance report, and our auditor’s report, to the shareholders along with a notice convening the annual general meeting. In addition, we must furnish to the exchanges quarterly unaudited or audited results within 45 days after the end of each accounting quarter. We are required to furnish to the exchanges audited financial results for the entire financial year within 60 days of the end of the financial year. We are also required to send copies of our annual report to the NSE and BSEyear and to publish our financial results in at least one English language daily newspaper circulating in the whole or substantially the whole of India and also in a daily newspaper published in the language of the region where our registered office is situated. Further as per the amendments in SEBI Regulations with respect to the annual reports for the financial year ending March 31, 2019 onwards, we will be required to send the Annual Report to the stock exchanges along with the notice of AGM not later than the day of commencement of dispatch to the shareholders. We are also required under the Indian Companies Act, 2013 to make available upon the request of any shareholder our complete balance sheet and statement of profit and loss along with all the subsidiaries. Under the Indian Companies Act, 2013, we must file with the Registrar of Companies our balance sheet and statement of profit and lossAnnual report within 30 days of the date on which the balance sheet and statement of profit and loss were adopted at the annual general meeting and our annual return within 60 days of the conclusion of that meeting. Related Party Transactions As per the Companies Act, 2013 and SEBI (LODR) Regulations, 2015, all related party transactions shall require prior approval of the Audit Committee.audit committee. The Audit Committeeaudit committee may grant omnibus approval for related party transactions proposed to be entered into by the Company subject to certain conditions. The Audit Committeeaudit committee shall review, at least on a quarterly basis, the details of related party transactions entered into by the Company pursuant to each of the omnibus approvals accorded by the Audit Committee.audit committee. The Audit Committeeaudit committee shall lay down the criteria for granting omnibus approvals in line with the policy on materiality of related party transactions of the Company and such approval shall be applicable to transactions which are similar in nature. PriorThe SEBI (LODR) Regulations, 2015 provide that all material related party transactions shall require approval of the shareholders by way ofthrough resolution and no related party shall vote to approve such resolutions whether the entity is a resolution is required for allrelated party to the particular transaction or not. As per Companies Act, 2013, the related party transactions require approval of the Board of Directors in case the transaction is not at arm’s length or ordinary course of business. Further approval of the shareholders would be required whenever the transactions exceeds the prescribed threshold limits. The member of the company shall not vote on such resolution to approve any contract or arrangement which may be entered into by the company, if such member is a related party. However, the approval of the Board / Shareholders will not apply if the related party transactions are not in the ordinary course of business and whichat arm’s length. Further, as per Companies Act, 2013, all related party transactions shall require approval of the Audit Committee and the Audit Committee may make omnibus approval for related party transactions proposed to be entered into by the Company subject to such conditions as provided under Rule 6A of Companies (Meetings of Board and its Powers), Rules, 2014. Omnibus approval can be provided for the transactions of repetitive nature and where the need for related party transaction cannot be foreseen and details are not available, audit committee may make omnibus approval for such transactions subject to their value not exceeding rupees one crore (equivalent to ₹ 10 Million) per transaction. Such approval shall be valid for a period of one financial year. In case any transaction involving any amount not exceeding rupees one crore (equivalent to ₹ 10 Million) is entered into by a director or officer of the company without obtaining the approval of the Audit Committee and is not ratified by the Audit Committee within three months from the date of the transaction, such transaction shall be voidable at arm’s length basis.the option of the Audit Committee. As per the transaction is provisions under the SEBI Listing Regulations, the listed entity shall formulate a policy on the materiality of related party transactions and dealing with a related party to any director or is authorized by any other director, the director concerned shall indemnify the company against any loss incurred due to such transactions. Further, such prior approvals do not apply to transactions between a holding company and its wholly owned subsidiary whose accounts are consolidated with related party transactions, including clear threshold limits duly approved by the Board of Directors, and that such holding company and placed before the shareholders at the general meeting. Policy shall be reviewed by the Board of Directors at least once every three years and amended accordingly. Disclosure of materialmaterially significant related party transactions and transactions whichthat may have potential conflict with interests of listed entity at large are not at an arm’s length basis is required to be included in the annual report along withreport. Further, as per the justificationamendments in SEBI (LODR) Regulations, 2015, all listed entities shall submit within 30 days from the date of publication of its standalone and consolidated financial results for enteringthe half year, disclosures of related party transactions on a consolidated basis, in the format specified in the relevant accounting standards for annual results to such contractsthe stock exchanges where the company is listed and arrangements.publish the same on its website. Borrowing Powers Our directors may raise, borrow, or secure the payment of any sums of money for our purposes as they deem appropriate without the consent of shareholders in a general meeting by way of special resolution, provided that, the aggregate of the moniesmoney to be borrowed and the principal amount outstanding in respect of moniesmoney raised, borrowed, or secured by us does not exceed 100% of the aggregate of our paid up share capital plus free reserves.reserves and securities premium. Under the Indian Companies Act, the payment and repayment of moneysmoney borrowed may be secured in such manner and upon such terms and conditions in all respect as the Board may think fit, by resolution passed at a meeting of the Board and in particular, by the issue of bonds, debentures, debenture stock of the company either unsecured or secured by a mortgage or charge over all or any part of the property of the company (both present and future) including its uncalled capital for the time being, and debentures, debenture stock, bonds and other securities may be made assignable free from any equities between the company and the person to whom the same may be issued. Corporate Social Responsibility The Companies Act, 2013, read with the Rules made thereunder, requires companies which meet the requirements of certain thresholds of net worth, turnover or net profits during the immediately preceding financial year to constitute a Corporate Social Responsibility (“CSR”) Committee and to spend at least 2%2.0% of average net profits before taxes(“net profit” shall not include such sums as may be prescribed, and shall be calculated in accordance with the provisions of section 198) for the previous three immediately preceding fiscal years on areas of CSR. This requirement is effective as of April 1, 2014. In the event we are unable to spend the required amount, we will be required to disclose details of amounts spent and, in case of any shortfall in such spending, also state the reasons for the shortfall.
Issue of equity shares andPre-emptive Rights Subject to the provisions of the Indian Companies Act, 2013 and ourthe Articles of Association andof the Company with respect to any special rights attaching to any of our equity shares, we may increase our share capital by the allotment or issue of new equity shares with preferred, deferred or other special rights or restrictions regarding dividends, voting, return of capital or other matters as we may from time to time determine by special resolution. We may issue preference shares that are redeemable or are liable to be redeemed at our option or the option of the holder in accordance with our Articles of Association. Under the Indian Companies Act, 2013, new equity shares shall first be offered to existing shareholders in proportion to the amount they have paid up on their equity shares on the record date.date of the offer. The offer shall be made by written notice specifying: the right, exercisable by the shareholders of record, to renounce the equity shares offered in favor of any other person; the number of equity shares offered; and the period of the offer, which may not be less than 15 days and not exceeding 30 days from the date of the offer. If the offer is not accepted, it is deemed to be declined, and thereafter, ourthe Board is permitted to distribute equity shares not accepted by existing shareholders in the manner it deems beneficial for us in accordance with ourthe Articles of Association.Association of the Company. Holders of ADSs may not be able to participate in any such offer. However, under the provisions of the Indian Companies Act, 2013, new equity shares may be offered tonon-shareholders, if this has been approved by a special resolution and has complied with the applicable rules. Capitalization of Profits and Reserves OurThe Articles of Association of the Company allow ourthe directors, with the approval of our shareholders by an ordinary resolution, to capitalize any part of the amount standing to the credit of our reserve accounts or to the credit of our statement of profit and loss or otherwise available for distribution. Any sum which is capitalized shall be appropriated among ourthe shareholders in the same proportion as if such sum had been distributed by way of dividend. This sum shall not be paid out in cash and shall be applied in the following manner:
paying up any amount remaining unpaid on the shares held by our shareholders; or issuingIssuing to our shareholders, fully paid bonus equity shares (issued either at par or a premium). Any issue of bonus equity shares would be subject to section 63 of the Companies Act, 2013, and the SEBI (Disclosure(Issue of Capital and Investor Protection) Guidelines, 2000,Disclosure Requirements) Regulations, 2018 (“ICDR Regulations”), as amended from time to time, which provideprovides that: noThe company is authorized by its articles of association for issue of bonus shares, capitalization of reserves, etc.; The company has not defaulted in payment of interest or principal in respect of fixed deposits or debt securities issued by it; The company has not defaulted in respect of the payment of statutory dues of the employees such as contribution to provident fund, gratuity and bonus; The outstanding partly paid shares on the date of the allotment of the bonus shares, are made fully paid-up; None of its promoters or directors is a fugitive economic offender; No company shall, pending the conversion of convertible securities, issue any bonus equity shares unless a similar benefit is extended to the holders of such convertible securities through a reservation of equity shares in proportion to such conversion; theThe bonus issue shall be made only out of free reserves, securities premium account or capital redemption reserve account and built out of the genuine profits or sharesecurities premium collected in cash only;and reserves created by revaluation of fixed assets shall not be capitalized for this purpose; bonus equity shares cannot be issued unless all the partly paid up equity shares have been fullypaid-up;
the company has not defaulted in the payment of interest or principal in respect of fixed deposits and interest on existing debentures or principal on redemption of such debentures;
aA declaration of bonus equity shares in lieu of dividend cannot be made; and
The bonus issue must be implemented within fifteen days from the company shall have sufficient reason to believe that it has not defaulted in the paymentdate of statutory duesapproval of the employees such as contribution to provident fund, gratuity, bonus etc.; any reserves createdissue by a revaluationits board of fixed assets shall not be capitalized;
the articles of association of the company must contain provisionsdirectors, if shareholder’s approval for the capitalization of reserves; and
profits or reserves for making the bonus issue is not required. In case shareholder’s approval for capitalization of profits or reserves for making the bonus issue is required, then the bonus issue must be implemented within 15 daystwo months from the date of approval by the meeting of board of directors.directors wherein the decision to announce the bonus issue was taken subject to shareholders’ approval. Purchase of own equity shares A company may, in accordance with provisions of the Companies Act, 2013, the Rules made thereunder and the regulations issued by SEBI mayin relation to buyback of shares by listed companies [SEBI (Buy-Back of Securities) Regulations, 2018 (referred to as ‘SEBI Buyback Regulations’)] buy-back its own shares out of its free reserves or securities premium account or the proceeds of any shares or other specified securities (other than proceeds of an earlier issue of the same kind of shares or same kind of other specified securities) subject to certain conditions, including: theThe buy-back must be authorized by the company’s Articles of Association; aA special resolution authorizing thebuy-back must be passed in a general meeting; theEach buy-back is limited to 25%25.0% or less of the company’s total paid up capital and free reserves in a financial year;reserves;
theThe ratio of aggregate of secured and unsecured debts owed by the company after suchbuy-back is not more than twice the paid up capital and its free reserves; theAll shares or other specified securities forbuy-back are fullypaid-up; theThe buy-back of shares or other specified securities listed on any recognized stock exchange is in accordance with the SEBI (Buy-Back of Securities) (Buy-Back) Regulations, 1998, as amended;2018, theThe buy-back in respect of shares or other specified securities other than listed shares or specified securities is in accordance with such rules as may be prescribed; and noNo offer ofbuy-back shall be made within a period of one year from the date of the closure of the preceding offer to buy back, if any. The second condition mentioned above would not be applicable if the number of equity shares proposed to be bought backbuy-back is, 10%ten per cent or less of the total paid uppaid-up equity capital and free reserves of the company and if suchbuy-back is authorized by the board of directors.directors by means of resolution passed at its meeting. No company shall directly or indirectly purchase its own shares or other specified securities— (a) through any subsidiary company including its own subsidiary companies; (b) through any investment company or group of investment companies; or (c) if a default, is made by the company, in the repayment of deposits accepted either before or after the commencement of this Act, interest payment thereon, redemption of debentures or preference shares or payment of dividend to any shareholder, or repayment of any term loan or interest payable thereon to any financial institution or banking company. Provided that the buy-back is not prohibited, if the default is remedied and a period of three years has lapsed after such default ceased to subsist. Any equity shares which have been bought back by usa Company must be extinguished within 7 days of the last date of completion of buy back. Further, we willa Company cannot not make a further issue of the same kind of shares or other specified securities including an allotment of new shares within a period of 6 months except by way of a bonus issue or in discharge of our existing obligations such as conversion of warrants, stock option schemes, sweat equity or conversion of preference shares or debentures into equity. AThe SEBI Buyback Regulations provides additional restriction that a company is also prohibited from purchasing its own shares or specified securities through any subsidiary company including its own subsidiary companies or through any investment company or group of investment companies or in the event ofnon-compliance with certain other provisions of the Companies Act, 2013.specified conditions. SEBI (Buy Back of Securities)Buyback Regulations 1998 (‘SEBI Buyback Regulations’) governs thepermit a company to buy-back through open market purchase through the following methods: | 1) | Tender offer: Tender offer means offer by a company tobuy-back its shares or other specified securities through a letter of offer from the holders of the shares or other specified securities of the company. A company maybuy-back its shares or other specified securities from its existing security-holders on a proportionate basis in accordance with the provisions of Chapter III of the SEBI Buyback Regulations. However, 15%15.0% of the number of securities which the company proposes to buy back or number of securities entitled as per their shareholding, whichever is higher, shall be reserved for small shareholders. The promoter intending to offer their shares or other specified securities forbuy-back shall be required to make specific disclosures such as quantum of shares proposed to be tendered, details of specified transactions as perprovided in the regulations etc. Other conditions in relation to filing of the offer document, adhering to the offer procedure, maintaining an escrow account, etc. shall also have to be complied with as per Chapter III of the SEBI Buyback Regulations. |
| 2) | Open market: The buyback of shares or other specified securities from the open market may be in one of the following methods: |
throughThrough stock exchange andor Specific conditions to be complied with, in relation to buyback through each of the above modes have been prescribed under the Chapter IV of the SEBI Buyback Regulations. Thebuy-back of the shares or other specified securities shall not be made from the promoters or persons in control of the company. TheSchedule V of the SEBI Buyback Regulations were amended on March 6, 2017 through the SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017, Chapter IV in relation to schedule of fees i.e.provides the fee structure and the mode of payment in the event of submitting the offer document or copy of public announcement to SEBI.
ADSADSs holders will be eligible to participate in a sharebuy-back in certain cases. An ADSADSs holder may acquire equity shares by withdrawing them from the depositarydepository facility and then selling those equity shares back to us in accordance with the provisions of applicable law as discussed above. ADSADSs holders should note that equity shares withdrawn from the depositarydepository facility may only bere-deposited into the depositarydepository facility under certain limited circumstances as specified under the guidelines issued by the GoI and the RBI relating to a sponsored ADSADSs facility and fungibililtyfungibility of ADSs. See “-“Item 10: Additional Information – D. Exchange Controls.”.
There can be no assurance that the equity shares offered by an ADSADSs investor in anybuy-back of equity shares by us will be accepted by us. The position regarding regulatory approvals required for ADSADSs holders to participate in abuy-back is not clear. ADSADSs investors are advised to consult their Indian legal advisers prior to participating in anybuy-back by us, including in relation to any regulatory approvals and tax issues relating to the sharebuy-back. Rights of Minority Shareholders The Companies Act, 2013, provides mechanisms for the protection of the rights of the minority shareholder. Where the share capital of a company is divided into different classes of shares and there has been variation in the rights attached to the shares of any class, the holders of not less than 10% of the issued shares of that class, who did not vote in favor of a resolution for the variation, have the right to apply to the NCLT within 21 days after the date on which the consent was given or the resolution was passed, to have the variation cancelled and such variation shall not have any effect unless confirmed by the NCLT. Further, under the Companies Act, 2013, the shareholders holding not less than 10% of the issued share capital or shareholders representing not less than 10% of the total number of members or 100 members, whichever is lesser, providedless or shareholders holding not less than 10.0% of the issued share capital, subject to the condition that they have paid all calls and other sums due on their shares, have the right to apply to the NCLT for an order to bring an end to the matter complained of, on the following grounds of oppression or mismanagement: that the company’s affairs have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to any member or members or in a manner prejudicial to the interests of the company; or that a material change, not being a change brought about by, or in the interests of, any creditors, including debenture holders or any class of shareholders of the company, has taken place in the management or control of the company, whether by an alteration in its board of directors or management or in the ownership of the company’s shares and by reason of such change, it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to theits interests or its members or any class of the company.members Provisions on Squeeze OutPurchase of Minority ShareholdersShareholding Section 236 of the Companies Act, 2013 provide for mechanism for purchase of minority shareholding. In the event of an acquirer, or a person acting in concert with such acquirer, becoming registered holder of 90%90.0% or more of the issued equity share capital of a company, or in the event of any person or group of persons becoming 90%90.0% majority or holding 90%90.0% of the issued equity share capital of a company by virtue of an amalgamation, share exchange, conversion of securities or for any other reason, such acquirer, person or group of persons, as the case may be, shall notify the Company of their intention to buy the remaining equity shares. The acquirer, person or group of persons as mentioned above shall offer to the minority shareholders of the company for buying the equity shares held by such shareholders at a price determined on the basis of valuation by a registered valuer in accordance with such rules as may be prescribed. Without prejudice to the aforesaid provisions, the minority shareholders of the company may offer to the majority shareholders to purchase the minority equity shareholding of the company at the price determined in accordance with such rules as may be prescribed. Book-Entry Shares and Liquidity Our equity shares are compulsorily traded in book-entry form and are available for trading under both depositarydepository systems in India, namely, the National Securities Depository Limited and Central Depository Services (India) Limited. The International Securities Identification Number (ISIN)(“ISIN”) for our equity shares is INE 205A01025.INE205A01025. Liquidation Rights According to the Indian Companies Act, 2013 and the IBC, certain payments have preference over payments to be made to equity shareholders. These payments having preference include payments to be made by the company to its employees, taxes, payments to secured and unsecured lenders and payments to holders of any shares entitled by their terms to preferential repayment over the equity shares. In the event of ourwinding-up, the holders of the equity shares are entitled to be repaid the amounts of paid up capital or credited as paid upon those equity shares after payments have been made by the company as set out above. Subject to such payments having been made by the company, any surplus assets are paid to holders of equity shares in proportion to their shareholdings. Takeover Code and SEBI Regulations Under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Code”) last amended on March 6, 2017,, the acquisition of shares or voting rights or control which entitles the acquirer to exercise 25%25.0% or more of the voting rights in or control over the target company triggers a requirement for the acquirer to make an open offer at an offer price determined as per the provisions of the Takeover Code. The acquirer is required to make a public announcement for an open offer on the date on which it is has agreed to acquire such shares or voting rights or control. Such open offer shall only be for such number of shares as is required to adhere to the maximum permittednon-public shareholding. Upon acquisition of shares or voting rights or control in the target company such that the aggregate share-holding of the acquirer (meaning a person who directly or indirectly, acquires or agrees to acquire shares or voting rights or control in a target company either by himself or together with persons acting in concert) is 5%5.0% or more of the shares or voting rights or control of the target company, the acquirer is required to, within two2 working days of such acquisition of shares or voting rights or receipt of intimation of allotment of shares, disclose their aggregate shareholding and voting rights in the target company to the target company and to the stock exchanges in which the shares of the target company are listed. Further, an acquirer, who, together with persons acting in concert with him, holds shares or voting rights entitling them to 5%5.0% or more of the shares or voting rights in a target company must disclose every sale or acquisition of shares representing 2%2.0% or more of the shares or voting rights of the target company to the target company and to the stock exchanges in which the shares of the target company are listed within 2 (two) working days of such acquisition or sale or receipt of intimation of allotment of such shares. This disclosure is required, in case of a sale, even if such sale results in the shareholding of the acquirer falling below 5%5.0%. Every person, who together with persons acting in concert with him, holds shares or voting rights entitling him to exercise 25%25.0% or more of the voting rights in a target company, has to disclose to the company and to stock exchanges, their aggregate shareholding, and voting rights as of March 31, in such target company within 7 (seven) working days from the end of the financial year of that target company. The acquisition of shares or voting rights which entitles the acquirer to exercise 25.0% or more of the voting rights in or control over the target company triggers a requirement for the acquirer to make an open offer to acquire at least 26.0% of the total shares of the target company at an offer price determined as per the provisions of the Takeover Code. The acquirer is required to make a public announcement for an open offer on the date on which it is agreed to acquire such shares or voting rights. Such open offer shall only be for such number of shares as is required to adhere to the maximum permittednon-public shareholding.
Where the public shareholding in the target company is reduced to a level below the limit specified in rule 19(2)(b) and / or rule 19A of the Securities Contract (Regulation) Rules, 1957, the target company is required to adopt any of the methods prescribed in the SEBI circular CIR/CFD/CMD/14/2015 dated November 30, 2015 and SEBI/HO/CFD/CMD/CIR/P/43/2018 dated February 22, 2018, so as to comply with the minimum public shareholding requirements in the manner specified by SEBI. Further, the Takeover Code also provides that an acquirer can make an offer for delisting the Company if such acquirer declares his intention to do so at the time of making the public announcement of an open offer. In other instances,The acquirer whose shareholding exceeds the acquirer willmaximum permissible non-public shareholding, pursuant to an open offer under these regulations, shall not be eligible to make a voluntary delisting offer under the SEBISecurities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, unless 12a period of twelve months havehas elapsed from the date of the completion of the offer period. Since we are a listed companythe Company is in India, the provisions of the Takeover Code will apply to usthe Company and to any person acquiring our equity shares or voting rights in ourthe Company. The ADSs entitle ADSADSs holders to exercise voting rights in respect of the Deposited Equity Shares (as described in the section titled “Voting Rights of Deposited Equity Shares Represented by ADSs”). Accordingly, the requirement to make an open offer of at least 26%26.0% of the shares of a company to the existing shareholders of the company would be triggered by an ADSADSs holder where the shares that underlie the holder’s ADSs represent 25%25.0% or more of the shares or voting rights of the company. We entered into uniform listing agreements with BSE and NSE which were superseded by SEBI (LODR) Regulation 2015, pursuant to which we must report to the stock exchanges any disclosures made to the company pursuant to the Takeover Code. The SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Code”) last amended on March 6, 2017 by SEBI (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2017 inCode contains the fee structure and the mode of payment in the event of filing the necessary disclosure by the acquirer under the Regulation 10sub-regulation 7. SEBI has amended various regulations such as the SEBI (LODR) Regulations, 2015, the Takeover Code, the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and the SEBI (Delisting of Equity Shares) Regulations, 2018 to grant relaxation or exemptions to listed companies whose resolution plan is approved under section 31 of the Insolvency and Bankruptcy Code, 2016. Voting Rights of Deposited Equity Shares Represented by ADSs Under Indian law, voting in relation to the equity shares is by show of hands unless a poll is demanded by a member or members present in person or by proxy holding at least 10%10.0% of the total shares entitled to vote on the resolution or by those holding shares with an aggregate paid up capital of at least Rs.500,000.₹ 500,000. A proxy (other than a body corporate represented by an authorized representative) may not vote except on a poll. As soon as practicable after receipt of notice of any general meetings at which the holders of deposited securities are entitled to vote, or of solicitation of consents or proxies from of holders of deposited securities shares or other deposited securities, our Depositary shall fix a record date forin respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9 of Deposit Agreement dated September 6, 2013.for determining the holders entitled to give instructions for the exercise of voting rights. The Depositary shall, then mailif requested by the Company in writing in a timely manner, at the Company’s expense and provided no U.S. legal prohibitions exist, distribute to holders as of the holders of ADSs a notice stating (i) such information as is contained inADS Record Date: (a) such notice of meeting and anyor solicitation materials, (ii)of consent or proxy, (b) a statement that each holderthe holders at the close of business on the record date setADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association of the Company and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Depositary will be entitledCompany), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the deposited securities represented by the ADSs evidenced by such holder’s ADRs,ADSs, and (iii)(c) a brief statement as to the manner in which such instructionvoting instructions may be given, including instructions to give discretionary proxy to a person designated by us.given. On receipt of the aforesaid notice from the Depositary,Depository, our ADSADSs holders may instruct the DepositaryDepository on how to exercise the voting rights for the shares that underlie their ADSs. For such instructions to be valid, the DepositaryDepository must receive them on or before a specified date. The DepositaryDepository will try, as far as is practical, and subject to the provisions of Indian law and our Memorandum of Association and our Articles of Association, to vote or to have its agents vote in relation to the shares or other deposited securities as per our ADSADSs holders’ instructions. The DepositaryDepository will only vote or attempt to vote as per an ADSADSs holder’s instructions. The DepositaryDepository will not itself exercise any voting discretion. Neither the DepositaryDepository nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast, or for the effect of any vote. There is no guarantee that our shareholders will receive voting materials in time to instruct the DepositaryDepository to vote and it is possible that ADSADSs holders, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Insider Trading Regulations SEBI through its notification dated December 31, 2018 has rationalized the Insider Trading Regulations. The amendment mainly focuses in providing mechanism for better implementation of the Insider Training Regulations. These changes, made to give effect to the accepted recommendations of the Committee on Fair Market Conduct, make broad- based changes to the regulations, on matters such as specifying the legitimate purposes for sharing unpublished price sensitive information, tracing the flow of such information, inclusive list of designated persons, establishing of process for how and when people are brought ‘inside’ on sensitive transactions etc. The changes in the Regulations were effective from April 1, 2019 which includes the Code of Conduct to Regulate, Monitor and Report Trading of Securities, Policy and Procedures for Inquiry in case of leak of Unpublished Price Sensitive Information and the Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information and Policy for Determination of Legitimate Purpose. The SEBI (Prohibition of Insider Trading) (3rd Amendment) Regulations, 2015 (the “SEBI2019 dated September 17, 2019, notified that the Code of Conduct of the Company shall provide for suitable protection against any discharge, termination, demotion, suspension, threats, harassment, directly or indirectly or discrimination against any employee who files a Voluntary Information Disclosure Form, irrespective of whether the information is considered or rejected by SEBI or he or she is eligible for a Reward under the regulations, by reasons as mentioned in the said regulations. Accordingly, we updated our Insider Trading Regulations”) replacedProhibition Policy which was approved by the previousmembers of the Board on November 14, 2019. We further updated our Insider Trading Prohibition Code to amend the definition of insider for effecting change in identification of Designated Employees/categories. The amended Code was effective from November 06, 2020 which was approved by the Board of Directors in its meeting held on November 06, 2020 and the same is available on the website of the Company www.vedantalimited.com. Further, SEBI (Prohibition of Insider Trading) Regulations. Key features(Amendment) Regulations, 2020 dated July 17, 2020, notified that the board of directors or heads of the SEBI Insider Trading Regulations inter alia are as follows: Key definitions:
“Insider” means a person who is a connected person or in possession of or having accessOrganization required to unpublished price sensitive information;
“Connected Person” is an exhaustive definition and includes any person who has a contractual, fiduciary or employment relationship or family relatives that allows such person directly or indirectly access to unpublished price sensitive information;
“Immediate Relatives” means a spouse of a person, and includes parent, sibling, and child of such person or of the spouse, any of whom is either dependent financially on such person, or consults such person in taking decisions relating to trading in securities;
“handle unpublished price sensitive information (“UPSI”)” means have to ensure that a structured digital database is maintained containing the nature of UPSI and the names of such persons who have shared the information and also the names of such persons with whom information is shared along with the PAN or any information, relating to a company or its securities, directly or indirectly, thatother identifier authorized by law where PAN is not generally available which upon becoming generally available, is likely to materially affect the price of the securities and shall, ordinarily including but not restricted to, information relating to financial results, dividend, changes in capital structure;available.
the SEBI Insider Trading Regulations provides for a framework for governing listed companies and its promoters, key managerial personnel, etc. when in possession of UPSI or deemed to be in possession of UPSI;
It also provides restrictions on communications and trading by Insiders and disclosures tradings done by Insiders;
Under the SEBI Insider Trading Regulations, a listed company is required to formulate a stated framework and policy for the fair disclosure of events and occurrences that could impact the price of its securities. This policy is required to be framed on principles such as the equality of access to information, publication of policies such as those on dividends, inorganic growth pursuits, calls on meetings with analysts and the publication of transcripts of such calls and meetings.
Comparison of Shareholders’ Rights We are incorporated under the laws of India. The following discussion summarizes certain material differences between the rights of holders of our equity shares and the rights of holders of the common stock of a typical corporation incorporated under the laws of the State of Delaware which result from differences in governing documents and the laws of India and Delaware. The rights of holders of our ADSs differ in certain respects from those of holders of our equity shares. This discussion does not purport to be a complete statement of the rights of holders of our equity shares under applicable law in India and our amended and restated Memorandum and Articles of Association or the rights of holders of the common stock of a typical corporation under applicable Delaware law and a typical certificate of incorporation and by laws.bylaws. | | | Delaware Law | | Indian Law | | | Annual and Special Meetings of Shareholders | | | | | Shareholders of a Delaware corporation generally do not have the right to call meetings of shareholders unless that right is granted in the certificate of incorporation orby-laws. However, if a corporation fails to hold its annual meeting within a period of 30 days after the date designated for the annual meeting, or if no date has been designated for the annual meeting, or if no date has been designated for a period of 13 months after its last annual meeting, the Delaware Court of Chancery may order a meeting to be held upon the application of a shareholder. | | While shareholders of a company do not have any right to call for an annual general meeting, shareholders holdingone-tenth of thepaid-up share capital of the company have a right to request an extraordinary general meeting. However, in the event the company defaults in holding an annual general meeting within 15 months from the date of its last annual general meeting or within 6 months from the end of financial year, whichever is higher, the GoI may order a meeting to be held upon the application of any shareholder. | | | Quorum Requirements for Meetings of Shareholders | | | | | A Delaware corporation’s certificate of incorporation or bylaws can specify the number of shares which constitute the quorum required to conduct business at a meeting, provided that in no event shall a quorum consist of less thanone-third of the shares entitled to vote at a meeting, except that, where a separate vote by a class or series or classes or series is required, a quorum shall consist of no less thanone-third of the shares of such class or series or classes or series. | | Our Articles of Association specify that the quorum for the general meeting shall be as provided in the Companies Act, 2013. According to the Indian Companies Act, 2013, quorum for a general meeting is at least 30 shareholders personally present if number of members as on date of meeting is exceeding 5,000 to vote and, in such instances the Indian Companies Act supersedes the Articles of Association. | | | Board of Directors | | | | | A typical certificate of incorporation and bylaws would provide that the number of directors on the board of directors will be fixed from time to time by a vote of the majority of the authorized directors. Under Delaware law, a board of directors can be divided into classes and cumulative voting in the election of directors is only permitted if expressly authorized in a corporation’s certificate of incorporation. | | Our Articles of Association provide that unless otherwise determined by the shareholders at a general meeting, the number of directors shall not be less than three or more than 15. The Company may appoint more than 15 directors by seeking the approval of its members by way of a special resolution. Under Indian law, the appointment and removal of directors (other than additional directors) is required to be approved by the shareholders. There is no concept under Indian law as to division of the board of directors into different classes or cumulative voting. | | | Removal of Directors | | | | | Under the Delaware General Corporation Law, a director of a corporation may be removed with the approval of a majority of the outstanding shares then entitled to vote at an election of directors, unless the certificate of incorporation provides otherwise. | | Under Indian law, a director of a company, other than a director appointed by the GoI, may be removed by an approval of the members by way of an ordinary resolution, provided that a special notice of the resolution to remove the director is given in accordance with the provisions of the Indian Companies Act.Act, 2013. Under our Articles of Association, any director who has been appointed by any persons pursuant to the provisions of an agreement with us may be removed at any time by such person. |
| | | Delaware Law | | Indian Law | | | Filling Vacancies on the Board of Directors | | | | | A typical certificate of incorporation and bylaws provide that, subject to the rights of the holders of any preferred stock, any vacancy, whether arising through death, resignation, retirement, disqualification, removal, an increase in the number of directors or any other reason, may be filled by a majority vote of the remaining directors, even if such directors remaining in office constitute less than a quorum, or by the sole remaining director. Any newly elected director usually holds office for the remainder of the full term expiring at the annual meeting of stockholders at which the term of the class of directors to which the newly elected director has been elected expires. | | The board of directors has the power to fill a vacancy on the board and any director so appointed shall hold office only so long as the vacating director would have held such office if no vacancy had occurred. The board has also the power to appoint additional director, however, such appointment shall be subject to approval by the shareholders in the immediate next annual general meeting |
| | | Delaware Law | | Indian Law | | | Interested Director Transactions | | | | | Interested director transactions are not voidable if (i) the material facts as to the interested director’s relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors, (ii) the material facts are disclosed or are known to the shareholders entitled to vote on such transaction and the transaction is specifically approved in good faith by vote of the majority of shares entitled to vote on the matter or (iii) the transaction is fair as to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee or the shareholders. | | Under Indian law, contracts or arrangements in which one or more directors of an Indian company has an interest are not void or voidable because of such interest, provided that certain conditions, such as obtaining the required approval of the board of directors and disclosing the nature of the interest to the board of directors, are satisfied. Subject to a few exceptions, for an interested director transaction not to be voided, (a) the interested director is required to disclose the nature of his concern or interest at a meeting of the board of directors, whether directly or indirectly, is concerned or interested including the Director who is a Promoter, Manager, Chief Executive Officer of anybody corporate; (b) the board of directors is required to grant its consent to the contract or arrangement; (c) the interested director is not permitted to take part in the discussion of, or vote on, the contract or arrangement; and (d) the approval of the members is required by way of resolution. An interested director is not to be counted for the purposes of quorum at the time of any such discussion or vote and if the interested director does vote, the vote shall be void. The contravention of relevant provisions is punishable with fine. Nothing in this section shall apply to any contract or arrangement entered into or to be entered into between two companies or between one or more companies and one or more bodies corporate where any of the directors of the one company or body corporate or two or more of them together holds or hold not more than two percent of the paid-up share capital in the other company or the body corporate. | | | Cumulative Voting | | | | | Delaware law does not require that a Delaware corporation provide for cumulative voting. However, the certificate of incorporation of a Delaware corporation may provide that shareholders of any class or classes or of any series may vote cumulatively either at all elections or at elections under specified circumstances. | | There is no concept of cumulative voting under Indian law. | | | Shareholder Action Without a Meeting | | | | | Unless otherwise specified in a Delaware corporation’s certificate of incorporation, any action required or permitted to be taken by shareholders at an annual or special meeting may be taken by shareholders without a meeting, without prior notice and without a vote, if consents, in writing, setting forth the action, are signed by shareholders with not less than the minimum number of votes that would be necessary to authorize the action at a meeting. All consents must be dated. No consent is effective unless, within 60 days of the earliest dated consent delivered to the corporation, written consents signed by a sufficient number of holders to take the action are delivered to the corporation. | | There is no concept of shareholder action without a meeting under Indian law. |
| | | Delaware Law | | Indian Law | | | Business Combinations | | | | | With certain exceptions, a merger, consolidation or sale of all or substantially all the assets of a Delaware corporation must be approved by the board of directors and a majority of the outstanding shares entitled to vote thereon. | | The sale, lease, or disposal of all or substantially all of the assets of an Indian company must be approved by the board of directors and shareholders holding a majority of the voting share capital of the company. | | | | | Under the Indian Companies Act, the merger of two companies is required to be approved by a Court or NCLT of competent jurisdiction or NCLT and by a three-fourths majority of each class of shareholders and creditors of the company present and voting at the meetings held to approve the merger. | | | Interested Stockholders | | | | | The Delaware General Corporation Law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by such statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date on which such person becomes an interested shareholder. An interested shareholder generally is one which owns or owned 15.0% or more of the target’s outstanding voting shares within the past three years. This has the effect of limiting the ability of a potential acquirer to make atwo-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors. | | Indian law does not prohibit corporate transactions but does require disclosure of related party transactions in the financial statements of the company. Under applicable accounting standards in India, during the time that a related party transaction exists, a company is required to disclose the name of the related parties, describe the relationship between the parties, describe the nature of the transactions and disclose the volume of the transactions either as an amount or as an appropriate proportion, the amounts or appropriate proportions of outstanding items pertaining to related parties at the balance sheet date and provisions for doubtful debts due from such parties at that date and the amounts written off or written back in the period in respect of debts due from or to related parties. | | | | | Transactions undertaken between a company and a person having a substantial interest in the company would qualify as a related party transaction and would be required to be disclosed under applicable accounting standards in India. Under such accounting standards, a party is considered to have a substantial interest in a company if that party owns, directly or indirectly, 20.0% or more of the voting power in the company. |
| | | Delaware Law | | Indian Law | | | Limitations on Personal Liability of Directors | | | | | A Delaware corporation may include in its certificate of incorporation provisions limiting the personal liability of its directors to the corporation or its shareholders for monetary damages for many types of breach of fiduciary duty. However, these provisions may not limit liability for any breach of the director’s duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law, the authorization of unlawful dividends, or unlawful share purchase or redemption, or any transaction from which a director derived an improper personal benefit. Moreover, these provisions would not be likely to bar claims arising under US federal securities laws. | | Generally, Indian law provides that directors are not personally liable in respect of contracts of the company. However, where a director acts without the approval or ratification of the company, such director may be personally liable. Directors are also personally liable for breach of trust or misfeasance, both civilly and in some cases criminally. The Indian Companies Act, 2013 of India, contains certain provisions making directors personally liable to discharge certain monetary obligations in their capacity as directors, such as thenon-refund of share application monies or excess application monies within the time limit stipulated by the Indian Companies Act.Act, 2013. Similarly, the Indian Companies Act, 2013 provides for civil liability of directors for misstatements in a prospectus issued by the company that has been signed by the directors, including the obligation to pay compensation to any persons subscribing to the shares of the company on the faith of statements made in the prospectus. Directors’ and officers’ liability insurance policies are available in India. However, the permissible coverage under such policies is subject to the same limitations as on the ability of the company to indemnify its directors as described under “-Indemnification of Directors and Officers.” | | | Indemnification of Directors and Officers | | | | | A Delaware corporation may indemnify a director or officer of the corporation against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in defense of an action, suit or proceeding by reason of his or her position if (i) the director or officer acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, the director or officer had no reasonable cause to believe his or her conduct was unlawful. | | Under Indian law, subject to specified exceptions, any provision, whether contained in the Articles of Association of a company or in any agreement, exempting or indemnifying any director, officer or auditor of the company against any liability in respect of any negligence, default, breach of duty or breach of trust which would by law otherwise attach to such director, officer or auditor, shall be void. However, pursuant to the exceptions permitted under Indian law, our Articles of Association provide for indemnification of any officer or agent against any liability incurred by such person in successfully defending any proceeding, whether civil or criminal, in which such person is acquitted in whole or in part on the grounds that such person had acted honestly and reasonably, or in connection with an application made by an officer or agent to the High Court of the relevant state for relief for reason that he or she has a reason to apprehend that any proceeding may be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust in which relief has been granted by such High Court. | | | Appraisal Rights | | | | | A shareholder of a Delaware corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive cash in the amount of the fair value of the shares held by that shareholder (as determined by a Court) in lieu of the consideration the shareholder would otherwise receive in the transaction. | | There is no concept of appraisal rights under Indian law. |
| | | Delaware Law | | Indian Law | | | Shareholder Suits | | | | | Class actions and derivative actions generally are available to the shareholders of a Delaware corporation for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys’ fees incurred in connection with such action. | | Under the Indian Companies Act, 2013, shareholders holding not less than one tenth of the issued share capital, shareholders representing not less than one tenth of the total number of members or one hundred members, provided that they have paid all calls and other sums due on their shares, have the right to request the NCLT, a statutory body, for an order or injunction as to the taking or not taking of an action by the company on the following grounds of oppression or mismanagement: (a) that the company’s affairs are being conducted in a manner prejudicial to public interest, in a manner oppressive to any member or members or in a manner prejudicial to the interests of the company; and (b) that a material change has taken place in the management or control of the company, whether by a change in the board of directors or management or in the ownership of the company’s shares, and by reason of such change it is likely that the affairs of the company will be conducted in a manner prejudicial to public interest or in a manner prejudicial to the interests of the company. |
| | | Delaware Law
| | Indian Law
| | | Inspection of Books and Records | | | | | All shareholders of a Delaware corporation have the right, upon written demand under oath stating the purpose thereof, to inspect or obtain copies of the corporation’s shares ledger and its other books and records for any proper purpose. | | Pursuant to our Articles of Association, our Board of directors has the authority to determine whether and to what extent and at what times and places and under what conditions or regulations our books are open to the inspection of the shareholders. Further, no shareholder of the company has the right to inspect any record of the company except as conferred under law or authorized by the board of directors or by the shareholders in a general meeting.directors. The books containing the minutes of the proceedings of any general meetings of the shareholders are required to be kept at the registered office of the company and such materials are to be opened for inspection by any shareholder, without charge, subject to reasonable restrictions which may be imposed by a company’s articles or thein its general meeting of the shareholders.meeting. If an inspection is refused, the company and every officer of the company in default will be punishable with a fine. Under Indian law, the audited financial statements for the relevant financial year, the directors’ report and the auditors’ report are required to be provided to the shareholders before the annual general meeting. | | | Amendment to Charter | | | | | Amendments to the certificate of incorporation of a Delaware corporation require the affirmative vote of the holders of a majority of the outstanding shares entitled to vote thereon or such greater vote as is provided for in the certificate of incorporation; a provision in the certificate of incorporation requiring the vote of a greater number or proportion of the directors or of the holders of any class of shares than is required by Delaware corporate law may not be amended, altered or repealed except by such greater vote. | | Under Indian Law, subject to certain specified amendments that require the additional approval of the central government, a company may make amendments to its articles with the approval of shareholders holding not less than 75.0% of the shares of the company. |
| | | Delaware Law | | Indian Law | | | Distributions and Dividends; Repurchases and Redemptions | | | | | Delaware law permits a corporation to declare and pay dividends out of statutory surplus or, if there is no surplus, out of net profits for fiscal year in which the dividend is declared and/or for the preceding fiscal year as long as the amount of capital of the corporation following the declaration and payment of the dividend is not less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets. Under Delaware law, any corporation may purchase, redeem, receive, take or otherwise acquire, own and hold, sell, lend, exchange, transfer or otherwise dispose of, pledge, use and otherwise deal in and with its own shares, except that generally it may not purchase or redeem those shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem capital shares that are entitled upon any distribution of its assets, whether by dividend or in liquidation, to a preference over another class or series of its shares if the shares will be retired upon their acquisition and the capital of the corporation is reduced. | | Under Indian law ifno dividend shall be declared or paid by a company for any financial year except out of the profits of the company for that year arrived at after providing for depreciation in accordance with the provisions of sub-section (2), or out of the profits of the company for any previous financial year or years arrived at after providing for depreciation in accordance with the provisions of that sub-section and remaining undistributed, or out of both provided that in computing profits any amount representing unrealized gains, notional gains or revaluation of assets and any change in carrying amount of an asset or of a liability on measurement of the asset or the liability at fair value shall be excluded. If the profits for a year are insufficient, the dividend for that year may be declared out of the accumulated profits earned in previous years and transferred to reserves, subject to the following conditions: (i) the rate of dividend declared shall not exceed the average of the rates at which dividend was declared by it in the 3 years immediately preceding that year. | | | Under Delaware law, any corporation may purchase or redeem its own shares, except that generally it may not purchase or redeem those shares if the capital of the corporation is impaired at the time or would become impaired as a result of the redemption. A corporation may, however, purchase or redeem capital shares that are entitled upon any distribution of its assets to a preference over another class or series of its shares if the shares will be retired upon their acquisition and the capital of the corporation reduced. | | (ii) the total amount to be drawn from the accumulated profits from previous years and transferred to the reserves may not exceed an amount equivalent to one tenth of thepaid-up capital and free reserves (iii) the amount so drawn shall first be utilized to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of the equity shares is declared. (iv) the balance of reserves after such withdrawal shall not fall below fifteen percent of its paid up share capital as appears in the latest audited financial statement. |
| | | v) no company shall declare dividend unless previous losses and depreciation not provided in previous year or years are set off against profit of the company of the current year. Delaware Law
| | Indian Law
| | | | | Shareholders have a right to claim a dividend, after such dividend has been declared by the company at a general meeting. Shareholders also have a right to claim the interim dividends, which may be declared only pursuant to a resolution of the company’s board of directors provided that in the event the company has incurred loss during the current financial year up to the end of the quarter immediately preceding the date of declaration of an interim dividend, then such interim dividend shall not be declared at a rate higher than the average dividends declared by the company during the immediately preceding 3 financial years. Dividends may be paid in cash or by cheque or warrant or in any electronic mode to the shareholder. Where a dividend has been declared by a company but has not been paid within 30 days from the date of declaration to any shareholder entitled to the payment of such dividend, a penalty can be imposed on a director who is knowingly a party to such default. | | | | | According to the Indian Companies Act, 2013, a company is empowered to purchase its own shares or other specified securities out of its free reserves, or the securities premium account or the proceeds of any shares or other specified securities (other than the kind of shares or other specified securities proposed to be bought back), subject to certain conditions including: (a) thebuy-back must be authorized by the articles of association of the company; (b) a resolution must be passed by shareholders holding not less than 75.0% of the outstanding shares in the general meeting of the company authorizing thebuy-back; (c) thebuy-back is limited to 25.0% of the total paid up capital and free reserves; (d) the ratio of debt owed by the company must not be more than twice the capital and free reserves after suchbuy-back; and (e) thebuy-back must be in accordance with the SEBI(Buy-Back (Buy-Back of Securities) Regulations, 1998. | | | | | Conditions (a) and (b) mentioned above would not be applicable if thebuy-back is for less than 10.0% of the totalpaid-up equity capital and free reserves of the company and suchbuy-back has been authorized by the Board of directors of the company. Further, a company buying back its securities is not permitted tobuy-back any additional securities for a period of 1 year after the buyback or to issue any securities of the same kind for a period of 6 months. | | | | | A company is also prohibited from purchasing its own shares or specified securities directly or indirectly. |
Comparison of Corporate Governance Standards The listing of our ADSs on the NYSE and our equity shares on the NSE and BSE cause us to be subject to NYSE listing standards and Indian corporate governance requirements set out SEBI (LODR) Regulations, 2015. The NYSE listing standards applicable to us, as a foreign private issuer, are considerably different from those applicable to companies incorporated in the United States. Under the NYSE rules, we need only (i) establish an independent audit committee that has specified responsibilities as described in the following table; (ii) provide prompt certification by our chief executive officer of any materialnon-compliance with any corporate governance rules of the NYSE; (iii) provide periodic (annual and interim) written affirmations to the NYSE with respect to our corporate governance practices; and (iv) provide a brief description of significant differences between our corporate governance practices and those followed by US companies. The corporate governance requirements which apply to us as a listed company on the NSE and BSE are contained in Regulation 1017 to 27 and Regulation 46 of SEBI (LODR) Regulations, 2015 in accordance with the Listing Agreement that we have entered into with the NSE and BSE. The SEBI (LODR) Regulations, 2015 was notified on September 2, 2015 and are effective from December 1, 2015.
The following table summarizes certain material differences in the corporate governance standards applicable to us under the listing regulations in accordance with the listing agreements with the NSE and BSE which is superseded SEBI (LODR) Regulations, 2015as amended and the corporate governance standards for a NYSE-listed company, both to a typical US domestic issuer and the requirements that would be different for us as a foreign private issuer. SEBI, in its meeting held on March 28, 2018 have approved various recommendations of the Kotak Committee report on corporate governance. These recommendations have been notified by the SEBI from time to time for implementation through its various notifications. | | | Standard for NYSE-Listed Companies | | Requirements by the SEBI (LODR) Regulations, 2015 effective
December 1, 2015
| | | Director Independence | | | | | A majority of the board must consist of independent directors. Independence is defined by various criteria including the absence of a material relationship between the director and the listed company. For example, directors who are employees, are immediate family of an executive officer of the company or receive over $ 120,000 per year in direct compensation from the listed company are not independent. Directors who are employees of or otherwise affiliated through immediate family with the listed company’s independent auditor are also not independent. Determinations of independence were made by the board. Thenon-management directors must meet at regularly scheduled executive sessions without management. (The NYSE requirements for a board consisting of independent directors andnon-management directors meeting at regularly scheduled executive sessions do not apply to us as a foreign private issuer.) | | Regulation 17(1) requires thatThe board of directors have an optimum combination of executive andnon-executive directors with at least one woman director.director and not less than fifty percent of the board of directors shall comprise of non-executive directors, provided top 500 listed entities shall have at least one independent woman director by April 1, 2019 and top 1,000 listed entities shall have at least one independent woman director by April 1, 2020 basis market capitalization at the end of immediate previous financial year. If the Chairman of the board of directors is an executive director, at least 50.0% of the board of directors shouldto comprise of independent directors. If the Chairmandirectors and in case of the board of directors is anon-executive director, chairman, then at least one third of the board should comprise of independent directors, provided that where thenon-executive Chairman is a promoter of the company or is related to any promoter or person occupying a management position at the board of directors level or at one level below that, at least 50.0% of the board of directors should comprise of independent directors.
Regulation 16(1)(b) define an ‘independent director’ to mean anon-executive, other than a nominee director Board must consist of a minimum of six directors for top 2000 listed entity
(i)entities based on market capitalisation at the end of previous financial year. Appoint a person or continue the directorship of any person as a non-executive director who inhas attained the opinionage of 75 years unless a special resolution is passed to that effect indicating the board,justification for such appointment. With effect from April 1, 2022, the top 500 entities by market capitalization to have a Chairperson who is a person of integritynon-executive director and possesses relevant expertise and experience;
(ii) who is or was not a promoter of the company or its holding, subsidiary or associate company;
(iii) who is not related to promoters or directors in the company, its holding, subsidiary or associate company;
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| | | Standard for NYSE-ListedManaging Director/CEO. Directors satisfy the criteria of being independent director as per the Companies
| | Requirements by Act, 2013 and the SEBI (LODR) Regulations, 2015 effective
December 1, 2015
| | | | | (iv) who, apart from receiving director’s remuneration, has or had no material pecuniary relationship withLODR other than nominee director and submits declaration confirming that they meet the company, its holding, subsidiary or associate company, or their promoters, or directors, during the two immediately preceding financial years or during the current financial year;
(v) nonecriteria of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company, or their promoters, or directors, amounting to 2% or more of its gross turnover or total income or Rs. 5,000,000 or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;
(vi) who, neither himself nor any of his relatives (A) holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed;
(B) is or has been an employee or proprietor or a partner, in any of the three financial years immediately preceding the financial year in which he is proposed to be appointed, of —(1) a firm of auditors or company secretaries in practice or cost auditors of the company or its holding, subsidiary or associate company; or (2) any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or associate company amounting to ten per cent or more of the gross turnover of such firm.
(C) holds together with his relatives 2% or more of the total voting power of the company; or
| | | | | (D) is a Chief Executive or director, by whatever name called, of anynon-profit organization that receives 25% or more of its receipts or corpus from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds 2% or more of the total voting power of the company;
(E) is a material supplier, service provider or customer or a lessor or lessee of the company;
(vii) who is not less than 21 years of age. independence. | | | Audit Committee | | | | | The audit committee must (i) be comprised entirely of independent directors; (ii) be directly responsible for the appointment, compensation, retention and oversight of any registered public accounting firm engaged (including resolution of disagreements between management and the auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or performing other audit, review or attest services for the listed issuer, and each such registered public accounting firm must report directly to the audit committee; (iii) establish procedures for the receipt, retention and treatment of complaints with respect to accounting and auditing issues; (iv) establish procedures for the confidential, anonymous submission by employees of the listed issuer of concerns regarding questionable accounting or auditing matters; (v) be authorized to engage independent counsel and other advisers it deems necessary to perform its duties; and (vi) be given sufficient funding by the Board of directors to compensate the independent auditors and other advisors as well as for the payment of ordinary administrative expenses incurred by the committee that are necessary or appropriate in carrying out its duties. | | Regulation 18(3)The Audit Committee must comprise of SEBI (LODR) Regulations, 2015 read with Part Cminimum three directors as members of Schedule II require thatwhich two third member to be independent directors wherein all shall be financially literate and atleast one member must have accounting and related financial management expertise and the Chairperson to be an Independent Director. Their role include: Oversight of financial reporting, Auditors, Internal Audit, Internal financial controls, Risk Management and Governance. The principal duties and responsibilities of the audit committee should includeAudit Committee is mentioned under the following:head of Audit Committee above. Details on the scope may be referred.
• oversight the company’s financial reporting processThe committee shall meet atleast four times in a year and the disclosure of its financial information to ensure that the financial statementnot more than 120 days shall elapse between two meetings. The quorum requirement is correct, sufficient and credible.
• recommendation for appointment, remuneration and terms of appointment of the auditors and approval of payment to statutory auditors for any other services rendered by the statutory auditors.
• revieweither two members or one-third, whichever is greater, with management the annual financial statements and auditor’s report thereon, before submission to the board of directors for approval, focusing primarily on matters required to be included in the Director’s Responsibility Statement in terms of clause (c) ofsub-section (3) of Section 134 of the Act, 2013, any changes in accounting policies and practices and reasons for the same, any major accounting entries based on exercise of judgment by management, any qualifications in the draft audit report, any significant adjustments arising out of the audit, the going concern assumption, compliance with accounting standards, compliance with stock exchange and legal requirements concerning financial statements and any related party transactions, modified opinion(s) in the draft audit report.
• Review with the management, the quarterly financial statements before submission to the board for approvalatleast two independent directors.
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| | | Standard for NYSE-Listed Companies | | Requirements by the SEBI (LODR) Regulations, 2015 effective
December 1, 2015
| | | | | • To review with management the statement of uses or application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the board to take up steps in this matter
• reviewing and monitoring the auditor‘s independence and performance, and effectiveness of audit process;
• approval or any subsequent modification of transactions of the listed entity with related parties;
• scrutiny of inter-corporate loans and investments;
• valuation of undertakings or assets of the listed entity, wherever it is necessary;
• evaluation of internal financial controls and risk management systems
• review with management the performance of statutory and internal auditors, and the adequacy of internal control systems.
| | | | | • review the adequacy of the internal audit function, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.
| | | | | • To discuss with internal auditors any significant findings andfollow-up thereon.
| | | | | • To review the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and report the matter to the board.
| | | | | • To discuss with statutory auditors before the audit commences, the nature and scope of the audit as well as to conduct post-audit discussions to ascertain any area of concern.
| | | | | • To examine the reasons for substantial defaults in payment to depositors, debenture holders, shareholders (in case ofnon-payment of declared dividends) and creditors.
| | | | | • To review the functioning of whistle blower mechanism.
| | | | | • Approval of appointment of the Chief Financial Officer (that is, the whole-time finance director or any other person heading the finance function or discharging that function) after assessing the qualifications, experience and background, etc. of the candidate.
| | | | | • To review the management’s discussion and analysis of financial condition and results of operation.
|
| | | Standard for NYSE-Listed Companies
| | Requirements by the SEBI (LODR) Regulations, 2015 effective
December 1, 2015
| | | | | • To review the statement of significant related party transactions submitted by the management.
| | | | | • To review the management letters/letters of internal control weaknesses issued by the statutory auditors.
| | | | | • To review the internal audit reports relating to internal control weaknesses.
| | | | | • To review the appointment, removal and terms of remuneration of the chief internal auditor.
• Reference to audit committee charter functions
• Statement of deviations:
(a) Quarterly statement of deviation(s) including report of monitoring agency, if applicable, submitted to stock exchange(s) as per the specified regulation
(b) Annual statement of funds utilized for purposes other than those stated in the offer document / prospectus / notice in terms of the requirement of the specified regulations
| | | The audit committee must consist of at least three members, and each member must be independent within the meaning established by the NYSE and Rule10A-3 under the Exchange Act. The audit committee members must be financially literate or become financially literate within a reasonable period of their appointment to the audit committee. | | Regulation 18(1)(a)(b) of SEBI (LODR) Regulations, 2015 require that a qualified and independent audit committee should be set up, which has a minimum of three members.Two-thirds of its members should be independent directors and the chairman of the audit committee should be an independent director. | | | Each listed company must have disclosed whether its Board of directors has identified an audit committee financial expert (as defined under applicable rules of the SEC) and if not, the reasons why the Board has not done so. | | Regulation 18(1)(c) of SEBI (LODR) Regulations, 2015 also require that all members of the audit committee should be financially literate and at least one member should have financial management and accounting expertise. | | | The audit committee must have a written charter that addresses the committee’s purpose and responsibilities. At a minimum, the committee’s purpose must be to assist the Board in the oversight of the integrity of the company’s financial statements, the company’s compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence and the performance of the company’s internal audit function and independent auditors. The duties and responsibilities of the audit committee include conducting a review of the independent auditing firm’s annual report describing the firm’s internal quality control procedures, any material issues raised by the most recent internal quality control review or peer review of the firm and any steps taken to address such issues. | | | | | The audit committee is also to assess the auditor’s independence by reviewing all relationships between the company and its auditor. It must establish the company’s hiring guidelines for employees and former employees of the independent auditor. | | |
| | | Standard for NYSE-Listed Companies
| | Requirements by the SEBI (LODR) Regulations, 2015 effective
December 1, 2015
| | | The committee must also discuss the company’s annual audited financial statements and quarterly financial statements with management and the independent auditors, the company’s earnings press releases, as well as financial information and earnings guidance provided to analysts and rating agencies, and policies with respect to risk assessment and risk management. | | | | | Each listed company must have an internal audit function. | | | | | function The committee must also meet separately, periodically, with management, with internal auditors (or other personnel responsible for the internal audit function) and with independent auditors and review with the independent auditor any audit problems or difficulties and management’s response. | | | | | The committee must report regularly to the Board. | | | | | (The NYSE audit committee requirements apply to us as foreign private issuers and we are not exempt from this requirement.) | | | | | Compensation Committee | | | | | Listed companies must have a compensation committee composed entirely of independent board members as defined by the NYSE listing standards. The committee must have a written charter that addresses its purpose and responsibilities.
| | Regulation 19 of and SEBI (LODR) Regulations, 2015 states that, the companyThe listed entity shall set up a nomination and remuneration committee which shall comprise at least three directors, all of whom shall benon-executive directors and at least half shall be independent. Chairman of the committee shall be an independent director. The principal duties and responsibilities of the Nomination and Remuneration Committee is mentioned under the head of Nomination and Remuneration Committee above. Details on the scope may be referred |
| | | Standard for NYSE-Listed Companies | | SEBI (LODR) Regulations, 2015 | The committee must have a written charter that addresses its purpose and responsibilities. These responsibilities include (i) reviewing and approving corporate goals and objectives relevant to CEO compensation; (ii) evaluating CEO performance and compensation in light of such goals and objectives for the CEO; (iii) based on such evaluation, reviewing and approving CEO compensation levels; (iv) recommending to the boardnon-CEO compensation, incentive compensation plans and equity-based plans; and (v) producing a report on executive compensation as required by the SEC to be included in the company’s annual proxy statement or annual report. The committee must also conduct an annual performance self-evaluation. (The NYSE compensation committee requirements allow us, as a foreign private issuer, to follow our home country rules in this regard. We comply with our home country rules applicable to the Compensation Committee.) | | Regulation 19
The quorum for a meeting of SEBI (LODR) Regulations, 2015 read with Part Dthe nomination and remuneration committee shall be either two members or one third of Schedule II, the rolemembers of the committee, shall include the following: (1) formulation of the criteria for determining qualifications, positive attributes and independence of a director and recommend to the board a policy, relating to the remuneration of the directors, key managerial personnel and other employees;
(2) formulation of criteria for evaluation of Independent Directors and the board;
(3) devising a policy on board diversity;
(4) identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down, and recommend to the board their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its annual report.
(5) whether to extend or continue the term of appointment of thewhichever is greater, including at least one independent director on the basis of the report of performance evaluation of independent directors.in attendance. The nomination and remuneration committee shall meet at least once in a year
| | | Nominating/Corporate Governance CommitteeNominating corporate governance
| | | | | Listed companies must have a nominating/corporate governance committee composed entirely of independent board members. | | Companies Act, 2013 requires that every listed company shall constitute a nomination and remuneration committee, comprising of three or morenon-executive directors, out of which not less thanone-half shall be independent directors. This Committee is also required pursuant to the SEBI (LODR) Regulations, 2015. |
| | | Standard for NYSE-Listed Companies
| | Requirements by the SEBI (LODR) Regulations, 2015 effective
December 1, 2015
| | | The committee must have a written charter that addresses its purpose and responsibilities, which include (i) identifying individuals qualified to become board members; (ii) selecting, or recommending that the board select, the director nominees for the next annual meeting of shareholders; (iii) developing and recommending to the board a set of corporate governance principles applicable to the company; (iv) overseeing the evaluation of the board and management; and (v) conducting an annual performance evaluation of the committee. (The NYSE nominating/corporate governance committee requirements do not apply to us as a foreign private issuer.) | | Regulation 19 of SEBI (LODR) Regulations, 2015 read with Part D of Schedule II, the role of the committee shall include the following:
(1) Formulation of the criteria for determining qualifications, positive attributes and independenceThere is no requirement of a directornomination corporate governance Committee. The scope and recommend to the board a policy, relating to the remunerationresponsibilities of the directors, key managerial personnel and other employees;
(2) Formulation of criteria for evaluation of Independent Directors and the board;
(3) Devising a policy on board diversity;
(4) Identifying persons who are qualified to become directors and who may be appointedthis committee is similar in senior management in accordanceline with the criteria laid down, and recommend to the board their appointment and removal. The company shall disclose the remuneration policy and the evaluation criteria in its Annual Report.
(5) whether to extend or continue the term of appointment of the independent director, on the basis of the report of performance evaluation of independent directors. Nomination & Remuneration Committee. | | | Corporate Governance Guidelines | | | | | Listed companies must adopt and disclose corporate governance guidelines. (The NYSE requirement that corporate governance guidelines be adopted does not apply to us as a foreign private issuer. However, we must disclose differences between the corporate governance standards to which we are subject and those of the NYSE.) | | Corporate governance requirements for listed companies in India are included in Regulation 17 to 27 and 46 of SEBI (LODR) Regulations, 2015. |
| | | Standard for NYSE-Listed Companies | | SEBI (LODR) Regulations, 2015 | | | Code of Business Conductbusiness conduct and Ethicsethics | | | | | All listed companies, United States and foreign, must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose any waivers of the code for directors or executive officers. (The NYSE requirement for a code of business conduct and ethics does not apply to us as a foreign private issuer.) | | Regulation 17 (5), 25(3) and Schedule V of SEBI(LODR) Regulations, 2015 require that theThe board of directors shall lay down a code of conduct for all board members and senior management of a listed company. This code of conduct is required to be posted on the website of the company. Further, all board members and senior management personnel are required to affirm compliance with the code on an annual basis and the company’s annual report must contain a declaration to this effect signed by its CEO. | | | | | Regulation 17(5)(b) and Regulation 25(5) of SEBI (LODR) Regulations, 2015, | | | | | 2015: • The Code of Conduct shall suitably incorporate the duties of independent directors as laid down in the Companies Act, 2013. | | | | | •
An independent director shall be held liable, only in respect of such acts of omission or commission by a company which had occurred with his knowledge, attributable through board processes, and with his consent or connivance or where he had not acted diligently with respect of the provisions contained in the SEBI (LODR) Regulations, 2015. |
C. Material Contracts The following is a summary of each of our material contracts, other than contracts entered into in the ordinary course of business, to which we are a party,See “Item 7: Major Shareholders and Related Party Transactions – B. Related Party Transactions – Related Party Transactions” for the 2 years immediately preceding the date of this Annual Report.
Representative Office Agreement with Vedanta
SIIL entered into a representative office agreement with Vedanta on March 29, 2005 under which Vedanta agreed to provide technical and commercial materials to us to enable us to promote our business or raise funds overseas, and to be ournon-exclusive overseas representative, for which we agreed to pay an amount of $ 2.0 million per year to Vedanta. This agreement expired on March 31, 2013.
Since the effectiveness of theRe-organization Transactions, we renewed this agreement on similar terms with Vedanta on May 20, 2014 for a period of 5 years. Under this renewed agreement, we have agreed to pay an amount of $ 2.0 million to Vedanta. This agreement is valid until March 2018.
Consultancy Agreement with Vedanta
SIIL entered into a consultancy agreement with Vedanta on March 29, 2005 under which Vedanta agreed to provide strategic planning and consultancy services to us and our subsidiaries in various areas of business such that we are able to finalize and implement our plans for growth and are able to raise the necessary finances. The terms of this agreement were negotiated by us and Vedanta and we believe them to be fair and reasonable. Under this agreement, Vedanta agreed to make certain of its employees available to us. The anticipated fee used for reference in the agreement, which was based on a relevant proportion of the expected annual budgeted costs for fiscal year 2005 plus themark-up of 40.0%, was $ 3.0 million per year. This agreement expired on March 31, 2013.
Since the effectiveness of theRe-organization Transactions, we have renewed this agreement with Vedanta on May 20, 2014 for a period of 5 years on similar terms. This agreement is valid until March 2018. Under this agreement, Vedanta has agreed to make certain of its employees available to us and we have agreed to pay a service fee to Vedanta on the basis of, among other things, the amount of time spent in providing the services and associated costs for which we have agreed to pay an amount of $ 3.0 million per year.
Outsourcing Services Agreement with Vedanta
SIIL entered into a service agreement with Vedanta on April 1, 2010, under which we agreed to provide accounting, treasury and related services at the request of Vedanta from time to time. In consideration of above, Vedanta agreed to pay us service charges aggregating to an amount of $ 0.2 million per year.
Since the effectiveness of theRe-organization Transactions, we renewed this agreement with Vedanta on May 20, 2014 for a period of 5 years. This agreement is valid until March 2018 and Vedanta has agreed to pay us service charges aggregating to an amount of $ 0.35 million per year with an annual increase of 10.0%.details.
Outstanding loans See “Note 17 “Borrowings” in22: Borrowings” of Notes to the Consolidated Financial Statements for more details. D. Exchange Controls General Ownership of Indian companies bynon-residents is regulated by the GoI and Reserve Bank of India (‘RBI’)RBI under the provisions of Foreign Exchange Management Act of 1999 (‘FEMA’), as amended, read with the rules, regulations and notifications issued under FEMA (‘Foreign Exchange Control Regulations’). Foreign investment in securities issued by Indian companies is generally regulated by the Foreign Exchange Control Regulations. A person resident outside India can transfer any security of an Indian company or any other security to an Indian resident only in accordance with the terms and conditions specified under Foreign Exchange Control Regulations made thereunder or as permitted by the RBI. Foreign Direct Investment The Government of India regulates ownership of Indian companies by foreigners. Foreign investment in Indian securities is generally regulated by the Foreign Exchange Management Act, 1999. The Foreign Exchange Management Act, 1999 (‘FEMA’), is read together with a series of rules and regulations issued thereunder by the RBI and GoI, had, pursuantwhich permits transactions involving the inflow or outflow of foreign exchange and empowers the RBI / GoI to its liberalization policy, set up Foreign Investment Promotion Board (‘FIPB’)prohibit or regulate such transactions. FEMA permits most current account transactions involving foreign exchange except those prohibited or restricted by the RBI. FEMA has eased restrictions on current account transactions. However, the GoI and RBI continue to exercise control over capital account transactions (i.e., those that alter the assets or liabilities, including contingent liabilities, of persons). The GoI and RBI have issued rules under FEMA to regulate all foreign direct investment. Foreign direct investment (“FDI”), means investment bynon- resident entity or a person resident outside India in thevarious kinds of capital account transactions, including certain aspects of the purchase and issuance of shares of Indian Company under Schedule 1companies. On October 17, 2019 GoI vide S.O. 3732(E) notified Foreign Exchange Management (Non-debt Instruments) Rules, 2019 and RBI vide G.S.R 796(E) notified Foreign Exchange Management (Debt Instruments) Regulations, 2019, in supersession of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outsideoutside India) Regulations, 2000. 2017. Hence, investment in non – debt instruments (includes equity shares, convertible debentures, preference shares and share warrants, depository receipts (“DRs”) issued against equity instruments, etc.) of an Indian company by a person resident outside India shall be under Foreign Exchange Management (Non-debt Instruments) Rules, 2019. FDI in India can be either through the automatic route or through the government approval route. Over a period of time, the GoI / RBI has relaxed the restrictions on FDI. Recently, as a part of the Union Budget, the Finance Minister proposed to abolish the FIPB in a phased out manner in fiscal year 2018. On June 5, 2017, the GoI issued the Office Memorandum- F.No. 01/01/FC12017–FIPB, providingFDI policy provides details regarding the specified sectoral regulatory bodies who would grantwhose approval is required for foreign investment under the extant FDI Policy and transition with respect to applications pending before FIPB.investments. As per the said memorandum, elevenFDI Policy, certain notified sectors/activities requiring government approval wouldshould now approach the concerned administrative ministry or department. For instance, FDI proposals relating to mining sector would be approvedrequire approval by Ministry of Mines. FDI proposals requiring government approval for other residuary sectors (except core investment companies) not covered under the specified sector list would require to be approved by Department of Industrial Policy and Promotion (‘DIPP’). A person who
An entity of a country, which shares land border with India or the beneficial owner of an investment into India is asituated in or is citizen of Bangladesh or an entity incorporated in Bangladeshany such country, can invest in India, under the FDI Policy,only with the prior approval of the DIPP and/or the respective sectoral administrative ministries or departments. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the government approval route, in sectors/activities other than defence,defense, space and atomic energy and sectors/activities prohibited for foreign investment. Subject to certain conditions, under current regulations, FDI in most industry sectors are under automatic route if the percentage of equity holding by all foreign investors does not exceed specified industry-specific thresholds. These conditions include certain minimum pricing requirements, compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, as amended, (‘the Takeover Code’), exit and ownership restrictions based on the nature of the foreign investor. FDI is prohibited in certain sectors such as the lottery business, gambling and betting, atomic energy, chit funds, Nidhi companies, trading in transferable development rights,Transferable Development Rights, railways (other than permitted activities), real estate business or construction of farm houses (other[other than development of townships, construction of residential and residential/commercial premises, roads or bridges and real estate investment trusts registered and regulated under the SEBI (REITs) Regulations 20142014] and manufacturing of cigars. FDI policy lays down guidelines for calculation of direct and indirect foreign investment in an Indian company. A person residing outside India (other than a citizen of Pakistan or Bangladesh)countries mentioned above) or any entity incorporated outside India (other than an entity incorporated in Pakistan or Bangladeshcountries mentioned above and an overseas corporate body as defined in FEMA) has general permission to purchase equity shares (including partly paid up shares), convertible debentures or convertible preference shares of an Indian company (mandatorily required to be fully paid up and compulsorily convertible), subject to certain terms and conditions. Currently, subject to certain exceptions, investment on non-repatriation basis byNon-Resident Indians (‘NRIs’) (as defined under Foreign Exchange Management (Deposit) Regulations, 2000) a Non-resident Indian (NRI) or an Overseas Citizen of India (OCI), including a company, a trust and a partnership firm incorporated outside India and owned and controlled by NRIs or OCIs, in equity instrument issued by Indian companies onnon-repatriation basis do not require the prior approval of the RBI subject to prohibition of investment in chit fund or a nidhiNidhi company or investment in Indian companies engaged in agricultural/plantation activities or real estate business or construction of farm houses (other than development of townships, construction of residential and commercial premises, roads or bridges and real investment trusts registered and regulated under the SEBI (REITs) Regulations 2014) or dealing in Transfer of Development RightsRights. The GoI has indicated that in all cases where FDI is allowed on an automatic route, , the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. As per the FDI Policy, downstream investment means indirect foreign investment (an investment by an Indian company/Limited Liability Partnership (‘LLP’) or an investment vehicle which in turn, has foreign investment), into another Indian company/LLP, by way of subscription or acquisition. Downstream investment by an Indian company/LLP, which is owned and/or controlled bynon-resident entities, into another Indian company/LLP, must be in accordance with the relevant sectoral conditions and caps with regard to the sectors in which the latter Indian company/LLP is operating. Downstream investments by Indian companies/LLP will be subject to the following conditions: Such a company/an Indian Company/LLP or an investment vehicle is to notify RBI and the Secretariat for Industrial Assistance, DIPP and/ or the respective sectoral administrative ministries or departments of its downstream investment in the form available at http://www.fipbindia.comForm DI within 30 days of such investment, even if capital instruments have not been allotted along with the modality of investment in new/existing ventures (with/without expansion program); Downstream investment by way of induction of foreign equityinvestment in an existing Indian company/LLP to be duly supported by a resolution of the board of directors as also a shareholders agreement, if any; Issue/transfer/pricing/valuation of shares shall be in accordance with applicable SEBI/RBI guidelines; For the purpose of downstream investment, the Indian companies/Companies/LLP making the downstream investments would have to bring in requisite funds from abroad and not leverage funds from the domestic market. This would, however, not preclude downstream companies/LLPs, with operations, from raising debt in the domestic market. Downstream investments through internal accruals are permissible by an Indian company/Company/LLP subject to certain conditions provided under FDI policy. For the purposes of foreign investment policy, internal accruals will mean profits transferred to reserve accounts after payment of taxes. We are majorly controlled by anon-resident entity and hence all downstream investments made by us are subject to the above conditions. Under the current regulations, following the Cairn India Merger sanctioned by the NCLT, Mumbai Bench, Vedanta Limited is engaged in the following businesses:
Mining and processing of aluminium,aluminum, copper and zinc, Iron Ore FDI up to 100%100.0% is permitted under the automatic route, subject to the Mines and Minerals (Development and Regulation) Act, 1957. Exploration of oil and natural gas – FDI up to 100%100.0% is permitted under the automatic route. Portfolio
Power generation (majorly Thermal power and remaining from renewable energy sources) – 100% FDI is permitted under automatic route subject to the provisions of The Electricity Act, 2003 Investment byNon-Resident Indians or an Overseas Citizen of India (“OCI”) A variety of methods for investing in shares of Indian companies are available to NRIs. Under the portfolio investment scheme, eachEach NRI or OCI can purchase (onon repatriation as well asnon-repatriation basis)basis, on a recognized stock exchange in India, up to 5.0% of the total paid-up value of the share issued by an Indian company, equity capital on a fully diluted basis, subject to the condition that the aggregatepaid-up valuetotal holdings of shares purchased by all NRIs and OCIs put together does not exceed 10%10.0% of the paid uppaid-up equity capital of the Company.on a fully diluted basis. The aggregate ceiling limit of 10.0% limit may be raised to 24.0% if a special resolution is passed in a general meeting of the shareholders of the company.Company. In addition to portfolio investments in Indian companies,the above, NRIs may also make foreign direct investments in Indian companies under the FDI route discussed above. These methods allow NRIs to make portfolio investments in shares and other securities of Indian companies on a basis not generally available to other foreign investors. Overseas corporate bodies controlled by NRIs, were previously permitted to invest on more favorable terms under the portfolio investment scheme. The RBI no longer recognizes overseas corporate bodies as an eligible class of investment vehicle under various routes and schemes under the foreign exchange regulations. Investment by Foreign Portfolio Investors On September 23, 2019, The SEBI (Foreign Portfolio Investors) Regulations, 2014 was repealed and replaced by SEBI (Foreign Portfolio Investors) Regulations, 2019 (‘FPI Regulations’) came into effect, where the SEBI clarified on March 28, 2014 that the new regime would commence on June 1, 2014.. All the existing foreign institutional investors (‘FIIs”), sub accounts and qualified foreign investors (‘QFIs’) have been classified together into a new class of investors known as the foreign portfolio investors (‘FPIs’). FPIs are required to be registered with the designated depositary participant on behalf of the SEBI subject to compliance, with ‘Know Your Customer’ norms. FPIs are permitted to invest only in certain securities, including but not limited to securities in the primary and secondary markets (including shares, debentures and warrants of companies, listed or to be listed on a recognized stock exchange in India), derivatives traded on a recognized stock exchange, treasury bills, dated government securities, and such other instruments specified by the SEBI from time to time. A single foreign portfolio investor or an investor group is permitted to purchaseinvest in equity sharescapital of an Indian company listed or to be listed on a company only belowrecognised stock exchange in India. The total holding by each FPI or an investor group, shall be less than 10.0% of the total issuedpaid-up equity capital on a fully diluted basis or less than 10 percent of the company. paid-up value of each series of debentures or preference shares or share warrants issued by an Indian company and the total holdings of all FPIs put together, including any other direct and indirect foreign investments in the Indian company by FPIs permitted under these rules, shall not exceed 24 per cent of paid-up equity capital on a fully diluted basis or paid up value of each series of debentures or preference shares or share warrants. The said limit of 10 percent and 24 percent shall be called the individual and aggregate limit, respectively. The aggregate ceiling limit of 24.0% limit may be raised to up to the sectoral cap/statutory ceiling, as applicable, with the approval of its Board of Directors and its General Body through a resolution and a special resolution, respectively Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in terms of the FPI Regulations, an FPI, other thanregistered as a Category IIII foreign portfolio investor, and unregulated broad based funds, which are classified as Category II foreign portfolio investors by virtue of their investment manager being regulated, may issue or otherwise deal in offshore derivative instruments (as defined under the FPI Regulations) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only to persons who are regulated by an appropriate regulatory authority;eligible for registration as Category I foreign portfolio investors; and (ii) such offshore derivative instruments are issued after compliance with ‘Know Your Client’ norms. An FPI is also required toshall ensure that no further issue orany transfer of any offshore derivative instrument is madeinstruments issued by or on behalf of it to any persons that are not regulated by an appropriate foreign regulatory authority. Any FII or QFI who holds a valid certificate of registration will be deemed to be a FPI until the expiry of the block of 3 years for which fees has been paid as provided by the SEBI (Foreign Institutional Investors) Regulations, 1995. All existing FIIs and sub accounts, subject to payment of conversion fees specified in the FPI, Regulations, may continue to buy, sell or otherwise deal in securitiesis made subject to the provisionsfollowing conditions: (a) such offshore derivative instruments are transferred to persons subject to fulfillment of regulation 21 (1) of FPI Regulations; and (b) prior consent of the FPI Regulations, untilforeign portfolio investor is obtained for such transfer, except when the earlier of (i) expiry of its registration as a FII orsub-account, or (ii) obtaining a certificate of registration as anpersons to whom the offshore derivative instruments are to be transferred to are pre-approved by the FPI. All QFIs may continue to buy, sell or otherwise deal in securities until the earlier of (i) up to a period of a one year from the date of commencement of the FPI Regulations or; (ii) obtaining a certificate of registration as an FPI. In furtherance of the FPI Regulations, the RBI amended relevant provisions of Foreign Exchange Management (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000 on March 13, 2014.
The portfolio investor registered in accordance with the FPI Regulations wouldmay be called ‘Registered Foreign Portfolio Investor (‘RFPI’(“RFPI”). Accordingly, anany transaction involving dealing in securities by a RFPI may purchase and sell shares and convertible debentures of an Indian companyshall be only through a registered broker as well as purchase shares and convertible debentures offeredsubject to the public under the FPI Regulations. Further, RFPI may sell shares or convertible debentures so acquiredcertain exceptions including but not limited to (i) in an open offer in accordance with the Takeover Code or (ii) in an open offer in accordance with the SEBI (Delisting of Equity Shares) Regulations, 2009; or (iii) through buyback of shares by a listed Indian company in accordance with the SEBI(Buy-back (Buy-back of Securities) Regulations, 1998. An RFPI may also acquire shares or convertible debentures (i) in any bid for, or acquisition of securities in response to an offer for disinvestment of shares made by the Central Government or any state government; or (ii) in any transaction in securities pursuant to an agreement entered into with merchant banker in the process of market making or subscribing to unsubscribed portion of the issue in accordance with Chapter XBIX of the SEBI (ICDR)Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. 2018.The individual and aggregate investment limits for the RFPIs should be below 10.0% and up to 24.0% respectively of the totalpaid-up equity capital or 10.0% and 24.0% respectively of thepaid-up value of each series of convertible debentures issued by an Indian company and such investment should be within the overall sectoral caps prescribed under the FDI policy. The aggregate ceiling limit of 24.0% limit may be raised to up to the sectoral cap/ statutory ceiling, as applicable if a special resolution is passed in a general meeting of the shareholders of the company. An RFPI may invest in government securities and corporate debt subject to limits specified by the RBI and SEBI from time to time and to trade in all exchange traded derivative contracts on the stock exchanges in India subject to the position limits as specified by SEBI from time to time.
ADSs Issue of ADSs Issue of securities through the depository receipt mechanism by Indian companies is governed by the Companies Act, 2013 (Companies Act), the Companies (Issue of Global Depository Receipts) Rules, 2014 (“Depository Receipts Rules”) and the Depository Receipts Scheme, 2014 (the “DR Scheme”). The GoI approved the DR Scheme on October 21, 2014, which came into force on December 15, 2014. Consequently, the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through(Through Depository Receipt Mechanism) Scheme, 1993 (“the 1993(the “1993 Scheme”) has been repealed except to the extent relating to foreign currency convertible bonds. The RBI also issued a circular on January 22, 2015, highlighting the salient features of the DR Scheme isScheme. SEBI vide circular dated October 10, 2019 (‘Current DR framework’) has provided a detailed framework for issue of depository receipts. The Current DR framework inter – alia provides that: Only ‘a company incorporated in additionIndia and listed on a recognized stock exchange in India’ may issue permissible securities or their holders may transfer permissible securities, for the purpose of issue of DRs, subject to compliance with the other policiesrequirements specified therein. The Current DR framework provides permissible securities to mean equity shares and debt securities, which are in dematerialized form and rank pari passu with the securities issued and listed on a recognized stock exchange. Listed company shall ensure that DRs are issued only with permissible securities as the underlying i.e. equity shares and debt securities, which are in dematerialized form and rank pari passu with the securities issued and listed on a recognized stock exchange. Listed company shall be permitted to issue permissible securities or facilities described above, relatingtransfer permissible securities of existing holders, for the purpose of issue of DRs, only in permissible jurisdictions and said DRs shall be listed on any of the specified international exchange(s) of the permissible jurisdiction. Permissible jurisdiction shall mean jurisdictions as may be notified by the Central Government from time to investmentstime, pursuant to notification no. G.S.R. 669(E) dated September 18, 2019 in Indian companies by foreign investors.respect of sub-rule 1 of rule 9 of Prevention of Money-Laundering (Maintenance of Records) Rules, 2005. In this regard, SEBI vide circular dated November 18, 2019 has provided a list of permissible jurisdictions and international exchange(s) which inter alia, includes the International Financial Services Centre in India. Under
Previously, under the DR Scheme, an Indian company, whether listed or unlisted, private or public, is permittedcompanies were only required to issue securities, including equity shares, through the depository receipt mechanism if such company has not been specifically prohibitedcomply with eligibility requirements pertaining to prohibition from accessing capital markets or dealing in securities. However, the current framework prescribes certain additional requirements, including not being declared as a willful defaulter or a fugitive economic offender. In terms
Listed company shall ensure compliance with extant laws relating to issuance of DRs, including, requirements prescribed in this Circular, the DR Scheme, securities can be issued through the depository receipt mechanism up to a limit soCompanies Act, 2013, FEMA, Prevention of Money-Laundering Act, 2002, and rules and regulations made thereunder. For this purpose, listed company may also enter into necessary arrangements with Custodian, Indian Depository and Foreign Depository. Listed company shall ensure that the aggregate underlyingof permissible securities which may be issued to foreign depositoriesor transferred for issuancethe purpose of depository receiptsissue of DRs, along with permissible securities already held by persons resident outside India, doesshall not exceed the applicablelimit on foreign investment limits prescribed by regulations framedholding of such permissible securities under the applicable regulations of FEMA. However, the listed company to ensure compliance with minimum public shareholding requirement after excluding the permissible securities held by the depository for the purpose of issue of DRs. Listed company shall ensure that any public disclosures made by the listed company on International Exchange(s) in compliance with the requirements of the permissible jurisdiction where the DRs are listed or of the international exchange(s), are also filed with the recognized stock exchange as soon as reasonably possible but not later than twenty four hours from the date of filing. Where permissible securities are issued by a listed company or ‘transferred by the existing holders ’, for the purpose of issue of DRs by the Foreign Exchange Management Act, 1999. The depository receipts andDepository, the underlying securities may be converted into each other subject to the applicable foreign investment limit. The DR Scheme provides that underlying securitiessame shall not be issued to a foreign depository for issuance of depository receipts at a price, which isnot less than the price applicable to a corresponding mode of issuanceissue of such permissible securities to domestic investors.investors under the applicable laws.
A permissible holder i.e. holder of DRs (including its beneficial owner) excludes an Indian and a non – resident Indian (‘NRI’), which is over and above the requirements of the DR Scheme. However, the SEBI through its circular dated December 18, 2020, has permitted the issuance of DRs to NRIs, pursuant to: (a) share based employee benefit schemes which are implemented by a company in terms of SEBI (Share Based Employee Benefits) Regulations 2014, (b) a bonus issue or (c) a rights issue. In terms of the DR Scheme, while the foreign depository is entitled to exercise of voting rights on the shares underlying the DRs could be dealt with contractually under the deposit agreement, if such voting rights were not exercisable by the DR holders, the shares would not be counted towards minimum public shareholding requirements. However, as per the Current DR framework, listed company shall ensure that the agreement entered between the holder of DRs, the listed company and the Depository provides that the voting rights on permissible securities, if any, associated withshall be exercised by the underlying securities whetherDR holder through the Foreign Depository pursuant to voting instructionsinstruction only from such DR holder. The SEBI circular issued on October 1, 2020 requires listed companies to appoint one of the holderIndian Depository as the “Designated Depository” for the purpose of depository receiptsmonitoring of limits in respect of DRs. A listed company issuing DRs is also required to ensure compliance with extant laws including compliance with the minimum public shareholding requirements and limits on foreign investment holding under the FEMA. As regards pricing, the current framework provides that the pricing of DR issuances would have to be undertaken at a minimum price equivalent to the price determined for corresponding mode of issue to domestic investors. The summary provided above is based on laws applicable as on March 31, 2021 and is not intended to constitute a complete analysis of all laws applicable to the Company and its securities or otherwise. Further, a holder of depository receiptssubstitute for professional legal advice. Listed Company shall ensure that DRs are issued againstonly with Permissible Securities as the underlying i.e. equity shares shall haveand debt securities, which are in dematerialized form and rank pari passu with the securities issued and listed on a Recognized Stock Exchange. Where Permissible Securities are issued by a Listed Company or ‘transferred by the existing holders ’, for the purpose of issue of DRs by the Foreign Depository, the same obligations as if it wereshall be issued at a price, not less than the holderprice applicable to a corresponding mode of issue of such Permissible Securities to domestic investors under the equity shares if it hasapplicable laws.Where Permissible Securities are issued by a Listed Company or ‘transferred by the rightexisting holders ’, for the purpose of issue of DRs by the Foreign Depository, the same shall be issued at a price, not less than the price applicable to a corresponding mode of issue voting instruction.of such Permissible Securities to domestic investors under the applicable laws. Restrictions on Redemption of ADSs, Sale of the Equity Shares Underlying the ADSs and the Repatriation of Sale Proceeds Anon-resident holder of the ADSs may transfer such ADSs, or request that the overseas depositary bank redeem such ADSs. Anon-resident holder of ADSADSs can transfer or redeem the ADSADSs into underlying equity shares of the company subject to the procedures specified under the DR Scheme. In the case of redemption, the overseas depositary bank will request the domestic custodian bank to release the corresponding underlying shares in favor of thenon-resident investor for being sold directly on behalf of thenon- resident investor, or being transferred in the books of account of the company in the name of thenon-resident. Foreign investors holding ADSADSs or equity shares equal to or more than 25.0% of the company’s total equity capital/voting rights may be required to make a public announcement of offer to the remaining shareholders of the company under the Takeover Code, on any further acquisition of equity capital/voting rights or ADSADSs equal to or more than 25.0%5.0% by the foreign investor. Investors who seek to sell any equity shares in India withdrawn from the depositary facility and to convert the Rupee proceeds from the sale into foreign currency and repatriate the foreign currency from India will also be subject to certain exchange control restrictions on the conversion of Rupees into dollars.
Fungibility of ADSs As per the directions issued by the Ministry of Finance in coordination with RBI on thetwo-way fungibility of ADSs, an ADSADSs holder who has redeemed the ADSADSs into underlying equity shares and has sold it in the Indian Market is permitted to purchase to that extent, through a registered stock broker in India, shares of an Indian company for the purposes of converting the same into ADSs, subject, inter alia, to the following conditions: theThe shares of the Indian company are purchased on a recognized stock exchange in India; theThe shares are purchased with the permission of the domestic custodian for the ADSs issued by the Indian company and such shares are deposited with the custodian after purchase; theThe custodian agreement is amended to enable the custodian to accept shares from entities other than the company; theThe number of shares of the Indian company so purchased does not exceed the head room which is equivalent to the difference between numbers of ADSADSs originally issued and number of ADSADSs outstanding, as further adjusted for ADSADSs redeemed into underlying shares and registered in the name of thenon-resident investor (and is further subject to specified sectoral caps); and complianceCompliance with the provisions of the ADRADRs Scheme and the guidelines issued thereunder. Further, the amendment to the regulations permit an issuer in India to sponsor the issue of ADSs through an overseas depositary against underlying equity shares accepted from holders of its equity shares in India for offering outside of India. The sponsored issue of ADSs is possible only if the following conditions are satisfied: theThe price of the offering is determined by the lead manager of the offering. The price shall not be less than the average of the weekly high and low prices of the shares of the company during the 2 weeks preceding the relevant date (i.e. the date on which the board of directors of the company decides to open the issue); the ADSThe ADSs offering is approved by the relevant authorities; the ADSThe ADSs offering is approved by a special resolution of the shareholders of the issuer in a general meeting; theThe facility is made available to all the equity shareholders of the issuer; theThe proceeds of the offering are repatriated into India within 1 month of the closing of the offering; theThe sales of the existing equity shares are made in compliance with the foreign direct investment policy in India; theThe number of shares offered by selling shareholders are subject to limits in proportion to the existing holdings of the selling shareholders when the offer is oversubscribed; and the offeringThe issue related expenses do not exceedexceeding 7.0% of the public offering proceeds andwould require RBI approval. The issue expenses are paid by shareholders on apro-rata basis. The issuer is also required to furnish a report to the RBI specifying the details of the offering, including the amount raised through the offering, the number of ADSs issued, the underlying shares offered and the percentage of equity in the issuer represented by the ADSs. Corporate Actions The ADSADSs holders are entitled to receive the benefits of corporate actions such as bonus, split and dividend in proportion to the number of equity shares represented by the ADS. The benefits are subject to the terms and conditions of the FEMA regulations and the offer documents of ADSADSs issue. Buyback of ADSADSs Shares issued under the ADRADRs Scheme represented by the ADS,ADSs, are eligible for participation in a buyback scheme, if any, announced by us. In the event that we decide to implement the buyback scheme for ADSADSs holders, the option form for the buyback scheme will be distributed to the ADSADSs custodian who will submit the same to the overseas depository. ADSADSs holders who wish to participate in the buyback scheme may exercise the buyback option by converting the ADSADSs into ordinary equity shares and surrendering those shares to the company under the buyback scheme. Transfer of Shares The RBI has now granted general permission to personsperson’s resident outside India to transfer shares and convertible debentures held by them to an Indian resident, subject to compliance with certain terms and conditions (including pricing norms) and reporting requirements. A resident who wishes to purchase shares from anon-resident must, pursuant to the relevant notice requirements, file a declaration with an authorized dealer in the prescribed FormFC-TRS within 60 days from the date of receipt of the amount of consideration, together with the relevant documents and file an acknowledgment thereof with the Indian company to effect transfer of the shares. Anon-resident may also transfer any security to a person resident in India by way of gift. The transfer of shares from an Indian resident to anon-resident does not require the prior approval of the GoI or the RBI if the activities of the investee company are under the automatic route pursuant to the FDI Policy and are not under the specified financial services sector, thenon-resident shareholding is within sector limits under the FDI policy and the pricing is in accordance with the guidelines prescribed by SEBI and the RBI. Anon-resident of India is generally permitted to sell equity shares underlying the ADSs held by him to any othernon-resident of India without the prior approval of the RBI. The RBI has granted general permission for the transfer of shares by a person resident outside India to a person resident in India, subject to compliance with certain pricing norms and reporting requirements. Other than mutual funds that may purchase ADSs subject to terms and conditions specified by the RBI and employees in connection with stock options, a person resident in India is not permitted to hold ADSs of an Indian company. An ADSADSs holder is permitted to surrender the ADSs held by him in an Indian company and to receive the underlying equity shares under the terms of the deposit agreement. E. Taxation India Taxation The following is a summary of the material Indian income tax, stamp duty and estate duty consequences of the purchase, ownership and disposal of the ADSs and the equity shares underlying the ADSs fornon-resident investors of the ADSs. The summary only addresses the tax consequences fornon-resident investors who hold the ADSs or the equity shares underlying the ADSs as capital assets and does not address the tax consequences which may be relevant to other classes ofnon-resident investors, including dealers. The summary proceeds on the basis that the investor continues to remain anon-resident when the income by way of dividends and capital gains are earned. The summary is based on Indian tax laws and relevant interpretations thereof as are in force as of the date of this Annual Report, including the Income Tax Act and the special tax regimes under Sections 115AC of the Income Tax Act read with the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, as amended, which provides for the taxation of persons resident in India on their global income and persons not resident in India on income received, accruing or arising in India or deemed to have been received, accrued or arisen in India, and is subject to change. The Finance Act 2013 has includedhad introduced General Anti Avoidance Rule (“GAAR”), wherein the tax authority may declare an arrangement as an impermissible avoidance arrangement if an arrangement is not entered at arm’s length, results in misuse/abuse of provisions of Income Tax Act, 1961, lacks commercial substance or the purpose of arrangement is obtaining a tax benefit. If any of our transactions are found to be ‘impermissible avoidance arrangements’ under GAAR, our business may be affected. The GAAR was originally proposed to become effective from April 1, 2013. Thereafter, a panel was formed to study the proposed GAAR, and make suitable recommendations. In September 2013, the GoI notified rules regarding the applicability of GAAR provisions. In the Finance Act 2015 it iswas proposed that the implementation of GAAR be deferred by two years and GAAR provisions bewere made applicable to the income of fiscal year 2018 and subsequent years by an amendment of the Income Tax Act. Further, investments made up to March 31, 2017 are protected from the applicability of the GAAR amendment in the relevant rules in this regard. This summary is not intended to constitute a complete analysis of all the tax consequences for anon-resident investor under Indian law in relation to the acquisition, ownership and disposal of the ADSs or the equity shares underlying the ADSs and does not deal with all possible tax consequences relating to an investment in the equity shares and ADSs, such as the tax consequences under state, local and other (for example,non-Indian) tax laws. Residence For the purpose of the Income Tax Act, an individual is considered to be a resident of India during fiscal year if he is in India for at least 182 days in a particular year or at least 60 days in a particular year and for a period or periods aggregating at least 365 days in the preceding 4 years. However, the 60 days period shall be read as 182 days in the case of (i) a citizen of India who leaves India in the previous year for employment outside India, or (ii) a citizen of India or a person of Indian origin living abroad who visits India. Previously, a company was considered to be resident in India if it was incorporated in India or the control and management of its affairs is situated wholly in India during the relevant fiscal year. However, the Finance Act 2015 changed the criteria for deciding the residential status of a company in India by stating that the place of effective management of a company would be the critical factor for such determination. Individuals and companies who are not residents of India based on the above mentioned criteria are treated asnon-residents. In the Finance Act 2016, place of effective management compliance has been deferred by one year. The new requirements have been made applicable from assessment year2017-18. The Indian Income Tax department has further clarified that guidelines regarding the place of effective management shall not be applicable to companies having turnover of Rs.500₹ 500 million or less in a financial year. Taxation of Sale of the ADSs It is unclear whether capital gains derived from the sale by anon-resident investor of rights in respect of ADSs will be subject to tax liability in India. This will depend on the view taken by Indian tax authorities on the position with respect to the situs of the rights being transferred in respect of the ADSs. The Finance Act, 2012 retrospectively amended the term “property” so as to include any rights in or in relation to an Indian company. Therefore, situs of right in respect of ADSs may be considered as situated in India. Nevertheless, under the ADRADRs Scheme and as per section 47(viia) of theIncome-tax Act, the transfer of ADSs outside India by anon-resident holder to anothernon-resident does not give rise to any capital gain tax in India. Under the ADRADRs Scheme, conversion of ADSs into equity shares shall not give rise to any capital gain tax in India. ADSs are considered as long-term capital assets if they are held for a period of more than 36 months otherwise they are considered as short-term capital assets. Section 115AC of the Income Tax Act provides that income by way of long-term capital gains arising from the transfer of ADSs by thenon-resident holder is taxed at the rate of 10.0% plus applicable surcharge and education cess; short term capital gains on such a transfer is taxed at the rate of 30.0% (40.0% in case of a foreign company) plus applicable surcharge and education cess. Because there are significant intricacies relating to application of rules on indirect transfers, it is not clear, whether or to what extent, a buyer of ADSADSs of the company should be held liable for not withholding tax on the acquisition of shares or be subject to Indian tax on gains realized on disposition of ADS. However, thenon-resident investor may examine exemption, if any available to him, from such taxation under the relevant Double Taxation Agreement between India and country of his residence. The incidence of capital gains and the period of holding, in the event ADSs are converted into shares and the shares are sold within a period of 36 months, may be checked with the tax counsels. Taxation of Dividends The Finance Act 2020 has repealed the DDT. Dividend received will be taxable in the hands of recipient. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates effective from April 1, 2020. Dividends paid prior to April 1, 2020 to non-resident holders of ADSs are not presently subject to tax in the hands of the recipient. However, the company that is distributing the dividend was liable to pay a “dividend distribution tax”“DDT” at the rate of 15.0% (on a gross basis) plus a surcharge of 10.0% and an education cess at the rate of 3.0%. According to the Finance (No. 2) Act, 2014, dividend distribution taxDDT is to be levied on gross distributable surplus amount instead of amount paid net of taxes. This resulted in an increase in the dividend distribution taxDDT to more than 20%20.0%, from 16.995% in the earlier years which was applicable to the dividends declared, distributed or paid on or after October 1, 2014. According to the Finance Act 2015, the surcharge on dividend tax has increased from 10%10.0% to 12%12.0%, and the effective dividend distribution taxDDT rate is 20.35% with effect from April 1, 2016. The Finance Act, 2018 increased the rate of cess from 3.0% to 4.0% which will result in an effective DDT rate of 20.6% from April 1, 2018. Under Section 115O(1A) of the Income Tax Act 1961, an Indian company, subject to certain conditions, can set off the dividend income received from its subsidiaries against the amount of dividend declared and distributed by it to its shareholders, therefore reducing the dividend distribution taxDDT to the extent of suchset-off. Any distribution of additional ADSADSs or equity shares to resident ornon-resident shareholders will not be subject to any Indian tax. Further, the Finance Act 2016 has provided that any income earned by an individual, Hindu Undivided Family (HUF) or a firm, who is a resident in India, by way of dividend declared, distributed or paid by any domestic company in excess of Rs.1, 000,000₹ 1,000,000 in aggregate shall be chargeable to tax at the rate of 10.0% on gross basis on such amount exceeding Rs.1,000,000₹ 1,000,000. With the introduction of Finance Act 2017, this provision will be applicable only to specified assessees (specified assessee means a person other than domestic company, charitable trusts registered under section 12 A or 10 (23C) of the Finance Act 2017). Taxation of Sale of the Equity Shares Sale of equity shares by any holder may occasion certain incidence of tax in India, as discussed below. Under applicable law, the sale of equity shares may be subject to a transaction tax and/or tax on income by way of capital gains. Capital gains accruing to anon-resident investor on the sale of the equity shares, whether to an Indian resident or to a person resident outside India and whether in India or outside India, may be subject to Indian capital gains tax in certain instances as described below. Sale of the Equity Shares on a Recognized Stock Exchange Shares listed on recognized stock exchange in India issued on conversion of the ADSs held by thenon-resident investor for a period of more than 12 months is treated as long term capital assets, otherwise they are considered as short term capital asset. Unlisted shares are treated as long-term capital assets, if they are held for more than 24 months, otherwise they are treated as short-term capital assets. Subject to the following, long-term capital gains realized by anon-resident upon the sale of equity shares obtained on conversion of ADSs are subject to tax at a rate of 10.0% along with the applicable surcharge and education cess; and short-term capital gains on such a transfer will be taxed at the rate of tax applicable to the seller; Long-term capital gain realized by anon-resident upon the sale of equity shares obtained on conversion of ADSs is exempt from tax if the sale of such shares is made on a recognized stock exchange and Securities Transaction Tax, or STT (described below) is paid;paid. However, the Finance Act 2018 effective from fiscal year 2018-19, has removed this exemption and long-term capital gain on sale of listed shares, on which STT is paid, is also taxable at 10.0% and Any short term capital gain is taxed at 15.0% along with the applicable surcharge and education cess, if the sale of such equity shares is settled on a recognized stock exchange and STT is paid on such sale. In accordance with applicable Indian tax laws, any income arising from a sale of the equity shares of an Indian company through a recognized stock exchange in India is subject to a securities transaction tax. Such tax is payable by a person irrespective of residential status and is collected by the recognized stock exchange in India on which the sale of the equity shares is effected.affected. Withholding tax on capital gains on sale of shares tonon-resident is required to be deducted under Section 195 of the Income Tax Act at the prescribed rates. For the purpose of computing capital gains on the sale of equity shares, the sale consideration received or accruing on such sale shall be reduced by the cost of acquisition of such equity shares and any expenditure incurred wholly and exclusively in connection with such sale. Under the Issue of Foreign Currency Convertible Bonds and Ordinary Shares (Through Depository Receipt Mechanism) Scheme, 1993, or Scheme, the purchase price of equity shares in India listed company received in exchange for ADSs will be the market price of the underlying shares on the date that the depositary gives notice to the custodian of the delivery of equity shares in exchange for such corresponding ADSs. The market price is the price of the equity shares prevailing in the BSE or the NSE as applicable. There is no corresponding provision under the Income Tax Act providing for the use of market price as the basis for determination of the purchase price of the equity shares. In the event that the tax department denies the use of market price as the basis for determination of the purchase price of the equity shares, the original purchase price of the ADSs shall be considered as the purchase price of the equity shares for computing the capital gains tax. According to the Scheme, anon-resident’s holding period for the purpose of determining the applicable capital gains tax rate relating to equity shares received in exchange for ADSs commences on the date of notice of redemption by the depositary to the custodian. Securities Transaction Tax Since October 1, 2004, with respect to a sale and purchase of equity shares entered into on a recognized stock exchange, (i) both the buyer and seller are required to pay a Securities Transaction Tax (STT) at the rate of 0.1% of the transaction value of the securities, if the transaction is a delivery based transaction, i.e. the transaction involves actual delivery or transfer of shares; the rate of 0.1% has been substituted for 0.125% by the Finance Act, 2012 with effect from July 1, 2012. (ii) the seller of the shares is required to pay a STT at the rate of 0.025% of the transaction value of the securities if the transaction is anon-delivery based transaction, i.e. a transaction settled without taking delivery of the shares. STT is levied with respect to a sale and purchase of a derivative and the rates of STT as amended by Finance Act, 2013 with effect from June 1, 2013 is as follows: (i) in case of sale of an option in securities, the seller is required to pay an STT at the rate of 0.017% of the option premium; (ii) in case of a sale of an option in securities, where the option is exercised, the buyer is required to pay a STT at the rate of 0.125% of the settlement price; and (iii) in case of sale of futures in securities, the seller is required to pay STT at 0.017% on transaction value. This rate of 0.017% changed to 0.01% under the Finance Act, 2013. Capital Losses The losses arising from a transfer of a capital asset in India can only be set off against capital gains and not against any other income in accordance with the Income Tax Act. A long-term capital loss may be set off only against a long-term capital gain. To the extent the losses are not absorbed in the year of transfer, they may be carried forward for a period of 8eight years immediately succeeding the year for which the loss was first computed and may be set off against the long-term capital gains assessable for such subsequent years. In order to get the benefit ofset-off of the capital losses in this manner, thenon-resident investor must file appropriate and timely tax returns in India. Tax Treaties The above mentioned tax rates and the consequent taxation are subject to any benefits available to anon-resident investor under the provisions of any agreement for the avoidance of double taxation entered into by the GoI with the country of tax residence of suchnon-resident investor. The investors are advised to consult their tax advisors the residential status for the purpose of treaty benefits in the event the investments are made through special purpose vehicle in an overseas jurisdiction. Withholding Tax on Capital Gains Any taxable gain realized by anon-resident from the sale of ADSs shall be subject to withholding tax of 10.0% at source and withheld by the buyer. However, no withholding tax is required to be withheld under Section 196D-(2) of the Income Tax Act from any income accruing to a FII as defined in Section 115AD of the Income Tax Act on the transfer of securities. The FII is required to pay the tax on its own behalf. Buy-Back of Securities Indian companies are not subject to tax on thebuy-back of their equity shares which are listed on a stock exchange. However, such shareholders will be taxed on the resulting gains from the sharebuy-back. We would be required to withhold tax at source in proportion to the capital gains tax liability of our shareholders. Stamp Duty Upon the issuance of the equity shares underlying the ADSs, we are required to pay a stamp duty for each equity share equal to 0.1% of the issue price. Under Indian stamp law, no stamp duty is payable on the acquisition or transfer of equity shares in book-entry form. However, a sale of equity shares by anon-resident holder will be subject to Indian stamp duty at the rate of 0.25% on the market value of equity shares on the trade date, although such duty is customarily borne by the transferee. A transfer of ADSs is not subject to Indian stamp duty. Wealth Tax, Gift Tax and Inheritance Tax
The holding of ADSs bynon-resident investors and the holding of the equity underlying shares by the depositary in a fiduciary capacity is exempt from payment of wealth tax. Further, there is no tax on gifts and inheritances which applies to the ADSs, or the equity shares underlying the ADSs. The Finance Act 2015 has abolished the levy of wealth tax under theWealth-tax Act, 1957 with effect from April 1, 2015.
Service Tax Prior to July 1,Till June 30, 2017, brokerage or commission fees paid to stockbrokers in connection with the sale or purchase of equity shares were subject to an Indian service tax at the effective tax rate of 12.36%15.0% (including cessSwachh Bharat Cess of 3.0%)0.5% and Krishi Kalyan Cess of 0.5% of taxable value) collected by the stockbroker (from February 24, 2009 to March 31, 2012 service tax was 10.3%).stockbroker. Further, pursuant to Section 65(101) of the Finance Act (2 of the 2004) asub-broker was also subject to this service tax. The Finance Act 2015 increased theWith effect from July 1, 2017, service tax rate from 12.36% to 14% effective from June 1, 2015. The ‘Education Cess’ and ‘Secondary and Higher Education Cess’ werewas subsumed in the revised rate of service tax of 14.0%. In addition to service tax, the GoI further levied Swachh Bharat Cess at the rate of 0.50% on the value of taxable services effective from November 15, 2015.The Finance Act 2016 further levied Krishi Kalyan Cess at the rate of 0.50% on the value of taxable services effective from June 1, 2016.under GST.
Goods and Service Tax (GST) With effect from July 1, 2017, service tax was subsumed under GST. Swachh Bharat Cess and Krishi Kalyan Cess were abolished. Therefore, brokerage or commission fees paid to stockbrokers in connection with the sale or purchase of equity shares became subject to GST at the rate of 18.0% andsub-brokers also became subject to GST at the same rate. Further, as a result of the Taxation Law Amendment Act, 2017- “Education Cess”, “Secondary Higher Education Cess”, “Swatch Bharat Cess” and “Krishi Kalyan Cess” has been abolished. Minimum Alternate Tax The Income Tax Act imposes a Minimum Alternate Tax on companies wherein the income tax payable on the total income is less than 18.5% of its book profit. The Minimum Alternate TaxMAT is payable at the rate of 18.5% plus applicable surcharge and cess. The Finance Act 2013 increased the surcharge on income of domestic companies having taxable income above Rs.₹ 100 million ($ 1.51 million) from 5.0% to 10.0% which resulted in the increase in the effective Minimum Alternate TaxMAT rate for such companies from 20.01% to 20.96%. The Finance Act, 2015 has increased the surcharge to 12%12.0% which resulted in an increase in the effective Minimum Alternate TaxMAT rate for such companies to 21.34%. which has been increased to 21.5% from April 1, 2018. Amounts paid as Minimum Alternate TaxMAT may be applied towards regular income taxes payable in any of the succeeding 15 years (as amended by the Finance Act 2017) subject to certain conditions. The manner of computing the Minimum Alternate TaxMAT which can be claimed as a credit is specified in the Income Tax Act. The Finance Act, 2007, included income eligible for deductions under section 10A and 10B of the Act in the computation of book profits for the levy of Minimum Alternate Tax,MAT, and determined that Minimum Alternate TaxMAT is payable on income which falls within the ambit of section 10A and 10B of the Act. The Amendment Act 2019, reduced MAT base tax rate from 18.5% to 15% plus applicable surcharge and cess. The effective MAT rate for all Indian Company for fiscal year 2019, 2020 and 2021 would be 21.55%, 17.47% and 17.47% respectively. Further, companies opting for concessional tax regime (as explained above) would not be required to pay MAT. For non-resident foreign company’s effective MAT rate as per the Tax Amendment Act 2019 reduced from 20.01% to 16.38% of the book profit. Tax Credit Anon-resident investor may be entitled to a tax credit with respect to any withholding tax paid by us or any other person for suchnon-resident investor’s account in accordance with the applicable laws of the applicable jurisdiction. United States Federal Income Taxation The following discussion describes certain material United States federal income tax consequences to US Holders (defined below) under present law of an investment in the ADSs or equity shares. This summary applies only to investors that hold the ADSs or equity shares as capital assets (generally, property held for investment) and that have the US dollar as their functional currency. This discussion is based on the United States Internal Revenue Code of 1986, as amended, as in effect on the date of this Annual Report and on United States Treasury regulations in effect or, in some cases, proposed, as of the date of this Annual Report, as well as judicial and administrative interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could apply retroactively and could affect the tax consequences described below. The summary below does not discuss certain United States federal tax consequences that may be relevant to a particular US Holder’s particular circumstances, such as Medicare contribution tax on net investment income. The following discussion neither deals with the tax consequences to any particular investor nor describes all of the tax consequences applicable to persons in special tax situations such as: certain financial institutions; regulated investment companies; real estate investment trusts ;trusts; United States expatriates; traders that elect to use themark-to-market method of accounting; persons liable for the alternative minimum tax; persons holding an ADSADSs or equity share as part of a straddle, hedging, conversion or integrated transaction; persons that actually or constructively own 10.0% or more of theour stock, by total combined voting power of all classes of our voting stock;or by value; persons subject to special tax accounting rules as a result of any item of gross income with respect to our ADSs or equity shares being taken into account in an applicable financial statement; persons who acquired ADSs or equity shares pursuant to the exercise of any employee share option or otherwise as compensation; or persons holding ADSs or equity shares through partnerships or other pass-through entities. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS ABOUT THE APPLICATION OF THE UNITED STATES FEDERAL TAX RULES TO THEIR PARTICULAR CIRCUMSTANCES AS WELL AS THE STATE AND LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES TO THEM OF THE OWNERSHIP AND DISPOSITION OF ADSs OR EQUITY SHARES. The discussion below of the United States federal income tax consequences to “US Holders” will apply to you if you are a beneficial owner of ADSs or equity shares and you are, for United States federal income tax purposes,purposes; an individual who is a citizen or resident of the United States; a corporation (or other entity taxable as a corporation for United states federal income tax purposes) created or organized in the United States or under the laws of the United States, any State thereof or the District of Columbia; an estate, the income of which is subject to United States federal income taxation regardless of its source; or a trust that (1) is subject to the primary supervision of a Court within the United States and the control of one or more United States persons for all substantial decisions of the trust or (2) was in existence on August 20, 1996, was treated as a domestic trust on the previous day and has a valid election in effect under the applicable United States Treasury regulations to be treated as a United States person. If an entity or arrangement treated as a partnership for United States federal income tax purposes holds ADSs or equity shares, the tax treatment of a partner will generally depend upon the status and the activities of the partnership. A US Holder that is a partner in a partnership holding ADSs or equity shares is urged to consult its tax advisor. The discussion below assumes that the representations contained in the deposit agreement are true and that the obligations in the deposit agreement and any related agreement will be complied with in accordance with their terms. If you hold ADSs, you should be treated as the holder of the underlying equity shares represented by those ADSs for United States federal income tax purposes. The United States Treasury has expressed concerns that parties to whom ADSs arepre-released may be taking actions that are inconsistent with the claiming, by US Holders of ADSs, of foreign tax credits for United States federal income tax purposes. Such actions would also be inconsistent with the claiming of the reduced rate of tax applicable to dividends received by certainnon-corporate US Holders, as described below. Accordingly, the availability of foreign tax credits or the reduced tax rate for dividends received by certainnon-corporate US Holders could be affected by future actions that may be taken by the United States Treasury or parties to whom ADSs arepre-released. Taxation of Dividends and Other Distributions on the ADSs or Equity Shares Subject to the PFIC rules discussed below, the gross amount of any distributions we make to you with respect to the ADSs or equity shares (including the amount of any Indian taxes withheld therefrom, if any) generally will be includible in your gross income as foreign source dividend income on the date of receipt by the depository, in the case of ADSs, or by you, in the case of equity shares, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under United States federal income tax principles). Any such dividends will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from other United States corporations. To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under United States federal income tax principles), such excess amount will be treated first as atax-free return of your tax basis in your ADSs or equity shares, and then, to the extent such excess amount exceeds your tax basis in your ADSs or equity shares, as capital gain. However, we currently do not, and we do not intend to calculate our earnings and profits under United States federal income tax principles. Therefore, a US Holder should expect that any distribution will generally be reported as a dividend even if that distribution would otherwise be treated as anon-taxable return of capital or as capital gain under the rules described above. With respect to certainnon-corporate US Holders, including individual US Holders, dividends may be taxed at the lower applicable capital gains rate applicable to “qualified dividend income”, provided that (1) the ADSs or equity shares, as applicable, are readily tradable on an established securities market in the United States or we are eligible for the benefits of the United States-India income tax treaty (the “Treaty”), (2) we are neither a PFIC nor treated as such with respect to you (as discussed below) for the taxable year in which the dividend is paid or the preceding taxable year, and (3) the equity shares are held for a holding period of more than 60 days during the 121 – day period beginning 60 days before theex-dividend date. Under US Internal Revenue Service authority, equity shares or ADSs representing such shares, are considered for the purpose of clause (1) above to be readily tradable on an established securities market in the United States if they are listed on the NYSE, as our ADSs currently are. You should consult your tax advisors regarding the availability of the lower capital gains rate applicable to qualified dividend income for any dividends paid with respect to our ADSs or equity shares. Any dividends will constitute foreign source income for foreign tax credit limitation purposes. Subject to certain complex conditions and limitations, Indian taxes withheld on any dividends may be eligible for credit against a U.S. Holder’s federal income tax liability. If a refund of the tax withheld is available under the laws of India or if the tax withheld exceeds the amount applicable under the Treaty, the amount of tax withheld that is refundable or that represents the excess portion will not be eligible for such credit against a U.S. Holder’s U.S. federal income tax liability (and will not be eligible for the deduction against U.S. federal taxable income). If the dividends are taxed as qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation will in general be limited to the gross amount of the dividend, multiplied by the reduced tax rate applicable to qualified dividend income and divided by the highest tax rate normally applicable to dividends. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, any dividends distributed by us with respect to ADSs or equity shares will generally constitute “passive category income” but could, in the case of certain US Holders, constitute “general category income.” A US Holder may not be able to claim a foreign tax credit for any Indian taxes imposed with respect to dividend distribution taxes on ADSs or equity shares (as discussed under “- India Taxation—Taxation of Dividends”). The rules relating to the determination of the foreign tax credit are complex and US Holders should consult their tax advisors to determine whether and to what extent a credit would be available in their particular circumstances, including the effects of any applicable income tax treaties. Taxation of a Disposition of ADSs or Equity Shares Subject to the PFIC rules discussed below, upon a sale or other disposition of ADSs or equity shares, a US Holder will generally recognize a capital gain or loss for United States federal income tax purposes in an amount equal to the difference between the amount realized for the ADSADSs or equity share and such US Holder’s tax basis in such ADSs and equity shares. Any such gain or loss will be treated as long-term capital gain or loss if the US Holder’s holding period in the ADSs and equity shares at the time of the disposition exceeds one year. Long-term capital gain of individual US Holders generally will be subject to United States federal income tax at reduced tax rates. The deductibility of capital losses is subject to limitations. Any such gain or loss that you recognize generally will be treated as United States source income or loss for foreign tax credit limitation purposes. Because gains generally will be treated as United States source gain, as a result of the United States foreign tax credit limitation, any Indian income tax imposed upon capital gains in respect of ADSs or equity shares (as discussed under “— “India Taxation —– Taxation of Sale of the ADSs” “—, “India Taxation—Taxation – Taxation of Sale of the Equity Shares,” “—“India Taxation—Taxation – Sale of the Equity Shares on a Recognized Stock Exchange,” “—“India Taxation—Taxation – Sale of the Equity Shares otherwise than on a Recognized Stock Exchange”Exchange” and “—“IndiaTaxation— Taxation – Buy-Back of Securities”Securities”) may not be currently creditable unless a US Holder has other foreign source income for the year in the appropriate United States foreign tax credit limitation basket. US Holders should consult their tax advisors regarding the application of Indian taxes to a disposition of an ADSADSs or equity share and their ability to credit an Indian tax against their United States federal income tax liability. Passive Foreign Investment Company Based on the market prices of our equity shares and ADSs and the composition of our income and assets, including goodwill, although not clear, we do not believe we were a PFIC for United States federal income tax purposes for our taxable year ended March 31, 2017.2021. However, the application of the PFIC rules is subject to uncertainty in several respects and, therefore, the US Internal Revenue Service may assert that, contrary to our belief, we were a PFIC for such taxable year. Moreover, although the asset test (defined below) is required to be calculated based on the fair market value of our assets, we did not do a valuation of our assets and our belief that we were not a PFIC for our taxable year ended March 31, 20172021 is, in part, based on the book value of our assets. In addition, we must make a separate determination each taxable year as to whether we are a PFIC (after the close of each taxable year). Accordingly, we cannot assure you we will not be a PFIC for the taxable year ending on March 31, 20172022 or any future taxable year. Anon-United States corporation will be a PFIC for United States federal income tax purposes for any taxable year if, applying certain look-through rules either: at least 75.0% of its gross income for such taxable year is passive income, or at least 50.0% of the total value of its assets (based on an average of the quarterly values of the assets during such year) is attributable to assets, including cash, that produce passive income or are held for the production of passive income (the asset test). For this purpose, we will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, 25.0% (by value) of the stock. A separate determination must be made after the close of each taxable year as to whether we were a PFIC for that year. Because the value of our assets for purposes of the PFIC test will generally be determined by reference to the market price of our equity shares and ADSs, which has historically been volatile, fluctuations in the market price of our equity shares and ADSs may cause us to become a PFIC. In addition, changes in the composition of our income or assets may cause us to become a PFIC. Our market capitalization was volatile during the year ended March 31, 2017, in particular at the beginning, which added greater uncertainty and increased the risk of becoming a PFIC. While we still believe we were not a PFIC for our taxable year ended March 31, 2021, there is no guarantee that the U.S. Internal Revenue service would agree such on position. If we are a PFIC for any taxable year during which you hold ADSs or equity shares, we generally will continue to be treated as a PFIC with respect to you for all succeeding years during which you hold our equity shares or ADSs, unless we cease to be a PFIC and you make a “deemed sale” election with respect to the equity shares or ADSs. If such election is timely made, you will be deemed to have sold the ADSs and equity shares you hold at their fair market value on the last day of the last taxable year in which we qualified as a PFIC and any gain from such deemed sale would be subject to the consequences described in the following two paragraphs. In addition, a new holding period would be deemed to begin for the equity shares and ADSs for purposes of the PFIC rules. After the deemed sale election, your equity shares or ADSs with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless we subsequently become a PFIC. For each taxable year that we are treated as a PFIC with respect to you, you will be subject to special tax rules with respect to any “excess distribution” that you receive and any gain you recognize from a sale or other disposition (including a deemed sale discussed in the precedent paragraph and a pledge) of the ADSs or equity shares, unless you make a“mark-to-market” “mark-to-market” election as discussed below. Distributions you receive in a taxable year that are greater than 125.0% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the ADSs or equity shares will be treated as an excess distribution. Under these special tax rules: the excess distribution or gain will be allocated ratablyrateably over your holding period for the ADSs or equity shares; the amount allocated to the current taxable year, and any taxable year in your holding period prior to the first taxable year in which we were a PFIC, will be treated as ordinary income; and the amount allocated to each other year will be subject to the highest tax rate in effect for individuals or corporations, as applicable, for each such year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year. In addition,non-corporate US Holders will not be eligible for reduced rates of taxation on any dividends received from us (as described above under “—“Taxation of Dividends and Other Distributions on the ADSs or Equity Shares”Shares”) if we are a PFIC in the taxable year in which such dividends are paid or in the preceding taxable year. The tax liability for amounts allocated to taxable years prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale or other disposition of the ADSs or equity shares cannot be treated as capital, even if you hold the ADSs or equity shares as capital assets. If we are treated as PFIC with respect to you for any taxable year, to the extent any of our subsidiaries are also PFICs or we make direct or indirect equity investments in other entities that are PFICs, you may be deemed to own shares in such lower-tier PFICs that are directly or indirectly owned by us in that proportion which the value of the ADSs and equity shares you own bears to the value of all of the ADSs and equity shares, and you may be subject to the adverse tax consequences described in the preceding two paragraphs with respect to the shares of such lower-tier PFICs that you would be deemed to own. You should consult your tax advisor regarding the applicability of the PFIC rules to any of our PFIC subsidiariessubsidiaries. A US Holder of “marketable stock” (as defined below) in a PFIC may make amark-to-market election for such stock to elect out of the PFIC rules described above regarding excess distributions and recognized gains. If you make a validmark-to-market election for the ADSs or equity shares, you will include in income for each year that we are a PFIC an amount equal to the excess, if any, of the fair market value of the ADSs or equity shares as of the close of your taxable year over your adjusted basis in such ADSs or equity shares. You will be allowed a deduction for the excess, if any, of the adjusted basis of the ADSs or equity shares over their fair market value as of the close of the taxable year. However, deductions are allowable only to the extent of any netmark-to-market gains on the ADSs or equity shares included in your income for prior taxable years. Amounts included in your income under amark-to-market election, as well as gain on the actual sale or other disposition of the ADSs or equity shares will be treated as ordinary income. Ordinary loss treatment will also apply to the deductible portion of anymark-to-market loss on the ADSs or equity shares, as well as to any loss realized on the actual sale or other disposition of the ADSs or equity shares, to the extent that the amount of such loss does not exceed the netmark-to-market gains previously included for such ADSs or equity shares. Your basis in the ADSs or equity shares will be adjusted to reflect any such income or loss amounts. If you make amark-to-market election, any distributions that we make would generally be subject to the tax rules discussed above under “ – Taxation of Dividends and Other Distributions on the ADSs or Equity Shares”, except that the lower rate applicable to qualified dividend income (discussed above) would not apply. Themark-to-market election is available only for “marketable stock,”stock”, which is stock that is traded in other thande minimisquantities on at least 15 days during each calendar quarter (“regularly traded”) on a qualified exchange or other market, as defined in the applicable United States Treasury regulations. The NYSE is a qualified exchange. Our ADSs are listed on the NYSE and, consequently, if you are a holder of ADSs and the ADSs are regularly traded, themark-to-market election would be available to you if we become a PFIC. Because amark-to-market election cannot be made for equity interests in any lower-tier PFICs we own, a US Holder may continue to be subject to the PFIC rules with respect to its indirect interest in any investments held by us that are treated as an equity interest in a PFIC for United States federal income tax purposes. You should consult your tax advisors as to the availability and desirability of amark-to-market election, as well as the impact of such election on interests in any lower-tier PFICs. Alternatively, if anon-United States corporation is a PFIC, a holder of shares in that corporation may avoid taxation under the PFIC rules described above regarding excess distributions and recognized gains by making a “qualified electing fund” election to include in income its share of the corporation’s income on a current basis. However, you may make a qualified electing fund election with respect to our ADSs or equity shares only if we agree to furnish you annually with certain tax information, and we currently do not intend to prepare or provide such information. Unless otherwise provided by the United States Treasury, each US Holder of a PFIC is required to file an annual report containing such information as the United States Treasury may require. If we are or become a PFIC, you should consult your tax advisor regarding any reporting requirements that may apply to you. You should consult your tax advisor regarding the application of the PFIC rules to your investment in ADSs or equity shares. Information Reporting and Backup Withholding Any dividend payments with respect to ADSs or equity shares and proceeds from the sale, exchange, redemption or other disposition of ADSs or equity shares may be subject to information reporting to the US Internal Revenue Service and possible United States backup withholding. Backup withholding will not apply, however, to a US Holder who furnishes a correct taxpayer identification number and makes any other required certification or who is otherwise exempt from backup withholding. US Holders who are required to establish their exempt status generally must provide such certification on Internal Revenue Service FormW-9. US Holders should consult their tax advisors regarding the application of the United States information reporting and backup withholding rules. Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your United States federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by timely filing the appropriate claim for refund with the US Internal Revenue Service and furnishing any required information. Additional Reporting Requirements Certain US Holders who are individuals (and certain entities) are required to report information relating to an interest in our ADSs or equity shares, subject to certain exceptions (including an exception for ADSs and equity shares held in accounts maintained by certain financial institutions). US Holders should consult their tax advisors regarding the effect, if any, of these rules on the ownership and disposition of our ADSs or equity shares. F. Dividends and Paying Agents Not applicable G. Statements by Experts Not applicable H. Documents on Display Publicly filed documents concerning our Company which are referred to in this Annual Report may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. Copies of these materials can also be obtained from the Public Reference Room at the SEC’s principal office, 100 F Street, N.E., Washington D.C. 20549, after payment of fees at prescribed rates. The SEC maintains a website atwww.sec.gov that contains reports, proxy and information statements and other information regarding registrants that make electronic filings through its Electronic Data Gathering, Analysis, and Retrieval or (“EDGAR system.system”). We have made all our filings with SEC using the EDGAR system. I. Subsidiary Information Not applicable ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Quantitative and Qualitative Analysis
The Company’s businesses are subject to several risks and uncertainties including commodity price risk and financial risks such as liquidity, foreign currency, interest rate and credit risk. See “Note 23 “Financial Instruments” in the25: Financial Instruments” of Notes to the consolidated financial statementsConsolidated Financial Statements for disclosures on financial instruments and market risk and financial instruments.risk. ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES |
A. Debt Securities Not Applicable.applicable B. Warrants and Rights Not Applicable.applicable C. Other Securities Not Applicable.applicable D. American Depositary Shares Our ADRADRs facility is maintained with Citibank, N.A., or the Depositary, pursuant to a deposit agreement, dated as of September 6, 2013, and renewed until August 31, 2018, among us, our Depositary and the holders and beneficial owners of our ADSs. We use the term “holder” in this discussion to refer to the person in whose name an ADRADRs is registered onin the books of the Depositary. In accordance with the deposit agreement, the Depositary may charge fees up to the amounts described below: | | | | | | | Sl. No. | | Type of Service | | Fees | | Payer | 1.1 | | Issuance of ADSs upon the deposit of ordinary shares (excluding issuances as a result of distributions described in paragraph 4 below). | | Up to $5.00$ 5 per 100 ADSs (or any portion thereof) issued.issued | | Person depositing ordinary shares or person receiving ADSs.ADSs | | | | | 2.2 | | Delivery of Deposited Securities (as defined under the Deposit Agreement) against surrender of ADSs.ADSs | | Up to $5.00$ 5 per 100 ADSs (or any portion thereof) surrendered.surrendered | | Person surrendering ADSs for purpose of withdrawal of Deposited Securities or person to whom Deposited Securities are delivered.delivered | | | | | 3.3 | | Distribution of cash dividends or other cash distributions (i.e. sale of rights and other entitlements). | | Up to $2.00$ 2 per 100 ADSs (or any portion thereof) held.held | | Person to whom distribution is made.made | | | | | 4.4 | | Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs.ADSs | | Up to $5.00$ 5 per 100 ADSs (or any portion thereof) held.held | | Person to whom distribution is made.made | | | | | 5.5 | | Distribution of securities other than ADSs or rights to purchase additional ADSs (i.e.spin-off shares). | | Up to $5.00$ 5 per 100 ADSs (or any portion thereof) held.held | | Person to whom distribution is made.made | | | | | 6.6 | | Depositary services.services | | Up to $2.00$ 2 per 100 ADSs (or any portion thereof) held.held | | Person holding ADSs on applicable record date(s) established by the Depositary.Depositary | | | | | 7.7 | | Transfer of ADRs.ADRs | | Up to $1.50$ 1.5 per certificate presented for transfer.transfer | | Person presenting certificate for transfer.transfer |
In addition, holders or beneficial owners of our ADSs, persons depositing ordinary shares for deposit and persons surrendering ADSs for cancellation and withdrawal of deposited securities will be required to pay the following charges: taxes (including applicable interest and penalties) and other governmental charges; registration fees for the registration of ordinary shares or other deposited securities on the share register and applicable to transfers of ordinary shares or other deposited securities to or from the name of the custodian, the Depositary or any nominees upon the making of deposits and withdrawals; certain cable, telex, facsimile and electronic transmission and delivery expenses; expenses and charges incurred by the Depositary in the conversion of foreign currency; fees and expenses incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs; fees and expenses incurred by the Depositary in connection with the delivery of deposited securities; and fees and expenses incurred by the Depositary, the custodian, or any nominee in connection with the servicing or delivery of deposited securities. In the case of cash distributions, the applicable fees, charges, expenses and taxes will be deducted from the cash being distributed. In the case of distributions other than cash, such as share dividends, the distribution generally will be subject to appropriate adjustments for the deduction of the applicable fees, charges, expenses and taxes. In certain circumstances, the Depositary may dispose of all or a portion of such distribution and distribute the net proceeds of such sale to the holders of ADS, after deduction of applicable fees, charges, expenses and taxes. If the Depositary determines that any distribution in property is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary may withhold the amount required to be withheld and may dispose of all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and appropriate to pay such taxes or charges and the Depositary will distribute the net proceeds of any such sale after deduction of such taxes or charges to the holders of ADSs entitled to the distribution. During fiscal year 2017,2021, the Depositary has not reimbursed to us anany amount of $ 916,669.80 (after deduction of applicable withholding taxes amounting to $ 392,108.49) with respect to investor relations expenses. PART II ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES |
NoneThere has been no material default in the payment of principal or interest.
ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |
ADSADSs offering in 2009
On July 16, 2009, we completed the ADSADSs offering on the NYSE. We sold an aggregate of 131,906,011 ADSs representing 131,906,011 equity shares. The price per ADSADSs was $ 12.15. The joint book runners of the ADSADSs offering were J.P. Morgan Securities Inc. and Morgan Stanley & Co. International plc. The joint book runners exercised their over-allotment option to acquire an additional 8,449,221 ADSs at $ 12.15 per ADS.ADSs. The aggregate price of the offering amount, including the over-allotment option, registered, and sold was $ 1,602.71,603 million. The registration statement on FormF-3 (FileNo. 333-160580) filed by us in connection with the ADSADSs offering was automatically effective on July 15, 2009. The net proceeds from the offering to us, after deducting underwriting discounts and commissions and offering expenses ($ 13.814 million), amounted to $ 1,588.91,589 million. As of March 31, 2014, we have used the entire proceeds for the purpose mentioned in the offer document. Pursuant to theRe-organization Transactions, each holder of the SIIL ADSs, received three Vedanta Limited ADSs for every five existing SIIL ADSs. The total outstanding Vedanta Limited ADSs as of March 31, 20172021 were 54,254,975.40,225,811. ITEM 15. | CONTROLS AND PROCEDURES |
(a) Disclosure Controls and Procedures As required by Rules13a-15 and15d-15 under the Exchange Act, management, including our Chief Executive Officer and our Deputy Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding our required disclosure. Based on the foregoing, ourOur Chief Executive Officer and our Deputy Chief Financial Officer have concluded that, as of March 31, 2017,2021, our disclosure controls and procedures were effective.not effective as a result of the material weaknesses in our internal control over financial reporting as described below.
(b) Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Rule13a-15(f) of the Exchange Act. Internal controls over financial reporting refers to a process designed by, or under the supervision of, our Chief Executive Officer and Deputy Chief Financial Officer and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with IFRS as issued by the IASB. Our internal control over financial reporting 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 our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of our financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our consolidated financial statements. Our management assessed the effectiveness of internal control over financial reporting as of March 31, 20172021 based on the criteria established in Internal Control—Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. As a result of this assessment, management concluded that there were material weaknesses in its internal control over financial reporting, as described below, existed as of March 31, 2017, our2021, and hence, the internal control over financial reporting was not effective as at that date. A material weakness is a deficiency, or combination of deficiencies, in providing reasonable assurance regarding the reliability ofinternal control over financial reporting and the preparationsuch that there is a reasonable possibility that a material misstatement of our annual or interim financial statements for external purposes in accordance with generally accepted accounting principles.will not be prevented or detected on a timely basis. The scope of our management’s assessment of the effectiveness of internal control over financial reporting includes all of our company’s consolidated operations. Our internal controls over financial reporting were ineffective due to the deficiencies related to the design and operation of controls (a) as a result of lack of board policies and procedures related to the authorisation of significant related party transactions, that the subsidiaries of Vedanta Limited undertook. Consequentially, certain subsidiaries of Vedanta Limited granted loans and guarantees to our controlling shareholders and their affiliates, as described in Note 35(b) of the Consolidated Financial Statements, as per the prevailing internal policies and regulations, which did not mandate prior approval of the Board of Vedanta Limited; and (b) over determination of the fair values of financial instruments executed with related parties. As a result, the Company did not appropriately value and record the aforementioned loans and guarantees to its controlling shareholders on a timely basis. Consequently, there was a material error in our interim consolidated financial statements as at and for the six months ended September 30, 2020, which was subsequently rectified in the consolidated financial statements for the year ended March 31, 2021. As part of remediation plan, during the year, we updated our policies and procedures regarding authorisations for such related party transactions which now require that every related party transaction proposed to be undertaken by the subsidiaries outside our Group would need prior approval from the Board and/or the Audit Committee of Vedanta Limited. We are implementing changes to our controls over estimation of the fair values of financial instruments entered into with our related parties, whereby the rationale for every input used in determination of the fair value would need to be documented and reviewed by the management. However, there is no assurance as to when such remediation would be completed. As the remediation plans are or continue to be implemented, management may take additional measures or modify the plan elements described above. Our management recognizes that there are inherent limitations in the effectiveness of any system of internal control over financial reporting, including the possibility of human error and the circumvention or override of internal control. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation and may not prevent or detect all misstatements and can only provide reasonable assurance with respect to the preparation and presentation of our financial statements. The effectiveness of our internal control over financial reporting as at March 31, 20172021 has been audited by S.R. Batliboi & Co. LLP, India, our independent registered public accounting firm, as stated in their report which is reproduced in its entirety in Item 15(c) below: (c) Attestation Report of the Registered Public Accounting Firm REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
TheTo the Shareholders and the Board of Directors and Shareholders of Vedanta Limited
Opinion on Internal Control over Financial Reporting We have audited Vedanta Limited and subsidiaries’ internal control over financial reporting as of March 31, 2017,2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weaknesses identified below on the achievement of the objectives of the control criteria, Vedanta Limited and subsidiaries’subsidiaries (the Company) has not maintained effective internal control over financial reporting as of March 31, 2021, based on the COSO criteria. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses in internal controls have been identified by the Company and included in management’s assessment with respect to deficiencies related to the design and operation of controls (a) as a result of lack of board policies and procedures related to the authorisation of significant related party transactions, that the subsidiaries of Vedanta Limited undertook. Consequentially, certain subsidiaries of Vedanta Limited granted loans and guarantees to its controlling shareholders and their affiliates without a prior approval of the Board of Vedanta Limited since the prevailing internal policies and regulations did not mandate prior approval of the Board of Vedanta Limited; and (b) over determination of the fair values of financial instruments executed with related parties. As a result, the Company did not appropriately value and record the aforementioned loans and guarantees to its controlling shareholders on a timely basis. This resulted in the Company’s interim consolidated financial statements being issued with a material error and the necessary adjustment being recorded subsequently. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of March 31, 2021 and 2020, the related consolidated statements of profit and loss, comprehensive income, cash flows and changes in equity for each of the three years in the period ended March 31, 2021. These material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2021 consolidated financial statements, and this report does not affect our report dated July 19, 2021, which expressed an unqualified opinion thereon. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated statements of financial position of the Company as of March 31, 2021 and 2020 the related consolidated statements of profit and loss, comprehensive income, cash flows and changes in equity for each of the three years in the period ended March 31, 2021, and the related notes and our report dated July 19, 2021, expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’sCompany’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting 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 control over financial reporting 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 authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Vedanta Limited and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of March 31, 2017, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statement of financial position of Vedanta Limited and subsidiaries as of March 31, 2017 and the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for the year ended March 31, 2017 and our report dated August 15, 2017 expressed an unqualified opinion thereon.
/s/ S. R. Batliboi & Co. LLP Gurgaon,Gurugram, India
August 15, 2017July 19, 2021
(d) Changes in Internal Control over Financial Reporting Management has evaluated, with the participation of our Chief Executive Officer and our Deputy Chief Financial Officer, whether any changes in our internal control over financial reporting that occurred during our last fiscal year have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on the evaluation we conducted, except for the remediation efforts described above in respect of the material weaknesses identified, management has concluded that no such changes have occurred in fiscal year 2017.2021. ITEM 16A. | AUDIT COMMITTEE FINANCIAL EXPERT |
The Chairperson of our Audit Committee is Lalita D. Gupte. Ravi Kant and Aman Mehta are the other members of the Audit Committee. Mr. Mehta was appointed as a member to the audit committee on July 12, 2017, replacing Mr. Naresh Chandra who passed away on July 9, 2017.
Each of Messrs. Kant, Mehta and Ms. Gupte satisfy the “independence” requirements pursuant to the rules of the SEC and Rule10A-3 of the Exchange Act.See “Item 6. Directors, Senior Management and Employees—A. Directors and Senior Management” for the experience and qualifications of the members of the Audit Committee.
Our Board has determined that Ms. GupteDindayal Jalan, an independent director and a member of our audit committee (now known as Audit & Risk Management Committee) qualifies as an “audit committee financial expert” within the requirements of the rules promulgated by the SEC relating to audit committees.committee. Dindayal Jalan satisfies the “independence” requirements of Rule 10A-3 of the exchange act and the NYSE rules. See “Item 6: Directors, senior management and employees – A. Directors and Senior Management”for the experience and qualifications of the members of the Audit committee and also see “Item 6: Directors, senior management and employees – C. Board practices – Committees of board – Audit committee”for the details of members of Audit committee. We have adopted a written Code of Business Conduct and Ethics that is applicable to all of our directors, senior management, executive officers, and employees. We amended our Code of Business Conduct and Ethics in October 2014. We added certain provisions including applicable provisions relating to the U.K Bribery Act, 2010, particularly on the meaning, scope and application of the terms bribery, corruption, fraud, gifts, entertainment and political contributions to the Company and our employees. As an issuer of securities in the United States, we are subject to the US Foreign Corrupt Practices Act (FCPA). Our businesses in other countries shall comply with their respective anti-corruption laws. Additionally, in accordance with the Companies Act, 2013 and the amendment in the listing agreement of stock exchanges in India, the Code of Business Conduct and Ethics was amended to incorporate the duties of the Independent Directors. The Code of Business Conduct and Ethics was amended in April 2015, elaborating on competition law and fair dealing. In addition to this amendment, the Code of Business Conduct and Ethics was further amended at the board meeting held in July 2015, to refresh the core purposes and values of the Company. Further, a corporate communications is established by the Company that will align with the Code of Business Conduct and Ethics and the aim is to guide employees on sharing any material information relating to the Company or the group and ensure that it is accurately communicated to interested parties. During fiscal year 2017, the Health, Safety and Environment section in the Company’s Code of Business Conduct and Ethics was amended to reflect applicable provisions relating to the U.K. Modern Slavery Act, 2015, particularly by including a Slavery and Trafficking Statement including the steps taken that slavery and human trafficking is not taking place, either in theirour business or across any of their supply chains. We have posted the code on our website at -– https://www.vedantalimited.com/media/85863/CorporateGovernance/vedanta_limited_code_of_conduct_and_business_ethics.pdf Information contained in our website does not constitute a part of this Annual Report. We will also make available a copy of the Code of Business Conduct and Ethics to any person, without charge, if a written request is made to us at our registered office at 1st1st Floor, C‘C’ wing, Unit 103, Corporate Avenue, Atul Projects, Chakala, Andheri (East),Mumbai-400 Mumbai – 400 093, Maharashtra, India. ITEM 16C. | PRINCIPAL ACCOUNTANT FEES AND SERVICES |
Our financial statements are prepared in accordance with IFRS as issued by the IASB and are audited by M/s S.R. Batliboi & Co. LLP, Chartered Accountants (“SRB”), a firm registered with the Public Company Accounting Oversight Board in the United States and an Indian firm of Chartered Accountants registered with the Institute of Chartered Accountants of India. Deloitte Haskins & Sells LLP (“Deloitte”) served as our independent registered public accountant for the year ended March 31, 2016 and SRB have been appointed as independent registered public accountant for the year ended March 31, 2017 for which audited statements appear in this Annual Report. The following table shows the aggregate fees for the professional services and other services rendered by Deloitte and the various member firms of Deloitte to us, including our subsidiaries, in fiscal year 2016, and the professional services and other services rendered by SRB and the various member firms of SRB to us, including our subsidiaries, in fiscal year 2017. years 2020 and 2021. | | | Fiscal year | | | For the Year Ended March 31, | | | | 2016 | | | 2017 | | | Particulars | | | 2020 | | | 2021 | | | | ($ in thousands) | | | ($ in thousands) | | Audit fees (audit and review of financial statements) | | | 2,973.0 | | | | 3,364.3 | | | | 3,845 | | | | 4,242 | | Audit-related fees (including other miscellaneous audit related certifications) | | | 110.7 | | | | 58.2 | | | | 50 | | | | 47 | | Tax fees (tax audit, other certifications and tax advisory services) | | | 241.1 | | | | 107.4 | | | | 64 | | | | 41 | | All other fees (certification on corporate governance and advisory services) | | | — | | | | 285.1 | | | | 72 | | | | 19 | | | | | | | | | | | | | | | Total | | | 3,324.8 | | | | 3,815.0 | | | | 4,031 | | | | 4,349 | | | | | | | | | | | | | | |
Audit & Risk Management CommitteePre-approval Process Our Audit Committee reviews andpre-approves the scope and the cost of audit services related to us and permissiblenon-audit services performed by the independent auditors, other than those forde minimis services, which are approved by the Audit Committee prior to the completion of the audit. All of the services related to our Company provided by SRB during the last fiscal year have been approved by the Audit Committee. In accordance with the Company’s Audit Committee Charter, prior approval of Audit Committee is obtained for any form of audit and non-audit services wherein the Statutory Auditors and its affiliates are engaged for the Company and its subsidiaries. The Audit Committee is briefed on the total approved services along with the actual services taken and additional approvals are also sought wherever required. The details on the category / nature of the services are also placed before the Audit Committee in detail. Further, the Audit Committee also recommends the appointment and remuneration payable to Tax Auditor, Secretarial Auditor, Internal Auditor and Cost Auditor. ITEM 16D. | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES |
Not applicable ITEM 16E. | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS |
| | | | | | | | | | | | | | | Period | | Total number of shares (and units) purchased | | | Average price paid per share (or units) | | | Total number of shares (or units) purchased as part of publically announced plans or programs(1) | | | Maximum number of shares (or units) that may yet be purchased under plans or programs(1) | January 27, 2017 to January 30, 2017 | | | 3,984,256 | | | | 259.58 | | | | 3,984,256 | | | 5% within one financial year of the paid up capital; 5% within the scheme tenure of the paid up capital |
| | | | | | | | | | | | | | | Period | |
| Total number of
shares (or units) purchased |
|
| Average price
paid per share (or units) (in ₹) |
| |
| Total number of shares (or
units) purchased as part of publically announced plans or programs (As at March 31, 2021) |
| | Maximum number of shares (or
units) that may yet be purchased under plans or programs | (1)April 1, 2020 to March 31, 2021 | The shareholders | | NIL | | | | NA | | | | 16,826,630 | | | 5.0% within one financial year of the paid up capital;5.0% within the scheme tenure of the Company by way of postal ballot on December 12, 2016 approved the Vedanta Limited ESOS 2016 and issue of securities to the employees of the Company and its holding or subsidiary companies. These options were awarded to employees under the Vedanta Limited ESOS 2016 with effect from December 15, 2016 for which the vesting condition will be the performance period of 36 months from December 15, 2016 to December 14, 2019. The options shall expire after six months from the date of vesting.paid up capital |
During the fiscal year 2021, no shares were purchased by Vedanta Employee Stock Option Scheme trust (“ESOS Trust”). As at March 31, 2021, total no. of shares (or units) purchased as part of publically announced plans or programs is 16,826,630. On December 12, 2016, the shareholders authorized the Company for the acquisition of up to 148,250,244 Equity Shares (which represents five percent of the paid up equity capital as on March 31, 2016, in different tranches from the secondary market by Vedanta Employee Stock Option Scheme trust (“ESOS Trust”) for the purpose of allotment to the employees of the Company and its subsidiary, post vesting of the options alloted.allotted. The secondary acquisition in a fiscal year by the ESOS Trust shall not exceed five percent of the paid up equity capital of the Company or such other limit as may be prescribed under the SEBI (Share Based Employee Benefits) Regulations, 2014 from time to time as at the end of the previous fiscal year. See “Item 6: Directors, senior management and Employees – B. Compensation – Vedanta Limited Employee stock option scheme (“Vedanta Limited ESOS”)”. ITEM 16F. | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT |
a) Former independent registered public accounting firmNot applicable
(i) On June 29, 2016, the Company in its Annual General meeting appointed SRB as the statutory auditor of the Company for its Indian reporting for a term of five (5) years from the financial year ending March 31, 2017 to the financial year ending March 31, 2021 subject to ratification of their appointment by the members at every Annual General Meeting, as may be required under the applicable provisions of the Companies Act, 2013. SRB replaced Deloitte who was the Company’s statutory auditor until the Annual General Meeting held on June 29, 2016. In order to align the change in auditors for the US reporting, based on the recommendation of the Audit Committee of the Company, the Board of Directors of the Company, on October 28, 2016 approved the appointment of SRB as the Company’s independent registered public accounting firm for U.S. reporting purposes for a term of five (5) years from the financial year2016-17 to financial year2020-21. SRB accepted the engagement on October 28, 2016.
(ii) Simultaneously with the engagement of SRB, the Company terminated Deloitte as its independent registered public accounting firm.
(iii) The report of Deloitte on the Company’s consolidated financial statements for the financial years ended March 31, 2016 and 2015 did not contain an adverse opinion or a disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles.
(iv) During the financial years ended March 31, 2016 and 2015, and through October 28, 2016, there were no (a) disagreements with Deloitte on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to Deloitte’s satisfaction, would have caused Deloitte to make reference to the subject matter thereof in connection with its reports for such years; or (b) reportable events that would be required to be described under Item 16 F(a)(1)(v) of Form20-F in connection with the Company’s annual report on Form20-F.
(v) The Company provided Deloitte with a copy of the above disclosure and submitted a letter from Deloitte agreeing with such disclosure as Exhibit 99.1 toForm 6-K submitted to the Securities and Exchange Commission on October 28, 2016.
b) New independent registered public accounting firm
The Company engaged SRB as its new independent accountants as of October 28, 2016. During the two most recent financial years ended March 31, 2016 and 2015 and through October 28, 2016, the Company has not consulted SRB regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company’s financial statements, and neither a written report was provided to the Company or oral advice was provided that SRB concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement, as that term is defined in Item 16F(a)(1)(iv) of 20F and the related instructions to this item, or a reportable event as that term is described in Item 16F(a)(1)(v) of 20F.
ITEM 16G. | CORPORATE GOVERNANCE |
As our ADSs are listed on the NYSE, we are subject to the NYSE listing standards. The NYSE listing standards applicable to us, as a foreign private issuer, are considerably different from those applicable to US companies. Under the NYSE rules, we need onlyto (i) establish an independent Audit Committee; (ii) provide prompt certification by our Chief Executive Officer of any materialnon-compliance with any corporate governance rules of the NYSE; (iii) provide periodic (annual and interim) written affirmations to the NYSE with respect to our corporate governance practices; and (iv) provide a brief description of significant differences between our corporate governance practices and those followed by US companies. Our Audit and Risk Management Committee consists of threefour directors: Lalita D. Gupte,Mahendra Kumar Sharma, who is our Chairperson, Ravi KantUpendra Kumar Sinha, Akhilesh Joshi and Aman Mehta.Dindayal Jalan. Each of Messrs. Kant, MehtaMahendra Kumar Sharma, Upendra Kumar Sinha, Akhilesh Joshi and Ms. GupteDindayal Jalan satisfy the “independence” requirements ofRule 10A-3 of the Exchange Act. A brief description of the significant differences between our corporate governance practices and those followed by US companies can be found in “Item 10. Additional Information—B. Memorandum and Articles of Association—Comparison of Corporate Governance Standards.” As a foreign private issuer, we are exempt from the NYSE rules applicable to a US company requiring (i) a board of directors consisting of a majority of independent directors, (ii) a compensation committee and a nominating/corporate governance committee, (iii) shareholder approval of equity-compensation plans, (iv) the adoption and disclosure of corporate governance guidelines, and (v) the adoption and disclosure of a code of business conduct and ethics for directors, officer and employees, and the prompt disclosure of any waivers thereof for directors or executive officers. In addition, we are deemed to be a “controlled company” under the NYSE rules. As a result, we are exempt from the NYSE rules applicable to a US company that is not a “controlled company” requiring (i) a board of directors consisting of a majority of independent directors and (ii) a compensation committee and a nominating/corporate governance committee. ITEM 16H. | MINE SAFETY DISCLOSURE |
Not applicable PART III ITEM 17. | FINANCIAL STATEMENTS |
See – “Item 18” for a list of the financial statements filed as part of this Annual Report. ITEM 18. | FINANCIAL STATEMENTS |
The following financial statements are filed as part of this Annual Report, together with the report of the independent registered public accounting firms: Report of Independent Registered Public Accounting Firm Consolidated Statements of Profit or Loss for the years ended March 31, 2015, 20162019, 2020 and 20172021 Consolidated Statements of Comprehensive Income for the years ended March 31, 2015, 20162019, 2020 and 20172021 Consolidated Statements of Cash Flow for the years ended March 31, 2015, 20162019, 2020 and 20172021 Consolidated Statements of Financial Position as at March 31, 20162020 and 20172021 Consolidated Statement of Changes in Equity for the years ended March 31, 2015, 20162019, 2020 and 20172021 Notes to the consolidated financial statements | | | | | 1.1 | | Certificate of Incorporation pursuant to change of name to Vedanta Limited—incorporated by reference to Exhibit 99.1 to the FormForm 6-K (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on May 29, 2015. | | | 1.2**1.2 | | Memorandum and Articles of Association of Vedanta Limited.Limited—incorporated by reference to Exhibit 1.2 of the annual report on Form-20F for fiscal year 2017 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 15, 2017. | | | 2.1 | | Form of Deposit Agreement among Sterlite Industries (India) Limited, Citibank, N.A., as Depositary, and owners and holders from time to time of American Depositary Shares evidenced by American Depositary Receipts issued thereunder amended (including the Form of ADR)—incorporated by reference to Exhibit (a) of Amendment No. 2 to the Registration Statement on FormForm F-6 (File No.No. 333-139102), as filed with the SEC on June 15, 2007 as amended by Form of ADR incorporated by reference to Form 424B3 (File No.No. 333-139102), as filed with the SEC on June 28, 2010. | | | 2.2 | | Form of Deposit Agreement among Sesa Goa Limited and Citibank, N.A., as Depositary and the holders and beneficial owners of American Depositary Shares issued thereunder—incorporated by reference to Exhibit 99.1 to the FormForm 6-K (File No.No. 001-33175), as filed with the SEC on September 11, 2013. | | | 2.3**2.3 | | Form of Deposit Agreement among Vedanta Limited and Citibank, N.A., for continued appointment of Citibank as the exclusive Depositary of American Depositary Receipts issued thereunder | | | 2.4 | | Specimen share certificate—thereunder—incorporated by reference to Exhibit 99.2 to2.3 of the annual report on Form 6-KForm-20F for fiscal year 2017 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 15, 2017. | | | 2.4 | | Specimen share certificate—incorporated by reference to Exhibit 99.2 to the Form 6-K (File No. 001-33175) of Vedanta Limited, as filed with the SEC on May 29, 2015. | | | 4.1 | | Brand License Agreement with Vedanta Resources Plc.- incorporated by reference to Exhibit 4.1 of the annual report on Form-20F for fiscal year 2018 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on July 31, 2018 | | | 4.2** | | Brand License and strategic service Agreement with Vedanta Resources Limited | | | 4.3 | | Vedanta Resources plc Long-Term Incentive Plan—incorporated by reference to Exhibit 10.1 to the Registration Statement on FormForm ��F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.24.4 | | Vedanta Resources plc Employee Share Ownership Plan (“ESOP”) 2013—incorporated by reference to Exhibit 4.2 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.34.5 | | Vedanta Resources plc ESOP Scheme 2012—incorporated by reference to Exhibit 4.3 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.4*4.6** | | Vedanta Limited Share Plan: Employee Stock Option Scheme (ESOS) 2021 | | | 4.7 | | Vedanta Resources plc Performance Share Plan Rules.Rules—incorporated by reference to Exhibit 4.4 of the annual report on Form-20F for fiscal year 2017 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 15, 2017. |
| | | 4.8 | | Cairn India Performance Option Plan—incorporated by reference to Exhibit 4.6 of the annual report on Form-20F for fiscal year 2016 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 1, 2016. | | | 4.54.9 | | Cairn India Performance Option Plan—Vedanta Resources plc Deferred Share Bonus Plan 2015—incorporated by reference to Exhibit 4.6 of the annual report on Form-20F for fiscal 2016year 2017 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 1, 2016. 15, 2017. | | | 4.6**4.10 | | Vedanta Resources plc Deferred Share Bonus Plan 2015. | | | 4.7** | | Vedanta Limited Share Plan: Employee Stock Option Scheme (ESOS) 2016.2016—incorporated by reference to Exhibit 4.7 of the annual report on Form-20F for fiscal year 2017 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 15, 2017. | | | 4.84.11 | | Vedanta Limited Share Plan: Employee Stock Option Scheme (ESOS) 2017—incorporated by reference to Exhibit 4.9 of the annual report on Form-20F for fiscal year 2018 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on July 31, 2018 | | | 4.12 | | Relationship Agreement dated December 5, 2003 among Vedanta, Volcan Investments Limited, Dwarka Prasad Agarwal, Agnivesh Agarwal and Anil Agarwal—incorporated by reference to Exhibit 10.2 to the Registration Statement onForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.94.13 | | Deed of Adherence dated December 11, 2007 among Vedanta Resources plc, Volcan Investments Limited, Onclave PTC Limited and Anil Agarwal-incorporated by reference to Exhibit 4.3 of the annual report onForm-20F for fiscal year 2008 (File No.(File No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. | | | 4.104.14 | | Shared Services Agreement dated December 5, 2003 among Vedanta, Sterlite Optical Technologies Limited, Sterlite Gold Limited and Sterlite Industries (India) Limited, including the letter agreement dated April 13, 2006 amending the Shared Services Agreement—incorporated by reference to Exhibit 10.3 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.114.15 | | Consultancy Agreement dated March 29, 2005 between Vedanta and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 10.4 to the Registration Statement onForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.124.16 | | Management Services Agreement dated May 20, 2014 between Vedanta and Sesa Sterlite Limited—incorporated by reference to Exhibit 4.8 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.134.17 | | Representative Office Agreement dated March 29, 2005 between Vedanta and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 10.5 to the Registration Statement onForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. |
| | | | | 4.144.18 | | Representative Office Agreement dated May 20, 2014 between Vedanta and Sesa Sterlite Limited—incorporated by reference to Exhibit 4.10 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.154.19 | | Shareholders’ Agreement between the President of India and Sterlite Opportunities and Ventures Limited dated April 4, 2002—incorporated by reference to Exhibit 10.6 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.164.20 | | Shareholders’ Agreement between Sterlite Industries (India) Limited, GoI and BALCO dated March 2, 2001—incorporated by reference to Exhibit 10.7 to the Registration Statement on FormF-1(FileNo.File No. 333-138739), as filed with the SEC on November 15, 2006. |
| | | 4.174.21 | | Guarantee Agreement between the President of India, Sterlite Industries (India) Limited, Sterlite Optical Technologies Limited and Sterlite Opportunities and Ventures Limited dated April 4, 2002—incorporated by reference to Exhibit 10.8 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.184.22 | | Agreement between Vedanta Aluminium Limited and Orissa Mining Corporation Limited dated October 5, 2004—incorporated by reference to Exhibit 10.9 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.194.23 | | Mining lease between the Government of Rajasthan and HZL dated March 13, 1980 renewed on September 15, 2000 pursuant to an order of the Government of Rajasthan dated May 1, 2000 and an indenture dated September 15, 2000—incorporated by reference to Exhibit 10.10 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.204.24 | | $ 92.6 million Term Facility Agreement between Sterlite Industries (India) Limited as borrower and CALYON, Standard Chartered Bank and ICICI Bank Limited as lenders dated March 22, 2006—incorporated by reference to Exhibit 10.11 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. |
| | | 4.214.25 | | Japanese Yen 3,570 million and $ 19.65 million Term Loan Facilities Agreement between Sterlite Industries (India) Limited as borrower and ICICI Bank Limited, Sumitomo Mitsui Banking Corporation and DBS Bank Limited as lenders dated September 19, 2005—incorporated by reference to Exhibit 10.12 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.224.26 | | $ 125 million Term Facility Agreement between HZL as borrower and ABN AMRO Bank N.V., CALYON, Standard Chartered Bank, DBS Bank Limited, Mizuho Corporate Bank, Limited., Sumitomo Mitsui Banking Corporation, The Sumitomo Trust and Banking Co., Limited., Cathay United Bank, Hua Nan Commercial Bank, National Bank of Kuwait S.A.K., Bank of Taiwan, The Export-Import Bank of the Republic of China, Chang Hwa Commercial Bank Limited., Chiao Tung Bank Co., Limited., The International Commercial Bank of China, Co. Limited., Mascareignes International Bank Ltd., Syndicate Bank, Canara Bank and The Shanghai Commercial and Savings Bank, Limited. as lenders dated July 29, 2005—incorporated by reference to Exhibit 10.13 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.234.27 | | $ 50 million Facility Agreement between BALCO as borrower and ICICI Bank Limited, Singapore Branch, ICICI Bank Limited, Bahrain Branch and ICICI Bank Limited, Offshore Banking Unit as lenders dated November 8, 2004—incorporated by reference to Exhibit 10.15 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.244.28 | | $ 50 million Facility Agreement between BALCO as borrower and ICICI Bank Limited, ICICI Bank Limited, Bahrain Branch and ICICI Bank Limited, Offshore Banking Unit as lenders dated November 10, 2004—incorporated by reference to Exhibit 10.16 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.254.29 | | Rs.₹ 10,000 million Facility Agreement between BALCO as borrower and Oriental Bank of Commerce, Syndicate Bank, The Jammu & Kashmir Bank Limited, Corporation Bank, Housing Development Finance Corporation Limited, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Indore, State Bank of Mysore, State Bank of Patiala, State Bank of Saurashtra, The Federal Bank Limited, The Karnataka Bank Limited, The Karur Vysya Bank Limited, UCO Bank, Vijaya Bank, ABN AMRO Bank N.V., The Laxmi Vilas Bank Limited as lenders dated September 16, 2003—incorporated by reference to Exhibit 10.17 to the Registration Statement on FormForm F-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. |
| | | | | 4.264.30 | | Information Memorandum dated May 30, 2013 relating to the issue of 5000 rated taxable secured listed redeemablenon-convertible debentures of face value of Rs. 10 Lakhs₹ 1 million each, aggregating up to Rs. 500 Crore₹ 5000 million to be issued on a private placement basis in the financial year2013-14 by BALCO—incorporated by reference to Exhibit 4.23 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.274.31 | | Disclosure document dated July 3, 2013 for private placement of secured, redeemablenon-convertible debentures of Rs.₹ 1,000,000 each aggregating up to Rs. 2500 Crores₹ 25000 million by Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.24 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.284.32 | | Disclosure document dated July 3, 2013 for Private Placement of Secured, RedeemableNon-Convertible Debentures of Rs.₹ 1,000,000 each aggregating up to Rs. 450 Crores—₹ 4500 million—incorporated by reference to Exhibit 4.25 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.294.33 | | Disclosure document dated July 3, 2013, for Private Placement of Secured, RedeemableNon-Convertible Debenture of Rs.₹ 100,000 each aggregating up to Rs.₹ 750 Crores—million—incorporated by reference to Exhibit 4.26 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.304.34 | | Common Rupee Loan Agreement dated December 27, 2013 among Sesa Sterlite Limited as Borrower, the Banks and Financial Institutions set forth in Part A Schedule I, as Rupee Lenders, Axis Bank Limited, as Lenders’ Agent and Axis Trustee Services Limited as Security Trustee—incorporated by reference to Exhibit 4.27 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. |
| | | 4.314.35 | | Term Loan Agreement dated November 28, 2013 between Sesa Sterlite and Canara Bank—incorporated by reference to Exhibit 4.28 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.324.36 | | US$100,000,000 Facility Agreement dated June 20, 2008 between Vedanta Aluminium Limited as Borrower, ICICI Bank Limited as Arranger, The Banks and Financial Institutions (listed in Schedule 1) as Original Lenders and ICICI Bank Limited as Agent—incorporated by reference to Exhibit 4.29 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. |
| | | 4.334.37 | | Facility Agreement dated April 5, 2011 between Vedanta Aluminium Limited as Borrower, The Banks and Financial Institutions Set Forth in Schedule I as the Rupee Lenders and State Bank of India as the Issuing Bank and Facility Agent—incorporated by reference to Exhibit 4.30 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.344.38 | | Amendment and Restatement Agreement dated June 27, 2011 relating to the $500,000,000$ 500,000,000 Intercompany Loan Facility Agreement dated July 6, 2009 between Vedanta Aluminium as the borrower and Welter Trading Limited as the original lender and Axis Bank Limited, Hong Kong Branch as agent and Security Trustee under the Amended and Restated Facility Agreement—incorporated by reference to Exhibit 4.31 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.354.39 | | $50,000,000 Facility Agreement dated January 8, 2013 among Vedanta Aluminium as the original borrower, Sterlite Industries (India) Limited as guarantor, AXIS Bank Limited, Hong Kong Branch as arranger, as original lender and as agent and AXIS Bank Limited as security trustee—incorporated by reference to Exhibit 4.32 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.364.40 | | $1,200,000,000 Facility Agreement dated May 15, 2013 for Vedanta with Twin Star Mauritius Holdings Limited as borrower arranged by Bank of America, N.A., Barclays Banl Plc, Citigroup Global Markets Asia Limited, J.P. Morgan Chase Bank N.A., Singapore Branch, The Royal Bank of Scotland Plc and Standard Chartered Bank and Standard Chartered Bank (Mauritius) Limited acting as account bank and Standard Chartered Bank acting as agent and security agent—incorporated by reference to Exhibit 4.33 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.374.41 | | Rs.₹ 50,000 million Facility Agreement dated July 21, 2014 among Sesa Sterlite Limited as borrower, State Bank of India as lender and SBICAP Trustee Company Limited as security trustee—incorporated by reference to Exhibit 4.35 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 4.384.42 | | Rs.₹ 10,000 million Facility Agreement dated April 15, 2014 among Sesa Sterlite Limited as borrower and Union Bank of India as lender—incorporated by reference to Exhibit 4.36 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. |
| | | | | 4.394.43 | | Rs.₹ 20,000 million Facility Agreement dated April 15, 2014 among Sesa Sterlite Limited as borrower, Bank of India as lender and SBICAP Trustee Company Limited as security trustee—incorporated by reference to Exhibit 4.37 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 4.404.44 | | Rs.₹ 10,250 million Facility Agreement dated April 15, 2014 among Sesa Sterlite Limited as borrower and Syndicate Bank as lender—incorporated by reference to Exhibit 4.38 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 4.414.45 | | Rs.₹ 20,000 million Facility Agreement dated April 15, 2014 among Sesa Sterlite Limited as borrower and Bank of Baroda as lender—incorporated by reference to Exhibit 4.39 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 4.424.46 | | Debenture trust deed dated December 23, 2014 for 9.36% rated, secured, listed, redeemablenon-convertible debentures between Sesa Sterlite Limited as the Issuer and Axis Trustee Services Limited as the Debenture Trustee—incorporated by reference to Exhibit 4.40 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. |
| | | 4.464.50 | | Option Agreement between Sterlite Industries (India) Limited, India Foils Limited and ICICI Bank Limited dated February 18, 2005—incorporated by reference to Exhibit 10.19 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.474.51 | | Corporate Guarantee by Sterlite Industries (India) Limited to ICICI Bank Limited on behalf of India Foils Limited dated February 8, 2005—incorporated by reference to Exhibit 10.20 to the Registration Statement on FormF-1(FileNo.File No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.484.52 | | Corporate Guarantee by Sterlite Industries (India) Limited to ICICI Bank Limited on behalf of Vedanta Aluminium Limited dated December 4, 2004—incorporated by reference to Exhibit 10.21 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.494.53 | | Frame Contract between Sterlite Industries (India) Limited and the CMT dated July 1, 2004, as amended on July 1, 2004—incorporated by reference to Exhibit 10.22 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.504.54 | | Copper Concentrate Purchase Contract between Sterlite Industries (India) Limited and the CMT dated July 1, 2005—incorporated by reference to Exhibit 10.23 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.514.55 | | Agreement for Sale and Purchase of the Power Transmission Line Division between Sterlite Industries (India) Limited and Sterlite Optical Technologies Limited dated August 30, 2006—incorporated by reference to Exhibit 10.24 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.524.56 | | Agreement between Sterlite Industries (India) Limited and Navin Agarwal dated October 8, 2003—incorporated by reference to Exhibit 10.25 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. |
| | | | | 4.534.57 | | Agreement between Sesa Goa Limited and Navin Agarwal dated August 17, 2013—incorporated by reference to Exhibit 4.42 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.544.58 | | Agreement between Sterlite Industries (India) Limited and Kuldip Kumar Kaura dated September 12, 2006—incorporated by reference to Exhibit 10.26 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 15, 2006. | | | 4.554.59 | | Letter issued by Sterlite Industries (India) Limited to Kuldip Kumar Kaura dated March 27, 2008—incorporated by reference to Exhibit 4.28 of the annual report onForm-20F for fiscal year 2008 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. | | | 4.564.60 | | Share Purchase Agreement between Sterlite Industries (India) Limited and Anil Agarwal dated October 3, 2006 relating to the sale of Sterlite Energy Limited—incorporated by reference to Exhibit 10.29 of Amendment No. 1 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 22, 2006. | | | 4.574.61 | | Share Purchase Agreement between Sterlite Industries (India) Limited and Dwarka Prasad Agarwal dated October 3, 2006 relating to the sale of Sterlite Energy Limited—incorporated by reference to Exhibit 10.30 of Amendment No. 1 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 22, 2006. | | | 4.584.62 | | Share Purchase Agreement between Sterlite Industries (India) Limited and Twin Star Infrastructure Limited dated October 3, 2006 relating to the sale of Sterlite Energy Limited—incorporated by reference to Exhibit 10.31 of Amendment No. 1 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on November 22, 2006. |
| | | 4.594.63 | | Specialty Deed between CMT, Mt Lyell Mining Company Limited, Citibank Limited and Citibank, N.A. dated April 1, 1999—incorporated by reference to Exhibit 10.36 of Amendment No. 2 to the Registration Statement on FormF-1 (File No.No. 333-138739), as filed with the SEC on February 8, 2007. | | | 4.604.64 | | Subordination Deed Poll between Monte Cello Corporation N.V., Citibank Limited and Citibank, N.A. dated April 1, 1999—incorporated by reference to Exhibit 10.37 of Amendment No. 2 to the Registration Statement on FormF-1(FileNo.File No. 333-138739), as filed with the SEC on February 8, 2007. | | | 4.614.65 | | Deed of Assignment of Debt between Monte Cello Corporation N.V. and Mt Lyell Mining Company Limited dated April 1, 1999—incorporated by reference to Exhibit 10.38 of Amendment No. 2 to the Registration Statement on FormForm F-1 (FileNo. 333-138739), as filed with the SEC on February 8, 2007. | | | 4.624.66 | | Deed of Assignment of Debt between Monte Cello Corporation N.V., Citibank Limited and Citibank, N.A. dated April 1, 1999—incorporated by reference to Exhibit 10.39 of Amendment No. 2 to the Registration Statement on FormF-1 (FileNo. 333-138739), as filed with the SEC on February 8, 2007. |
| | | 4.634.67 | | Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated August 29, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures-incorporated by reference to Exhibit 4.38 of the annual report onForm-20F for fiscal year 2008 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. | | | 4.644.68 | | Addendum dated March 17, 2008 to the Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated August 29, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures-incorporated by reference to Exhibit 4.39 of the annual report onForm-20F for fiscal year 2008 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. | | | 4.654.69 | | Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited datedDecember 23, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures-incorporated by reference to Exhibit 4.40 of the annual report onForm-20F for fiscal year 2008 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. | | | 4.664.70 | | Addendum dated March 17, 2008 to the Memorandum of Understanding between Sterlite Industries (India) Limited and Vedanta Aluminium Limited dated December 23, 2007 relating to the subscription of the Zero Percent Optionally Fully Convertible Debentures-incorporated by reference to Exhibit 4.41 of the annual report onForm-20F for fiscal year 2008 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. |
| | | | | 4.674.71 | | Purchase and Sale Agreement dated May 30, 2008 among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (U.S.A), Inc. and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.42 of the annual report onForm-20F for fiscal year 2008 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on June 30, 2008. | | | 4.684.72 | | Amendment No. 1 dated April 15, 2009 to the Settlement and Sale and Purchase Agreement dated March 6, 2009 among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (U.S.A), Inc., and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.43 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.694.73 | | Amendment No. 2 effective as of April 22, 2009 to the Settlement and Sale and Purchase Agreement dated March 6, 2009, as amended on April 15, 2009, among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (U.S.A), Inc., and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.44 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.704.74 | | Amendment No. 3 effective as of June 12, 2009 to the Settlement and Sale and Purchase Agreement dated March 6, 2009, as amended on April 15, 2009 and April 22, 2009, among Asarco LLC, AR Silver Bell, Inc., Copper Basin Railway, Inc., Asarco Santa Cruz, Inc., Sterlite (U.S.A), Inc., and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.45 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.714.75 | | Sterlite Plan Agreement in Principle Term Sheet dated June 12, 2009 among Asarco LLC, the subsidiary debtors, Sterlite (U.S.A), Inc., Robert C. Pate, in his capacity as the Future Claims Representative, and the Official Committee of Asbestos Claimants—incorporated by reference to Exhibit 4.46 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.724.76 | | Credit Agreement Letter dated February 7, 2005 between India Foils Limited and ICICI Bank Limited-incorporated by reference to Exhibit 4.47 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. |
| | | 4.734.77 | | Novation Agreement dated November 15, 2008 among Sterlite Industries (India) Limited, India Foils Limited and ICICI Bank Limited in respect of Rs. 772.5₹ 773 million term loan facility—incorporated by reference to Exhibit 4.48 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.744.78 | | Credit Agreement Letter dated August 4, 2005 between India Foils Limited and ICICI Bank Limited-incorporated by reference to Exhibit 4.49 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.754.79 | | Novation Agreement dated November 15, 2008 among Sterlite Industries (India) Limited, India Foils Limited and ICICI Bank Limited in respect of the Rs.₹ 250 million term loan facility—incorporated by reference to Exhibit 4.50 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. |
| | | 4.764.80 | | Agreement dated February 18, 2009 between the Orissa Mining Corporation Limited and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.55 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.774.81 | | Term Sheet dated May 22, 2009 between Sterlite Industries (India) Limited and Vedanta Aluminium Limited relating to the subscription of 9.75%Non-Convertible Debentures-incorporated by reference to Exhibit 4.54 of the annual report onForm-20F for fiscal year 2009 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on July 10, 2009. | | | 4.784.82 | | Indenture and Supplemental Indenture, both dated October 29, 2009, between Sterlite Industries (India) Limited and Wilmington Trust Company as trustee and Citibank, N.A., as securities administrator—incorporated by reference to Exhibits 4.1 and 4.2 to theForm-6K (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on November 3, 2009. | | | 4.794.83 | | Second Supplemental Indenture dated October 29, 2009, between Sesa Goa Limited and Wilmington Trust Company as trustee and Citibank N.A., as securities administrator—incorporated by reference to Exhibit 99.2 to the Form6-K (File001-33175) of Sesa Sterlite Limited, as filed with the SEC on September 11, 2013. |
| | | | | 4.804.84 | | Trust Deed dated October 30, 2009 between Sesa Goa Limited and Citicorp International Limited for the $500,000,000$ 500,000,000 5.0% Convertible Bonds due 2014 convertible into Shares of Sesa Goa Limited—incorporated by reference to Exhibit 4.73 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.814.85 | | Amendment dated March 29, 2009 to the Consultancy and Representative Office Agreement between Vedanta and Sterlite Industries (India) Limited both dated March 29, 2005—incorporated by reference to Exhibit 4.56 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.824.86 | | Outsourcing Services Agreement dated April 1, 2010 between Vedanta and Sterlite Industries (India) Limited—incorporated by reference to Exhibit 4.57 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.834.87 | | Outsourcing Services Agreement dated May 20, 2014 between Vedanta and Sesa Sterlite Limited—incorporated by reference to Exhibit 4.76 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 4.844.88 | | Share Purchase Agreement dated May 9, 2010 between Anglo Operations Limited, Taurus International S.A., Anglo South Africa Capital (Pty) Limited, Anglo American Services (UK) Limited, Welter Trading Limited and Vedanta—incorporated by reference to Exhibit 4.58 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.854.89 | | Buyer’s Credit Import Advance facility dated December 8, 2009 and Demand Promissory Note accepted on May 18, 2010 obtained by BALCO from DBS Bank Limited for $ 50 million—incorporated by reference to Exhibit 4.59 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.864.90 | | Letter of Credit Facility Agreement dated August 30, 2010 obtained by TSPL from ICICI Bank for Rs.₹ 10,000 million—incorporated by reference to Exhibit 4.60 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.874.91 | | Share Purchase and Shareholders’ Agreement dated September 17, 2010 between Sterlite Industries (India) Limited, Leighton Contractors (India) Private Limited and Vizag General Cargo Berth Private Limited—incorporated by reference to Exhibit 4.61 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. |
| | | 4.884.92 | | Corporate Guarantee dated December 8, 2010 given by Sterlite Industries (India) Limited to IL&FS Trust Company Limited on behalf of TSPL—incorporated by reference to Exhibit 4.62 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.894.93 | | Second Deed of Amendment dated December 16, 2010 between Anglo Operations Limited, Taurus International S.A., Anglo South Africa Capital (Pty) Limited, Anglo American Services (UK) Limited, Welter Trading Limited, THL Zinc Limited, Labaume B.V., Pecvest 17 (Proprietary) Limited and Vedanta as an amendment to the Share Purchase Agreement dated May 9, 2010—incorporated by reference to Exhibit 4.63 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. | | | 4.904.94 | | Letter of Credit Facility Agreement dated December 18, 2010 obtained by BALCO from ICICI Bank for Rs.₹ 2.50 billion—incorporated by reference to Exhibit 4.64 of the annual report on Form20-F for fiscal year 2011 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on September 30, 2011. |
| | | | | 4.944.98 | | Addendum to the Service Agreement (dated April 1, 2014) between Sesa Sterlite Limited and Mr. Din Dayal Jalan—incorporated by reference to Exhibit 4.96 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 8.1** | | List of subsidiaries of Vedanta LimitedLimited. | | | 11.1 | | Sterlite Industries (India) Limited—Code of Business Conduct and Ethics as amended till November 2011—incorporated by reference to Exhibit 11.1 of the annual report on Form20-F for fiscal year 2012 (File No.No. 001-33175) of Sterlite Industries (India) Limited, as filed with the SEC on May 25, 2012. | | | 11.2 | | Sesa Sterlite Limited—Code of Business Conduct and Ethics as revised and approved by the board on January 28, 2014—incorporated by reference to Exhibit 11.2 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 11.3 | | Sesa Sterlite Limited—Code of Business Conduct and Ethics as revised and approved by the board on October 29, 2014—incorporated by reference to Exhibit 11.3 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 11.4 | | Vedanta Limited—Code of Business Conduct and Ethics as revised and approved by the board on April 29, 2015 and July 29, 2015—incorporated by reference to Exhibit 11.4 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 11.5 | | Vedanta Limited—Antitrust Guidance Notes—incorporated by reference to Exhibit 11.5 of the annual report onForm-20F for fiscal year 2015 (File No.No. 001-33175) of Vedanta Limited, as filed with the SEC on August 14, 2015. | | | 11.6**11.6 | | Vedanta Limited—Code of Business Conduct and Ethics as revised and approved by the board on October 28, 2016.2016 —incorporated by reference to Exhibit 11.6 of the annual report on Form-20F for fiscal year 2017 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 15, 2017. | | | 12.1** | | Certification by the Chief Executive Officer pursuant to 17 CFR 240.15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | 12.2** | | Certification by the Chief Financial Officer pursuant to 17 CFR 240.15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | | | 13.1** | | Certification by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| | | 13.2** | | Certification by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | | | 15.1 | | Reserves evaluation report dated June 12, 2014 by DeGolyer and MacNaughton—incorporated by reference to Exhibit 15.2 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 15.2 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2014 on the Proved Reserves of certain Fields in India owned by Cairn India Limited for Sesa Sterlite Limited—incorporated by reference to Exhibit 15.3 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 15.3 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2013 on the Proved Reserves of certain Fields in India owned by Cairn India Limited for Sesa Sterlite Limited—incorporated by reference to Exhibit 15.4 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. | | | 15.4 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2012 on the Proved Reserves of certain Fields in India owned by Cairn India Limited for Sesa Sterlite Limited—incorporated by reference to Exhibit 15.5 of the annual report onForm-20F for fiscal year 2014 (File No.No. 001-33175) of Sesa Sterlite Limited, as filed with the SEC on August 15, 2014. |
| | | | | 15.8**15.8 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2017 on the Proved Reserves of certain Fields in India owned by Cairn India Limited for Vedanta Limited—incorporated by reference to Exhibit 15.8 of the annual report on Form-20F for fiscal year 2017 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on August 15, 2017. | | | 15.9 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2018 on the Proved Reserves of certain Fields in India owned by Cairn India Limited (now Vedanta Limited—oil and gas business) for Vedanta Limited—incorporated by reference to Exhibit 15.9 of the annual report on Form-20F for fiscal year 2018 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on July 31, 2018. | | | 15.10 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2019 on the Proved Reserves of certain Fields in India owned by Cairn India Limited (now Vedanta Limited—oil and gas business) for Vedanta Limited—incorporated by reference to Exhibit 15.10 of the annual report on Form-20F for fiscal year 2019 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on July 15, 2019. | | | 15.11 | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2020 on the Proved Reserves of certain Fields in India owned by Cairn India Limited (now Vedanta Limited—oil and gas business) for Vedanta Limited—incorporated by reference to Exhibit 15.11 of the annual report on Form-20F for fiscal year 2020 (File No. 001-33175) of Vedanta Limited, as filed with the SEC on September 15, 2020. | | | 15.12** | | Appraisal Report by DeGolyer and MacNaughton as of March 31, 2021on the Proved Reserves of certain Fields in India owned by Cairn India Limited (now Vedanta Limited—oil and gas business) for Vedanta Limited. |
** Filed herewith Notes: The Company has not included as exhibits certain instruments with respect to its long-term debt, the amount of debt authorized under each of which does not exceed 10% of its total assets, and it agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form20-F and that it has duly caused and authorized the undersigned to sign this Annual Report on its behalf. | | | VEDANTA LIMITED | | | By: | | /s/ GR Arun KumarAjay Goel | Name: | | GR Arun KumarAjay Goel | Title: | | Deputy Chief Financial Officer |
Date: August 15, 2017July 19, 2021 Index to Consolidated Financial Statements | | | | | | | Page(s) | | Report of Independent Registered Public Accounting Firm | | | F-2 | | Consolidated Statements of Profit or Loss for the years ended March 31, 2015, 20162019, 2020 and 20172021 | | | F-4F-7 | | Consolidated Statements of Comprehensive Income / (Loss) for the years ended March 31, 2015, 20162019, 2020 and 20172021 | | | F-5F-8 | | Consolidated Statements of Financial Position as at March 31, 20162020 and 20172021 | | | F-6F-9 | | Consolidated Statements of Cash Flows for the years ended March 31, 2015, 20162019, 2020 and 20172021 | | | F-7F-10 | | Consolidated Statements of Changes in Equity for the years ended March 31, 2015, 20162019, 2020 and 20172021 | | | F-9F-11 | | Notes to the Consolidated Financial Statements | | | F-11F-14 | |
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMReport of Independent Registered Public Accounting Firm
TheTo the Shareholders and the Board of Directors and Shareholders of Vedanta Limited
Opinion on the Financial Statements We have audited the accompanying consolidated statementstatements of financial position of Vedanta Limited (the “Company”) and its consolidated subsidiaries (collectively the “Group”) as of March 31, 20172021 and 2020, the related consolidated statements of profit orand loss, comprehensive income, cash flows and changes in equity for each of the three years in the period ended March 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Group at March 31, 2021 and 2020, and the results of its operations and its cash flows for each of the yearthree years in the period ended March 31, 2017. These financial statements are2021, in conformity with International Financial Reporting Standards as issued by the responsibility of Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.International Accounting Standard Board. We conducted our auditsalso have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States). (PCAOB), the Group’s internal control over financial reporting as of March 31, 2021, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated July 19, 2021 expressed an adverse opinion thereon. Basis for Opinion These financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on the Group’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includesmisstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the financial statements. An auditOur audits also includes assessingincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion,presentation of the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Vedanta Limited and subsidiaries at March 31, 2017 and the consolidated results of their operations and their cash flows for the year ended March 31, 2017, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Vedanta Limited’s internal control over financial reporting as of March 31, 2017, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) and our report dated August 15, 2017 expressed an unqualified opinion thereon.
/s/ S. R. Batliboi & Co. LLP
Gurgaon, India
August 15, 2017
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Vedanta Limited
Mumbai, Maharashtra, India
We have audited the accompanying consolidated statements of financial position of Vedanta Limited and subsidiaries (the “Company”) as of March 31, 2016, and the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for each of the two years in the period ended March 31, 2016, all expressed in Indian Rupees. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
InCritical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion suchon the consolidated financial statements, present fairly, in all material respects,taken as a whole, and we are not, by communicating the financial position of Vedanta Limited and subsidiaries as of March 31, 2016, andcritical audit matters below, providing separate opinions on the results of their operations and their cash flows for each ofcritical audit matters or on the two years in the period ended March 31, 2016, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.accounts or disclosures to which they relate. | Impairment assessment of Property Plant and Equipment at Tuticorin |
| | | Description of the Matter | | As discussed in Notes 3(I) and 14 to the consolidated financial statements, the Group performs impairment assessments for all assets where there are indicators of impairment. As part of their assessment, whenever such indicators exist, the Group determines the recoverable value based on the higher of the Value in Use model (VIU) or Fair Value Less Cost of Disposal (FVLCD) for each of the cash generating units (CGU), considering different internal and external factors in accordance with IAS 36 — Impairment of Assets. During the year, the Group determined that there were indicators of impairment for the assets in the Tuticorin CGU within the Copper segment (refer to note 3(c)I(vii)). Auditing the Group’s impairment assessments is complex due to the significant estimation required in determining the recoverable amount. The Group’s methodologies for estimating the recoverable amount of these assets involve significant assumptions, which include future commodity prices and future production volumes, discount rate, and future operating expenditures. These assumptions are sensitive to and affected by economic, industry, and company specific qualitative factors such as uncertainty with respect to timing of resumption of operations due to the withdrawal of the Group’s licenses to operate the copper plant. These significant assumptions and inputs are forward-looking and could be affected by future economic and market conditions. | | | How We Addressed the Matter in Our Audit | | We obtained an understanding, evaluated the design and tested the operating effectiveness of certain internal controls over the Group’s impairment assessment process including controls over the Group’s assessment of indicators of impairment and controls over the determination of significant assumptions such as future commodity prices, future production volumes, discount rate and future operating expenditures. To test the significant assumptions used for the determination of the recoverable value of the CGU, our audit procedures included, among others, comparison of future commodity prices with the published commodity price reports and research reports from external parties and comparison of future operating expenditures to the latest approved long term budgets. We also performed an assessment of the Group’s ability to forecast by comparing prior years’ estimated cash flows to actual results. We tested the integrity and mathematical accuracy of the models and performed sensitivity analyses to evaluate the significant assumptions used such as production volumes, future operating expenditures. We engaged valuation specialists to assist us in evaluating the methodology used and the discount rate and future commodity prices applied to calculate the recoverable value. Valuation specialists also assisted us in evaluating the results of the sensitivity analyses performed on such data including changes in the expected restart date of the plant. We assessed the implications of withdrawal of the Group’s licence to operate through inspection of external legal opinions regarding the case. We assessed the competence and objectivity of the lawyers engaged by the Group and assessed management’s position regarding the case, through discussions with legal counsel to evaluate the basis of their conclusion. We also evaluated the Group’s disclosures in relation to these matters. |
| Assessment of recoverability and recognition of deferred tax assets |
| | | Description of the Matter | | As described in Note 3(c)I(vi) to the consolidated financial statements, the Group has recognised Minimum Alternate Tax (MAT) credits within deferred tax assets of Rs. 82,358 million which are available for utilisation against future tax liabilities. Of those deferred tax assets Rs. 3,400 million are expected to be utilised during the fourteenth year of the stipulated fifteen year carry forward period from the year in which the same arose. Additionally, as described in Note 9, ESL Steel Limited, one of the constituents of the Group, has recognized deferred tax assets of Rs 31,823 million during the current year. Auditing the Group’s assessment of recognition and recoverability of these deferred tax assets is complex and dependent on the generation of future taxable income. Significant judgment and estimation are required to assess the sufficiency of future taxable income and 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. The Group uses projections of future taxable income in order to assess the probability that the deferred tax assets will be realized. Predicting future taxable income is dependent on assumptions and judgments regarding future market conditions, commodity prices, production volumes and capital expenditures. The Group, based on such an analysis, determined that the realization of these deferred tax assets within the stipulated carry forward period is probable. | | | How We Addressed the Matter in Our Audit | | We obtained an understanding, evaluated the design and tested the operating effectiveness of certain internal controls over the estimation of probable future taxable income relating to the recoverability of deferred taxes assets, including controls related to the determination of assumptions used in the preparation and review of the business plan, budget, and analysis of forecasted of future taxable income prepared by the Group. To evaluate the future projections of taxable income estimated by management, our procedures included, amongst others, obtaining approval of the budgeted results included in the current year’s projections, testing the future cash flow projections with the assistance of valuation specialists, including comparison of forecasts considered in the previous year with the actual performance of the current year and the consistency of those projections with the projections used in other areas of estimation such as those used for impairment assessments of other non-financial assets. We obtained management’s sensitivity analyses over the key assumptions to assess their impact on the forecasts of the future taxable income. We tested the completeness and accuracy of the amounts recognized as deferred tax assets and evaluated the disclosures made by the Group on the expected recoverability of the deferred tax assets. | | Production Sharing Contract extension for Rajasthan Block and the related settlement demands |
| | | Description of the Matter | | As described in Note 3(c)I(viii) to the consolidated financial statements, the Production Sharing Contract (PSC) for the Rajasthan Block (RJ), which was valid until May 14, 2020, was extended, initially for a period of three months and subsequently through a series of extensions up to July 31, 2021, subject to compliance with certain conditions, one of which relates to settlement of demands raised by the Government of India through the Directorate General of Hydrocarbons (DGH) with respect to the government’s share of profit petroleum for RJ. The Group recognizes a liability for those demands for which it is probable that a liability has been incurred as of March 31, 2021 and the amount is reasonably estimable. Matters where a liability is assessed as possible or a reasonable estimate cannot be made are disclosed as contingencies in the financial statements in accordance with IAS 37 — Provisions, Contingent Liabilities and Contingent Assets. The Group, after considering the underlying facts and circumstances, including court rulings have considered the PSC extension to be reasonably certain and disclosed the matter including the related demands, as a contingency in the consolidated financial statements. |
| | | | | Auditing management’s determination of whether a liability in respect of the aforesaid PSC extension matter is probable and reasonably estimable, possible or remote, is highly subjective and requires significant judgment considering the time period involved in the resolution of the matters since these disputes include the government as the counterparty and the complexity of the matters involved with limited precedents. | | | How We Addressed the Matter in Our Audit | | We obtained an understanding, evaluated the design of and tested certain internal controls of the Group for assessing the completeness, valuation, presentation and disclosure of the contingencies. This included testing controls related to the Group’s process for identification, recognition, measurement and disclosure of contingencies. We evaluated the Group’s analysis of the probability of a liability related to the demands arising on the PSC extension matter by assessing the merits through inspection of relevant documentation and correspondences including high court rulings and responses sent to DGH. We assessed the competence and objectivity of the lawyers engaged by the Group and held discussions with the internal and external legal counsel to confirm our understanding of the demands, obtained confirmations from the external legal counsel and obtained written representations from executives of the Group. We also evaluated the Group’s disclosures in relation to these matters. | | Accounting for transactions with the parent company and its affiliates | | | Description of the Matter | | As described in note 17 and 35(b) to the consolidated financial statements, the Group has undertaken related party transactions with Vedanta Resources Limited (‘VRL’), its parent company and its affiliates pertaining to the granting of loans and guarantees. Auditing the Group’s accounting for the related party transactions involved a high degree of subjectivity due to a) significant estimation in the determination of the appropriate market rate of interest to arrive at the fair values, on initial recognition, of loans and guarantees given and b) the existence of material weaknesses in the design of controls related to authorisation of related party transactions by the board of Vedanta Limited and design and operation of controls for the determination of fair values of financial instruments entered into with related parties |
| | | How We Addressed the Matter in Our Audit | | We obtained and inspected the Group’s policies, processes, and procedures related to the identification of related parties, obtaining approval for, recording, and disclosing related party transactions. As a response to the material weaknesses we increased the extent of our procedures by testing all related party transactions by comparing the transactions and balances to the underlying contracts, confirmation letters, and other supporting documents provided by management. We held discussions and obtained representations from management in relation to such transactions. We examined the approvals of the board of directors and/or audit committee for entering into these transactions. We obtained and assessed, with the assistance of valuation specialists, management’s estimates of the fair value of loans and guarantees granted by the Group to VRL and its affiliates on the date of such transactions. Specifically, we compared the prevailing United States Treasury rates and the borrower’s specific credit default spreads with the contractual interest rates and guarantee commission on the loans and guarantees respectively granted by the Group. We assessed the competence and objectivity of specialists engaged by management and by us. We also evaluated the Group’s disclosures in relation to these matters. |
/s/ Deloitte HaskinsS. R. Batliboi & SellsCo. LLP Gurgaon,We have served as the Company’s auditor since 2016
Gurugram, India August 1, 2016 (August 15, 2017 as to the effects of the adjustments discussed in Note 34)July 19, 2021
VEDANTA LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF PROFIT OR LOSS (In millions except share or per share amounts unless otherwise stated) | For the year ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | | | 2019 | | 2020 | | 2021 | | 2021 | | | | | Notes | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) (Note 2) | | | Notes | | | (₹ in million) | | (₹ in million) | | (₹ in million) | | (US dollars in million) (Note 2 (a)) | | Revenue | | 4 | | | 733,579 | | | | 639,493 | | | | 717,207 | | | | 11,059.5 | | | | 6 | | | | 909,012 | | | 835,446 | | | 868,630 | | | 11,876 | | Cost of sales* | | | | | (995,968) | | | | (875,756) | | | | (533,989) | | | | (8,234.2) | | | | | | (727,832 | ) | | (829,461 | ) | | (635,225 | ) | | (8,685 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross profit / (loss) | | | | | (262,389) | | | | (236,263) | | | | 183,218 | | | | 2,825.3 | | | | Gross profit | | | | | | 181,180 | | | | 5,985 | | | | 233,405 | | | | 3,191 | | Other operating income | | | | | 4,802 | | | | 4,785 | | | | 5,186 | | | | 79.9 | | | | | | 15,468 | | | 9,863 | | | 13,094 | | | 179 | | Distribution expenses | | | | | (10,078) | | | | (12,070) | | | | (16,361) | | | | (252.3) | | | | | | (17,069 | ) | | (18,205 | ) | | (20,184 | ) | | (276 | ) | Administration expenses | | | | | (31,550) | | | | (25,274) | | | | (19,299) | | | | (297.6) | | | | | | (34,363 | ) | | (37,577 | ) | | (39,463 | ) | | (539 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | | | (299,215) | | | | (268,822) | | | | 152,744 | | | | 2,355.3 | | | | Operating profit/(loss) | | | | | | 145,216 | | | | (39,934 | ) | | | 186,852 | | | | 2,555 | | Investment and other income | | 5 | | | 51,154 | | | | 43,998 | | | | 45,428 | | | | 700.5 | | | | 7 | | | | 31,540 | | | 25,714 | | | 32,177 | | | 440 | | Finance and other costs | | 6 | | | (63,398) | | | | (59,584) | | | | (61,600) | | | | (949.8) | | | | 8 | | | | (59,026 | ) | | (54,557 | ) | | (52,955 | ) | | (724 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) before tax | | | | | (311,459) | | | | (284,408) | | | | 136,572 | | | | 2,106.0 | | | Income tax (expense) / benefit | | 7 | | | 108,320 | | | | 103,060 | | | | (38,027) | | | | (586.4) | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | | | (203,139) | | | | (181,348) | | | | 98,545 | | | | 1,519.6 | | | Profit / (loss) attributable to: | | | | | | | | | | | | Profit/(loss) before tax | | | | | | 117,730 | | | | (68,777 | ) | | | 166,074 | | | | 2,271 | | Income tax (expense)/Credit | | | | 9 | | | | (41,501 | ) | | 26,677 | | | (19,084 | ) | | (261 | ) | | | | | | | | | | | | | | | | | Profit/(loss) for the year | | | | | | 76,229 | | | | (42,100 | ) | | | 146,990 | | | | 2,010 | | Profit/(loss) attributable to: | | | | | | | | | | | | Equity holders of the parent | | | | | (128,350) | | | | (125,153) | | | | 55,033 | | | | 848.6 | | | | | | 49,775 | | | (61,248 | ) | | 112,883 | | | 1,544 | | Non-controlling interests | | | | | (74,789) | | | | (56,195) | | | | 43,512 | | | | 671.0 | | | | | | 26,454 | | | 19,148 | | | 34,107 | | | 466 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | | | (203,139) | | | | (181,348) | | | | 98,545 | | | | 1,519.6 | | | | | | | | | | | | | | | | | | | Earnings / (loss) per share | | 27 | | | | | | | | | | Profit/(Loss) for the year | | | | | | 76,229 | | | | (42,100 | ) | | | 146,990 | | | | 2,010 | | | | | | | | | | | | | | | | | | | Earnings/(Loss) per share (in ₹ and US $) | | | | 12 | | | | | | | | | | Basic | | | | | (43.29) | | | | (42.21) | | | | 18.57 | | | | 0.3 | | | | | | 13.43 | | | (16.54 | ) | | 30.47 | | | 0.42 | | Diluted | | | | | (43.29) | | | | (42.21) | | | | 18.56 | | | | 0.3 | | | | | | 13.38 | | | (16.54 | ) | | 30.28 | | | 0.41 | | Weighted average number of equity shares used in computing earnings per share | | | | | | | | | | | | | | | | | | | | | Basic | | | | | 2,965,004,871 | | | | 2,965,004,871 | | | | 2,964,333,584 | | | | 2,964,333,584 | | | | | | 3,705,502,141 | | | 3,702,554,614 | | | 3,704,196,924 | | | 3,704,196,924 | | Diluted | | | | | 2,965,004,871 | | | | 2,965,004,871 | | | | 2,965,560,871 | | | | 2,965,560,871 | | | | | | 3,721,449,633 | | | 3,702,554,614 | | | 3,727,544,981 | | | 3,727,544,981 | |
The accompanying notes are an integral part of these consolidated financial statements. * | Cost of sales for the year ended (i) March 31, 2015,2019 includes net impairment reversal of ₹ 2,611 million; (ii) March 31, 2016 and March 31, 20172020 includes net impairment charge of Rs. 406,144 million, Rs. 339,549 million₹ 146,821 million; and Rs. 1,162(iii) March 31, 2021 includes an Asset Under Construction write off of ₹ 2,440 million ($ 17.933 million) respectively (Refer note 8a & 8b)Note 14). |
The Group’s (Refer noteNote 1- Group overview) consolidated statements of profit or loss are presented disclosing expenses by function. The consolidated statements of profit or loss disclosing expenses presented by nature are in Note 32 (c).10. VEDANTA LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS) (In millions except share or per share amounts unless otherwise stated) | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) (Note 2) | | Profit / (loss) for the year | | | (203,139) | | | | (181,348) | | | | 98,545 | | | | 1,519.6 | | Other comprehensive income, net of income tax: | | | | | | | | | | | | | | | | | | | | | | Items that will not be reclassified subsequently to profit or loss | | | | | | | | | | | | | | | | | Re-measurement of defined benefit obligation* | | | (457) | | | | (93) | | | | (14) | | | | (0.2) | | | | | | | Items that will be reclassified subsequently to profit or loss | | | | | | | | | | | | | | | | | | | | | | Exchange differences on translation of foreign operations* | | | 8,620 | | | | 3,227 | | | | (3,466) | | | | (53.6) | | | | | | | (Loss) / gain onavailable-for-sale financial investments | | | 151 | | | | 170 | | | | 263 | | | | 4.1 | | Cash flow hedges*# | | | (758) | | | | 163 | | | | (16) | | | | (0.2) | | | | | | | | | | | | | | | | | | | Total other comprehensive income for the year, net of income tax | | | 7,556 | | | | 3,467 | | | | (3,233) | | | | (49.9) | | | | | | | | | | | | | | | | | | | | | | | | Total Comprehensive Income / (loss) for the year | | | (195,583) | | | | (177,881) | | | | 95,312 | | | | 1,469.7 | | | | | | | | | | | | | | | | | | | | | | | | Total Comprehensive Income / (loss) attributable to: | | | | | | | | | | | | | | | | | Equity holders of the parent | | | (131,122) | | | | (132,708) | | | | 54,292 | | | | 837.2 | | Non-controlling interests | | | (64,461) | | | | (45,173) | | | | 41,020 | | | | 632.5 | | | | | | | | | | | | | | | | | | | | | | (195,583) | | | | (177,881) | | | | 95,312 | | | | 1,469.7 | | | | | | | | | | | | | | | | | | |
* | Refer to Note 7 for tax related to each component of other comprehensive income / (loss) |
# | Refer to Note 32(a) for amounts reclassified into consolidated statements of profit / (loss) for the year out of other comprehensive income / (loss) |
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | | | | | | (₹ in million)
| | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) (Note 2 (a)) | | Profit/(loss) for the year | | | 76,229 | | | | (42,100 | ) | | | 146,990 | | | | 2,010 | | Other comprehensive income/(loss), net of income tax: | | | | | | | | | | | | | | | | | | | | | | Items that will not be reclassified subsequently to profit or loss | | | | | | | | | | | | | | | | | Re-measurement of defined benefit obligation | | | (403 | ) | | | (2,118 | ) | | | (5 | ) | | | (0 | ) | Tax credit/(expense) | | | 247 | | | | 714 | | | | (104 | ) | | | (2 | ) | (Loss)/Gain on fair value of financial asset investment | | | (446 | ) | | | (738 | ) | | | 621 | | | | 8 | | | | | | | Items that will be reclassified subsequently to profit or loss | | | | | | | | | | | | | | | | | | | | | | Exchange differences on translation of foreign operations | | | 7,719 | | | | 8,217 | | | | 2,558 | | | | 35 | | Tax (expense)/ credit | | | (249 | ) | | | 340 | | | | (610 | ) | | | (8 | ) | Gain/(loss) on cash flow hedges recognised during the year | | | 1,134 | | | | 1,254 | | | | (2,533 | ) | | | (35 | ) | Tax (expense)/ credit | | | (513 | ) | | | (438 | ) | | | 862 | | | | 12 | | (Gain)/loss on cash flow hedges recycled to profit or loss | | | (1,838 | ) | | | (327 | ) | | | 1,879 | | | | 26 | | Tax credit/ (expense) | | | 595 | | | | 114 | | | | (606 | ) | | | (8 | ) | | | | | | | | | | | | | | | | | | | | | | | Total other comprehensive income for the year, net of income tax | | | 6,246 | | | | 7,018 | | | | 2,062 | | | | 28 | | | | | | | | | | | | | | | | | | | | | | | | Total Comprehensive Income/(Loss) for the year | | | 82,475 | | | | (35,082 | ) | | | 149,052 | | | | 2,038 | | | | | | | | | | | | | | | | | | | | | | | | Total Comprehensive Income/(Loss) attributable to: | | | | | | | | | | | | | | | | | Equity holders of the parent | | | 56,854 | | | | (52,950 | ) | | | 114,005 | | | | 1,559 | | Non-controlling interests | | | 25,621 | | | | 17,868 | | | | 35,047 | | | | 479 | | | | | | | | | | | | | | | | | | | | | | 82,475 | | | | (35,082 | ) | | | 149,052 | | | | 2,038 | | | | | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements. VEDANTA LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (In millions except share or per share amounts unless otherwise stated)
| As at | | | | | March 31, 2016 | | | March 31, 2017 | | | March 31, 2017 | | | | | | March 31, 2020 | | March 31, 2021 | | March 31, 2021 | | | | Notes | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) (Note 2) | | | Notes | | | (₹ in million) | | (₹ in million) | | (US dollars in million) (Note 2 (a)) | | ASSETS | | | | | | | | | | | | | | | | | Non-current assets | | | | | | | | | | | | | | | | | Property, plant and equipment | | | 8a | | | | 874,575 | | | | 877,127 | | | | 13,525.5 | | | | 14 | | | | 966,871 | | | 946,181 | | | 12,937 | | Exploration and evaluation assets | | | 8b | | | | 105,899 | | | | 98,852 | | | | 1,524.3 | | | | 14 | | | | 17,922 | | | 24,542 | | | 336 | | Other intangible assets | | | 8c | | | | 6,301 | | | | 6,378 | | | | 98.3 | | | Leasehold land | | | | | 3,545 | | | | 3,594 | | | | 55.4 | | | Intangible assets | | | | 15 | | | | 7,790 | | | 7,481 | | | 102 | | Deferred tax assets | | | 7 | | | | 82,481 | | | | 77,582 | | | | 1,196.3 | | | | 9 | | | | 82,669 | | | 73,958 | | | 1,011 | | Financial assets investments | | | 10 | | | | 432 | | | | 695 | | | | 10.7 | | | | 16 | | | | 911 | | | 1,532 | | | 21 | | Derivative financial assets | | | 23 | | | | 53 | | | | 38 | | | | 0.6 | | | | | | 25 | | | | — | | | | — | | Current tax asset | | | | | 23,996 | | | | 28,176 | | | | 434.5 | | | Income tax assets | | | | 9 | | | | 26,455 | | | 27,481 | | | 376 | | Othernon-current assets | | | 11 | | | | 16,992 | | | | 35,016 | | | | 540.0 | | | | 17 | | | | 70,358 | | | 127,727 | | | 1,746 | | | | | | | | | | | | | | | | | | | | | | | | | Totalnon-current assets | | | | | 1,114,274 | | | | 1,127,458 | | | | 17,385.6 | | | | | | 1,173,001 | | | | 1,208,902 | | | | 16,529 | | | | | | | | | | | | | | | | | | | | | | | | | Current assets | | | | | | | | | | | | | | | | | Inventories | | | 12 | | | | 81,261 | | | | 97,266 | | | | 1,499.9 | | | | 18 | | | | 113,362 | | | 99,509 | | | 1,360 | | Current tax asset | | | | | 2,768 | | | | 136 | | | | 2.1 | | | Income tax assets | | | | | | 75 | | | 69 | | | 1 | | Trade and other receivables | | | 13 | | | | 79,295 | | | | 60,276 | | | | 929.5 | | | | 17 | | | | 83,277 | | | 130,593 | | | 1,785 | | Short-term investments | | | 14 | | | | 566,192 | | | | 524,685 | | | | 8,090.7 | | | | 19 | | | | 327,210 | | | 281,775 | | | 3,853 | | Derivative financial assets | | | 23 | | | | 1,228 | | | | 91 | | | | 1.4 | | | | 25 | | | | 6,922 | | | 701 | | | 10 | | Restricted cash and cash equivalents | | | 15 | | | | 3,367 | | | | 11,747 | | | | 181.1 | | | | 20 | | | | 960 | | | 1,025 | | | 14 | | Cash and cash equivalents | | | 16 | | | | 20,870 | | | | 97,202 | | | | 1,498.9 | | | | 21 | | | | 50,598 | | | 48,537 | | | 664 | | | | | | | | | | | | | | | | | | | | | | | | | Total current assets | | | | | 754,981 | | | | 791,403 | | | | 12,203.6 | | | | | | 582,404 | | | | 562,209 | | | | 7,687 | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | | | | 1,869,255 | | | | 1,918,861 | | | | 29,589.2 | | | | | | 1,755,405 | | | | 1,771,111 | | | | 24,216 | | | | | | | | | | | | | | | | | | | | | | | | | LIABILITIES | | | | | | | | | | | | | | | | | Current liabilities | | | | | | | | | | | | | | | | | Short-term borrowings | | | 17 | | | | 182,328 | | | | 413,126 | | | | 6,370.5 | | | Borrowings | | | | 22 | | | | 212,231 | | | 189,600 | | | 2,592 | | Acceptances | | | 18 | | | | 99,500 | | | | 113,304 | | | | 1,747.2 | | | | 23 | | | | 101,851 | | | 80,891 | | | 1,106 | | Trade and other payables | | | 19 | | | | 252,706 | | | | 285,794 | | | | 4,406.9 | | | | 24 | | | | 310,660 | | | 309,431 | | | 4,231 | | Derivative financial liabilities | | | 23 | | | | 4,474 | | | | 8,216 | | | | 126.7 | | | | 25 | | | | 960 | | | 2,786 | | | 38 | | Retirement benefits | | | 22 | | | | 340 | | | | 503 | | | | 7.8 | | | | 27 | | | | 1,064 | | | 1,135 | | | 16 | | Provisions | | | 20 | | | | 1,693 | | | | 1,131 | | | | 17.4 | | | | 26 | | | | 2,471 | | | 2,378 | | | 33 | | Current tax liabilities | | | | | 703 | | | | 2,028 | | | | 31.3 | | | | | | 1,894 | | | 2,792 | | | 38 | | | | | | | | | | | | | | | | | | | | | | | | | Total current liabilities | | | | | 541,744 | | | | 824,102 | | | | 12,707.8 | | | | | | 631,131 | | | | 589,013 | | | | 8,054 | | | | | | | | | | | | | | | | | | | | | | | | | Net current assets / (liabilities) | | | | | 213,237 | | | | (32,699) | | | | (504.2) | | | | | | (48,727 | ) | | | (26,804 | ) | | | (367 | ) | | | | | | | | | | | | | | | | | | | | | | | | Non-current liabilities | | | | | | | | | | | | | | | | | Long-term borrowings | | | 17 | | | | 493,784 | | | | 332,654 | | | | 5,129.6 | | | Borrowings | | | | 22 | | | | 367,244 | | | 379,622 | | | 5,191 | | Deferred tax liabilities | | | 7 | | | | 30,212 | | | | 24,015 | | | | 370.3 | | | | 9 | | | | 29,675 | | | 21,894 | | | 299 | | Retirement benefits | | | 22 | | | | 1,584 | | | | 1,390 | | | | 21.4 | | | | 27 | | | | 1,614 | | | 1,465 | | | 20 | | Provisions | | | 20 | | | | 10,732 | | | | 19,233 | | | | 296.6 | | | | 26 | | | | 26,663 | | | 29,854 | | | 408 | | Derivative financial liabilities | | | 23 | | | | 78 | | | | 557 | | | | 8.6 | | | | 25 | | | | 451 | | | 764 | | | 10 | | Othernon-current liabilities | | | 21 | | | | 14,863 | | | | 3,122 | | | | 48.1 | | | | 24 | | | | 16,732 | | | 14,450 | | | 198 | | | | | | | | | | | | | | | | | | | | | | | | | Totalnon-current liabilities | | | | | 551,253 | | | | 380,971 | | | | 5,874.6 | | | | | | 442,379 | | | | 448,049 | | | | 6,126 | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities | | | | | 1,092,997 | | | | 1,205,073 | | | | 18,582.4 | | | | | | 1,073,510 | | | | 1,037,062 | | | | 14,180 | | | | | | | | | | | | | | | | | | | | | | | | | Net assets | | | | | 776,258 | | | | 713,788 | | | | 11,006.8 | | | | | | 681,895 | | | | 734,049 | | | | 10,036 | | | | | | | | | | | | | | | | | | | | | | | | | EQUITY | | | | | | | | | | | | | | | | | Share capital | | | 25 | | | | 2,965 | | | | 3,718 | | | | 57.3 | | | | 30 | | | | 3,718 | | | 3,718 | | | 51 | | Securities premium | | | | | 200,010 | | | | 190,452 | | | | 2,936.8 | | | | | | 190,452 | | | 190,452 | | | 2,604 | | Treasury shares | | | | | — | | | | (1,034) | | | | (15.9) | | | | | | (3,806 | ) | | (3,223 | ) | | (44 | ) | Share based payment reserve | | | | | — | | | | 1,548 | | | | 23.9 | | | | | | 2,496 | | | 1,707 | | | 23 | | Other components of equity | | | | | 13,203 | | | | 12,464 | | | | 192.2 | | | | | | 116,526 | | | 117,712 | | | 1,609 | | Retained earnings | | | | | 194,982 | | | | 369,390 | | | | 5,696.1 | | | | | | 203,135 | | | 274,231 | | | 3,750 | | | | | | | | | | | | | | | | | | | | | | | | | Equity attributable to equity holders of the parent | | | | | 411,160 | | | | 576,538 | | | | 8,890.4 | | | | | | 512,521 | | | | 584,597 | | | | 7,993 | | Non-controlling interests | | | | | 365,098 | | | | 137,250 | | | | 2,116.4 | | | | | | 169,374 | | | 149,452 | | | 2,043 | | | | | | | | | | | | | | | | | | | | | | | | | Total Equity | | | | | 776,258 | | | | 713,788 | | | | 11,006.8 | | | | | | 681,895 | | | | 734,049 | | | | 10,036 | | | | | | | | | | | | | | |
The accompanying notes are an integral part of these consolidated financial statements. VEDANTA LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions except share or per share amounts unless otherwise stated)
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) (Note 2) | | Cash flows from operating activities | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | (203,139) | | | | (181,348) | | | | 98,545 | | | | 1,519.6 | | Adjustments to reconcile profit to net cash provided by operating activities: | | | | | | | | | | | | | | | | | Income tax (benefit) / expense recognised in profit or loss | | | (108,320) | | | | (103,060) | | | | 38,027 | | | | 586.4 | | Depreciation and amortization | | | 111,091 | | | | 83,343 | | | | 61,477 | | | | 948.0 | | Impairment of property, plant and equipment and exploration and evaluation assets | | | 406,438 | | | | 339,549 | | | | 1,162 | | | | 17.9 | | Provision for doubtful debts/advances | | | 3,222 | | | | 2,368 | | | | 345 | | | | 5.3 | | Unsuccessful exploration costs written off | | | 7,867 | | | | 294 | | | | 407 | | | | 6.3 | | Fair value gain on financial assets held for trading | | | (37,406) | | | | (31,244) | | | | (32,630) | | | | (503.2) | | Share based payment expense | | | — | | | | — | | | | 66 | | | | 1.0 | | Loss on sale of property, plant and equipment, net | | | 153 | | | | 63 | | | | 451 | | | | 7.0 | | Exchange loss, net | | | 3,785 | | | | 6,124 | | | | 2,371 | | | | 36.5 | | Inventory Written off | | | 2,226 | | | | — | | | | 120 | | | | 1.9 | | Interest and dividend income | | | (12,998) | | | | (12,754) | | | | (12,982) | | | | (200.1) | | Interest expense | | | 58,054 | | | | 55,915 | | | | 59,413 | | | | 916.1 | | Changes in assets and liabilities: | | | | | | | | | | | | | | | | | (Increase) / decrease in trade and other receivables | | | (2,143) | | | | 22,910 | | | | 18,176 | | | | 280.3 | | Decrease/ (Increase) in inventories | | | (1,746) | | | | 6,476 | | | | (16,161) | | | | (249.2) | | Decrease / (Increase) in other current andnon-current assets | | | 5,418 | | | | (1,645) | | | | (14,181) | | | | (218.7) | | (Decrease)/increase in trade and other payable | | | 7,653 | | | | 40,072 | | | | 23,384 | | | | 360.3 | | (Decrease) in other current andnon-current liabilities | | | (5,408) | | | | (2,168) | | | | (8,854) | | | | (136.5) | | Proceeds from short-term investments | | | 1,145,596 | | | | 1,019,940 | | | | 1,032,613 | | | | 15,923.1 | | Purchases of short-term investments | | | (1,150,465) | | | | (1,070,637) | | | | (935,851) | | | | (14,431.0) | | | | | | | | | | | | | | | | | | | Cash generated from operations | | | 229,878 | | | | 174,198 | | | | 315,898 | | | | 4,871.0 | | Interest paid | | | (84,816) | | | | (55,372) | | | | (62,048) | | | | (956.8) | | Interest received | | | 18,453 | | | | 13,061 | | | | 11,315 | | | | 174.5 | | Dividends received | | | 1 | | | | 4 | | | | 7 | | | | 0.1 | | Income tax paid | | | (37,806) | | | | (24,539) | | | | (53,067) | | | | (818.3) | | | | | | | | | | | | | | | | | | | Net cash from operating activities | | | 125,710 | | | | 107,352 | | | | 212,105 | | | | 3,270.5 | | | | | | | | | | | | | | | | | | | Cash flows from investing activities | | | | | | | | | | | | | | | | | Purchases of property, plant and equipment and intangible assets | | | (82,304) | | | | (54,642) | | | | (52,517) | | | | (809.8) | | Proceeds from sale of property, plant and equipment | | | 392 | | | | 629 | | | | 1,012 | | | | 15.6 | | Exploration and evaluation assets | | | (21,438) | | | | (5,831) | | | | (1,234) | | | | (19.0) | | Loans repaid by related parties | | | 14 | | | | 25 | | | | — | | | | — | | Loans to related parties | | | (1) | | | | (656) | | | | 0 | | | | 0.0 | | Proceeds from short-term deposits | | | 155,515 | | | | 48,844 | | | | 11,231 | | | | 173.2 | | Purchases of short-term deposits | | | (94,490) | | | | (31,705) | | | | (36,349) | | | | (560.5) | | Acquisition of additional interests in subsidiaries | | | — | | | | — | | | | (40) | | | | (0.6) | | Net changes in restricted cash and cash equivalents | | | (1,627) | | | | 723 | | | | (2,013) | | | | (31.0) | | | | | | | | | | | | | | | | | | | Net cash used in investing activities | | | (43,939) | | | | (42,613) | | | | (79,910) | | | | (1,232.1) | | | | | | | | | | | | | | | | | | | Cash flows from financing activities | | | | | | | | | | | | | | | | | (Repayment of) / proceeds from working capital loan, net | | | 1,641 | | | | 2,130 | | | | 6,123 | | | | 94.4 | | Proceeds from acceptances | | | 174,029 | | | | 162,739 | | | | 175,698 | | | | 2,709.3 | | Repayment of acceptances | | | (171,118) | | | | (160,982) | | | | (163,134) | | | | (2,515.6) | | Proceeds from other short-term borrowings | | | 459,659 | | | | 415,541 | | | | 720,647 | | | | 11,112.5 | | Repayment of other short-term borrowings | | | (513,716) | | | | (468,658) | | | | (582,196) | | | | (8,977.6) | | Proceeds from long-term borrowings | | | 180,428 | | | | 115,657 | | | | 88,466 | | | | 1,364.2 | | Repayment of long-term borrowings | | | (99,486) | | | | (39,595) | | | | (71,743) | | | | (1,106.3) | |
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) (Note 2) | | Loan from related parties | | | 730 | | | | 3,856 | | | | 2,846 | | | | 43.9 | | Loan repaid to related parties | | | (80,463) | | | | (51,182) | | | | (128,094) | | | | (1,975.2) | | Payment of dividends to equity holders of the parent, including dividend distribution tax | | | (10,378) | | | | (17,358) | | | | (5,189) | | | | (80.0) | | Payment of dividends tonon-controlling interests, including dividend distribution tax | | | (16,703) | | | | (14,862) | | | | (91,537) | | | | (1,411.5) | | Proceeds from issue of shares at a subsidiary | | | 147 | | | | — | | | | — | | | | — | | Purchase of Treasury Shares | | | — | | | | — | | | | (1,034) | | | | (15.9) | | Proceeds from erstwhile Cairn Stock Options | | | — | | | | — | | | | 24 | | | | 0.4 | | Payment for buyback of shares at subsidiary (including buyback expenses) | | | (11,218) | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Net cash used in financing activities | | | (86,448) | | | | (52,714) | | | | (49,123) | | | | (757.4) | | | | | | | | | | | | | | | | | | | Effect of exchange rate changes on cash and cash equivalents | | | 338 | | | | 224 | | | | (299) | | | | (4.6) | | Net (decrease) / increase in cash and cash equivalents | | | (4,339) | | | | 12,249 | | | | 82,773 | | | | 1,276.4 | | Cash and cash equivalents at the beginning of the year | | | 12,960 | | | | 8,621 | | | | 20,870 | | | | 321.8 | | Cash and cash equivalents at the end of the year1 | | | 8,621 | | | | 20,870 | | | | 103,643 | | | | 1,598.2 | | Supplementary disclosure ofnon-cash investing activities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Payables for purchase of property, plant and equipment including exploration and evaluation assets | | | 86,009 | | | | 66,711 | | | | 40,535 | | | | 625.1 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) (Note 2 (a)) | | Cash flows from operating activities | | | | | | | | | | | | | | | | | Profit / (loss) before tax | | | 117,730 | | | | (68,777 | ) | | | 166,074 | | | | 2,271 | | Adjustments to reconcile profit / (loss) to net cash provided by operating activities: | | | | | | | | | | | | | | | | | Depreciation and amortisation | | | 96,146 | | | | 100,490 | | | | 81,178 | | | | 1,110 | | Impairment (reversal) / charge of property, plant and equipment/ exploration and evaluation assets/ other assets | | | (2,611 | ) | | | 148,022 | | | | — | | | | — | | Provision for loss of Asset under construction | | | — | | | | — | | | | 2,440 | | | | 33 | | Provision for doubtful debts/advances | | | — | | | | 3,281 | | | | 5,126 | | | | 70 | | Unsuccessful exploration costs written off | | | 497 | | | | 27 | | | | 71 | | | | 1 | | Fair value gain on financial assets held for trading/fair value through profit or loss | | | (18,393 | ) | | | (5,574 | ) | | | (9,340 | ) | | | (128 | ) | Share based payment expense | | | 812 | | | | 716 | | | | 575 | | | | 8 | | Loss/ (Gain) on sale of property, plant and equipment, net | | | 682 | | | | 562 | | | | (743 | ) | | | (10 | ) | Exchange loss/ (gain), net | | | 5,919 | | | | 3,436 | | | | (1025 | ) | | | (14 | ) | Inventory Written off | | | 1,564 | | | | 1,176 | | | | — | | | | — | | Interest, dividend income and bargain gain | | | (14,498 | ) | | | (17,651 | ) | | | (22,306 | ) | | | (305 | ) | Interest expense | | | 56,305 | | | | 49,768 | | | | 53,135 | | | | 726 | | Costs incurred for environment clearance | | | — | | | | — | | | | 2,135 | | | | 29 | | Liabilities written back no longer required | | | — | | | | (1,681 | ) | | | (950 | ) | | | (13 | ) | Changes in assets and liabilities: | | | | | | | | | | | | | | | | | (Increase) / decrease in receivables | | | (27,783 | ) | | | 11,479 | | | | (29,250 | ) | | | (400 | ) | (Increase) / decrease in inventories | | | (6,316 | ) | | | 19,447 | | | | 13,833 | | | | 189 | | Increase / (decrease) in payables | | | 66,889 | | | | (54,748 | ) | | | 7,515 | | | | 103 | | Proceeds from short-term investments | | | 833,526 | | | | 1,033,449 | | | | 833,293 | | | | 11,393 | | Purchases of short-term investments | | | (815,230 | ) | | | (983,579 | ) | | | (751,598 | ) | | | (10,276 | ) | | | | | | | | | | | | | | | | | | Cash generated from operations | | | 295,239 | | | | 239,843 | | | | 350,163 | | | | 4,787 | | Interest paid | | | (58,901 | ) | | | (55,682 | ) | | | (53,499 | ) | | | (731 | ) | Interest received | | | 8,868 | | | | 9,401 | | | | 20,351 | | | | 278 | | Dividends received | | | 306 | | | | 181 | | | | 18 | | | | 0 | | Income tax paid | | | (37,092 | ) | | | (11,350 | ) | | | (21,081 | ) | | | (288 | ) | | | | | | | | | | | | | | | | | | Net cash from operating activities | | | 208,420 | | | | 182,393 | | | | 295,952 | | | | 4,046 | | | | | | | | | | | | | | | | | | | Cash flows from investing activities | | | | | | | | | | | | | | | | | Consideration paid for business acquisition (net of cash and cash equivalents acquired) | | | (50,750 | ) | | | (335 | ) | | | (448 | ) | | | (6 | ) | Purchases of property, plant and equipment (including intangibles) | | | (89,754 | ) | | | (78,227 | ) | | | (68,833 | ) | | | (941 | ) | Proceeds from sale of property, plant and equipment | | | 1,252 | | | | 1,455 | | | | 1,678 | | | | 23 | | Loans repaid by related parties (Refer Note 35) | | | 15 | | | | — | | | | 11,116 | | | | 152 | | Loans to related parties (Refer Note 35) | | | (0 | ) | | | — | | | | (76,600 | ) | | | (1,047 | ) | Proceeds from short-term deposits | | | 43,501 | | | | 45,634 | | | | 145,633 | | | | 1,991 | | Purchases of short-term deposits | | | (19,310 | ) | | | (111,899 | ) | | | (179,839 | ) | | | (2,459 | ) | Proceeds on liquidation of structured investments | | | — | | | | 30,774 | | | | — | | | | — | | Payment towards structured investments | | | (18,152 | ) | | | (4,354 | ) | | | — | | | | — | | Net changes in restricted cash and cash equivalents | | | 51 | | | | 86 | | | | (65 | ) | | | (1 | ) | | | | | | | | | | | | | | | | | | Net cash used in investing activities | | | (133,147 | ) | | | (116,866 | ) | | | (167,358 | ) | | | (2,288 | ) | | | | | | | | | | | | | | | | | | Cash flows from financing activities | | | | | | | | | | | | | | | | | Repayment of working capital loan, net | | | (6,265 | ) | | | (113,658 | ) | | | (95,925 | ) | | | (1,312 | ) | Proceeds from acceptances | | | 173,808 | | | | 170,398 | | | | 190,993 | | | | 2,611 | | Repayment of acceptances | | | (186,824 | ) | | | (149,221 | ) | | | (211,398 | ) | | | (2,890 | ) | Proceeds from other short-term borrowings | | | 44,291 | | | | 22,344 | | | | 104,895 | | | | 1,434 | | Repayment of other short-term borrowings | | | (31,775 | ) | | | (26,837 | ) | | | (91,279 | ) | | | (1,248 | ) | Proceeds from long-term borrowings | | | 168,346 | | | | 118,256 | | | | 167,070 | | | | 2,284 | | Repayment of long-term borrowings | | | (98,890 | ) | | | (89,959 | ) | | | (95,770 | ) | | | (1,309 | ) | Payment of dividends to equity holders of the parent | | | (69,795 | ) | | | (14,441 | ) | | | (35,187 | ) | | | (481 | ) | Payment of dividends to non-controlling interests, including dividend distribution tax | | | (37,158 | ) | | | — | | | | (56,029 | ) | | | (766 | ) | Loan given to parent and its affiliates in excess of fair value (Refer Note 35) | | | — | | | | — | | | | (5,361 | ) | | | (73 | ) | Purchase of Treasury Shares for stock options | | | (1,425 | ) | | | — | | | | — | | | | — | | Exercise of Stock options | | | 44 | | | | — | | | | — | | | | — | | Payment for acquiring non-controlling interest | | | — | | | | (1,074 | ) | | | — | | | | — | | Payment of lease liability | | | — | | | | (3,164 | ) | | | (3,380 | ) | | | (46 | ) | | | | | | | | | | | | | | | | | | Net cash used in financing activities | | | (45,643 | ) | | | (87,356 | ) | | | (131,371 | ) | | | (1,796 | ) | | | | | | | | | | | | | | | | | | Effect of exchange rate changes on cash and cash equivalents | | | (936 | ) | | | 136 | | | | 716 | | | | 10 | | | | | | | | | | | | | | | | | | | Net (decrease) / increase in cash and cash equivalents | | | 28,694 | | | | (21,693 | ) | | | (2,061 | ) | | | (28 | ) | | | | | | | | | | | | | | | | | | Cash and cash equivalents at the beginning of the year | | | 43,597 | | | | 72,291 | | | | 50,598 | | | | 692 | | Cash and cash equivalents at the end of the year1 | | | 72,291 | | | | 50,598 | | | | 48,537 | | | | 664 | |
The accompanying notes are an integral part of these consolidated financial statements. 1. | For composition referRefer Note 15 and Note 1621 |
VEDANTA LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In millions except share or per share amounts unless otherwise stated)₹ in million) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attributable to equity holders of the parent | | | | | | | | | | Share capital | | | Securities premium | | | Translation of foreign operations | | | Available for sale financial investments | | | Cash flow hedges | | | Retained earnings | | | Total | | | Non controlling interests | | | Total | | Balance as at April 1, 2014 | | | 2,965 | | | | 200,010 | | | | 22,527 | | | | 48 | | | | 589 | | | | 473,431 | | | | 699,570 | | | | 562,773 | | | | 1,262,343 | | Loss for the year | | | — | | | | — | | | | — | | | | — | | | | — | | | | (128,350) | | | | (128,350) | | | | (74,789) | | | | (203,139) | | Exchange differences on translation of foreign operations | | | — | | | | — | | | | (1,844) | | | | — | | | | — | | | | — | | | | (1,844) | | | | 10,464 | | | | 8,620 | | Movement in available for sale financial investments | | | — | | | | — | | | | — | | | | 151 | | | | — | | | | — | | | | 151 | | | | — | | | | 151 | | Re-measurement of defined benefit obligation, net of tax | | | — | | | | — | | | | — | | | | — | | | | — | | | | (301) | | | | (301) | | | | (156) | | | | (457) | | Net movement in fair value of cash flow hedges, net of tax | | | — | | | | — | | | | — | | | | — | | | | (778) | | | | — | | | | (778) | | | | 20 | | | | (758) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) for the year | | | — | | | | — | | | | (1,844) | | | | 151 | | | | (778) | | | | (128,651) | | | | (131,122) | | | | (64,461) | | | | (195,583) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in Non controlling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,049 | | | | 3,049 | | | | (14,120) | | | | (11,071) | | Dividend including tax on dividend | | | — | | | | — | | | | — | | | | — | | | | — | | | | (10,378) | | | | (10,378) | | | | (16,703) | | | | (27,081) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2015 | | | 2,965 | | | | 200,010 | | | | 20,683 | | | | 199 | | | | (189) | | | | 337,451 | | | | 561,119 | | | | 467,489 | | | | 1,028,608 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attributable to equity holders of the parent | | | | | | | | | | Share capital | | | Securities premium | | | Translation of foreign operations | | | Available for sale financial investments | | | Cash flow hedges | | | Retained earnings | | | Total | | | Non controlling interests | | | Total | | Balance as at April 1, 2015 | | | 2,965 | | | | 200,010 | | | | 20,683 | | | | 199 | | | | (189) | | | | 337,451 | | | | 561,119 | | | | 467,489 | | | | 1,028,608 | | Loss for the year | | | — | | | | — | | | | — | | | | — | | | | — | | | | (125,153) | | | | (125,153) | | | | (56,195) | | | | (181,348) | | Exchange differences on translation of foreign operations | | | — | | | | — | | | | (7,813) | | | | — | | | | — | | | | — | | | | (7,813) | | | | 11,040 | | | | 3,227 | | Movement in available for sale financial investments | | | — | | | | — | | | | — | | | | 170 | | | | — | | | | — | | | | 170 | | | | — | | | | 170 | | Re-measurement of defined benefit obligation, net of tax | | | — | | | | — | | | | — | | | | — | | | | — | | | | (65) | | | | (65) | | | | (28) | | | | (93) | | Net movement in fair value of cash flow hedges, net of tax | | | — | | | | — | | | | — | | | | — | | | | 153 | | | | — | | | | 153 | | | | 10 | | | | 163 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) for the year | | | — | | | | — | | | | (7,813) | | | | 170 | | | | 153 | | | | (125,218) | | | | (132,708) | | | | (45,173) | | | | (177,881) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Change in Non controlling interests | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 356 | | | | 356 | | Dividend including tax on dividend | | | — | | | | — | | | | — | | | | — | | | | — | | | | (17,358) | | | | (17,358) | | | | (57,676) | | | | (75,034) | | Others | | | | | | | | | | | — | | | | | | | | | | | | 107 | | | | 107 | | | | 102 | | | | 209 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2016 | | | 2,965 | | | | 200,010 | | | | 12,870 | | | | 369 | | | | (36) | | | | 194,982 | | | | 411,160 | | | | 365,098 | | | | 776,258 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attributable to equity holders of the parent | | | | | | | | | | Share capital | | | Securities premium | | | Treasury shares# | | | Share based payment reserve | | | Translation of foreign operations | | | Available for sale financial investments | | | Cash flow hedges | | | Retained earnings* | | | Total | | | Non controlling interests | | | Total | | Balance as at April 1, 2016 | | | 2,965 | | | | 200,010 | | | | — | | | | — | | | | 12,870 | | | | 369 | | | | (36) | | | | 194,982 | | | | 411,160 | | | | 365,098 | | | | 776,258 | | Profit for the year | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 55,033 | | | | 55,033 | | | | 43,512 | | | | 98,545 | | Exchange differences on translation of foreign operations, net of tax1 | | | — | | | | — | | | | — | | | | — | | | | (1,081) | | | | — | | | | — | | | | — | | | | (1,081) | | | | (2,385) | | | | (3,466) | | Movement in available for sale financial investments | | | — | | | | — | | | | — | | | | — | | | | — | | | | 263 | | | | — | | | | — | | | | 263 | | | | — | | | | 263 | | Re-measurement of defined benefit obligation, net of tax1 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (2) | | | | (2) | | | | (12) | | | | (14) | | Net movement in fair value of cash flow hedges, net of tax1,2 | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 79 | | | | — | | | | 79 | | | | (95) | | | | (16) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) for the year | | | — | | | | — | | | | — | | | | — | | | | (1,081) | | | | 263 | | | | 79 | | | | 55,031 | | | | 54,292 | | | | 41,020 | | | | 95,312 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Transferred to capital reserve pursuant to merger (Refer note 1) | | | — | | | | (9,558) | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 9,558 | | | | — | | | | — | | | | — | | Purchase of treasury shares | | | — | | | | — | | | | (1,034) | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,034) | | | | — | | | | (1,034) | | Recognition of share based payment | | | — | | | | — | | | | — | | | | 66 | | | | — | | | | — | | | | — | | | | — | | | | 66 | | | | — | | | | 66 | | Purchase ofnon-controlling interests—Cairn India Limited | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (15) | | | | (15) | | | | (188) | | | | (203) | | Dividend including tax on dividend | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (70,918) | | | | (70,918) | | | | (55,165) | | | | (126,083) | | Change in Non controlling interests (Refer note 1) | | | 753 | | | | — | | | | — | | | | 1,482 | | | | — | | | | — | | | | — | | | | 180,752 | | | | 182,987 | | | | (213,515) | | | | (30,528) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2017 | | | 3,718 | | | | 190,452 | | | | (1,034) | | | | 1,548 | | | | 11,789 | | | | 632 | | | | 43 | | | | 369,390 | | | | 576,538 | | | | 137,250 | | | | 713,788 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2017 (in US dollars in million) | | | 57.3 | | | | 2,936.8 | | | | (15.9) | | | | 23.9 | | | | 181.8 | | | | 9.7 | | | | 0.7 | | | | 5,696.1 | | | | 8,890.4 | | | | 2,116.4 | | | | 11,006.8 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attributable to equity holders of the parent | | | | | | | | | | Share capital | | | Securities premium | | | Treasury shares# | | | Share based payment reserve | | | Translation of foreign operations | | | Equity Instruments through OCI | | | Cash flow hedges | | | Retained earnings* | | | Total | | | Non- controlling interests | | | Total | | Balance as at April 1, 2018 | | | 3,718 | | | | 190,452 | | | | (2,607 | ) | | | 1,773 | | | | 98,673 | | | | 1,532 | | | | (104 | ) | | | 303,363 | | | | 596,800 | | | | 157,377 | | | | 754,177 | | Profit for the year | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 49,775 | | | | 49,775 | | | | 26,454 | | | | 76,229 | | Other comprehensive income / (loss) for the year, net of tax | | | — | | | | — | | | | — | | | | — | | | | 8,277 | | | | (446 | ) | | | (630 | ) | | | (122 | ) | | | 7,079 | | | | (833 | ) | | | 6,246 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) for the year | | | — | | | | — | | | | — | | | | — | | | | 8,277 | | | | (446 | ) | | | (630 | ) | | | 49,653 | | | | 56,854 | | | | 25,621 | | | | 82,475 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Purchase of treasury shares | | | — | | | | — | | | | (1,425 | ) | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,425 | ) | | | — | | | | (1,425 | ) | Stock options cancelled during the year | | | — | | | | — | | | | — | | | | (71 | ) | | | — | | | | — | | | | — | | | | 71 | | | | — | | | | — | | | | — | | Recognition of share based payment | | | — | | | | — | | | | — | | | | 822 | | | | — | | | | — | | | | — | | | | — | | | | 822 | | | | — | | | | 822 | | Exercise of stock options | | | — | | | | — | | | | 61 | | | | (31 | ) | | | — | | | | — | | | | — | | | | 14 | | | | 44 | | | | — | | | | 44 | | Non-controlling interest on business combination | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,962 | | | | 1,962 | | Dividend | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (69,795 | ) | | | (69,795 | ) | | | (35,739 | )1 | | | (105,534 | ) | Change in fair value of put option liability/ conversion option asset/ derecognition of non-controlling interest | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,962 | ) | | | (1,962 | ) | | | 1,387 | | | | (575 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2019 | | | 3,718 | | | | 190,452 | | | | (3,971 | ) | | | 2,493 | | | | 106,950 | | | | 1,086 | | | | (734 | ) | | | 281,344 | | | | 581,338 | | | | 150,608 | | | | 731,946 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Retained earnings mainly includes general reserve, debenture redemption reserve, preference share redemption reserve and capital reserve (Refer Note 25)30) |
# | Treasury share represents 3,984,25614,998,702 equity shares (face value of Re₹ 1 each) of the Company purchased by Vedanta Limited ESOP Trust pursuant to the Company’s stock option scheme as detailed in note 26.Note 29. |
1 | Refer toIncludes tax on dividend |
(₹ in million) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attributable to equity holders of the parent | | | | | | | | | | Share capital | | | Securities premium | | | Treasury shares# | | | Share based payment reserve | | | Translation of foreign operations | | | Equity Instruments through OCI | | | Cash flow hedges | | | Retained earnings* | | | Total | | | Non- controlling interests | | | Total | | Balance as at April 1, 2019 | | | 3,718 | | | | 190,452 | | | | (3,971 | ) | | | 2,493 | | | | 106,950 | | | | 1,086 | | | | (734 | ) | | | 281,344 | | | | 581,338 | | | | 150,608 | | | | 731,946 | | Profit / (Loss) for the year | | | — | | | | — | | | | — | | | | — | | | | — | | �� | | — | | | | — | | | | (61,248 | ) | | | (61,248 | ) | | | 19,148 | | | | (42,100 | ) | Other comprehensive income / (loss) for the year, net of tax | | | — | | | | — | | | | — | | | | — | | | | 9,498 | | | | (738 | ) | | | 464 | | | | (926 | ) | | | 8,298 | | | | (1,280 | ) | | | 7,018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) for the year | | | — | | | | — | | | | — | | | | — | | | | 9,498 | | | | (738 | ) | | | 464 | | | | (62,174 | ) | | | (52,950 | ) | | | 17,868 | | | | (35,082 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock options cancelled during the year | | | — | | | | — | | | | — | | | | (519 | ) | | | — | | | | — | | | | — | | | | 519 | | | | — | | | | — | | | | — | | Recognition of share based payment | | | — | | | | — | | | | — | | | | 754 | | | | — | | | | — | | | | — | | | | — | | | | 754 | | | | — | | | | 754 | | Exercise of stock options | | | — | | | | — | | | | 165 | | | | (232 | ) | | | — | | | | — | | | | — | | | | 67 | | | | 0 | | | | 0 | | | | 0 | | Dividend | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (14,441 | ) | | | (14,441 | ) | | | — | | | | (14,441 | ) | Change in fair value of put option liability/ conversion option asset/ derecognition of non-controlling interest | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (3,448 | ) | | | (3,448 | ) | | | 3,240 | | | | (208 | ) | Acquisition of Non-controlling interest in Electrosteel Steels Limited | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,268 | | | | 1,268 | | | | (2,342 | ) | | | (1,074 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2020 | | | 3,718 | | | | 190,452 | | | | (3,806 | ) | | | 2,496 | | | | 116,448 | | | | 348 | | | | (270 | ) | | | 203,135 | | | | 512,521 | | | | 169,374 | | | | 681,895 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Retained earnings mainly includes general reserve, debenture redemption reserve, preference share redemption reserve and capital reserve (Refer Note 7 for tax related to each component of other comprehensive income / (loss)30) |
2# | ReferTreasury share represents 14,378,261 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(a) for amounts reclassified into consolidated statements of profit / (loss) for the year out of other comprehensive income / (loss)29. |
(₹ in million) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Attributable to equity holders of the parent | | | | | | | | | | Share capital | | | Securities premium | | | Treasury shares# | | | Share based payment reserve | | | Translation of foreign operations | | | Equity Instruments through OCI | | | Cash flow hedges | | | Retained earnings* | | | Total | | | Non- controlling interests | | | Total | | Balance as at April 1, 2020 | | | 3,718 | | | | 190,452 | | | | (3,806 | ) | | | 2,496 | | | | 116,448 | | | | 348 | | | | (270 | ) | | | 203,135 | | | | 512,521 | | | | 169,374 | | | | 681,895 | | Profit for the year | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 112,883 | | | | 112,883 | | | | 34,107 | | | | 146,990 | | Other comprehensive income / (loss) for the year, net of tax | | | — | | | | — | | | | — | | | | — | | | | 777 | | | | 621 | | | | (212 | ) | | | (64 | ) | | | 1,122 | | | | 940 | | | | 2,062 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) for the year | | | — | | | | — | | | | — | | | | — | | | | 777 | | | | 621 | | | | (212 | ) | | | 112,819 | | | | 114,005 | | | | 35,047 | | | | 149,052 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Stock options cancelled during the year | | | — | | | | — | | | | — | | | | (920 | ) | | | — | | | | — | | | | — | | | | 595 | | | | (325 | ) | | | — | | | | (325 | ) | Recognition of share based payment | | | — | | | | — | | | | — | | | | 575 | | | | — | | | | — | | | | — | | | | — | | | | 575 | | | | — | | | | 575 | | Exercise of stock options | | | — | | | | — | | | | 583 | | | | (444 | ) | | | — | | | | — | | | | — | | | | (139 | ) | | | — | | | | — | | | | — | | Dividend | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (35,187 | ) | | | (35,187 | ) | | | (56,029 | ) | | | (91,216 | ) | Acquisition of FACOR (Refer Note 4(a)) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (309 | ) | | | (309 | ) | Change in fair value of put option liability/ conversion option asset/ derecognition of non-controlling interest | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,631 | ) | | | (1,631 | ) | | | 1,369 | | | | (262 | ) | Effect of fair valuation of inter-company loan** | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (5,361 | ) | | | (5,361 | ) | | | — | | | | (5,361 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2021 | | | 3,718 | | | | 190,452 | | | | (3,223 | ) | | | 1,707 | | | | 117,225 | | | | 969 | | | | (482 | ) | | | 274,231 | | | | 584,597 | | | | 149,452 | | | | 734,049 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as at March 31, 2021 (US dollars in million) | | | 51 | | | | 2,604 | | | | (44 | ) | | | 23 | | | | 1,603 | | | | 13 | | | | (7 | ) | | | 3,750 | | | | 7,993 | | | | 2,043 | | | | 10,036 | |
* | Retained earnings mainly includes general reserve, debenture redemption reserve, preference share redemption reserve and capital reserve (Refer Note 30) |
# | Treasury share represents 12,193,159 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 29. |
** | An amount of ₹ 3,364 million ($ 46 million) was originally recognized as a transaction with the shareholder and the same was increased by ₹ 5,802 million ($ 79 million) upon revision in terms. Of the same, ₹ 3,805 million ($ 52 million) was reversed on a subsequent modification during the year. Refer note 35(b) for further details. |
VEDANTA LIMITED AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. Group overview - Vedanta Limited (“the Company” or “the parent”) and its consolidated subsidiaries (collectively, the “Group” or “Vedanta Limited”) are principallyis a diversified natural resource group engaged in businessexploring, extracting and processing minerals and oil and gas. The Group engages in the exploration, production and sale of zinc, lead, silver, copper, aluminum, iron ore mining,non-ferrous metals and mining (copper, aluminiumoil & gas and zinc),have 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 and exploration & production of oil & gas in India Australia, Namibia,and manufacturing of glass substrate in South Africa, Liberia, UAEKorea and Ireland. Vedanta LimitedTaiwan. The Company was incorporated on September 8, 19758,1975 under the laws of the Republic of India and had its registered office at Tuticorin, Tamilnadu.India. The registered office of the Company has been changed to 1stis situated at 1st Floor, ‘C’ wing, Unit 103, Corporate Avenue, Atul Projects, Chakala,Chaklala, Andheri (East), Mumbai-400092, Maharashtra. Vedanta Limited’sThe Company’s shares are listed on National Stock Exchange and Bombay Stock Exchange in India. In June 2007, Vedanta Limitedthe 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. In July 2009, Vedanta Limitedthe Company completed itsfollow-on offering of an additional 131,906,011 ADSs, each currently representing four equity shares, which are listed on the New York Stock Exchange. On April 22, 2015, theThe Company (formerly known as Sesa Sterlite Limited) submitted to the SEC that its name has been changed to Vedanta Limited following the approval from the Registrar of Companies, Goa on April 21, 2015.
Cairn India Limited Merger
The Group’s oil and gas business was held by Cairn India Limited and its subsidiaries. During the current year, pursuant to the merger of Cairn India Limited with the Company (refer below), interests have been transferred to Vedanta Limited and its subsidiaries.
Merger of Cairn India Limited with Vedanta Limited
Vedanta Limited and Cairn India Limited, had initially announced a scheme of merger between the two companies on June 14, 2015, terms whereof were amended on July 22, 2016 (“Scheme”). As per the terms of the Scheme, Cairn India Limited was to merge into Vedanta Limited and upon the merger becoming effective:
| a. | Non-controlling shareholders of Cairn India Limited were to receive one equity share in Vedanta Limited of face value Re. 1 each and four 7.5% Redeemable Preference Shares (redeemable after 18 months from issuance) in Vedanta Limited with a face value of Rs. 10 each for each equity share held in Cairn India Limited. |
| b. | No shares were to be issued to Vedanta Limited or any of its subsidiaries for their shareholding in Cairn India Limited. This included shares held by Sesa Resources Limited in Cairn India Limited with a carrying value of Rs. 9,558 Million, the effects of cancellation of which was to be recorded in securities premium account. |
| c. | The employees of Cairn India Limited who were holding stock options in Cairn India Limited were to be compensated either in cash or through issuance of stock options of Vedanta Limited. |
| d. | The authorised share capital of Cairn India Limited aggregating to Rs. 22,500 million was to be assumed by the Company, resulting in an increase in its authorised share capital from Rs. 51,620 Million (divided into 51,270 million equity shares of Re. 1 each and 35 million preference shares of Rs. 10 each) to Rs. 74,120 million (divided into 44,020 million equity shares of Re. 1 each and 3,010 million preference shares of Rs. 10 each). |
All substantive approvals for effecting the merger of Cairn India Limited with Vedanta Limited were received by March 27, 2017 and therefore the same has been accounted for in the current financial year ending March 31, 2017. The Board of Directors of both the companies made the merger operative on April 11, 2017, whereafter Cairn India Limited ceased to exist.
Sincenon-controlling shareholders of Cairn India Limited have become the shareholders of the Company,non-controlling interest of Rs. 213,515 Million ($ 3,292.4 million) attributable to Cairn India Limited stands extinguished. Correspondingly, there is (a) an increase in equity share capital of Rs. 753 Million ($ 11.6 million) (representing par value of 752.5 million equity shares), borrowings of Rs. 30,100 Million ($ 464.1 million) (representing par value of redeemable preferences shares) and Rs. 428 Million ($ 6.6 million) (representing cash compensation payable to stock option holders of Cairn India Limited), share based payment reserve of Rs. 1,482 million ($ 22.9 million) (representing employee stock options issued to stock option holders of Cairn India Limited) and other equity of Rs. 190,310 million ($ 2,934.6 million) and (b) a decrease in securities premium account by Rs. 9,558 million ($ 147.4 million).
Goa Energy Limited and Sterlite Infra Limited Merger
During fiscal year 2015, Goa Energy Limited and Sterlite Infra Limited, wholly owned subsidiaries, merged with Vedanta Limited. The High Court of Bombay had approved the scheme of amalgamation of the Goa Energy Limited on March 12, 2015 and the High Court of Madras had approved the Scheme of Amalgamation of Sterlite Infra Limited on March 25, 2015.
Business Overview -
Vedanta Limited and its consolidated subsidiaries is a diversified natural resource company 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 have a presence across India, South Africa, Namibia, Ireland, Australia, Liberia and UAE. The Group is also in the business of commercial power generation and port operations in India.
Vedanta Limited is majority owned by Twin Star Holdings Limited (“Twin Star”), Finsider International Company Limited (“Finsider”), Vedanta Holdings Mauritius II Limited (“VHM2L”),West Globe Limited (“West Globe”) and Welter Trading Limited (“Welter”) which are in turn wholly-owned subsidiaries of Vedanta Resources PLC (“VRPLC”), which was a public limited company incorporated in the United Kingdom and listed on the London Stock Exchange.Exchange (VRPLC has been delisted from London Stock Exchange on October 1, 2018 and is renamed as “Vedanta Resources Limited” (“VRL”) with effect from October 29, 2018). Twin Star, Finsider, VHM2L, West Globe and Welter held 46.5%37.1%, 13.5%10.8%, 1.5%5.0%, 1.2% and 1.3%1.0% respectively of Vedanta Limitedthe Company’s equity as at March 31, 2017.2021.
Details of Group’s various businesses are as follows. The Group’s zincpercentage holdings in each of the below businesses are disclosed in Note 34. Zinc India business is owned and operated by Hindustan Zinc Limited (“HZL”) in which it has a 64.9% interest as at March 31, 2017. HZL’s operations include five lead-zinc mines, one rock phosphate mine, four hydrometallurgical zinc smelters, two lead smelters, one pyro metallurgical lead-zinc smelter, six sulphuric acid plants, a silver refinery and six captive power plants in the State of Rajasthan in Northwest India and one zinc ingot melting and casting plant at Haridwar and one silver refinery, one zinc ingot melting and casting plant and one lead ingot melting and casting plant at Pantnagar in the State of Uttarakhand in North India.. The Group’s zinc
Zinc international business is comprised of 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 has 100% interest in Skorpion, 74% interest in BMM and 100% interest in Lisheen (which owns the Lisheen mine in Ireland that ceased operations in December 2015) as at March 31, 2017. The Group’s oil and gas business is owned and operated by Vedanta Limited (prior to merger this was owned and operated by erstwhile Cairn India Limited)the Company and its subsidiariessubsidiary, Cairn Energy Hydrocarbons Limited and Cairn South Africa Proprietary Limited. The Group has a diversified asset base with seven blocks, one in stateconsists of Rajasthan in India, one on the west coastexploration, development and production of India, four on the east coast of Indiaoil and one in South Africa. On 15 October 2015, at the expiry of second phase extension, the Group has relinquished the block in Sri Lanka and is in the process of closing down the Sri Lankan operations.gas. The Group’s iron ore business is owned by Vedanta Limitedthe Company, and by two wholly owned subsidiaries of the Company, i.e., Sesa Resources Limited and Sesa Mining Corporation Private Limited and consists of exploration, mining and processing of iron ore, pig iron and metallurgical coke and generation of power. The miningpower for captive use. Pursuant to Honourable Supreme Court order, operations are carried out at Codli group, Bicholim mine, Surla mine andin the Sonshi group of mines in state of Goa and Narrain mines situated at state of Karnataka in India. The business also has a Metallurgical Coke and Pig Iron plant in state of Goa in India. Iron ore business also has a power plant in state of Goa in India for captive use.are currently suspended. The Group’s iron ore business includes Western Cluster Limited (“WCL”) in Liberia which has iron ore assets and is a wholly owned subsidiary ofby the Group. WCL’s assets include development rights to western clusterWestern 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 Vedanta Limited,the Company, Copper Mines of Tasmania Pty Ltd (“CMT”) and Fujairah Gold FZC and is principally one of custom smelting and includes a copper smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three 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 April 09, 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 May 23, 2018 ordered for disconnection of electricity supply and closure of copper smelter plant. Post such order, the state government on May 28, 2018 ordered the permanent closure of the plant. We continue to engage with the Government of India and arelevant authorities to enable the restart of operations at copper India. [Refer Note 3(c)(I)(vii)]. Further, the Company’s copper business includes refinery and tworod 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 plants at Silvassa in Western India. 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 in the UAE.FZC. The operations of Mt Lyell copper mine waswere suspended in January 2014 following a mud slide incident and the operations at Mt Lyell copper mine have beenwere put into care and maintenance since July 9,09, 2014 following a rock fall incident in June 2014. The Group’s aluminiumAluminium business is owned and operated by Vedanta Limitedthe Company and by Bharat Aluminium Company Limited (“BALCO”) in which it has a 51% interest as at March 31, 2017.. The aluminium operations include a refinery and a 75 MW captive power plant at Lanjigarh and a smelter and a 1215 MW captive power plantplants at Jharsuguda both situated in the State of OrissaOdisha in India. The pots are in the stage of commissioning in the 1.25 mtpaJharsuguda-II Aluminium smelter with 530 pots having been commissioned by March 31, 2017. Refinery expansion project being set up at Lanjigarh was on hold since October 20, 2010, as the MoEF had directed the Company to hold from further expansion. However, environment clearance (EC) for the Lanjigarh expansion project has been received in the quarter ending December 31, 2015. BALCO’s partially integrated aluminium operations are comprised of two bauxite mines, 1410 MWcaptive power plant,plants, smelting and fabrication facilities in the State of Chhattisgarh in central India.The BALCO-II smelter was commissioned, with all 336 pots operational in August 2016.India. The Group’s power business is owned and operated by Vedanta Limited,the Company, BALCO, HZL, MEL and Talwandi Sabo Power Limited (“TSPL”), a wholly owned subsidiariessubsidiary of Vedanta Limitedthe Company, which are engaged in the power generation business in India. Vedanta LimitedThe Company’s power operations include 2,400 MW (four unitsa thermal coal- based commercial power facility of 600 MW each) thermal coal-based commercial power facility at Jharsuguda in the State of OrissaOdisha in Eastern India and all fourIndia. BALCO power operations included 600 MW (2 units of 600300 MW are currently operational. In 2015, the Company had petitioned to OERC to convert the 600 MW X 4 IPP into Captive power plant (CPP) to cater the power needs of the 1.25 MTPA Smelter at Jharsuguda. After many deliberations & considerations of facts, OERC issued an order of conversion of Unit 1, 3 & 4 into CPP with effect from April 1, 2015, however retained the IPP status of Unit 2 to fulfill the obligation under PPA with GRIDCO. BALCO haseach) thermal coal based power plant with total capacityat Korba, of 600MW, two unitswhich a unit of 300 MW each, at Korba and are referredwas converted to as IPP 600 MW. The first 300 MW unit of the IPP 600 MW was capitalized on August 1, 2015 after the successful completion of trial runs. The second unit has been commissioned and started commercial productionbe used for captive consumption vide order from May 1, 2016. TSPL had signed aCentral Electricity Regulatory Commission (CERC) dated January 01, 2019. Talwandi Sabo Power Limited (“TSPL”) power purchase agreement with the Punjab State Power Corporation Limited (“PSPCL”) for the establishment ofoperations include 1,980 MW (three units of 660 MW each) thermal coal-basedcoal- based commercial power facilities and the first 660 MW unit of the Talwandi Sabo power plant (TSPL) was capitalized in financial year 2015, second 660 MW unit was capitalized on December 1, 2015 after the successful completion of trial runs and the third 660MW unit at TSPL was capitalized on September 1, 2016. Thefacilities. Power business also includes the 274 MW of wind power plants commissioned by HZL and 106.5 MWa power plant at MALCO Energy Limited (“MEL”) (under care and maintenance) situated nearat Mettur Dam in the State of Tamil Nadu in southern India.(presently under care and maintenance). The Group’s other activities include ESL Steel Limited (“ESL”) (formerly known as Electrosteel Steels Limited) acquired on June 4, 2018. ESL is engaged in the manufacturing and supply of billets, TMT bars, wire rods and ductile iron pipes in India. The Group’s other activities also include Vizag General Cargo Berth Private Limited (“VGCB”) and Maritime Ventures Private Limited (”(“MVPL”) in which the Group owns a 100% interest.. Vizag port project includes mechanisationmechanization of coal handling facilities and upgradation of general cargo berth for handling coal at the outer harborharbour of Visakhapatnam portPort 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 Portsports and other allied sectors. VGCB commenced operations in the fourth quarter of fiscal 2013. The Group’s other activities also include AvanStrate Inc. (“ASI”) and Ferro Alloys Corporation Limited (“FACOR”). ASI is involved in manufacturing of glass substrate in South Korea and Taiwan. FACOR was acquired on September 21, 2020 and 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). Delisting of Vedanta Limited These consolidated financial statementsThe Company vide letter dated May 12, 2020 had informed the stock exchanges that it has received a letter dated May 12,2020 from its Holding Company, Vedanta Resources Ltd. (“VRL”), wherein VRL had expressed its intention to, either individually or along with one or more subsidiaries, acquire all fully paid-up equity shares of the GroupCompany (“Equity Shares”) that are held by the public shareholders of the Company (as defined under the Delisting Regulations, to be referred to as “Public Shareholders”) and consequently voluntarily delist the Equity Shares from BSE Limited and National Stock Exchange of India Limited, the recognized stock exchanges where the Equity Shares are presently listed (“Stock Exchanges”), in accordance with the Delisting Regulations (“Delisting Proposal”) and if such delisting is successful, then to also delist the Company’s American Depositary Shares from the New York Stock Exchange (“NYSE”) and deregister the Company from the Securities and Exchange Commission (“SEC”), subject to the requirements of the NYSE and the SEC.
After obtaining due approvals, the Public Shareholders holding Equity Shares were authorizedinvited to submit Bids pursuant to the reverse book building process conducted through the Stock Exchange Mechanism made available by BSE during the bid period (October 05, 2020 to October 09, 2020), in accordance with the Delisting Regulations. The total number of Offer Shares validly tendered by the Public Shareholders in the Delisting Offer was 1,25,47,16,610 Offer Shares, which was less than the minimum number of Offer Shares required to be accepted by the Acquirers in order for issuance by Vedanta Limited’s boardthe Delisting Offer to be successful in terms of directors on August 13, 2017.Regulation 17(1)(a) of the Delisting Regulations. Thus, the Delisting Offer is deemed to have failed in terms of Regulation 19(1) of the Delisting Regulations. 2. Basis of preparation and basis of measurement of financial statements a) Basis of preparation These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by International Accounting Standards Board (“IASB”). These consolidated 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. BasisThese financial statements are approved for issue by the Board of measurementDirectors on July 19, 2021.
TheCertain comparative figures appearing in these consolidated financial statements have been prepared onregrouped and/or reclassified to better reflect the historical cost convention and on an accrual basis, except for derivative financial instruments, short-term investments andavailable-for-sale financial investments which are remeasured at fair values at the endnature of each reporting period as explained in the accounting policies below.
Application of new and revised standards:
The Group has adopted with effect from 1 April 2016, the following new amendment and pronouncements. Their adoption has not had any significant impact on the amounts reported in the financial statements.
☐ | Amendments to IAS 1: Disclosure Initiative |
☐ | Annual Improvements to IFRSs: 2012-2014 Cycle |
☐ | Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation |
☐ | Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations |
☐ | Amendment to IFRS 10, IFRS 12 and IAS 28: Sale or Contribution of Assets between an Investor and its |
Associate or Joint Venture.
☐ | Amendments to IFRS 10, IFRS 12 and IAS 28: Investment entities: Applying the Consolidation Exemption |
The Group has not early adopted any other amendments, standards or interpretations that have been issued but are not yet effective.
Going concern
The consolidated financial statements have been prepared in accordance with the going concern basis of accounting.
Convenience translationthose items.
The consolidated financial statements are presented in Indian Rupee (₹), the presentation currency of the Company (Also refer note 3.S).Company. Solely for the convenience of readers, the consolidated financial statements as at and for the year ended March 31, 20172021 have been translated into US dollars (“$”) at the noon buying rate of $ 1.00 = Rs. 64.85₹ 73.1400 in the City of New York for cable transfers of Indian Rupee as certified for customs purposes by the Federal Reserve Bank of New York on March 31, 2017.2021. No representation is made that the Indian Rupee amounts represent US dollar amounts or have been, could have been or could be converted into US dollars at such a rate or any other rate. 3.
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. 3(a) Significant accounting policies – A. Basis of consolidation Subsidiary:Subsidiaries:
The consolidated financial statements incorporate the results of Vedanta Limitedthe Company and all its subsidiaries (the “Group”), being the entities that it controls. Control is evidenced where the Group has power over the investee, or 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 entityentity’s returns. 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. Fornon-wholly owned subsidiaries, a share of the profit / lossprofit/(loss) for the financial year and net assets is attributed to thenon-controlling interests as shown in the consolidated statements of profit or loss, consolidated statements of comprehensive income and consolidated statements of financial position. Liability for put option issued to non-controlling interests which do not grant present access to ownership interest to the Group is recognised at present value of the redemption amount and is reclassified from equity. At the end of each reporting period, the non-controlling interests subject to put option is derecognised and the difference between the amount derecognised and present value of the redemption amount, which is recorded as a financial liability, is accounted for as an equity transaction. For acquisitions of additional interests in subsidiaries, where there is no change in control, the Group recognises a reduction to thenon-controlling interest of the respective subsidiary with the difference between this figure and the cash paid, inclusive of transaction fees, being recognised in equity. In addition,Similarly, upon dilution of controlling interests the difference between the cash received from sale or listing of the subsidiary shares and the increase tonon-controlling interest is also recognised in equity. The results of subsidiaries acquired or disposed off during the year are included in the consolidated statements of profit or loss from the effective date of acquisition or up to the effective date of disposal, as appropriate. Intra-groupIntra-Group balances and transactions, and any unrealized income and expensesunrealised profits arising from intra-groupintra-Group transactions are eliminated in preparing the consolidated financial statements. Unrealizedeliminated. Unrealised losses are eliminated unless costs cannot be recovered.
Joint arrangements A Joint arrangement is an arrangement of which two or more parties have joint control. Joint control is considered when there is contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Investments in joint arrangements are classified as either joint operations or joint venture. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement, have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby, the parties that have joint control of the arrangement have rights to the net assets of the arrangement. The Group has both joint operations and joint ventures. Joint operations The Group has joint operations within its oilOil and gas segment andsegment. 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 venturesoperations in which the Group holds an interest, classifiedinterest. 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 statementheadings. Details of joint operations are set out in Note 34. Joint venture The Group accounts for its interest in joint venture using the equity method (see Note B below), after initially being recognised at cost in the consolidated statements of financial position and statementposition. Goodwill arising on the acquisition of profit or loss headings.joint venture is included in the carrying value of investments in joint venture. B. Investments in associatesassociates: 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. An associate is an entity over which the Group is in a position to exercise significant influence over operating and financial policies. Goodwill arising on the acquisition of associates is included in the carrying value of investments in associate. Investment Equity method of accounting Under the equity method of accounting applicable for investments in associates isand 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 associate’s consolidatedpost-acquisition profits or losses of the investee, and the Group’s share of other comprehensive income of the investee, other changes to the associate’sinvestees net assets and is further adjusted for impairment losses, if any. Dividend received or receivable from associate and joint ventures are recognised as a reduction in carrying amount of the investment. The consolidated statements of profit or loss and consolidated statements of comprehensive income include the Group’s share of associate’sinvestee’s results, except where the associateinvestee is generating losses, share of such losses in excess of the Group’s interest in that associateinvestee are not recognized.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 associateinvestee 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.associate/ joint venture. Unrealised gains arising from transactions with associatesassociate and joint venture are eliminated against the investment to the extent of the Group’s interest in the associate.these entities. Unrealised losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment of the asset transferred. C. Revenue recognition
Revenues are measured at Accounting policies of equity accounted investees is changed where necessary to ensure consistency with the fair value of the consideration received or receivable, net of discounts, volume rebates, outgoing sales taxes, excise duty and other indirect taxes. Revenues from sales are recognised when all significant risks and rewards of ownership of the commodity sold are transferred to the customer which usually is on delivery of the goods to the shipping agent. Revenues from sale ofby-products are included in revenue.
Certain of the Group’s sales contracts provide for provisional pricing based on the price on The London Metal Exchange (“LME”), as specified in the contract, when shipped. 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 of oil, gas and condensate production, recognised on a direct entitlement basis, when significant risks and rewards of ownership are transferred to the buyers. Government’s share of profit petroleum is accounted for when the obligation (legal or constructive), 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 rate arrived at based on the principles laid down under the relevant Tariff Regulations as notifiedpolicies adopted by the regulatory bodies, as applicable.Group.
WhereThe carrying amount of equity accounted investments are tested for impairment in accordance with the Group acts as a port operator, revenues and costs relating to each construction contract of service concession arrangements are recognised over the period of each arrangement only to the extent of costs incurred that are probable of recovery. Revenues and costs relating to operating phase of the port contract are measured at the fair value of the consideration received or receivable for the services provided.policy described in Note 3 (a)(G) below.
Revenue from rendering of services is recognised on the basis of work performed.
Dividend income is recognised when the right to receive payment is established. Interest income is recognised using the effective interest rate method.
D.C. Business combinations
AcquisitionsBusiness combinations are accounted for under the purchaseacquisition method. The acquirer’sacquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date.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 datenon-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 cost of acquisition,purchase consideration, the Groupre-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 recognizedrecognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the surplus is credited to the consolidated statements of profit or loss in the period of acquisition. Where it is not possible to complete the determination of fair values by the date on which the first post-acquisition financial statements are approved, a provisional assessment of fair value is made and any adjustments required to those provisional fair values are finalised within 12 months of the acquisition date. The Group makes adjustments toThose provisional amounts are adjusted through goodwill during the provisional fair valuemeasurement period, or additional assets or liabilities are recognised, or the amounts recognised at the date of acquisitionwhich existing assets or liabilities were recorded are remeasured to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognised as ofat that date. The Group applies theThese adjustments are called as measurement period adjustments retrospectively to the consolidated financial statements to reflect theadjustments. The measurement period adjustments as retrospectively recorded on the date ofdoes not exceed twelve months from the acquisition as if measurement period adjustments had been recorded initially at the date of acquisition. date.Anynon-controlling interest in an acquiree is measured at fair value or as thenon-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 statements of profit or lossloss. If the Group acquires a group of assets in linea company that does not constitute a business combination in accordance with IFRS 3.3 ‘Business Combinations’, the cost of the acquired group of assets is allocated to the individual identifiable assets acquired based on their relative fair value. Common Controlcontrol transactions A business combination involving entities or businesses under common control is a business combination in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination and the control is not transitory. The transactions between entities under common control are scoped out of IFRS 3 and there is no authoritative literature for these transactions under IFRS. As a result, the Group adopted accounting principles similar to thepooling-of-interest method based on the predecessor values. The assets and liabilities of the acquired entity are recognised at the book values recorded in the ultimate parent entity’s consolidated financial statements with the exception of certain income tax and deferred tax benefits arising on account of the common control transaction but relating to previous years, which are recognised retrospectively.statements. The components of equity of the acquired companies are added to the same components within Group equity except that any share capital and investments in the books of the acquiring entity is cancelled and the differences, if any, is adjusted in the opening retained earnings.earnings/ capital reserve. The Company’s shares issued in consideration for the acquired companies are recognizedrecognised from the moment the acquired companies are included in these financial statements and the financial statements of the commonly controlled entities would be combined, retrospectively, as if the transaction had occurred at the beginning of the earliest reporting period presented. However, the prior years’ comparative information is only adjusted for periods during which the entities were under common control. D. 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 rebates, outgoing sales taxes/ goods and service tax and other indirect taxes excluding excise duty. Revenues from sale of by-products are included in revenue. Certain of the Group’s sales contracts provide for provisional pricing based on the price on the London Metal Exchange (LME) and crude index, as specified in the contract. Revenue in respect of such contracts is recognised when control passes to the customer and is measured at the amount the entity expects to be entitled – being the estimate of the price expected to be received at the end of the measurement period. Post transfer of control of goods, provisional pricing features are accounted in accordance with IFRS 9 ‘Financial Instruments’ rather than IFRS 15 ‘Revenue from contracts with customers’ and therefore the IFRS 15 rules on variable consideration do not apply. These ‘provisional pricing’ adjustments, i.e., the consideration received post transfer of control are included in total revenue 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 is recognised for the earned consideration when that right is conditional on the Group’s future performance. A contract liability is the obligation to transfer goods 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 statements of profit or 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. E (a) Property, plant and equipment (i) Mining Propertiesproperties and leases - The costs of mining properties, which include the costs of acquiring and developing mining properties and mineral rights, are capitalised as property, plant and equipment under the heading “Mining properties” in the year in which they are incurred. When a decision is taken that a mining property is viable for commercial production (i.e. when the Group determines that the mining property will provide sufficient and sustainable return relative to the risks and the Group decided to proceed with the mine development), all furtherpre-production primary development expenditure other than that on land, buildings, plant, equipment and equipmentcapital work in progress is capitalised as partproperty, 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 costcosts of theacquiring and developing mining property until the mining property is capable of commercial production. Explorationproperties and evaluation assets are recognized as assets at their cost of acquisition, subject to meeting the commercial production criteria as above and are subject to impairment review on annual basis, or more frequently if indicators of impairment exist.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 CompanyGroup uses the expected volume of waste compared with the actual volume of waste extracted for a given value of oreore/mineral production for the purpose of determining the cost of the stripping activity asset. Deferred stripping costcosts 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 circumstance,circumstances where a mining property is abandoned, the cumulative capitalizedcapitalised costs relating to the property are written off in the same period.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.reserves as defined by the ‘JORC’ Code, ‘MORC’ code or ‘SAMREC’ Code. Changes in the commercial reserves affecting unit of production calculations are dealt with prospectively over the revised remaining reserves. The estimates of hydrocarbon reserves and resources have been derived in accordance with the Society of Petroleum Engineers “Petroleum Resources Management System (2018)”. (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 statements of profit or loss. All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons has been demonstrated are capitalised within property, plant and equipment—equipment - development/producing assets on afield-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 statements of profit or 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 andnon-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. 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. Expenditure incurred after theAll other expenses on existing property, plant and equipment, have been put into operation, such as repairsincluding day-to-day repair and maintenance expenditure and cost of replacing parts, are normally charged to the consolidated statements of profit or lossLoss 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 period in whichconsolidated statements of profit or loss when the costs are incurred.asset is derecognised. Major inspection and overhaul expenditure is capitalized,capitalised, if the recognition criteria are met. (iv) Assets in the course ofunder construction Assets in the course ofunder construction are capitalised in the assets under construction account. At the point when an asset is capable of operating in the manner intended by management, the cost of construction is transferred to the appropriate category of property, plant and equipment. Costs associated with the commissioning of an asset and any obligatory decommissioning costs are capitalised until the period of commissioning has been completed and the asset is ready for its intended use. Asset under construction are presented at cost, net of accumulated impairment losses, if any. (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.depreciated or amortised. Mining properties: propertiesThe capitalised mining properties are amortised on aunit-of-production basis over the total estimated remaining commercial proved and probable reserves of each property or Group of properties and are subject to impairment review. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future capital expenditure required to access the commercial reserves. Changes in the estimates of commercial reserves or future capital expenditure are dealt with prospectively. Oil and gas assets: producing facilitiesAll expenditures carried within each field are amortised from the commencement of production on a unit of production basis, which is the ratio of oil and gas production in the period to the estimated quantities of commercial reserves at the end of the period plus the production in the period, generally on afield-by-field basis or group of fields which are reliant on common infrastructure. Commercial reserves are proven and probable oil and gas reserves, which are defined as the estimated quantities of crude oil, natural gas and natural gas liquids which geological, geophysical and engineering data demonstrate with a specified degree of certainty to be recoverable in future years from known reservoirs and which are considered commercially producible. Costs used in the unit of production calculation comprise the net book value of capitalised costs plus the estimated future field development costs required to access the commercial reserves. Changes in the estimates of commercial reserves or future field development costs are dealt with prospectively. Other assets: assetsOther buildings,Depreciation on Property, plant and equipment office equipment and fixtures, and motor vehicles are stated atis calculated using the straight-line method (SLM) to allocate their cost, less accumulated depreciation and any provision for impairment. Depreciation commences whennet 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, are ready for their intended use. Depreciation is provided at rates calculated to write off the cost, less estimated residual value,usage of each asset on a straight-line basis over its expectedthe assets, the operating conditions of the assets, past history of replacement and maintenance support.
Estimated useful life of assets are as follows: | | | | | Buildings: ASSET | | Useful life (in years) | | | — Operations and administrationBuildings (Residential; factory etc.)
| | | 6-60 years3 - 60 | | Plant and equipment | | | 15-40 years15 - 40 | | Railway Sidings | | | 15 | | Office equipment | | | 3 - 6 | | Furniture and fixtures | | | 3-10 years8 - 10 | | Motor vehiclesVehicles
| | | 8-10 years8 - 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 statements of profit or 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 financialyear-end year end and, if expectations differ from previous estimates, the change(s)change is accounted for as a change in accounting estimate. (b) Exploration and evaluation assets Exploration and evaluation expenditure incurred prior to obtaining the mining right or the legal right to explore are expensed as incurred. Exploration and evaluation expenditure incurred after obtaining the mining right or the legal right to explore, are capitalised as Explorationexploration and evaluation assets (intangible assets) and stated at cost less impairment.impairment, if any. Exploration and evaluation assets are transferred to the appropriate category of property, plant and equipment when the technical feasibility and commercial viability has been determined. Exploration and evaluation assets are assessed for impairment and losses,impairment loss, if any, is recognised prior to reclassification. Exploration and evaluation expenditure incurred prior to obtaining the mining right or the legal right to explore are expensed as incurred. 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: a.
Acquisition costs - costs associated with acquisition of licenses and rights to explore, including related professional fees. b.
General exploration costs - costs of surveys and studies, rights of access to properties to conduct those studies (e.g., costs incurred for environment clearance, defensedefence clearance, etc.), and salaries and other expenses of geologists, geophysical crews and other personnel conducting those studies. c.
Costs of exploration drilling and equipping exploration and appraisal wells. Expenditure incurred on the acquisition of a license interest is initially capitalised on alicense-by-license basis. Costs are held,un-depleted, within exploration and evaluation assets until such time as the exploration phase on the license area is complete or commercial reserves have been discovered.
Exploration expenditure incurred in the process of determining oil and gas exploration targets is capitalised within “Exploration“exploration and evaluation assets” (intangible assets) andassets “and subsequently allocated to drilling activities. Exploration drilling costs are initially capitalised on awell-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 awell-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 centercentre within property, plant and equipment—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 statements of profit or loss. Expenditure incurred on the acquisition of a licence interest is initially capitalised on a licence-by-licence basis. Costs are held undepleted, within exploration and evaluation assets until such time as the exploration phase on the licence area is complete or commercial reserves have been discovered. Net proceeds from any disposal of an exploration asset are initially credited against the previously capitalised costs. Any surplus/ deficit is taken torecognised in the consolidated statements of profit or loss. (c) Other intangibleIntangible assets Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangibleSubsequently, intangibles assets are carriedmeasured at cost less accumulated amortizationamortisation and accumulated impairment losses, if any. Intangible assetsThe Group recognises port concession rights as “Intangible Assets” arising out offrom a service concession arrangements are accounted forarrangement, 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 intangible assets whereproperty, plant and equipment, irrespective whether the infrastructure is existing infrastructure of the grantor or the infrastructure is constructed or purchased by the Group has a contractual right to charge usersas part of services when the projects are completed andservice concession arrangement. Such an intangible asset is measuredrecognised by the Group initially at the cost determined as the fair value of the consideration received or receivable of suchfor the construction services. Such assetsservice delivered and is capitalised when the project is complete in all respects. Port concession rights are amortizedamortised on straight line basis based on the lower of their useful lives orover the balance of license period. The concession period (presentlyis 30 years)years from the date of the award. Any addition to the port concession rights are measured at fair value on recognition. Port concession rights also include certain property, plant and equipment in accordance with IFRIC 12 “Service Concession Arrangements”.
Intangible assets are amortised over their estimated useful life on a straight line basis. Software is amortizedamortised over the estimated useful life of fiveranging from 2-5 years. Amounts paid for securing mining rights are amortizedamortised 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 statements of profit or 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.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 statements of financial position. G. Financial instruments (i)Non-derivativeA financial assetsinstrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
The Group(a) Financial Assets – Recognition & subsequent measurement
All financial assets are recognised initially recognises loans and receivables and deposits at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costcosts 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 theythe Group commits to purchase or sell the asset. For purposes of subsequent measurement, financial assets are originated.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 consolidated statements of profit or loss. The losses arising from impairment are recognised in consolidated statements of profit or 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 recognized in the consolidated statements of profit or loss. On derecognition of the asset, cumulative gain or loss previously recognised in other comprehensive income is reclassified from the equity to consolidated statements of profit or 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 categorization as at amortised cost or as FVOCI, is classified as at FVTPL. In addition, the Group may elect to designate a debt instrument, which otherwise meets amortised cost or FVOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The Group has not designated any debt instrument as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes being recognised in consolidated statements of profit or loss. Equity instruments All equity investments in the scope of IFRS 9 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which IFRS 3 applies are classified as at FVTPL. For 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 or 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 statements of profit or loss. (b) 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. (c) Impairment of financial assets In accordance with IFRS 9, the Group applies expected credit loss (“ECL”) model for measurement and recognition of impairment loss on the following financial assets: i) | Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities and deposits |
ii) | Financial assets that are debt instruments and are measured as at FVOCI |
iii) | Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of IFRS 15. |
The Group follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables, contract assets and liabilitieslease 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 offsetthe 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 net amount presentedcash flows that the entity expects to receive, discounted at the original EIR. ECL impairment loss allowance (or reversal) during the year is recognised as income/expense in theconsolidated statements of profit or loss. The consolidated statements of financial position when,presentation for various financial instruments is described below: i) | Financial assets measured at amortised cost: ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets. The Group does not reduce impairment allowance from the gross carrying amount. |
ii) | Debt instruments measured at FVOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ‘accumulated impairment amount’ in the OCI. |
For assessing increase in credit risk and only when,impairment loss, the Group has a legal rightcombines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to offset the amounts and intends eitherenable significant increases in credit risk to settlebe identified on a net basis or to realise the asset and settle the liability simultaneously.timely basis. The Group has the followingnon-derivativedoes not have any purchased or originated credit-impaired (POCI) financial assets:assets, i.e., financial asset investments, short-term investments, cashassets which are credit impaired on purchase/origination. (d) Financial liabilities – Recognition and cash equivalents, loans and receivables. (a) Financial asset investmentsSubsequent measurement
Financial asset investments thatliabilities are neither classified, at initial recognition, as held for trading nor designated asfinancial liabilities at fair value through profit or loss, or as loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value, and in the case of financial liabilities at amortised cost, net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments. The measurement of financial liabilities depends on their classification, as described below: Financial liabilities at fair value through profit or loss Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified asavailable-for-sale and are recorded at its fair value plus transaction costs that are directly attributable to the acquisition of financial asset investments and then remeasured at subsequent reporting dates to fair value. Unrealized gains and losses on financial asset investments are recognised directly in the consolidated statements of comprehensive income. Upon disposal or impairment of the investments, the gains and losses in other comprehensive income are reclassified into the consolidated statements of profit or loss. Investments in unquoted equity instruments that do not have a market price and whose fair value cannot be reliably measured are measured at cost. Equity investments are recorded innon-current assets unless held for trading if they are expected to be sold within one year.
(b) Short-term investments
Short-term investments represent short-term marketable securities and other bank deposits with an original maturity of more than three months. These are highly liquid investments that are readily convertible into cash which are subject to insignificant risk of changes in value and heldincurred for the purpose of meeting short-term cash commitments.
Short-term marketable securitiesrepurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are categorizednot designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading andunless they are initially recognised at fair value with any gainsdesignated as effective hedging instruments.
Gains or losses arising onre-measurement liabilities held for trading are recognised in the consolidated statements of profit or loss. Other bank deposits
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognised in OCI. These gains/ losses are not subsequently measured at amortised cost usingtransferred to consolidated statements of profit or loss. However, the effective interest method. (c) Cash and cash equivalents and restricted cash and cash equivalents
Cash and cash equivalentsGroup may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the consolidated statements of profit or loss. The Group has not designated any financial position and cash flow statement comprise cashliability as at bank and in hand, and short-term deposits which have a maturity of three monthsfair value through profit or less from the date of acquisition, and are unrestricted as to withdrawal and usage. Additionally, cash and cash equivalents for the purposes of cash flow statements includes restricted cash balance kept in a specified bank account towards unpaid dividend to be utilized solely for the purposes of payment of dividends.loss.
Restricted cash and cash equivalents in the consolidated statements of financial position comprise cash at bank and in hand, and short-term deposits which have a maturity of three months or less from the date of acquisition, and are restricted as to withdrawal and usage.
(d) Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Trade receivables are stated at their transaction value as reduced by appropriate allowances for estimated irrecoverable amounts.
Loans and other receivables are subsequently measuredFinancial liabilities at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate (EIR) method. (Loans and Borrowings and Trade and Other payables)(ii)Non-derivative financial liabilities
The Group initially recognises debt securities issued on the date that they are originated. All other financial liabilities are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. The difference between the carrying amount of the financial liabilities derecognisedAfter initial recognition, interest-bearing loans and consideration paidborrowings and payable is recognised in the consolidated statement of profit or loss.
Financial assets and liabilities are offset and the net amount presented in the consolidated statements of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
The Group has the followingnon-derivative financial liabilities: Borrowings, Foreign currency convertible notes, trade and other payables.
(a) Borrowings
Interest bearing loans and borrowings are initially recorded at the fair value, net of directly attributable transaction costs. After initial recognition, interest bearing loans and borrowingspayables are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in consolidated statements of profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account the finance charges, including premiums payableany discount or premium on settlementacquisition and fees or redemption and direct issue costs that are an integral part of the EIR. The EIR amortisation is included inas finance and other costs in the consolidated statements of profit or loss. The unamortised portion (e) Financial liabilities – Derecognition A financial liability is classified withderecognised when the carrying amount of debt. (b) Foreign currency convertible notes
Convertible notes issued in foreign currency are convertible atobligation under the option ofliability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the holder into ordinary shares of the Group according tosame lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the issue. The conversion option which is not settled by exchanging a fixed amount of cash for a fixed number of shares is accounted for separately from the liability component as derivative and initially accounted for at fair value. The liability component is recognized initially at the difference between the fair valuederecognition of the noteoriginal liability and the fair valuerecognition of the conversion option. Directly attributable notes issue costs are allocated to the liability component and the conversion option (expensed off immediately) in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component is measured at amortised cost using the EIR method.a new liability. The conversion option is subsequently measured at fair value at each reporting date, with changes in fair value recognized in consolidated statements of profit or loss. The conversion option is presented together with the related liability.
(c) Trade and other payables
Trade and other payables are recognised at their transaction cost, which is its fair value, and subsequently measured at amortised cost.
(iii) Derivative financial instruments
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.
Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and arere-measured at their fair value at subsequent financial position dates.
At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.
Fair Value Hedges –
Changesdifference in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. 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.
Cash flow Hedges—
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in the consolidated statements of comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the consolidated statements of profit or loss. Amounts recognized as other comprehensive income are transferred to the statement of profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognized or when a forecast transaction occurs. When the hedged item is anon-financial asset, the amount recognized in the consolidated statements of comprehensive income is transferred to therespective carrying amount of the asset when it is recognized. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognized in the consolidated statements of comprehensive income is transferred to consolidated statements of profit or loss.
Hedge of net investment in foreign operation-
For derivative instruments that are designated and qualify as a hedge of a net investment in a foreign operation, the gain or loss is reported in the consolidated statements of comprehensive income as part of the exchange difference on translation of foreign operations to the extent it is effective. Any ineffective portions of net investment hedges are recognized in other income/expense in the consolidated statement of profit or loss immediately. Under a hedge of a net investment, the cumulative gain or loss remains in the consolidated statements of comprehensive income when the hedging instrument expires or is sold, terminated or exercised, or when the hedge no longer qualifies for hedge accounting or the Group revokes designation of the hedge relationship. The cumulative gain or lossamounts is recognised in the consolidated statements of profit or loss as partloss.
(f) 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 gain / loss on disposal whencash flows of the net investmentcombined 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 foreign operationcase of a non-financial variable that the variable is disposed. Derivative financial instruments that do not qualify for hedge accounting are markedspecific to market ata party to the financial position date and gains or losses are recognizedcontract. Reassessment only occurs if there is either a change in the consolidated statementsterms 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 immediately.loss.
If the hybrid contract contains a host that is a financial asset within the scope of IFRS 9, the Group does not separate embedded derivatives. Rather, it applies the classification requirements contained in IFRS 9 to the entire hybrid contract. Derivatives embedded in other financial instruments orall other host contracts are treatedaccounted for as separate derivatives whenand recorded at fair value if their riskseconomic characteristics and characteristicsrisks are not closely related to those of the host contracts and the host contracts are not carriedheld for trading or designated at fair value though profit or loss. These embedded derivatives are measured at fair value with unrealised gains or losses reportedchanges in thefair value recognised in consolidated statements of profit or loss.loss, unless designated as effective hedging instruments. H.(g) 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. I.(h) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statements of financial position 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. (i) Derivative financial instruments and hedge accounting Initial recognition and subsequent measurement In order to hedge its exposure to foreign exchange, interest rate, and commodity price risks, the Group enters into forward, option, swap contracts and other derivative financial instruments. The Group does not hold derivative financial instruments for speculative purposes. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to consolidated statements of profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to consolidated statements of profit or 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 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: (1) Fair value hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in consolidated statements of profit or 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 consolidated statements of profit or 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. (2) 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 statements of profit or loss. Amounts recognised in OCI are transferred to consolidated statements of profit or 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. (3) 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 statements of profit or loss. On disposal of the foreign operation, the cumulative value of any such gains or losses recorded in equity is reclassified to the consolidated statements of profit or loss (as a reclassification adjustment). H. Borrowing costs Borrowing cost includes interest expense as per effective interest rate (EIR) and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs directly relating to the acquisition, construction or production of a qualifying capital project under construction are capitalised and added to the project cost during construction until such time that the assets are substantially ready for their intended use, i.e., when they are capable of commercial production. Borrowing costs relating to the construction phase of a service concession arrangement is capitalised as part of the cost of the intangible asset. Where funds are borrowed specifically to finance a qualifying capital project, the amount capitalised represents the actual borrowing costs incurred. Where surplus funds are available out of money borrowed specifically to finance a qualifying capital project, the income generated 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. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during the extended periods when active development on the qualifying assets is interrupted. All other borrowing costs are recognizedrecognised in the consolidated statements of profit or loss in the year in which they are incurred. J. ImpairmentCapitalisation 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.
Financial assets
A financial assetEIR is assessed at each reporting date to determine whether there is any objective evidencethe rate that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect onexactly discounts the estimated future cash flowspayments or receipts over the expected life of that asset.
An impairment loss in respectthe financial liability or a shorter period, where appropriate, to the amortised cost of a financial asset measured at amortised cost is calculated asliability. When calculating the difference between its carrying amount, andeffective interest rate, the present valueGroup estimates the expected cash flows by considering all the contractual terms of the estimated future cash flows discounted at the original effective interest rate. An impairment loss in respect of anavailable-for-salefinancial asset is calculated by reference to its fair value. instrument (for example, prepayment, extension, call and similar options).Significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. All impairment losses are recognized in the consolidated statements of profit or loss. Any cumulative loss in respect of anavailable-for-sale financial asset recognized previously in the consolidated statements of comprehensive income is transferred to the consolidated statements of profit or loss on recognition of impairment. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized. For financial assets measured at amortised cost andavailable-for-sale financial assets that are debt securities, the reversal is recognized in the consolidated statements of profit or loss. Foravailable-for-sale financial assets that are equity securities, reversal is recognized directly in the consolidated statements of comprehensive income.
The allowance accounts in respect of trade and other receivables are used to record impairment losses unless the Group is satisfied that no recovery of the amount owing is possible; at that point the amounts are considered irrecoverable and are written off against the financial asset directly.I. Impairment
Non-financial assets Impairment charges and reversals are assessed at an individual asset or 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. Impairment tests are carried out annually for all assets whenThe Group assesses at each reporting date, whether there is an indication of impairment.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. ExternalInternal 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, 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 entityGroup 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 taxpost-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 apre-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 income statement.consolidated statements of profit or 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.recognised except if initially attributed to goodwill. Exploration and evaluation assets: In assessing whether there is any indication that an exploration and evaluation asset may be impaired, the companyGroup considers, as a minimum, the following indications:indicators: the period for which the entityGroup 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 entityGroup has decided to discontinue such activities in the specific area; sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale; and reserve information prepared annually by external experts. When a potential impairment is identified, an assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash-generating unit) to which the exploration and evaluation assets is attributed. Exploration areas in which reserves have been discovered but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is under way or planned. To the extent that capitalised expenditure is no longer expected to be recovered, it is charged to the statementconsolidated statements of profit or loss. K.J. Leases
DeterminingThe Group assesses at contract inception, all arrangements to determine whether an arrangement contains lease
At inception of an arrangement, the Group determines whether the arrangement isthey are, or containscontain, a lease. The arrangementThat is, or contains, a lease if fulfillment of the arrangement is dependent oncontract conveys the right to control the use of a specifican identified asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
At inception or on reassessment of an arrangement that contains lease, the Group separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair valueperiod of the underlying asset; subsequently the liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the Group’s incremental borrowing rate.time in exchange for consideration.
Group as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Group is classified as a finance lease.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Group’s general policy on the borrowing costs. Contingent rentals are recognised as expenses in the periods in which they are incurred.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.
(a) Group as a lessor Leases in which the CompanyGroup 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 CompanyGroup to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Company’sGroup’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. L.(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 E 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 included in Trade and other payables. (iii) Short-term leases and leases of low-value assets The Group applies the short-term lease recognition exemption to its short-term leases of equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. K. Government grants Government grantsGrants and subsidies from the government are not recognised untilwhen there is a reasonable assurance that (i) the Group will comply with the conditions attachingattached to them, and that(ii) the grantsgrant/subsidy will be received.
When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the consolidated statements of profit or loss over the periods necessary to match them with the related costs, which they are intended to compensate. Government grants relating to tangible fixed assets are deducted in calculating the carrying amount of the assets and recognised in the consolidated statements of profit or loss over the expected useful lives of the assets concerned as a reduced depreciation expense. Other grants (including grants 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 revenue) are credited to the consolidated statements of profit or loss on a systematic basis as and when the related expenditure is incurred. financial liabilities.M.L. Inventories
Inventories (other than immaterialby-productsand scrap) includingwork-in-progress are stated at the lower of cost and net realisable value, less any provision for obsolescence. value. Cost is determined on the following bases:basis: purchasedPurchased copper concentrate is recorded at cost on afirst-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. finishedFinished products are valued at raw material cost plus costs of conversion, comprising laborlabour 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 however, cost of finished goods of oilis followed); and condensate is determined on a quarterly weighted average basis; and Immaterial
by-productsBy-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 tofor completion and disposal. N.
M. Taxation Tax expense represents the sum of current tax and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the reporting date and includes any adjustment to tax payable in respect of previous years. Subject to the exceptions below, deferred tax is provided, using the balance sheet method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes: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 or loss;(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 realizedrealised 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 recognized directly in other comprehensive income is recognised in the consolidated statements of comprehensive income and not in theoutside consolidated statements of profit or loss.loss is recognised outside consolidated statements of profit or 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. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered. Deferred tax assets and deferred tax liabilities are offset, when theyif a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to income taxes levied bythe same taxable entity and the same taxation authority andauthority. 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 relevant entity intends to settle its current taxassessment of the fair value of assets and liabilities acquired. Subsequently deferred tax is charged or credited in the consolidated statements of profit or 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 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 a net basis.which method predicts better resolution of the treatment. O.N. 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 separately each year separately for each plan using the projected unit credit method by independentthird party qualified actuaries as atactuaries. Remeasurement including, effects of asset ceiling and return on plan assets (excluding amounts included in interest on the year end. Remeasurementnet 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 statements of profit or loss. For defined contribution schemes, the amount charged to
Past service costs are recognised in the consolidated statements of profit or loss in respecton the earlier of: the date of pensionthe plan amendment or curtailment, and the date that the Group recognises related restructuring costs and other post-retirement benefits is the contributions payable in the year. 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 costexpense or income and remeasurement, and gains and losses on curtailments and settlements. Current service cost and past service cost iscosts are recognised within cost of sales and administrative expenses and distribution expenses. Net interest expense or income is recognized withrecognised within finance and other costs. P. Share basedFor defined contribution schemes, the amount charged to the consolidated statements of profit or 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.
O. Share-based payments Certain employees (including executive directors) of the CompanyGroup 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 with market-related vesting conditions areis 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 sheetreporting 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 basedshare-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. Additionally, VRPLC offers certain share based incentives under the Long-Term Incentive Plan (“LTIP”) to employees and directors of the Company and its subsidiaries. VRPLC recovers the proportionate cost (calculated based on the grant date fair value of the options granted) from the respective group companies, which is charged to the consolidated statements of profit or loss.
Q.P. Provisions, contingent liabilities and contingent assets
The assessments undertaken in recognising provisions and contingencies have been made in accordance with the applicable IFRS. Provisions represent liabilities to the Group for which the amount or timing is uncertain. Provisions are recognizedrecognised 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 appropriatepre-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 recognizedrecognised in the consolidated statements of profit or loss as a finance cost.and other costs. 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 ornon-occurrence of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognizedrecognised 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 recognizedrecognised because it cannot be measured reliably. The Group does not recognizerecognise a contingent liability but discloses its existence in the consolidated financial statements. Contingent assets are not recognizedrecognised but disclosed in the financial statements when an inflow of economic benefit is probable. R.The Group has significant capital commitments in relation to various capital projects which are not recognised in the consolidated statements of financial position.
Q. 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 statementconsolidated statements of profit or 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 a finance and other costcosts in the consolidated statements of profit or 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 statements of profit or loss as extraction progresses. Where the costs of site restoration are not anticipated to be material, they are expensed as incurred. S. ForeignR. Accounting for foreign currency translationtransactions and translations
The functional currency for each entity in the Group is determined as the currency of the primary economic environment in which it operates. For all principal operating subsidiaries, the functional currency is normally the local currency of the country in which it operates with the exception of oil and gas business operations which hashave a US dollar functional currency as that is the currency of the primary economic environment in which it operates. In the financial statements of individual group companies, transactions in currencies other than the respective functional currencycurrencies are translated into thetheir functional currencycurrencies at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in other currencies are translated into the functional currencycurrencies 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 on monetary items are included in the consolidated statements of profit or loss except any exchange differences onthose where the monetary itemsitem is designated as an effective hedging instrument of the currency risk of designated forecasted sales or purchases, which are recognizedrecognised in the consolidated statementsother comprehensive income. Exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings are capitalised as part of comprehensive income.borrowing costs in qualifying assets. For the purposes of the consolidatedconsolidation of financial statements, items in the consolidated statements of profit or loss of those businesses for which the Indian RupeeRupees 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 statements of financial position areis translated into Indian rupees at the rates as at the reporting date. Exchange differences arising on translation are recognised in the 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 statements of profit or loss. T.S. 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.T. Treasury Sharesshares
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 companyCompany from the market, for giving shares to employees. The shares held by EBT are treated as treasury shares. 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 capital reserve.equity. Share options whenever exercised, would be satisfied with treasury shares. U. Current and non-current classification The Group presents assets and liabilities in the consolidated statements of financial position 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 realized 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 realized 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. V. CriticalAcceptances 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 up to twelve months (for raw materials) and up to 36 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 Acceptances. 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 consolidated statements of financial position. Interest expense on these are recognised in the finance and other costs. Payments made by banks and financial institutions to the operating vendors are treated as an operational cash outflow and financing inflow and settlement of such acceptances by the Group is treated as a financing cash outflow. W. Cash and cash equivalents and restricted cash and cash equivalents Cash and cash equivalents comprise cash at bank and in hand, and short-term money market deposits which have a maturity of three months or less from the date of acquisition, that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value and are unrestricted as to withdrawal and usage. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above and additionally includes unpaid dividend account. Restricted cash and cash equivalents in the consolidated statements of financial position comprise cash at bank and in hand, and short-term deposits which have a maturity of three months or less from the date of acquisition and are restricted as to withdrawal and usage. 3(b) Application of new and revised standards The Group has adopted, with effect from April 01, 2020, the following new and revised standards and interpretations. Their adoption has not had any significant impact on the amounts reported in the consolidated financial statements. Amendments to IFRS 3 regarding definition of a Business Amendments to IFRS 7 and 9 regarding Interest Rate Benchmark Reform Amendments to IAS 1 and IAS 8 regarding definition of Material Amendments to IFRS 16 regarding COVID-19 related rent concessions Standards issued but not yet effective The new and amended standards that are issued, but not yet effective, up to the date of issuance of the Group’s financial statements are disclosed below: | | | New pronouncement | | Effective date | Reference to the Conceptual Framework – Amendments to IFRS 3 | | January 01, 2022 | Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16 | | January 01, 2022 | Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37 | | January 01, 2022 | AIP IFRS 1 First-time Adoption of International Financial Reporting Standards – Subsidiary as a first-time adopter | | January 01, 2022 | AIP IFRS 9 Financial Instruments – Fees in the ‘10 per cent’ test for derecognition of financial liabilities | | January 01, 2022 | AIP IAS 41 Agriculture – Taxation in fair value measurements | | January 01, 2022 | IFRS 17 Insurance Contracts | | January 01, 2023 | Classification of Liabilities as Current or Non-current - Amendments to IAS 1 | | January 01, 2023 | Definition of Accounting Estimates - Amendments to IAS 8 | | January 01, 2023 | Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 | | January 01, 2023 |
The amendments are not expected to have a material impact on the Group. 3(c) Significant accounting judgmentsestimates and estimation uncertaintyjudgements The preparation of consolidated financial statements in conformity with IFRS requires management to make judgments,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. ActualThese judgments and estimates are based on management’s best knowledge of the relevant facts and circumstances, having regard to previous experience, but actual results may differ materially from these estimates under different assumptions and conditions.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. In particular,The information about significant areas of estimation uncertainty and critical judgmentsjudgements in applying accounting policies that have the most significant effect on the amounts recognizedrecognised in the financial statements are included in the following accounting policies and/or notes:as given below:
I. Significant estimatesEstimates: The outbreak of novel Coronavirus (COVID-19) pandemic globally and in India and the consequent lockdown restrictions imposed by national governments is causing significant disturbance and slowdown of economic activity across the globe. The commodity prices including oil have seen significant volatility with downward price pressures due to major demand centers affected by lockdown. The Group is in the business of metals and mining, Oil & gas and generation of power which are considered as either essential goods and services or were generally allowed to continue to carry out the operations with adequate safety measures. The Group has taken proactive measures to comply with various regulations/guidelines issued by the Government and local bodies to ensure safety of its workforce and the society in general. The Group has considered possible effects of COVID-19 on the recoverability of its investments, property, plant and equipment (PPE), inventories, loans and receivables, etc. in accordance with IFRS. The Group has considered forecast consensus, industry reports, economic indicators and general business conditions to make an assessment of the implications of the Pandemic. The Group has also performed sensitivity analysis on the key assumptions identified basis the internal and external information, which are indicative of future economic condition. Based on the assessment, the Group had recorded necessary adjustments, including impairment to the extent the carrying amount exceeds the recoverable amount during the previous year ended March 31, 2020 (Refer Note 14). No such impairments or reversals were identified during the current year. The actual effects of COVID-19 could be different from what is presently assessed and would be known only in due course of time, however no further adjustments are considered necessary at this stage. (ii) | Oil and gas reserve estimatesGas reserves |
Significant technical and commercial judgements are required to determine the Group’s estimated oil and natural gas reserves. Oil and gasGas reserves are estimated on a proved and probable entitlement interest basis. Proven and probable reserves are estimated using standard recognised evaluation techniques. The estimate is reviewed at each financial year end.annually. Future development costs are estimated taking into account the level of development required to produce the reserves by reference to operators, where applicable, and internal engineers. Net entitlement reserves estimates are subsequently calculated using the Group’s current oil price and cost recovery assumptions, in line with the relevant agreements. Changes in reserves as a result of factors such as production cost, recovery rates, grade of reserves or commodityoil and gas prices could impact the depreciationdepletion rates, carrying value of assets (Refer Note 14) and environmental and restoration provisions. Details of impairment and depreciation are disclosed in note 8.
ii. | Useful economic lives and impairment of assets |
Property, plant and equipment other than mining properties, oil and gas properties, and leases are depreciated over their useful economic lives. Management reviews the useful economic lives at least once a year and any changes could affect the depreciation rates prospectively and hence the asset carrying values. The Group also reviews its property, plant and equipment, including mining properties and leases, for possible impairment if there are events or changes in circumstances that indicate that carrying values of the assets may not be recoverable.
In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits such as changes in commodity prices, the Group’s business plans and changes in regulatory environment are taken into consideration. The carrying value of the assets of a cash generating unit (CGU) is compared with the recoverable amount of those assets, that is, the higher of fair value less costs of disposal and value in use. Recoverable value is based on the management estimates of commodity prices, market demand and supply, economic and regulatory climates, long-term plan, discount rates and other factors. Any subsequent changes to cash flow due to changes in the abovementioned factors could impact the carrying value of the assets.
iii.(iii) | Carrying value of exploration and evaluation fixed assets:oil & gas assets |
Where a project is sufficiently advanced the recoverability of IFRS 6 Exploration assets are assessed by comparing the carrying value to higher of fair value less cost of disposal or value in use. Explorationuse if impairment indicators, as contained in IFRS 6. Change to the valuation of exploration assets are inherently judgemental to value and furtheris an area of judgement. Further details on the Group’s accounting policypolicies on this are includedset out in accounting policy above. The amounts for exploration and evaluation assets represent active exploration projects. These amounts arewill be written off to the consolidated statementstatements of profit or loss as exploration costs unless commercial reserves are established, or the determination process is not completed and there are no indicatorsindications 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 and impairment chargecharge/ reversal and the assumptions used are disclosed in note 8. Note 14.iv.(iv) | Carrying value of developing / developing/producing oil and gas assets:assets |
Management performperforms impairment tests on the Group’s developing / developing/producing oil and gas assets where indicators of impairment or impairment reversal of previously recorded impairment are identified in accordance with IAS 36. TheIn the current year, the management has reviewed the key assumptions, i.e., future production, oil prices, discount to price, Production sharing contract (PSC) life, discount rates, etc. for all of its oil and gas assets. Based on analysis of events that have occurred since then, there did not exist any indication that the assets may be impaired or previously recorded impairment charge may reverse. Hence, detailed impairment analysis has not been conducted in the current financial year.
However, during the year ended March 31, 2020, management had performed impairment tests on the Group’s developing/producing oil and gas assets and the impairment assessments arewere based on a range of estimates and assumptions, including: | | | Estimates/assumptions | | Basis | Future production | | proved and probable reserves, resource estimates (with an appropriate conversion factor) considering the expected permitted mining volumes and, in certain cases, expansion projects | Commodity prices | | management’s best estimate benchmarked with external sources of information, to ensure they are within the range of available analyst forecast | Discount to priceExchange rates | | management’smanagement best estimate based on historic prevailing discountbenchmarked with external sources of information | Extension of PSC | | granted till 2030 on the expected commercial terms (Refer note 3(c)(I)(viii) | Discount rates | | cost of capital risk-adjusted for the risk specific to the asset/ CGU | Extension of PSC | | assumed that PSC (“Production Sharing Contract”)
for Rajasthan block would be extended until 2030 on the expected commercial terms
|
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/ reversal and the assumptions used are disclosed in note 8.Note 14. v.(v) | Mining properties and leases |
The carrying value of mining property and leases is arrived at by depreciating the assets over the life of the mine using the unit of production method based on proved and probable reserves. The estimate of reserves is subject to assumptions relating to life of the mine and may change when new information becomes available. Changes in reserves as a result of factors such as production cost, recovery rates, grade of reserves or commodity prices could thus impact the carrying values of mining properties and leases and environmental and restoration provisions. Management performs impairment tests when there is an indication of impairment. The impairment assessments are based on a range of estimates and assumptions, including: | | | Estimates/assumptions | | Basis | Future production | | proved and probable reserves, resource estimates (with an appropriate conversion factor) considering the expected permitted mining volumes and, in certain cases, 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 | Exchange rates | | management best estimate benchmarked with external sources of information | Discount rates | | cost of capital risk-adjusted for the risk specific to the asset/ CGU |
Details ofThere is no impairment charge are disclosed in note 8.recognised during the years ended March 31, 2019, March 31, 2020 and March 31, 2021.
vi.(vi) | AssessmentRecoverability of impairment at Lanjigarh refinery:deferred tax and other income tax assets |
The Group has received the necessary approvalscarry forward tax losses, unabsorbed depreciation and MAT credit that are available for expansion of the Lanjigarh refinery to 4 million tonnes per annum (MTPA) in FY 2016. Approval for expansion from 4 MTPA to 6 MTPA is dependent upon certain conditions. Accordingly, second stream operation has commenced in Alumina refinery from April 2016, thus taking itoffset against future taxable profit. Deferred tax assets are recognised only to the debottlenecked capacity of 1.7 - 2.0 MTPA (contingent on bauxite quality). Further ramp up to 4 MTPAextent that it is probable that taxable profit will be considered after tying upavailable against which the local bauxite sources. The Group has consideredunused tax losses or tax credits can be utilized. This involves an assessment of when those assets are likely to reverse, and a judgement as to whether or not there will be sufficient taxable profits available to offset the delayassets. 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 tying up local bauxite sources as an indicationthe amounts recognised in respect of impairment. Hence, the Group has reviewed the carrying value of its property, plant and equipments at Lanjigarh as at balance sheet date, estimated the recoverable amounts of thesedeferred tax assets and concluded that there was no impairment because the recoverable amount (estimated based on fair value less cost of disposal) exceeded the carrying amounts.
The key assumptions and estimates usedconsequential impact in determining the fair value less cost of disposal of these assets were:
The State of Odisha has abundant bauxite resources and given the initiatives by the Government of Odisha, management is confident that bauxite will be made available in the short to medium term. The Company has entered into agreements with various suppliers internationally and domestically to ensure the availability of bauxite to run its refinery. In the initial years, the Company has assumed that bauxite will be purchased from third party suppliers in India and other countries, till the bauxite is sourced from own mines.
The State of Odisha has taken certain measures including reservation of areas for mining operations or undertaking prospecting and constitution of Ministerial Committee for formulation of policy for supply of ores to Odisha based industries on long-term basis. GOI has amended the existing MMDR Act. The major change is in the process followed for grant of concessions i.e. from First come First serve basis to more transparent process of auction and to expedite the grant process.
The management expects that the conditions for construction of the alumina refinery beyond 4 MTPA will be fulfilled and it is assumed that the final unconditional approval for the expansion of the refinery would be received for commencement of production by fiscal 2020.
The government of Odisha has cancelled all the old reservations for mine allotment and has formed a more transparent process of auction of mines under the MMDR Act, which will improve the chances of local bauxite availability.
Management expects that the mining approvals for various local bauxite mines will be received.
The Group has carried out a sensitivity analysis on the key variables including delay in obtaining bauxite mining approval, depreciation of rupee against US dollar, discount rate and London Metal Exchange aluminium prices. The most significant variable is the estimated timeframe for obtaining regulatory approval for the mining and/or gaining access to local bauxite. The sensitivity analysis indicates that even if regulatory approvals for mines /access to local bauxite are delayed by a year, the recoverable amount is still expected to exceed the carrying value and costs.
The carrying amounts of property plant and equipment related to alumina refinery operations at Lanjigarh and related mining assets as at March 31, 2016 is Rs. 69,150 million and March 31, 2017 is Rs. 69,277 million ($ 1,068.3 million).
vii. | Assessment of impairment of Karnataka and Goa Iron ore mines: |
Karnataka mining
The mining ban in Karnataka was lifted on April 17, 2013 and the mining operations resumed with effect from December 28, 2013 but had to again suspend operations from July 31, 2014 due to the expiry of temporary working permission. Subsequent thereto, on execution of Mining Lease Deed and Mining Lease Renewal Agreement, the Company resumed mining operations in Karnataka on February 28, 2015. Currently the permissible extraction capacity is fixed at 2.29 MTPA which is based on lowest of Reserves and Resources (R & R) capacity, Dumping capacity and Road capacity as assessed by Indian Council of Forestry Research and Education. Subsequently, based on reassessment of R & R and other factors, the modified mining plan has been submitted to Indian Bureau of Mines in March 2016 for enhancement of production to 6 MTPA. Management has estimated the recoverable amounts of these assets considering the increase in the extraction capacity in FY 2018.
A delay of one year in increase in the allocated capacity would result in reduction in the recoverable amount by approximately 1%, however the recoverable amount would continue to be sufficiently in excess of the carrying value.
The carrying value of assets as at March 31, 2016 is Rs. 9,656 million and March 31, 2017 is Rs. 9,090 million ($ 140.2 million).
Goa mining
In the year2014-15, the Ministry of Environment and Forest had withdrawn its earlier order which had kept the environment clearances for iron ore mines in Goa in abeyance. Also the State Government of Goa issued a mining leases policy and had revoked the order of temporary suspension on Iron ore mining in Goa. The Group had been allocated an interim annual mining capacity of 6.9 million tonnes per annum (MTPA) (out of the total interim mining cap of 20 MTPA for FY 2017) of saleable ore.
The Expert Committee, constituted by the Supreme Court of India for conducting the Macro-Environmental Impact Assessment study on the ceiling of annual extraction of iron ore mining in Goa has recommended an enhancement of mining cap to 30 MTPA. Further, the Expert Committee has also recommended that after reviewing the macro Environment Impact Assessment of the enhanced extraction rate by the State and augmenting the carrying capacity, the same may be further enhanced to 37 MTPA. The report of the Expert Committee is pending for consideration of Supreme Court. Post the Supreme Court clearance, the State Government will allocate the limits. It has been assumed that the allocation will be made based on the proportionate share of the current EC limits.
The mining operations resumed in October, 2015. Management has estimated the recoverable amounts of these assets considering the mining cap in FY 2018 of 30 MTPA and 37 MTPA from FY 2019 and onwards.
A delay of one year in increase in the mining cap to 30 MTPA and 37 MTPA would result in a reduction in the recoverable amount by approximately 4%, however the recoverable amount would continue to be sufficiently in excess of the carrying value. The carrying value of assets as at March 31, 2016 is Rs. 41,968 million and March 31, 2017 is Rs. 41,185 million ($ 635.1 million).
Management has reviewed the carrying value of Karnataka and Goa mining assets as at the balance sheet date, estimated the recoverable amounts of these assets and concluded that there was no impairment as the recoverable amount (estimated based on higher of value in use and fair value less costs of disposal) exceeded the carrying amounts.
The Group has carried out a sensitivity analysis on key variables including delay in increase in the mining cap, movement in iron ore prices, discount rate and appreciation of rupee against US dollar. Based on the sensitivity analysis, the recoverable amount is still expected to exceed the carrying value.
viii. | Site restoration, rehabilitation and environmental costs: |
Provision is made for costs associated with restoration and rehabilitation of mining sites as soon as the obligation to incur such costs arises. Such restoration and closure costs are typical of extractive industries and they are normally incurred at the end of the life of the mine or oil fields. The costs are estimated on the basis of mine closure plans and the estimated discounted costs of dismantling and removing these facilities and the costs of restoration are capitalised when incurred reflecting the Group’s obligations at that time.
The provision for decommissioning oil and gas assets is based on the current estimate of the costs for removing and decommissioning producing facilities, the forecast timing of settlement of decommissioning liabilities and the appropriate discount rate.
A corresponding provision is created on the liability side. The capitalized asset is charged to the consolidated statements of profit or loss overloss.
The total deferred tax assets recognised in these financial statements (Refer Note 9) includes MAT credit entitlements of ₹ 91,258 million and ₹ 82,358 million ($ 1,126 million) as at March 31, 2020 and March 31, 2021 respectively, of which ₹ 35,998 million as at March 31, 2020 was expected to be utilised in fourteenth and fifteenth year and ₹ 3,400 million ($ 47 million) as at March 31, 2021 is expected to be utilised in the lifefourteenth year, fifteen years being the maximum permissible time period to utilise the MAT credits. Additionally, the Group has tax receivables on account of refund arising on account of past amalgamation and relating to various tax disputes. The recoverability of these receivables involve application of judgement as to the ultimate outcome of the operation through the depreciation of the assettax assessment and the provision is increased each period via unwinding the discount on the provision. Management estimates are based on local legislation and/or other agreements. The actual costs and cash outflows may differ from estimates because of changes in laws and regulations, changes in prices, analysis of site conditions and changes in restoration technology. Details of such provisions are set out in Note 20. ix. | The HZL and BALCO call options |
The Group had exercised its call option to acquire the remaining 49% interest in BALCO and 29.5% interest in HZL. The Government of India has however, contested the validity of the options and disputed their valuation performed in terms of the relevant agreements the details of which are set out in note 28. In view of the lack of resolution on the options, thenon-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 fair value, accordingly, the value of the option would be nil, and hence, the call options have not been recognized in the financial statements.
Significant judgments
a | 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 judgment is required in both assessing the tariff to be charged under the PPA in accordance with IAS 18 and to assess the recoverability of revenues is probable.
In assessing this critical judgment management considered favorable external legal opinions and the strengths of its arguments in each of the matters. In addition the fact that the contracts are with government owned companies implies the credit risk is low. (Refer note 11 for details).
In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Group. A tax provision is recognised when the group has a present obligation as a result of a past event, it is probable that the group will be required to settle that obligation. Where it is management’s assessment that the outcome 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. A contingent liability also arises in extremely rare cases where there is liability that cannot be recognized because it cannot be measured reliably the Group does not recognize the contingent liability but discloses its existence in the consolidated financial statements.
When considering the classification of a legal or tax cases are probable, possible or remote there is judgement involved.litigations. This pertains to the application of the legislation, which in certain cases is based upon management’s interpretation of country specific tax law, in particular India, and the likelihood of settlement. Management usesin-house and external legal professionals to make informed decision.decision (Refer Note 9).
Although there can be no assurance regarding
(vii) | Copper operations in Tamil Nadu, India |
In an appeal filed by the final outcomeGroup against the closure order of the legal proceedings,Tuticorin Copper smelter by Tamil Nadu Pollution Control Board (“TNPCB”), the appellate authority National Green Tribunal (“NGT”) passed an interim order on May 31, 2013 allowing the copper smelter to recommence operations and appointed an Expert Committee to submit a report on the plant operations. Post the interim order, the plant recommenced operations on June 23, 2013. Based on Expert Committee’s report on the operations of the plant stating that the plant’s emission were within prescribed standards and based on this report, NGT ruled on August 08, 2013 that the Copper smelter could continue its operations and recommendations made by the Expert Committee be implemented in a time bound manner. The Group has implemented all of the recommendations. 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, required as per procedure established by law was rejected by TNPCB in April 2018. Vedanta Limited has filed an appeal before the TNPCB Appellate Authority challenging the Rejection Order. During the pendency of the appeal, there were protests by a section of local community raising environmental concerns and TNPCB vide its order dated May 23, 2018 ordered closure of existing copper smelter plant with immediate effect. Further, the Government of Tamil Nadu, issued orders dated May 28, 2018 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 May 30, 2018, directing the immediate suspension and revocation of the Factory License and the Registration Certificate for the existing smelter plant. The Company has appealed this before the National Green Tribunal (NGT). NGT vide its order on December 15, 2018 has set aside the impugned orders and directed the TNPCB to pass fresh orders for renewal of consent and authorization to handle hazardous substances, subject to appropriate conditions for protection of environment in accordance with law. The State of Tamil Nadu and TNPCB approached Supreme Court in Civil Appeals on January 02, 2019 challenging the judgement of NGT dated December 15, 2018 and the previously passed judgement of NGT dated August 08, 2013. The Supreme Court vide its judgement dated February 18, 2019 set aside the judgements of NGT dated December 15, 2018 and August 08, 2013 solely on the basis of maintainability and directed the Company to file an appeal in High 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 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. The matter was again mentioned before the bench on March 17, 2021, wherein the matter was posted for hearing on August 17, 2021. However, subsequent to the year end, the Company approached the Supreme Court offering to supply medical oxygen from the said facility in view of prevailing COVID-19 situation, which was allowed by the Supreme Court, under supervision of a committee constituted by the Government of Tamil Nadu. 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 themany material adjustments to have a materiality adverse impact on the Group’s financial position or profitability. The liabilities which are assessed as possible and hence are not recognised in these financial statements as discloseda consequence of above actions. The Company has carried out an impairment analysis for existing plant assets during the year ended March 31, 2021 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. April 01, 2024 and noted that the recoverable amount of the assets would still be in note 29.excess of their carrying values. The carrying value of the assets as at March 31, 2021 is ₹ 18,257 million ($ 250 million). Expansion Plant: Separately, the Company has filed a fresh application for renewal of the Environmental Clearance (EC) for the proposed Copper Smelter Plant 2 (Expansion Project) dated March 12, 2018 before the Expert Appraisal Committee of the MoEF 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 May 23, 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 Ministry of Environment and Forests (MoEF) has delisted the expansion project since the matter is sub-judice. Separately, SIPCOT vide its letter dated May 29, 2018, cancelled 342.22 acres of the land allotted for the proposed Expansion Project. Further the TNPCB issued orders on June 07, 2018 directing the withdrawal of the Consent to Establish (CTE) which was valid till March 31, 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 and accordingly made impairment provision of ₹ 6,692 million in March 2020. During the current period, there are no updates in the expansion matter and impairment provision of ₹ 6,692 million ($ 91 million) is adequate and the net carrying value of ₹ 965 million ($ 13 million) as at March 31, 2021 approximates its recoverable value. Property, plant and equipment of ₹ 14,742 million and ₹ 13,367 million ($ 183 million) and inventories of ₹ 5,166 million and ₹ 2,836 million ($ 39 million) as at March 31, 2020 and March 31, 2021 respectively, 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. Impairment recognised during the year ended March 31, 2020 For the expansion plant, the project activities are on halt since May 2018. Further, the project EC for the expansion plant got expired on December 31, 2018 and fresh application is filed before the competent authority, however, the process will start only after reopening of the existing plant and after obtaining all statutory approvals, the timing of which is uncertain. Keeping in view the above factors and the fact that value in use cannot be reasonably ascertained, the company has carried out recoverability assessment of the items of property, plant and equipment, asset under construction and capital advances. Based on the realisable value estimate of ₹ 2,886 million, the company has recognised an impairment of ₹ 6,692 million (comprising of asset under construction balances of ₹ 4,349 million, capital advances of ₹ 1,961 million and other assets of ₹ 382 million) during the year. 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. May 15, 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 April 07, 2017 (“Pre-NELP Policy”), for RJ block by a period of 10 years, w.e.f. May 15, 2020. As per the said policy and extension, 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. The Company is studying the order and all available legal remedies are being evaluated for further action as appropriate. One of the conditions for extension of PSC relates to notification of certain audit exceptions raised for Financial Year 16-17 as per PSC provisions and provides for payment of amounts, if such audit exceptions result into any creation of liability. The Directorate General of Hydrocarbons (“DGH”), in May 2018, has raised a demand on the Company and its subsidiary for the period up to March 31, 2017 for Government’s additional share of Profit oil based on its computation of disallowance of cost incurred in excess of the initially approved Field Development Plan (“FDP”) of pipeline project for ₹ 14,770 million ($ 202 million) and retrospective re-allocation of certain common costs between Development Areas (“DAs”) of RJ aggregating to ₹ 26,690 million ($ 364 million). The DGH vide its letter dated May 12, 2020, reiterated its demand only with respect to the retrospective re-allocation of certain common costs between Development Areas (“DAs”) of RJ block of ₹ 26,690 million ($ 364 million) towards contractor share for the period upto March 31, 2017. This amount was subsequently revised to ₹ 33,600 million ($ 458 million) till March 2018 vide DGH letter dated December 24, 2020. The Company in January 2020 received notifications from the DGH on audit exceptions arising out of its audit for the FY 2017-18, which comprises consequential effects on profit oil due to the aforesaid matters and certain new matters on cost allowability plus interest aggregating to ₹ 47,135 million ($ 645 million), representing share of Vedanta Limited and its subsidiary, CEHL (“the Claimants”), which have been suitably responded to by the Company. 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 the tribunal stands constituted. Further, on September 23, 2020, the GoI had filed an application for interim relief before Delhi High Court seeking payment of all disputed dues. This matter is now pending adjudication. 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 now pending adjudication. 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 October 26, 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 July 31, 2021 or signing of the PSC addendum, whichever is earlier. Ravva Block The Government of India (GoI) has granted its approval for a ten-year extension of PSC for Ravva Block with effect from 28 October 2019, in terms of the provision of the “Policy on the Grant of the extension to Production Sharing Contract Signed by Government awarding small, medium-sized and discovered field to private joint ventures” dated 28 March 2016. The PSC addendum recording this extension has been executed by all parties. The Ravva Extension Policy, amongst others, provides for an increased share of profit petroleum of 10% for the GoI during the extended term of the Ravva PSC and payment of royalty and cess as per prevailing rate in accordance with the PNG Rules, 1959 and OIDB Act. Under the Ravva PSC, the Company’s oil and gas business is entitled to recover 100% of cost of production and development from crude oil and natural gas sales before any profit is allocated among the parties. Cost recovery for exploration cost during extension period shall be governed as per the provision of Office Memorandum 2013, 2019 issued by MoPNG on exploration in mining lease area post expiry of the exploration period. c(ix) | Impact of Taxation Laws (Amendment) Act, 2019 |
Pursuant to the introduction of Section 115BAA of the Indian Income Tax Act, 1961 which is effective April 01, 2019, companies in India have the option to pay corporate income tax at the rate of 22% plus applicable surcharge and cess as against the earlier rate of 30% plus applicable surcharge and cess, subject to certain conditions like, the Company has to forego all benefits like tax holidays, brought forward losses generated through tax incentives/additional depreciation and outstanding MAT credit. Considering all the provisions under Section 115BAA and based on the expected timing of exercising of the option under Section 115BAA, the Group has re-measured its deferred tax balances as at March 31, 2021. This computation required assessment of assumptions regarding future profitability, which is inherently uncertain. To the extent assumptions regarding future profitability change, there can be increase or decrease in the amounts recognized (Refer Note 9 for details). (x) | ESL Steel Limited (formerly known as Electrosteel Steels Limited) (ESL), had filed application for renewal of Consent to Operate (‘CTO’) on August 24, 2017 for the period of five years which was denied by Jharkhand State Pollution Control Board (‘JSPCB’) on August 23, 2018, as JSPBC awaited response from The Ministry of Environment and Finance (MOEF) over a 2012 show-cause notice. After a personal hearing towards the show cause notice, the Ministry of Environment, Forests and Climate Change revoked the Environmental Clearance (EC) on September 20, 2018. The Hon’ble 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 September 16, 2020 passed an order vacating the interim stay in place beyond September 23, 2020, while listed the matter for final hearing. ESL urgently filed a petition in the Supreme Court, and on September 22, 2020, ESL was granted permission to run the plant till further orders. Next date of High Court hearing is October 01, 2021 and Supreme Court hearing is yet to be listed. |
The Forest Advisory Committee (FAC) of MoEFCC granted the Stage 1 clearance and the MoEF&CC approved the related Terms of Reference (TOR) on August 25, 2020. As per Stage 1 clearance, the company is required to provide non-forest land in addition to the afforestation cost. The company, based on the report of an EIA consultant, has recognised a provision of ₹ 2,135 million ($ 29 million) as part of cost of sales in these financial statement with respect to the costs to be incurred by the company for obtaining Environment Clearance. (xi) | Assessment of IFRIC4-impairment of assets at Aluminium division |
During year ended March 31, 2020, considering lower sales realisation, an impairment trigger was identified in the aluminium division of the Company. The impairment assessments are based on a range of estimates and assumptions, including: | | | Estimates/ assumption | | Basis | Future production | | Proved and probable reserves, production facilities, resource estimates and expansion projects | Commodity prices | | management’s best estimate benchmarked with external sources of information, to ensure they are within the range of available analyst forecast | Discount rates | | cost of capital risk-adjusted for the risk specific to the asset/CGU |
During the year ended March 31, 2020, The Group had carried out an impairment analysis, based on value in use approach, considering the key variables and concluded that there existed no impairment. The Group had carried out sensitivity analysis on key assumptions including commodity price, discount rate and delay in expansion of refinery. Based on sensitivity analysis, the recoverable amount was expected to exceed the carrying value as at March 31, 2020 of ₹ 318,413 million. No negative developments have occurred since the previous year, while the commodity price have increased. Accordingly, it is not expected that the carrying amount would exceed the recoverable amount and hence the recoverable value for the year ended March 31, 2021 was not re-determined. Considering the uncertainties caused due to COVID-19, as described in (i) above, the Group prepared its cash flow forecasts under various scenarios and has performed additional sensitivities on certain key assumptions. Based on such an analysis and assessment of its ability to raise additional capital, the Group continues to prepare its financial statements on a going concern basis. II. Significant Judgements: (i) | Determining whether an arrangement contains a leaselease: |
The Group has ascertained that the Power Purchase Agreement (PPA) entered into between one of the Subsidiariessubsidiaries and a State Gridstate grid qualifies to be an operating lease under IAS 17IFRS 16 “Leases”. Accordingly, the consideration receivable under the PPA relating to recovery of capacity charges towards capital cost have been recognised as operating lease rentals and in respect of variable cost that includes fuel costs, operations and maintenance, etc. is considered as revenue from sale of products/services. Significant judgement is required in segregating the capacity charges due from the State Grid,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 recognizedrecognised are disclosed in note 29 C (ii). Note 6.X. Recently issued accounting pronouncements:The following Standards have been issued but are not yet effective up toIn the datenormal course of authorisationbusiness, 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 these financial statements:
Amendments resulting from Annual Improvements 2014-2016 Cycle: The amendments are effective for annual periods beginning on or after 1 January 2018, although entities are permitted to apply them earlier.
IAS 7 Statement of Cash Flows: Narrow-scope amendments: The amendments introduce an additional disclosurepast events, and it is probable that will enable users of financial statements to evaluate changes in liabilities arising from financing activities. Thethe Group will be required to provide information on movementssettle 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 gross liabilities arising from financing activitiesthe notes but are not provided for in additionthe financial statements. When considering the classification of a legal or tax cases as probable, possible or remote there is judgement involved. This pertains to the net debt reconciliation currently provided. The amendments are effective for annual periods beginning on or after 1 January 2017, although entities are permitted to apply them earlier. Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses.These amendments on the recognition of deferred tax assets for unrealised losses clarify how to account for deferred tax assets related to debt instruments measured at fair value. The amendments are effective for annual periods beginning on or after 1 January 2017, although entities are permitted to apply them earlier.
IFRIC 22: Foreign Currency Transactions and Advance Consideration: The Interpretation, which was issued on 8 December 2016, addresses how to determine the date of a transaction for the purpose of determining the exchange rate to use on initial recognition of an asset, expense or income (or part of it) when a relatednon-monetary asset ornon-monetary liability arising from the payment or receipt of advance consideration in a foreign currency is derecognised. The amendments are effective for annual periods beginning on or after 1 January 2018, although entities are permitted to apply them earlier.
IAS 40 Investment Property: Paragraph 57 has been amended to state that an entity shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the definition of investment property. A change in management’s intentions for the use of a property by itself does not constitute evidence of a change in use. The list of evidence in paragraph 57(a) – (d) was designated asnon-exhaustive list of examples insteadapplication of the previous exhaustive list. The amendments are effective for periods beginning on or after 1 January 2018. Earlier applicationlegislation, which in certain cases is permitted.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.
IFRS 2 Share-based Payment: Few amendments to clarify the classification and measurement of share-based payment transactions have been issued. The amendments are effective for annual periods beginning on or after 1 January 2018. Earlier application is permitted. The amendments are toAlthough there can be applied prospectively. However, retrospective application is allowed if this is possible without the use of hindsight.
IFRS 4 Insurance Contracts: Amendmentsno assurance regarding the interaction of IFRS 4 and IFRS 9 has been issued. An entity choosing to apply the overlay approach retrospectively to qualifying financial assets does so when it first applies IFRS 9. An entity choosing to apply the deferral approach does so for annual periods beginning on or after 1 January 2018.
IFRS 9 – Financial Instruments
In July 2014, the International Accounting Standards Board issued the final version of IFRS 9, Financial Instruments. The standard reduces the complexityoutcome of the current rules on financial instruments as mandated in IAS 39. IFRS 9 has fewer classification and measurement categories as compared to IAS 39. It eliminateslegal proceedings, the rule based requirement of segregating embedded derivatives from financial assets and tainting rules pertaining to held to maturity investments. For financial assets which are debt instruments, IFRS 9 establishes a principle based approach for classification based on cash flow characteristics of the asset and the business model in which an asset is held. For an investment in an equity instrument which is not held for trading, IFRS 9 permits an irrevocable election, on initial recognition, on an individualshare-by- share basis, to present all fair value changes from the investment in other comprehensive income. No amount recognized in other comprehensive income on such equity investment would ever be reclassified to profit or loss. It requires the entity, which chooses to designate a liability as at fair value through profit or loss, to present the portion of the fair value change attributable to the entity’s own credit risk in the other comprehensive income. IFRS 9 replaces the ‘incurred loss model’ in IAS 39 with an ‘expected credit loss’ model. The measurement uses a dual measurement approach, under which the loss allowance is measured as either 12 month expected credit losses or lifetime expected credit losses. The standard also introduces new presentation and disclosure requirements. The effective date for the adoption of IFRS 9 is annual periods beginning on or after 1 January 2018, though early adoption is permitted. Except for hedge accounting, retrospective application is required but providing comparative information is not compulsory. For hedge accounting, the requirements are generally applied prospectively, with some limited exceptions.
The Group has substantially completed its assessment of the effects of transition to IFRS 9. The impacts that have been identified on adopting IFRS 9 on the Group are detailed below. The Group does not expect any additional material effects being identified later in the implementation process.
Classification and measurement: IFRS 9 establishes a principle based approach for classification of financial assets based on cash flow characteristics of the asset and the business model in which an asset is held. The fair value changes of some of the Group’s financial assets may get recorded in the statement of other comprehensive income leading to changes in the profit after tax with consequent change to the other comprehensive income.
Impairment: Based on Group’s assessment, the impairment of financial assets held at amortised cost is not expectedthem to have materiala materially adverse impact on the Group’s results, givenfinancial position or profitability. These are set out in Note 33.(iii) | Revenue recognition and receivable recovery in relation to the power division |
In certain cases, the low exposureGroup’s power customers are disputing various contractual provisions of Power Purchase Agreements (PPA). Significant judgement is required in both assessing the tariff to counterparty default riskbe charged under the PPA in accordance with IFRS 15 and to assess the recoverability of withheld revenue currently accounted for as a result ofreceivables. In assessing this critical judgment management considered favourable external legal opinions the Group has obtained in relation to the claims and favourable court judgements in the related matter. In addition, the fact that the contracts are with government owned companies implies the credit risk management processes that areis low. Refer note 17. 4. Business Combination and Others a) Ferro Alloys Corporation Limited—Business Combination On September 21, 2020, the Company acquired control over Ferro Alloys Corporation Limited (“FACOR”). FACOR was admitted under Corporate insolvency resolution process in place. Hedge accounting: The adoptionterms of the new standardInsolvency and Bankruptcy Code, 2016 of India. The National Company Law Tribunal (NCLT) vide its order dated January 30, 2020 approved the resolution plan for acquiring controlling stake in FACOR. Pursuant to the approved resolution plan, FACOR will be 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, FACOR Power Limited (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. The fair value of the identifiable assets and liabilities of FACOR as at the date of the acquisition were as follows: | | | | | | | | | | | (₹ in million) | | | ($ in million) | | Particulars | | Fair Value at Acquisition | | | Fair Value at Acquisition | | Property, Plant and Equipment* | | | 3,543 | | | | 49 | | Other non-current assets | | | 93 | | | | 1 | | | | | | | | | | | Non-current assets | | | 3,636 | | | | 50 | | | | | | | | | | | Inventories | | | 460 | | | | 6 | | Cash and cash equivalents | | | 106 | | | | 2 | | Short-term Investments | | | 688 | | | | 9 | | Trade and other receivables | | | 371 | | | | 5 | | | | | | | | | | | Current assets | | | 1,625 | | | | 22 | | | | | | | | | | | Total Assets (A) | | | 5,261 | | | | 72 | | | | | | | | | | | Borrowings | | | 93 | | | | 1 | | Deferred tax liabilities | | | 597 | | | | 8 | | Trade and other payables | | | 664 | | | | 9 | | Provisions | | | 74 | | | | 1 | | | | | | | | | | | Total Liabilities (B) | | | 1,428 | | | | 19 | | | | | | | | | | | Net Assets (C = A-B) | | | 3,833 | | | | 53 | | | | | | | | | | | Satisfied by: | | | | | | | | | Cash Consideration Paid for Equity acquired | | | 336 | | | | 5 | | Cash Consideration Paid for Debt acquired | | | 216 | | | | 3 | | Zero coupon Non-Convertible Debentures issued by FACOR repayable equally over 4 years commencing March 2021 (Nominal value ₹ 2,865 million) ($ 39 million)** | | | 2,358 | | | | 32 | | | | | | | | | | | Total Purchase consideration (D) | | | 2,910 | | | | 40 | | | | | | | | | | | Non-Controlling interest on acquisition (10% of net liabilities of FPL) (E) | | | (309 | ) | | | (4 | ) | | | | | | | | | | Bargain Gain (C-D-E) (Refer Note 7) | | | 1,232 | | | | 17 | | | | | | | | | | |
* | Includes mining rights of ₹ 2,202 million ($ 30 million). |
** | The instrument has been recorded at fair value and a small portion of the same are yet to be issued. |
Since the date of acquisition, FACOR has contributed ₹ 2,740 million ($ 37 million) and ₹ 1,628 million ($ 22 million) to the Group revenue and profit before tax respectively for the year ended March 31, 2021. If FACOR had been acquired at the beginning of the year, the Group revenue would have been ₹ 870,867 million ($ 11,907 million) and the profit before tax of the Group would have been ₹ 166,237 million ($ 2,273 million). The carrying amount of all assets and liabilities within the working capital equals their fair value. None of the Trade receivables was impaired and the full contractual amount were expected to be realised. Mining Rights have been valued considering the With or Without method, i.e., based on the cost savings resulting from the usage of the mines vis a vis procurement of raw material (chrome ore) from external vendors. Land has been valued based on the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act. Buildings, Plant & Machinery, Other Tangible Assets, Capital Work in Progress and Capital Advances pertaining to the Tangible Assets together have been estimated based on the Value in Use of FACOR under the Income Approach. Since FACOR was acquired as part of IBC, 2016, it resulted in a bargain gain forming part of Investment and other Income. Non-controlling interest has been measured at the non-controlling interest’s proportionate share of FPL’s identifiable net assets. Acquisition costs of ₹ 28 million ($ 0 million) have been charged to the consolidated statement of profit and loss. b) Acquisition of Global coke plant On July 28, 2019, the Group acquired Sindhudurg plant of Global Coke Limited which was under liquidation as per the Insolvency and Bankruptcy Code 2016 (including all amendments for the time being in force) for a cash consideration of ₹ 335 million. The assets acquired mainly included Land, Building and Plant & Machinery of similar value as the cash consideration. The acquisition complements backward integration opportunity for the Group’s existing pig iron division and also increase Group’s footprint in met coke market in south western part of India. Detailed disclosure of fair value of the identifiable assets and liabilities of Sindhudurg plant has not materially changebeen provided as the same is not material. Acquisition costs related to the same were not material. 5. Segment information 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 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 and steel. The Group has seven reportable segments: copper, aluminium, iron ore, power, Zinc India (comprises of zinc and lead India), Zinc international, oil and gas and others. The management of the Group is organized 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 of port/berth, steel and glass substrate 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, Profit, Assets and Liabilities include the respective amounts recognisedidentifiable to each of the segments and amount allocated on a reasonable basis. Unallocated expenditure consists 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 described in relationNote 3. 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 (Segment profit) are evaluated regularly by the CODM in deciding how to existing hedging arrangements.allocate resources and in assessing performance and is a non-IFRS measure. The Group’s financing (including finance and other costs and investment and other income) and income taxes are reviewed on an overall basis and are not allocated to operating segments. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties except from power segment sales amounting to ₹ 670 million, ₹ Nil and ₹ Nil ($ Nil) which is at cost for the year ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively. The following table presents revenue and profit information and certain assets and liabilities information regarding the Group’s reportable segments for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 and as at March 31, 2020 and March 31, 2021: a. Year ended March 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Copper | | | Zinc India | | | Zinc International | | | Aluminium | | | Power | | | Iron Ore | | | Oil and Gas | | | Others | | | Elimination | | | Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales | | | 107,390 | | | | 206,562 | | | | 27,383 | | | | 292,080 | | | | 64,559 | | | | 29,033 | | | | 132,228 | | | | 49,777 | | | | — | | | | 909,012 | | Inter-segment sales | | | — | | | | — | | | | — | | | | 206 | | | | 678 | | | | 81 | | | | — | | | | 455 | | | | (1,420 | ) | | | — | | Segment revenue | | | 107,390 | | | | 206,562 | | | | 27,383 | | | | 292,286 | | | | 65,237 | | | | 29,114 | | | | 132,228 | | | | 50,232 | | | | (1,420 | ) | | | 909,012 | | Cost of Sales and expenses | | | (109,729 | ) | | | (100,567 | ) | | | (20,421 | ) | | | (270,228 | ) | | | (49,962 | ) | | | (22,793 | ) | | | (55,703 | ) | | | (40,431 | ) | | | 1,420 | | | | (668,414 | ) | Segment profit / (loss) | | | (2,339 | ) | | | 105,995 | | | | 6,962 | | | | 22,058 | | | | 15,275 | | | | 6,321 | | | | 76,525 | | | | 9,801 | | | | — | | | | 240,598 | | Depreciation and amortisation | | | (1,447 | ) | | | (18,768 | ) | | | (4,287 | ) | | | (16,577 | ) | | | (5,969 | ) | | | (2,455 | ) | | | (42,669 | ) | | | (3,974 | ) | | | — | | | | (96,146 | ) | Other items* | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,847 | ) | Impairment (Refer Note 14) | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,611 | | | | — | | | | — | | | | 2,611 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | (3,786 | ) | | | 87,227 | | | | 2,675 | | | | 5,481 | | | | 9,306 | | | | 3,866 | | | | 36,467 | | | | 5,827 | | | | — | | | | 145,216 | | Investment and other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 31,540 | | Finance and other costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (59,026 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Profit before tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 117,730 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions to property, plant and equipments, exploration and evaluation assets and intangible assets** | | | 2,732 | | | | 36,574 | | | | 15,939 | | | | 15,265 | | | | 307 | | | | 377 | | | | 38,412 | | | | 51,910 | | | | | | | | 161,516 | |
* | Other items represent forex loss on MAT credit entitlements which have not been allocated to any segment. |
** | Others includes acquisition through business combinations |
IFRS 15 –
b. Year ended March 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Copper | | | Zinc India | | | Zinc International | | | Aluminium | | | Power | | | Iron Ore | | | Oil and Gas | | | Others | | | Elimination | | | Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales | | | 90,517 | | | | 181,590 | | | | 31,275 | | | | 265,445 | | | | 58,599 | | | | 34,500 | | | | 126,608 | | | | 46,912 | | | | — | | | | 835,446 | | Inter-segment sales | | | 9 | | | | — | | | | — | | | | 328 | | | | — | | | | 130 | | | | — | | | | 913 | | | | (1,380 | ) | | | — | | Segment revenue | | | 90,526 | | | | 181,590 | | | | 31,275 | | | | 265,773 | | | | 58,599 | | | | 34,630 | | | | 126,608 | | | | 47,825 | | | | (1,380 | ) | | | 835,446 | | Cost of Sales and expenses | | | (93,420 | ) | | | (94,450 | ) | | | (27,477 | ) | | | (245,837 | ) | | | (42,109 | ) | | | (26,318 | ) | | | (53,925 | ) | | | (43,187 | ) | | | 1,380 | | | | (625,343 | ) | Segment profit / (loss) | | | (2,894 | ) | | | 87,140 | | | | 3,798 | | | | 19,936 | | | | 16,490 | | | | 8,312 | | | | 72,683 | | | | 4,638 | | | | — | | | | 210,103 | | Depreciation and amortisation | | | (1,471 | ) | | | (22,610 | ) | | | (6,329 | ) | | | (17,183 | ) | | | (5,701 | ) | | | (2,413 | ) | | | (40,077 | ) | | | (4,706 | ) | | | — | | | | (100,490 | ) | Other items* | | | (2,028 | ) | | | — | | | | (42 | ) | | | 1,681 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (1,525 | ) | Impairment (Refer Note 14) | | | (6,692 | ) | | | — | | | | — | | | | — | | | | — | | | | (1,201 | ) | | | (135,031 | ) | | | (5,098 | ) | | | — | | | | (148,022 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | (13,085 | ) | | | 64,530 | | | | (2,573 | ) | | | 4,434 | | | | 10,789 | | | | 4,698 | | | | (102,425 | ) | | | (5,166 | ) | | | — | | | | (39,934 | ) | Investment and other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 25,714 | | Finance and other costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (54,557 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loss before tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (68,777 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets and liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment assets | | | 64,853 | | | | 206,643 | | | | 51,831 | | | | 486,545 | | | | 174,210 | | | | 34,450 | | | | 155,551 | | | | 80,247 | | | | | | | | 1,254,330 | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 911 | | Deferred tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 82,669 | | Short-term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 327,210 | | Cash and cash equivalents (including restricted cash and cash equivalents) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 51,558 | | Income tax assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,530 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,197 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,755,405 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment liabilities | | | 45,368 | | | | 47,650 | | | | 12,266 | | | | 179,278 | | | | 16,418 | | | | 11,813 | | | | 102,055 | | | | 15,454 | | | | — | | | | 430,302 | | Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 579,475 | | Current tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,894 | | Deferred tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,675 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 32,164 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,073,510 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions to property, plant and equipments, exploration and evaluation assets and intangible assets** | | | 2,192 | | | | 46,088 | | | | 7,552 | | | | 14,187 | | | | 671 | | | | 1,081 | | | | 45,490 | | | | 2,373 | | | | | | | | 119,668 | |
* | Other items represent provision for receivables from KCM of ₹ 2,070 million, Renewable Power Obligation (RPO) liability reversal of ₹ 1,681 million. Additionally, forex loss on MAT credit entitlements of ₹ 1,136 million which has not been allocated to any segment is included in here. |
** | The total of additions includes ₹ 34 million not allocated to any segment. Iron Ore includes acquisition through business combination. |
c. Year ended March 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Copper | | | Zinc India | | | Zinc International | | | Aluminium | | | Power | | | Iron Ore | | | Oil and Gas | | | Others | | | Elimination | | | Total | | | Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales | | | 108,879 | | | | 219,316 | | | | 27,290 | | | | 285,756 | | | | 53,752 | | | | 44,875 | | | | 75,308 | | | | 53,454 | | | | — | | | | 868,630 | | | | 11,876 | | Inter-segment sales | | | 18 | | | | — | | | | — | | | | 686 | | | | — | | | | 409 | | | | — | | | | 313 | | | | (1,426 | ) | | | — | | | | — | | Segment revenue | | | 108,897 | | | | 219,316 | | | | 27,290 | | | | 286,442 | | | | 53,752 | | | | 45,284 | | | | 75,308 | | | | 53,767 | | | | (1,426 | ) | | | 868,630 | | | | 11,876 | | Cost of Sales and expenses | | | (110,650 | ) | | | (103,116 | ) | | | (19,190 | ) | | | (208,919 | ) | | | (39,682 | ) | | | (27,108 | ) | | | (43,142 | ) | | | (44,634 | ) | | | 1,426 | | | | (595,015 | ) | | | (8,135 | ) | Segment profit / (loss) | | | (1,753 | ) | | | 116,200 | | | | 8,100 | | | | 77,523 | | | | 14,070 | | | | 18,176 | | | | 32,166 | | | | 9,133 | | | | — | | | | 273,615 | | | | 3,741 | | Depreciation and amortisation | | | (1,533 | ) | | | (24,617 | ) | | | (3,211 | ) | | | (16,926 | ) | | | (5,749 | ) | | | (2,208 | ) | | | (21,274 | ) | | | (5,660 | ) | | | — | | | | (81,178 | ) | | | (1,110 | ) | Other items* | | | (2,086 | ) | | | — | | | | (40 | ) | | | 950 | | | | — | | | | — | | | | — | | | | (2,135 | ) | | | — | | | | (3,145 | ) | | | (43 | ) | Asset Under Construction written off (Refer Note 14) | | | — | | | | — | | | | — | | | | (1,811 | ) | | | — | | | | — | | | | — | | | | (629 | ) | | | — | | | | (2,440 | ) | | | (33 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | (5,372 | ) | | | 91,583 | | | | 4,849 | | | | 59,736 | | | | 8,321 | | | | 15,968 | | | | 10,892 | | | | 709 | | | | — | | | | 186,852 | | | | 2,555 | | Investment and other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 32,177 | | | | 440 | | Finance and other costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (52,955 | ) | | | (724 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Profit before tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 166,074 | | | | 2,271 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets and liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment assets | | | 59,570 | | | | 200,072 | | | | 60,740 | | | | 477,070 | | | | 163,620 | | | | 33,039 | | | | 181,108 | | | | 78,024 | | | | | | | | 1,253,243 | | | | 17,135 | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,532 | | | | 21 | | Deferred tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 73,958 | | | | 1,011 | | Short-term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 281,775 | | | | 3,853 | | Cash and cash equivalents (including restricted cash and cash equivalents) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 49,563 | | | | 678 | | Income tax assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 27,549 | | | | 377 | | Loans to related party | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 70,712 | | | | 967 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,779 | | | | 174 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,771,111 | | | | 24,216 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment liabilities | | | 43,277 | | | | 47,217 | | | | 10,672 | | | | 156,994 | | | | 18,405 | | | | 12,269 | | | | 111,776 | | | | 20,990 | | | | | | | | 421,600 | | | | 5,764 | | Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 569,222 | | | | 7,783 | | Current tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,792 | | | | 38 | | Deferred tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21,894 | | | | 299 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 21,554 | | | | 296 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,037,062 | | | | 14,180 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions to property, plant and equipments, exploration and evaluation assets and intangible assets** | | | 622 | | | | 25,163 | | | | 3,754 | | | | 17,135 | | | | 267 | | | | 985 | | | | 15,192 | | | | 6,019 | | | | | | | | 69,155 | | | | 946 | |
* | Other items represent provision for receivables from KCM of ₹ 2,127 million ($ 29 million), Renewable Power Obligation (RPO) liability reversal of ₹ 950 million ($ 13 million), Costs to be incurred by the Company for obtaining Environment Clearance of ₹ 2,135 million ($ 29 million). Additionally, forex gain on MAT credit entitlements of ₹ 166 million ($ 2 million) which has not been allocated to any segment is included in here. |
** | The total of additions includes ₹ 18 million ($ 0 million) not allocated to any segment. Others segment includes ₹ 3,543 million ($ 48 million) acquired through business combination. |
Geographical Segment Analysis The Group’s operations are located in India, Namibia, South Africa, UAE, Liberia, Ireland, Australia, South Korea and Taiwan. The following table provides an analysis of the Group’s sales by geographical market irrespective of the origin of the goods: | | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | India | | | 591,599 | | | | 542,256 | | | | 536,212 | | | | 7,331 | | China | | | 37,868 | | | | 26,942 | | | | 52,213 | | | | 714 | | UAE | | | 10,150 | | | | 8,201 | | | | 6,984 | | | | 95 | | Malaysia | | | 48,657 | | | | 76,479 | | | | 71,092 | | | | 972 | | Others | | | 220,738 | | | | 181,568 | | | | 202,129 | | | | 2,764 | | | | | | | | | | | | | | | | | | | | | | 909,012 | | | | 835,446 | | | | 868,630 | | | | 11,876 | | | | | | | | | | | | | | | | | | |
The following is an analysis of the carrying amount of non-current assets, excluding deferred tax assets, derivative financial assets, financial asset investments and other non-current financial assets analysed by the geographical area in which the assets are located: — | | | | | | | | | | | | | | | As at March 31 | | | | 2020 | | | 2021 | | | 2021 | | | | Carrying amount | | | Carrying Amount | | | Carrying Amount | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | India | | | 973,821 | | | | 954,629 | | | | 13,052 | | South Africa | | | 37,231 | | | | 44,486 | | | | 608 | | Namibia | | | 7,500 | | | | 8,870 | | | | 121 | | Taiwan | | | 11,620 | | | | 10,029 | | | | 137 | | Others | | | 9,840 | | | | 7,883 | | | | 108 | | | | | | | | | | | | | | | | | | 1,040,012 | | | | 1,025,897 | | | | 14,026 | | | | | | | | | | | | | | |
Information about major customer Revenue from Contracts with Customersone customer amounted to ₹ 104,164 million ($ 1,424 million) (March 31, 2019 and March 31, 2020: No Customer), arising from sales made in the Aluminium, zinc and copper segment. No other customer contributed to more than 10% of revenues. IFRS 15 –
Disaggregation of Revenue Below table summarises the disaggregated revenue from contracts with Customers outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The standard replaces most current revenue recognition guidance. The core principlecustomers: — | | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Oil | | | 126,430 | | | | 109,062 | | | | 64,798 | | | | 886 | | Gas | | | 5,270 | | | | 7,945 | | | | 6,837 | | | | 93 | | Zinc Metal | | | 172,046 | | | | 157,559 | | | | 166,343 | | | | 2,274 | | Lead Metal | | | 37,575 | | | | 34,702 | | | | 38,803 | | | | 531 | | Silver Metal & Bars | | | 25,829 | | | | 24,756 | | | | 43,949 | | | | 601 | | Iron Ore | | | 6,911 | | | | 14,820 | | | | 21,734 | | | | 297 | | Metallurgical Coke | | | 532 | | | | 553 | | | | 2,565 | | | | 35 | | Pig Iron | | | 20,612 | | | | 22,394 | | | | 24,249 | | | | 332 | | Copper Products | | | 92,931 | | | | 73,489 | | | | 102,049 | | | | 1,395 | | Aluminium Products | | | 280,730 | | | | 254,293 | | | | 283,944 | | | | 3,882 | | Power | | | 47,839 | | | | 44,064 | | | | 36,509 | | | | 499 | | Steel Products | | | 41,859 | | | | 37,850 | | | | 39,663 | | | | 542 | | Ferro Alloys | | | — | | | | — | | | | 2,740 | | | | 37 | | Others | | | 42,186 | | | | 37,465 | | | | 21,261 | | | | 291 | | | | | | | | | | | | | | | | | | | Revenue from contracts with customers* | | | 900,750 | | | | 818,952 | | | | 855,444 | | | | 11,696 | | Revenue from contingent rents | | | 16,724 | | | | 16,729 | | | | 15,147 | | | | 207 | | Loss on provisionally priced contracts under IFRS 9 (Refer Note 6(a)) | | | (8,462 | ) | | | (12,995 | ) | | | (1,961 | ) | | | (27 | ) | JV partner’s share of the exploration costs approved under the OM (Refer Note 6(b)) | | | — | | | | 12,760 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total Revenue | | | 909,012 | | | | 835,446 | | | | 868,630 | | | | 11,876 | | | | | | | | | | | | | | | | | | |
* | includes revenues from sale of services aggregating to ₹ 2,205 million, ₹ 2,159 million and ₹ 2,239 million ($ 30 million) for the financial years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively which is recorded over a period of time and the balance revenue is recognised at a point in time. |
6. Revenue | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Sale of products | | | 890,083 | | | | 816,558 | | | | 851,244 | | | | 11,639 | | Sale of services | | | 2,205 | | | | 2,159 | | | | 2,239 | | | | 30 | | Revenue from contingent rents | | | 16,724 | | | | 16,729 | | | | 15,147 | | | | 207 | | | | | | | | | | | | | | | | | | | Total revenue | | | 909,012 | | | | 835,446 | | | | 868,630 | | | | 11,876 | | | | | | | | | | | | | | | | | | |
a) | Revenue from sale of products and from sale of services comprises of revenue from contracts with customers of ₹ 900,750 million, ₹ 818,952 million and ₹ 855,444 million ($ 11,696 million) for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively and a net loss on mark-to-market of ₹ 8,462 million, ₹ 12,995 million and ₹ 1,961 million ($ 27 million) on account of gains / losses relating to sales of product that were provisionally priced as at the beginning of the respective year with the final price settled during the subsequent year ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively, gains / losses relating to sales of product fully priced during the respective year, and marked to market gains/ losses relating to sales of product that were provisionally priced as at the end of the respective year. |
b) | Government of India (GoI) vide Office Memorandum (“OM”) No. O-19025/10/2005-ONG-DV dated February 01, 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 October 24, 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, during the year ended March 31, 2020, the Group has recognized revenue of ₹ 12,760 million for past exploration costs, through increased share in the joint operations revenue as the Group believes that cost recovery mechanism prescribed under OM is not applicable to its Joint operation partner, view which is also supported by an independent legal opinion. However, the Joint operation partner carries a different understanding and the matter is pending resolution. |
c) | 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 new standard is for companies to recognize revenue to depict the transfer of goods or services tocontract with its customers, in amounts that reflect the consideration to which the company expectseither all performance obligations are to be entitled in exchange for those goodscompleted within one year from the date of such contracts or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively including service revenues and contract modifications and improve guidance for multiple-element arrangements. The new Standard will come into effect for the annual reporting periods beginning on or after 1 January 2018 with early application permitted. The Group plans to adopt the new standard on the required effective date. The Group has done a preliminary assessmentright to receive consideration from its customers for all completed performance obligations. Accordingly, the Group has availed the practical expedient available under paragraph 121 of IFRS 15 and a more detailed analysis is required beforedispensed with the effectsadditional disclosures with respect to performance obligations that remained unsatisfied (or partially unsatisfied) at the reporting date. Further, since the terms of the same oncontracts directly identify the Group’s financial statements can be assessed. The Group istransaction 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 process of laying out a detailed assessmentrevenue recognised in the financial statements.
Further, there is no material difference between the contract price and implementation plan for the roll out of IFRS 15. Basis our preliminary assessments the following has been noted: The timing of the recognition of revenue- The new standard introduces the concept of ‘control’ for revenue recognition, in contrast to the “risk and rewards” approach in IAS 18. Accordingly, the revenue recognition model will change from one based on the transfer of risk and reward of ownership to the transfer of control of ownership. The Group’s revenue is predominantly derived from commodity sales, where the point of recognition is dependent on the contract sales terms, known as the International Commercial terms (Incoterms). As the transfer of risks and rewards generally coincides with the transfer of control at a point in time for the Incoterms as part of the Group’s commodity sales arrangements, the timing and amount of revenue recognised for the sale of commodities is unlikely to be materially affected for the majority of sales.customers.
IFRS 15 provides presentation and disclosure requirements, which are more detailed than under current IFRS. The presentation requirements represent a significant change from current practice and significantly increases the volume of disclosures required in Group’s financial statements.
IFRS 16 – Leases
IFRS16- Leases, specifies recognition, measurement and disclosure criteria for leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17. The new Standard will come into effect for annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted if IFRS 15 Revenue from Contracts with Customers has also been applied.
The Group is currently in the process of determining the potential impact of adopting the above standard.
4. Revenue
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Sale of products, gross of excise duty | | | 760,995 | | | | 666,567 | | | | 749,314 | | | | 11,554.6 | | Less: excise duty | | | (35,904) | | | | (37,308) | | | | (39,462) | | | | (608.5) | | Sale of products, net of excise duty | | | 725,091 | | | | 629,259 | | | | 709,852 | | | | 10,946.1 | | Sale of services | | | 5,012 | | | | 6,731 | | | | 4,792 | | | | 73.9 | | Export incentives | | | 3,476 | | | | 3,503 | | | | 2,563 | | | | 39.5 | | | | | | | | | | | | | | | | | | | Total revenue | | | 733,579 | | | | 639,493 | | | | 717,207 | | | | 11,059.5 | | | | | | | | | | | | | | | | | | |
5.7. Investment and other income
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Fair value gain on financial assets held for trading | | | 37,406 | | | | 31,244 | | | | 32,630 | | | | 503.2 | | Interest income: | | | | | | | | | | | | | | | | | Interest income on financial assets held for trading | | | 5,091 | | | | 4,648 | | | | 8,070 | | | | 124.4 | | Interest income on bank deposits at amortized cost | | | 3,163 | | | | 3,199 | | | | 1,712 | | | | 26.4 | | Interest income on loans and receivables at amortized cost | | | 4,760 | | | | 4,465 | | | | 3,193 | | | | 49.2 | | Dividend income: | | | | | | | | | | | | | | | | | Dividend income on available for sale investments | | | 1 | | | | 4 | | | | 7 | | | | 0.1 | | Foreign exchange gain/ (loss) net | | | 750 | | | | 461 | | | | (184) | | | | (2.8) | | Capitalisation of interest income(1) | | | (17) | | | | (23) | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | 51,154 | | | | 43,998 | | | | 45,428 | | | | 700.5 | | | | | | | | | | | | | | | | | | |
Notes:
(1) | Capitalisation of interest income relates to the income from temporary surplus funds, specifically borrowed to acquire/ construct qualifying assets. |
6. Finance and other costs
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Interest cost: | | | | | | | | | | | | | | | | | Interest on borrowings other than convertible notes(1) | | | 56,990 | | | | 53,848 | | | | 55,100 | | | | 849.7 | | Interest on convertible notes(1) | | | 3,605 | | | | — | | | | — | | | | — | | Unwinding of discount on provisions | | | 1,062 | | | | 779 | | | | 844 | | | | 13.0 | | Net foreign exchange loss on foreign currency borrowings | | | 8,404 | | | | 4,708 | | | | 2,321 | | | | 35.8 | | Bank charges | | | 1,746 | | | | 1,126 | | | | 700 | | | | 10.8 | | Others | | | 1,496 | | | | 5,051 | | | | 9,325 | | | | 143.7 | | Capitalisation of finance costs(2) | | | (9,905) | | | | (5,928) | | | | (6,690) | | | | (103.2) | | | | | | | | | | | | | | | | | | | | | | 63,398 | | | | 59,584 | | | | 61,600 | | | | 949.8 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Fair value gain on financial assets held for trading / fair value through profit or loss (FVTPL)(1) | | | 18,393 | | | | 5,574 | | | | 9,340 | | | | 128 | | Interest income: | | | | | | | | | | | | | | | | | Interest income on financial assets held for trading/FVTPL | | | 9,286 | | | | 10,169 | | | | 4,779 | | | | 66 | | Interest income on bank deposits at amortized cost | | | 1,428 | | | | 2,183 | | | | 5,649 | | | | 77 | | Interest income on loans and receivables at amortized cost (Refer Note 35(b)) | | | 2,261 | | | | 4,518 | | | | 9,806 | | | | 134 | | Others | | | 1,217 | | | | 287 | | | | 810 | | | | 11 | | Dividend income on available for sale investments/investments held at FVOCI | | | 10 | | | | 17 | | | | 17 | | | | 0 | | Dividend income – financial assets held for trading/FVTPL | | | 296 | | | | 477 | | | | 13 | | | | 0 | | Bargain gain net of acquisition cost | | | — | | | | — | | | | 1,232 | | | | 17 | | Foreign exchange gain/ (loss) net | | | (1,351 | ) | | | 2,489 | | | | 531 | | | | 7 | | | | | | | | | | | | | | | | | | | | | | 31,540 | | | | 25,714 | | | | 32,177 | | | | 440 | | | | | | | | | | | | | | | | | | |
Notes: (1) | Represent cost in respect of financial liabilities which are carried at amortised cost using the effective interest rate method. |
(2) | Capitalisation of borrowing costs relates to funds borrowed both specifically and generally to acquire/ construct qualifying assets. The capitalisation rate relating to general borrowings was approximately 8.97%, 8.91% and 9.00%Income for the year ended March 31, 2015, 20162019, March 31, 2020 and 2017 respectively.March 31, 2021 includes mark to market gain/(loss) of ₹ 10,406 million, (₹ 3,624 million) and ₹ Nil ($ Nil) respectively relating to structured investments purchased from Volcan Investments Limited (Refer Note 35). |
7.
8. Finance and other costs | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Interest expense on financial liabilities at amortised cost(2) | | | 60,712 | | | | 56,175 | | | | 51,844 | | | | 709 | | Unwinding of discount on provisions | | | 936 | | | | 962 | | | | 721 | | | | 10 | | Net foreign exchange loss on borrowings and creditors for capital expenditure | | | 2,721 | | | | 4,789 | | | | (180 | ) | | | (3 | ) | Transaction costs paid to the ultimate parent company (Refer Note 35(f)) | | | — | | | | — | | | | 1,032 | | | | 14 | | Other finance costs | | | 2,792 | | | | 2,588 | | | | 2,502 | | | | 34 | | Net interest on defined benefit arrangements | | | 210 | | | | 212 | | | | 194 | | | | 3 | | Capitalisation of finance costs(1) | | | (8,345 | ) | | | (10,169 | ) | | | (3,158 | ) | | | (43 | ) | | | | | | | | | | | | | | | | | | | | | 59,026 | | | | 54,557 | | | | 52,955 | | | | 724 | | | | | | | | | | | | | | | | | | |
Notes: (1) | Interest rate of 7.3%, 7.49% and 6.91% was used to determine the amount of general borrowing costs eligible for capitalization in respect of qualifying asset for the year ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively. |
(2) | Includes interest expense on lease liabilities for the year ended March 31, 2020 and March 31, 2021 of ₹ 247 million and ₹ 278 million ($ 4 million). |
9. Income tax expense Overview of the Indian direct tax regime Indian companies are subject to Indian income tax on a standalone basis. Each entity is assessed for tax on taxable profits determined for each fiscalfinancial year beginning on April 1 and ending on March 31. For each fiscalfinancial year, the respective entities’ profit or loss is subject to the higher of the regular income tax payable or the minimum alternative tax (“MAT”). Statutory income taxes are assessed based on book profits prepared under generally accepted accounting principles in India (“Indian GAAP”) adjusted in accordance with the provisions of the (Indian) Income tax Act, 1961. Such adjustments generally relate to depreciation of fixed assets, disallowances of certain provisions and accruals, deduction for tax holidays and similar exemptions, the use of tax losses carried forward and retirement benefit costs. Statutory income tax is charged at 30% plus a surcharge and education cess. The combined Indian statutory tax rate for the fiscalfinancial year2014-152018-19 was 33.99%, for the fiscal year2015-16 was 34.61%, for the fiscal year2016-17 was 34.61%34.94% and for the fiscalfinancial year2017-182019-20 will be 34.61%was 34.94% and for the financial year 2020-21 is 34.94%. MAT is assessed on book profits adjusted for certain limited items as compared to the adjustments allowed for assessing regular income tax under normal provisions. MAT for the fiscalfinancial year2015-16 and2016-172018-19 was chargeable at 18.50% plus asurcharge and education cess and for financial year 2019-20 and 2020-21 at 15% plus surcharge and education cess. The combined Indian statutory tax rate of MAT for the fiscalfinancial year2015-16 and2016-172018-19 was 21.34%21.55% and for the fiscalfinancial year2017-182019-20 will be 21.34%and 2020-21 is 17.47%. MAT paid in excess of regular income tax during a year can be set off against regular income taxes within a period of fifteen years succeeding the assessment year in which MAT credit arises subject to the limits prescribed. Business losses in India can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. Unabsorbed depreciation can be carried forward for an indefinite period. Losses arising out of transfer of capital assets in India can be carried forward for a maximum period of eight assessment years immediately succeeding the assessment year to which the loss pertains. The carried forward long term capital losses can beset-off only against long term capital gains. Short term capital losses can be set off only against capital gains (which can be either long term or short termshort-term capital gain). Income tax returns submitted by companies are regularly subjected to a comprehensive review and challenge by the tax authorities. There are appellate procedures available to both the tax authorities and taxpayers and it is not uncommon for significant or complex matters in dispute to remain outstanding for several years before they are finally resolved by the High Court or the Supreme Court. There(a) Tax charge/ (credit) recognised in the consolidated statement of Profit or Loss
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Current tax: | | | | | | | | | | | | | | | | | Current tax on profit for the year | | | 37,758 | | | | 17,911 | | | | 20,671 | | | | 283 | | Credit in respect of current tax for earlier years | | | (59 | ) | | | (33 | ) | | | (14 | ) | | | (0 | ) | Total current tax (a) | | | 37,699 | | | | 17,878 | | | | 20,657 | | | | 283 | | Deferred tax: | | | | | | | | | | | | | | | | | Reversal and origination of temporary differences | | | 3,818 | | | | (44,562 | ) | | | (1,546 | ) | | | (22 | ) | (Credit)/ Charge in respect of Deferred tax for earlier years | | | (16 | ) | | | 7 | | | | (27 | ) | | | (0 | ) | Total Deferred Tax (b) | | | 3,802 | | | | (44,555 | ) | | | (1,573 | ) | | | (22 | ) | Total income tax expense/ (benefit) for the year (a+b) | | | 41,501 | | | | (26,677 | ) | | | 19,084 | | | | 261 | | Profit/ (Loss) before tax | | | 117,730 | | | | (68,777 | ) | | | 166,074 | | | | 2,271 | | Effective income tax rate (%) | | | 35.3 | % | | | 38.8 | % | | | 11.5 | % | | | 11.5 | % |
(b) A reconciliation of income tax expense/ (credit) applicable to profit / (loss) before tax at the Indian statutory income tax rate to income tax expense / (credit) at the Group’s effective income tax rate for the year indicated are variousas follows. | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Profit/ (Loss) before tax | | | 117,730 | | | | (68,777 | ) | | | 166,074 | | | | 2,271 | | Indian statutory income tax rate | | | 34.94 | % | | | 34.94 | % | | | 34.94 | % | | | 34.94 | % | Tax at Indian statutory income tax rate | | | 41,140 | | | | (24,033 | ) | | | 58,034 | | | | 794 | | Disallowable expenses | | | 2,423 | | | | 1,883 | | | | 1,278 | | | | 17 | | Non-taxable income | | | (1,917 | ) | | | (1,406 | ) | | | (1,227 | ) | | | (17 | ) | Tax holidays and similar exemptions (Refer note below) | | | (8,076 | ) | | | (4,934 | ) | | | (7,710 | ) | | | (105 | ) | Effect of tax rates differences of subsidiaries operating at other rates | | | (1,277 | ) | | | (581 | ) | | | (3,625 | ) | | | (50 | ) | Tax on distributable reserve of/ dividend from subsidiary | | | 11,018 | | | | 19,532 | | | | 8,690 | | | | 119 | | Unrecognised tax assets (Net)** | | | (2,135 | ) | | | (713 | ) | | | (31,932 | ) | | | (437 | ) | Change in deferred tax balances due to change in tax law* | | | — | | | | (17,760 | ) | | | (3,125 | ) | | | (43 | ) | Capital Gains/ Other Income subject to lower tax rate | | | (1,711 | ) | | | (2,733 | ) | | | (1,756 | ) | | | (24 | ) | Credit in respect of earlier years | | | (75 | ) | | | (26 | ) | | | (41 | ) | | | (1 | ) | Other permanent differences | | | 2,111 | | | | 4,094 | | | | 498 | | | | 8 | | | | | | | | | | | | | | | | | | | Total income tax expense / (credit) | | | 41,501 | | | | (26,677 | ) | | | 19,084 | | | | 261 | | | | | | | | | | | | | | | | | | |
* | Deferred tax charge for the year ended March 31,2020 includes deferred tax credit of ₹ 16,512 million on remeasurement of deferred tax balances as at March 31, 2019. Also refer note 3(c)(I)(ix). |
** | In June 2018, the Company acquired 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 IFRS 12 – Income taxes, ESL has recognized deferred tax assets of ₹ 31,823 million (US$ 435 million) during the year ended March 31, 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 or tax holidays available toare relevant for the companies operating in India. The most important to the Companies in the Group are:These are briefly described as under: The location based exemption ProfitsIn order to boost industrial and economic development in undeveloped regions, provided certain conditions are met, profits of newly constructed industrial entitiesestablished undertakings located in designatedcertain areas atin India canmay benefit from a tax holiday.holiday under section 80IC of the Income Tax Act, 1961. Such a 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 March 31, March 2012. However, such entityundertaking would continue to be subject to the Minimum Alternative tax (‘MAT’).
In the current year, undertaking at Pantnagar, which is part of Hindustan Zinc Limited (Zinc India), is 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 such typessetup SEZ Operations in its aluminium division of undertakings at Haridwar and Pantnagar, which are part of Hindustan ZincVedanta Limited (Zinc India)(where no benefit has been drawn). In the current year, Haridwar and Pantnagar units are eligible for deduction at 30% of taxable profits Sectoral Benefit - Benefit—Power Plants and Port Operations Profits on newly constructedTo encourage the establishment of infrastructure certain power plants and port operations are eligible for aports have been offered income tax holiday, provided certain conditions are met, tax incentives exist to exemptexemptions 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 power plant’s operation.
Income Tax Act, 1961. The Group currently has total operational capacity of 9.08.4 Giga WattWatts (GW) of thermal based power generation facilities includingand wind power capacity of 274 MW.Mega Watts (MW) and port facilities. However, such entities generating powerundertakings would continue to be subject to the MAT provisions. The Group has power plants which benefit from such deductions, at various locations of Hindustan Zinc Limited (where such benefits has been drawn), Talwandi Sabo Power Limited, Vedanta Limited and Bharat Aluminium Company Limited (where no benefit has been drawn) and port facilities at Vizag General Cargo Berth Limited (where no benefits. The Group operates a zinc refinery in Export Processing Zone, Namibia which has been drawn).granted tax exempt status by the Namibian government. Sectoral Benefit- Oil & Gas
Provided certain conditionsIn addition, the subsidiaries incorporated in Mauritius are met, profitseligible for tax credit to the extent of newly constructed industrial undertakings engaged in the oil and gas sector may benefit from a deduction of 100%80% of the profits of the undertaking for a period of seven consecutive years. This deduction is only available to blocks licensed prior to 31 March 2011. However, such entities would continue to be subject to the MAT provisions. In the Group, erstwhile Cairn India Limited (now merged with Vedanta Limited) and Cairn energy Hydrocarbons Limited benefits from such deductions. Previous year was the last year for claiming such benefit.applicable tax rate on foreign source income.
The total effect of such tax holidays were Rs. 13,793and exemptions was ₹ 8,076 million, (impact on basic EPS Rs. 4.65), Rs. 20,176₹ 4,934 million (impact on basic EPS Rs. 6.80), and Rs. 14,755₹ 7,710 million ($ 227.5105 million) (impact on basic EPS Rs. 4.98) ($ 0.08) for the years ended March 31, 2015, 2016 and 2017 respectively. Investment Allowance u/s.32 AC of the Income Tax Act - Incentive for acquisition and installation of new high value Plant or Machinery to manufacturing companies by providing an additional deduction of 15% of the actual cost of Plant or Machinery acquired and installed during the year. The actual cost of the new Plant or Machinery should exceed Rs 250 million to be eligible for this deduction. The deduction under section 32 AC is available up to financial year2019, March 31, 2017.
The major components of income tax expense for the year ended2020 and March 31, 2015, 2016 and 2017 are indicated below: 2021 respectively.(a) Consolidated statements of profit or loss
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Current tax: | | | | | | | | | | | | | | | | | Current tax on profit for the year | | | 35,896 | | | | 36,681 | | | | 39,520 | | | | 609.4 | | Charge / (credit) in respect of current tax for earlier years | | | 29 | | | | (1,660) | | | | (87) | | | | (1.3) | | | | | | | | | | | | | | | | | | | Total current tax | | | 35,925 | | | | 35,021 | | | | 39,433 | | | | 608.1 | | | | | | | | | | | | | | | | | | | | | | | | Deferred tax: | | | | | | | | | | | | | | | | | Origination and reversal of temporary differences | | | (145,333) | | | | (139,104) | | | | (690) | | | | (10.6) | | Charge in respect of Deferred tax for earlier years | | | 1,088 | | | | 19 | | | | (716) | | | | (11.1) | | Increase in tax rate | | | — | | | | 1,004 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total deferred tax | | | (144,245) | | | | (138,081) | | | | (1,406) | | | | (21.7) | | | | | | | | | | | | | | | | | | | Total Income Tax (Benefit) / expense for the year | | | (108,320) | | | | (103,060) | | | | 38,027 | | | | 586.4 | | Effective income tax rate (%) | | | 34.8% | | | | 36.2% | | | | 27.8% | | | | 27.8% | |
(b) Consolidated statements of comprehensive income
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Deferred tax (credit) / charge on: | | | | | | | | | | | | | | | | | - cash flow hedges | | | (59) | | | | 185 | | | | 383 | | | | 5.9 | | - reclassification adjustments on cash flow hedges | | | (332) | | | | (101) | | | | (284) | | | | (4.4) | | - remeasurement of defined benefit obligation | | | (260) | | | | (47) | | | | (40) | | | | (0.6) | | - Exchange differences on translation of foreign operations | | | — | | | | — | | | | (61) | | | | (0.9) | | | | | | | | | | | | | | | | | | | | | | (651) | | | | 37 | | | | (2) | | | | 0.0 | | | | | | | | | | | | | | | | | | |
A reconciliation of income tax expense applicable to accounting profit / (loss) before tax at the statutory income tax rate to recognised income tax expense for the year indicated are as follows:
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Accounting profit / (loss) before tax | | | (311,459) | | | | (284,408) | | | | 136,572 | | | | 2,106.0 | | | | | | | Indian Statutory income tax rate | | | 33.99% | | | | 34.61% | | | | 34.61% | | | | 34.61% | | Tax at Indian statutory income tax rate | | | (105,865) | | | | (98,428) | | | | 47,265 | | | | 728.8 | | Disallowable expenses | | | 711 | | | | 970 | | | | 1,198 | | | | 18.5 | | Non-taxable income | | | (5,024) | | | | (12,249) | | | | (10,344) | | | | (159.5) | | Tax holidays and similar exemptions | | | (13,793) | | | | (20,176) | | | | (14,755) | | | | (227.5) | | Impact of changes in tax rate | | | — | | | | 1,004 | | | | — | | | | — | | Effect of tax rates differences of subsidiaries operating in other jurisdictions | | | 7,682 | | | | 4,951 | | | | (2,515) | | | | (38.8) | | Dividend distribution tax | | | 4,133 | | | | 16,235 | | | | 16,418 | | | | 253.2 | | Charge/(credit) in respect of previous years | | | 1,117 | | | | (1,641) | | | | (803) | | | | (12.4) | | Utilisation of Tax Losses | | | (3,913) | | | | (152) | | | | (1,441) | | | | (22.2) | | Unrecognised Tax Losses | | | 5,292 | | | | 7,570 | | | | 5,933 | | | | 91.5 | | Capital Loss lapsed on account of Merger (Refer note 1) | | | — | | | | — | | | | 3,411 | | | | 52.6 | | Others | | | 1,340 | | | | (1,144) | | | | (6,340) | | | | (97.8) | | | | | | | | | | | | | | | | | | | | | | (108,320) | | | | (103,060) | | | | 38,027 | | | | 586.4 | | | | | | | | | | | | | | | | | | |
There are certainincome-tax related legal proceedings which are pending against the Group. Potential liabilities, if any have been adequately provided for, and the Group does not currently estimate any probable material incremental tax liabilities in respect of these matters.
(c) Deferred tax assets/liabilities The Group has recognisedaccrued significant amounts of deferred tax. The majority of the deferred tax liabilities representrepresents accelerated tax relief for the depreciation of property plant and equipment, the depreciation of mining reserves and the depreciationfair value uplifts created on mining reserves.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 deferredDeferred tax assets/(assets) and liabilities recognized in the consolidated statementsstatement of financial position are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | For the year ended March 31, 2015: | | | | | | | | | | | | | | | | | | | | | Opening balance as at April 1, 2014 | | | Charged/ (credited) to Statement of profit or loss | | | Charged/ (credited) to OCI | | | Charged/ (credited) to equity | | | Exchange difference transferred to translation of foreign operation | | | Total as at March 31, 2015 | | Significant components of deferred tax liabilities/(assets) | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Property, plant and equipment, Exploration and Evaluation and other intangible assets | | | 338,210 | | | | (123,455) | | | | — | | | | — | | | | 7,361 | | | | 222,116 | | Unabsorbed depreciation/business loss | | | (30,529) | | | | 855 | | | | — | | | | — | | | | 6 | | | | (29,668) | | Voluntary retirement scheme | | | (427) | | | | (267) | | | | — | | | | — | | | | — | | | | (694) | | Employee benefits | | | (486) | | | | 291 | | | | (260) | | | | — | | | | 11 | | | | (444) | | Fair value of derivative assets/ liabilities | | | 885 | | | | (1,018) | | | | (391) | | | | — | | | | — | | | | (524) | | Fair valuation of other assets/liabilities | | | 3,682 | | | | 5,955 | | | | — | | | | — | | | | 25 | | | | 9,662 | | MAT credits entitlement | | | (94,768) | | | | (24,065) | | | | — | | | | — | | | | — | | | | (118,833) | | Other temporary differences | | | 220 | | | | (2,541) | | | | — | | | | — | | | | 31 | | | | (2,290) | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 216,787 | | | | (144,245) | | | | (651) | | | | — | | | | 7,434 | | | | 79,325 | |
| | | | | | | | | | | | | | | | | | | | | For the year ended March 31, 2019: | | | | | | | | | | | | | | | | | | Opening balance as at April 1, 2018 | | | Charged/ (credited) to Statement of profit or loss | | | Charged/ (credited) to other comprehensive income | | | Exchange difference arising on translation of foreign operation | | | Closing balance as at March 31, 2019 | | Significant components of deferred tax (assets)/liabilities | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Property, plant and equipment, Exploration and Evaluation and other intangible assets | | | 126,867 | | | | 9,570 | | | | — | | | | 3,111 | | | | 139,548 | | Voluntary retirement scheme | | | (411 | ) | | | 16 | | | | — | | | | — | | | | (395 | ) | Employee benefits | | | (875 | ) | | | (15 | ) | | | (247 | ) | | | 39 | | | | (1,098 | ) | Fair value of derivative asset/ liability | | | (563 | ) | | | 288 | | | | (82 | ) | | | — | | | | (357 | ) | Fair valuation of other asset/liability | | | 9,913 | | | | (1,432 | ) | | | — | | | | (10 | ) | | | 8,471 | | MAT credit entitlement | | | (110,884 | ) | | | 7,280 | | | | 384 | | | | (23 | ) | | | (103,243 | ) | Unabsorbed depreciation and business losses | | | (34,625 | ) | | | (11,030 | ) | | | — | | | | — | | | | (45,655 | ) | Other temporary differences | | | (4,354 | ) | | | (875 | ) | | | (135 | ) | | | (583 | ) | | | (5,947 | ) | | | | | | | | | | | | | | | | | | | | | | Total | | | (14,932 | ) | | | 3,802 | | | | (80 | ) | | | 2,534 | | | | (8,676 | ) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | For the year ended March 31, 2016: | | | | | | | | | | | | | | | | | | | | | Opening balance as at April 1, 2015 | | | Charged/ (credited) to Statement of profit or loss | | | Charged/ (credited) to OCI | | | Charged/ (credited) to equity | | | Exchange difference transferred to translation of foreign operation | | | Total as at March 31, 2016 | | Significant components of deferred tax liabilities/(assets) | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Property, plant and equipment, Exploration and Evaluation and other intangible assets | | | 222,116 | | | | (117,353) | | | | — | | | | — | | | | 6,370 | | | | 111,133 | | Unabsorbed depreciation/business loss | | | (29,668) | | | | (8,011) | | | | — | | | | — | | | | — | | | | (37,679) | | Voluntary retirement scheme | | | (694) | | | | (197) | | | | — | | | | — | | | | — | | | | (891) | | Employee benefits | | | (444) | | | | 125 | | | | (47) | | | | — | | | | 22 | | | | (344) | | Fair value of derivative assets/ liabilities | | | (524) | | | | 320 | | | | 84 | | | | — | | | | — | | | | (120) | | Fair valuation of other assets/liabilities | | | 9,662 | | | | (168) | | | | — | | | | — | | | | 48 | | | | 9,542 | | MAT credits entitlement | | | (118,833) | | | | (11,673) | | | | — | | | | — | | | | — | | | | (130,506) | | Other temporary differences | | | (2,290) | | | | (1,124) | | | | — | | | | — | | | | 10 | | | | (3,404) | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 79,325 | | | | (138,081) | | | | 37 | | | | — | | | | 6,450 | | | | (52,269) | |
| | | | | | | | | | | | | | | | | | | | | For the year ended March 31, 2020: | | | | | | | | | | | | | | | | | | Opening balance as at April 1, 2019 | | | Charged/ (credited) to Statement of profit or loss | | | Charged/ (credited) to other comprehensive income | | | Exchange difference arising on translation of foreign operation | | | Closing balance as at March 31, 2020 | | Significant components of deferred tax (assets)/liabilities | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Property, plant and equipment, Exploration and Evaluation and other intangible assets | | | 139,548 | | | | (61,429 | ) | | | — | | | | (93 | ) | | | 78,026 | | Voluntary retirement scheme | | | (395 | ) | | | 111 | | | | — | | | | — | | | | (284 | ) | Employee benefits | | | (1,098 | ) | | | 6 | | | | (714 | ) | | | 49 | | | | (1,757 | ) | Fair value of derivative asset/ liability | | | (357 | ) | | | (69 | ) | | | 324 | | | | — | | | | (102 | ) | Fair valuation of other asset/liability | | | 8,471 | | | | 911 | | | | (1 | ) | | | 593 | | | | 9,974 | | MAT credit entitlement | | | (103,243 | ) | | | 11,605 | | | | 251 | | | | 129 | | | | (91,258 | ) | Unabsorbed depreciation and business losses | | | (45,655 | ) | | | (9,223 | ) | | | — | | | | — | | | | (54,878 | ) | Other temporary differences | | | (5,947 | ) | | | 13,533 | | | | (590 | ) | | | 289 | | | | 7,285 | | | | | | | | | | | | | | | | | | | | | | | Total | | | (8,676 | ) | | | (44,555 | ) | | | (730 | ) | | | 967 | | | | (52,994 | ) | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the year ended March 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | Opening balance as at April 1, 2016 | | | Charged/ (credited) to Statement of profit or loss | | | Charged/ (credited) to OCI | | | Charged/ (credited) to equity | | | Exchange difference transferred to translation of foreign operation | | | Total as at March 31, 2017 | | | Total as at March 31, 2017 | | Significant components of deferred tax liabilities/(assets) | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Property, plant and equipment, Exploration and Evaluation and other intangible assets | | | 111,133 | | | | (651) | | | | — | | | | — | | | | (258) | | | | 110,224 | | | | 1,699.7 | | Unabsorbed depreciation/business loss | | | (37,679) | | | | (3,975) | | | | — | | | | — | | | | — | | | | (41,654) | | | | (642.3) | | Voluntary retirement scheme | | | (891) | | | | 112 | | | | — | | | | — | | | | — | | | | (779) | | | | (12.0) | | Employee benefits | | | (344) | | | | (58) | | | | (40) | | | | — | | | | — | | | | (442) | | | | (6.8) | | Fair value of derivative assets/ liabilities | | | (120) | | | | (317) | | | | 99 | | | | — | | | | — | | | | (338) | | | | (5.2) | | Fair valuation of other assets/liabilities | | | 9,542 | | | | (625) | | | | — | | | | — | | | | 14 | | | | 8,931 | | | | 137.7 | | MAT credits entitlement | | | (130,506) | | | | 6,933 | | | | (278) | | | | — | | | | — | | | | (123,851) | | | | (1,909.8) | | Other temporary differences | | | (3,404) | | | | (2,825) | | | | 217 | | | | 43 | | | | 311 | | | | (5,658) | | | | (87.3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | (52,269) | | | | (1,406) | | | | (2) | | | | 43 | | | | 67 | | | | (53,567) | | | | (826.0) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | For the year ended March 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | Opening balance as at April 1, 2020 | | | Charged/ (credited) to Statement of profit or loss | �� | | Charged/ (credited) to other comprehensive income | | | Charged to Equity | | | Deferred tax on acquisition through business combination | | | Exchange difference arising on translation of foreign operation | | | Closing balance as at March 31, 2021 | | | Closing balance as at March 31, 2021 | | Significant components of deferred tax (assets)/liabilities | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Property, plant and equipment, Exploration and Evaluation and other intangible assets | | | 78,026 | | | | (145 | ) | | | — | | | | — | | | | 498 | | | | 1,647 | | | | 80,026 | | | | 1,094 | | Voluntary retirement scheme | | | (284 | ) | | | (246 | ) | | | — | | | | — | | | | — | | | | — | | | | (530 | ) | | | (7 | ) | Employee benefits | | | (1,757 | ) | | | (222 | ) | | | 104 | | | | 319 | | | | — | | | | (94 | ) | | | (1,650 | ) | | | (23 | ) | Fair value of derivative asset/ liability | | | (102 | ) | | | 93 | | | | (256 | ) | | | — | | | | — | | | | — | | | | (265 | ) | | | (4 | ) | Fair valuation of other asset/liability | | | 9,974 | | | | (2,422 | ) | | | 9 | | | | — | | | | — | | | | (277 | ) | | | 7,284 | | | | 100 | | MAT credit entitlement* | | | (91,258 | ) | | | 8,621 | | | | 249 | | | | — | | | | — | | | | 30 | | | | (82,358 | ) | | | (1,126 | ) | Unabsorbed depreciation and business losses | | | (54,878 | ) | | | 7,837 | | | | — | | | | — | | | | — | | | | — | | | | (47,041 | ) | | | (643 | ) | Other temporary differences | | | 7,285 | | | | (15,089 | ) | | | 352 | | | | — | | | | 104 | | | | (182 | ) | | | (7,530 | ) | | | (103 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | (52,994 | ) | | | (1,573 | ) | | | 458 | | | | 319 | | | | 602 | | | | 1,124 | | | | (52,064 | ) | | | (712 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deferred tax assets and liabilities have been offset where they arise in the same legal entity and taxing jurisdiction with a legal right to offset income tax assets against income tax liabilities but not otherwise. Accordingly, the net deferred tax (assets)/liability has been disclosed in the consolidated statement of financial position as follows: | | | | | | | | | | | | | | | | | As at March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | Particulars | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Deferred tax assets | | | (52,830 | ) | | | (82,669 | ) | | | (73,958 | ) | | | (1,011 | ) | Deferred tax liabilities | | | 44,154 | | | | 29,675 | | | | 21,894 | | | | 299 | | | | | | | | | | | | | | | | | | | Net deferred tax (asset)/ liability | | | (8,676 | ) | | | (52,994 | ) | | | (52,064 | ) | | | (712 | ) | | | | | | | | | | | | | | | | | |
* | Recognition of deferred tax assets on MAT credits entitlement is based on the respective legal entity’s present estimates and business plans as per which the same is expected to be utilized within the stipulated fifteen-year period from the date of origination (Refer Note 3(c)(I)(vi)). |
Deferred tax assets in the Group have been recognized 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. MAT credit entitlements represent taxes paid which are available for offset against future tax liabilities in the respective entities. The Group has analysed the business plans and profit projections for each of the entities where there are MAT credit entitlements and has recognized them as assets only to the extent it expects to utilize the same within the stipulated fifteen year period from origination. Unused tax losses/ unused tax credit for which no deferred tax asset is recognizedhas been recognised amount to Rs. 143,917₹ 176,593 million and Rs. 98,831₹ 101,541 million ($ 1,524.01,388 million) as at March 31, 20162020 and March 31, 20172021 respectively. As at March 31, 2020 | | | | | | | | | | | | | | | | | | | | | Unused tax losses/ unused tax credit | | Within one year (₹ in million) | | | Greater than one year, less than five years (₹ in million) | | | Greater than five years (₹ in million) | | | No expiry date (₹ in million) | | | Total (₹ in million) | | Unutilized business losses | | | 5,552 | | | | 25,885 | | | | 49,165 | | | | 15,738 | | | | 96,340 | | Unabsorbed depreciation | | | — | | | | — | | | | — | | | | 80,163 | | | | 80,163 | | Unused capital losses | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | Unutilised R&D Tax Credit | | | — | | | | — | | | | — | | | | 86 | | | | 86 | | | | | | | | | | | | | | | | | | | | | | | Total | | | 5,552 | | | | 25,889 | | | | 49,165 | | | | 95,987 | | | | 176,593 | | | | | | | | | | | | | | | | | | | | | | |
TheNo deferred tax assets have been recognised on these unused tax losseslosses/ 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.
As at March 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | Unused tax losses/ unused tax credit | | Within one year (₹ in million) | | | Greater than one year, less than five years (₹ in million) | | | Greater than five years (₹ in million) | | | No expiry date (₹ in million) | | | Total (₹ in million) | | | Total (US dollars in million) | | Unutilized business losses | | | 1,966 | | | | 22,220 | | | | 30,753 | | | | 18,870 | | | | 73,809 | | | | 1,009 | | Unabsorbed depreciation | | | 105 | | | | 1,014 | | | | 2,979 | | | | 23,533 | | | | 27,631 | | | | 378 | | Unused capital losses | | | — | | | | 4 | | | | — | | | | — | | | | 4 | | | | 0 | | Unutilised R&D Tax Credit | | | — | | | | — | | | | — | | | | 97 | | | | 97 | | | | 1 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 2,071 | | | | 23,238 | | | | 33,732 | | | | 42,500 | | | | 101,541 | | | | 1,388 | | | | | | | | | | | | | | | | | | | | | | | | | | |
No deferred tax assets have been recognised on these unused tax losses/ unused tax credit as there is no evidence that sufficient taxable profit will be available in future against which these can be utilised by the respective entities. MAT credits are taxes paid to Indian tax authorities which can be offset against future tax liabilities, subject to certain restrictions, within a period of 15 years from the year of origination. The Group recognises MAT assets only to the extent it expects to realise the same within the prescribed period. Further, the Group had unrecognised MAT credit amounting to ₹ 3,996 million and ₹ Nil ($ Nil) as at March 31, 2017 expire, if unutilized, based on the year of origination as follows: | | | | | | | | | | | | | | | | | | | | | | | | | Particulars | | Within one year (Rs. in million) | | | Greater than one year, less than five years (Rs. in million) | | | Greater than five years (Rs. in million) | | | No expiry date (Rs. in million) | | | Total (Rs. in million) | | | Total (US Dollars in million) | | Unutilized business losses | | | 17,450 | | | | 49,351 | | | | 138 | | | | 11,830 | | | | 78,769 | | | | 1,214.7 | | Unabsorbed depreciation | | | — | | | | — | | | | — | | | | 19,975 | | | | 19,975 | | | | 308.0 | | Unused R&D Tax Credit | | | | | | | | | | | | | | | 87 | | | | 87 | | | | 1.3 | | Total | | | 17,450 | | | | 49,351 | | | | 138 | | | | 31,892 | | | | 98,831 | | | | 1,524.0 | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Group had unused MAT credit amounting to Rs. 3,995 million2020 and Rs. 2,960 million ($ 45.6 million) as at March 31, 2016 and 20172021 respectively. Such tax credits havewere not been recognised on the basis that recovery is not probable in the foreseeable future. However, as per the amendments to the tax laws in September, 2019, a new tax provision has been introduced whereby a company can claim the benefits of reduced tax rates, provided it forgoes certain incentives/exemptions under Income Tax Act, 1961. One of the subsidiaries of the Group during the current year has opted for the same and has forgone the unrecognised MAT Credit for the earlier years.
Unrecognised MAT credit expires, if unutilized, based on the year of origination was as follows: | Financial year ending March 31, | | (Rs. in million) | | | (US dollar in million) | | | 2020 | | | 2021 | | | 2021 | | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | 2022 | | | | 1,036 | | | | — | | | | — | | 2023 | | | 137 | | | | 2.1 | | | | 137 | | | | — | | | | — | | 2024 | | | 521 | | | | 8.0 | | | | 521 | | | | — | | | | — | | 2025 | | | 517 | | | | 8.0 | | | | 517 | | | | — | | | | — | | 2026 | | | 1,035 | | | | 15.9 | | | | 1,035 | | | | — | | | | — | | 2027 | | | 633 | | | | 9.7 | | | | 633 | | | | — | | | | — | | 2028 | | | 81 | | | | 1.3 | | | | 81 | | | | — | | | | — | | 2029 | | | 36 | | | | 0.6 | | | | 36 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | 2,960 | | | | 45.6 | | | | 3,996 | | | | — | | | | — | | | | | | | | | | | | |
As at March 31, 2016 and 2017, theThe 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 was Rs. 530,842is ₹ 313,322 million and Rs. 328,798₹ 322,395 million ($ 5,070.14,408 million) as at March 31, 20162020 and 2017March 31, 2021 respectively.
8 (a).(d) Non-current tax assets
Non-current tax assets of ₹ 26,455 million and ₹ 27,481 million ($ 376 million) as at March 31, 2020 and March 31, 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 in Group companies including tax holiday claim. (e) The tax department had raised demands on account of remeasurement of certain tax incentives, as described above, under section 80IA and 80 IC of the Income tax Act. During the year ended March 31, 2020, based on the favorable orders from Income Tax Appellate Tribunal relating to Assessment Year 09-10 to Assessment Year 12-13, the Commissioner of Income Tax (Appeals) has allowed these claims for Assessment Year 14-15 to Assessment Year 15-16, which were earlier disallowed and has granted refund of amounts deposited under protest. Against the Tribunal order, 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. Due to this there is a strong prima facie case that Tribunal order will stand confirmed and department’s appeal would be dismissed. The amount involved in this dispute as of March 31, 2021 is ₹ 112,710 million (US$ 1,541 million) (March 31, 2020: ₹ 105,658 million) plus applicable interest upto the date of settlement of the dispute. 10. The Group presents the consolidated statements of profit or loss by disclosing expenses by function. The consolidated statements of profit or loss disclosing expenses by nature is presented below: CONSOLIDATED STATEMENTS OF PROFIT OR LOSS | | | | | | | | | | | | | | | | | | | | | For the year ended March 31, | | Notes | | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Revenue | | | 6 | | | | 909,012 | | | | 835,446 | | | | 868,630 | | | | 11,876 | | Other operating income** | | | | | | | 15,468 | | | | 9,863 | | | | 13,094 | | | | 179 | | Investment and other income | | | 7 | | | | 31,540 | | | | 25,714 | | | | 32,177 | | | | 440 | | | | | | | | | | | | | | | | | | | | | | | Total Income | | | | | | | 956,020 | | | | 871,023 | | | | 913,901 | | | | 12,495 | | (Decrease)/increase in inventories of finished goods and work-in-progress | | | | | | | 1,614 | | | | (13,690 | ) | | | (7,662 | ) | | | (104 | ) | Raw materials and other consumables used* | | | | | | | (614,583 | ) | | | (549,936 | ) | | | (524,019 | ) | | | (7,165 | ) | Employee costs | | | | | | | (30,230 | ) | | | (26,920 | ) | | | (28,632 | ) | | | (391 | ) | Other costs*** | | | | | | | (42,530 | ) | | | (46,185 | ) | | | (50,941 | ) | | | (697 | ) | Depreciation and amortisation | | | | | | | (96,146 | ) | | | (100,490 | ) | | | (81,178 | ) | | | (1,110 | ) | Impairment (charge) / reversal | | | | | | | 2,611 | | | | (148,022 | ) | | | — | | | | — | | Asset under construction written off | | | | | | | — | | | | — | | | | (2,440 | ) | | | (33 | ) | Finance and other costs | | | 8 | | | | (59,026 | ) | | | (54,557 | ) | | | (52,955 | ) | | | (724 | ) | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) before tax | | | | | | | 117,730 | | | | (68,777 | ) | | | 166,074 | | | | 2,271 | | | | | | | | | | | | | | | | | | | | | | | Income tax expense | | | 9 | | | | (41,501 | ) | | | 26,677 | | | | (19,084 | ) | | | (261 | ) | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | | | | | 76,229 | | | | (42,100 | ) | | | 146,990 | | | | 2,010 | | | | | | | | | | | | | | | | | | | | | | |
* | includes power and fuel charges, repairs, royalty, cess, mining and other operating expenses. |
** | includes export incentive and duty drawback amounting to ₹ 4,577 million, ₹ 4,327 million and ₹ 3,162 million ($ 43 million) for financial year ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively. |
*** | includes rent for the year ended March 31, 2020 and March 31, 2021 representing expense on short term/ low value leases. |
11. Exchange gain/ (loss) recognised in the consolidated statements of profit or loss: | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Cost of sales | | | (3,006 | ) | | | (4,268 | ) | | | (1,937 | ) | | | (26 | ) | Administration cost (Forex on MAT credit entitlements) | | | (1,847 | ) | | | (1,136 | ) | | | 166 | | | | 2 | | Investment and other income | | | (1,351 | ) | | | 2,489 | | | | 531 | | | | 7 | | Finance and other costs | | | (2,721 | ) | | | (4,789 | ) | | | 180 | | | | 3 | | | | | | | | | | | | | | | | | | | Total | | | (8,925 | ) | | | (7,704 | ) | | | (1,060 | ) | | | (14 | ) | | | | | | | | | | | | | | | | | |
12. Earnings/(Loss) per share (“EPS”) The following reflects the income and share data used in the basic and diluted earnings per share computations: Computation of weighted average number of shares | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | Weighted average number of ordinary shares for basic earnings per share* | | | 3,705,502,141 | | | | 3,702,554,614 | | | | 3,704,196,924 | | Effect of dilution: | | | | | | | | | | | | | Potential ordinary shares relating to share option awards | | | 15,947,492 | | | | 21,220,860 | # | | | 23,348,057 | | | | | | | | | | | | | | | Adjusted weighted average number of ordinary shares for diluted earnings per share | | | 3,721,449,633 | | | | 3,702,554,614 | # | | | 3,727,544,981 | | | | | | | | | | | | | | |
Computation of basic and diluted earnings per share Basic earnings/(loss) per share: | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million except EPS data) | | | (₹ in million except EPS data) | | | (₹ in million except EPS data) | | | (US dollars in million except EPS data) | | Profit/(Loss) for the year attributable to equity holders of the parent | | | 49,775 | | | | (61,248 | ) | | | 112,883 | | | | 1,544 | | Weighted average number of ordinary shares for basic earnings per share* | | | 3,705,502,141 | | | | 3,702,554,614 | | | | 3,704,196,924 | | | | 3,704,196,924 | | | | | | | | | | | | | | | | | | | Earnings/(Loss) per share (INR / USD) | | | 13.43 | | | | (16.54 | ) | | | 30.47 | | | | 0.42 | | | | | | | | | | | | | | | | | | |
Diluted earnings/(loss) per share: | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million except EPS data) | | | (₹ in million except EPS data) | | | (₹ in million except EPS data) | | | (US dollars in million except EPS data) | | Profit/(Loss) for the year attributable to equity holders of the parent | | | 49,775 | | | | (61,248 | ) | | | 112,883 | | | | 1,544 | | Adjusted weighted average number of ordinary shares for diluted earnings per share* | | | 3,721,449,633 | | | | 3,702,554,614 | # | | | 3,727,544,981 | | | | 3,727,544,981 | | | | | | | | | | | | | | | | | | | Earnings/(Loss) per share# (INR / USD) | | | 13.38 | | | | (16.54 | ) | | | 30.28 | | | | 0.41 | | | | | | | | | | | | | | | | | | |
* | After excluding the impact of treasury shares |
# | Potential dilutive shares have been considered as anti dilutive for year ended March 31, 2020. |
Nominal value per share is ₹ 1 for the year ended March 31, 2019, 2020 and March 31, 2021. 13. Dividends Each equity share holder is entitled to dividends as and when Vedanta Limited declares and pays dividends after obtaining shareholder approval for final dividend and board approval in case of an interim dividend. Dividends are paid in Indian Rupees. Remittance of dividends outside India is governed by Indian law on foreign exchange and is subject to applicable taxes. Distributions made and proposed | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Amounts recognised as distributions to equity share holders: | | | | | | | | | | | | | | | | | Equity dividend on ordinary shares: | | | | | | | | | | | | | | | | | Interim dividend for the year: (March 31, 2019: ₹ 17.00/- and ₹ 1.85/- per share, March 31, 2020: ₹ 3.90/- per share, March 31, 2021: ₹ 9.50/- per share) a,b,c | | | 70,043 | | | | 14,441 | | | | 35,187 | | | | 481 | | Tax on above a,b,c,e | | | 14,370 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total | | | 84,413 | | | | 14,441 | | | | 35,187 | | | | 481 | | | | | | | | | | | | | | | | | | | Preference dividend on redeemable preference sharesd: | | | | | | | | | | | | | | | | | Preference dividend for the year: Nil (March 31, 2019: 7.5% p.a.) | | | 1,299 | | | | — | | | | — | | | | — | | Dividend distribution tax on preference dividend | | | 274 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total | | | 1,573 | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | |
a) | An interim dividend of ₹ 9.50 per share was declared during the year ended March 31, 2021. |
b) | An interim dividend of ₹ 3.90 per share was declared during the year ended March 31, 2020. The right to interim dividend of ₹ 3.90 per share was waived by ESOP trust. |
c) | Two interim dividends of ₹ 17.00 and ₹ 1.85 per share were declared during the year ended March 31, 2019. This includes interim dividend of ₹ 17.00 per share amounting to ₹ 255 million and dividend distribution tax of ₹ 52 million payable on 14,998,802 equity shares held by Vedanta Limited through ESOP trust for its stock options. The right to second interim dividend of ₹ 1.85 per share was waived by ESOP trust. |
d) | Dividend at the rate of 7.5% p.a. on the redeemable preference shares of face value of ₹ 10/- per preference share for the period April 01, 2018 to October 27, 2018, as per their terms of issuance was declared during the year ended March 31, 2019. The same has been accounted for as interest cost and has been recorded in the Consolidated Statement of Profit or Loss. These preference shares were redeemed, along with dividend on October 26, 2018. (Refer Note 30) |
e) | recognised in consolidated statements of profit or loss. |
If profits for a year are insufficient to declare dividends, dividends for that year may be declared and paid out from accumulated profits on the following conditions: The rate of dividend declared shall not exceed the average of the rates at which dividend was declared by the company in the three years immediately preceding that year; The total amount to be drawn from such accumulated profits shall not exceed one-tenth of the sum of the company’s paid-up share capital and free reserves as appearing in the latest audited financial statement; The amount so drawn shall first be utilised to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared; and The balance of reserves after such withdrawal shall not fall below fifteen per cent of the company’s paid up share capital as appearing in the latest audited financial statement. 14. Property, plant and equipment and Exploration and evaluation assets – | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mining property | | | Land and buildings | | | Plant and equipment | | | Motor vehicles | | | Office equipment and fixtures | | | Oil and Gas Properties | | | Total | | | Total | | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | US dollars in million | | Cost | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | April 01, 2015 | | | 160,257 | | | | 81,585 | | | | 511,543 | | | | 2,454 | | | | 7,934 | | | | 593,948 | | | | 1,357,721 | | | | | | Additions | | | 8,630 | | | | 23,265 | | | | 93,414 | | | | 163 | | | | 445 | | | | 8,934 | | | | 134,851 | | | | | | Disposals | | | (16,424) | | | | (7) | | | | (3,240) | | | | (680) | | | | (499) | | | | — | | | | (20,850) | | | | | | Foreign exchange | | | (459) | | | | (559) | | | | (2,554) | | | | 43 | | | | 68 | | | | 35,626 | | | | 32,165 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 152,004 | | | | 104,284 | | | | 599,163 | | | | 1,980 | | | | 7,948 | | | | 638,508 | | | | 1,503,887 | | | | 23,190.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions | | | 9,441 | | | | 2,356 | | | | 114,533 | | | | 327 | | | | 535 | | | | 8,863 | | | | 136,055 | | | | 2,098.0 | | Transfer during the year from exploration and evaluation assets | | | 9,508 | | | | — | | | | — | | | | — | | | | — | | | | 1,103 | | | | 10,611 | | | | 163.6 | | Disposals/ adjustments | | | (2,302) | | | | (562) | | | | (2,078) | | | | (701) | | | | (37) | | | | — | | | | (5,680) | | | | (87.6) | | Foreign exchange | | | 1,814 | | | | 464 | | | | 1,980 | | | | 40 | | | | 40 | | | | (14,717) | | | | (10,379) | | | | (160.0) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2017 | | | 170,465 | | | | 106,542 | | | | 713,598 | | | | 1,646 | | | | 8,486 | | | | 633,757 | | | | 1,634,494 | | | | 25,204.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated depreciation and impairment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | April 01, 2015 | | | 88,480 | | | | 14,838 | | | | 169,446 | | | | 1,492 | | | | 4,608 | | | | 411,653 | | | | 690,517 | | | | | | Charge for the year | | | 5,787 | | | | 2,695 | | | | 19,601 | | | | 311 | | | | 779 | | | | 53,542 | | | | 82,715 | | | | | | Disposals | | | (16,424) | | | | (2) | | | | (2,623) | | | | (629) | | | | (480) | | | | — | | | | (20,158) | | | | | | Foreign exchange | | | (122) | | | | (372) | | | | (1,307) | | | | 39 | | | | 22 | | | | 26,319 | | | | 24,579 | | | | | | Impairment(1) | | | — | | | | 186 | | | | 617 | | | | 26 | | | | 12 | | | | 74,854 | | | | 75,695 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 77,721 | | | | 17,345 | | | | 185,734 | | | | 1,239 | | | | 4,941 | | | | 566,368 | | | | 853,348 | | | | 13,158.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mining property | | | Land and buildings | | | Plant and equipment | | | Oil and Gas Properties | | | Others | | | ROU assets | | | Assets under construction | | | Total | | | Exploration and evaluation assets | | | Total | | | Total | | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | �� in million | | | ₹ in million | | | US dollars in million | | Gross Block | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | 217,672 | | | | 136,202 | | | | 846,964 | | | | 1,305,790 | | | | 14,429 | | | | — | | | | 131,301 | | | | 2,652,358 | | | | 122,465 | | | | 2,774,823 | | | | | | Effects of implementing IFRS 16 | | | — | | | | — | | | | (163 | ) | | | — | | | | — | | | | 5,626 | | | | — | | | | 5,463 | | | | — | | | | 5,463 | | | | | | Additions | | | 14,915 | | | | 3,667 | | | | 19,983 | | | | 32,968 | | | | 1,487 | | | | 10,212 | | | | 28,899 | | | | 112,131 | | | | 6,887 | | | | 119,018 | | | | | | Transfers/ Reclassification E (12) | | | 6,930 | | | | (590 | ) | | | 8,558 | | | | 2,243 | | | | 382 | | | | 0 | | | | (16,860 | ) | | | 663 | | | | (2,243 | ) | | | (1,580 | ) | | | | | Disposals/ Adjustments | | | (1,265 | ) | | | (65 | ) | | | (7,578 | ) | | | (132 | ) | | | (334 | ) | | | (2,140 | ) | | | (10,054 | ) | | | (21,568 | ) | | | (476 | ) | | | (22,044 | ) | | | | | Acquisition through business combination (Refer Note 4(b)) | | | — | | | | 192 | | | | 143 | | | | — | | | | — | | | | — | | | | — | | | | 335 | | | | — | | | | 335 | | | | | | Unsuccessful exploration cost | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (27 | ) | | | (27 | ) | | | | | Foreign exchange | | | (4,899 | ) | | | (362 | ) | | | (3,660 | ) | | | 108,417 | | | | (231 | ) | | | 452 | | | | (275 | ) | | | 99,442 | | | | 9,460 | | | | 108,902 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | 233,353 | | | | 139,044 | | | | 864,247 | | | | 1,449,286 | | | | 15,733 | | | | 14,150 | | | | 133,011 | | | | 2,848,824 | | | | 136,066 | | | | 2,984,890 | | | | 40,811 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions | | | 13,011 | | | | 1,601 | | | | 15,121 | | | | 8,813 | | | | 1,318 | | | | 1,082 | | | | 17,248 | | | | 58,194 | | | | 7,003 | | | | 65,197 | | | | 891 | | Transfers/ Reclassification | | | 4,569 | | | | (1,485 | ) | | | 27,130 | | | | (81 | ) | | | (137 | ) | | | 2,529 | | | | (32,634 | ) | | | (109 | ) | | | 81 | | | | (28 | ) | | | (0 | ) | Disposals/ Adjustments | | | (47 | ) | | | (327 | ) | | | (5,438 | ) | | | (69 | ) | | | (391 | ) | | | (25 | ) | | | (2,919 | ) | | | (9,216 | ) | | | — | | | | (9,216 | ) | | | (126 | ) | Acquisition through business combination (Refer Note 4(a)) | | | 2,202 | | | | 1,321 | | | | — | | | | — | | | | — | | | | — | | | | 20 | | | | 3,543 | | | | — | | | | 3,543 | | | | 48 | | Unsuccessful exploration cost | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | (70 | ) | | | (70 | ) | | | (1 | ) | Foreign exchange | | | 7,316 | | | | 1,151 | | | | 6,932 | | | | (29,417 | ) | | | 341 | | | | (160 | ) | | | 722 | | | | (13,115 | ) | | | (2,611 | ) | | | (15,726 | ) | | | (215 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 260,404 | | | | 141,305 | | | | 907,992 | | | | 1,428,532 | | | | 16,864 | | | | 17,576 | | | | 115,448 | | | | 2,888,121 | | | | 140,469 | | | | 3,028,590 | | | | 41,408 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Accumulated depreciation, depletion, amortisation and impairment | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | 150,674 | | | | 29,944 | | | | 258,501 | | | | 1,099,156 | | | | 7,623 | | | | — | | | | 15,616 | | | | 1,561,514 | | | | 94,505 | | | | 1,656,019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Effects of implementing IFRS 16 | | | — | | | | — | | | | (6 | ) | | | — | | | | — | | | | 6 | | | | — | | | | — | | | | — | | | | — | | | | — | | Charge for the year | | | 17,736 | | | | 5,190 | | | | 34,816 | | | | 39,889 | | | | 1,642 | | | | 982 | | | | — | | | | 100,255 | | | | — | | | | 100,255 | | | | | | Disposals/Adjustments | | | — | | | | (6 | ) | | | (4,057 | ) | | | — | | | | (251 | ) | | | (166 | ) | | | — | | | | (4,480 | ) | | | — | | | | (4,480 | ) | | | | | Transfers/Reclassifications | | | — | | | | — | | | | (67 | ) | | | — | | | | 67 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | Impairment Charge B,C&D | | | — | | | | 167 | | | | 5,098 | | | | 119,299 | | | | — | | | | 215 | | | | 6,310 | | | | 131,089 | | | | 15,732 | | | | 146,821 | | | | | | Foreign exchange | | | (1,932 | ) | | | (426 | ) | | | (2,405 | ) | | | 98,451 | | | | (132 | ) | | | 19 | | | | — | | | | 93,575 | | | | 7,907 | | | | 101,482 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | 166,478 | | | | 34,869 | | | | 291,880 | | | | 1,356,795 | | | | 8,949 | | | | 1,056 | | | | 21,926 | | | | 1,881,953 | | | | 118,144 | | | | 2,000,097 | | | | 27,345 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Charge for the year | | | 16,745 | | | | 5,197 | | | | 35,627 | | | | 20,516 | | | | 1,734 | | | | 1,413 | | | | — | | | | 81,232 | | | | — | | | | 81,232 | | | | 1,111 | | Disposals/Adjustments | | | — | | | | (236 | ) | | | (4,144 | ) | | | (69 | ) | | | (305 | ) | | | — | | | | — | | | | (4,754 | ) | | | — | | | | (4,754 | ) | | | (65 | ) | Transfers/Reclassification | | | 3 | | | | — | | | | 352 | | | | — | | | | (71 | ) | | | (2 | ) | | | (285 | ) | | | (3 | ) | | | — | | | | (3 | ) | | | (0 | ) | Asset under construction written off A | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2,440 | | | | 2,440 | | | | — | | | | 2,440 | | | | 33 | | Foreign exchange | | | 3,376 | | | | 755 | | | | 4,377 | | | | (27,675 | ) | | | 254 | | | | (15 | ) | | | — | | | | (18,928 | ) | | | (2,217 | ) | | | (21,145 | ) | | | (289 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 186,602 | | | | 40,585 | | | | 328,092 | | | | 1,349,567 | | | | 10,561 | | | | 2,452 | | | | 24,081 | | | | 1,941,940 | | | | 115,927 | | | | 2,057,867 | | | | 28,135 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Charge for the year | | | 7,631 | | | | 4,087 | | | | 21,299 | | | | 159 | | | | 474 | | | | 27,487 | | | | 61,137 | | | | 942.7 | | Disposals/adjustments | | | (1,397) | | | | (708) | | | | (640) | | | | (583) | | | | (61) | | | | — | | | | (3,389) | | | | (52.4) | | Foreign exchange | | | 650 | | | | 353 | | | | 1,430 | | | | 34 | | | | 31 | | | | (13,822) | | | | (11,324) | | | | (174.5) | | Impairment1 | | | — | | | | — | | | | — | | | | — | | | | — | | | | 4,225 | | | | 4,225 | | | | 65.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2017 | | | 84,605 | | | | 21,077 | | | | 207,823 | | | | 849 | | | | 5,385 | | | | 584,258 | | | | 903,997 | | | | 13,939.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net book value / Carrying amount | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 74,283 | | | | 86,939 | | | | 413,429 | | | | 741 | | | | 3,007 | | | | 72,140 | | | | 650,539 | | | | | | Asset under construction (Including capital advances) | | | | | | | | | | | | | | | | | | | | | | | | | | | 224,036 | | | | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | 874,575 | | | | | | March 31, 2017 | | | 85,860 | | | | 85,465 | | | | 505,775 | | | | 797 | | | | 3,101 | | | | 49,499 | | | | 730,497 | | | | 11,264.4 | | Asset under construction (Including capital advances) | | | | | | | | | | | | | | | | | | | | | | | | | | | 146,630 | | | | 2,261.1 | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | 877,127 | | | | 13,525.5 | | March 31, 2017 (US dollars in million) | | | 1,395.0 | | | | 1,316.8 | | | | 7,770.5 | | | | 12.9 | | | | 5.9 | | | | 763.3 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mining property | | | Land and buildings | | | Plant and equipment | | | Oil and Gas Properties | | | Others | | | ROU assets | | | Assets under construction | | | Total | | | Exploration and evaluation assets | | | Total | | | Total | | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | US dollars in million | | Net book value / Carrying amount | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | 66,998 | | | | 106,258 | | | | 588,463 | | | | 206,634 | | | | 6,806 | | | | — | | | | 115,685 | | | | 1,090,844 | | | | 27,960 | | | | 1,118,804 | | | | | | As at March 31, 2020 | | | 66,875 | | | | 104,175 | | | | 572,367 | | | | 92,491 | | | | 6,784 | | | | 13,094 | | | | 111,085 | | | | 966,871 | | | | 17,922 | | | | 984,793 | | | | | | As at March 31, 2021 | | | 73,802 | | | | 100,720 | | | | 579,900 | | | | 78,965 | | | | 6,303 | | | | 15,124 | | | | 91,367 | | | | 946,181 | | | | 24,542 | | | | 970,723 | | | | 13,273 | |
Disclosure of Right of Use (ROU) Assets as per IFRS 16 “Leases” | | | | | | | | | | | | | | | | | | | Land & Building | | | Plant and Equipment | | | Total | | | Total | | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | US dollars in million | | Gross Block | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | — | | | | — | | | | — | | | | | | Effects of implementing IFRS 16 | | | 5,357 | | | | 269 | | | | 5,626 | | | | | | Additions | | | 3,493 | | | | 6,719 | | | | 10,212 | | | | | | Transfers/ Reclassification | | | — | | | | 0 | | | | 0 | | | | | | Deductions | | | 2,140 | | | | — | | | | 2,140 | | | | | | Foreign exchange | | | 101 | | | | 351 | | | | 452 | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | 6,811 | | | | 7,339 | | | | 14,150 | | | | 193 | | | | | | | | | | | | | | | | | | | Additions | | | 922 | | | | 160 | | | | 1,082 | | | | 15 | | Transfers/Reclassification | | | 2,533 | | | | (4 | ) | | | 2,529 | | | | 35 | | Deductions | | | (16 | ) | | | (9 | ) | | | (25 | ) | | | (0 | ) | Foreign exchange | | | (47 | ) | | | (113 | ) | | | (160 | ) | | | (2 | ) | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 10,203 | | | | 7,373 | | | | 17,576 | | | | 241 | | | | | | | | | | | | | | | | | | | Accumulated depreciation and impairment | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | | | | | | | | | | | | | | | Effects of implementing IFRS 16 | | | — | | | | 6 | | | | 6 | | | | | | Charge for the year | | | 771 | | | | 211 | | | | 982 | | | | | | Disposals/Adjustments | | | (166 | ) | | | — | | | | (166 | ) | | | | | Impairment Charge | | | 215 | | | | — | | | | 215 | | | | | | Foreign exchange | | | 13 | | | | 6 | | | | 19 | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | 833 | | | | 223 | | | | 1,056 | | | | 14 | | | | | | | | | | | | | | | | | | | Charge for the year | | | 622 | | | | 791 | | | | 1,413 | | | | 19 | | Transfers/Reclassification | | | — | | | | (2 | ) | | | (2 | ) | | | (0 | ) | Disposals/Adjustments | | | (0 | ) | | | (0 | ) | | | (0 | ) | | | (0 | ) | Foreign exchange | | | (12 | ) | | | (3 | ) | | | (15 | ) | | | (0 | ) | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 1,443 | | | | 1,009 | | | | 2,452 | | | | 33 | | | | | | | | | | | | | | | | | | | Net book value / Carrying amount | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | — | | | | — | | | | — | | | | | | As at March 31, 2020 | | | 5,978 | | | | 7,116 | | | | 13,094 | | | | | | As at March 31, 2021 | | | 8,760 | | | | 6,364 | | | | 15,124 | | | | 208 | |
| 1.1) | (a) During the year ended March 31, 2021, the Company has recognized a loss of ₹ 1,811 million ($ 25 million) relating to certain items of Assets under construction at the Aluminium operations, which are no longer expected to be used. |
| 2) | During the year ended March 2017,31, 2021, ESL Steel Limited conducted a detailed physical verification and evaluation of project equipment and material being carried forward as Assets under construction at a carrying value of ₹ 8,107 million ($ 111 million) out of total carrying value of ₹ 8,350 million ($ 114 million). Pending completion of entire exercise, an interim provision of ₹ 629 million ($ 8 million) has been recognized relating to certain items of Assets under construction, which are no longer expected to be used. |
B) | During the year ended March 31, 2019 and March 31, 2020 the Group has recognised nethad recognized impairment reversal of Rs 845₹ 2,611 million ($ 13.0 million)and impairment charge of ₹ 135,031 million respectively, on its assets in the oil and gas segment comprising: |
| Ø | For the year ended March 31, 2020:- |
| 1) | Impairment charge of ₹ 127,164 million relating to Rajasthan oil and gas block. The impairment loss has been includedblock (“RJ CGU”) triggered by the significant fall in cost of sales.the crude oil prices. Of this net reversal, charge, of Rs 4,225₹ 116,748 million ($ 65.2 million) (refer table above)impairment charge has been recorded against oil and gas propertiesproducing facilities and reversal of Rs. 5,070₹ 10,416 million ($ 78.2 million) (refer note 8(b))impairment charge has been recorded against exploratory and evaluation assets.exploration intangible assets under development. The valuation remains dependent on price and further deterioration in long term prices may result in additional impairment. |
For oil and& gas properties, CGUsassets, CGU’s identified are on the basis of a PSC (‘Production Sharing Contract’)production sharing contract (PSC) level, as it is the smallest group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. The recoverable amount of the RajasthanRJ CGU, Rs. 130,131₹ 105,109 million, ($ 2,006.6 million) was determined based on the fair value less costs of disposal approach, as it more accurately reflects the recoverable amount based on our view of the assumptions that would be used by a market participant. The same was computed using a level-3 valuation technique in the fair value hierarchy. This is based on the cash flows expected to be generated by the projected oil orand 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.estimates of reserves and risked resources. Reserves assumptions for fair value less costs of disposal discounted cash flow 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 avalue-in-use test. Discounted cash flow analysis used to calculate fair value less costs of disposal usesuse assumption for short termshort-term oil price of US$ 54$ 38 per barrel for the next one year (March 31, 2016: US$ 41 per barrel) and the long termscales up to long-term nominal price of US$ 68$ 57 per barrel over the next 3 yearthree years thereafter (March 31, 2016: US$70 per barrel) derived from a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate of 2.5%2% per annum. The cash flows are discounted using thepost-tax nominal discount rate of 10.2 % (March 2016: 11.00 %)10.35% derived from thepost-tax weighted average cost of capital. Also refer note 3 (V) (iv) for othercapital after factoring the risks ascribed to the successful implementation of key assumptions. Duringgrowth projects. Additionally, in computing the year ended 31 March 2016,recoverable value, the effects of market participant’s response on production sharing contract matters have also been appropriately considered. Based on the sensitivities carried out by the Group, had recognisedchange in crude price assumptions by $ 1/bbl and changes to discount rate by 1% would lead to a change in recoverable value by ₹ 3,370 million and ₹ 4,940 million, respectively.
| 2) | Impairment charge of ₹ 2,551 million relating to KG-ONN-2003/1 CGU mainly due to the reduction in crude oil price forecast. The recoverable amount of the CGU, ₹ 1,496 million was determined based on fair value less cost of disposal approach, a level-3 valuation technique in the fair value hierarchy as described in above paragraph. Discounted cash flow analysis used to calculate fair value less costs of disposal use assumption for oil price as described in above paragraph. The cash flows are discounted using the post-tax nominal discount rate of 11.1% derived from the post-tax weighted average cost of capital. The sensitivities around change in crude price and discount rate are not material to the financial statements. |
| 3) | Impairment charge of ₹ 5,316 million in exploration block KG-OSN-2009/3, was provided for as the Government of India approval on extension and grant of excusable delay is awaited for. |
| Ø | For the year ended March 31, 2019:- |
| 1) | During the year ended March 31, 2019, the Group has recognized net impairment reversal of ₹ 2,611 million in respect of Oil & Gas Block KG-ONN-2003/1 (CGU) on booking of commercial reserves and subsequent commencement of commercial production. The impairment reversal has been recorded against Oil & Gas producing facilities. The recoverable amount of the Group’s share in KG-ONN-2003/1 (CGU) was determined to be ₹ 2,075 million. The recoverable amount of the KG-ONN-2003/1 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 our 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 use assumption for short-term oil price of US $ 62 per barrel for the year ended March 31, 2019 and scales up to long-term nominal price of US $ 65 per barrel by year ended March 31, 2022 derived from a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate of 2.5% per annum. The cash flows are discounted using the post-tax nominal discount rate of 11.8% derived from the post-tax weighted average cost of capital. The sensitivities around change in crude price and discount rate are not material to the financial statements. |
C) | During the year ended March 31, 2020, the Group has recognized impairment charge of ₹ 5,098 million on the assets of AvanStrate Inc (ASI) mainly due to the significant changes in the market and economic environment in which ASI operates leading to decrease in demand and profitability in the glass substrate business. The charge relates to ASI business in Japan, Taiwan and Korea classified in the ‘others’ segment. Given the significant interdependence of these entities on each other, these are considered as a single cash-generating unit. |
The net recoverable value of assets and liabilities was assessed at ₹ 15,360 million based on oil and gas assets of Rs. 322,998 million mainly relating to Rajasthan block, triggeredthe value in use approach. Based on the sensitivities carried out by the significant fallGroup, decrease in the crude oil prices. Of this charge, Rs. 74,854volume assumptions by 1% would lead to decrease in recoverable value by ₹ 170 million had been recorded against oil and gas properties and Rs. 248,144 million against exploratory and evaluation assets.increase in discount rate by 1% would lead to a decrease in recoverable value by ₹ 480 million. During the year ended 31 March 2015, the Group had recognised impairment charge on oil and gas assets of Rs. 406,144 million mainly relating to Rajasthan block and Sri Lanka block, triggered by the significant fall in the crude oil prices. Of this charge, Rs. 132,211 million had been recorded against oil and gas properties and Rs. 273,933 million against exploratory and evaluation assets. The impairment charge of Rs. 273,933 million also included Rs. 48,192 million impairment charge relating to exploratory wells in Sri Lanka, as the development of hydrocarbons in the said block was not commercially viable at the current prices.
D) | Refer note 3(c)(I)(vii) relating to assets at copper plant where operations are suspended. |
(b) During the year ended 31 March 2017, Group has madenon-cash provision for impairment of Rs. 2,007 million ($ 30.9 million) relating to certain old items of asset under construction at the Alumina refinery operations.
(c) During the year ended 31 March 2016, the Group has recognized Rs. 14,900 million impairment charge in respect of the exploratory assets in West Africa (Western Cluster, Liberia) on account of low iron ore prices,geo-political factors and no plans for any substantive expenditure resulting in continued uncertainty in the project. Of this charge, Rs 8,555 million has been recorded against Exploratory and Evaluation assets (refer note 8(b)), Rs 344 million in property, plant and equipment and Rs 6,001 million has been recorded against assets under construction (refer note 8(a) above).
(d) During the year ended 31 March 2016, the Group has recognized Rs. 1,154 million impairment charge in the carrying amount of idle assets grouped under assets under construction at Bellary, Karnataka in India.
(e) During the year ended 31 March 2016, the Group has recognised Rs. 497 million impairment charge in property, plant and equipment relating to its operation in the Copper Mines of Tasmania Pty Ltd, Australia on account of extended care and maintenance, lower copper prices and continued uncertainty instart-up of operations.
| 1. | Plant and equipment include refineries, smelters, power plants, aircrafts, ships, river fleets, railway sidings and related facilities. |
| 2. | AdditionsOthers includes net deferred stripping cost addition of Rs. 508 millionfurniture and Rs. 265 million ($ 4.1 million) for the years ended March 31, 2016fixtures, office equipments and March 31, 2017 respectively.vehicles. |
| 3. | During the year ended March 31, 2019, 2020 and 2021, interest capitalized was ₹ 8,345 million, ₹ 10,169 million and ₹ 3,158 million ($ 43 million) respectively. |
| 4. | Certain property, plant and equipment are pledged as collateral against borrowings, the details related to which have been described in Note 1722 on “Borrowings”. Interest (net) capitalised as part of property, plant and equipment was Rs. 5,905 million and Rs. 6,690 million ($ 103.2 million) for the years ended March 31, 2016 and March 31, 2017, respectively. |
| 4. | Depreciation charge for the year includes Rs. 20 million and Rs.6 million ($ 0.1 million) capitalised as property, plant and equipment during the year ended March 31, 2016 and 2017 respectively. |
| 5. | During the year ended March 31, 2015, in line with its accounting policy,Land and building includes 40 quarters at Bidhan Bagh Unit and 300.88 acres of land at Korba and Bidhan Bagh which have been occupied without authorization for which Group is evaluating evacuation options and the Group had carried out a review ofhas filed the useful life of its assets. Consideringcivil suits for the physical condition of the assets and benchmarking analysis, the Group had revised the useful life. The carrying value of the assets had been depreciated over the revised remaining useful life with effect from October 1, 2014.same. |
As a result the net depreciation charge for the year ended March 31, 2015 was lower by Rs. 4,337 million and loss after tax was lower by Rs. 2,863 million (net of deferred tax impact of Rs. 1,474 million). The changes made to the useful economic lives is expected to have an impact on the depreciation charge going forward, although the quantum per asset class will vary depending on whether the useful life has increased or decreased.
| 6. | An impairment chargeThe land transferred to BALCO by National Thermal Power Corporation Ltd. (NTPC) vide agreement dated June 20, 2002 comprising of Rs. 294 million had been recognized171.44 acres land for BALCO’s 270 MW captive power plant and it’s allied facilities and 34.74 acres land for staff quarters of the said captive power plant is yet to be registered in administration expenses during the year ended March 31, 2015 in respectfavour of expenditure incurred on coal blocks allotted to the BALCO (Aluminium Segment), due to cancellationnon-availability of coal blocks by the Supreme Courttitle deeds from NTPC. The arbitration is pending between Balco and NTPC (presently in appeal before Delhi High Court), in which transfer of India.title deeds is also sub-judice and is posted for hearing on July 27, 2021. |
| 7. | Assets under construction as at March 31, 2015, March 31, 2016 and March 31, 2017 is after accumulated impairment charge of Rs. 962 million, Rs 8,115 million and Rs 10,122 million ($156.1 million) respectively. |
| 8. | During the year ended March 31, 2016, subsequent to end of life of mines in Lisheen, Rs 13,356 million has been adjusted from accumulated depreciation and impairment to cost. |
| 9. | The Division Bench of the Hon’ble High Court of Chhattisgarh has vide its order dated February 25, 2010, upheld that the 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 the 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 the 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 between1971-76. The Central Empowered Committee of the Supreme Court has already recommendedex-ex-post post facto diversion of the forest land in possession of BALCO. BALCO has also filed two IA before the BALCO. TheSupreme Court, 1st 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 presentlysub-judicesubjudice before the Hon’ble Supreme Court.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. No next date is there and the matter is to be listed in due course. |
Plant and equipment includes refineries, smelters, power plants and related facilities, data processing equipment and electrical fittings.
8 (b) Exploration and evaluation assets
| | | | | | | | | | | | | | | | | | | | | | | Gambsberg Mine Project | | | Oil and Gas | | | Western Cluster Project | | | Total | | | Total | | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | US dollars in million | | Cost | | | | | | | | | | | | | | | | | | | | | April 01, 2015 | | | 9,852 | | | | 323,799 | | | | 8,180 | | | | 341,831 | | | | | | Additions | | | 1,060 | | | | 4,912 | | | | — | | | | 5,972 | | | | | | Unsuccessful Exploration Cost | | | — | | | | (294) | | | | — | | | | (294) | | | | | | Foreign exchange | | | (1,404) | | | | 16,118 | | | | 375 | | | | 15,089 | | | | | | Impairment(charge)/reversal* | | | — | | | | (248,144) | | | | (8,555) | | | | (256,699) | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 9,508 | | | | 96,391 | | | | — | | | | 105,899 | | | | 1,633.0 | | | | | | | | | | | | | | | | | | | | | | | Additions | | | — | | | | 1,234 | | | | — | | | | 1,234 | | | | 19.0 | | Transfer during the year to property plant and equipment | | | (9,508) | | | | (1,103) | | | | — | | | | (10,611) | | | | (163.6) | | Unsuccessful Exploration Cost | | | — | | | | (407) | | | | — | | | | (407) | | | | (6.3) | | Foreign exchange | | | — | | | | (2,333) | | | | — | | | | (2,333) | | | | (36.0) | | Impairment(charge)/reversal* | | | — | | | | 5,070 | | | | — | | | | 5,070 | | | | 78.2 | | | | | | | | | | | | | | | | | | | | | | | March 31, 2017 | | | — | | | | 98,852 | | | | — | | | | 98,852 | | | | 1,524.3 | | | | | | | | | | | | | | | | | | | | | | | Exploration and Evaluation Assets as at: | | | | | | | | | | | | | | | | | | | | | March 31, 2017 (US dollars in million) | | | — | | | | 1,524.3 | | | | — | | | | 1,524.3 | | | | | |
* | Refer foot note 1 to note 8 (a)8. | Freehold land under “Land and Buildings” includes gross block as at March 31, 2020 ₹ 2,953 million and March 31, 2021 ₹ 2,884 million ($ 39 million), accumulated amortization as at March 31, 2020 ₹ 2,560 million and March 31, 2021 ₹ 2,545 million ($ 35 million), which is available for use during the lifetime of the Production Sharing Contract of the respective Oil and Gas blocks and title deed for the same is in the name of the licensee of the block. |
8 (c) Other
| 9. | Property, plant and equipment and exploration and evaluation assets net block includes share of jointly owned assets with the joint venture partners of ₹ 116,331 million and ₹ 106,784 million ($ 1,460 million) as at March 31, 2020 and 2021 respectively. |
| 10. | Oil and Gas Properties includes development assets under construction of carrying value of ₹ 48,477 million and ₹ 41,324 million ($ 565 million) as at March 31, 2020 and 2021 respectively. |
| 11. | Title deeds of land of 264 acres relating to ESL Steel Limited were not available with the Group up to previous year. During the year the Group has got it regularized. |
| 12. | A parcel of land aggregating to ₹ 1,201 million relating to Iron Ore business had been reclassified during the year ended March 31, 2020, due to existence of litigation, to Financial Assets and later impaired. ₹ 379 million and ₹ 28 million ($ 0 million) have been transferred to intangible assets from “Asset under construction” for the year ended March 31, 2020 and 2021 respectively. |
| 13. | TSPL’s assets consisting of land (including ROU land), building and plant and machinery having net carrying values as at March 31, 2020 and 2021 of ₹ 3,975 million and ₹ 3,942 million ($ 54 million), ₹ 1,945 million and ₹ 1,781 million ($ 24 million) and ₹ 88,619 million and ₹ 84,505 million ($ 1,155 million) respectively have been given on operating lease (refer note 3(c)(II)(i)). |
| 14. | Reconciliation of depreciation, depletion and amortization expense: |
| | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2019 | | | 2020 | | | 2021 | | | Total | | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | US dollars in million | | Depreciation, depletion and amortization expense on | | | | | | | | | | | | | | | | | Property, plant and equipment | | | 95,718 | | | | 100,255 | | | | 81,232 | | | | 1,111 | | Intangible assets | | | 812 | | | | 821 | | | | 682 | | | | 9 | | As per property, plant and equipment and intangibles schedule | | | 96,530 | | | | 101,076 | | | | 81,914 | | | | 1,120 | | Less: Depreciation capitalized | | | (100 | ) | | | — | | | | (498 | ) | | | (7 | ) | Less: Cost allocated to joint ventures | | | (284 | ) | | | (586 | ) | | | (238 | ) | | | (3 | ) | | | | | | | | | | | | | | | | | | Charged to consolidated statement of profit or loss | | | 96,146 | | | | 100,490 | | | | 81,178 | | | | 1,110 | | | | | | | | | | | | | | | | | | |
15. Intangible assets | | | | | | | | | | | | | | | | | | | | | | | Port Concession Rights | | | Software License | | | Others | | | Total | | | Total | | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | US dollars in million | | Cost | | | | | | | | | | | | | | | | | | | | | April 01, 2015 | | | 6,014 | | | | 2,223 | | | | 541 | | | | 8,778 | | | | | | Additions | | | 3 | | | | 145 | | | | 116 | | | | 264 | | | | | | Deletions | | | — | | | | (70) | | | | — | | | | (70) | | | | | | Foreign exchange difference | | | — | | | | 70 | | | | — | | | | 70 | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 6,017 | | | | 2,368 | | | | 657 | | | | 9,042 | | | | 139.4 | | | | | | | | | | | | | | | | | | | | | | | Additions | | | 29 | | | | 496 | | | | 56 | | | | 581 | | | | 9.0 | | Deletions | | | (70) | | | | (39) | | | | — | | | | (109) | | | | (1.7) | | Foreign exchange difference | | | — | | | | (25) | | | | — | | | | (25) | | | | (0.4) | | | | | | | | | | | | | | | | | | | | | | | March 31, 2017 | | | 5,976 | | | | 2,800 | | | | 713 | | | | 9,489 | | | | 146.3 | | | | | | | | | | | | | | | | | | | | | | | Accumulated amortisation and impairment | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | Port Concession Rights 1 | | | Software License | | | Others | | | Total | | | Total | | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | US dollars in million | | Gross Block | | | | | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | 5,962 | | | | 3,214 | | | | 2,957 | | | | 12,133 | | | | | | Additions | | | 58 | | | | 202 | | | | 55 | | | | 315 | | | | | | Transfers from Property, Plant and Equipment | | | — | | | | 13 | | | | 366 | | | | 379 | | | | | | Disposals/Adjustments | | | (7 | ) | | | — | | | | — | | | | (7 | ) | | | | | Foreign exchange difference | | | 0 | | | | 150 | | | | 239 | | | | 389 | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | 6,013 | | | | 3,579 | | | | 3,617 | | | | 13,209 | | | | 181 | | | | | | | | | | | | | | | | | | | | | | | Additions | | | 15 | | | | 78 | | | | 322 | | | | 415 | | | | 6 | | Transfers from Property, Plant and Equipment | | | — | | | | 28 | | | | — | | | | 28 | | | | 0 | | Disposals/Adjustments | | | — | | | | (64 | ) | | | — | | | | (64 | ) | | | (1 | ) | Foreign exchange difference | | | — | | | | (28 | ) | | | (107 | ) | | | (135 | ) | | | (2 | ) | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 6,028 | | | | 3,593 | | | | 3,832 | | | | 13,453 | | | | 184 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | Port Concession Rights | | | Software License | | | Others | | | Total | | | Total | | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | ₹ in million | | | US dollars in million | | Accumulated depreciation, depletion, amortization and impairment | | | | | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | 1,352 | | | | 2,655 | | | | 414 | | | | 4,421 | | | | | | Charge for the year | | | 228 | | | | 306 | | | | 287 | | | | 821 | | | | | | Disposals/Adjustments | | | (2 | ) | | | — | | | | — | | | | (2 | ) | | | | | Foreign exchange difference | | | 0 | | | | 135 | | | | 44 | | | | 179 | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | 1,578 | | | | 3,096 | | | | 745 | | | | 5,419 | | | | 75 | | | | | | | | | | | | | | | | | | | | | | | Charge for the year | | | 230 | | | | 147 | | | | 305 | | | | 682 | | | | 9 | | Transfers from Property, Plant and Equipment | | | — | | | | 3 | | | | — | | | | 3 | | | | 0 | | Disposals/Adjustments | | | — | | | | (64 | ) | | | — | | | | (64 | ) | | | (1 | ) | Foreign exchange difference | | | — | | | | (31 | ) | | | (37 | ) | | | (68 | ) | | | (1 | ) | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 1,808 | | | | 3,151 | | | | 1,013 | | | | 5,972 | | | | 82 | | | | | | | | | | | | | | | | | | | | | | | Net book value / Carrying amount | | | | | | | | | | | | | | | | | | | | | As at April 01, 2019 | | | 4,610 | | | | 559 | | | | 2,543 | | | | 7,712 | | | | | | As at March 31, 2020 | | | 4,435 | | | | 483 | | | | 2,872 | | | | 7,790 | | | | | | As at March 31, 2021 | | | 4,220 | | | | 442 | | | | 2,819 | | | | 7,481 | | | | 102 | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | Port Concession Rights | | | Software License | | | Others | | | Total | | | Total | | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | Rs. in million | | | US dollars in million | | April 01, 2015 | | | 442 | | | | 1,688 | | | | 55 | | | | 2,185 | | | | | | Charge for the year | | | 247 | | | | 330 | | | | 25 | | | | 602 | | | | | | Deletions | | | — | | | | (70) | | | | — | | | | (70) | | | | | | Foreign exchange difference | | | — | | | | 25 | | | | — | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 689 | | | | 1,973 | | | | 80 | | | | 2,742 | | | | 42.3 | | | | | | | | | | | | | | | | | | | | | | | Charge for the year | | | 231 | | | | 184 | | | | 28 | | | | 443 | | | | 6.8 | | Deletions | | | (10) | | | | (37) | | | | — | | | | (47) | | | | (0.7) | | Foreign exchange difference | | | — | | | | (27) | | | | — | | | | (27) | | | | (0.4) | | | | | | | | | | | | | | | | | | | | | | | March 31, 2017 | | | 910 | | | | 2,093 | | | | 108 | | | | 3,111 | | | | 48.0 | | | | | | | | | | | | | | | | | | | | | | | Other Intangibles as at: | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | 5,328 | | | | 395 | | | | 578 | | | | 6,301 | | | | | | March 31, 2017 | | | 5,066 | | | | 707 | | | | 605 | | | | 6,378 | | | | 98.3 | | March 31, 2017 (US dollars in million) | | | 78.1 | | | | 10.9 | | | | 9.3 | | | | | | | | | |
(1) | Vizag General Cargo Berth Private Limited (VGCB), a special purpose vehicle and wholly owned by the Company, was incorporated for the coal berth mechanization and upgradesupgradation at Visakhapatnam port. VGCB is wholly owned by Vedanta Limited as on March 31, 2017 (99.99% as on March 31, 2016). The project was to be carried out on a design, build, finance, operate, transfer basis and the concession agreement between Visakhapatnam Port and VGCB was signed in June 2010. In October 2010, VGCB was awarded with the concession after fulfilling conditions stipulated as a precedent to the concession agreement. Visakhapatnam Port has provided, in lieu of license fee an exclusive license to VGCB for designing, engineering, financing, constructing, equipping, operating, maintaining, and replacing the project/ project facilities and services. The concession period is 30 years from the date of the award. The capacity of upgraded berth would be 10.18 MMTPA and that the Visakhapatnam Port would be entitled to receive 38.10% share of the gross revenue as royalty. VGCB is entitled to recover a tariff from the user(s) of the project facilities and services as per Tariff Authority for Major Ports (TAMP) notification. The tariff rates are linked to the Wholesale Price Index (WPI) and would accordingly be adjusted as specified in the concession agreement every year. The ownership of all infrastructure assets, buildings, structures, berths, wharfs, equipment and other immovable and movable assets constructed, installed, located, created or provided by VGCB at the project site and/or in the port’s assets pursuant to concession agreement would be with VGCB until expiry of this concession agreement. The cost of any repair, replacement or restoration of the project facilities and services shall be borne by VGCB during the concession period. VGCB has to transfer all its rights, titles and interest in the project facilities and services free of cost to Visakhapatnam Port at the end of the concession period. Intangible asset- port concession rights represent consideration for construction services. No revenue from construction contract of service concession arrangements on exchanging construction services for the port concession rights was recognised for the year ended March 31, 2015, March 31, 2016 and March 31, 2017 as no construction services were provided. |
9.Non-controlling Interests (‘NCI’) and joint operations
Details of subsidiaries that have materialnon-controlling interests
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. Note 31 to the financial statements lists the details of share holdings in the subsidiaries.
TheNon-controlling interests that are material to the Group relate to Hindustan Zinc Limited (HZL) as at March 31, 2017.
As at March 31, 2017, NCIs hold an economic interest by virtue of their shareholding of 35.08% , 49.00% and 26.00% in HZL, BALCO and BMM, respectively. The NCI holdings as at March 31, 2016 were 35.08%, 40.12% , 49.00%, 26.00%, 0.01% and 26.00% in HZL, Cairn, BALCO, BMM, VGCB and PMCB respectively.
The principal place of business of HZL, erstwhile Cairn and BALCO is in India, and that of BMM is in South Africa.
The table below shows summarized financial information of subsidiaries of the Group that have materialnon-controlling interests. The amounts are presented before inter-company eliminations.
| | | | | | | | | | | As at March 31, 2016 | | | | (Rs. in million) | | | | HZL | | | Cairn | | Current assets | | | 370,918 | | | | 340,186 | | Non-current assets | | | 155,667 | | | | 233,285 | | Current liabilities | | | 150,356 | | | | 49,497 | | Non-current liabilities | | | 1,428 | | | | 18,043 | | Equity attributable to equity holders of the Parent | | | 243,959 | | | | 298,652 | | Non-controlling interests | | | 130,843 | | | | 207,278 | |
| | | | | | | | | | | | | | | | | | | As at March 31, 2017 | | | | (Rs. in million) | | | | HZL | | | BALCO | | | BMM | | | Total | | Current assets | | | 346,079 | | | | 11,400 | | | | 6,185 | | | | 363,664 | | Non-current assets | | | 169,958 | | | | 121,735 | | | | 21,483 | | | | 313,176 | | Current liabilities | | | 201,159 | | | | 56,254 | | | | 4,947 | | | | 262,360 | | Non-current liabilities | | | 2,043 | | | | 29,341 | | | | 6,496 | | | | 37,880 | | Equity attributable to equity holders of the Parent | | | 203,098 | | | | 24,245 | | | | 12,007 | | | | 239,350 | | Non-controlling interests | | | 109,737 | | | | 23,295 | | | | 4,218 | | | | 137,250 | | | | | | As at March 31, 2017 | | | | (US Dollars In Million) | | | | HZL | | | BALCO | | | BMM | | | Total | | Current assets | | | 5,336.6 | | | | 175.8 | | | | 95.4 | | | | 5,607.8 | | Non-current assets | | | 2,620.8 | | | | 1,877.2 | | | | 331.3 | | | | 4,829.3 | | Current liabilities | | | 3,101.9 | | | | 867.4 | | | | 76.3 | | | | 4,045.6 | | Non-current liabilities | | | 31.5 | | | | 452.4 | | | | 100.2 | | | | 584.1 | | Equity attributable to equity holders of the Parent | | | 3,131.8 | | | | 374.0 | | | | 185.2 | | | | 3,691.0 | | Non-controlling interests | | | 1,692.2 | | | | 359.2 | | | | 65.0 | | | | 2,116.4 | |
| | | | | | | | | | | For the Year Ended March 31, 2016 | | | | (Rs. In Million) | | | | HZL | | | Cairn | | Revenue | | | 139,589 | | | | 86,559 | | Expenses | | | (59,708) | | | | (294,705) | | Profit / (loss) for the year | | | 79,881 | | | | (208,146) | | Profit / (loss) attributable to equity holders of the Parent | | | 51,860 | | | | (124,644) | | Profit / (loss) attributable tonon-controlling interests | | | 28,021 | | | | (83,502) | | Profit / (loss) for the year | | | 79,881 | | | | (208,146) | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | (7) | | | | 16,668 | | Other comprehensive income / (loss) attributable tonon-controlling interests | | | (3) | | | | 11,574 | | Other comprehensive income / (loss) during the year | | | (10) | | | | 28,242 | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 51,853 | | | | (107,977) | | Total comprehensive income / (loss) attributable tonon-controlling interests | | | 28,018 | | | | (71,927) | | Total comprehensive income / (loss) during the year | | | 79,871 | | | | (179,904) | | Dividends paid / payable tonon-controlling interests, including dividend tax | | | 54,055 | | | | 3,621 | | Net cash inflow from operating activities | | | 13,042 | | | | 61,051 | | Net cash (outflow) / inflow from investing activities | | | 19,006 | | | | (40,434) | | Net cash (outflow) from financing activities | | | (32,039) | | | | (9,026) | | Net cash inflow / (outflow) | | | 9 | | | | 11,591 | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2017 | | | | (Rs. In Million) | | | | HZL | | | Cairn | | | BALCO | | | BMM | | | Total | | Revenue | | | 171,163 | | | | 82,041 | | | | 57,210 | | | | 8,281 | | | | 318,695 | | Expenses | | | 83,584 | | | | 51,138 | | | | 57,293 | | | | 6,657 | | | | 198,672 | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 87,579 | | | | 30,903 | | | | (83) | | | | 1,624 | | | | 120,023 | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) attributable to equity holders of the Parent | | | 56,858 | | | | 18,495 | | | | (42) | | | | 1,200 | | | | 76,511 | | Profit / (loss) attributable tonon-controlling interests | | | 30,721 | | | | 12,408 | | | | (41) | | | | 424 | | | | 43,512 | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 87,579 | | | | 30,903 | | | | (83) | | | | 1,624 | | | | 120,023 | | | | | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | (19) | | | | (3,963) | | | | (119) | | | | 830 | | | | (3,271) | | Other comprehensive income / (loss) attributable tonon-controlling interests | | | (10) | | | | (2,658) | | | | (114) | | | | 290 | | | | (2,492) | | | | | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) during the year | | | (29) | | | | (6,621) | | | | (233) | | | | 1,120 | | | | (5,763) | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 56,839 | | | | 14,532 | | | | (161) | | | | 2,030 | | | | 73,240 | | Total comprehensive income / (loss) attributable tonon-controlling interests | | | 30,711 | | | | 9,750 | | | | (155) | | | | 714 | | | | 41,020 | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) during the year | | | 87,550 | | | | 22,282 | | | | (316) | | | | 2,744 | | | | 114,260 | | | | | | | | | | | | | | | | | | | | | | | Dividends paid / payable tonon-controlling interests, including dividend tax | | | 52,447 | | | | 2,718 | | | | — | | | | — | | | | 55,165 | | | | | | | | | | | | | | | | | | | | | | | Net cash inflow from operating activities | | | 75,772 | | | | 54,464 | | | | 7,857 | | | | 5,677 | | | | 143,770 | | Net cash (outflow) / inflow from investing activities | | | 38,161 | | | | (54,981) | | | | (6,120) | | | | (3,966) | | | | (26,906) | | Net cash (outflow) from financing activities | | | (112,550) | | | | (5,997) | | | | (1,748) | | | | — | | | | (120,295) | | | | | | | | | | | | | | | | | | | | | | | Net cash inflow / (outflow) | | | 1,383 | | | | (6,514) | | | | (11) | | | | 1,711 | | | | (3,431) | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2017 | | | | (US dollars In Million) | | | | HZL | | | Cairn | | | BALCO | | | BMM | | | Total | | Revenue | | | 2,639.4 | | | | 1,265.1 | | | | 882.2 | | | | 127.7 | | | | 4,914.4 | | Expenses | | | 1,288.9 | | | | 788.6 | | | | 883.5 | | | | 102.6 | | | | 3,063.6 | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 1,350.5 | | | | 476.5 | | | | (1.3) | | | | 25.1 | | | | 1,850.8 | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) attributable to equity holders of the Parent | | | 876.8 | | | | 285.2 | | | | (0.7) | | | | 18.5 | | | | 1,179.8 | | Profit / (loss) attributable tonon-controlling interests | | | 473.7 | | | | 191.3 | | | | (0.6) | | | | 6.6 | | | | 671.0 | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 1,350.5 | | | | 476.5 | | | | (1.3) | | | | 25.1 | | | | 1,850.8 | | | | | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | (0.3) | | | | (61.1) | | | | (1.8) | | | | 12.8 | | | | (50.4) | | Other comprehensive income / (loss) attributable tonon-controlling interests | | | (0.2) | | | | (41.0) | | | | (1.8) | | | | 4.5 | | | | (38.5) | | | | | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) during the year | | | (0.5) | | | | (102.1) | | | | (3.6) | | | | 17.3 | | | | (88.9) | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 876.5 | | | | 224.1 | | | | (2.5) | | | | 31.3 | | | | 1,129.4 | | Total comprehensive income / (loss) attributable tonon-controlling interests | | | 473.5 | | | | 150.3 | | | | (2.4) | | | | 11.1 | | | | 632.5 | | | | | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) during the year | | | 1,350.0 | | | | 374.4 | | | | (4.9) | | | | 42.4 | | | | 1,761.9 | | | | | | | | | | | | | | | | | | | | | | | Dividends paid / payable tonon-controlling interests, including dividend tax | | | 808.7 | | | | 41.9 | | | | — | | | | — | | | | 850.6 | | | | | | | | | | | | | | | | | | | | | | | Net cash inflow from operating activities | | | 1,168.4 | | | | 839.8 | | | | 121.2 | | | | 87.5 | | | | 2,216.9 | | Net cash (outflow) / inflow from investing activities | | | 588.5 | | | | (847.8) | | | | (94.4) | | | | (61.2) | | | | (414.9) | | Net cash (outflow) from financing activities | | | (1,735.5) | | | | (92.5) | | | | (27.0) | | | | — | | | | (1,855.0) | | | | | | | | | | | | | | | | | | | | | | | Net cash inflow / (outflow) | | | 21.4 | | | | (100.5) | | | | (0.2) | | | | 26.3 | | | | (53.0) | | | | | | | | | | | | | | | | | | | | | | |
| The effect of changes in ownership interests in subsidiaries that did not result in a loss of control is as follows:
|
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 VGCB was signed in June 2010. In October 2010, VGCB 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 VGCB for designing, engineering, financing, constructing, equipping, operating, maintaining, and replacing the project/project facilities and services. The concession period is 30 years from the date of the award. The upgraded capacity is 10.18 mmtpa and the Visakhapatnam port trust would be entitled to receive 38.10% share of the gross revenue as royalty. VGCB is entitled to recover a tariff from the user(s) of the project facilities and services as per its Tariff Authority for Major Ports (TAMP) notification. The tariff rates are linked to the Wholesale Price Index (WPI) and would accordingly be adjusted as specified in the concession agreement every year. The ownership of all infrastructure assets, buildings, structures, berths, wharfs, equipment and other immovable and movable assets constructed, installed, located, created or provided by VGCB at the project site and/or in the port’s assets pursuant to concession agreement would be with VGCB until expiry of this concession agreement. The cost of any repair, replacement or restoration of the project facilities and services shall be borne by VGCB during the concession period. VGCB has to transfer all its rights, titles and interest in the project facilities and services free of cost to VPT at the end of the concession period. Intangible asset port concession rights represents consideration for construction services. No Revenue from construction contract of service concession arrangements on exchanging construction services for the port concession rights was recognized for the year ended March 31, 2019, March 31, 2020 and March 31, 2021. | | | | | | | | | | | For the Year Ended March 31, 2016 | | | | (Rs. In Million) | | | | HZL | | | Cairn | | Changes in NCI#
| | | — | | | | 356 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2017 | | | | (Rs. In Million) | | | | HZL | | | Cairn | | | BALCO | | | BMM | | | Total | | Purchase of NCI# | | | — | | | | (188) | | | | — | | | | — | | | | (188) | | | | | | | | | | | | | | | | | | | | | | | Changes in NCI# | | | — | | | | (213,515) | | | | — | | | | — | | | | (213,515) | | | | | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2017 | | | | (US dollars In Million) | | | | HZL | | | Cairn | | | BALCO | | | BMM | | | Total | | Purchase of NCI# | | | — | | | | (2.9) | | | | — | | | | — | | | | (2.9) | | | | | | | | | | | | | | | | | | | | | | | Changes in NCI# | | | — | | | | (3,292.4) | | | | — | | | | — | | | | (3,292.4) | | | | | | | | | | | | | | | | | | | | | | |
# | Refer Consolidated Statement of Changes in Equity |
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:
| | | | | | | Operating Blocks | | Area | | Participating
Interest (%) | | India:
| | | | | | | Ravva block – Exploration and production
| | Krishna Godavari | | | 22.50 | | CB-OS/2 – Exploration
| | Cambay Offshore | | | 60.00 | | CB-OS/2 – Development & production
| | Cambay Offshore | | | 40.00 | | RJ-ON-90/1 – Exploration
| | Rajasthan Onshore | | | 100.00 | | RJ-ON-90/1 – Development & production
| | Rajasthan Onshore | | | 70.00 | | PR-OSN-2004/1 – Exploration
| | Palar Basin Offshore | | | 35.00 | | KG-OSN-2009/3 – Exploration
| | Krishna Godavari Offshore | | | 100.00 | | South Africa Block1 – Exploration
| | Orange Basin South Africa Offshore | | | 60.00 | | | | | Relinquished block
| | | | | | | SL2007-01-001(2) – Exploration
| | North West Sri Lanka Offshore | | | — | | MB-DWN-2009/1(1) – Exploration
| | Mumbai Deep Water | | | — | | | | | Non Operating Blocks
| | | | | | | India:
| | | | | | | KG-ONN-2003/1(3) Exploration and appraisal | | Krishna Godavari Onshore | | | 49.00 | |
(1) | Relinquished on April 15, 2016 |
(2) | Relinquished on October 15, 2015 |
(3) | Operatorship has been transferred to Oil and Natural Gas Corporation (ONGC) w.e.f. July 7, 2014 |
10.16. Financial asset investments
Financial asset investments represent investments classified and accounted for asavailable-for-sale investmentsat fair value through profit or loss or through other comprehensive income (Refer Note 25) | Movements for the year ended March 31, | | 2016 | | | 2017 | | | 2017 | | | 2020 | | | 2021 | | | 2021 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | As at April 01, | | | 262 | | | | 432 | | | | 6.6 | | | | 48,865 | | | | 911 | | | | 12 | | Changes in fair value | | | 170 | | | | 263 | | | | 4.1 | | | Purchase/(Sale) of structured investment (Refer Note 35) | | | | (44,847 | ) | | | — | | | | — | | Changes in fair value (including on investments purchased/sold during the year) | | | | (4,362 | ) | | | 621 | | | | 9 | | Investment in bonds* | | | | 500 | | | | — | | | | — | | Exchange difference | | | | 755 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | As at March 31, | | | 432 | | | | 695 | | | | 10.7 | | | | 911 | | | | 1,532 | | | | 21 | | | | | | | | | | | | | | | | | | | | |
These investments represent
* | Reclassified from short-term investments |
Financial asset investment represents quoted investments in equity securitiesshares and other investments that present the Group with opportunitiesan opportunity for returnreturns through dividend income and gains in value. The fair values of quotedThese securities are determined by reference to published price quotations in active markets. Theheld at fair values of unquoted securitiesvalue. These are determined by reference to discounted cash flows model. During the year endedclassified as non-current as at March 31, 2017 pursuant to demerger of “Sterlite Technologies Limited” into “Sterlite Technologies Limited”2020 and “Sterlite Power Transmission Limited”, 952,859 shares of “Sterlite Power Transmission Limited” have been allotted to the Company.March 31, 2021.
11.17. Trade and other receivables and Othernon-current assets
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Financial | | | | | | | | | | | | | Bank Deposits1 | | | 1,212 | | | | 91 | | | | 1.4 | | Site restoration assets2 | | | 3,091 | | | | 3,859 | | | | 59.5 | | Claims receivable | | | — | | | | 71 | | | | 1.1 | | Trade receivables3 | | | 341 | | | | 13,540 | | | | 208.8 | | Others | | | 1,291 | | | | 1,739 | | | | 26.8 | | Total - Financial | | | 5,935 | | | | 19,300 | | | | 297.6 | | | | | | Non Financial | | | | | | | | | | | | | Deposits with Government Authorities | | | 6,413 | | | | 3,726 | | | | 57.5 | | Claims and other receivable | | | 4,644 | | | | 11,990 | | | | 184.9 | | Total - Non Financial | | | 11,057 | | | | 15,716 | | | | 242.4 | | | | | | | | | | | | | | | | | 16,992 | | | 35,016 | | | 540.0 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, | | | | 2020 Non- current | | | 2020 Current | | | 2020 Total | | | 2021 Non- current | | | 2021 Current | | | 2021 Total | | | 2021 Non- current | | | 2021 Current | | | 2021 Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | (US dollars in million) | | | (US dollars in million) | | Financial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Bank Deposits1 | | | 338 | | | | — | | | | 338 | | | | 1,153 | | | | — | | | | 1,153 | | | | 16 | | | | — | | | | 16 | | Site restoration assets2 | | | 6,199 | | | | — | | | | 6,199 | | | | 8,220 | | | | — | | | | 8,220 | | | | 112 | | | | — | | | | 112 | | Trade receivables3,7 | | | 31,111 | | | | 26,936 | | | | 58,047 | | | | 31,582 | | | | 34,459 | | | | 66,041 | | | | 432 | | | | 471 | | | | 903 | | Others5 | | | 11,694 | | | | 9,279 | | | | 20,973 | | | | 15,998 | | | | 2,395 | | | | 18,393 | | | | 219 | | | | 33 | | | | 252 | | Loans to related parties (Refer Note 35) | | | 42 | | | | 793 | | | | 835 | | | | 50,562 | | | | 20,150 | | | | 70,712 | | | | 691 | | | | 276 | | | | 967 | | Receivables from related parties | | | — | | | | 1,180 | | | | 1,180 | | | | — | | | | 1,476 | | | | 1,476 | | | | — | | | | 20 | | | | 20 | | Advance recoverable | | | — | | | | 13,710 | | | | 13,710 | | | | — | | | | 39,083 | | | | 39,083 | | | | — | | | | 534 | | | | 534 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total—Financial (A) | | | 49,384 | | | | 51,898 | | | | 101,282 | | | | 107,515 | | | | 97,563 | | | | 205,078 | | | | 1,470 | | | | 1,334 | | | | 2,804 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non Financial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance with Government Authorities | | | 5,526 | | | | 9,765 | | | | 15,291 | | | | 6,098 | | | | 7,294 | | | | 13,392 | | | | 83 | | | | 99 | | | | 182 | | Advance for supplies | | | — | | | | 14,005 | | | | 14,005 | | | | — | | | | 12,209 | | | | 12,209 | | | | — | | | | 167 | | | | 167 | | Advance to related party | | | — | | | | 208 | | | | 208 | | | | 944 | | | | 2,271 | | | | 3,215 | | | | 13 | | | | 31 | | | | 44 | | Others4,6 | | | 15,448 | | | | 7,401 | | | | 22,849 | | | | 13,170 | | | | 11,256 | | | | 24,426 | | | | 180 | | | | 154 | | | | 334 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total—Non Financial (B) | | | 20,974 | | | | 31,379 | | | | 52,353 | | | | 20,212 | | | | 33,030 | | | | 53,242 | | | | 276 | | | | 451 | | | | 727 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total (A+B) | | | 70,358 | | | | 83,277 | | | | 153,635 | | | | 127,727 | | | | 130,593 | | | | 258,320 | | | | 1,746 | | | | 1,785 | | | | 3,531 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
11. | includes₹ 245 million and ₹ 302 million ($ 4 million) under lien with banks, ₹ Nil and ₹ 46 million ($ 1 million) under lien with Others, ₹ 50 million and ₹ 42 million ($ 1 million) held as collateral in respect of closure costmargin money and future redundancy payments payable to employees of Lisheen₹ Nil and ₹ 214 million ($ 3 million) held as principal reserve created against principal payment on termination of their employment on or before the mine closure of Rs. 1,212 millionloans from banks as at March 31, 2016.2020 and March 31, 2021 respectively. |
22. | includes deposit in Site Restoration Fund of Rs. 2,583₹ 6,199 million and Rs.3,275₹ 8,220 million ($50.5 112 million) and investment in a rehabilition trust of Rs. 508 million and Rs. 584 ($ 9.0 million) as at March 2016 and March 31, 2017, respectively.. |
33. | In July 2017, the Appellate Tribunal for Electricity (APTEL) dismissed the appeal(s)appeal filed by one of the Company’sGroup’s subsidiaries, Talwandi Sabo Power Limited (TSPL), engaged in power generation, in with respect of certain disputes with its customer relating to (a) the interpretation of how the calorific value of coal and costs associated with it should be determined;determined. However, APTEL had allowed payment of shunting and (b) whether there has been a change in law post execution ofunloading charges. TSPL filed an appeal before the Power Purchase Agreement. Both these matters effect the computation of tariff to be chargedHonourable Supreme Court (SC), which by TSPL to its customer and TSPLan order dated March 07, 2018 has decided to file appeal(s) before the Honorable Supreme Court to seek relief.matter in favour of TSPL. Subsequently, PSPCL has paid ₹ 13,771 million ($ 188 million) till March 31, 2021. The outstanding trade receivables on account of these disputesdues (including interest receivable) in relation to this dispute is ₹ 3,871 million and ₹ 828 million ($ 11 million) as at March 31, 2017 were Rs. 7,493 million ($ 115.5 million). The Company, basis external legal opinions2020 and its own assessment of the merits of the case, remains confident that it is highly probable that the Supreme Court would uphold TSPL’s appeal and has thus continued to treat these balances as recoverable.March 31, 2021 respectively. |
Additionally, Rs. 5,510In another matter 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 filed an appeal before the Honourable Supreme Court to seek relief which is yet to be listed. The outstanding trade receivables in relation to this dispute and other matters is ₹ 12,978 million and ₹ 16,047 million ($ 85.0219 million) as at March 31, 2017 were outstanding2020 and March 31, 2021 respectively. The Group, based on external legal opinion and its own assessment of the merits of the case, remains confident that it is highly probable that the Supreme court will uphold TSPL’s appeal and has thus continued to treat these balances as recoverable.
Additionally, trade receivables amounting to Rs 13,490 million and ₹ 13,230 million ($ 181 million) as at March 31, 2020 and March 31, 2021 respectively, withheld by GRIDCO (‘GRIDCO’ or ‘the Customer’) on account of certain disputes with another customer relating to computation of tariffs and differential revenues recognised with respect topower tariffs pending finalizationadjudication by Appellate Tribunal for Electricity (APTEL), which the Company is confident of recovering fully. The Customer has also raised claims of ₹ 4,130 million on the Company in respect of short supply of power for which a provision of ₹ 2,180 million has been made. Various minutes of meetings were signed with the Customer for computing the short supply claims, which were subject to approval of Odisha State Electricity Regulatory Commission (‘OERC’). On June 22, 2020 OERC pronounced its order on computation methodology for short supply claims, basis which both the parties had to recompute the amount of claim and settle the matter in two months from the date of the order. On initial impact assessment of the said Order by the state regulatory commission. In lieuCompany, it believes that no further provisioning is required in this regard. Further, the Company filed an appeal before APTEL against the OERC Order. The matter is now listed before registrar court on July 14, 2021. The Customer has also sought review of the ongoing disputesOERC Order. The matter has been posted for order by OERC in due course. In the management doesmeanwhile, power supply to GRIDCO has resumed and GRIDCO has been making regular payments against monthly energy invoices.
4. | Includes claim receivables, advance recoverable (oil and gas business), prepaid expenses, export incentive receivables and receivables from KCM. |
5. | Includes claims receivables, advance recoverable (oil and gas business) and others. It also includes advance profit petroleum of ₹ 3,219 million and ₹ Nil ($ Nil) as at March 31, 2020 and March 31, 2021 respectively. |
6. | As at March 31, 2020 and March 31, 2021, the Company and its subsidiaries have an outstanding receivable equivalent to ₹ 4,374 million (net of provision of ₹ 2,070 million) and ₹ 2,107 million ($ 29 million) (net of provision of ₹ 4,197 million ($ 57 million)) respectively from Konkola Copper Mines Plc (KCM), predominantly regarding monies advanced against future purchase of copper cathode/anode. |
A provisional liquidator was appointed to manage KCM’s affairs on May 21, 2019, after ZCCM Investments Holdings Plc (“ZCCM”), an entity majorly 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. The local Court of Appeal (“CAZ”) has ruled in favor of VRHL/VRL, ordering a stay of the winding up proceedings and referring the matter for arbitration. In light of the orders from CAZ, VRL has also filed an application in the High Court of Zambia, asking for directions on the powers of the provisional liquidator and the matter was argued on March 30, 2021. The ruling has been reserved. ZCCM has also appealed the CAZ order before a single judge bench of the Supreme Court of Zambia and the matter was heard on June 04, 2021. Responses were filed on June 11, 2021 and order is awaited. VRHL and VRL had also commenced arbitration proceedings against ZCCM with seat in Johannesburg consistent with their position that arbitration is the agreed dispute resolution process. The procedural timetable for the arbitration envisages an initial hearing of prioritised issues commencing on May 31, 2021, with the substantive dispute being heard in November 2021 and February 2022. Meanwhile, KCM has not expectbeen supplying goods to the collectionGroup, which it was supposed to as per the terms of these receivables within twelve months and hence have classified them asthe advance. The Group has recognised provision of non-current₹ 2,070 million ₹ 2,127 million ($ 29 million) during the year.year ended March 31, 2020 and March 31, 2021 respectively and based on its assessment of the merits of the case backed by legal opinions, the Group is of the view that VRL’s contractual position is upheld and continues to be strong on merits. 12.
7. | The total trade receivables as at April 01, 2019 were ₹ 76,700 million (net of provision for expected credit loss). |
18. Inventories Inventories consist of the following: | | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Raw materials and consumables | | | 51,862 | | | | 55,643 | | | | 858.0 | | Work-in-progress | | | 22,523 | | | | 33,171 | | | | 511.6 | | Finished goods | | | 6,876 | | | | 8,452 | | | | 130.3 | | | | | | | | | | | | | | | | | | 81,261 | | | | 97,266 | | | | 1,499.9 | | | | | | | | | | | | | | |
Inventories with a carrying amount of Rs. 55,659 million and Rs. 51,249 million ($ 790.3 million) have been pledged as security against certain bank borrowings of the Group as at March 31, 2016 and 2017, respectively. (Refer note 17)
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Raw materials and consumables | | | 67,432 | | | | 60,555 | | | | 828 | | Work-in-progress | | | 33,267 | | | | 30,202 | | | | 412 | | Finished goods | | | 12,663 | | | | 8,752 | | | | 120 | | | | | | | | | | | | | | | | | | 113,362 | | | | 99,509 | | | | 1,360 | | | | | | | | | | | | | | |
Inventory held at net realizable value amounted to Rs. 1,876₹ 23,576 million and Rs. 449₹ 23,985 million ($6.9 328 million) as at March 31, 20162020 and March 31, 2017,2021, respectively. The write down on this inventory amounted to Rs. 330₹ 1,176 million and Rs. 120₹ 1,594 million ($ 1.922 million) for the year ended March 31, 20162020 and March 31, 2017, respectively.2021, respectively and this has been charged to the consolidated statements of profit or loss. 13. Trade and other receivables
Trade and other receivables (net of allowances) consist of the following:
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Financial | | | | | | | | | | | | | Trade receivables | | | 25,559 | | | | 20,328 | | | | 313.4 | | Trade receivables from related parties | | | 404 | | | | 562 | | | | 8.7 | | Loans to related parties | | | 805 | | | | 692 | | | | 10.7 | | Cash call / receivables from joint Operations | | | 26,844 | | | | 8,449 | | | | 130.3 | | Other receivables * | | | 3,696 | | | | 3,191 | | | | 49.2 | | Total - Financial | | | 57,308 | | | | 33,222 | | | | 512.3 | | | | | | Non Financial | | | | | | | | | | | | | Balance with Government authorities | | | 7,620 | | | | 6,832 | | | | 105.3 | | Prepayments | | | 2,047 | | | | 1,774 | | | | 27.4 | | Advances for supplies | | | 7,382 | | �� | | 11,640 | | | | 179.5 | | Advance for supplies to related party | | | 332 | | | | 1,390 | | | | 21.6 | | Other receivables | | | 4,606 | | | | 5,418 | | | | 83.4 | | Total - Non Financial | | | 21,987 | | | | 27,054 | | | | 417.2 | | | | | | | | | | | | | | | | | 79,295 | | | 60,276 | | | 929.5 | | | | | | | | | | | | | | |
* | includes deposit held as collateral in respect of closure cost and future redundancy payments payable to employees of Lisheen on termination of their employment on or before the mine closure of Rs. 1,132 million and Rs. 914 million ($ 14.1 million) as at March 31, 2016 and March 31, 2017 respectively. |
The credit period given to customers ranges from zero to 90 days. Other receivables primarily include deposits and interest receivable. For terms and conditions of loans to related parties, refer Note 31 on related party disclosures.
Trade receivables with a carrying value of Rs. 38,384 million and Rs. 19,172 million ($ 295.6 million) have been given as collateral towards borrowings as at March 31, 2016 and 2017 respectively. (Refer note 17)
Allowances for trade and other receivables
The change in the allowance for trade and other receivables (current andnon-current) is as follows:
| | | | | | | | | | | | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | As at April 01, | | | 14,740 | | | | 17,657 | | | | 272.3 | | Allowance made during the year | | | 2,384 | | | | 2,425 | | | | 37.4 | | Reversals during the year | | | (16 | ) | | | (304 | ) | | | (4.7 | ) | Written off | | | — | | | | — | | | | — | | Foreign Exchange difference | | | 549 | | | | (335 | ) | | | (5.2 | ) | | | | | | | | | | | | | | As at March 31, | | | 17,657 | | | | 19,443 | | | | 299.8 | | | | | | | | | | | | | | |
14.19. Short-term investments
Short-term investments consist of the following: | | | As at March 31, | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | 2020 | | | 2021 | | | 2021 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Bank deposits1 | | | 32,815 | | | | 55,790 | | | | 860.3 | | | | 80,633 | | | | 116,730 | | | | 1,596 | | Other investments2 | | | 533,377 | | | | 468,895 | | | | 7,230.4 | | | | 246,577 | | | | 165,045 | | | | 2,257 | | | | | | | | | | | | | | | | | | | | | | | 566,192 | | | 524,685 | | | 8,090.7 | | | | 327,210 | | | | 281,775 | | | | 3,853 | | | | | | | | | | | | | | | | | | | | |
Bank deposits are made for periods of between three months and one year depending on the cash requirements of the companies within the Group and earn interest at the respective fixed deposit rates. Other investments include mutual fund investments and investment in bonds andwhich are recorded at fair valuedvalue with changes in fair value reported through the consolidated statements of profit or loss. Bank deposits are madeThese investments do not qualify for the periodsrecognition as cash and cash equivalents due to their maturity period and risk of more than three months depending on the cash requirementschange in value of the respective companies and earn interest at the respective deposit rates.investments. Refer Note 25 for further details. 1. | Includes Rs. 2,361₹ 2,562 million and Rs. 2,350₹ 6,568 million ($ 36.290 million) onunder lien with banks, Nil and ₹ 213 million ($ 3 million) under lien with others, ₹ 571 million and ₹ 465 million ($ 6 million) deposit held as collateral in respect of closure cost, ₹ 1,385 million and ₹ 2,726 million ($ 37 million) held as margin money and ₹ Nil and ₹ 4,603 million ($ 63 million) held as interest reserve created against interest payment on loans from banks as at March 31, 20162020 and March 31, 20172021 respectively. |
2. | Includes Rs. 4,309₹ 1,013 million and Rs. 5,246 million₹ Nil ($ 80.9 million)Nil) invested in bonds of a related party as at March 31, 20162020 and March 31, 20172021 respectively. (Refer Note 35(c)) |
15.
20. Restricted cash and cash equivalents Restricted cash and cash equivalents consist of the following: | | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Cash at banks1 | | | 3,367 | | | | 10,118 | | | | 156.0 | | Short term deposits2 | | | — | | | | 1,629 | | | | 25.1 | | | | | | | | | | | | | | | | | | 3,367 | | | | 11,747 | | | | 181.1 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Cash at banks1 | | | 960 | | | | 1,025 | | | | 14 | | | | | | | | | | | | | | | | | | 960 | | | | 1,025 | | | | 14 | | | | | | | | | | | | | | |
11. | Cash at banks is restricted in use as it relates to unclaimed dividends of Rs. 3,367₹ 941 million and Rs. 3,677₹ 1,006 million ($ 56.714 million) as at March 31, 20162020 and March 31, 20172021 respectively. Further itIt also includes Rs. 6,441earmarked escrow amount of ₹ 19 million and ₹ 19 million ($ 99.30 million) which relates to unclaimed redeemable preference shares as at March 31, 2017 representing unpaid dividend amount which is required to be remitted to minority shareholders within 30 days from the date of declaration of dividend. The said amount of unpaid dividend has been classified as cash2020 and cash equivalent for the purpose of Statement of Cash flows. |
2 | includes Rs. 1,114 million ($17.2 million) of bank deposits on lien with banks as at March 31, 2017 and Rs. 515 million ($ 7.9 million) held as collateral in respect of closure cost as at March 31, 2017.2021 respectively. |
16.21. Cash and cash equivalents
Cash and cash equivalents consist of the following: | | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Cash at banks and in hand* | | | 8,743 | | | | 85,631 | | | | 1,320.4 | | Short-term deposits | | | 12,127 | | | | 11,571 | | | | 178.5 | | | | | | | | | | | | | | | | | 20,870 | | | 97,202 | | | 1,498.9 | | | | | | | | | | | | | | |
Short-term deposits are made for periods of between one day and three months, depending on the immediate cash requirements of the respective companies, and earn interest at the respective short-term deposit rates.
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Cash at banks and in hand | | | 23,922 | | | | 26,604 | | | | 364 | | Short-term deposits* | | | 26,676 | | | | 21,933 | | | | 300 | | | | | | | | | | | | | | | | | | 50,598 | | | | 48,537 | | | | 664 | | | | | | | | | | | | | | |
* | Include Rs. NilShort-term deposits are made for periods of between one day and Rs. 75,437 million ($ 1,163.2 million) as at March 31, 2016 and March 31, 2017 respectively in unpaid dividend accountthree months, depending on the immediate cash requirements of the subsidiary, attributable torespective companies, and earn interest at the Company’s shareholding which has been remitted in April 2017.respective short-term deposit rates. |
17.22. Borrowings
Short-term borrowings represent borrowings with an original maturity of less than one year and current portion of long-term borrowings. Long-term borrowings represent borrowings with an original maturity of greater than one year. Maturity distribution is based on contractual maturities. Interest rates on floating-rate debt are linked to benchmark rates.
Short-termCurrent borrowings consist of:
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Banks and financial institutionsa | | | 108,713 | | | | 322,436 | | | | 4,972.0 | | Current portion of long-term borrowings | | | 73,615 | | | | 90,690 | | | | 1,398.5 | | | | | | | | | | | | | | | Short-term and current portion of long term borrowings | | | 182,328 | | | | 413,126 | | | | 6,370.5 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Banks and financial institutions | | | 112,710 | | | | 36,086 | | | | 493 | | Current maturities of long-term borrowings | | | 99,521 | | | | 153,514 | | | | 2,099 | | | | | | | | | | | | | | | Current borrowings (A) | | | 212,231 | | | | 189,600 | | | | 2,592 | | | | | | | | | | | | | | |
Long-termNon-current borrowings consist of:
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Banks and financial institutions | | | 327,445 | | | | 255,557 | | | | 3,940.8 | | Non-convertible debentures | | | 115,153 | | | | 136,751 | | | | 2,108.7 | | Redeemable preference shares (refer note 1) | | | — | | | | 30,100 | | | | 464.2 | | Loans from Related Party | | | 123,835 | | | | — | | | | — | | Other | | | 966 | | | | 936 | | | | 14.4 | | | | | | | | | | | | | | | Long-term borrowings | | | 567,399 | | | | 423,344 | | | | 6,528.1 | | Less: Current portion of long-term borrowings | | | (73,615 | ) | | | (90,690 | ) | | | (1,398.5 | ) | | | | | | | | | | | | | | Long-term borrowings, net of current portion | | | 493,784 | | | | 332,654 | | | | 5,129.6 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Banks and financial institutions | | | 294,233 | | | | 359,164 | | | | 4,911 | | Non-convertible debentures | | | 163,874 | | | | 165,923 | | | | 2,269 | | Redeemable preference shares | | | 19 | | | | 19 | | | | 0 | | Non-convertible bonds | | | 1,462 | | | | 1,565 | | | | 21 | | Others | | | 7,177 | | | | 6,465 | | | | 89 | | | | | | | | | | | | | | | Non-current borrowings | | | 466,765 | | | | 533,136 | | | | 7,290 | | Less: Current maturities of long-term borrowings | | | (99,521 | ) | | | (153,514 | ) | | | (2,099 | ) | | | | | | | | | | | | | | Non-current borrowings, net of current maturities (B) | | | 367,244 | | | | 379,622 | | | | 5,191 | | | | | | | | | | | | | | |
a | Includes Rs. 68,080 million ($ 1,049.8 million) which became current pursuant to cancellation of shares held by TMHL in Cairn India, upon the merger being effective as referred to in note 1. The same was classified as anon-current borrowing in earlier periods. |
Bank loans availed byIn the event Vedanta Resources Limited ceases to be the Company’s majority shareholder, the Group will be required to immediately repay some of its outstanding long term debt.
The Group facilities are subject to certain financial and non- financial covenants. The primary covenants relating towhich must be complied with include interest service coverage ratio, current ratio, debt service coverage ratio, total outside liabilities to totaltangible net worth, fixed assets coverage ratio, ratio of total term liabilities to tangible net worth, debt to EBITDA ratio and return on fixed assets. The Group has complied with the covenants as per the terms of the loan agreement. The Company has discounted trade receivables on recourse basis Rs. 1,656 million ($ 25.5 million) as at March 31, 2017. Accordingly, the monies received on this account are shown as borrowings as the trade receivables do not meetde-recognition criteria.
Details ofNon-convertible debentures issued by the Group have been provided below-below (carrying value)- | | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | 9.00% due May 2016 | | | 750 | | | | — | | | | — | | 8.60% due May 2016 | | | 2,500 | | | | — | | | | — | | 9.60% due September 2016 | | | 1,200 | | | | — | | | | — | | 10.25% due August 2017 | | | 5,000 | | | | 5,000 | | | | 77.1 | | 9.70% due September 2017 | | | 1,800 | | | | 1,800 | | | | 27.8 | | 9.36% due October 2017 | | | 9,750 | | | | 9,752 | | | | 150.4 | | 9.27% due November 2017 | | | 2,000 | | | | 2,000 | | | | 30.8 | | 9.36% due December 2017 | | | 5,250 | | | | 5,250 | | | | 81.0 | | 8.91% due April 2018 | | | 9,960 | | | | 9,978 | | | | 153.9 | | 7.75% due September 2019 | | | — | | | | 2,500 | | | | 38.6 | | 8.65% due September 2019 | | | — | | | | 1,500 | | | | 23.1 | | 8.25% due October 2019 | | | — | | | | 3,000 | | | | 46.3 | | 8.20% due November 2019 | | | — | | | | 3,000 | | | | 46.3 | | 7.50% due November 2019 | | | — | | | | 2,000 | | | | 30.8 | | 7.95% due April 2020 | | | — | | | | 3,000 | | | | 46.3 | | 8.70% due April 2020 | | | — | | | | 6,000 | | | | 92.5 | | 9.70% due August 2020 | | | 19,990 | | | | 19,990 | | | | 308.2 | | 8.75% due April 2021 | | | — | | | | 2,500 | | | | 38.6 | | 8.75% due September 2021 | | | — | | | | 2,500 | | | | 38.6 | | 9.24% due October 2022* | | | 4,992 | | | | 4,997 | | | | 77.0 | | 9.40% due November 2022* | | | 4,992 | | | | 4,997 | | | | 77.0 | | 9.40% due December 2022* | | | 4,992 | | | | 4,998 | | | | 77.0 | | 9.24% due December 2022* | | | 4,997 | | | | 4,999 | | | | 77.0 | | 9.10% due April 2023* | | | 24,987 | | | | 24,990 | | | | 385.4 | | 9.17% due July 2023* | | | 11,993 | | | | 12,000 | | | | 185.0 | | | | | | | | | | | | | | | | | | 115,153 | | | | 136,751 | | | | 2,108.7 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | 9.20% due February 2030 | | | 20,000 | | | | 20,000 | | | | 273 | | 9.20% due December 2022 | | | 7,480 | | | | 7,487 | | | | 102 | | 8.75% due June 2022 | | | 12,682 | | | | 12,690 | | | | 174 | | 7.5% due March 2022 | | | — | | | | 4,927 | | | | 67 | | 8.90% due December 2021 | | | 8,978 | | | | 8,991 | | | | 123 | | 8.75% due September 2021 | | | 2,500 | | | | 2,500 | | | | 34 | | 5.35% due September 2021 | | | — | | | | 35,163 | | | | 481 | | 9.18% due July 2021 | | | 10,000 | | | | 10,000 | | | | 137 | | 9.27% due July 2021 | | | 9,995 | | | | 9,999 | | | | 137 | | 8.50% due June 2021 | | | 16,496 | | | | 16,500 | | | | 226 | | 8.75% due April 2021 | | | 2,500 | | | | 2,500 | | | | 34 | | 8.50% due April 2021 | | | 23,493 | | | | 23,500 | | | | 321 | | 8.55% due April 2021 | | | 10,000 | | | | 10,000 | | | | 137 | | 0% due March 2022 | | | — | | | | 1,666 | | | | 23 | | 9.00% due November 2020 | | | 1,500 | | | | — | | | | — | | 8.25% due September 2020 | | | 4,250 | | | | — | | | | — | | 7.85% due August 2020 | | | 5,000 | | | | — | | | | — | | 9.45% due August 2020 | | | 20,000 | | | | — | | | | — | | 7.90% due July 2020 | | | 3,000 | | | | — | | | | — | | 8.70% due April 2020 | | | 6,000 | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 163,874 | | | | 165,923 | | | | 2,269 | | | | | | | | | | | | | | |
* | The holders of these NCDs and the Company have put and call option at the end of 5 years from the respective date of the allotment of the NCDs. |
Security Details The Group has taken borrowings in various countries towards funding of its acquisitions, capital expenditure and working capital requirements. The borrowings comprise of funding arrangements from various banks and financial institutions taken by the parent and subsidiaries. Out of the total borrowings of Rs. 676,112 million and Rs. 745,780 million ($ 11,500.1 million) shown above, total secured borrowings are Rs. 436,376 million and Rs. 453,336 million ($ 6,990.5 million) and unsecured borrowings are Rs. 239,736 million and Rs. 292,444 million ($ 4,509.5 million) as at March 31, 2016 and March 31, 2017 respectively. | | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2020 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Secured borrowings | | | 480,476 | | | | 487,027 | | | | 6,659 | | Unsecured borrowings | | | 98,999 | | | | 82,195 | | | | 1,124 | | | | | | | | | | | | | | | Total borrowings | | | 579,475 | | | | 569,222 | | | | 7,783 | | | | | | | | | | | | | | |
The details of security provided by the Group in various countries, to various banks on the assets of Parent and subsidiaries are as follows: | | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2016 | | | 2017 | | | 2017 | | | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Project buyers’ credit from banks | | Secured by exclusive charge on the assets of Vedanta Limited’s aluminium division at Jharsuguda imported under facility and first charge on Jharsuguda aluminium’s current assets on pari passu basis. | | | 18 | | | | 115 | | | | 1.8 | | | | Secured by first charge on pari passu basis on all the movable assets of TSPL. | | | 1,311 | | | | — | | | | — | | | | Secured by a residual charge on all the movable assets of VGCB, both present and future. | | | 1,212 | | | | 1,180 | | | | 18.2 | | | | Secured by exclusive charge only on specific assets imported under the facility in BALCO. | | | 3,852 | | | | 194 | | | | 3.0 | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2020 | | | 2021 | | | 2021 | | | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Working capital loans (grouped under banks and financial institutions) | | First pari passu charge on current assets of Vedanta Limited | | | 34 | | | | 6,500 | | | | 89 | | | 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# | | | 2,478 | | | | 490 | | | | 7 | | | Other secured working capital loans | | | 3,740 | | | | — | | | | — | | | | | | | External commercial borrowings (grouped under banks and financial institutions) | | 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 | | | 3,351 | | | | 2,188 | | | | 30 | | | The facility is secured by first pari passu charge on all movable project assets related to 1200 MW power project and 3.25 LTPA smelter project both present and future along with secured lenders at BALCO | | | 2,762 | | | | 1,686 | | | | 23 | | | | | | | Non-convertible Debentures | | Secured by the 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) Aluminium Smelter having output of 1.6 MTPA along with 1215 (9*135) MW CPP at Jharsuguda, Odisha | | | 49,139 | | | | 54,095 | | | | 740 | | | Secured by way of charge against all existing assets of FACOR | | | — | | | | 1,670 | | | | 23 | | | Secured by a first pari passu charge on the whole of the present and future of the movable fixed assets of 2400 MW (600 MW*4) Power Plant of Vedanta Limited at Jharsuguda location | | | 39,988 | | | | 40,000 | | | | 547 | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2016 | | | 2017 | | | 2017 | | | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | | | | | Cash credit | | Secured by hypothecation of stock of raw materials,work-in-progress, semi-finished, finished products, consumable stores and spares, bills receivable, book debts and all other movables, both present and future in BALCO. The charges ranks pari passu among banks under multiple banking arrangements, both for fund based andnon-fund based facilities. | | | 1,209 | | | | — | | | | — | | | | | | | External commercial borrowings | | Secured by a first pari passu charge on all present and future movable assets of Vedanta Limited’s Aluminium division at Jharsuguda including its movable plant and machinery, equipment, machinery spare tools and accessories except for assets acquired under buyer’s credit where there is a second charge. | | | 19,845 | | | | 6,480 | | | | 99.9 | | | | Secured by first pari passu charge over property, plant and equipments of BALCO with Minimum Security cover of 1.25 times except for assets acquired under buyer’s credit where there is a second charge. | | | — | | | | 4,791 | | | | 73.9 | | | | Secured by first pari passu charges on Project assets related to 1200 MW Power Plant and 3.25 LTPA Smelter both present and future along with secured lenders except for assets acquired under buyer’s credit where there is a second charge in BALCO. | | | 3,289 | | | | 3,231 | | | | 49.8 | | | | Secured by first pari passu charges on all the property, plant and equipments (excluding land) of the 3.25 LTPA Aluminium Smelter along with a Thermal Power Plant of 1200 MW at BALCO except for assets acquired under buyer’s credit where there is a second charge, both present and future along with secured lenders | | | 13,266 | | | | 8,645 | | | | 133.3 | | | | | | | Non-convertible Debentures | | The Principal together with interest (in respect of the amount so subscribed and issued) is secured by the first pari pasu charge over specific identified property, plant and equipments of Vedanta Limited’s iron ore division with the minimum security cover of 1.25 times. | | | 15,000 | | | | 15,000 | | | | 231.3 | | | | Secured by a first pari passu charge over property, plant and equipment of BALCO with minimum security cover of 1.10 times except for assets acquired under buyer’s credit where there is a second charge. | | | 2,500 | | | | — | | | | — | | | | Secured by first pari passu charge over property, plant and equipments ( excluding leasehold properties) of BALCO with Minimum Security cover of 1.25 times except for assets acquired under buyer’s credit where there is a second charge. | | | 5,000 | | | | 5,000 | | | | 77.1 | | | | Secured by security cover of 1.25 times on the face value of outstanding debentures by way of first pari passu charge on the assets of Vedanta Limited’s power division and/or assets of 2400 MW Thermal Power at Jharsuguda, Orissa at all times during the tenure of the debenture. | | | 14,976 | | | | 14,990 | | | | 231.2 | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2020 | | | 2021 | | | 2021 | | | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | | Secured by way of first ranking pari passu charge on movable fixed assets in relation to the Lanjigarh Refinery Expansion Project (having capacity beyond 2 MTPA and upto 6 MTPA) situated at Lanjigarh, Odisha. The 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 capacity expansions | | | 11,000 | | | | 5,000 | | | | 68 | | | | Secured by way of first pari passu charge on all present and future of the movable fixed assets of 2400 MW (600 MW*4) Power Plant of Vedanta Limited at Jharsuguda location, as may be identified and notified by the Issuer to the Security Trustee from time to time, with minimum asset coverage of 1 time of the aggregate face value of debentures outstanding at any point of time | | | 10,000 | | | | 10,000 | | | | 137 | | | | Secured by first pari passu charge on movable and/or immovable fixed assets of TSPL with a minimum asset cover of 1 time during the tenure of NCD | | | 26,497 | | | | 20,000 | | | | 273 | | | | Other secured non-convertible debentures | | | 27,250 | | | | — | | | | — | | | | | | | Term Loans (grouped under banks and financial institutions) | | Secured by first pari passu charge on fixed assets of TSPL and second pari passu charge on current assets of TSPL, both present and future# | | | 31,903 | | | | 51,400 | | | | 702 | | | First pari passu charge by way of hypothecation/ equitable mortgage on the movable/ immovable assets of the Aluminium division of Vedanta Limited comprising of alumina refinery having output of 1 MTPA along with co-generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Odisha; aluminium smelter having output of 1.6 MTPA along with 1215 (9x135) MW CPP at Jharsuguda, Odisha, both present and future | | | 33,842 | | | | 18,834 | | | | 257 | | | 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 aggregate capacity of 90 MW at Lanjigarh, Odisha (Power Plant); and (ii) aluminium smelter having output of 1.6 MTPA along with 1215 (9x135) MW CPP at Jharsuguda, Odisha (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 | | | 28,851 | | | | 21,935 | | | | 300 | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2016 | | | 2017 | | | 2017 | | | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | | Secured by way of first pari-passu charge on the specific movable and/or immovable property, plant and equipments except for assets acquired under buyer’s credit where there is a second charge, as may be identified and notified by the Issuer to the Security Trustee from time to time, with minimum asset coverage of 1 time of the aggregate face value of Bonds outstanding at any point of time. The whole of the movable property, plant and equipments of the 1.6 MTPA Aluminium Smelter along with 1215 MW captive power plant in Jharsuguda and 1 MTPA alumina refinery along with 75 MWco-generation plant in Lanjigarh are covered | | | 61,967 | | | | 66,982 | | | | 1,032.9 | | | | Secured by first pari passu charge over the property, plant and equipments of Vedanta Limited’s Lanjigarh Expansion and Lanjigarh 2 MTPA Assets with a minimum security cover of 1 time of the outstanding amount of the debenture | | | — | | | | 15,500 | | | | 239.0 | | | | Secured 1.1 times of the face value of outstanding debentures, by way of charge on the property, plant and equipment of the VGCB | | | 750 | | | | — | | | | — | | | | Secured by first pari passu charge on all the property, plant and equipments of TSPL both present and future, with a minimum asset cover of 1.1 times during the tenure of the NCDs (including debt service reserve account). | | | 14,960 | | | | 19,279 | | | | 297.3 | | | | | | | Term Loans | | Secured by first charge on pari passu basis on all the assets of TSPL, both present and future | | | 23,300 | | | | 36,401 | | | | 561.3 | | | | Secured by first pari passu charge by way of hypothecation on the entire movable property, plant and equipments (including WIP) of the Aluminium and Power Project, both present and future except for assets acquired under buyer’s credit where there is a second charge; and mortgage by deposit of documents of title of the land pertaining to the property, plant and equipments. Aluminium and Power project shall mean the manufacturing facilities comprising of (i) alumina refinery having output of 1 MTPA along withco-generation captive power plant with an aggregate capacity of 75 MW at Lanjigarh, Orissa. (ii) aluminium smelter having an output of 1.6 MTPA along with a 1215 (9x135) MW CPP at Jharsuguda, Orissa. | | | — | | | | 26,588 | | | | 410.0 | | | | Secured by a first pari passu charge on movable & immovable property, plant and equipments of Vedanta Limited’s Refinery expansion Project (beyond 2 MTPA & upto 6 MTPA) | | | — | | | | 9,844 | | | | 151.8 | | | | Secured by creating first pari-passu charge by way of hypothecation of the movable property, plant and equipments except for assets acquired under buyer’s credit where there is a second charge, and mortgage on all the immovable property, plant and equipments of the Aluminium Division of Vedanta Limited, both present and future, including leasehold land. | | | 104,475 | | | | 92,923 | | | | 1,432.9 | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2020 | | | 2021 | | | 2021 | | | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | | 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 1 MTPA alumina refinery of Vedanta Limited along with 90 MW power plant in Lanjigarh and all its related expansions | | | 4,582 | | | | 4,357 | | | | 60 | | | | | | | | | Secured by a pari-passu charge by way of hypothecation on the movable fixed assets of Vedanta Limited pertaining to its Aluminium division comprising of 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 | | | 13,785 | | | | 12,270 | | | | 168 | | | | | | | | | First pari passu charge by way of hypothecation/ equitable mortgage on the movable/ immovable assets of the Aluminium division of Vedanta Limited comprising of alumina refinery having output of 1 MTPA along with co-generation captive power plant with an aggregate capacity of 90 MW at Lanjigarh, Odisha; aluminium smelter having output of 1.6 MTPA along with 1215 (9x135) MW CPP at Jharsuguda, Odisha and additional charge on Lanjigarh Expansion project, both present and future | | | 11,370 | | | | 10,922 | | | | 149 | | | | | | | | | 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 of 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 | | | 29,849 | | | | 28,015 | | | | 383 | | | | | | | | | 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 | | | 36,919 | | | | 28,100 | | | | 384 | | | | | | | | | Pledge of 49% of shares & other securities and rights to any claims held by THL Zinc Limited in and against BMM | | | 4,044 | | | | 2,198 | | | | 30 | | | | | | | | | 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 | | | 2,235 | | | | 1,471 | | | | 20 | | | | | | | | | 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 coal block assets) by way of a deed of hypothecation | | | 16,150 | | | | 14,466 | | | | 198 | | | | | | | | | 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 by way of a deed of hypothecation | | | 12,925 | | | | 10,530 | | | | 144 | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2016 | | | 2017 | | | 2017 | | | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | | Secured by a first pari passu charge by way of hypothecation on the entire movable property, plant and equipments (including CWIP) of the project at Vedanta Limited’s Jharsuguda Aluminium division except for assets acquired under buyer’s credit where there is a second charge, both present and future; and mortgage by deposit of documents of title of the land pertaining to the property, plant and equipments. | | | 19,662 | | | | 19,421 | | | | 299.5 | | | | Secured by aggregate of the Net property, plant and equipments of Aluminium Division and the Lanjigarh Expansion Project reduced by the outstanding amount of other borrowings having first pari passu charge on the property, plant and equipments of Aluminium division and the Lanjigarh Expansion Project except for assets acquired under buyer’s credit where there is a second charge. | | | 12,444 | | | | 12,450 | | | | 192.0 | | | | Secured by creating first pari-passu charge by way of hypothecation of the movable property, plant and equipments and mortgage on all the immovable property, plant and equipments of the Aluminium Division of Vedanta Limited except for assets acquired under buyer’s credit where there is a second charge, both present and future, including leasehold land. | | | 4,450 | | | | 3,750 | | | | 57.8 | | | | Secured by 2nd pari passu charge on specific property, plant and equipments of Vedanta Limited related to 2400 MW power project in Jharsuguda (except agricultural land) | | | 6,870 | | | | 4,373 | | | | 67.4 | | | | Secured by first pari passu charge on movable property, plant and equipments (excluding Coal Block assets) except for assets acquired under buyer’s credit where there is a second charge, both present and future along with secured lenders in BALCO. | | | 15,937 | | | | 15,409 | | | | 237.5 | | | | The facility is guaranteed by Vedanta Resources Plc. Further TEHL has pledged all the shares it holds in TMHL as security for this loan | | | 59,269 | | | | 38,905 | | | | 599.9 | | | | The facility is guaranteed by Vedanta Resources Plc. Further 100% shares of TMHL (held by TEHL) have been pledged as security for this facility | | | 30,814 | | | | 29,180 | | | | 450.0 | | | | Secured by first pari passu charge on all movable and immovable property, plant and equipment, current assets of VGCB including escrow account, both present and future with a minimum cover of 1.25 times and first pari passu charge with other term lenders on project assets. | | | — | | | | 2,705 | | | | 41.7 | | | | | | | | | | | | | | | | | | | Total | | | 436,376 | | | | 453,336 | | | | 6,990.5 | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | As at March 31, | | | | | | 2020 | | | 2021 | | | 2021 | | | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | | 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 | | | 33,725 | | | | 31,341 | | | | 429 | | | | | | | | | Secured by first pari passu charge by way of hypothecation over all the movable assets (save and except Current Assets) of Vedanta Limited, present or future, pertaining to Lanjigarh refinery expansion project beyond 1.7 MTPA to 6.0 MTPA located at Lanjigarh, Odisha including but not limited to plant and machinery, machinery spares, tools and accessories in relation to aforementioned expansion project. Among others, the Lanjigarh Refinery Expansion Project shall specifically exclude the alumina refinery upto 1.7 MTPA of Vedanta Limited along with 90 MW power plant in Lanjigarh and all its related expansions | | | 7,360 | | | | 6,860 | | | | 94 | | | | | | | | | 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 Vedanta Limited, and the debt service reserve account to be opened for the facility along with the amount lying to the credit thereof (Refer Note 37(f)) | | | — | | | | 85,380 | | | | 1,167 | | | | | | | | | Secured by first pari passu charge by the way of 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 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 | | | 14,874 | | | | 11,478 | | | | 157 | | | | | | | | | Other secured term loans | | | 15,414 | | | | — | | | | — | | | | | | | Others | | Secured by Fixed asset (rare metals) of AvanStrate | | | 5,657 | | | | 5,361 | | | | 73 | | | First charge by way of hypothecation on the entire stocks of raw materials, semi-finished and finished goods, consumable stores and spares and such other movables including book-debts, bills whether documentary or clean, outstanding monies, receivables and all other current assets of Vedanta Limited, both present and future, ranking pari passu with other participating banks | | | 752 | | | | 480 | | | | 7 | | | | | | | Project buyer’ credit from banks (grouped under banks and financial institutions) | |
Other secured project buyers’ credit | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 480,476 | | | | 487,027 | | | | 6,659 | | | | | | | | | | | | | | | | |
# | As compared to previous year, TSPL has given an additional charge i.e., second pari passu charge on its current assets on all the working capital loan and second pari passu charge on its fixed assets on rupee term loans outstanding as on March 31, 2021. |
18.Movement in borrowings during the year is provided below:
| | | | | | | | | | | | | | | | | | | Short term borrowings | | | Long term borrowings* | | | Total | | | Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | As at April 01, 2019 | | | 229,820 | | | | 432,442 | | | | 662,262 | | | | | | Cash flow | | | (118,151 | ) | | | 28,297 | | | | (89,854 | ) | | | | | Other non-cash changes** | | | 570 | | | | 3,260 | | | | 3,830 | | | | | | Foreign currency translation differences | | | 471 | | | | 2,766 | | | | 3,237 | | | | | | | | | | | | | | | | | | | | | | | As at April 01, 2020 | | | 112,710 | | | | 466,765 | | | | 579,475 | | | | 7,923 | | | | | | | | | | | | | | | | | | | Cash flow | | | (82,309 | ) | | | 71,300 | | | | (11,009 | ) | | | (150 | ) | Other non-cash changes** | | | 5,768 | | | | (4,444 | ) | | | 1,324 | | | | 18 | | Debt on acquisition through business combination | | | 80 | | | | — | | | | 80 | | | | 1 | | Foreign currency translation differences | | | (163 | ) | | | (485 | ) | | | (648 | ) | | | (9 | ) | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 36,086 | | | | 533,136 | | | | 569,222 | | | | 7,783 | | | | | | | | | | | | | | | | | | |
* | including current maturities of long-term borrowings |
** | Other non-cash changes comprises of amortisation of borrowing costs, foreign exchange difference on borrowings. |
23. Acceptances Acceptances consist of: | | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Payable under trade financing arrangements | | | 99,500 | | | | 113,304 | | | | 1,747.2 | | | | | | | | | | | | | | | | | | 99,500 | | | | 113,304 | | | | 1,747.2 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Payable under trade financing arrangements | | | 101,851 | | | | 80,891 | | | | 1,106 | | | | | | | | | | | | | | | | | | 101,851 | | | | 80,891 | | | | 1,106 | | | | | | | | | | | | | | |
Acceptances compriseare interest-bearing liabilities and are normally settled within a period of credittwelve months. These represent arrangements whereby operational suppliers are paid by financial institutions, with the Group recognising the liability for settlement with the institutions at a later date. These acceptances carry an interest ranging from 0.4% - 3.5% p.a. for facilities availed in foreign currency from offshore branches of Indian banks or foreign banks and financial institutions4.25% - 6.65% p.a. for payment to suppliers for raw materials purchased by the Group. The arrangements are interest-bearingfacilities availed in rupee from domestic banks and are payable within one year. The fair valuesecured by a first pari-passu charge over the present and future current assets of acceptances is not materially different from the carrying values presented.Group. 19.
24. Trade and other payables Trade and other payables consist of:Other non-current liabilities
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Financial | | | | | | | | | | | | | Amount due to other related parties | | | 3,583 | | | | 310 | | | | 48 | | Dividend payable3 | | | 35,572 | | | | 72,170 | | | | 1,112.9 | | Trade payables1 | | | 63,582 | | | | 62,639 | | | | 965.9 | | Creditors for capital expenditure | | | 54,755 | | | | 37,444 | | | | 577.4 | | Security deposit and retentions | | | 9,850 | | | | 9,867 | | | | 152.1 | | Other liabilities-current | | | 17,420 | | | | 32,441 | | | | 500.3 | | Total - Financial | | | 184,762 | | | | 214,871 | | | | 3,313.4 | | | | | | Non Financial | | | | | | | | | | | | | Dividend Tax Payable | | | 20,644 | | | | — | | | | — | | Statutory Liabilities | | | 15,985 | | | | 19,072 | | | | 294.1 | | Advances from customers2 | | | 26,368 | | | | 47,354 | | | | 730.2 | | Other payables | | | 4,947 | | | | 4,497 | | | | 69.2 | | | | | | | | | | | | | | | Total - Non Financial | | | 67,944 | | | | 70,923 | | | | 1,093.5 | | | | | | | | | | | | | | | | | 252,706 | | | 285,794 | | | 4,406.9 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, | | | | 2020 Non-Current | | | 2020 Current | | | 2020 Total | | | 2021 Non-current | | | 2021 Current | | | 2021 Total | | | 2021 Non- Current | | | 2021 Current | | | 2021 Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | (US dollars in million) | | | (US dollars in million) | | Financial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Unclaimed/unpaid dividend | | | — | | | | 941 | | | | 941 | | | | — | | | | 1,014 | | | | 1,014 | | | | — | | | | 14 | | | | 14 | | Trade payables | | | — | | | | 79,064 | | | | 79,064 | | | | — | | | | 77,731 | | | | 77,731 | | | | — | | | | 1,063 | | | | 1,063 | | Amount due to related party | | | — | | | | 1,772 | | | | 1,772 | | | | — | | | | 4,130 | | | | 4,130 | | | | — | | | | 56 | | | | 56 | | Liabilities for capital expenditure | | | 8,107 | | | | 59,112 | | | | 67,219 | | | | 9,365 | | | | 70,088 | | | | 79,453 | | | | 128 | | | | 958 | | | | 1,086 | | Profit petroleum payable | | | — | | | | 6,891 | | | | 6,891 | | | | — | | | | 14,677 | | | | 14,677 | | | | — | | | | 201 | | | | 201 | | Security deposit and retentions | | | — | | | | 2,015 | | | | 2,015 | | | | 2 | | | | 2,223 | | | | 2,225 | | | | 0 | | | | 31 | | | | 31 | | Other liabilities | | | 2,419 | | | | 43,695 | | | | 46,114 | | | | 847 | | | | 38,808 | | | | 39,655 | | | | 12 | | | | 530 | | | | 542 | | Put option liability with non-controlling interests1 | | | 2,472 | | | | — | | | | 2,472 | | | | 2,633 | | | | — | | | | 2,633 | | | | 36 | | | | — | | | | 36 | | Lease liability3 | | | 2,033 | | | | 4,566 | | | | 6,599 | | | | 1,603 | | | | 4,808 | | | | 6,411 | | | | 22 | | | | 66 | | | | 88 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total – Financial | | | 15,031 | | | | 198,056 | | | | 213,087 | | | | 14,450 | | | | 213,479 | | | | 227,929 | | | | 198 | | | | 2,919 | | | | 3,117 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Non Financial | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Statutory Liabilities | | | — | | | | 31,318 | | | | 31,318 | | | | — | | | | 31,461 | | | | 31,461 | | | | — | | | | 430 | | | | 430 | | Amount payable to owned post employment benefit trust | | | — | | | | 506 | | | | 506 | | | | — | | | | 321 | | | | 321 | | | | — | | | | 5 | | | | 5 | | Advances from customers2 | | | 1,683 | | | | 78,887 | | | | 80,570 | | | | — | | | | 62,330 | | | | 62,330 | | | | — | | | | 852 | | | | 852 | | Advance from related party | | | — | | | | 214 | | | | 214 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Other payables | | | 18 | | | | 1,679 | | | | 1,697 | | | | — | | | | 1,840 | | | | 1,840 | | | | — | | | | 25 | | | | 25 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total – Non Financial | | | 1,701 | | | | 112,604 | | | | 114,305 | | | | — | | | | 95,952 | | | | 95,952 | | | | — | | | | 1,312 | | | | 1,312 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,732 | | | | 310,660 | | | | 327,392 | | | | 14,450 | | | | 309,431 | | | | 323,881 | | | | 198 | | | | 4,231 | | | | 4,429 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Trade payables are majorly non-interest bearing and are normally settled upto 180 days terms. The fair value of trade and other payables is not materially different from the carrying valuesvalue presented. 1 | Trade payablesThe 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 (December 22, 2017) at a price higher of ₹ 52 ($ 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 arenon-interest bearing treated as equity transaction and are normally settled within 1 day to 180 days terms.hence accounted for in equity. |
2 | AdvancesAdvance from customers include amounts received under long term supply agreements. The advance payment plus a fixed rate of return will be settled by supplying goods as per the terms of the respective agreements. The portion of advance that is expectedare contract liabilities to be settled within the next 12 months has been classifiedthrough delivery of goods. The amount of such balances as a current liability. Includes advance from related party Rs. 68at April 01, 2018 was ₹ 49,442 million, as at April 01, 2019 was ₹ 91,949 million and Rs. 139 million ($2.1 million) as at April 01, 2020 was ₹ 80,570 million. The Group has refunded ₹ 10,460 million, ₹ 6,499 million and ₹ 45 million ($ 1 million) to the customers and recognised revenue of ₹ 37,867 million, ₹ 84,886 million and ₹ 78,782 million ($ 1,077 million) during the year ended March 31, 20162019, March 31, 2020 and March 31, 20172021 respectively. All other changes are either due to receipt of new advances or exchange differences. |
3 | Includes payable to related party Rs. 32,983 million ($508.6 million) (refer note 31) as at March 31, 2017 |
20. Provisions
| | | | | | | | | | | | | | | Restoration, rehabilitation and environmental (a) | | | Other (b) | | | Total | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | As at April 01, 2015 | | | 11,286 | | | | 4,750 | | | | 16,036 | | Additions | | | 203 | | | | 85 | | | | 288 | | Utilized | | | (1,160) | | | | (1,970) | | | | (3,130) | | Change in estimate | | | 141 | | | | — | | | | 141 | | Unwinding of discount | | | 750 | | | | — | | | | 750 | | Reclassification to trade and other payables | | | — | | | | (2,102) | | | | (2,102) | | Exchange differences | | | 293 | | | | 149 | | | | 442 | | | | | | | | | | | | | | | As at March 31, 2016 | | | 11,513 | | | | 912 | | | | 12,425 | | | | | | | | | | | | | | | | | | | Classification as at March 31, 2016 | | | | | | | | | | | | | Current | | | 877 | | | | 816 | | | | 1,693 | | Non-current | | | 10,636 | | | | 96 | | | | 10,732 | | | | | | | | | | | | | | | | | | 11,513 | | | | 912 | | | | 12,425 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Restoration, rehabilitation and environmental (a) | | | Other (b) | | | Total | | | Total | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | As at April 01, 2016 | | | 11,513 | | | | 912 | | | | 12,425 | | | | 191.6 | | Additions | | | 1,162 | | | | 513 | | | | 1,675 | | | | 25.8 | | Utilized | | | (600) | | | | (310) | | | | (910) | | | | (14.0) | | Change in estimate | | | 6,641 | | | | — | | | | 6,641 | | | | 102.4 | | Unwinding of discount | | | 844 | | | | — | | | | 844 | | | | 13.0 | | Exchange differences | | | (286) | | | | (25) | | | | (311) | | | | (4.8) | | | | | | | | | | | | | | | | | | | As at March 31, 2017 | | | 19,274 | | | | 1,090 | | | | 20,364 | | | | 314.0 | | | | | | | | | | | | | | | | | | | | | | | | Classification as at March 31, 2017 | | | | | | | | | | | | | | | | | Current | | | 564 | | | | 567 | | | | 1,131 | | | | 17.4 | | Non-current | | | 18,710 | | | | 523 | | | | 19,233 | | | | 296.6 | | | | | | | | | | | | | | | | | | | | | | 19,274 | | | | 1,090 | | | | 20,364 | | | | 314.0 | | | | | | | | | | | | | | | | | | |
(a) Restoration, rehabilitation and environmental
The provision for restoration, rehabilitation and environmental3 Movement in lease liabilities represents 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 Africa and Irish law and the terms of the Group’s mining and other licenses and contractual arrangements. These amounts calculated by considering discount rates within the range of 2% to 13%, becomes payable on closure of mine and are expected to be incurred over a period of one to thirty years. Within India, the principal restoration and rehabilitation provisions are recorded where a legal obligation exists relating to oil and gas fields, where costs are expected to be incurred in restoring the site of production facilities at the end of producing life of an oil field. The Group recognizes the full cost of site restoration as a liability to rectify these environmental damages.
An obligation to incur restoration, rehabilitation and environment costs arises when environmental disturbances are caused by the development or ongoing production from a producing field.
In the current year, the Group revised the discount rate applied to the decommissioning liability in relation to the Group’s oil and gas segment from 8% (March 31, 2016) to 3.5% (March 31, 2017) p.a. to reflect the risk free rate of return of the currency in which the majority of the expenses are likely to be incurred. The consequential increase in decommissioning provision and property, plant and equipment of Rs.8,105 million (US$ 125.0 million), which the Group believes is not material, has been recognized in the current year.
(b) Other
Other provisions comprises the Group’s best estimates of the costs based on the possibility of occurrence in the future to settle certain legal, tax and other claims outstanding against the Group. The timing of cash flows in respect of such provisions cannot be reasonably determined. In addition the provision as of March 31, 2015 included provision of Rs. 1,766 million recognized pursuant to the introduction of the Mines and Mineral (Development and Regulation) Amendment Act, 2015, the timing and amount of which was uncertain. The same had been reclassified to trade and other payables as of March 31, 2016 post removal of uncertainty.
21. Othernon-current liabilities
Non-current liabilities consist of:
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Financial | | | | | | | | | | | | | Project creditors, Security deposits and retentions | | | 4,035 | | | | 3,104 | | | | 47.8 | | Others | | | 595 | | | | 18 | | | | 0.3 | | Total - Financial | | | 4,630 | | | | 3,122 | | | | 48.1 | | Non Financial | | | | | | | | | | | | | Advance from customers (Refer note 19(2)) | | | 9,986 | | | | — | | | | — | | Others | | | 247 | | | | — | | | | — | | Total Non Financial | | | 10,233 | | | | — | | | | — | | | | | | | | | | | | | | | | | | 14,863 | | | | 3,122 | | | | 48.1 | | | | | | | | | | | | | | |
22. Employee benefits
The Group participates in defined contribution and benefit schemes, the assets of which are held (where funded) in separately administered funds.
For defined contribution schemes the amount charged to the consolidated statements of profit or loss is the total amount of contributions payable in the year.
For defined benefit schemes, 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 recognized in full in Consolidated Statement of Comprehensive Income for the year.
Defined contribution schemes
The Group contributed a total of Rs. 747 million , Rs. 909 million , Rs. 872 million ($ 13.4 million) for the years ended March 31, 2015, 2016 and 2017 respectively, to the following defined contribution plans.
Central provident fund and family pension fund
In accordance with the Indian Provident Fund Act, 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 2017) of an employee’s basic salary. 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 statements of profit or loss in the period they are incurred. Where the contributions are made to independently managed and approved funds, shortfall in actual return, if any, from the return guaranteed by the State are made by the employer. There is no such shortfall in the actual return for independently managed funds for the year ended March 31, 2016 and 2017. The benefits are paid to employees on their retirement or resignation from the Group.
Superannuation
Superannuation, another pension scheme applicable in India, is applicable only to senior 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 statements of profit or loss in the period 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 legal requirement in Australia. The employer contributes, into the employee’s fund of choice, 9.50% of an employee’s gross remuneration where the employee is covered by an industrial agreement and 12.50% of the basic remuneration for all other employees. All employees have the 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 statements of profit or loss in the period 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%.
The Fund provides disability cover which is equal to the member’s fund credit and a death cover of 2 times annual salary in the event of death before retirement.
Black Mountain (Pty) Limited, South Africa Pension and Provident Funds
BMM has two retirement funds, both administered by Alexander Forbes, a registered financial service provider. Both funds form part of the Alexander Forbes umbrella fund and are defined contribution funds. The purpose of the funds is to provide retirement and death benefits to all eligible employees. Both the fund plans are defined contribution schemes for its employees and amount of contribution paid or payable during the year is charged to profit or loss. Group contributes at a fixed percentage of 10.5% for up to supervisor grade and 15% for others.
Lisheen Mine, Ireland Pension Funds
Lisheen participates in a defined contribution pension scheme for all employees. The plan requires Lisheen to contribute 5% of annual basic salary of the employee and the employee is required to also contribute 5% of their annual basic salary. Under the terms of the executive scheme a contribution of 15% each is made by Lisheen and by the individual. Employees may also make additional voluntary contributions subject to certain limits. The Lisheen’s contribution will continue until an employee terminates employment or reaches the retirement age of 65, whichever happens first.
Defined benefit plans
Contribution to provident fund trust (the “trusts”) of Iron ore division, BALCO, HZL, SRL and SMCL
The provident funds of Iron ore division, BALCO, HZL, SRL and SMCL are exempted under section 17 of The Employees Provident Fund and Miscellaneous Provisions Act, 1952. Conditions for grant of exemption stipulates that the employer shall make good deficiency, if any, between the return guaranteed by the statute and actual earning of the Fund. Based on actuarial valuation in accordance with IAS 19 and Guidance note issued by Institute of Actuaries of India for interest rate guarantee of exempted provident fund liability of employees, there is no interest shortfall that is required to be met by Iron ore division, BALCO, HZL, SRL and SMCL as of March 31, 2017 and March 31, 2016. Having regard to the assets of the fund and the return in the investments, the Group does not expect any deficiency in the foreseeable future. The Group contributed a total of Rs. 666 million , Rs. 642 million , Rs. 536 million ($ 8.3 million) for the years ended March 31, 2015, 2016 and 2017 respectively in relation to the independently managed and approved funds. The present value of obligation and the fair value of plan assets of the trust are summarized below.
| | | | | | | | | | | | | | | | | | | As at March 31, 2015 (Rs. Million) | | | As at March 31, 2016 (Rs. Million) | | | As at March 31, 2017 (Rs. Million) | | | As at March 31, 2017 (US dollars in million) | | Fair value of plan assets of trusts | | | 11,220 | | | | 11,846 | | | | 13,336 | | | | 205.6 | | Present value of defined benefit obligations | | | (10,736) | | | | (11,628) | | | | (13,110) | | | | (202.2) | | | | | | | | | | | | | | | | | | | Net liability arising from defined benefit obligation | | | Nil | | | | Nil | | | | Nil | | | | Nil | | | | | | | | | | | | | | | | | | |
% allocation of Plan assets of the trust
| | | | | | | | | | | | | | | As at March 31, 2015
| | | As at March 31, 2016
| | | As at March 31, 2017
| | Assets by category | | | | | | | | | | | | | Government Securities | | | 85.69 | | | | 85.90 | | | | 77.17 | | Debentures/Bonds | | | 13.08 | | | | 13.75 | | | | 22.59 | | Fixed Deposits | | | 1.23 | | | | 0.35 | | | | 0.24 | | | | | | | | | | | | | | |
Post-Retirement Medical Benefits:
The Group has a scheme of post-retirement medical benefits for employees at BMM and BALCO. Based on an actuarial valuation conducted as at year end, a provision is recognized in full for the benefit obligation. The obligation relating to post-retirement medical benefits as at March 31, 2016 and 2017 was Rs.306 million and Rs. 613 million ($ 9.5 million) respectively (balance as at March 31, 2017 includes an amount of post- retirement medical benefit of Rs. 232 million reclassified from defined benefit obligation relating to gratuity plan). The obligation under this plan is unfunded. The Group considers these amounts as not material and accordingly has not provided further disclosures as required by IAS 19 (Revised 2011) “Employee benefits”. The remeasurement loss/ (gain) on post-retirement medical benefits of Rs. 22 million, Rs. (24) million, Rs. 6 million ($ (0.1) million) for the year ended March 31, 2015, 2016 and 2017 respectively have been recognized in other comprehensive income.
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, 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 statements of financial position.
The iron ore division of the Company, HZL and erstwhile Cairn India Limited have constituted a trust recognized by Indian Income Tax Authorities for gratuity to employees, contributions to the trust are funded with Life Insurance Corporation of India (LIC), ICICI Prudential Life Insurance Company Limited and HDFC Standard life insurance.
Principal actuarial assumptions
Principal actuarial assumptions used to determine the present value of the defined benefit obligation are as follows:
| | | | | | | | | | | | | | | Year ended March 31, 2015 | | | Year ended March 31, 2016 | | | Year ended March 31, 2017 | | Discount rate | | | 7.8% - 7.9% | | | | 8% | | | | 7.7% | | Expected rate of increase in compensation level of covered employees | | | 5.0% to 10.0% | | | | 5% to 10% | | | | 3% to 15% | |
In India, the mortality tables used, assume that a person aged 60 at the end of the balance sheet date has a future life expectancy of 19 years. | | | | | | | | | | | | | | | As at March 31, | | | | 2020 | | | 2021 | | | 2020 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | As at April 01 | | | 1,390 | | | | 6,599 | | | | 90 | | Additions during the year | | | 10,212 | | | | 3,611 | | | | 49 | | Interest on lease liabilities | | | 247 | | | | 278 | | | | 4 | | Payments made | | | (3,164 | ) | | | (3,380 | ) | | | (34 | ) | Deletions | | | (2,086 | ) | | | (697 | ) | | | (21 | ) | | | | | | | | | | | | | | As at March 31, | | | 6,599 | | | | 6,411 | | | | 88 | | | | | | | | | | | | | | |
Assumptions regarding mortality for Indian entities are based on mortality tables of ‘Indian Assured Lives Mortality (2006-2008)’ published by the Institute of Actuaries of India.
Amount recognised in the consolidated statements of financial position consists of:
| | | | | | | | | | | | | | | | | | | As at March 31, 2015 (Rs. Million) | | | As at March 31, 2016 (Rs. Million) | | | As at March 31, 2017 (Rs. Million) | | | As at March 31, 2017 (US dollars in million) | | Fair value of plan assets | | | 2,824 | | | | 2,899 | | | | 3,215 | | | | 49.6 | | Present value of defined benefit obligations | | | (4,987) | | | | (4,517) | | | | (4,495) | | | | (69.3) | | | | | | | | | | | | | | | | | | | Net liability arising from defined benefit obligation | | | (2,163) | | | | (1,618) | | | | (1,280) | | | | (19.7) | | | | | | | | | | | | | | | | | | |
Amounts recognised in consolidated statement of profit or loss in respect of defined benefit schemes are as follows:
| | | | | | | | | | | | | | | | | | | Year ended March 31, 2015 (Rs. Million) | | | Year ended March 31, 2016 (Rs. Million) | | | Year ended March 31, 2017 (Rs. Million) | | | Year ended March 31, 2017 (US dollars in million) | | Current service cost | | | 281 | | | | 279 | | | | 277 | | | | 4.3 | | Net Interest cost | | | 134 | | | | 158 | | | | 99 | | | | 1.5 | | | | | | | | | | | | | | | | | | | Total charge to consolidated statements of profit or loss | | | 415 | | | | 437 | | | | 376 | | | | 5.8 | | | | | | | | | | | | | | | | | | |
Amounts recognised in the consolidated statement of comprehensive income in respect of defined benefit scheme are as follows:
| | | | | | | | | | | | | | | | | | | Year ended March 31, 2015 (Rs. Million) | | | Year ended March 31, 2016 (Rs. Million) | | | Year ended March 31, 2017 (Rs. Million) | | | Year ended March 31, 2017 (US dollars in million) | | Remeasurements of the net defined benefit obligation:- | | | | | | | | | | | | | | | | | Actuarial losses arising from changes in demographic assumptions | | | 18 | | | | — | | | | 2 | | | | 0.0 | | Actuarial (gains) / losses arising from changes in financial assumptions | | | 319 | | | | (28) | | | | (6) | | | | (0.1) | | Actuarial losses arising from experience adjustments | | | 349 | | | | 207 | | | | 50 | | | | 0.8 | | (Gain) / Loss on Plan assets (excluding amounts included in net interest cost) | | | 9 | | | | (15) | | | | 2 | | | | 0.0 | | | | | | | | | | | | | | | | | | | Remeasurement of the net defined benefit liability | | | 695 | | | | 164 | | | | 48 | | | | 0.7 | | | | | | | | | | | | | | | | | | |
The movement of the present value of defined benefit obligation was as follows:
| | | | | | | | | | | | | | | | | | | Year ended March 31, 2015 (Rs. in Million) | | | Year ended March 31, 2016 (Rs. in Million) | | | Year ended March 31, 2017 (Rs. in Million) | | | Year ended March 31, 2017 (US dollars in million) | | | | | | | At 1 April | | | (4,439) | | | | (4,987) | | | | (4,517) | | | | (69.6) | | Reclassification to post retirement medical benefits | | | — | | | | — | | | | 232 | | | | 3.6 | | -Current service cost | | | (281) | | | | (279) | | | | (277) | | | | (4.3) | | Benefits paid | | | 800 | | | | 1,298 | | | | 451 | | | | 6.9 | | Interest cost of scheme liabilities | | | (381) | | | | (370) | | | | (338) | | | | (5.2) | | Actuarial (losses) arising from changes in demographic assumptions | | | (18) | | | | — | | | | (2) | | | | (0.0) | | Actuarial gains / (losses) arising from changes in financial assumptions | | | (319) | | | | 28 | | | | 6 | | | | 0.1 | | Actuarial (losses) arising from experience adjustment | | | (349) | | | | (207) | | | | (50) | | | | (0.8) | | At March 31, | | | (4,987) | | | | (4,517) | | | | (4,495) | | | | (69.3) | |
The movement in the fair value of plan assets was as follow:
| | | | | | | | | | | | | | | | | | | Year ended March 31, 2015 (Rs. in Million) | | | Year ended March 31, 2016 (Rs. in Million) | | | Year ended March 31, 2017 (Rs. in Million) | | | Year ended March 31, 2017 (US dollars in million) | | At 1 April | | | 2,754 | | | | 2,824 | | | | 2,899 | | | | 44.7 | | Contributions received | | | 286 | | | | 677 | | | | 455 | | | | 7.0 | | Benefits paid | | | (454) | | | | (829) | | | | (376) | | | | (5.8) | | Remeasurement gain / (loss) arising from return on plan assets | | | (9) | | | | 15 | | | | (2) | | | | (0.0) | | Interest income | | | 247 | | | | 212 | | | | 239 | | | | 3.7 | | At March 31, | | | 2,824 | | | | 2,899 | | | | 3,215 | | | | 49.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | LIC | | | ICICI | | | HDFC | | % allocation of plan assets | | As at March 31 | | | As at March 31 | | | As at March 31 | | Assets by category | | 2016 | | | 2017 | | | 2016 | | | 2017 | | | 2016 | | | 2017 | | Government securities | | | 45.0 | | | | 45.0 | | | | 21.7 | | | | 26.2 | | | | 52.1 | | | | 67.5 | | Debentures/bonds | | | 35.0 | | | | 35.0 | | | | 21.9 | | | | 54.0 | | | | 42.9 | | | | 32.5 | | Equity instruments | | | 10.0 | | | | 10.0 | | | | 56.4 | | | | 16.2 | | | | — | | | | — | | Fixed Deposits | | | — | | | | — | | | | — | | | | 0.7 | | | | — | | | | — | | Money market instruments | | | 10.0 | | | | 10.0 | | | | — | | | | 2.9 | | | | 5.0 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | 100.0 | | | | | | | | | | | | | | | | | | | | | | | | | | |
The actual return on plan assets was Rs. 238 million, Rs. 227 million and Rs. 237 million, ($ 3.7 million) for the years ended March 31, 2015, March 31, 2016 and March 31, 2017 respectively.
The group expects to contribute Rs. 314.1 million ($ 4.8 million) to the funded defined benefit plans in fiscal 2018.
The Weighted average duration of the defined benefit obligation is 12.5 years and 12.7 years as at March 31, 2016 and March 31, 2017 respectively.
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 (Rs. in million) | | | Increase / (Decrease) in defined benefit obligation (US dollars in million) | | Discount rate | | | | | | | | | | | | Increase by 0.50% | | | (155) | | | | (2.4) | | Decrease by 0.50% | | | 161 | | | | 2.5 | | Expected rate of increase in compensation level of covered employees | | | | | | | | | Increase by 0.50% | | | 141 | | | | 2.2 | | Decrease by 0.50% | | | (142) | | | | (2.2) | |
The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined obligation liability recognized in the statement of consolidated financial position.
Risk analysis
Group is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows:
Investment risk
Most of the Indian defined benefit plans are funded with Life Insurance Corporation of India (LIC), ICICI Prudential Life (ICICI) and HDFC Standard Life. Group does not have any liberty to manage the fund provided to LIC, ICICI and HDFC Standard Life.
The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to Government of India bonds for 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 plan liability.
Longevity risk/ Life expectancy
The present value of the defined benefit plan liability 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 liability.
Salary growth risk
The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan liability.
23.25. Financial instruments
This section gives an overview of the significance of financial instruments for the Group and provides additional information on the consolidated statements of financial position. Details of significant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 and Note 3.
A. Financial assets and liabilities: The following tables present the carrying value and fair value of each category of financial assets and liabilities as at March 31, 20162020 and 2017.March 31, 2021. | As at March 31, 2016: | | | | | | | | | | | | | | | | | | | | As at March 31, 2020: | | | | | | | | | | | | | | | | | | | | | (Rs. in million) | | | (₹ in million) | | Financial assets | | Held for trading | | | Loans and receivables | | | Available for sale financial assets | | | Derivatives used for hedging | | | Total carrying value | | | Total fair value | | | Fair value through profit or loss | | Fair value through other comprehensive income | | | Derivatives designated as hedging instruments | | | Amortised cost | | | Total carrying value | | | Total fair value | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | — at fair value | | | — | | | | — | | | | 432 | | | | — | | | | 432 | | | | 432 | | | —at fair value | | | | 500 | | | 411 | | | | — | | | | — | | | | 911 | | | | 911 | | Other non—current assets | | | — | | | | 5,935 | | | | — | | | | — | | | | 5,935 | | | | 5,935 | | | | — | | | | — | | | | — | | | | 49,384 | | | | 49,384 | | | | 49,384 | | Trade and other receivable | | | — | | | | 57,308 | | | | — | | | | — | | | | 57,308 | | | | 57,308 | | | | 506 | * | | | — | | | | — | | | | 51,392 | | | | 51,898 | | | | 51,898 | | Short term investments | | | | | | | | | | | | | | | | | | | | | | | | | —Bank deposits | | | — | | | | 32,815 | | | | — | | | | — | | | | 32,815 | | | | 32,815 | | | | — | | | | — | | | | — | | | | 80,633 | | | | 80,633 | | | | 80,633 | | —Other investments | | | 533,377 | | | | — | | | | — | | | | — | | | | 533,377 | | | | 533,377 | | | | 246,577 | | | | — | | | | — | | | | — | | | | 246,577 | | | | 246,577 | | Derivative financial assets | | | — | | | | — | | | | — | | | | 1,281 | | | | 1,281 | | | | 1,281 | | | Financial instruments (derivatives) | | | | 2,760 | | | | — | | | | 4,187 | | | | — | | | | 6,947 | | | | 6,947 | | Cash and cash equivalents | | | — | | | | 20,870 | | | | — | | | | — | | | | 20,870 | | | | 20,870 | | | | — | | | | — | | | | | | 50,598 | | | | 50,598 | | | | 50,598 | | Restricted cash and cash equivalents | | | — | | | | 3,367 | | | | — | | | | — | | | | 3,367 | | | | 3,367 | | | | — | | | | — | | | | — | | | | 960 | | | | 960 | | | | 960 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 533,377 | | | | 120,295 | | | | 432 | | | | 1,281 | | | | 655,385 | | | | 655,385 | | | | 250,343 | | | | 411 | | | | 4,187 | | | | 232,967 | | | | 487,908 | | | | 487,908 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | As at March 31, 2016 | | | | | | | | | | | | | | | (Rs. in million) | | Financial liabilities | | Derivatives used for hedging | | | Amortised cost | | | Total carrying value | | | Total fair value | | Borrowings | | | | | | | | | | | | | | | | | —Short term | | | — | | | | 182,328 | | | | 182,328 | | | | 182,328 | | —Long term | | | — | | | | 493,784 | | | | 493,784 | | | | 495,755 | | Acceptances | | | — | | | | 99,500 | | | | 99,500 | | | | 99,500 | | Trade and other payables | | | — | | | | 184,762 | | | | 184,762 | | | | 184,762 | | Othernon-current liabilities | | | — | | | | 4,630 | | | | 4,630 | | | | 4,220 | | Derivative financial liabilities | | | 4,552 | | | | — | | | | 4,552 | | | | 4,552 | | | | | | | | | | | | | | | | | | | Total | | | 4,552 | | | | 965,004 | | | | 969,556 | | | | 971,117 | | | | | | | | | | | | | | | | | | |
* | Under IFRS 9, provisionally priced receivables are fair valued at each reporting date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2017: | | | | | | | | | | | | | | | | | | | | | | | | | | | (Rs. in million) | | | (US dollars in million) | | Financial assets | | Held for trading | | | Loans and receivables | | | Available for sale financial assets | | | Derivatives used for hedging | | | Total carrying value | | | Total fair value | | | Total carrying value | | | Total fair value | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — at fair value | | | — | | | | — | | | | 695 | | | | — | | | | 695 | | | | 695 | | | | 10.7 | | | | 10.7 | | Other non—current assets | | | — | | | | 19,300 | | | | — | | | | — | | | | 19,300 | | | | 19,300 | | | | 297.6 | | | | 297.6 | | Trade and other receivable | | | — | | | | 33,222 | | | | — | | | | — | | | | 33,222 | | | | 33,222 | | | | 512.3 | | | | 512.3 | | Short term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | —Bank deposits | | | — | | | | 55,790 | | | | — | | | | — | | | | 55,790 | | | | 55,790 | | | | 860.3 | | | | 860.3 | | —Other investments | | | 468,895 | | | | — | | | | — | | | | — | | | | 468,895 | | | | 468,895 | | | | 7,230.4 | | | | 7,230.4 | | Derivative financial assets | | | — | | | | — | | | | — | | | | 129 | | | | 129 | | | | 129 | | | | 2.0 | | | | 2.0 | | Cash and cash equivalents | | | — | | | | 97,202 | | | | — | | | | — | | | | 97,202 | | | | 97,202 | | | | 1,498.9 | | | | 1,498.9 | | Restricted cash and cash equivalents | | | — | | | | 11,747 | | | | — | | | | — | | | | 11,747 | | | | 11,747 | | | | 181.1 | | | | 181.1 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 468,895 | | | | 217,261 | | | | 695 | | | | 129 | | | | 686,980 | | | | 686,980 | | | | 10,593.3 | | | | 10,593.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020: | | | | | | | | | | | | | | | | | | | | | (₹ in million) | | Financial liabilities | | Fair value through profit or loss | | | Derivatives designated as hedging instrument | | | Amortised cost | | | Others* | | | Total carrying value | | | Total fair value | | Borrowings | | | — | | | | — | | | | 579,475 | | | | — | | | | 579,475 | | | | 580,521 | | Acceptances | | | — | | | | — | | | | 101,851 | | | | — | | | | 101,851 | | | | 101,851 | | Trade and other payables*** | | | 5,170 | ** | | | — | | | | 205,445 | | | | 2,472 | | | | 213,087 | | | | 213,087 | | Financial instruments (derivatives) | | | 464 | | | | 947 | | | | | | | | — | | | | 1,411 | | | | 1,411 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 5,634 | | | | 947 | | | | 886,771 | | | | 2,472 | | | | 895,824 | | | | 896,870 | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Includes put option liability accounted for at fair value (Refer Note 24) |
** | Under IFRS 9, provisionally priced payables are fair valued at each reporting date. |
*** | Includes lease liability of ₹ 6,599 million. |
| | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2017: | | | | | | | | | | | | | | | | | | | | | (Rs. in million) | | | (US dollars in million) | | Financial liabilities | | Derivatives used for hedging | | | Amortised cost | | | Total carrying value | | | Total fair value | | | Total carrying value | | | Total fair value | | Borrowings | | | | | | | | | | | | | | | | | | | | | | | | | —Short term | | | — | | | | 413,126 | | | | 413,126 | | | | 413,126 | | | | 6,370.5 | | | | 6,370.5 | | —Long term | | | — | | | | 332,654 | | | | 332,654 | | | | 334,567 | | | | 5,129.6 | | | | 5,159.1 | | Acceptances | | | — | | | | 113,304 | | | | 113,304 | | | | 113,304 | | | | 1,747.2 | | | | 1,747.2 | | Trade and other payables | | | — | | | | 214,871 | | | | 214,871 | | | | 214,871 | | | | 3,313.4 | | | | 3,313.4 | | Othernon-current liabilities | | | — | | | | 3,122 | | | | 3,122 | | | | 3,122 | | | | 48.1 | | | | 48.1 | | Derivative financial liabilities | | | 8,773 | | | | — | | | | 8,773 | | | | 8,773 | | | | 135.3 | | | | 135.3 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 8,773 | | | | 1,077,077 | | | | 1,085,850 | | | | 1,087,763 | | | | 16,744.1 | | | | 16,773.6 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | (₹ in million) | | | (US dollars in million) | | Financial assets | | Fair value through profit or loss | | | Fair value through other comprehensive income | | | Derivatives designated as hedging instruments | | | Amortised cost | | | Total carrying value | | | Total fair value | | | Total carrying value | | | Total fair value | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | —at fair value | | | 500 | | | | 1,032 | | | | — | | | | — | | | | 1,532 | | | | 1,532 | | | | 21 | | | | 21 | | Other non—current assets | | | — | | | | — | | | | — | | | | 107,515 | | | | 107,515 | | | | 112,534 | | | | 1,470 | | | | 1,539 | | Trade and other receivable | | | 1,633 | * | | | — | | | | — | | | | 95,930 | | | | 97,563 | | | | 97,711 | | | | 1,334 | | | | 1,336 | | Short term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | —Bank deposits | | | — | | | | — | | | | — | | | | 116,730 | | | | 116,730 | | | | 116,730 | | | | 1,596 | | | | 1,596 | | —Other investments | | | 165,044 | | | | — | | | | — | | | | — | | | | 165,044 | | | | 165,044 | | | | 2,257 | | | | 2,257 | | Financial instruments (derivatives) | | | 129 | | | | — | | | | 572 | | | | — | | | | 701 | | | | 701 | | | | 10 | | | | 10 | | Cash and cash equivalents | | | — | | | | — | | | | — | | | | 48,537 | | | | 48,537 | | | | 48,537 | | | | 664 | | | | 664 | | Restricted cash and cash equivalents | | | — | | | | — | | | | — | | | | 1,025 | | | | 1,025 | | | | 1,025 | | | | 14 | | | | 14 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 167,306 | | | | 1,032 | | | | 572 | | | | 369,737 | | | | 538,647 | | | | 543,814 | | | | 7,366 | | | | 7,437 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Under IFRS 9, provisionally priced receivables are fair valued at each reporting date. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021: | | | | | | | | | | | | | | | | | | | | | | | | | | | (₹ in million) | | | (US dollars in million) | | Financial liabilities | | Fair value through profit or loss | | | Derivatives designated as hedging instrument | | | Amortised cost | | | Others* | | | Total carrying value | | | Total fair value | | | Total carrying value | | | Total fair value | | Borrowings | | | — | | | | — | | | | 569,222 | | | | — | | | | 569,222 | | | | 565,941 | | | | 7,783 | | | | 7,738 | | Acceptances | | | — | | | | — | | | | 80,891 | | | | — | | | | 80,891 | | | | 80,891 | | | | 1,106 | | | | 1,106 | | Trade and other payables | | | 7,066 | ** | | | — | | | | 218,230 | | | | 2,633 | | | | 227,929 | | | | 227,929 | | | | 3,117 | | | | 3,117 | | Financial instruments (derivatives) | | | 933 | | | | 2,618 | | | | — | | | | — | | | | 3,551 | | | | 3,551 | | | | 48 | | | | 48 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 7,999 | | | | 2,618 | | | | 868,343 | | | | 2,633 | | | | 881,593 | | | | 878,312 | | | | 12,054 | | | | 12,009 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Includes put option liability accounted for at fair value (Refer Note 24) |
** | Under IFRS 9, provisionally priced payables are fair valued at each reporting date. |
*** | Includes lease liability of ₹ 6,411 million ($ 88 million). |
Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs) The below tablestable summarizes the categories of financial assets and liabilities as at March 31, 20162020 and 2017March 31, 2021 measured at fair value: | | | | | | | | | | | | | As at March 31, 2016 | | (Level 1) | | | (Level 2) | | | (Level 3) | | | | (Rs. in million) | | Financial assets | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | — Held for trading | | | 234,972 | | | | 298,405 | | | | — | | —Derivative financial assets | | | | | | | | | | | | | —Commodity contracts | | | — | | | | 216 | | | | — | | —Forward foreign currency contracts | | | — | | | | 722 | | | | — | | — Forward foreign currency contracts (Net investment in foreign operation) | | | — | | | | 343 | | | | — | | Available-for-sale investments | | | | | | | | | | | | | — Financial asset investments held at fair value | | | 432 | | | | — | | | | — | | | | | | | | | | | | | | | | | | 235,404 | | | | 299,686 | | | | — | | | | | | | | | | | | | | | Financial liabilities | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | —Derivative financial liabilities | | | | | | | | | | | | | —Commodity contracts | | | — | | | | 126 | | | | — | | —Forward foreign currency contracts | | | — | | | | 4,426 | | | | — | | | | | | | | | | | | | | | | | | — | | | | 4,552 | | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | | As at March 31, 2020 | | (Level 1) | | | (Level 2) | | | (Level 3) | | | | (₹ in million) | | Financial assets | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | — Investments | | | 75,975 | | | | 170,602 | | | | 500 | | — Derivatives financial assets | | | — | | | | 2,760 | | | | — | | — Trade and other receivables | | | — | | | | 506 | | | | — | | At fair value through other comprehensive income | | | | | | | | | | | | | — Financial asset investments held at fair value | | | 304 | | | | — | | | | 107 | | Derivatives designated as hedging instruments | | | | | | | | | | | | | — Derivatives financial assets | | | — | | | | 4,187 | | | | | | | | | | | | | | | | | | | | | | 76,279 | | | | 178,055 | | | | 607 | | | | | | | | | | | | | | | Financial liabilities | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | —Derivatives financial liabilities | | | — | | | | 464 | | | | — | | Trade payable | | | — | | | | 5,170 | | | | — | | Derivatives designated as hedging instruments | | | | | | | | | | | | | —Derivatives financial liabilities | | | — | | | | 947 | | | | — | | Trade and other payables- Put option liability with non controlling interest (Refer Note 24) | | | — | | | | — | | | | 2,472 | | | | | | | | | | | | | | | | | | — | | | | 6,581 | | | | 2,472 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | (Level 1) | | | (Level 2) | | | (Level 3) | | | (Level 1) | | | (Level 2) | | | (Level 3) | | | | (₹ in million) | | | (US dollars in million) | | Financial assets | | | | | | | | | | | | | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | | | | | | | | | | | | | — Investments | | | 63,183 | | | | 101,861 | | | | 500 | | | | 864 | | | | 1,393 | | | | 7 | | — Derivatives financial assets | | | — | | | | 129 | | | | — | | | | — | | | | 2 | | | | — | | — Trade and other receivables | | | — | | | | 1,633 | | | | — | | | | — | | | | 22 | | | | — | | At fair value through other comprehensive income | | | | | | | | | | | | | | | | | | | | | | | | | — Financial asset investments held at fair value | | | 925 | | | | — | | | | 107 | | | | 13 | | | | — | | | | 1 | | Derivatives designated as hedging instruments | | | | | | | | | | | | | | | | | | | | | | | | | — Derivatives financial assets | | | — | | | | 572 | | | | — | | | | — | | | | 8 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 64,108 | | | | 104,195 | | | | 607 | | | | 877 | | | | 1,425 | | | | 8 | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | | | | | | | | | | | | | —Derivatives financial liabilities | | | — | | | | 933 | | | | — | | | | — | | | | 13 | | | | — | | Trade payable | | | — | | | | 7,066 | | | | — | | | | — | | | | 97 | | | | — | | Derivatives designated as hedging instruments | | | | | | | | | | | | | | | | | | | | | | | | | —Derivatives financial liabilities | | | — | | | | 2,618 | | | | — | | | | — | | | | 36 | | | | — | | Trade and other payables- Put option liability with non controlling interest (Refer Note 24) | | | — | | | | — | | | | 2,633 | | | | — | | | | — | | | | 36 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 10,617 | | | | 2,633 | | | | — | | | | 146 | | | | 36 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2017 | | (Level 1) | | | (Level 2) | | | (Level 3) | | | (Level 1) | | | (Level 2) | | | (Level 3) | | | | (Rs. in million) | | | (US dollars in million) | | Financial assets | | | | | | | | | | | | | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | | | | | | | | | | | | | — Held for trading | | | 194,086 | | | | 274,809 | | | | — | | | | 2,992.8 | | | | 4,237.6 | | | | — | | —Derivative financial assets | | | | | | | | | | | | | | | | | | | | | | | | | —Commodity contracts | | | — | | | | 90 | | | | — | | | | — | | | | 1.4 | | | | — | | —Forward foreign currency contracts | | | — | | | | 39 | | | | — | | | | — | | | | 0.6 | | | | — | | Available-for-sale investments | | | | | | | | | | | | | | | | | | | | | | | | | —Financial asset investments held at fair value | | | 600 | | | | — | | | | 95 | | | | 9.2 | | | | — | | | | 1.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 194,686 | | | | 274,938 | | | | 95 | | | | 3,002.0 | | | | 4,239.6 | | | | 1.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | At fair value through profit or loss | | | | | | | | | | | | | | | | | | | | | | | | | —Derivative financial liabilities | | | | | | | | | | | | | | | | | | | | | | | | | —Commodity contracts | | | — | | | | 1,113 | | | | — | | | | — | | | | 17.2 | | | | — | | —Forward foreign currency contracts | | | — | | | | 7,660 | | | | — | | | | — | | | | 118.1 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | — | | | | 8,773 | | | | — | | | | — | | | | 135.3 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | |
The below tablestable summarizes the fair value of financial liabilitiestrade receivables, other than those where carrying value is determined to be the fair valuenon-current assets and borrowings which are carried at amortised cost as at March 31, 20162020 and 2017:March 31, 2021: | | | | | As at March 31, 20162020 | | (Level 2) | | | | (Rs.₹ in million) | | Financial Liabilities | | | | | - Long term borrowingsBorrowings | | | 495,755 | | - Othernon-current liabilities
| | | 4,220580,521 | | | | | | | | | | 499,975580,521 | | | | | | |
| | | | | | | | | As at March 31, 2017 | | (Level 2) | | | (Level 2) | | | | (Rs. in million) | | | US dollars in million | | Financial Liabilities | | | | | | | | | - Long term borrowings | | | 334,567 | | | | 5,159.1 | | | | | | | | | | | | | | 334,567 | | | | 5,159.1 | | | | | | | | | | |
| | | | | | | | | As at March 31, 2021 | | (Level 2) | | | (Level 2) | | | | (₹ in million) | | | (US dollars in million) | | Financial Assets | | | | | | | | | -Other non-current assets* | | | 112,534 | | | | 1,539 | | -Trade receivables* | | | 97,711 | | | | 1,336 | | | | | | | | | | | | | | 210,245 | | | | 2,875 | | | | | | | | | | | Financial Liabilities | | | | | | | | | -Borrowings | | | 565,941 | | | | 7,738 | | | | | | | | | | | | | | 565,941 | | | | 7,738 | | | | | | | | | | |
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 ofby referring to market inputs including quotes, trades, poll, and primary issuances for securities and /or underlying securities issued by the same or similar issuer and for similar maturities or based on the applicable spreadand movement for thein benchmark security, derived based on the aforementioned factor(s).etc. Trade and other receivables (excluding non financial assets),Financial assets forming part of cash and cash equivalents (including restricted cash and cash equivalents), bank deposits, financial liabilities forming part of trade and other payables, (excluding non financial liabilities)acceptances and short-term borrowings: Approximateborrowings being carried at amortised cost. The fair value approximate their carrying amounts largely due to the short-term maturities of these instruments. Othernon-currentNon-current financial assets and financial liabilities: Fair value is calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered to approximate to fair value.
Long-term fixed-rate and variable-rate borrowings: 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.financed project.
Quotedavailable-for-sale financial assetsasset investments: Fair value is derived from quoted market prices in active markets. Unquoted financial asset investments: Fair value of unquoted securities are determined by reference to discounted cash flows model. Derivative financial assets/liabilities: The Group enters into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings.counterparties. Interest rate swaps, foreign exchange forward contracts and commodity forward contracts are valued using valuation techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques by the Group include forward pricing and swap models, using present value calculations. The models incorporate various inputs including the credit quality of counterparties, 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.)(UK). Other non-current financial liabilities: Fair value is calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered to approximate to fair value. 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 March 31, 20172020 and March 31, 2021 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 eachyear-end. There were no significant transfers between Levellevel 1, level 2 and Level 2level 3 during the current year. Risk management framework The Group’s businesses are subject to several risks and uncertainties including financial risks. The Group’s documented risk management polices act as an effective tool in mitigating the various financial risks to which the businesses are exposed to in the course of their daily operations. The risk management policies cover areas such as liquidity risk, commodity price risk, foreign exchange risk, interest rate risk, counterparty credit risk and capital management. Risks are identified at both the corporate and individual subsidiary level with active involvement of senior management. Each operating subsidiary in the Group has in place risk management processes which are in line with the Group’s policy. Each significant risk has a designated ‘owner’ within the Group at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated. The risk management process is coordinated by the Management Assurance function and is regularly reviewed by the Group’s Audit Committee. The Audit Committee is aided by the CFO Committee andother 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 CFO Committee and 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 maximization. The treasury policies are approved by the Committee of the Board. Daily treasury operations of the subsidiary companies are managed by their respective finance teams within the framework of the overall Group treasury policies. Long-term fund raising including strategic treasury initiatives are handledmanaged jointly by athe 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 investments and debt position, exposure to currency, commodity and interest rate derivatives.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 investment portfolio at the Group is independently reviewed by CRISIL Limited and Group portfolio has been rated as “Very Good” meaning highest safety. The investments are made keeping in mind safety, liquidity and yield maximization.
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 subject toin line with the Group’s policies. Commodity price risk The Group is exposed to the movement of base metal commodity prices on the London Metal Exchange. Any decline in the prices of the base metals that the Group produces and sells will have an immediate and direct impact on the profitability of the businesses. As a general policy, the Group aims to sell the products at prevailing market prices. The commodity price risk in import of input commodity such as Copper Concentrate & Alumina, for our copper and aluminium business respectively, is hedged onback-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 Aluminum 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 enters into hedging arrangements for its aluminium sales to realise average month of sale LME prices. Copper The Group’s custom smelting copper operations at Tuticorin is benefitted by a natural hedge except to the extent of a possible mismatch in quotationquotational periods between the purchase of concentrate and the sale of finished copper. The Group’s policy on custom smelting is to generate margins from Treatment charges/Refining charges or “TcRc”“Tc/Rc”, improving operational efficiencies, minimising conversion cost, generating a premium over LME on sale of finished copper, sale ofby-products and from achieving import parity on domestic sales. Hence, mismatches in quotationquotational 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 copper concentrate and sales of finished products, both of which are linked to the LME price. TcRc isTc/Rcs are a major source of income for the Indian copper smelting operations. FluctuationFluctuations in TcRc isTc/Rcs are influenced by factors including demand and supply conditions prevailing in the market for mine output. The Group’s copper business has a strategy of securing a majority of its concentrate feed requirement under long-term contracts with mines.
Zinc, Lead and LeadSilver The sales prices are linked to the LME prices. The Group also enters into hedging arrangements for its Zinc, Lead and LeadSilver sales to realise average month of sale LME prices. Zinc International Raw material for zinc and lead is mined in Namibia, South Africa and Ireland 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 throughe-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. 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 The value of net financial liabilities linked to commodities (excluding derivatives) accounted for on provisional prices was Rs. 29,630₹ 4,664 million and Rs. 25,654₹ 5,440 million (US$ 395.6($ 74 million) as at March 31, 20162020 and March 31, 20172021 respectively. 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 April 1, 2017.01, 2021. Set out below is the impact of 10% increase in LME prices onpre-tax profit/(loss) for the year andpre-tax equity as a result of changes in the value of the Group’s commodity financial instruments: | | | | | | | | | | | | | As at March 31, 2016 | | (Rs. in million) | | | | Total exposure | | | Effect on pre-tax profit/(loss) of a 10% increase in the LME | | | Effect on pre-tax equity of a 10% increase in the LME | | Copper | | | 32,789 | | | | (3,279 | ) | | | — | | | | As at March 31, 2017 | | (Rs. in million) | | | | Total exposure | | | Effect on pre-tax profit/(loss) of a 10% increase in the LME | | | Effect on pre-tax equity of a 10% increase in the LME | | Copper | | | 29,543 | | | | (2,954 | ) | | | — | | US dollars in million | | | 455.6 | | | | (45.6 | ) | | | | |
| | | | | | | | | | | | | | | For the year ended March 31, 2020 | | (₹ in million) | | | | Total exposure | | | Effect on pre-tax profit/(loss) of a 10% increase in the LME | | | Effect on pre-tax equity of a 10% increase in the LME | | Copper | | | (10,279 | ) | | | (1,028 | ) | | | — | | | | For the year ended March 31, 2021 | | (₹ in million) | | | | Total exposure | | | Effect on pre-tax profit/(loss) of a 10% increase in the LME | | | Effect on pre-tax equity of a 10% increase in the LME | | Copper | | | (10,016 | ) | | | (1,002 | ) | | | — | | | | For the year ended March 31, 2021 | | (US dollars in million) | | | | Total exposure | | | Effect on pre-tax profit/(loss) of a 10% increase in the LME | | | Effect on pre-tax equity of a 10% increase in the LME | | Copper | | | (137 | ) | | | (14 | ) | | | — | |
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 is Rs. 3,279in India of ₹ 790 million loss and Rs.2,954₹ 874 million loss ($ 45.6 million)12 million loss) for the year ended March 31, 20162020 and March 31, 20172021 respectively, which is pass through in nature and as such will not have any impact on the profitability. Financial risk The Group’s Board approved financial risk policies compriseinclude 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 optimize interest and commodity pricing through proven financial instruments. (a) Liquidity 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 short-termstructured investment net of deferred consideration payable for such investments provide liquidity both in the short-term as well as in the long-term. Anticipated future cash flows, together with undrawn fund based committed facilities of ₹ 114,117 million ($ 1,560 million), and cash and short-term investments of ₹ 326,138 million ($ 4,459 million) as at March 31, 2021, are expected to be sufficient to meet the liquidity requirement of the Group in the near future. 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. In May 2020, India Ratings downgraded its ratings on the Company’s long-term facilities to ‘IND AA-’ from ‘IND AA’ with a negative outlook on account of higher expected balance sheet leverage and elevated refinancing risk in risk averse debt markets in COVID environment. CRISIL upgradedalso downgraded its rating on the ratings for the Group’scompany’s long-term bank facilities and itsNon-ConvertibleNon-current Debentures (NCD) programme to CRISIL AA / Stable Outlook‘CRISIL AA-’ from CRISILAA- / Negative at‘CRISIL AA’ in October 2020 while revising the beginning of FY2017. The revision happened in three steps in September 2016 – Change in Outlook from Negative to Stable withAA- rating; February 2017 – change in Outlook from Stable to Positive withAA- rating and April 2017 – Upgrade of Ratings from CRISILAA- / Positive outlook to CRISIL AA / Stable Outlook. ‘Stable’ from ‘Negative’ on expectation of higher financial leverage and cash outflow from VEDL towards debt maturities at VRL post failure of take private transaction. In February 2021, India Ratings revised its outlook to ‘Stable’ from ‘Negative’ while affirming the long-term issuer ratings at ‘IND AA-’. The outlook revision reflects the Group’s improved liquidity position, supported by the moderated refinancing risks at VRL. Vedanta Limited has the highest short termshort-term rating on its working capital and Commercial Paper Programme at A1+ from CRISIL A1+.and India Ratings has revised the outlook on Vedanta Limited’s ratings from IND AA/ Negative to IND AA/Stable on account of improved financial metrics and completion of the merger with Cairn.Ratings. The Group remains committed to maintaining a healthy liquidity, a low gearing ratio, deleveraging and strengthening its statement of financial position. Group’s balance sheet. The maturity profile of the Group’s financial liabilities based on the remaining period from the date of balance sheet date to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Group.Group: | | | | | | | | | | | | | | | | | | | | | As at March 31, 2016 Payment due by year | | <1 year | | | 1-3 years | | | 3-5 years | | | >5 years | | | Total | | | | (Rs. in million) | | Acceptances* | | | 99,766 | | | | — | | | | — | | | | — | | | | 99,766 | | Trade and other payables** | | | 184,762 | | | | 1,880 | | | | 326 | | | | 2,424 | | | | 189,392 | | Borrowings*** | | | 234,871 | | | | 384,195 | | | | 128,153 | | | | 89,463 | | | | 836,682 | | Derivative financial liabilities | | | 4,474 | | | | 78 | | | | — | | | | — | | | | 4,552 | | | | | | | | | | | | | | | | | | | | | | | | | | 523,873 | | | | 386,153 | | | | 128,479 | | | | 91,887 | | | | 1,130,392 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2017 Payment due by year | | <1 year | | | 1-3 years | | | 3-5 years | | | >5 years | | | Total | | | | (Rs. in million) | | Acceptances* | | | 113,502 | | | | — | | | | — | | | | — | | | | 113,502 | | Trade and other payables** | | | 214,871 | | | | 1,153 | | | | — | | | | 1,969 | | | | 217,993 | | Borrowings*** | | | 453,974 | | | | 179,381 | | | | 160,210 | | | | 68,261 | | | | 861,826 | | Derivative financial liabilities | | | 8,216 | | | | 557 | | | | — | | | | — | | | | 8,773 | | | | | | | | | | | | | | | | | | | | | | | | | 790,563 | | | 181,091 | | | 160,210 | | | 70,230 | | | 1,202,094 | | | | | | | | | | | | | | | | | | | | | | | US dollars in million | | | 12,190.6 | | | | 2,792.4 | | | | 2,470.5 | | | | 1,083.0 | | | | 18,536.5 | |
| | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 Payment due by year | | <1 year | | | 1 - 3 years | | | 3 - 5 years | | | >5 years | | | Total | | | | (₹ in million) | | Acceptances* | | | 102,759 | | | | — | | | | — | | | | — | | | | 102,759 | | Lease Liability* | | | 4,566 | | | | 950 | | | | 404 | | | | 679 | | | | 6,599 | | Trade and other payables** | | | 180,679 | | | | 11,339 | | | | 1 | | | | — | | | | 192,019 | | Bank and other borrowings*** | | | 259,161 | | | | 244,823 | | | | 95,469 | | | | 115,365 | | | | 714,818 | | Derivative financial liabilities | | | 960 | | | | 451 | | | | — | | | | — | | | | 1,411 | | | | | | | | | | | | | | | | | | | | | | | | | | 548,125 | | | | 257,563 | | | | 95,874 | | | | 116,044 | | | | 1,017,606 | | | | | | | | | | | | | | | | | | | | | | |
* | Includes committed interest payments |
** | Includes both Non-current and current financial liabilities grouped under “other non current liabilities”.and committed interest payment, as applicable. Excludes interest accrued on borrowings. |
*** | Includes long termNon-current borrowings, short termcurrent borrowings, committed interest payments on borrowings and interest accrued on borrowings. |
| | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 Payment due by year | | <1 year | | | 1 - 3 years | | | 3 - 5 years | | | >5 years | | | Total | | | | (₹ in million) | | Acceptances* | | | 81,381 | | | | — | | | | — | | | | — | | | | 81,381 | | Lease Liability* | | | 4,808 | | | | 601 | | | | 220 | | | | 782 | | | | 6,411 | | Trade and other payables** | | | 198,192 | | | | 11,153 | | | | 0 | | | | — | | | | 209,345 | | Bank and other borrowings*** | | | 234,645 | | | | 220,879 | | | | 116,726 | | | | 155,035 | | | | 727,285 | | Derivative financial liabilities | | | 2,786 | | | | 764 | | | | — | | | | — | | | | 3,550 | | | | | | | | | | | | | | | | | | | | | | | | | 521,812 | | | 233,397 | | | 116,946 | | | 155,817 | | | 1,027,972 | | | | | | | | | | | | | | | | | | | | | | | US dollars in million | | | 7,134 | | | | 3,191 | | | | 1,599 | | | | 2,130 | | | | 14,055 | |
* | Includes committed interest payments |
** | Includes both Non-current and current financial liabilities and committed interest payments.payment, as applicable. Excludes interest accrued on borrowings. |
*** | Includes Non-current borrowings, current borrowings, committed interest payments on borrowings and interest accrued on borrowings. |
The Group had access to following funding facilities: | | | | | | | | | | | | | As at March 31, 2016 | | | | | | | | | | Funding facility | | Total facility | | | Drawn | | | Un drawn | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Less than 1 year | | | 608,741 | | | | 495,586 | | | | 113,155 | | 1-5 years and above | | | 143,879 | | | | 141,285 | | | | 2,594 | | | | | | | | | | | | | | | Total | | | 752,620 | | | | 636,871 | | | | 115,749 | | | | | | | | | | | | | | | | | | | As at March 31, 2017 | | | | | | | | | | Funding facility | | Total facility | | | Drawn | | | Un drawn | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Less than 1 year | | | 323,922 | | | | 222,892 | | | | 101,030 | | 1-5 years and above | | | 166,663 | | | | 162,363 | | | | 4,300 | | | | | | | | | | | | | | | Total | | | 490,585 | | | | 385,255 | | | | 105,330 | | | | | | | | | | | | | | | US dollars in million | | | 7,564.9 | | | | 5,940.7 | | | | 1,624.2 | |
| | | | | | | | | | | | | As at March 31, 2020 | | | | | | | | | | Funding facility | | Total facility | | | Drawn | | | Un drawn | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Fund/ Non-fund based | | | 637,259 | | | | 526,107 | | | | 111,152 | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | | | | | | | | Funding facility | | Total facility | | | Drawn | | | Un drawn | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Fund/ Non-fund based | | | 727,522 | | | | 562,322 | | | | 165,200 | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | | | | | | | | Funding facility | | Total facility | | | Drawn | | | Un draw | | | | (US dollars in million) | | | (US dollars in million) | | | (US dollars in million) | | Fund/ Non-fund based | | | 9,947 | | | | 7,688 | | | | 2,259 | | | | | | | | | | | | | | |
Collateral The Group has pledged a partfinancial instruments with carrying amount of its trade receivables, short-term investments₹ 215,949 million and cash₹ 219,900 million ($ 3,007 million) as at March 31, 2020 and cash equivalentsMarch 31, 2021 respectively and inventories with carrying amount of ₹ 85,138 million and ₹ 76,541 million ($ 1,046 million) as at March 31, 2020 and March 31, 2021 respectively as per the requirements specified in order to fulfill the collateral requirements for thevarious financial facilities in place. The counterparties have an obligation to returnrelease the securities to the Group. ThereGroup when financial facilities are no other significant terms and conditions associated with the use of collateral. The details related to the fair value of collateral have been stated in Note 13, 14 and 15.surrendered.
(b) Foreign exchangecurrency risk Fluctuations in foreign currency exchange rates may have an impact on the consolidated statements of profit or loss, the consolidated statements of change in equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the respective consolidated entities. Considering the countries and economic environment in which the Group operates, its operations are subject to risks arising from the fluctuations primarily in the US dollar, Australian dollar, Namibian dollar, AED, ZAR, GBP, INR, JPY and Euro against the functional currencies of Vedanta Limited and its subsidiaries.Group. 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,Group’s presentation currency swaps and other derivatives to hedge the effects of movements in exchange rates on foreign currency denominated assets and liabilities.is Indian Rupee. 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. The policymajority of the Groupassets are located in India and the Indian Rupee is to determine on a regular basis what portion of the foreign exchange risk on financing transactionsfunctional currency for the Indian operating subsidiaries except for Oil and loansGas business. Natural hedges available in the business are to be hedged through forward exchange contractsidentified at each entity level and other instruments.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. Longer term exposures, except partoverruns, where cost of net investment in foreign operations exposures, are normally unhedged. However all new long-term borrowing exposures are being hedged.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 statements of profit or loss. The exposure summarised below is mitigated by some of the derivative contracts entered into by the Group as disclosed under the section on “Derivative financial instruments” The carrying amount of the Group’s financial assets and liabilities in different currencies are as follows: | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2016 | | | As at March 31, 2017 | | | As at March 31, 2017 | | | | Financial assets | | | Financial liabilities | | | Financial assets | | | Financial liabilities | | | Financial assets | | | Financial liabilities | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | (US dollars in million) | | INR | | | 27,508 | | | | 27,024 | | | | 19,205 | | | | 29,622 | | | | 296.1 | | | | 456.8 | | USD | | | 88,280 | | | | 442,398 | | | | 14,540 | | | | 273,877 | | | | 224.2 | | | | 4,223.2 | | Euro | | | 3,096 | | | | 3,040 | | | | 1,810 | | | | 2,679 | | | | 27.9 | | | | 41.3 | | Others | | | 3,608 | | | | 3,081 | | | | 3,745 | | | | 3,252 | | | | 57.8 | | | | 50.2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | As at March 31, 2021 | | | As at March 31, 2021 | | | | Financial assets | | | Financial liabilities | | | Financial assets | | | Financial liabilities | | | Financial assets | | | Financial liabilities | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | (US dollars in million) | | INR | | | 353,005 | | | | 605,410 | | | | 402,393 | | | | 636,589 | | | | 5,508 | | | | 8,704 | | USD | | | 127,624 | | | | 267,061 | | | | 128,023 | | | | 219,817 | | | | 1,750 | | | | 3,004 | | Others | | | 7,279 | | | | 23,353 | | | | 8,231 | | | | 25,187 | | | | 113 | | | | 344 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 487,908 | | | | 895,824 | | | | 538,647 | | | | 881,593 | | | | 7,371 | | | | 12,052 | | | | | | | | | | | | | | | | | | | | | | | | | | |
The Group’s exposure to foreign currency arises where a group entityGroup company holds monetary assets and liabilities denominated in a currency different to the functional currency of the respective business,that entity, with US dollarUSD (US Dollar) being the majornon-functional currency. The valuecurrency of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rate, liquidity and other market changes.Group’s main operating subsidiaries. The results of Group’s operations may be affected largely by fluctuations in the exchange rates between the Indian Rupee, Australian dollar, Namibia dollar and ZAR against the US dollar. The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the currencies by 10%10 % against the functional currencycurrencies of the respective entities.
Set out below is the impact of a 10% strengthening in the functional currencies of the respective entities onpre-tax profit/(loss) andpre-tax equity arising as a result of the revaluation of the Group’s foreign currency monetary financial assets/ liabilities :liabilities: | March 31, 2016 | | Effect on pre-tax profit/(loss) of a 10% increase in currency | | | Effect onpre- tax equity of a 10% increase in currency | | | For the year ended March 31, 2020 | | | Effect of 10% strengthening of functional currency on pre-tax profit/(loss) | | | Effect of 10% strengthening of foreign currency on equity (pre-tax) | | | | | (₹ in million) | | | (₹ in million) | | USD | | | 33,377 | | | | (2,035 | ) | | | 13,207 | | | | 0 | | INR | | | (48 | ) | | | — | | | | 276 | | | | — | | EURO | | | (6 | ) | | | — | | |
| March 31, 2017 | | Effect on pre-tax profit/(loss) of a 10% increase in currency | | | Effect on pre- tax equity of a 10% increase in currency | | | Effect on pre-tax profit/(loss) of a 10% increase in currency | | | Effect on pre-tax equity of a 10% increase in currency | | | For the year ended March 31, 2021 | | | Effect of 10% strengthening of functional currency on pre-tax profit/(loss) | | | Effect of 10% strengthening of foreign currency on equity (pre-tax) | | | Effect of 10% strengthening of functional currency on pre-tax profit/(loss) | | | Effect of 10% strengthening of foreign currency on equity (pre-tax) | | | | (Rs. in million) | | | (US Dollars in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | (US dollars in million) | | USD | | | 25,752 | | | | (182 | ) | | | 397.1 | | | | (2.8 | ) | | | 11,325 | | | | — | | | | 155 | | | | — | | INR | | | 1,042 | | | | — | | | | 16.1 | | | | — | | | | (3,072 | ) | | | — | | | | (42 | ) | | | — | | EURO | | | 16 | | | | (71 | ) | | | 0.2 | | | | (1.1 | ) | |
A 10% weakening of the functional currencies of respective entitiesbusinesses would have an equal and opposite effect on the Group’s financial statements. (c) Interest rate risk The Group’s net debt of ₹ 201,900 million and ₹ 243,084 million ($ 3,324 million) as at March 31, 2020 and March 31, 2021 respectively, comprises debt of ₹ 579,475 million and ₹ 569,222 million ($ 7,783 million) as at March 31, 2020 and March 31, 2021 respectively, offset by cash, cash equivalents, short term investments of ₹ 377,575 million (net of deferred consideration payable for such investments) and ₹ 326,138 million ($ 4,459 million) as at March 31, 2020 and March 31, 2021 respectively. 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 and the Indian Rupee debt is split between fixed and floating rates.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 atax-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. Additionally, the investments portfolio is independently reviewed by CRISIL Limited, and Group’s investment portfolio has been rated as “Very Good” meaning highest safety. The exposure of the Group’s financial assets as at March 31, 20162020 to interest rate risk is as follows: | | | | | | | | | | | | | | | | | | | Floating rate financial assets | | | Fixed rate financial assets | | | Non-interest bearing financial assets | | | Total financial assets | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Financial assets | | | 424,296 | | | | 173,872 | | | | 55,936 | | | | 655,104 | | Derivative financial assets | | | — | | | | — | | | | 1,281 | | | | 1,281 | | | | | | | | | | | | | | | | | | | | | | 424,296 | | | | 173,872 | | | | 57,217 | | | | 655,385 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Floating rate financial assets | | | Fixed rate financial assets | | | Non-interest bearing financial assets | | | Total financial assets | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Financial assets | | | 121,046 | | | | 244,344 | | | | 122,518 | | | | 487,908 | | | | | | | | | | | | | | | | | | | | | | 121,046 | | | | 244,344 | | | | 122,518 | | | | 487,908 | | | | | | | | | | | | | | | | | | |
The exposure of the Group’s financial liabilities as at March 31, 20162020 to interest rate risk is as follows: | | | | | | | | | | | | | | | | | | | Floating rate financial liabilities | | | Fixed rate financial liabilities | | | Non-interest bearing financial liabilities | | | Total financial liabilities | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Financial liabilities | | | 324,037 | | | | 451,143 | | | | 189,824 | | | | 965,004 | | Derivative financial liabilities | | | — | | | | — | | | | 4,552 | | | | 4,552 | | | | | | | | | | | | | | | | | | | | | | 324,037 | | | | 451,143 | | | | 194,376 | | | | 969,556 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Floating rate financial liabilities | | | Fixed rate financial liabilities | | | Non-interest bearing financial liabilities | | | Total financial liabilities | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Financial liabilities | | | 312,971 | | | | 374,148 | | | | 208,705 | | | | 895,824 | | | | | | | | | | | | | | | | | | | | | | 312,971 | | | | 374,148 | | | | 208,705 | | | | 895,824 | | | | | | | | | | | | | | | | | | |
The weighted average interest rate on the fixed rate financial liabilities is 7.1% p.a. and the weighted average period for which the rate is fixed is 1.4 years.
The exposure of the Group’s financial assets as at March 31, 20172021 to interest rate risk is as follows: | | | Floating rate financial assets | | | Fixed rate financial assets | | | Non-interest bearing financial assets | | | Total financial assets | | | Floating rate financial assets | | | Fixed rate financial assets | | | Non-interest bearing financial assets | | | Total financial assets | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Financial assets | | | 355,073 | | | | 195,353 | | | | 136,425 | | | | 686,851 | | | | 113,318 | | | | 270,601 | | | | 154,728 | | | | 538,647 | | Derivative financial assets | | | — | | | | — | | | | 129 | | | | 129 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 355,073 | | | | 195,353 | | | | 136,554 | | | | 686,980 | | | | 113,318 | | | | 270,601 | | | | 154,728 | | | | 538,647 | | | | | | | | | | | | | | | | | | | | | | | | | | | (US dollars in million) | | | 5,475.3 | | | | 3,012.4 | | | | 2,105.6 | | | | 10,593.3 | | | | 1,549 | | | | 3,700 | | | | 2,116 | | | | 7,365 | |
The exposure of the Group’s financial liabilities as at March 31, 20172021 to interest rate risk is as follows: | | | Floating rate financial liabilities | | | Fixed rate financial liabilities | | | Non-interest bearing financial liabilities | | | Total financial liabilities | | | Floating rate financial liabilities | | | Fixed rate financial liabilities | | | Non-interest bearing financial liabilities | | | Total financial liabilities | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | Financial liabilities | | | 399,564 | | | | 459,007 | | | | 218,506 | | | | 1,077,077 | | | | 322,843 | | | | 329,629 | | | | 229,121 | | | | 881,593 | | Derivative financial liabilities | | | — | | | | — | | | | 8,773 | | | | 8,773 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 399,564 | | | | 459,007 | | | | 227,279 | | | | 1,085,850 | | | | 322,843 | | | | 329,629 | | | | 229,121 | | | | 881,593 | | | | | | | | | | | | | | | | | | | | | | | | | | | (US dollars in million) | | | 6,161.4 | | | | 7,078.0 | | | | 3,504.7 | | | | 16,744.1 | | | | 4,414 | | | | 4,507 | | | | 3,133 | | | | 12,054 | |
Considering the net debt position as at March 31, 2021 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 weighted average interest ratesensitivity analysis below has been determined based on the fixed rateexposure to interest rates for financial liabilities is 7.0% p.a. andinstruments at the weighted average period for which the rate is fixed is 1.4 years.balance sheet date. The table below illustrates the impact of a 0.5% to 2.0% movement in interest rates on interest onfloating rate financial assets/ liabilities (net) on profit/(loss) and equity assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of date. The year end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant. | Increase in interest rates | | | | | Increase in interest rates Year ended March 31, | | | | | | | 2016 | | | 2017 | | | 2017 | | | 2020 | | | 2021 | | | 2021 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | 0.50% | | | 501 | | | | (222) | | | | (3.4) | | | | (960) | | | | (1,048) | | | | (14) | | 1.00% | | | 1,003 | | | | (445) | | | | (6.9) | | | | (1,919) | | | | (2,095) | | | | (29) | | 2.00% | | | 2,005 | | | | (890) | | | | (13.7) | | | | (3,838) | | | | (4,191) | | | | (57) | |
An equivalent reduction in interest rates would have an equal and opposite effect on the Group’s financial statements. (d) Counterparty and concentration of creditCredit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group is exposed to credit risk forfrom trade receivables, short-termcontract assets, cash and cash equivalents, short term investments and derivativeother 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 Group’s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10.0% or more of revenue on a consolidated basis in any of the years indicated. 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 ofnon-performance by any of the Group’s counterparties. With respect to loans to related parties, as described in note 35(b), credit risk is adequately considered and no deterioration has happened or is expected to happen in the credit profile of the borrowers since the grant of the loans. Accordingly, the Group does not foresee any significant credit risk with respect to such loans. 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 other than cash represents the maximum credit exposure. The Group’s maximum exposure to credit risk as at March 31, 20162020 and March 31, 20172021 is Rs. 631,148₹ 487,908 million and Rs. 578,031₹ 538,647 million ($8,913.3 7,365 million) respectively. The maximum credit exposure on financial guarantees given by the Group for various financial facilities is described in Note 2933 on “Commitments, contingencies, and guarantees”. None of the Group’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade and other receivables, and othernon-current assets, there were no indications as at March 31, 2017,2021, that defaults in payment obligations will occur except as described in Note 13 onmovement in allowance for impairment of trade and other receivables.for financial assets given below. The analysis of
Of the year end trade and other receivable is as follows:receivables, the following are expected to be realised in the normal course of business and hence not considered impaired: | As at March 31 | | 2016 | | | 2017 | | | 2017 | | | 2020 | | | 2021 | | | 2021 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Neither impaired nor past due | | | 47,302 | | | | 15,400 | | | | 237.5 | | | | 29,702 | | | | 134,386 | | | | 1,837 | | Past due but not impaired | | | | | | | | | | | | | Due Less than 1 month | | | 1,774 | | | | 9,429 | | | | 145.4 | | | | 7,941 | | | | 6,116 | | | | 84 | | Due Between 1 - 3 months | | | 4,495 | | | | 3,014 | | | | 46.5 | | | | 14,271 | | | | 2,763 | | | | 38 | | Due Between 3 - 12 months | | | 5,945 | | | | 15,307 | | | | 236.0 | | | | 16,858 | | | | 8,419 | | | | 115 | | Due Greater than 12 months | | | 3,727 | | | | 9,372 | | | | 144.5 | | | | 25,973 | | | | 44,016 | | | | 602 | | | | | | | | | | | | | | | | | | | | | | | 63,243 | | | 52,522 | | | 809.9 | | | | 94,745 | | | | 195,700 | | | | 2,676 | | | | | | | | | | | | | | | | | | | | |
Receivables are deemed to be past due or impaired with reference to the Group’s normal terms and conditions of business. These terms and conditions are determined on a case to case basis with reference to the customer’s credit quality and prevailing market conditions. Receivables that are classified as ‘past due’ in the above table are those that have not been settled within the terms and conditions that have been agreed with that customer. The credit quality of the Group’s customers is monitored on an ongoing basis and assessed for impairment where indicators of such impairment exist. The solvency of the debtor and their ability to repay the receivable is considered in assessing receivables for impairment (also refer footnotes to note 11).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 and other receivables and other non-current assets) | | | | | | | | | | | | | Movements for the year ended March 31, | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | As at April 01, | | | 10,451 | | | | 13,050 | | | | 178 | | Allowance made during the year | | | 2,576 | | | | 2,969 | | | | 41 | | Reversals during the year | | | (354 | ) | | | (592 | ) | | | (8 | ) | Exploration cost written off | | | — | | | | 22 | | | | 0 | | Foreign Exchange difference | | | 377 | | | | (116 | ) | | | (1 | ) | | | | | | | | | | | | | | As at March 31, | | | 13,050 | | | | 15,333 | | | | 210 | | | | | | | | | | | | | | |
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 statements of financial position within current andnon-current assets and liabilities. Derivatives that are designated as hedges are classified as current ornon-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. Embedded derivatives
Derivatives embedded in liabilities are treated as separate derivative contracts andmarked-to-market when their risks and characteristics are not clearly and closely related to those of their host contracts and the host contracts are not fair valued.
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 recognized in equitythe consolidated statements of comprehensive income until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to the consolidated statements of profit or loss. These hedges have been effective for the year ended March 31, 2017.2020 and March 31, 2021. The Group uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. The Group hedged part of its foreign currency exposure on capital commitments during fiscal 2017.the year ended 2021. Fair value changes on such forward contracts are recognized in the consolidated statements of comprehensive income. The majority of cash flow hedges taken out by the Group during the year comprisenon-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 March 31, 20182022 and consequently may impact the consolidated statements of 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 the consolidated statements of profit or loss over the expected useful life of the property, plant and equipment. Fair value hedgehedges 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 recognized in the consolidated statements of profit or loss. The Group uses foreign exchange contracts from time to time to optimize currency risk exposure on its foreign currency transactions. Fair value changes on such forward contracts are recognized in the consolidated statements of profit or loss. Non-qualifying/economicNon-designated hedgeeconomic 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 and zinc future contracts on the LME and certain other derivative instruments. Fair value changes on such derivative instruments are recognized in the consolidated statements of profit or loss. Net investment in foreign operations
The Group has partly hedged its foreign exchange risk in net investment in foreign operations. 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 the consolidated statements of comprehensive income. Gains and losses relating to hedge ineffectiveness are recognised immediately in the consolidated statements of profit or loss for the period. Gains and losses accumulated in the translation reserve are included in the consolidated statements of 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: | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2016 | | | As at March 31, 2017 | | | | Assets | | | Liabilities | | | Assets | | | Liabilities | | | Assets | | | Liabilities | | | | (Rs. in million) | | | (US dollars in million) | | | | | | | | | Current | | | | | | | | | | | | | | | | | | | | | | | | | Cash flow hedges* | | | | | | | | | | | | | | | | | | | | | | | | | — Commodity contracts | | | 13 | | | | 43 | | | | 1 | | | | 854 | | | | 0.0 | | | | 13.2 | | — Forward foreign currency contracts | | | 1 | | | | 549 | | | | — | | | | 137 | | | | — | | | | 2.1 | | Fair value hedges** | | | | | | | | | | | | | | | | | | | | | | | | | — Commodity contracts | | | 8 | | | | — | | | | — | | | | 21 | | | | — | | | | 0.3 | | — Forward foreign currency contracts | | | 116 | | | | 2,484 | | | | 1 | | | | 5,325 | | | | 0.0 | | | | 82.1 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2016 | | | As at March 31, 2017 | | | | Assets | | | Liabilities | | | Assets | | | Liabilities | | | Assets | | | Liabilities | | | | (Rs. in million) | | | (US dollars in million) | | Net investment in foreign operation*** | | | 343 | | | | — | | | | — | | | | — | | | | — | | | | — | | Non-qualifying hedges | | | | | | | | | | | | | | | | | | | | | | | | | — Commodity contracts | | | 195 | | | | 83 | | | | 89 | | | | 238 | | | | 1.4 | | | | 3.7 | | — Forward foreign currency contracts | | | 550 | | | | 1,306 | | | | — | | | | 1,630 | | | | — | | | | 25.1 | | — Cross currency swap | | | 2 | | | | 9 | | | | — | | | | 11 | | | | — | | | | 0.2 | | Non Current | | | | | | | | | | | | | | | | | | | | | | | | | Fair value hedges** | | | | | | | | | | | | | | | | | | | | | | | | | — Forward Foreign Currency Contracts | | | 53 | | | | 78 | | | | 38 | | | | 557 | | | | 0.6 | | | | 8.6 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 1,281 | | | | 4,552 | | | | 129 | | | | 8,773 | | | | 2.0 | | | | 135.3 | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | As at March 31, 2021 | | | | Assets | | | Liabilities | | | Assets | | | Liabilities | | | Assets | | | Liabilities | | | | (₹ in million) | | | (US dollars in million) | | Current | | | | | | | | | | | | | | | | | | | | | | | | | Cash flow hedges* | | | | | | | | | | | | | | | | | | | | | | | | | — Commodity contracts | | | 1,036 | | | | — | | | | 27 | | | | 550 | | | | 0 | | | | 8 | | — Forward foreign currency contracts | | | 0 | | | | — | | | | — | | | | — | | | | | | | | — | | — Interest rate swap | | | — | | | | 26 | | | | — | | | | 50 | | | | — | | | | 1 | | Fair value hedges | | | | | | | | | | | | | | | | | | | | | | | | | — Commodity contracts | | | 1,001 | | | | 110 | | | | 406 | | | | 91 | | | | 6 | | | | 1 | | — Forward foreign currency contracts | | | 2,125 | | | | 360 | | | | 139 | | | | 1,163 | | | | 2 | | | | 16 | | Non — qualifying hedges | | | | | | | | | | | | | | | | | | | | | | | | | — Commodity contracts | | | 61 | | | | 201 | | | | 5 | | | | 22 | | | | 0 | | | | 0 | | — Forward foreign currency contracts | | | 2,694 | | | | 248 | | | | 124 | | | | 911 | | | | 2 | | | | 12 | | — Other (Foreign currency swap) | | | 5 | | | | 15 | | | | — | | | | — | | | | — | | | | — | | Non Current | | | | | | | | | | | | | | | | | | | | | | | | | Cash flow hedge* | | | | | | | | | | | | | | | | | | | | | | | | | — Interest rate swap | | | — | | | | 77 | | | | — | | | | 51 | | | | — | | | | 1 | | Fair value hedges | | | | | | | | | | | — | | | | | | | | | | | | | | — Forward foreign currency contracts | | | 25 | | | | 374 | | | | — | | | | 713 | | | | — | | | | 10 | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 6,947 | | | | 1,411 | | | | 701 | | | | 3,551 | | | | 10 | | | | 49 | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | Refer consolidated statements of profit or losscomprehensive income and consolidated statements of change in equity for the change in the fair value of cash flow hedges. |
** | The change in fair value hedge of Rs. 8 million and Rs. 21 million ($ 0.3 million) in commodity contracts and Rs. 2,368 million and Rs. 5,324 million ($82.1 million) on forward foreign currency contracts for the fiscal 2016 and 2017 respectively, has been recognised in the consolidated statements of profit or loss. |
*** | Comprises loss of Rs. 961 million and Rs. 283 million ($ 4.4 million) for the year ended March 31, 2016 and March 31, 2017 respectively recognised in consolidated statements of comprehensive income and gain of Rs. 1,304 million and Rs. 782 million ($ 12.1 million) for the year ended March 31, 2016 and March 31, 2017 respectively in consolidated statements of profit or loss. |
24. Capital management26. Provisions
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, | | | | 2020 Non-Current | | | 2020 Current | | | 2020 Total | | | 2021 Non-Current | | | 2021 Current | | | 2021 Total | | | 2021 Non-Current | | | 2021 Current | | | 2021 Total | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | (US dollars in million) | | | (US dollars in million) | | Provision for employee benefits | | | 91 | | | | 1,742 | | | | 1,833 | | | | 117 | | | | 1,545 | | | | 1,662 | | | | 2 | | | | 21 | | | | 23 | | Provision for restoration, rehabilitation and environmental costs | | | 26,572 | | | | 188 | | | | 26,760 | | | | 29,737 | | | | 275 | | | | 30,012 | | | | 406 | | | | 4 | | | | 410 | | Other provisions | | | — | | | | 541 | | | | 541 | | | | (0 | ) | | | 558 | | | | 558 | | | | (0 | ) | | | 8 | | | | 8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 26,663 | | | | 2,471 | | | | 29,134 | | | | 29,854 | | | | 2,378 | | | | 32,232 | | | | 408 | | | | 33 | | | | 441 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Restoration, rehabilitation and environmental costs (a) | | | Others (b) | | | | (₹ in million) | | | (₹ in million) | | As at April 01, 2019 | | | 24,532 | | | | 521 | | Additions | | | 694 | | | | 14 | | Utilised | | | (143 | ) | | | — | | Unused amounts reversed | | | 962 | | | | — | | Unwinding of discount | | | (499 | ) | | | — | | Revision in estimates | | | — | | | | 6 | | Exchange differences | | | 1,214 | | | | — | | | | | | | | | | | As at March 31, 2020 | | | 26,760 | | | | 541 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Restoration, rehabilitation and environmental costs (a) | | | Others (b) | | | Restoration, rehabilitation and environmental costs | | | Others | | | | (₹ in million) | | | (₹ in million) | | | US dollars in million) | | | (US dollars in million) | | As at April 01, 2020 | | | 26,760 | | | | 541 | | | | 366 | | | | 8 | | Additions | | | 2,701 | | | | 17 | | | | 37 | | | | 0 | | Utilised | | | (24 | ) | | | — | | | | 0 | | | | — | | Unused amounts reversed | | | (243 | ) | | | — | | | | (4 | ) | | | — | | Unwinding of discount | | | 721 | | | | — | | | | 10 | | | | — | | Revision in estimates | | | (122 | ) | | | — | | | | (2 | ) | | | — | | Exchange differences | | | 219 | | | | — | | | | 3 | | | | — | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | 30,012 | | | | 558 | | | | 410 | | | | 8 | | | | | | | | | | | | | | | | | | |
(a) 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 objectivesobligations 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 division 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 managing capitalthe 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 Cairn India & Zinc International operations in Ireland and higher range is at Zinc International operations in African Countries. An obligation to safeguard continuity, maintainincur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production from a strong credit ratingproducing field. (b) Other provisions Other provisions include provision for disputed cases 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.claims. 27. Retirement benefits The Group setsparticipates 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 statements of capital requiredprofit or 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 Consolidated Statement of Comprehensive Income for the year. (i) | Defined contribution plans |
The Group contributed a total of ₹ 722 million, ₹ 840 million and ₹ 1,190 million ($ 16 million) for the years ended March 31, 2019, 2020 and 2021 respectively, to the following defined contribution plans. | | | | | | | | | | | | | | | | | | | Year ended March 31, 2019 (₹ Million) | | | Year ended March 31, 2020 (₹ Million) | | | Year ended March 31, 2021 (₹ Million) | | | Year ended March 31, 2021 (US dollars in million) | | Employer’s contribution to recognised provident fund and family pension fund | | | 553 | | | | 630 | | | | 978 | | | | 13 | | Employer’s contribution to superannuation | | | 169 | | | | 210 | | | | 208 | | | | 3 | | Employer’s contribution to National Pension Scheme | | | — | | | | — | | | | 4 | | | | 0 | | | | | | | | | | | | | | | | | | | | | | 722 | | | | 840 | | | | 1,190 | | | | 16 | | | | | | | | | | | | | | | | | | |
Indian pension plans Central recognised provident fund In accordance with the ‘The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952’, employees are entitled to receive benefits under the Provident Fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for the year ended March 31, 2020 and March 31, 2021) of an employee’s basic salary. 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 statements of profit or loss in the year 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. This is provided for every permanent employee on the basispayroll. At the age of annual businesssuperannuation, contributions cease and long-term operating plansthe individual receives a monthly payment based on the level of contributions through the years, and on their salary scale at the time they retire, subject to a maximum ceiling of salary level. The Government funds these payments, thus the Group has no additional liability beyond the contributions that it makes, regardless of whether the central fund is in surplus or deficit. Superannuation Superannuation, another pension scheme applicable in India, is applicable only to executives above certain grade. However, in case of oil & gas (applicable from the second year of employment) and Iron Ore Segment, the benefit is applicable to all executives. Vedanta Limited and each relevant Indian subsidiary holds policy with the Life Insurance Corporation of India (“LIC”), to which include capitaleach of these entities contributes a fixed amount relating to superannuation and other strategic investments.the pension annuity is met by the LIC as required, taking into consideration the contributions made. The Group has no further obligations under the scheme beyond its monthly contributions which are charged to the consolidated statements of profit or 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 authorized by the Government of India to which each of the entity contributes a fixed amount relating to superannuation and the pension annuity will be met by the fund manager as per rules of National Pension Scheme. The funding requirementsGroup has no further obligations under the scheme beyond its monthly contributions which are met through a mixturecharged to the consolidated statement of equity, internal fund generation, convertible debt securities,profit and other long term borrowings. The Group’s policy is to use short-term and long-term borrowings to meet anticipated funding requirements.loss in the year they are incurred. Australian pension scheme The Group monitors capital onalso participates in defined contribution superannuation schemes in Australia. The contribution of a proportion of an employee’s salary into a superannuation fund is a compulsory legal requirement in Australia. The employer contributes, into the basisemployee’s fund of choice 9.5% of the net gearing ratioemployee’s gross remuneration where the employee is covered by the industrial agreement and 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 statements of profit or 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 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 Net debt / Total Capital (equity + net debt). 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 2 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 statements of profit or loss in the year they are incurred. 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 not subject to any externally imposed capital requirements.provide retirement and death benefits to all eligible employees. Net debt are long termGroup contributes at a fixed percentage of 10.5% for up to supervisor grade and short term debts as reduced by cash and cash equivalents (including restricted cash and cash equivalents) and short-term investments. Equity comprises15% for others.
Membership of both funds is compulsory for all components excluding other componentspermanent employees under the age of equity (which comprises the cash flow hedges, translation of foreign operations andavailable-for-sale financial investments).60 years. The following table summarizesGroup has no additional liability beyond the capitalcontributions that it makes. Accordingly, this scheme has been accounted for on a defined contribution basis and contributions are charged directly to the consolidated statements of profit or 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 Group: | | | | | | | | | | | | | As at March 31, | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Equity | | | 693,450 | | | | 634,199 | | | | 9,779.5 | | | | | | | | | | | | | | | Cash and cash equivalents (Note 15 and 16) | | | 24,237 | | | | 108,949 | | | | 1,680.0 | | Short term investments (Note 14) | | | 566,192 | | | | 524,685 | | | | 8,090.7 | | | | | | | | | | | | | | | Total cash (a) | | | 590,429 | | | | 633,634 | | | | 9,770.7 | | Short-term borrowings (Note 17) | | | 182,328 | | | | 413,126 | | | | 6,370.5 | | Long-term borrowings (Note 17) | | | 493,784 | | | | 332,654 | | | | 5,129.6 | | | | | | | | | | | | | | | Total debt (b) | | | 676,112 | | | | 745,780 | | | | 11,500.1 | | Net debt(c=(b-a)) | | | 85,683 | | | | 112,146 | | | | 1,729.4 | | | | | | | | | | | | | | | Total capital (equity+net debt) | | | 779,133 | | | | 746,345 | | | | 11,508.9 | | | | | | | | | | | | | | | Gearing ratio | | | 0.1 | | | | 0.2 | | | | 0.2 | |
25. Shareholders’ equity
Authorised Share Capital:
AsEmployees’ Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for grant of exemption stipulates that the employer shall make good deficiency, if any, between the return guaranteed by the statute and actual earning of the Fund. Based on actuarial valuation in accordance with IAS 19 and Guidance note issued by Institute of Actuaries of India for interest rate guarantee of exempted provident fund liability of employees, there is no interest shortfall that is required to be met by Iron ore division, BALCO, HZL, SRL and SMCL as at March 31, 20172020 and March 31, 2021. Having regard to the authorised equity share capitalassets 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 ₹ 678 million, ₹ 471 million, ₹ 482 million ($ 7 million) for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively in relation to the independently managed and approved funds and has recognised the same as expense in the consolidated statement of Profit or loss. The present value of obligation and the fair value of plan assets of the trust are summarized below. | | | | | | | | | | | | | | | | | | | As at March 31, 2019 (₹ Million) | | | As at March 31, 2020 (₹ Million) | | | As at March 31, 2021 (₹ Million) | | | As at March 31, 2021 (US dollars in million) | | Fair value of plan assets of trusts | | | 21,949 | | | | 23,437 | | | | 24,213 | | | | 331 | | Present value of defined benefit obligations | | | (21,159 | ) | | | (22,990 | ) | | | (23,751 | ) | | | (325 | ) | | | | | | | | | | | | | | | | | | Net liability arising from defined benefit obligation | | | Nil | | | | Nil | | | | Nil | | | | Nil | | | | | | | | | | | | | | | | | | |
Percentage allocation of Plan assets of the trust | | | | | | | | | | | | | | | As at March 31, 2019 | | | As at March 31, 2020 | | | As at March 31, 2021 | | Assets by category | | | | | | | | | | | | | Government Securities | | | 65.66 | | | | 61.68 | | | | 63.19 | | Debentures/Bonds | | | 33.09 | | | | 36.67 | | | | 34.36 | | Equity | | | 1.25 | | | | 1.65 | | | | 1.63 | | Money Market Instruments | | | — | | | | — | | | | 0.82 | | | | | | | | | | | | | | |
The remeasurement loss of ₹ 1,524 million and ₹ 55 million ($ 1 million) has been charged to other comprehensive income (OCI) for the year ended March 31, 2020 and March 31, 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 employee’s spouses as well. Based on an actuarial valuation conducted as at year-end, a provision is recognised in full for the benefit obligation. The obligation relating to post-retirement medical benefits as at March 31, 2020 and March 31, 2021 was ₹ 786 million and ₹ 861 million ($ 12 million) respectively. The obligation under this plan is unfunded. The Group considers these amounts as not material and accordingly has not provided further disclosures as required by IAS 19 “Employee benefits”. The current service cost of ₹ 11 million, ₹ 13 million and ₹ 10 million ($ 0 million) for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively has been recognised in consolidated statement of profit or loss. The remeasurement loss / (gain) on the obligation of post-retirement medical benefits of ₹ 14 million, ₹ 150 million, ₹ (23) million ($ 0 million) for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively have been recognised in other comprehensive income. Net interest cost on the obligation of post-retirement medical benefits of ₹ 48 million, ₹ 61 million and ₹ 64 million ($ 1 million) for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively have been recognized in finance costs. Other Post employment Benefits: India - Gratuity plan In accordance with the Payment of Gratuity Act of 1972, Vedanta Limited comprised 44,020,100,000 equity sharesand 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 par valueprovision 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 statements of Re. 1 each.financial position. During the current year, the authorized equity share capitalThe iron ore and oil & gas division of the Company, SRL, SMCL, HZL and FACOR have constituted a trust recognised by Indian Income Tax Authorities for gratuity to employees, contributions to the trust are funded with Life Insurance Corporation of India (LIC), ICICI Prudential Life Insurance Company Limited and HDFC Life Insurance Company Limited.
Principal actuarial assumptions Principal actuarial assumptions used to determine the present value of the Other post-employment benefit plan obligation are as follows: | | | | | | | | | | | | | | | Year ended March 31, 2019 | | | Year ended March 31, 2020 | | | Year ended March 31, 2021 | | Discount rate | | | 7.8 | % | | | 6.8 | % | | | 6.9 | % | Expected rate of increase in compensation level of covered employees | | | 2% to 15 | % | | | 2% to 15 | % | | | 2% to 15 | % | Mortality table | | | IALM (2006-08) | | | | IALM (2012-14) | | | | IALM (2012-14) | |
Amount recognised in the consolidated statements of financial position consists of: | | | | | | | | | | | | | | | | | | | As at March 31, 2019 (₹ Million) | | | As at March 31, 2020 (₹ Million) | | | As at March 31, 2021 (₹ Million) | | | As at March 31, 2021 (US dollars in million) | | Fair value of plan assets | | | 3,868 | | | | 4,418 | | | | 4,009 | | | | 55 | | Present value of defined benefit obligations | | | (5,890 | ) | | | (6,310 | ) | | | (5,748 | ) | | | (79 | ) | | | | | | | | | | | | | | | | | | Net liability arising from defined benefit obligations | | | (2,022 | ) | | | (1,892 | ) | | | (1,739 | ) | | | (24 | ) | | | | | | | | | | | | | | | | | |
Amounts recognised in consolidated statements of profit or loss in respect of Other post-employment benefit plan are as follows: | | | | | | | | | | | | | | | | | | | Year ended March 31, 2019 (₹ Million) | | | Year ended March 31, 2020 (₹ Million) | | | Year ended March 31, 2021 (₹ Million) | | | Year ended March 31, 2021 (US dollars in million) | | Current service cost | | | 389 | | | | 411 | | | | 395 | | | | 5 | | Past service cost | | | 3 | | | | — | | | | — | | | | — | | Net Interest cost | | | 162 | | | | 151 | | | | 130 | | | | 2 | | | | | | | | | | | | | | | | | | | Total charge to consolidated statements of profit or loss | | | 554 | | | | 562 | | | | 525 | | | | 7 | | | | | | | | | | | | | | | | | | |
Amounts recognised in the consolidated statements of comprehensive income in respect of Other post-employment benefit plan are as follows: | | | | | | | | | | | | | | | | | | | Year ended March 31, 2019 (₹ Million) | | | Year ended March 31, 2020 (₹ Million) | | | Year ended March 31, 2021 (₹ Million) | | | Year ended March 31, 2021 (US dollars in million) | | Remeasurements of the net defined benefit obligation:- | | | | | | | | | | | | | | | | | Actuarial losses /(gains) arising from changes in financial assumptions | | | (64 | ) | | | 283 | | | | 11 | | | | 0 | | Actuarial losses/(gains) arising from experience adjustments | | | 409 | | | | 163 | | | | (104 | ) | | | (1 | ) | Actuarial (gains)/losses arising from changes in demographic assumptions | | | 15 | | | | (14 | ) | | | (2 | ) | | | (0 | ) | Acturial losses on Plan assets (excluding amounts included in net interest cost) | | | 29 | | | | 12 | | | | 58 | | | | 1 | | | | | | | | | | | | | | | | | | | Remeasurement of the net defined benefit liability | | | 389 | | | | 444 | | | | (37 | ) | | | (0 | ) | | | | | | | | | | | | | | | | | |
The movement of the present value of Other post-employment benefit plan obligation is as follows: | | | | | | | | | | | | | | | | | | | Year ended March 31, 2019 (₹ in Million) | | | Year ended March 31, 2020 (₹ in Million) | | | Year ended March 31, 2021 (₹ in Million) | | | Year ended March 31, 2021 (US dollars in million) | | At 1 April | | | (5,464 | ) | | | (5,890 | ) | | | (6,310 | ) | | | (86 | ) | Acquired in business combination | | | (154 | ) | | | — | | | | (177 | ) | | | (2 | ) | Current service cost | | | (389 | ) | | | (411 | ) | | | (395 | ) | | | (5 | ) | Past service cost | | | (3 | ) | | | — | | | | — | | | | — | | Benefits paid | | | 899 | | | | 875 | | | | 1,475 | | | | 20 | | Interest cost of scheme liabilities | | | (419 | ) | | | (452 | ) | | | (436 | ) | | | (6 | ) | Actuarial (losses)/gains arising from change in assumptions | | | (360 | ) | | | (432 | ) | | | 95 | | | | 1 | | | | | | | | | | | | | | | | | | | At March 31, | | | (5,890 | ) | | | (6,310 | ) | | | (5,748 | ) | | | (78 | ) | | | | | | | | | | | | | | | | | |
The movement in the fair value of Other post-employment benefit plan assets is as follows: | | | | | | | | | | | | | | | | | | | Year ended March 31, 2019 (₹ in Million) | | | Year ended March 31, 2020 (₹ in Million) | | | Year ended March 31, 2021 (₹ in Million) | | | Year ended March 31, 2021 (US dollars in million) | | At 1 April | | | 3,391 | | | | 3,868 | | | | 4,418 | | | | 60 | | Acquired in business combination | | | 164 | | | | — | | | | 160 | | | | 2 | | Contributions received | | | 822 | | | | 859 | | | | 184 | | | | 3 | | Benefits paid | | | (737 | ) | | | (598 | ) | | | (1,001 | ) | | | (14 | ) | Remeasurement gain / (loss) arising from return on plan assets | | | (29 | ) | | | (12 | ) | | | (58 | ) | | | (1 | ) | Interest income | | | 257 | | | | 301 | | | | 306 | | | | 4 | | | | | | | | | | | | | | | | | | | At March 31, | | | 3,868 | | | | 4,418 | | | | 4,009 | | | | 54 | | | | | | | | | | | | | | | | | | |
All the above plan assets of the Group have been invested in the qualified insurance policies. The actual return on plan assets was ₹ 228 million, ₹ 289 million and ₹ 248 million, ($ 3 million) for the years ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively. The weighted average duration of the defined benefit obligation is 14.7 years, 14.3 years and 14.0 years as at March 31, 2019, March 31, 2020 and March 31, 2021 respectively. The Group expects to contribute ₹ 524 million ($ 7 million) to the funded Gratuity plan during the year ending March 31, 2022. Sensitivity analysis for defined benefit plans 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 | | | Increase / (Decrease) in defined benefit obligation | | | | Year ended March 31, 2020 (₹ in million) | | | Year ended March 31, 2021 (₹ in million) | | | Year ended March 31, 2021 (US dollars in million) | | Discount rate | | | | | | | | | | | | | | | | | Increase by 0.50% | | | (213 | ) | | | (213 | ) | | | (3 | ) | Decrease by 0.50% | | | 227 | | | | 231 | | | | 3 | | Expected rate of increase in compensation level of covered employees | | | | | | | | | | | | | Increase by 0.50% | | | 200 | | | | 208 | | | | 3 | | Decrease by 0.50% | | | (198 | ) | | | (199 | ) | | | (3 | ) |
The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. In presenting the above sensitivity analysis, the present value of defined benefit obligation has changedbeen 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 statements of financial position. Risk analysis Group is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefits plans and management estimation of the impact of these risks are as follows: Investment risk Most of the Indian defined benefit plans are funded with Life Insurance Corporation of India (LIC), ICICI Prudential Life Insurance Company Limited (ICICI) and HDFC Life Insurance Company Limited (HDFC). Group does not have any liberty to manage the fund provided to LIC, ICICI 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 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. 28. Employee costs | | | | | | | | | | | | | | | | | For the year ended March 31, | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Salaries and wages | | | 33,657 | | | | 30,217 | | | | 31,260 | | | | 427 | | Contributions to provident and other funds | | | 1,803 | | | | 1,735 | | | | 2,077 | | | | 28 | | Share based payments | | | 1,176 | | | | 727 | | | | 597 | | | | 8 | | JV Employee cost allocation | | | (6,406 | ) | | | (5,759 | ) | | | (5,302 | ) | | | (72 | ) | | | | | | | | | | | | | | | | | | | | | 30,230 | | | | 26,920 | | | | 28,632 | | | | 391 | | | | | | | | | | | | | | | | | | |
29. Share-Based Compensation Plans 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 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, sustained individual performance based and market performance based stock options. The maximum value of Merger (Refer note 1)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 March 31, 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, ESG & Carbon footprint or a combination of these for the respective business/ SBU entities. Options granted during the year ended March 31, 2020 includes business performance based, sustained individual performance based and market performance based stock options. Business performances will be measured using Volume, Cost, Net Sales Realisation, EBITDA, free cash flow 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 March 31, 2020 is presented below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Year of Grant | | Exercise Period | | Options outstanding April 1, 2019 | | | Options granted during the year | | | Options transferred from Parent/ fellow subsidiaries | | | Options forfeited during the year | | | Options exercised during the year * | | | Options expired during the year | | | Options outstanding March 31, 2020 | | | Options exercisable March 31, 2020 | | 2016-17 | | December 15, 2019-June 14, 2020 | | | 6,508,226 | | | | — | | | | — | | | | 4,819,269 | | | | 620,441 | | | | — | | | | 1,068,516 | | | | 1,068,516 | | 2017-18 | | September 1, 2020-February 28, 2021 | | | 8,274,393 | | | | — | | | | — | | | | 1,246,468 | | | | — | | | | — | | | | 7,027,925 | | | | — | | 2017-18 | | October 16, 2020-April 15, 2021 | | | 11,126 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,126 | | | | — | | 2017-18 | | November 1, 2020-April 30, 2021 | | | 27,638 | | | | — | | | | — | | | | 27,638 | | | | — | | | | — | | | | — | | | | — | | 2018-19 | | November 1, 2021-April 30, 2022 | | | 13,566,200 | | | | — | | | | — | | | | 2,146,154 | | | | — | | | | — | | | | 11,420,046 | | | | — | | 2018-19 | | Cash settled | | | 1,047,660 | | | | — | | | | 211,170 | | | | 189,674 | | | | — | | | | — | | | | 1,069,156 | | | | — | | 2019-20 | | November 29, 2022-May 28, 2023 | | | — | | | | 16,713,640 | | | | — | | | | 832,310 | | | | — | | | | — | | | | 15,881,330 | | | | — | | 2019-20 | | Cash settled | | | — | | | | 2,037,690 | | | | — | | | | 140,990 | | | | — | | | | — | | | | 1,896,700 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 29,435,243 | | | | 18,751,330 | | | | 211,170 | | | | 9,402,503 | | | | 620,441 | | | | — | | | | 38,374,799 | | | | 1,068,516 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
* | excludes 58,420 options exercised during the year regarding which the transaction could not be completed before March 31, 2020 and hence, the corresponding shares were held by the Group. |
The details of share options for the year ended March 31, 2021 is presented below: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Financial Year of Grant | | Exercise Period | | Options outstanding April 1, 2020 | | | Options granted
during the year | | | Options transferred from Parent/ fellow subsidiaries | | | Options forfeited during the year | | | Options exercised during the year * | | | Options expired during the year | | | Options outstanding March 31, 2021 | | | Options exercisable March 31, 2021 | | 2016-17 | | December 15, 2019-June 14, 2020 | | | 1,068,516 | | | | — | | | | — | | | | 8,648 | | | | 1,059,868 | | | | — | | | | — | | | | — | | 2017-18 | | September 1, 2020-February 28, 2021 | | | 7,027,925 | | | | — | | | | — | | | | 5,514,169 | | | | 1,136,816 | | | | — | | | | 376,940 | | | | 376,940 | | 2017-18 | | October 16, 2020-April 15, 2021 | | | 11,126 | | | | — | | | | — | | | | 11,126 | | | | — | | | | — | | | | — | | | | — | | 2018-19 | | November 1, 2020-April 30, 2021 | | | 11,420,046 | | | | — | | | | — | | | | 1,507,806 | | | | — | | | | — | | | | 9,912,240 | | | | — | | 2018-19 | | Cash settled | | | 1,069,156 | | | | — | | | | — | | | | 340,300 | | | | — | | | | — | | | | 728,856 | | | | — | | 2019-20 | | November 29, 2022-May 28, 2023 | | | 15,881,330 | | | | — | | | | — | | | | 2,309,052 | | | | — | | | | — | | | | 13,572,278 | | | | — | | 2019-20 | | Cash settled | | | 1,896,700 | | | | — | | | | | | | | 1,019,249 | | | | | | | | — | | | | 877,451 | | | | — | | 2020-21 | | November 06, 2023 - May 05, 2024 | | | — | | | | 12,711,112 | | | | — | | | | — | | | | — | | | | — | | | | 12,711,112 | | | | — | | 2020-21 | | Cash settled | | | — | | | | 880,000 | | | | — | | | | — | | | | — | | | | — | | | | 880,000 | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 38,374,799 | | | | 13,591,112 | | | | — | | | | 10,710,350 | | | | 2,196,684 | | | | — | | | | 39,058,877 | | | | 376,940 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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 value of stock options following these types of vesting conditions have been estimated using the Black-Scholes-Merton Option Pricing model. The value arrived at under this model has been then multiplied by the expected % vesting based on business performance conditions (only for business performance-based options) and the expected multiplier on account of sustained individual performance (for both type of options). The inputs used in the Black-Scholes-Merton Option Pricing model include the share price considered as of the valuation date, exercise price as per the scheme/ plan of the options, expected dividend yield (estimated based on actual/ expected dividend trend of the company), expected tenure (estimated as the remaining vesting period of the options), the risk-free rate (considered as the zero coupon yield as of the valuation date for a term commensurate with the expected tenure of the options) and expected volatility (estimated based on the historical volatility of the return in company’s share prices for a term commensurate with the expected tenure of the options). The exercise period of 6 months post vesting period has not been considered as the options are expected to be exercised immediately post the completion of the vesting period. Total Shareholder Returns-Based Options: The fair value 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 March 31, 2020 and March 31, 2021 are set out below: | | | | | | | | | Particulars | | Year ended March 31, 2020 | | | Year ended March 31, 2021 | | | | | | | ESOS 2019 | | | ESOS 2020 | | Number of Options | |
| 2,037,690 (cash settled)
/ 16,713,640 (equity settled) |
| |
| 880,000 (cash settled)
/ 12,711,112 (equity settled) |
| Exercise Price | | | ₹ 1 | | | | ₹ 1 | | Share Price at the date of grant | | | ₹ 144.60 | | | | ₹ 228.75 | | Contractual Life | | | 3 years | | | | 2 years and 7 months | | Expected Volatility | | | 36.64% | | | | 49.28% | | Expected option life | | | 3 years | | | | 2 years and 7 months | | Expected dividends | | | 7.96% | | | | 6.80% | | Risk free interest rate | | | 5.68% | | | | 4.84% | | Expected annual forfeitures | | | 10% p.a. | | | | 10% p.a. | | Fair value per option granted (Non-market performance based) | | | ₹ 102.30 | | | | ₹ 150.73 | | Fair value per option granted (Market performance based) | | | ₹ 72.12 | | | | NA | |
Weighted average share price at the date of exercise of stock options was ₹ 126.02 and ₹ 131.08 for the year ended March 31, 2020 and March 31, 2021 respectively. The weighted average remaining contractual life for the share options outstanding was 2.28 years and 2.03 years for the year ended March 31, 2020 and March 31, 2021 respectively. The Company recognized total expense of ₹ 822 million, ₹ 754 million and ₹ 575 million ($ 8 million) related to equity settled share-based payment transactions for the year ended March 31, 2019, March 31, 2020 and March 31, 2021 respectively. The total expense recognised on account of cash settled share based plan during the year ended March 31, 2020 was ₹ 5 million and for the year ended March 31, 2021 was ₹ 63 million ($ 1 million). The carrying value of cash settled share based compensation liability as at March 31, 2020 was ₹ 13 million and as at March 31, 2021 was ₹ 72 million ($ 1 million). 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 classyear. The exercise period is 7 years from the vesting date. Details of equityemployees stock option plans is presented below | | | | | | | | | | | | | | | | | CIESOP Plan | | Year ended March 31, 2020 | | | Year ended March 31, 2021 | | | | Number of options | | | Weighted average exercise price in ₹ | | | Number of options | | | Weighted average exercise price in ₹ | | Outstanding at the beginning of the year | | | 6,477,059 | | | | 279.2 | | | | 5,341,740 | | | | 288.2 | | Granted during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Expired during the year | | | (658,663) | | | | 200.1 | | | | (1,082,229) | | | | 291.3 | | Exercised during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Forfeited / cancelled during the year | | | (476,656) | | | | 288.1 | | | | (944,337) | | | | 288.0 | | Outstanding at the end of the year | | | 5,341,740 | | | | 288.2 | | | | 3,315,174 | | | | 287.3 | | Exercisable at the end of the year | | | 5,341,740 | | | | 288.2 | | | | 3,315,174 | | | | 287.3 | |
| | | | | | | | | | | | | Scheme | | Range of exercise price in ₹ | | | Weighted average remaining contractual life of options (in years) | | | Weighted average exercise price in ₹ | | The details of exercise price for stock options outstanding as at March 31, 2020 are: | | | | | | | | | | | | | CIESOP Plan | | | 286.85-291.25 | | | | 1.46 | | | | 288.2 | | The details of exercise price for stock options outstanding as at March 31, 2021 are: | | | | | | | | | | | | | CIESOP Plan | | | 286.85-287.75 | | | | 0.80 | | | | 287.3 | | | | | | | | | | | | | | |
Employee share option plan of Vedanta Resources Limited (earlier known as Vedanta Resources Plc) During the year ended March 31,2019, in respect of one of the Company’s subsidiary, i.e., BMM, the Group has awarded certain cash settled share based options indexed to Parents’ shares having a par(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 March 31, 2020 and March 31, 2021 is ₹ 221 million and ₹ 221 million ($ 3 million) respectively and the carrying value of Re 1 per share. Each shareholder is eligible for one vote percash settled share held and dividend as and when declared by the Company. Issued, subscribed and fully paid up share capital:
Vedanta Limited’s issued equity share capital was Rs. 2,965 million and Rs. 3,718 million ($ 57.3 million) consisting of 2,965,004,871 and 3,717,493,092 equity sharesbased compensation liability as at March 31, 20162020 and March 31, 2017, respectively. This includes 57,046,1552021 is ₹ 511 million and 54,254,975 American Depository Shares (“ADS”) as at₹ 860 million ($ 12 million) respectively
Out of the total expense of ₹ 980 million and ₹ 859 million ($ 12 million) pertaining to equity settled options and cash settled options for the year ended March 31, 20162020 and March 31, 2017, respectively. Equity share capital of Rs. 3,7182021 respectively, the Group has capitalised ₹ 253 million and ₹ 262 million ($ 57.34 million) as atexpense for the year ended March 31, 2017 also includes 752.5 million2020 and March 31, 2021 respectively.
30. Shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 (in Million) | | | As at March 31, 2020 (₹ Million) | | | As at March 31, 2021 (in Million) | | | As at March 31, 2021 (₹ Million) | | | As at March 31, 2021 (US dollars in million) | | Authorised Share Capital: | | | | | | | | | | | | | | | | | | | | | Opening and closing balance (equity shares of ₹ 1 each with voting rights) a | | | 44,020 | | | | 44,020 | | | | 44,020 | | | | 44,020 | | | | 602 | | Authorised preference share capital: | | | | | | | | | | | | | | | | | | | | | Opening and closing balance (preference shares of ₹ 10 each) | | | 3,010 | | | | 30,100 | | | | 3,010 | | | | 30,100 | | | | 412 | | Issued, subscribed and paid up | | | | | | | | | | | | | | | | | | | | | Equity shares of ₹ 1 each with voting right a,b,c,d | | | 3,718 | | | | 3,718 | | | | 3,718 | | | | 3,718 | | | | 51 | |
a) | 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. |
b) | This includes 261,780,208 equity shares in the form of 65,445,052 American Depository Shares (ADS) and 160,903,244 equity shares in the form of 40,225,811 American Depository Shares (ADS) as at March 31, 2020 and March 31, 2021, respectively. |
c) | Includes 308,232 equity shares as at March 31, 2020 and 308,232 equity shares as at March 31, 2021 kept in abeyance. These shares are not part of listed equity capital and pending allotment as they are sub-judice. |
d) | Includes 14,378,261 equity shares as at March 31, 2020 and 12,193,159 equity shares as at March 31, 2021 held by Vedanta Limited ESOS Trust. |
Securities premium Securities premium is created to record amounts received in excess of the par value of shares toin separate account as required by the Indian Companies Act. The securities premium account may be issued pursuantapplied by the company towards the issue of unissued shares of the company to the schememembers of Merger (Refer note 1).the company as fully paid bonus shares, writing off the preliminary expenses of the company, writing off the expenses of, or the commission paid or discount allowed on any issue of shares or debentures of the company, providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company; or for the purchase of its own shares or other securities. Retained earnings includes amongst others, general reserve, debenture redemption reserve, capital reserve and preference share redemption reserve. General reservesreserve Under the erstwhile Indian 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 thepaid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results 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 balancesbalance in general reserves, as determined in accordance with applicable regulations, was Rs. 191,052₹ 160,950 million and ₹ 160,950 million ($ 2,946.12,201 million) as at March 31, 2017. (Also refer dividend section below).2020 and March 31, 2021 respectively. Debenture redemption reserve TheAs per the earlier provision under the Indian Companies Act, requires companies that issue debentures were required to create a 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 not be utilized except to redeem debentures. The MCA vide its Notification dated August 16, 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, hence, in view of the same, Vedanta Limited is not required to create Debenture Redemption Reserve. Retained earnings include Rs. 17,696₹ 11,115 million and ₹ 5,835 million ($ 272.980 million) of debenture redemption reserve as at March 31, 2017.2020 and March 31, 2021 respectively.
Preference share redemption reserve The Indian Companies Act 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, either by reducing the additional paid in capital (securities premium account) or out of profits, 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 account. This amount should then be utilised for the purpose of redemption of redeemable preference shares. This reserve can be used to issue fullypaid-up bonus shares to the shareholders of Vedanta Limited. Retained earnings include Rs. 769₹ 30,869 million and ₹ 30,869 million ($ 11.9422 million) of preference share redemption reserve as at March 31, 20172020 and March 31, 2021 respectively. Capital reserve The balance in capital reserve as ofat March 31, 20172020 and March 31, 2021 is Rs. 190,186₹ 184,328 million and ₹ 182,697 million ($ 2,932.72,498 million). respectively. The said balance in capital reserve has mainly arisen pursuant to extinguishment of non-controlling interests of erstwhile Cairn India Limited and acquisition of ASI. Further, changes in capital reserve are due to recognition/derecognition of put option liability and non-controlling interests pertaining to ASI. 31. Non-controlling Interests (‘NCI’) Details of subsidiaries that have material non-controlling interests 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. Note 34 to the financial statements lists the details of shareholdings in the subsidiaries. The Non-controlling interests that are material to the Group relate to Hindustan Zinc Limited (HZL) and Bharat Aluminium Company Limited (BALCO) as at March 31, 2020 and March 31, 2021. As at March 31, 2020, NCIs hold an economic interest by virtue of their shareholding of 35.08%, 49.00%, 26.00%, 48.37% and 4.51% in HZL, BALCO, BMM, ASI and ESL respectively. As at March 31, 2021, these holdings are 35.08%, 49.00%, 26.00%, 48.37%, 4.51% and 10% in HZL, BALCO, BMM, ASI, ESL and FPL respectively. The principal place of business of HZL, BALCO, ESL and FPL is in India, BMM is in South Africa and ASI is in Japan, South Korea and Taiwan. The table below shows summarized financial information of subsidiaries of the Group that have material non-controlling interests. The amounts are presented before inter-company eliminations. | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | | (₹ in million) | | | | HZL | | | BALCO | | | Others | | | Total | | Current assets | | | 248,153 | | | | 27,235 | | | | 33,886 | | | | 309,274 | | Non-current assets | | | 213,673 | | | | 113,872 | | | | 99,626 | | | | 427,171 | | Current liabilities | | | 53,035 | | | | 62,034 | | | | 31,544 | | | | 146,613 | | Non-current liabilities | | | 1,842 | | | | 32,992 | | | | 74,411 | | | | 109,245 | | Equity attributable to equity holders of the Parent | | | 264,198 | | | | 23,501 | | | | 27,514 | | | | 315,213 | | Non-controlling interests* | | | 142,751 | | | | 22,580 | | | | 4,043 | | | | 169,374 | |
* | ₹ 4,000 million ($ 53 million) (loss) attributable to NCI of ASI transferred to put option liability as at March 31, 2020 |
| | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | | (₹ in million) | | | | HZL | | | BALCO | | | Others | | | Total | | Current assets | | | 245,694 | | | | 28,748 | | | | 41,604 | | | | 316,046 | | Non-current assets | | | 203,262 | | | | 110,396 | | | | 134,990 | | | | 448,648 | | Current liabilities | | | 77,512 | | | | 53,990 | | | | 37,575 | | | | 169,077 | | Non-current liabilities | | | 45,043 | | | | 28,874 | | | | 77,778 | | | | 151,695 | | Equity attributable to equity holders of the Parent | | | 211,900 | | | | 28,703 | | | | 59,236 | | | | 299,839 | | Non-controlling interests* | | | 114,501 | | | | 27,577 | | | | 7,374 | | | | 149,452 | |
* | ₹ 5,369 million ($ 73 million) (loss) attributable to NCI of ASI transferred to put option liability as at March 31, 2021. |
| | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | | (US dollars In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Current assets | | | 3,359 | | | | 393 | | | | 569 | | | | 4,321 | | Non-current assets | | | 2,779 | | | | 1,509 | | | | 1,846 | | | | 6,134 | | Current liabilities | | | 1,060 | | | | 738 | | | | 514 | | | | 2,312 | | Non-current liabilities | | | 616 | | | | 395 | | | | 1,063 | | | | 2,074 | | Equity attributable to equity holders of the Parent | | | 2,897 | | | | 392 | | | | 810 | | | | 4,099 | | Non-controlling interests | | | 1,565 | | | | 377 | | | | 101 | | | | 2,043 | |
| | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2019 | | | | (₹ In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Revenue | | | 208,336 | | | | 100,491 | | | | 62,660 | | | | 371,487 | | Expenses | | | (130,710 | ) | | | (100,287 | ) | | | (61,384 | ) | | | (292,381 | ) | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 77,626 | | | | 204 | | | | 1,276 | | | | 79,106 | | | | | | | | | | | | | | | | | | | Profit / (loss) attributable to equity holders of the Parent | | | 50,396 | | | | 104 | | | | 2,152 | | | | 52,652 | | Profit / (loss) attributable to non-controlling interests | | | 27,230 | | | | 100 | | | | (876 | ) | | | 26,454 | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 77,626 | | | | 204 | | | | 1,276 | | | | 79,106 | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | 246 | | | | (182 | ) | | | (2,298 | ) | | | (2,234 | ) | Other comprehensive income / (loss) attributable to non-controlling interests | | | 136 | | | | (174 | ) | | | (795 | ) | | | (833 | ) | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) during the year | | | 382 | | | | (356 | ) | | | (3,093 | ) | | | (3,067 | ) | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 50,642 | | | | (78 | ) | | | (146 | ) | | | 50,418 | | Total comprehensive income / (loss) attributable to non-controlling interests | | | 27,366 | | | | (74 | ) | | | (1,671 | ) | | | 25,621 | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) during the year | | | 78,008 | | | | (152 | ) | | | (1,817 | ) | | | 76,039 | | | | | | | | | | | | | | | | | | | Dividends paid / payable to non-controlling interests, including dividend tax | | | (35,739 | ) | | | — | | | | — | | | | (35,739 | ) | | | | | | | | | | | | | | | | | | Net cash inflow from operating activities | | | 87,806 | | | | 20,610 | | | | 14,272 | | | | 122,688 | | Net cash (outflow) / inflow from investing activities | | | (10,917 | ) | | | (5,735 | ) | | | (19,027 | ) | | | (35,679 | ) | Net cash (outflow) / inflow from financing activities | | | (96,301 | ) | | | (11,552 | ) | | | 6,712 | | | | (101,141 | ) | | | | | | | | | | | | | | | | | | Net cash (outflow) / inflow | | | (19,412 | ) | | | 3,323 | | | | 1,957 | | | | (14,132 | ) | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2020 | | | | (₹ In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Revenue | | | 183,321 | | | | 87,465 | | | | 65,667 | | | | 336,453 | | Expenses | | | (115,651 | ) | | | (89,262 | ) | | | (74,126 | ) | | | (279,039 | ) | Profit / (loss) for the year | | | 67,670 | | | | (1,797 | ) | | | (8,459 | ) | | | 57,414 | | Profit / (loss) attributable to equity holders of the Parent | | | 43,933 | | | | (916 | ) | | | (4,751 | ) | | | 38,266 | | Profit / (loss) attributable to non-controlling interests | | | 23,737 | | | | (881 | ) | | | (3,708 | ) | | | 19,148 | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 67,670 | | | | (1,797 | ) | | | (8,459 | ) | | | 57,414 | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | (649 | ) | | | 19 | | | | (2,102 | ) | | | (2,732 | ) | Other comprehensive income / (loss) attributable to non-controlling interests | | | (351 | ) | | | 18 | | | | (947 | ) | | | (1,280 | ) | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) during the year | | | (1,000 | ) | | | 37 | | | | (3,049 | ) | | | (4,012 | ) | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 43,284 | | | | (897 | ) | | | (6,853 | ) | | | 35,534 | | Total comprehensive income / (loss) attributable to non-controlling interests | | | 23,386 | | | | (863 | ) | | | (4,655 | ) | | | 17,868 | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) during the year | | | 66,670 | | | | (1,760 | ) | | | (11,508 | ) | | | 53,402 | | | | | | | | | | | | | | | | | | | Net cash inflow / (outflow) from operating activities | | | 74,282 | | | | 1,069 | | | | 7,017 | | | | 82,368 | | Net cash (outflow) / inflow from investing activities | | | (36,247 | ) | | | (1,904 | ) | | | (6,204 | ) | | | (44,355 | ) | Net cash (outflow) / inflow from financing activities | | | (19,276 | ) | | | (886 | ) | | | (4,186 | ) | | | (24,348 | ) | | | | | | | | | | | | | | | | | | Net cash inflow / (outflow) | | | 18,759 | | | | (1,721 | ) | | | (3,373 | ) | | | 13,665 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2021 | | | | (₹ In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Revenue | | | 220,704 | | | | 96,879 | | | | 77,202 | | | | 394,785 | | Expenses | | | (141,492 | ) | | | (86,221 | ) | | | (43,423 | ) | | | (271,136 | ) | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 79,212 | | | | 10,658 | | | | 33,779 | | | | 123,649 | | | | | | | | | | | | | | | | | | | Profit / (loss) attributable to equity holders of the Parent | | | 51,424 | | | | 5,436 | | | | 32,682 | | | | 89,542 | | Profit / (loss) attributable to non-controlling interests | | | 27,788 | | | | 5,222 | | | | 1,097 | | | | 34,107 | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 79,212 | | | | 10,658 | | | | 33,779 | | | | 123,649 | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | (28 | ) | | | (235 | ) | | | 2,866 | | | | 2,603 | | Other comprehensive income / (loss) attributable to non-controlling interests | | | (15 | ) | | | (225 | ) | | | 1,180 | | | | 940 | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) during the year | | | (43 | ) | | | (460 | ) | | | 4,046 | | | | 3,543 | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 51,396 | | | | 5,201 | | | | 35,548 | | | | 92,145 | | Total comprehensive income / (loss) attributable to non-controlling interests | | | 27,773 | | | | 4,997 | | | | 2,277 | | | | 35,047 | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) during the year | | | 79,169 | | | | 10,198 | | | | 37,825 | | | | 127,192 | | | | | | | | | | | | | | | | | | | Dividends paid / payable to non-controlling interests, including dividend tax | | | (56,029 | ) | | | — | | | | — | | | | (56,029 | ) | | | | | | | | | | | | | | | | | | Net cash inflow from operating activities | | | 191,094 | | | | 13,996 | | | | 12,708 | | | | 217,798 | | Net cash (outflow) / inflow from investing activities | | | (111,459 | ) | | | (3,083 | ) | | | (5,337 | ) | | | (119,879 | ) | Net cash (outflow) / inflow from financing activities | | | (95,286 | ) | | | (11,463 | ) | | | (6,763 | ) | | | (113,512 | ) | | | | | | | | | | | | | | | | | | Net cash (outflow) / inflow | | | (15,651 | ) | | | (550 | ) | | | 608 | | | | (15,593 | ) | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2021 | | | | (US dollars in million) | | | | HZL | | | BALCO | | | Others | | | Total | | Revenue | | | 3,018 | | | | 1,325 | | | | 1,056 | | | | 5,399 | | Expenses | | | (1,935 | ) | | | (1,179 | ) | | | (594 | ) | | | (3,708 | ) | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 1,083 | | | | 146 | | | | 462 | | | | 1,691 | | | | | | | | | | | | | | | | | | | Profit / (loss) attributable to equity holders of the Parent | | | 703 | | | | 74 | | | | 448 | | | | 1,225 | | Profit / (loss) attributable to non-controlling interests | | | 380 | | | | 72 | | | | 14 | | | | 466 | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | 1,083 | | | | 146 | | | | 462 | | | | 1,691 | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) attributable to the equity holders of the Parent | | | (0 | ) | | | (3 | ) | | | 39 | | | | 36 | | Other comprehensive income / (loss) attributable to non-controlling interests | | | (0 | ) | | | (3 | ) | | | 16 | | | | 13 | | | | | | | | | | | | | | | | | | | Other comprehensive income / (loss) during the year | | | (0 | ) | | | (6 | ) | | | 55 | | | | 49 | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) attributable to the equity holders of the Parent | | | 703 | | | | 71 | | | | 487 | | | | 1,261 | | Total comprehensive income / (loss) attributable to non-controlling interests | | | 380 | | | | 68 | | | | 31 | | | | 479 | | | | | | | | | | | | | | | | | | | Total comprehensive income / (loss) during the year | | | 1,083 | | | | 139 | | | | 518 | | | | 1,740 | | | | | | | | | | | | | | | | | | | Dividends paid / payable to non-controlling interests, including dividend tax | | | (766 | ) | | | — | | | | — | | | | (766 | ) | | | | | | | | | | | | | | | | | | Net cash inflow / (outflow) from operating activities | | | 2,613 | | | | 191 | | | | 174 | | | | 2,978 | | Net cash (outflow) / inflow from investing activities | | | (1,524 | ) | | | (42 | ) | | | (73 | ) | | | (1,639 | ) | Net cash (outflow) / inflow from financing activities | | | (1,303 | ) | | | (157 | ) | | | (92 | ) | | | (1,552 | ) | | | | | | | | | | | | | | | | | | Net cash inflow / (outflow) | | | (214 | ) | | | (8 | ) | | | 9 | | | | (213 | ) | | | | | | | | | | | | | | | | | |
The effect of changes in ownership interests in subsidiaries that did not result in a loss of control is as follows: | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2019 | | | | (₹ In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Changes in NCI | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2020 | | | | (₹ In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Changes in NCI | | | — | | | | — | | | | (2,342 | ) | | | (2,342 | ) | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2021 | | | | (₹ In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Changes in NCI | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | For the Year Ended March 31, 2021 | | | | (US Dollars In Million) | | | | HZL | | | BALCO | | | Others | | | Total | | Changes in NCI | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | |
32. Capital management 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 other borrowings. The Group’s policy is to use current year pursuantand non-current borrowings to mergermeet 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 describedreduced by cash and cash equivalents, other bank balances, current investments. Equity comprises all components including other comprehensive income. The following table summarizes the capital of the Group: | | | | | | | | | | | | | As at March 31, | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Equity | | | 681,895 | | | | 734,049 | | | | 10,036 | | | | | | | | | | | | | | | Cash and cash equivalentsa | | | 50,598 | | | | 48,537 | | | | 664 | | Short term investmentsa | | | 326,639 | | | | 276,494 | | | | 3,780 | | Non-current bank depositsb | | | 338 | | | | 1,107 | | | | 15 | | | | | | | | | | | | | | | Total cash (a) | | | 377,575 | | | | 326,138 | | | | 4,459 | | Current borrowings (Note 22) | | | 212,231 | | | | 189,600 | | | | 2,592 | | Non-current borrowings (Note 22) | | | 367,244 | | | | 379,622 | | | | 5,191 | | | | | | | | | | | | | | | Total debt (b) | | | 579,475 | | | | 569,222 | | | | 7,783 | | Net debt (c=(b-a)) | | | 201,900 | | | | 243,084 | | | | 3,324 | | | | | | | | | | | | | | | Total capital (equity+net debt) (d) | | | 883,795 | | | | 977,133 | | | | 13,360 | | | | | | | | | | | | | | | Gearing ratio (c/d) | | | 0.2 | | | | 0.2 | | | | 0.2 | |
a) | The constituents of ‘total cash’ for the purpose of capital management disclosure includes only those amounts of restricted funds that are corresponding to liabilities (e.g. margin money deposits). Consequently, restricted funds of ₹ 1,530 million and ₹ 6,352 million ($ 87 million) as at March 31, 2020 and March 31, 2021 respectively have been excluded from ‘total cash’ in the capital management disclosures. Till March 31, 2020 such restricted balance were also included in total cash. (Refer notes 19, 20 and 17). |
b) | Additionally, Non-current bank deposits of ₹ 338 million and ₹ 1,107 million ($ 15 million) as at March 31, 2020 and March 31, 2021 respectively have been included to form part of ‘total cash’ in the capital management disclosures. |
33. Commitments, guarantees, contingencies and other disclosures In the normal course of business, the Group enters into certain capital commitments and also gives certain financial guarantees. A. Capital commitments The Group has a number of continuing operational and financial commitments in note 1.the normal course of business including: Dividends
Exploratory mining 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: Each equity
| | | | | | | | | | | | | | | As at, | | | | March 31, 2020 | | | March 31, 2021 | | | March 31, 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Oil & Gas sector | | | | | | | | | | | | | Cairn Oil & Gas | | | 31,464 | | | | 15,547 | | | | 213 | | | | | | | | | | | | | | | Aluminium sector | | | | | | | | | | | | | Lanjigarh Refinery (Phase II) | | | 15,728 | | | | 11,877 | | | | 162 | | Jharsuguda 1.25 MTPA smelter | | | 4,140 | | | | 4,630 | | | | 63 | | | | | | | | | | | | | | | Zinc sector | | | | | | | | | | | | | Zinc India (mines expansion, solar and smelter) | | | 9,123 | | | | 3,625 | | | | 50 | | Gamsberg mining & milling project | | | 1,306 | | | | 938 | | | | 13 | | | | | | | | | | | | | | | Copper sector | | | | | | | | | | | | | Tuticorin Smelter 400 KTPA* | | | 27,913 | | | | 29,951 | | | | 410 | | | | | | | | | | | | | | | Others | | | 16,112 | | | | 18,722 | | | | 256 | | | | | | | | | | | | | | | Total | | | 105,786 | | | | 85,290 | | | | 1,167 | | | | | | | | | | | | | | |
* | currently contracts are under suspension under the force majeure clause as per the contract |
Committed work programme (Other than capital commitment): | | | | | | | | | | | | | | | As at, | | | | March 31, 2020 | | | March 31, 2021 | | | March 31, 2021 | | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Oil & Gas sector | | | | | | | | | | | | | Cairn India (OALP - Oil and Gas blocks) | | | 58,409 | | | | 56,254 | | | | 769 | | | | | | | | | | | | | | |
Other Commitments | (i) | 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 at (5%/7%) at variable cost as per the conditions referred to in PPA. The PPA has a tenure of twenty five years, expiring in FY2037. |
| (ii) | TSPL has signed a long term power purchase agreement (PPA) with Punjab State Power Corporation Limited (PSPCL) [formerly known as Punjab State Electricity Board (PSEB)] for supply of power generated from the power plant. The PPA has tenure of twenty five years, expiring in FY2042. |
B. Guarantees The aggregate amount of indemnities and other guarantees on which the Group does not expect any material losses, was ₹ 64,878 million and ₹ 62,810 million ($ 860 million) as at March 31, 2020 and March 31, 2021 respectively. The Group has given guarantees in the normal course of business as stated below: Guarantees and bonds advanced to the customs authorities in India of ₹ 4,713 million and ₹ 6,477 million ($ 89 million) as at March 31, 2020 and March 31, 2021 respectively relating to the export and payment of import duties on purchases of raw material and capital goods. Guarantees issued for Group’s share holderof minimum work programme commitments of ₹ 29,059 million and ₹ 28,888 million ($ 395 million) as at March 31, 2020 and March 31, 2021 respectively. Guarantees of ₹ 537 million and ₹ 794 million ($ 11 million) issued under bid bond for placing bids as at March 31, 2020 and March 31, 2021 respectively. Bank guarantees of ₹ 1,150 million and ₹ 1,150 million ($ 16 million) outstanding as at March 31, 2020 and March 31, 2021 respectively 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 of ₹ 29,419 million and ₹ 25,501 million ($ 349 million) as at March 31, 2020 and March 31, 2021 respectively 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. C. Export Obligations The Indian entities of the Group have export obligations of ₹ 38,269 million and ₹ 21,653 million ($ 296 million) as at March 31, 2020 and March 31, 2021 respectively on account of concessional rates of import duty paid on capital goods under the Export Promotion Capital Goods Scheme and under the Advance License 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 ₹ 6,072 million and ₹ 3,534 million ($ 48 million) as at March 31, 2020 and March 31, 2021 respectively, plus applicable interest. The Group has given bonds of ₹ 16,950 million and ₹ 17,750 million ($ 243 million) as at March 31, 2020 and March 31, 2021 respectively to custom authorities against these export obligations. D. Contingencies The Group discloses the following legal and tax cases as contingent liabilities. Hindustan Zinc Limited: 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 ₹ 3,339 million ($ 46 million) as at March 31, 2020 and March 31, 2021 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 entitledunlikely that the claim will lead to dividends asa future obligation and when thus no provision has been made in the financial statements. Vedanta Limited: Income tax Vedanta Limited declares(notice was served on Cairn India Limited which subsequently merged with Vedanta Limited, accordingly now referred to as Vedanta Limited/Company) received a demand totalling ₹ 204,947 million ($ 2,802 million) (including interest of ₹ 102,473 million ($ 1,401 million)) holding the Company as ‘assessee in default’ as per Section 201 of Indian Income Tax Act. The Group has challenged the said order and pays dividends after obtaining shareholder approval / board approvalpresently pending before the Income Tax Appellate Tribunal (ITAT). The Group also filed a writ petition before the Delhi High Court wherein it has raised several grounds against the order said order. The matter came up for hearing on February 05, 2020 before Delhi High Court but adjourned and the next date of hearing is July 29, 2021. Separately, Vedanta Resources Limited has filed a Notice of Claim against the Government of India (‘GOI’) under the UK-India Bilateral Investment Treaty (the BIT). Hearing already concluded in May 2019 and award awaited. Separately Cairn UK Holdings Limited (“CUHL”), on whom the primary liability of income tax lies, had received an Order from the ITAT in the financial year 2016-17 holding that the transaction is taxable in view of the clarificatory amendment in the law but also acknowledged that amendment being a retrospective transaction, interest would not be levied. Hence affirming a demand of ₹ 102,473 million ($ 1,401 million) excluding the interest portion that had previously been claimed. Against this demand Tax authorities have recovered ₹ 58,680 million ($ 802 million) from the CUHL. Vedanta has also paid interim dividend of ₹ 50 million ($ 1 million) to the Tax authorities and thus reducing the liability to ₹ 43,840 million ($ 598 million). In related proceedings, the International Arbitration Tribunal ruled unanimously in the case of Cairn Energy Plc that India had breached its obligations under the BIT. The Company understands that Government of India has challenged the ruling before the International Court of Justice at The Hague. As the Cairn Energy Plc Arbitration award received on December 23, 2020 regarding retrospective tax will have a direct influence upon the Group’s case, due to the fact that primary liability of paying the income tax is CUHL’s and in this case there is expected to be no income tax liability in the hands of CUHL, the claim of amounts assessed as in default against the Group should be eliminated. Further going by the recent ruling of Supreme court in an another unrelated matter, it was held that person under Section 195 cannot be held responsible to do impossible in case of retrospective act. Thus, it was impossible for Vedanta Limited (successor in the business of Cairn India Limited) to deduct income tax and can’t be held responsible for default under Section 201. The Group believes that owing to the similarity in the facts of the case it has a good case to argue and accordingly it is unlikely that any liability will devolve upon the group. Ravva Joint Venture arbitration proceedings ONGC Carry The Ravva Production Sharing Contract (PSC) obliges the contractor parties to pay a proportionate share of ONGC’s exploration, development, production and contract costs in consideration for ONGC’s payment of costs related to the construction and other activities it conducted in Ravva prior to the effective date of the Ravva PSC (the ONGC Carry). The question as to how the ONGC Carry is to be recovered and calculated, along with other issues, was submitted to an International Arbitration Tribunal in August 2002 which rendered a decision on the ONGC Carry in favour of the contractor parties (including Vedanta Limited (Cairn India Limited which subsequently merged with Vedanta Limited, accordingly now referred to as Vedanta Limited)) whereas four other issues were decided in favour of Government of India (GOI) in October 2004 (Partial Award). The GOI then proceeded to challenge the ONGC Carry decision before the Malaysian courts, as Kuala Lumpur was the seat of the arbitration. The Federal Court of Malaysia upheld the Partial Award. As the Partial Award did not quantify the sums, therefore, contractor parties approached the same Arbitration Tribunal to pass a Final Award in the subject matter since it had retained the jurisdiction to do so. The Arbitral Tribunal was reconstituted and the Final Award was passed in October 2016 in Vedanta Limited’s favour. GOI’s challenge of the Final Award has been dismissed by the Malaysian High Court and the next appellate court in Malaysia, i.e., Malaysian Court of Appeal. GOI then filed an appeal at Federal Court of Malaysia. The matter was heard on February 28, 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 now listed for hearing in the Hon’ble Delhi High Court, which is pending adjudication. Base Development Cost Ravva joint operations had received a claim from the Ministry of Petroleum and Natural Gas, Government of India (GOI) for the period from 2000-2005 for ₹ 9,455 million ($ 129 million) for an alleged underpayment of profit petroleum (by recovering higher Base Development Costs (“BDC”) against the cap imposed in the PSC) to the Government of India (GOI), out of which, Vedanta Limited’s (Cairn India Limited which subsequently merged with Vedanta Limited, accordingly now referred to as Vedanta Limited) share will be ₹ 2,126 million ($ 29 million) plus interest. Joint venture partners initiated the arbitration proceedings and Arbitration Tribunal published the Award in January 2011 allowing claimants (including Vedanta Limited) to recover the development costs spent to the tune of ₹ 20,377 million ($ 278 million) and disallowed over run of ₹ 1,613 million ($ 22 million) spent in respect of BDC along with 50% legal costs. Finally, the Supreme Court of India on September 16, 2020 pronounced the order in favour of Vedanta, rejecting all objections of the GOI and allowed enforcement of the Arbitration Award. With the Supreme Court order the Ravva BDC Matter stands closed. In connection with the above two matters, the Company has received an order dated October 22, 2018 from the GOI directing oil marketing companies (OMCs) who are the offtakers of Ravva Crude to divert the sale proceeds to Government’s account. GOI alleges that the Ravva Joint Operations (consisting of four joint venture partners) has short paid profit petroleum of ₹ 23,015 million (US$ 314 million) (the Company’s share approximately - ₹ 6,817 million (US$ 93 million)) on account of the two disputed issues of ONGC Carry and BDC matters, out of which ₹ 4,691 Crore (US$ 64 million) pertains to ONGC Carry and ₹ 2,126 Crore (US$ 29 million) pertains to BDC Matter. Against an interim dividend. Dividendsapplication, filed by Vedanta Limited along with one of its joint venture partner, for seeking stay of such action from GOI, before the Delhi High Court, the Court directed the OMCs to deposit above sums to the Delhi High Court for both BDC and ONGC Carry matters. However, Vedanta Limited (and other joint venture partner) has been given the liberty to seek withdrawal of the amounts from the Court upon furnishing a bank guarantee of commensurate value. On the basis of the above direction, the customers have deposited ₹ 6,817 million ($ 93 million) out of which ₹ 6,157 million ($ 84 million) has been withdrawn post submission of bank guarantee. The Hon’ble Delhi High Court (HC) vide its order dated May 28, 2020 read with order dated June 4, 2020 has directed that all future sale proceeds of Ravva Crude w.e.f. June 5, 2020 be paid directly to Vedanta Limited by the OMCs. In view of the closure of the BDC matter, the Company has also filed an application in HC on September 22, 2020 seeking refund of remaining ₹ 660 million (US$ 9 million) and release of Bank guarantees submitted in Court pertaining to the BDC matter. The high court has since released bank guarantees of ₹ 1,466 million (US$ 20 million). During the proceedings of the above matter, the GOI has also filed an interim application seeking deposit by the said OMCs of an amount of ₹ 6,377 million ($ 87 million) (Vedanta’s share of ₹ 4,105 million ($ 56 million) towards interest on the alleged short payment of profit petroleum by the petitioners, i.e., Vedanta Limited (and other joint venture partner). The matter is pending before the Delhi High Court along with ONGC carry case. 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, the Company would be liable for approximately ₹ 6,958 million plus interest and ₹ 4,691 million ($ 64 million) plus interest as at March 31, 2020 and March 31, 2021 respectively. Proceedings related to the Imposition of Entry Tax Vedanta Limited and other Group companies, i.e., Bharat Aluminium Company Limited (BALCO) and Hindustan Zinc Limited (HZL) challenged the constitutional validity of the local statutes and related notifications in the states of Chhattisgarh, Odisha and Rajasthan pertaining to the levy of entry tax on the entry of goods brought into the respective states from outside. 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 proceeded with hearing the matters. The regular bench remanded the entry tax matters relating to the issue of discrimination against domestic goods bought from other States to the respective High Courts for final determination but retained the issue of jurisdiction for levy on imported goods, for determination by the regular bench of the Supreme Court. Following the order of the Supreme Court, the Group filed writ petitions in respective High Courts. On October 09, 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 August 22, 2016, exempted the entry tax levy on SEZ operations. The total claims against Vedanta Limited and its subsidiaries are ₹ 13,664 million and ₹ 14,119 million ($ 193 million) net of provisions made as at March 31, 2020 and March 31, 2021 respectively. BALCO: Challenge against imposition of Energy Development Cess BALCO challenged the imposition of Energy Development Cess levied on generators and distributors of electrical energy at 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 at the rate of 10 paise while the State Electricity Board is required to pay at 5 paise. The High Court of Chhattisgarh by order dated December 15, 2006 declared the provisions imposing ED Cess on CPPs as discriminatory and therefore ultra vires the Constitution. BALCO has sought refund of Cess paid till March 2006 amounting to ₹ 345 million ($ 5 million). The State of Chhattisgarh moved a Special Leave Petition in Indian Rupees. Remittancethe Supreme Court (the SC) and the SC whilst issuing notice has stayed the refund of dividends outside Indiathe 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 of the same. Final argument in this matter started before the Supreme Court. In case the Supreme Court overturns the decision of the High Court, the Group would be liable to pay an additional amount of ₹ 8,407 million and ₹ 9,304 million ($ 127 million) as at March 31, 2020 and March 31, 2021 respectively. Accordingly, the total exposure on the Group would be ₹ 8,752 million and ₹ 9,650 million ($ 132 million) as at March 31, 2020 and March 31, 2021 respectively. Miscellaneous disputes- Income tax The Group is governed by Indian lawinvolved in various tax disputes amounting to ₹ 19,093 million and ₹ 19,442 million ($ 266 million) as at March 31, 2020 and March 31, 2021 respectively relating to income tax. It also includes similar matters where initial assessment is pending for subsequent periods and where the Group has made claims and assessments are in progress. These mainly relate to the disallowance of tax holiday for 100% Export Oriented Undertaking under section 10B of the Income Tax Act, 1961, disallowance of tax holiday benefit on foreign exchangeproduction 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. Interest and penalty, if any would be additional. Refer note 9(e) for other income tax disputes. The Group believes that these disallowances are not tenable and accordingly no provision is considered necessary. Miscellaneous other disputes The Group is subject to applicable taxes. various claims and exposures which arise in the ordinary course of conducting and financing its business from the excise, indirect tax authorities and others. These claims and exposures mostly relate to the assessable values of sales and purchases or to incomplete documentation supporting the companies’ returns or other claims.On April 29, 2014The approximate value of claims (excluding the boarditems as set out separately above) against the Group companies total ₹ 39,960 million and ₹ 47,820 million ($ 654 million) as at March 31, 2020 and March 31, 2021 respectively.
The Group considers that it can take steps such that the risks can be mitigated and that there will no significant unprovided liabilities arising. 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 directorsoperations, cash flows or the financial position of the Group. 34. Interest in Other entities The Group’s subsidiaries as at March 31, 2021 are as follows: | | | | | | | | | | | | | | | Susbsidiaries | | Principal activities | | Country of Incorporation | | Immediate holding company | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2020 | | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2021 | | Cairn Energy India Pty Limited2 | | Oil and gas exploration, development and production | | Australia | | Cairn India Holdings Limited | | | 100.00 | | | | — | | Copper Mines of Tasmania Pty Limited (“CMT”) | | Copper mining | | Australia | | Monte Cello BV | | | 100.00 | | | | 100.00 | | Thalanga Copper Mines Pty Limited (“TCM”) | | Copper mining | | Australia | | Monte Cello BV | | | 100.00 | | | | 100.00 | | Bharat Aluminium Company Limited (“BALCO”) | | Aluminium mining and smelting | | India | | Vedanta Limited | | | 51.00 | | | | 51.00 | |
| | | | | | | | | | | | | | | Susbsidiaries | | Principal activities | | Country of Incorporation | | Immediate holding company | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2020 | | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2021 | | Electrosteel Steels Limited | | Manufacturing of Steel & DI Pipe | | India | | Vedanta Limited | | | 95.49 | | | | 95.49 | | Goa Sea Port Private Limited | | Infrastructure | | India | | Sterlite Ports Limited | | | 100.00 | | | | 100.00 | | Hindustan Zinc Limited (“HZL”) | | Zinc mining and smelting | | India | | Vedanta Limited | | | 64.92 | | | | 64.92 | | MALCO Energy Limited (“MEL”) | | Power generation | | India | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Maritime Ventures Private Limited | | Infrastructure | | India | | Sterlite Ports Limited | | | 100.00 | | | | 100.00 | | Paradip Multi Cargo Berth Private Limited | | Infrastructure | | India | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Sesa Mining Corporation Limited | | Iron ore mining | | India | | Sesa Resources Limited | | | 100.00 | | | | 100.00 | | Sesa Resources Limited (“SRL”) | | Iron ore mining | | India | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Sterlite Ports Limited | | Infrastructure | | India | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Talwandi Sabo Power Limited (“TSPL”) | | Power generation | | India | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Vizag General Cargo Berth Private Limited | | Infrastructure | | India | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Killoran Lisheen Finance Limited(a) | | Investment company | | Ireland | | Vedanta Lisheen Holdings Limited | | | 100.00 | | | | 100.00 | | Killoran Lisheen Mining Limited | | Development of a Zinc and lead mine | | Ireland | | Vedanta Lisheen Holdings Limited | | | 100.00 | | | | 100.00 | | Lisheen Milling Limited | | Manufacturing3 | | Ireland | | Vedanta Lisheen Holdings Limited | | | 100.00 | | | | 100.00 | |
| | | | | | | | | | | | | | | Susbsidiaries | | Principal activities | | Country of Incorporation | | Immediate holding company | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2020 | | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2021 | | Lisheen Mine Partnership | | Development and operation of a zinc/ lead mine | | Ireland | | 50% each held by Killoran Lisheen Mining Limited & Vedanta Lisheen Mining Limited | | | 100.00 | | | | 100.00 | | Vedanta Exploration Ireland Limited(a) | | Exploration company | | Ireland | | Vedanta Lisheen Holdings Limited | | | 100.00 | | | | 100.00 | | Vedanta Lisheen Holdings Limited | | Investment company | | Netherlands | | THL Zinc Holding BV | | | 100.00 | | | | 100.00 | | Vedanta Lisheen Mining Limited | | Zinc and lead mining | | Ireland | | Vedanta Lisheen Holdings Limited | | | 100.00 | | | | 100.00 | | AvanStrate Inc. (‘ASI’) | | Holding Company | | Japan | | Cairn India Holdings Limited | | | 51.63 | | | | 51.63 | | Cairn India Holdings Limited | | Investment company | | Jersey | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Western Cluster Limited | | Iron ore mining | | Liberia | | Bloom Fountain Limited | | | 100.00 | | | | 100.00 | | Bloom Fountain Limited | | Operating (Iron ore) and Investment Company | | Mauritius | | Vedanta Limited | | | 100.00 | | | | 100.00 | | CIG Mauritius Holdings Private Limited(a) | | Investment Company | | Mauritius | | Cairn Energy Hydrocarbons Limited | | | 100.00 | | | | 100.00 | | CIG Mauritius Private Limited(a) | | Investment Holding Company and to provide services and resources relevant to oil & gas exploration, production and development | | Mauritius | | CIG Mauritius Holdings Private Limited | | | 100.00 | | | | 100.00 | | THL Zinc Limited | | Investment company | | Mauritius | | THL Zinc Ventures Ltd | | | 100.00 | | | | 100.00 | | THL Zinc Ventures Limited | | Investment company | | Mauritius | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Amica Guesthouse (Proprietary) Limited | | Accommodation and catering services | | Namibia | | SZPL | | | 100.00 | | | | 100.00 | | Namzinc (Proprietary) Limited | | Owns and operates zinc refinery | | Namibia | | SZPL | | | 100.00 | | | | 100.00 | | Skorpion Mining Company (Proprietary) Limited (‘NZ’) | | Exploration, development, treatment production and sale of zinc ore | | Namibia | | SZPL | | | 100.00 | | | | 100.00 | | Skorpion Zinc (Proprietary) Limited (‘SZPL’) | | Operating (Zinc) and Investment Company | | Namibia | | VNHL | | | 100.00 | | | | 100.00 | | THL Zinc Namibia Holdings (Proprietary) Limited (“VNHL”) | | Mining and Exploration and Investment company | | Namibia | | THL Zinc Ltd | | | 100.00 | | | | 100.00 | |
| | | | | | | | | | | | | | | Susbsidiaries | | Principal activities | | Country of Incorporation | | Immediate holding company | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2020 | | | The Company’s / Immediate holding Company’s percentage holding (in %) as at March 31, 2021 | | Lakomasko BV | | Investment company | | Netherlands | | THL Zinc Holding BV | | | 100.00 | | | | 100.00 | | Monte Cello BV (“MCBV”) | | Holding company | | Netherlands | | Vedanta Limited | | | 100.00 | | | | 100.00 | | THL Zinc Holding BV | | Investment company | | Netherlands | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Cairn Energy Discovery Limited2 | | Oil and gas exploration, development and production | | Scotland | | Cairn India Holdings Limited | | | 100.00 | | | | — | | Cairn Energy Gujarat Block 1 Limited | | Oil and gas exploration, development and production | | Scotland | | Cairn India Holdings Limited | | | 100.00 | | | | 100.00 | | Cairn Energy Hydrocarbons Limited | | Oil and gas exploration, development and production | | Scotland(b) | | Cairn India Holdings Limited | | | 100.00 | | | | 100.00 | | Cairn Exploration (No. 2) Limited2 | | Oil and gas exploration, development and production | | Scotland | | Cairn India Holdings Limited | | | 100.00 | | | | — | | Black Mountain Mining (Proprietary) Limited | | Exploration, development, production and sale of zinc, lead, copper and associated mineral concentrates | | South Africa | | THL Zinc Ltd | | | 74.00 | | | | 74.00 | | Cairn South Africa Pty Limited4 | | Oil and gas exploration, development and production | | South Africa | | Cairn Energy Hydrocarbons Limited | | | 100.00 | | | | 100.00 | | AvanStrate Korea Inc | | Manufacturer of LCD glass substrate | | South Korea | | Avanstrate (Japan) Inc. | | | 100.00 | | | | 100.00 | | Cairn Lanka Private Limited | | Oil and gas exploration, development and production | | Sri Lanka | | CIG Mauritius Private Limited | | | 100.00 | | | | 100.00 | | AvanStrate Taiwan Inc | | Manufacturer of LCD glass substrate | | Taiwan | | Avanstrate (Japan) Inc. | | | 100.00 | | | | 100.00 | | Fujairah Gold FZC | | Manufacturing of Copper Rod and Refining of Precious Metals (Gold & Silver) | | United Arab Emirates | | Malco Energy Limited | | | 100.00 | | | | 100.00 | | Sterlite (USA) Inc.(a) | | Investment company | | United States of America | | Vedanta Limited | | | 100.00 | | | | 100.00 | | Ferro Alloy Corporation Limited (FACOR) (c) | | Manufacturing of Ferro Alloys and Mining | | India | | Vedanta Limited | | | — | | | | 100.00 | | FACOR Alloys corporation Limited(c) | | Real estate | | India | | FACOR | | | — | | | | 100.00 | | FACOR Power Limited(c) | | Power Generation | | India | | FACOR | | | — | | | | 90.00 | |
(b) | Principal place of business is in India |
(c) | Acquired with effect from September 21, 2020 |
1) | The Group also has interest in certain trusts which are neither significant nor material to the Group. |
2) | Cairn Exploration (No. 2) Limited and Cairn Energy Discovery Limited have been dissolved w.e.f. September 22, 2020. Cairn Energy India (Pty) Ltd. deregistered on August 26, 2020. |
3) | Activity of the company ceased in February 2016. |
4) | deregistered w.e.f. April 06, 2021. |
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: | | | | | | | | | | | | | | | | | | Participating Interest (%) | | Operating Blocks | | Area | | | As at March 31, 2020 | | | As at March 31, 2021 | | India: | | | | | | | | | | | | | Ravva block – Exploration and production | | | Krishna Godavari | | | | 22.50 | | | | 22.50 | | CB-OS/2 – Exploration | | | Cambay Offshore | | | | 60.00 | | | | 60.00 | | CB-OS/2 – Development & production | | | Cambay Offshore | | | | 40.00 | | | | 40.00 | | RJ-ON-90/1 – Exploration | | | Rajasthan Onshore | | | | 100.00 | | | | 100.00 | | RJ-ON-90/1 – Development & production | | | Rajasthan Onshore | | | | 70.00 | | | | 70.00 | | KG-OSN-2009/3 – Exploration | | | Krishna Godavari Offshore | | | | 100.00 | | | | 100.00 | | Non-Operating Blocks | | | | | | | | | | | | | India: | | | | | | | | | | | | | KG-ONN-2003/1 | | | Krishna Godavari Onshore | | | | 49.00 | | | | 49.00 | |
(1) | South Africa Block1-Exploration was relinquished on September 10, 2019. |
35. Related party transactions 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 (formerly Vedanta Resources Plc) Vedanta Resources Holdings Limited Twin Star Holdings Limited Finsider International Company Limited Vedanta Resources Finance Limited Vedanta Resources Cyprus Limited | • | | Vedanta Holdings Mauritius II Limited (c) |
B) | Fellow subsidiaries (with whom transactions have taken place) |
| • | | Konkola Copper Mines (a) |
Sterlite Technologies Limited Sterlite Power Transmission Limited Sterlite Iron and Steel Company Limited Sterlite Power Grid Ventures Limited Twin Star Technologies Limited C) | Post Retirement Benefit Plan |
Balco Employees Provident Fund Trust Hindustan Zinc Ltd Employees Contributory Provident Fund Trust Sesa Group Employees Provident Fund Trust Sesa Mining Corporation Limited Employees Provident Fund Trust Sesa Resources Limited Employees Provident Fund Trust HZL Employee group Gratuity Trust Sesa Group Employees Gratuity Fund and Sesa Group Executives Gratuity Fund Sesa Resources Limited Employees Gratuity Fund Sesa Mining Corporation Limited Employees Gratuity Fund Sesa Group Executives Superannuation scheme Fund Sesa Resources Limited and Sesa Mining Corporation Limited Employees Superannuation Fund | • | | FACOR Superannuation Trust (d) |
| • | | FACOR Employees Gratuity Scheme (d) |
D) | Associates and Joint Ventures (with whom transactions have taken place) |
RoshSkor Township (Pty) Ltd Goa Maritime Private Limited E) | Other Related Parties (with whom transactions have taken place) |
| I) | Enterprises over which key management personnel/their relatives have control or significant influence |
Vedanta Medical Research Foundation Sesa Community Development Foundation Minova Runaya Private Limited | II) | Enterprises which are Associates/Joint Ventures of entities under common control |
(a) | Konkola Copper Mines Plc (KCM) ceased to be a related party w.e.f. May 21, 2019. The Company had total receivable of - ₹ 4,374 million (net of provision of ₹ 2,070 million)) as at 31 March 2020 and ₹ 2,107 million ($ 29 million) (net of provision of ₹ 4,234 million ($ 58 million)) as at 31 March 2021. |
(b) | Ceased to be related party during the year ended March 31, 2020. |
(c) | On December 24, 2020, Vedanta Holdings Mauritius II Limited purchased shares of Vedanta Limited. |
(d) | Acquired during the year. |
Ultimate controlling party Vedanta Limited is a majority-owned and controlled subsidiary of Vedanta Resources Limited recommended a final dividend(‘VRL’). Volcan Investments Limited (‘Volcan’) and its wholly owned subsidiary together hold 100 % of Rs. 1.75 per equitythe 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. A summary of significant related party transactions for the year ended March 31, 2014, which was2019, March 31, 2020 and March 31, 2021 are noted below: | | | | | | | | | | | | | | | | | | | | | | | For the Year ended March 31, 2019 | | | | | | Entities controlling the company/ Fellow Subsidiaries | | | Associates/ Joint Ventures | | | Others | | | Total | | | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | | Income: | | | | | | | | | | | | | | | | | (i) | | Sales | | | 9,184 | | | | — | | | | — | | | | 9,184 | | (ii) | | Other Income | | | | | | | | | | | | | | | | | a) | | Interest income /guarantee commission | | | 394 | | | | — | | | | — | | | | 394 | | b) | | Outsourcing Service Income | | | 30 | | | | — | | | | — | | | | 30 | | c) | | Dividend Income | | | 162 | | | | — | | | | — | | | | 162 | | | | Expenditure and other transactions: | | | | | | | | | | | | | | | | | (i) | | Purchases of goods/services | | | 4,036 | | | | — | | | | 9 | | | | 4,045 | | (ii) | | Long Term Incentive Plan expense | | | 148 | | | | — | | | | — | | | | 148 | | (iii) | | Management and brand fees expenses | | | 3,389 | | | | — | | | | — | | | | 3,389 | | (iv) | | Reimbursement of other expenses (net of recovery) | | | (21 | ) | | | — | | | | — | | | | (21 | ) | (v) | | Corporate Social Responsibility Expenditure / donation | | | — | | | | — | | | | 1,329 | | | | 1,329 | | (vi) | | Contribution to Post retirement employee benefit trust | | | — | | | | — | | | | 714 | | | | 714 | | (vii) | | Remuneration to relative of Key Managerial Personnel | | | — | | | | — | | | | 151 | | | | 151 | | (viii) | | Commission/Sitting Fees | | | | | | | | | | | | | | | | | | | -To Independent directors | | | — | | | | — | | | | 42 | | | | 42 | | | | -To key management personnel | | | — | | | | — | | | | 10 | | | | 10 | | | | -To relatives of key management personnel | | | — | | | | — | | | | 3 | | | | 3 | | (ix) | | Dividend paid. | | | | | | | | | | | | | | | | | | | -To Holding companies | | | 35,126 | | | | — | | | | — | | | | 35,126 | | | | -To key management personnel | | | — | | | | — | | | | 0 | | | | 0 | | | | -To relatives of key management personnel | | | — | | | | — | | | | 4 | | | | 4 | | | | Transactions during the year: | | | | | | | | | | | | | | | | | (i) | | Loans given / (repaid) | | | — | | | | (15 | ) | | | — | | | | (15 | ) | (ii) | | Guarantee given / (taken) | | | (8,735 | ) | | | — | | | | 687 | | | | (8,048 | ) | (iii) | | Guarantee relinquished | | | 8,735 | | | | — | | | | 524 | | | | 9,259 | | (iv) | | Investment made/(redeemed) | | | (1,992 | ) | | | — | | | | — | | | | (1,992 | ) | (v) | | Investments Purchased from | | | 38,124 | | | | — | | | | — | | | | 38,124 | |
| | | | | | | | | | | | | | | | | | | | | | | For the Year ended March 31, 2020 | | | | | | Entities controlling the company/ Fellow Subsidiaries | | | Associates/ Joint Ventures | | | Others | | | Total | | | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | | Income: | | | | | | | | | | | | | | | | | (i) | | Sales | | | 8,554 | | | | — | | | | 22 | | | | 8,576 | | (ii) | | Other Income | | | | | | | | | | | | | | | | | a) | | Interest income /guarantee commission | | | 423 | | | | — | | | | — | | | | 423 | | b) | | Outsourcing Service Income | | | 30 | | | | — | | | | — | | | | 30 | | c) | | Dividend Income | | | 17 | | | | — | | | | 39 | | | | 56 | | | | Expenditure and other transactions: | | | | | | | | | | | | | | | | | (i) | | Purchases of goods/services | | | 581 | | | | — | | | | 67 | | | | 648 | | (ii) | | Long Term Incentive Plan (Recovery) | | | (4 | ) | | | — | | | | (2 | ) | | | (6 | ) | (iii) | | Management and brand fees expenses | | | 5,257 | | | | — | | | | — | | | | 5,257 | | (iv) | | Reimbursement of other expenses (net of recovery) | | | 479 | | | | — | | | | 1 | | | | 480 | | (v) | | Corporate Social Responsibility Expenditure / donation | | | — | | | | — | | | | 1,110 | | | | 1,110 | | (vi) | | Contribution to Post retirement employee benefit trust | | | — | | | | — | | | | 1,117 | | | | 1,117 | | (vii) | | Remuneration to relative of Key Managerial Personnel | | | — | | | | — | | | | 169 | | | | 169 | | (viii) | | Commission/Sitting Fees | | | | | | | | | | | | | | | | | | | -To Independent directors | | | — | | | | — | | | | 42 | | | | 42 | | | | -To key management personnel | | | — | | | | — | | | | 40 | | | | 40 | | | | -To relatives of key management personnel | | | — | | | | — | | | | 3 | | | | 3 | | (ix) | | Dividend paid. | | | | | | | | | | | | | | | | | | | -To Holding companies | | | 7,267 | | | | — | | | | — | | | | 7,267 | | | | -To key management personnel | | | — | | | | — | | | | 0 | | | | 0 | | | | -To relatives of key management personnel | | | — | | | | — | | | | 1 | | | | 1 | | | | Transactions during the year: | | | | | | | | | | | | | | | | | (i) | | Loans given / (repaid) | | | 0 | | | | (3 | ) | | | — | | | | (3 | ) | (ii) | | Financial guarantee given | | | — | | | | — | | | | 2 | | | | 2 | | (iii) | | Financial guarantee relinquished | | | — | | | | — | | | | 255 | | | | 255 | | (iv) | | Investment made/(redeemed) (Refer Note 35 (f)) | | | (44,847 | ) | | | — | | | | — | | | | (44,847 | ) |
| | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2020 | | | | | | Entities controlling the company/ Fellow Subsidiaries | | | Associates/ Joint Ventures | | | Others | | | Total | | | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | | Balances as at year end: | | | | | | | | | | | | | | | | | (i) | | Trade Receivables | | | 30 | | | | — | | | | — | | | | 30 | | (ii) | | Loans | | | 793 | | | | 42 | | | | — | | | | 835 | | (iii) | | Receivable from | | | 1,325 | | | | 10 | | | | 23 | | | | 1,358 | | (iv) | | Trade Payables | | | 1,143 | | | | — | | | | 67 | | | | 1,210 | | (v) | | Payable to | | | 601 | | | | — | | | | 681 | | | | 1,282 | | (vi) | | Investments | | | 1,013 | | | | — | | | | — | | | | 1,013 | | (vii) | | Guarantees outstanding given | | | — | | | | — | | | | 255 | | | | 255 | | (viii) | | Banking Limits assigned/utilised/renewed to/for group companies (Refer Note 35 (d)) | | | 1,150 | | | | — | | | | — | | | | 1,150 | | (ix) | | Remuneration, Commission and consultancy fees payable to KMP and their relatives | | | — | | | | — | | | | 63 | | | | 63 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | For the Year ended March 31, 2021 | | | | | | Entities controlling the company/ Fellow Subsidiaries | | | Associates/ Joint Ventures | | | Others | | | Total | | | Total | | | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | | Income: | | | | | | | | | | | | | | | | | | | | | (i) | | Sales | | | 7,357 | | | | — | | | | 37 | | | | 7,394 | | | | 101 | | (ii) | | Other Income | | | | | | | | | | | | | | | | | | | | | a) | | Interest income /guarantee commission (Refer Note 35 (b)) | | | 6,697 | | | | — | | | | — | | | | 6,697 | | | | 92 | | b) | | Outsourcing Service Income | | | 36 | | | | — | | | | — | | | | 36 | | | | 0 | | c) | | Dividend Income | | | 17 | | | | — | | | | — | | | | 17 | | | | 0 | | | | Expenditure and other transactions: | | | | | | | | | | | | | | | | | | | | | (i) | | Purchases of goods/services | | | 760 | | | | — | | | | 546 | | | | 1,306 | | | | 18 | | (ii) | | Long Term Incentive Plan (Recovery) | | | — | | | | — | | | | — | | | | — | | | | — | | (iii) | | Management and brand fees expenses (Refer Note 35 (e)) | | | 9,855 | | | | — | | | | — | | | | 9,855 | | | | 135 | | (iv) | | Reimbursement of other expenses (net of recovery) | | | 904 | | | | — | | | | (1 | ) | | | 903 | | | | 12 | | (v) | | Corporate Social Responsibility Expenditure / donation | | | — | | | | — | | | | 629 | | | | 629 | | | | 9 | | (vi) | | Contribution to Post retirement employee benefit trust | | | — | | | | — | | | | 585 | | | | 585 | | | | 8 | | (vii) | | Remuneration to relative of Key Managerial Personnel | | | — | | | | — | | | | 127 | | | | 127 | | | | 2 | | (viii) | | Commission/Sitting Fees | | | | | | | | | | | | | | | | | | | | | | | -To Independent directors | | | — | | | | — | | | | 35 | | | | 35 | | | | 0 | | | | -To key management personnel | | | — | | | | — | | | | 15 | | | | 15 | | | | 0 | | | | -To relatives of key management personnel | | | — | | | | — | | | | 3 | | | | 3 | | | | 0 | | (ix) | | Dividend paid. | | | | | | | | | | | | | | | | | | | | | | | -To Holding companies | | | 17,703 | | | | — | | | | — | | | | 17,703 | | | | 242 | | | | -To key management personnel | | | — | | | | — | | | | 0 | | | | 0 | | | | 0 | | | | -To relatives of key management personnel | | | — | | | | — | | | | 2 | | | | 2 | | | | 0 | | (x) | | Guarantee Commission Expense. (Refer Note 35 (a)) | | | 1,332 | | | | — | | | | — | | | | 1,332 | | | | 18 | | | | Transactions during the year: | | | | | | | | | | | | | | | | | | | | | (i) | | Loans given (Net of repayment of ₹ 11,170 million) ($ 153 million) (Refer Note 35 (b)) | | | 71,654 | | | | — | | | | — | | | | 71,654 | | | | 980 | | (ii) | | Financial guarantee given (Refer Note 35 (b)) | | | 31,468 | | | | — | | | | — | | | | 31,468 | | | | 430 | | (iii) | | Financial guarantee relinquished (Refer Note 35 (b)) | | | 31,458 | | | | — | | | | 115 | | | | 31,573 | | | | 432 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | As at March 31, 2021 | | | | | | Entities controlling the company/ Fellow Subsidiaries | | | Associates/ Joint Ventures | | | Others | | | Total | | | Total | | | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | | | Balances as at year end: | | | | | | | | | | | | | | | | | | | | | (i) | | Trade Receivables | | | 466 | | | | — | | | | — | | | | 466 | | | | 6 | | (ii) | | Loans (Refer Note 35 (b)) | | | 70,663 | | | | 49 | | | | — | | | | 70,712 | | | | 970 | | (iii) | | Receivable from (Including brand fee prepaid) (Refer Note 35 (a,e,f)) | | | 9,271 | | | | 10 | | | | 23 | | | | 9,304 | | | | 127 | | (iv) | | Trade Payables | | | 973 | | | | — | | | | 215 | | | | 1,188 | | | | 16 | | (v) | | Payable to (Including brand fee payable) (Refer note 35(e)) | | | 2,078 | | | | — | | | | 866 | | | | 2,943 | | | | 40 | | (vi) | | Guarantees outstanding given (Refer Note 35 (a)) | | | 10 | | | | — | | | | 47 | | | | 57 | | | | 1 | | (vii) | | Banking Limits assigned/utilised/renewed to/for group companies (Refer Note 35 (d)) | | | 1,150 | | | | — | | | | — | | | | 1,150 | | | | 16 | | (viii) | | Remuneration, Commission and consultancy fees payable to KMP and their relatives | | | — | | | | — | | | | 61 | | | | 61 | | | | 1 | |
Remuneration of key management personnel The remuneration of the key management personnel of the Group are set out below in aggregate for each of the categories specified in IAS 24 Related party disclosures. | | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2019 | | | 2020 | | | 2021 | | | 2021 | | | | (₹ in million) | | | (₹ in million) | | | (₹ in million) | | | (US dollars in million) | | Short term employee benefits | | | 413 | | | | 396 | * | | | 277 | | | | 4 | | Post-employment benefits** | | | 14 | | | | 79 | | | | 10 | | | | 0 | | Share based payments | | | 45 | | | | 12 | | | | 2 | | | | 0 | | | | | | | | | | | | | | | | | | | Total | | | 472 | | | | 487 | | | | 289 | | | | 4 | | | | | | | | | | | | | | | | | | |
* | This includes reimbursement to the parent company for remuneration paid to the then CEO and Whole Time Director of the Company aggregating to ₹ 115 million (USD 2 million) for the year ended March 31, 2020. |
** | Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all the employees together. |
a) 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 current year, the Board of Directors of the Company has 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 ₹ 366 million ($ 5 million), applicable from April 2020 onwards to be paid in ratio of participating interests held equally by the shareholders’ atCompany 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 current year, the Board of Directors of the Company has approved a consideration to be paid for this guarantee consisting of one-time charge of ₹ 1,829 million ($ 25 million), i.e., 2.5% of the total estimated cost of initial exploration phase of approx. ₹ 73,140 million ($ 1 billion) and an annual general meeting, held on July 11, 2014. The dividend amountingcharge of 1% of spend, subject to Rs. 5,188a minimum fee of ₹ 731 million ($ 10 million) and maximum fee of ₹ 1,463 million ($ 20 million) per annum. Accordingly, the Company has been subsequently paid before the due date. On October 29, 2014 the boardrecorded a guarantee commission expense of directors of Vedanta Limited declared an interim divided of Rs. 1.75 per equity share₹ Nil and ₹ 1,332 million ($ 18 million) for the year ended March 31, 2015.2020 and 2021 respectively and ₹ Nil and ₹ 1,610 million ($ 22 million) is outstanding as a pre-payment at March 31, 2020 and March 31, 2021 respectively.
b) In June 2020, as part of its cash management activities, the Company through its overseas subsidiaries extended certain loans and guarantee facilities, for a period upto 12 months, to Vedanta Resources Limited (“VRL”) and its subsidiaries (collectively “the VRL group”) which were drawn over a period of time carrying interest ranging from 3% to 7% and guarantee fee at 1%. In October 2020, certain terms of the loan facilities were modified primarily comprising extension of the tenor, increase in quantum and making it repayable in instalments by December 2023, which resulted in substantial modification of the instruments. Further, the guarantee was also extinguished. The dividend amountingdifference in the fair value of the loan and guarantee was debited to Rs. 5,188equity as a transaction with the shareholder. The provisions of IFRS 9 – ‘Financial Instruments’ as applicable for assets which are credit impaired on initial recognition were applicable to loans aggregating to ₹ 8,923 million (US$ 122 million) to one of the subsidiaries of VRL. Subsequently, in February 2021, the contractual rate of interest on these instruments were increased with retrospective effect to 14% to 17.5% to enable the Group to earn the fair market rate of interest, as was determined on the date of the origination of the transaction with an understanding to revise it further based on prevailing market conditions. Thereafter, in March 2021, since the credit default swap rates had stabilized, 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 IFRS 9 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 ₹ 5,361 million (US$ 73 million) is reflected in the statements of changes in equity and cash flow as a transaction with the shareholder. The accounting effects of these transactions have been recorded for the first time in these financial statements and were not recorded in the interim financial statements of the Group as at and for the six months ended September 30, 2020. As of March 31, 2021, loans of ₹ 70,653 million (US$ 966 million) are outstanding. The loans are now entirely held by a single subsidiary of VRL, which holds 37.1% shares (increased to 43.6% subsequent to the year-end) in the Company and is required to maintain the said level of shareholding during the tenure of the loans. The said entity also has a contractual ceiling on its borrowings, which is lower than the market value of its investments and other assets. Further, an accretive interest of ₹ 146 million (US$ 2 million) over and above the contractual interest has been subsequently paid beforeaccounted for in the due date.statement of profit and loss. OnSubsequent to the year end, in April 2021, the VRL group has repaid ₹ 15,140 Million (US$ 207 million) of the aforesaid loans. In May 2021, the overseas subsidiaries of the Company, entered into a novation agreements with the said subsidiary of VRL and agreed to novate ₹ 21,942 million (US$ 300 million) to another subsidiary of VRL with a revised rate of interest of 10.1%. Being a non-adjusting post balance sheet event, accounting effects of the same have not been recorded.
c) Cairn India Holdings Limited held bonds issued by Vedanta Resources Limited, the carrying value of which at the start of the year was ₹ 2,110 million (US$ 31 million), which have maturities ranging from June 2021 to May 2023 at coupon ranging from 7.13% to 8.25% p.a. During the year, investments have been disposed off in open market for a consideration of ₹ 2,117 million ($ 29 2015 the board of directors ofmillion). d) Bank guarantee given by Vedanta Limited recommendedon behalf of Volcan Investments Limited in favour of Income Tax department, India as collateral in respect of certain tax disputes of Volcan Investments Limited. e) In 2017, the Group had executed a final dividendthree-year brand license agreement (“the Agreement”) with Vedanta Resources Ltd (‘VRL’) for the use of Rs. 2.35 per equity sharebrand ‘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 current year, 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 ₹ 3,130 million and ₹ 9,390 million ($ 128 million) for the year ended March 31, 2015, which was approved by the shareholders’2020 and 2021 respectively. The Group pays such fee in advance, at the start of the year based on estimated annual general meeting, held on July 11, 2015. The dividend amounting to Rs. 6,967 million has been subsequently paid beforeturnover. f)During the due date. On October 27, 2015 the board of directors of Vedanta Limited declared an interim dividend of Rs. 3.5 per equity share for thefinancial year ended March 31, 2016. The dividend amounting2019, 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 ₹ 38,124 million (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 ₹ 44,847 million (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 realization was net of applicable transaction costs of ₹ 926 million (GBP 10 million, USD 12 million), which in January 2021, CIHL agreed to Rs. 10,378 millionbear. Accordingly, this amount has been subsequently paid beforerecorded in the due date.consolidated statements of profit or loss in the current year.
On October 28, 2016 the boardg) Loan balances outstanding from Sterlite Iron and Steel Company Limited and Twin Star Holding Limited of directors of Vedanta Limited declared an interim dividend of Rs. 1.75 ($0.03) per equity share for the year ended₹ 49 million (USD 1 million) & ₹ 49 million (USD 1 million) and ₹ 748 million (USD 10 million) and ₹ 730 million (USD 10 million) as at March 31, 2017. The dividend amounting to Rs.5,1892020 and March 31, 2021 respectively, including accrued interest of ₹ 200 million ($80.0 3 million) has been subsequently paid before the due date.
On March 30, 2017 the board of directors of Vedanta Limited declared an interim dividend of Rs. 17.70 ($0.27) per equity shareprovided for the year ended March 31, 2017. The dividend amounting to Rs. 65,800 million ($1,014.6 million) has been subsequently paid.
If profits for a year are insufficient to declare dividends, dividends for that year may be declared and paid out from accumulated profits on the following conditions:
The rate of dividend declared shall not exceed the average of the rates at which dividend was declared by the company in the three years immediately preceding that year;
The total amount to be drawn from such accumulated profits shall not exceedone-tenth of the sum of the company’spaid-up share capital and free reserves as appearing in the latest audited financial statement;
The amount so drawn shall first be utilised to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared; and
The balance of reserves after such withdrawal shall not fall below fifteen per cent of the company’s paid up share capital as appearing in the latest audited financial statement.
26. Share-Based Compensation Plans
The Company offers equity based award plans to its employees, officers and directors through the Company’s stock option plan introduced in the current year, Cairn India’s stock option plan now administered by the Company pursuant to merger with the Company and Vedanta Resources Plc [Vedanta Resources Long-Term Incentive Plan (“LTIP”), Employee Share Ownership Plan (“ESOP”), Performance Share Plan (“PSP”) and Deferred Share Bonus Plan (“DSBP”)] collectively referred as ‘VR PLC ESOP’ scheme.
The Vedanta Limited Employee Stock Option Scheme (ESOS) 2016
During the year, the Company introduced an Employee Stock Option Scheme 2016 (“ESOS”), which was approved by the Company shareholders to provide equity settled incentive to all employees of the Company including holding and subsidiary companies. The ESOS scheme includes both tenure based and performance based stock option awards. The value of options that can be awarded to members of the wider management group is calculated by reference to the grade average CTC and individual grade of the employee. The performance conditions attached to the award 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 award 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 Nomination and Remuneration Committee. Dependent on the level of employee, part of these awards will be subject to a continued service condition only with the remainder measured in terms of TSR.
The performance condition is measured by taking Vedanta Limited’s TSR at the start and end of the performance period (without averaging), and comparing its performance with that of the comparator group or groups. The information to enable this calculation to be carried out on behalf of the Nomination and Remuneration Committee (the Committee) is provided by the Company’s advisers. The Committee considers that this performance condition, which requires that the Company’s total return has outperformed a group of industry peers, provides a reasonable alignment of the interests of participants with those of the shareholders.
Initial awards under the ESOS were granted on December 15, 2016. The exercise price of the awards is Re. 1 per share and the performance period is three years, with nore-testing being allowed.
| | | | | The details of share options for the year ended March 31, 2017 is presented below:
| | ESOS
December
2016 | | Options as at April 1, 2016
| | | — | | Options granted during the year
| | | 8,000,000 | | Options forfeited during the year
| | | 196,600 | | Options exercised during the year
| | | — | | | | | | | Options outstanding as at March 31, 2017
| | | 7,803,400 | | | | | | |
The fair value of all awards has been determined at the date of grant of the award allowing for the effect of any market-based performance conditions. This fair value, adjusted by the Group’s estimate of the number of awards that will eventually vest as a result ofnon-market conditions, is expensed over the vesting period.
The fair values were calculated using the Black-Scholes Model for tenure based awards and Monte Carlo simulation model for performance based awards. The inputs to the model include the share price at date of grant, exercise price, expected volatility, expected dividends, expected term and the risk free rate of interest. Expected volatility has been calculated using historical return indices over the period to date of grant that is commensurate with the performance period of the award. The volatilities of the industry peers have been modelled based on historical movements in the indices over the period to date of grant which is also commensurate with the performance period for the option. The history of return indices is used to determine the volatility and correlation of share prices for the comparator companies and is needed for the Monte Carlo model to estimate their future TSR performance relative to the Vedanta Limited’s TSR performance. All options are assumed to be exercised immediately after vesting, as the exercise period is 6 months.
The assumptions used in the calculations of the charge in respect of the ESOS awards granted during the year ended March 31, 2017 are set out below:2021.
36. Subsequent Events a) | | | | | Particulars | | ESOS December 2016 | | NumberAs per the information received from Vedanta Resources Limited (“VRL” or “Acquirer”), VRL 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”), have acquired 374,231,161 equity shares of Options
| | | 8,000,000 | | Exercise Price
| | | Re.1 | | Share Price at the date of grant
| | | Rs.235.9 | | Contractual Life
| | | 3 Years | | Expected Volatility
| | | 48% | | Expected option life
| | | 3 Years | | Expected dividends
| | | 3.2% | | Risk free interest rate
| | | 6.5% | | Expected annual forfeitures
| | | 10 % p.a | | Fair value per option granted (Service based/Performance based) | | | Rs.213.6/Rs.82.8 | |
The Company recognized total expense of Rs. 66 million related to above equity settled share-based payment transactions in the year ended March 31, 2017. The equity settled employee stock options reserve outstanding with respect to the above scheme as at March 31, 2017 is Rs. 66 million ($ 1.0 million).
Employee stock option plans of erstwhile Cairn India Limited:
Erstwhile Cairn India Limited has provided various share based payment schemes to its employees. During the year ended March 31, 2017, the following schemes were in operation:
| | | | | | | | | | | | | | | | | Particulars | | CIPOP | | | CIESOP | | | CIPOP Phantom | | | CIESOP Phantom | | Date of Board Approval | | | 17-Nov-06 | | | | 17-Nov-06 | | |
| Not applicable | | |
| Not applicable | | Date of Shareholder’s approval | | | 17-Nov-06 | | | | 17-Nov-06 | | |
| Not applicable | | |
| Not applicable | | Number of options granted till March 31, 2017 | | | 16,167,131 | | | | 30,112,439 | | | | 4,831,955 | | | | 758,370 | | Method of Settlement | | | Equity | | | | Equity | | | | Cash | | | | Cash | | Vesting Period | |
| 3 years from grant date | | |
| 3 years from grant date | | |
| 3 years from grant date | | |
| 3 years from grant date | | Exercise Period | |
| 3 months from vesting date | | |
| 7 years from vesting date | | |
| Immediately upon vesting | | |
| Immediately upon vesting | |
CIPOP plan (including phantom options)
Options will vest (i.e., become exercisable) at the end of a “performance period” which has been set by the Nomination and Remuneration committee at the time of grant (although such period will not be less than three years). However, the percentage of an option which vests on this date will be determined by the extent to whichpre-determined performance conditions have been satisfied. Phantom options are exercisable proportionate to the period of service rendered by the employee subject to completion of one year.
CIESOP plan (including phantom options)
There are no specific vesting conditions under CIESOP plan other than completion of the minimum service period. Phantom options are exercisable proportionate to the period of service rendered by the employee subject to completion of one year.
Details of activities under employees stock option plans
| | | | | | | | | | | | | | | | | CIPOP Plan | | March 31, 2016 | | | March 31, 2017 | | | | Number of options | | | Weighted average exercise price in Rs. | | | Number of options | | | Weighted average exercise price in Rs. | | Outstanding at the beginning of the year | | | 6,199,640 | | | | 10.00 | | | | 5,061,646 | | | | 10.00 | | Granted during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Expired during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Exercised during the year | | | 9,729 | | | | 10.00 | | | | 939,680 | | | | 10.00 | | Forfeited / cancelled during the year | | | 1,128,265 | | | | 10.00 | | | | 1,633,634 | | | | 10.00 | | Modified during the year (refer note below) | | | Nil | | | | NA | | | | 2,488,332 | | | | NA | | Outstanding at the end of the year | | | 5,061,646 | | | | 10.00 | | | | Nil | | | | NA | | Exercisable at the end of the year | | | 18,270 | | | | 10.00 | | | | Nil | | | | NA | | | | | | | | | | | | | | | | | | |
Weighted average share price at the date of exercise of stock options is Rs. 144.82 and Rs. 195.72 ($ 3.0 million) as at March 31, 2016 and March 31, 2017 respectively:
| | | | | | | | | | | | | | | | | CIESOP Plan | | March 31, 2016 | | | March 31, 2017 | | | | Number of options | | | Weighted average exercise price in Rs. | | | Number of options | | | Weighted average exercise price in Rs. | | Outstanding at the beginning of the year | | | 10,388,430 | | | | 303.43 | | | | 9,602,201 | | | | 302.56 | | Granted during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Expired during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Exercised during the year | | | Nil | | | | NA | | | | 89,402 | | | | 165.07 | | Forfeited / cancelled during the year | | | 786,229 | | | | 314.00 | | | | 550,133 | | | | 296.45 | | Outstanding at the end of the year | | | 9,602,201 | | | | 302.56 | | | | 8,962,666 | | | | 304.31 | * | Exercisable at the end of the year | | | 9,602,201 | | | | 302.56 | | | | 8,962,666 | | | | 304.31 | * | | | | | | | | | | | | | | | | | |
Weighted average share price at the date of exercise of stock options is Rs. 227.41 ($3.5 million) as at March 31, 2017 (March 31, 2016: NA).
| | | | | | | | | | | | | | | | | CIPOP Plan-Phantom options | | March 31, 2016 | | | March 31, 2017 | | | | Number of options | | | Weighted average exercise price in Rs. | | | Number of options | | | Weighted average exercise price in Rs. | | Outstanding at the beginning of the year | | | 1,046,501 | | | | 10.00 | | | | 825,184 | | | | 10.00 | | Granted during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Expired during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Exercised during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Forfeited / cancelled during the year | | | 221,317 | | | | 10.00 | | | | 492,021 | | | | 10.00 | | Modified during the year (refer note below) | | | Nil | | | | NA | | | | 333,163 | | | | NA | | Outstanding at the end of the year | | | 825,184 | | | | 10.00 | | | | Nil | | | | NA | | Exercisable at the end of the year | | | Nil | | | | NA | | | | Nil | | | | NA | | | | | | | | | | | | | | | | | | |
Weighted average share price at the date of exercise of stock options is NA (March 31, 2016: NA)
| | | | | | | | | | | | | | | | | CIESOP Plan-Phantom options | | March 31, 2016 | | | March 31, 2017 | | | | Number of options | | | Weighted average exercise price in Rs. | | | Number of options | | | Weighted average exercise price in Rs. | | Outstanding at the beginning of the year | | | 14,174 | | | | 326.85 | | | | Nil | | | | NA | | Granted during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Expired during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Exercised during the year | | | Nil | | | | NA | | | | Nil | | | | NA | | Forfeited / cancelled during the year | | | 14,174 | | | | 327.29 | | | | Nil | | | | NA | | Modified during the year (refer note below) | | | Nil | | | | NA | | | | Nil | | | | NA | | Outstanding at the end of the year | | | NA | | | | NA | | | | NA | | | | NA | | Exercisable at the end of the year | | | Nil | | | | NA | | | | Nil | | | | NA | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Scheme | | Range of exercise price in Rs. | | | No. of options outstanding | | | Weighted average remaining contractual life of options (in years) | | | Weighted average exercise price in Rs. | | The details of exercise price for stock options outstanding as at March 31, 2017 are: | | CIPOP Plan | | | NA | | | | Nil | | | | NA | | | | NA | | CIESOP Plan | | | 160-331.25 | | | | 8,962,666 | | | | NA | | | | 304.31 | * | CIPOP Plan – Phantom options | | | NA | | | | Nil | | | | NA | | | | NA | | The details of exercise price for stock options outstanding as at March 31, 2016 are: | | CIPOP Plan | | | 10.00 | | | | 5,061,646 | | | | 0.86 | | | | 10.00 | | CIESOP Plan | | | 160-331.25 | | | | 9,602,201 | | | | NA | | | | 302.56 | | CIPOP Plan – Phantom options | | | 10.00 | | | | 825,184 | | | | 1.06 | | | | 10.00 | |
* | SubsequentCompany under the voluntary open offer (“Open Offer”) made to the mergerpublic shareholders of Cairnthe Company in accordance with the Securities and Exchange Board of India Limited with Vedanta Limited the exercise price has been reduced by Rs. 40 per option i.e. to Rs. 264.31 as detailed further(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”) and thereby increasing their shareholding in the modifications terms provided below | Company from the current 55.1% to 65.18%.Effect of the above employee share-based payment plans on the statement of profit and loss and on its financial position:
| | | | | | | | | Particulars | | March 31, 2016 | | | March 31, 2017 | | Total Employee Compensation Cost pertaining to share-based payment plans | | | 356.0 | | | | 206.7 | | Compensation Cost pertaining to equity-settled employee share-based payment plan included above | | | 342.8 | | | | 158.2 | | Compensation Cost pertaining to cash-settled employee share-based payment plan included above | | | 13.2 | | | | 48.5 | |
The equity settled employee stock options outstanding as at March 31, 2017 was Rs. 1,482 million ($ 22.9 million).
Volatility is the measure of the amount by which the price has fluctuated or is expected to fluctuate during the period. The measure of volatility used in Black-Scholes option- pricing model is the annualized standard deviation of the continuously compounded rates of return on the stock over a period of time. Time to maturity /expected life of options is the period for which the Company expects the options to be live. Time to maturity has been calculated as an average of the minimum and maximum life of the options.
Modification in terms of Employee stock option plans
Pursuant to the merger of Cairn India Limited with the Company as referred to in note 1, the stock option plans of Cairn India Limited stands modified as follows:
| a) | The exercise price of CIESOP plan is reduced by Rs 40 per option. |
| b) | The liability w.r.t.Government of Rajasthan launched an Amnesty Scheme in respect of settlement of Entry Tax disputes in February 2021. The scheme was subsequently modified in April 2021 by significantly increasing the CIPOP plans (including phantom options)rebate limits. Whereafter, the Group has been fixed based onopted for the share pricesame for one of Cairn India Limited as on March 27, 2017, beingits subsidiary, HZL. Consequentially, a charge of ₹ 1,342 million ($ 18 million) will get recorded in the effective date of merger. Accordingly, the outstanding employee stock option liability (Equity Settled) and Provision for employee stock option (Cash Settled) of Rs. 625 million and Rs. 83 million respectively, has been transferred tosubsequent period financial liability.statements. |
The incremental fair value for the remaining stock options, being the difference between the fair value of the modified equity instrument and that of the original equity instrument, has beenThere are no other material adjusting or re-estimatednon-adjusting on the effective date of merger and the difference has been recognizedsubsequent events, except as already disclosed in the statement of profit and loss account.these financial statements.
Employee share option plan of Vedanta Resources Plc
The value of shares that are awarded to members of the group is calculated by reference to the individual fixed salary and share-based remuneration consistent with local market practice. ESOP scheme of VR PLC is both tenure and performance based share schemes. The awards are indexed to and settled by Parent’s shares (Vedanta Resources Plc shares as defined in the scheme). The awards have a fixed exercise price denominated in Parent’s functional currency (10 US cents per share), the performance period of each award is three years and is exercisable within a period of six months from the date of vesting beyond which the option lapses.
Amount recovered by the Parent and recognized by the Company in the Statement of Profit and Loss (net of capitalization) for year ended March 31, 2016 and March 31, 2017 is Rs. 809 million and Rs. 628 million respectively. The Company considers these amounts as not material and accordingly has not provided further disclosures.
27. Earnings per share (“EPS”)
The following reflects the income and share data used in the basic and diluted earnings per share computations:37. Other matters
Computation of weighted average number of shares
| | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | Weighted average number of ordinary shares for basic earnings per share | | | 2,965,004,871 | | | | 2,965,004,871 | | | | 2,964,333,584 | | Effect of dilution: | | | | | | | | | | | | | Potential ordinary shares relating to share option awards | | | — | | | | — | | | | 1,227,287 | | Adjusted weighted average number of ordinary shares for diluted earnings per share | | | 2,965,004,871 | | | | 2,965,004,871 | | | | 2,965,560,871 | |
Computation of basic and diluted earnings per share
Basic earnings per share:
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million except EPS data) | | | (Rs. in million except EPS data) | | | (Rs. in million except EPS data) | | | (US dollars in million except EPS data) | | Profit / (loss) for the year attributable to equity holders of the parent | | | (128,350) | | | | (125,153) | | | | 55,033 | | | | 848.6 | | Weighted average number of ordinary shares for basic earnings per share* | | | 2,965,004,871 | | | | 2,965,004,871 | | | | 2,964,333,584 | | | | 2,964,333,584 | | | | | | | | | | | | | | | | | | | Earnings / (loss) per share | | | (43.29) | | | | (42.21) | | | | 18.57 | | | | 0.3 | | | | | | | | | | | | | | | | | | |
Diluted earnings per share:
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million except EPS data) | | | (Rs. in million except EPS data) | | | (Rs. in million except EPS data) | | | (US dollars in million except EPS data) | | Profit / (loss) for the period attributable to equity holders of the parent | | | (128,350) | | | | (125,153) | | | | 55,033 | | | | 848.6 | | Adjusted weighted average number of ordinary shares for diluted earnings per share* | | | 2,965,004,871 | | | | 2,965,004,871 | | | | 2,965,560,871 | | | | 2,965,560,871 | | | | | | | | | | | | | | | | | | | Earnings / (loss) per share | | | (43.29) | | | | (42.21) | | | | 18.56 | | | | 0.3 | | | | | | | | | | | | | | | | | | |
* | After excluding the impact of treasury shares |
The Group has excluded the following shares underlying the convertible note from the calculations of dilutive earnings per share because their inclusion would have been anti-dilutive.
| | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | Shares excluded from the calculation of dilutive EPS | | | 47,608,946 | | | | — | | | | — | |
28. Options to acquire subsidiary’s shares—
a.(a) i. Call option — HZL
Pursuant to the Government of India’s policy of disinvestment, the GroupCompany 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 GroupCompany had two call options to purchase all of the Government of India’s shares in HZL at fair market value. The Group also acquired an additional 20% of the equity capital in HZL through an open offer. The Group exercised the first call option on August 29, 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 providedprovides the GroupCompany 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 GroupCompany exercised the second call option on July 21, 2009. The Government of India disputed the validity of the call option and refused to act upon the second call option. Consequently, the GroupCompany invoked arbitration which is in the early stages. The next date of hearing is scheduled for April 21, 2018. Meanwhile, theto be notified. The Government of India without prejudice to the position on the Put/Put / Call option issue has received approval from the Cabinet for disinvestmentdivestment and the Government is looking to divest through the auction route. Meanwhile, the Supreme Court has, in January 2016, directed status quo pertaining to disinvestment of Government of India’s residual shareholding in a public interest petition filed which is currently pending and sub-judice. b.ii. Call option — BALCO
Pursuant to the Government of India’s policy of divestment, the GroupCompany in March 2001 acquired 51% equity interest in BALCO from the Government of India. Under the terms of the SHA, the GroupCompany had a call option to purchase the Government of India’s remaining ownership interest in BALCO at any point from March 2,02, 2004. The GroupCompany exercised this option on March 19, 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,Company, the arbitral tribunal by a majority award rejected the claims of the GroupCompany on the ground that the clauses relating to the call option, the right of first refusal, the“tag-along” “tag along” rights and the restriction on the transfer of shares violate the erstwhile Companies Act, 1956 and are not enforceable. The GroupCompany has challenged the validity of the majority award inbefore the Hon’ble High Court ofat 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 on October 17, 2017.August 11, 2020. Meanwhile, the Government of India without prejudice to its position on the Put/Put / Call option issue has received approval from the Cabinet for divestment and the Government is looking to divest through the auction route. On January 9,09, 2012, the GroupCompany offered to acquire the Government of India’s interests in HZL and BALCO for the INR equivalent of Rs. 154,920 million ($2,388.9 million)US$ 2,071 and Rs. 17,820 million ($274.8 million)US$ 238 respectively. This offer was separate from the contested exercise of the call options, and GroupCompany 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. The Group continues to include the shareholding in the two companies HZL and BALCO, in respect of which the Group has a call option asnon-controlling interest.
In view of the lack of resolution on the options, thenon-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 GroupCompany 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. 29. Commitments, contingencies, and guarantees
In the normal course of business, the Group enters into certain capital commitments and also gives certain financial guarantees. The aggregate amount of indemnities and other guarantees on which the Group does not expect any material losses, was Rs. 48,305 million and Rs. 39,556 million ($610.0 million) as at March 31, 2016 and 2017 respectively
A. Commitments
Capital commitments
The Group had significant capital commitments as at March 31, 2016 and 2017 amounting to Rs. 83,343 million and Rs. 74,290 million ($1,145.6 million) respectively, related primarily to capacity expansion projects, including commitments amounting to Rs. 2,152 million ($ 33.2 million) (previous year Rs. 6,142 million) for its commercial power generation business, Rs. 25,083 million ($ 386.8 million) (previous year Rs. 34,423 million) for capacity expansion at its aluminum business, Rs. 16,360 million ($ 252.3 million) (previous year Rs. 20,148 million) for capacity expansion at HZL, Rs. 15,473 million ($ 238.6 million) (previous year Rs. 15,047 million) at its copper business, Rs. 1,429 million ($ 22.0 million) (previous year Rs. 2,750 million) for expansion at Cairn and Rs 13,354 million ($205.9 million) (previous year Rs 3,854 million) for expansion at BMM.
Guarantees
The Group has given guarantees in the normal course of business as stated below:
Guarantees on the issuance of customs and excise duty bonds amounting to Rs. 2,819 million and Rs.4,391 million ($ 67.7 million) for the import of goods, including capital equipment at concessional rates of duty as at March 31, 2016 and March 31, 2017 respectively.
A bank guarantee amounting to AUD 6.1 million (Rs. 302 million or $ 4.7 million) as at March 31, 2017 (Previous year AUD 6.1 million or Rs. 310 million), in favor of the Ministry for Economic Development, Energy and Resources, Tasmania, Australia as a security against rehabilitation liabilities on behalf of CMT. The same guarantee is backed up by the issuance of a corporate guarantee of Rs. 302 million ($ 4.7 million). These liabilities have been fully recognized in the Group’s consolidated financial statements. The Group does not anticipate any additional liability on these guarantees.
Bank indemnity guarantees amounting to AUD 4.7 million (Rs. 232 million or $ 3.6 million) as at March 31, 2017 (Previous year AUD 4.7 million or Rs. 238 million), in favor of the State Government of Queensland, Tasmania, Australia, as security against rehabilitation liabilities on behalf of Thalanga Copper Mines Proprietary Limited (“TCM”). The same guarantees are backed up by the issuance of a corporate guarantee of AUD 4.7 million (Rs.232 million or $ 3.6 million). The environmental liability has been fully recognized in the Group’s consolidated financial statements.
Bank indemnity guarantees amounting to ZAR 21 million (Rs. 99 million or $ 1.5 million) as at March 31, 2017 (Previous year ZAR 21 million or Rs. 92 million), in favor of the Department of Mineral Resources, South Africa as a security against rehabilitation liabilities on behalf of BMM. The environmental liability has been fully recognized in the Group’s consolidated financial statements. The Group does not anticipate any additional liability on these guarantees.
Performance bank guarantees amounting to Rs. 7,757 million and Rs. 4,355 million ($67.1 million) as at March 31, 2016 and 2017 respectively. These guarantees are issued in the normal course of business while bidding for supply contracts or in lieu of advances received from customers. These are contractual guarantees and are enforceable if the terms and conditions of the contracts are not met and the maximum liability on these contracts is the amount mentioned above. The Group does not anticipate any liability on these guarantees. Included in above performance guarantees for committed cumulative mandated work program of Rs. 872 million and Rs.1,349 million ($20.8 million) as at March 31, 2016 and March 31, 2017 respectively and for obligations arising out of various statutes while carrying out Petroleum Operations to the GOI, Ministry of Petroleum and Natural Gas and The Director General of Customs, Sri Lanka against its performance in respect ofMB-DWN-2009/1,KG-OSN-2009/3,SL-2007-01-001andPR-OSN-2004/1 blocks as required under the respective production sharing contracts /Production Resource Agreements. These guarantees are issued in the normal course of business and are valid till the time obligations under the each production sharing contracts/ production resource agreements are met. These guarantees are enforceable if the terms and conditions of the respective production sharing contracts/ production resource agreements are not met and potential liability shall be both, performance and obligations.
Bank guarantees for securing supplies of materials and services in the normal course of business. The value of these guarantees as at March 31, 2016 and 2017 was Rs. 7,586 million and Rs. 5,444 million ($ 83.9 million) respectively. The Group has also given bank guarantees in the normal course of business for an aggregate value of Rs. 1,964 million and Rs. 2,103 million ($ 32.4 million) for litigation, against provisional valuation of custom duty and for other liabilities as at March 31, 2016 and 2017 respectively. The Group does not anticipate any liability on these guarantees. Included in above, bank guarantee of Rs. 1,150 million ($ 17.7 million) 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.
The Group’s outstanding guarantees cover obligations aggregating Rs. 25,755 million and Rs. 22,591 million ($ 348.4 million) as at March 31, 2016 and 2017 respectively, the liabilities for which have not been recorded in its consolidated financial statements.
Export obligations
The Indian entities of the Group have export obligations of Rs. 141,728 million and Rs. 155,834 million ($ 2,403.0 million) as at March 31, 2016 and March 31, 2017 respectively 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 import of raw material laid down by the Government of India and also the export duty liability of Special Economic Zone units.
In the event of the Group’s inability to meet its obligations, the Group’s liability would be Rs. 22,550 million and Rs. 16,965 million ($261.6 million) as at March 31, 2016 and March 31, 2017 respectively, reduced in proportion to actual exports, plus applicable interest. Due to the remote likelihood of the Group being unable to meet its export obligations, the Group does not anticipate a loss with respect to these obligations and hence has not made any provision in its consolidated financial statements.
B. Contingencies
The Group discloses the following legal and tax cases as contingent liabilities.
HZL: Department of Mines and Geology
The Department of Mines and Geology of the State of Rajasthan issued several show cause notices in August, September and October 2006 to HZL, totalling to Rs. 3,339 million ($51.5 million) as at March 31, 2016 and March 31, 2017. These notices alleged 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. HZL believes that the likelihood of this claim is not probable and thus no provision has been made in the financial statements. HZL had filed writ petitions in the High Court of Rajasthan in Jodhpur and had obtained a stay in respect of these demands. The High Court 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.
Erstwhile Cairn India Limited: Income tax
In March 2014, erstwhile Cairn India received a show cause notice from the Indian Tax Authorities (“Tax Authorities”) for not deducting withholding tax on the payments made to Cairn UK Holdings Limited (“CUHL”) UK, for acquiring shares of Cairn India Holdings Limited (“CIHL”), as part of their internal reorganisation. Tax Authorities have stated in the said notice that a short-term capital gain has accrued to CUHL on transfer of the shares of CIHL to Cairn India, in financial year 2006-2007, on which tax should have been withheld by the Company. Pursuant to this various replies were filed with the tax authorities.
After hearings, the Income Tax Authority, during March 2015, have issued an order by holding Cairn India as ‘assessee in default’ and asked to pay such demand totalling Rs. 204,947 million ($3,160.3 million) (including interest of Rs. 102,474 million ($1,580.2 million)) as at March 31, 2016 and March 31, 2017. Cairn India had filed appeal before the Appellate Authority CIT (Appeals) which via order dated July 3, 2017 confirmed the tax demand against Cairn India. Cairn India is in process of filing appeal with Income Tax Appellate Tribunal (ITAT). Separately, Cairn India had also filed a fresh Writ petition before Delhi High Court wherein it raised several points for assailing the aforementioned Income tax Authority’s order. The matter is listed for hearing on August 17, 2017 before Delhi High Court.
In this regard, also Vedanta Resources Plc. (holding company), had filed a Notice of Claim against the Government Of India (‘GOI’) under the UK India Bilateral Investment Treaty (the “BIT”) in order to protect its legal position and shareholder interests. Hearings happened before Arbitration Tribunal on 25th -26th May 2017 on jurisdiction issue and now the tribunal’s order is awaited. Management has been advised that Vedanta Resources Plc. has a good case to defend as per provisions of BIT, the benefit of which would ultimately accrue to company.
Vedanta Limited: Contractor claim
Shenzhen Shandong Nuclear Power Construction Co. Limited (‘SSNP’) subsequent to terminating the EPC contract invoked arbitration as per the contract allegingnon-payment of their dues towards construction of a 210 MWco-generation power plant for 6 MTPA expansion project, and filed a claim of Rs. 16,686 million and Rs. 15,798 million ($243.6 million) as at March 31, 2016 and March 31, 2017 respectively. Based on the assessment, the Company has booked a liability of Rs. 1,791 million ($27.6 million). SSNP also filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996 before the Bombay High Court praying for interim relief. The Bombay High Court initially dismissed their petition, but on a further appeal by SSNP, the Division Bench of the Bombay High Court directed the Company to deposit a bank guarantee for an amount of Rs. 1,870 million as a security, being a prima facie representation of the claim, until arbitration proceedings are completed. The Company has deposited a bank guarantee of equivalent amount. Management is of the opinion that this claim is not valid under the terms of the contract with SSNP and it is unlikely that SSNP can legally sustain the claim and accordingly, no further provision is considered necessary. The arbitration has concluded and the proceedings have now been reserved for the pronouncement of the final award.
Ravva Joint Venture arbitration proceedings: ONGC Carry
Erstwhile Cairn India (now merged into Vedanta Limited) is involved in a dispute against Government of India “GOI” relating to the recovery of contractual costs in terms of calculation of payments that contractor party were required to make in connection with the Ravva field.
The Ravva Production Sharing Contract “PSC” obliges the contractor parties to pay proportionate share of ONGC’s exploration, development, production and contract costs in consideration for ONGC’s payment of costs related to 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 whereas four other issues were decided in favour of GOI in October 2004 (“Partial Award”). However Arbitral Tribunal retained the jurisdiction for determination of remaining issues between the parties, including costs quantification.
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 which adjudicated the matter on October 11, 2011, upheld the Partial Award. Per the decision of the Arbitral Tribunal , the contractor parties and GOI were required to arrive at a quantification of the sums relatable to each of the issues under the Partial Award.
Pursuant to the decision of the Federal Court, the contractor parties approached Ministry of Petroleum and Natural Gas (“MoPNG”) to implement the Partial Award while reconciling the statement of accounts as outlined in Partial Award.
However, MoPNG on July 10, 2014 proceeded to issue a Show Cause Notice alleging that since the partial award has not been enforced profit petroleum share of GOI has been short-paid. MoPNG threatened to recover the amount from the sale proceeds payable by the oil marketing companies to the contractor parties.
As Partial Award did not quantify the sums, therefore, contractor parties approached the same Arbitral 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 Cairn India’s favour. GOI has challenged the Final Award in the Malaysian courts. Further, Company has also filed for enforcement of the Partial Award and Final Award with Delhi High Court. While the Cairn India does not believe the GOI will be successful in its challenge, if the Arbitral Award is reversed and such reversal is binding, Cairn India could be liable for approximately USD 63.90 million (approximately Rs. 4,233 million and Rs. 4,143 million as at March 31, 2016 and March 31, 2017 respectively) plus interest.
Proceedings related to the Imposition of Sales Tax and Entry Tax
Sales tax and Entry tax demands relating to tax on freight, tax rate differences, stock transfers matters, etc. is Rs.10,096 million and Rs.11,274 million ($173.8 million) as at March 31, 2016 and March 31, 2017 respectively.
The Company and other group companies i.e. Bharat Aluminium Company Limited (Balco), HZL and Cairn India (now merged with Vedanta Limited) challenged the constitutional validity of the local statutes and related notifications in the states of Chhattisgarh, Odisha and Rajasthan pertaining to the levy of entry tax on the entry of goods brought into the 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.
Post the order of the nine judge bench, the regular bench of the Supreme Court proceeded with hearing the maters. The regular bench remanded the entry tax matters relating to the issue of discrimination against domestic goods from other States to the respective High Courts for final determination but retained the issue of jurisdiction on levy on imported goods, for determination by Supreme Court.
The argument pertaining to imported goods are currently pending before a regular bench of the SC. The issue of discrimination has been remanded back to the High Courts for final adjudication. Vedanta has filed a writ petitions before the Odisha High Courts as well as the Rajasthan and Chhattisgarh High Courts.
Whereas, the issue pertaining to levy of entry tax on 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 an SEZ basis the definition of local area under the Odisha Entry Tax Act which is very clear and does not include an SEZ. In addition, the Govt of Odisha further through its SEZ Policy 2015 and the operational guidelines for administration of this policy dated 22.08.2016, exempted entry tax levy on SEZ operations.
TSPL: Proceedings related to claim for Liquidated Damages
TSPL had entered into a long term PPA with PSPCL for supply of power. Due to delay in fulfilment of certain obligations by PSPCL as per the PPA and force majeure events, there was a delay in completion of the project as per the PPA timelines. TSPL has received notices of claims from PSPCL seeking payment of Liquidated damages (LD) of Rs. 3,176 million (maximum) each for delay in commissioning of Unit I, II and III totalling to Rs. 9,529 million ($146.9 million) as at March 31, 2016 and March 31, 2017.
During the financial year2014-15, PSPCL had invoked the Performance Bank Guarantee (PBG) of Rs. 1,500 million to recover the LD on account of delay in Commercial Operation Date (COD). Against the PBG invocation stay was granted by PSERC and this was later upheld by APTEL as well. The matter is referred to Arbitration by a panel of three Arbitrators. Pleadings, witnessing and arguments are over in the matter. Note for Written Submissions have been filed on 16th March, 2017. Arbitral award is awaited at the current stage. On the basis of facts backed by legal opinion, no provision is considered necessary at this stage.
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 CPPs 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 December 15, 2006 declared the provisions imposing ED Cess on CPPs as discriminatory and therefore ultra vires the Constitution. The Company has sought refund of ED Cess paid till March 2006 amounting to Rs. 345 million ($5.3 million).
The State of Chhattisgarh moved an SLP in the Supreme Court and whilst issuing notice has stayed the refund of the Cess already deposited. The matter is to be heard by a larger bench of the Supreme Court and will be listed in due course for final hearing. In case the Supreme Court overturns the decision of the High Court, Balco would be liable to pay an additional amount of Rs. 5,378 million and Rs. 5,758 million ($88.8 million) as at March 31, 2016 and March 31, 2017 respectively and the Company may have to bear a charge of Rs. 5,723 million and Rs. 6,103 million ($94.1 million) as at March 31, 2016 and March 31, 2017 respectively.
South Africa Carry cost
As part of thefarm-in agreement for Block 1, the Group was required to carry its joint venture partner, Petro SA, up to a gross expenditure of USD 100 million (approximately Rs. 6,625 million and Rs. 6,484 million as at March 31, 2016 and March 31, 2017 respectively) for a work program including 3D and 2D seismic studies and at least one exploration well. The group has spent Rs. 2,451 million and Rs. 2,449 million (approximately $ 37.7 million) as at March 31, 2016 and March 31, 2017 respectively towards exploration expenditure and a minimum of carry Rs. 4,174 million and Rs. 4,035 million (approximately $ 63 million) as at March 31, 2016 and March 31, 2017 respectively (including drilling one well) was outstanding at the end of the initial exploration period. Considering the prevailing situation the Company has sought an extension for entry into the second renewal phase of the exploration period. However, after assessing past judicial precedents supported by independent legal advice, the Company has provided for the requisite damages and obligation for the aforesaid carry cost has been assessed as possible and disclosed as a contingency.
Ravva Joint Venture arbitration proceedings: Base Development Cost:
In case of Cairn, Ravva joint venture had received a claim from the Ministry of Petroleum and Natural Gas, Government of India(GOI) for the period from 2000-2005 for $ 129.0 million for an alleged underpayment of profit petroleum to the Indian Government, out of which, Group’s share will be $29.0 million (approximately Rs 1,921 million) and $29.0 million (approximately Rs 1,881 million) plus potential interest at applicable rate (LIBOR plus 2% as per PSC) as at March 31,2016 and March 31,2017 respectively. This claim relates to the Indian Government’s allegation that the Ravva JV had recovered costs in excess of the Base Development Costs (“BDC”) cap imposed in the PSC and that the Ravva JV had also allowed these excess costs in the calculation of the Post Tax Rate of Return (PTRR). Joint venture partners initiated the arbitration proceedings and Arbitration Tribunal published the Award on January 18, 2011 at Kuala Lumpur, allowing Claimants (including the Group) to recover the development costs spent to the tune of $ 278.0 million and disallowed over run of $ 22.3 million spent in respect of BDC along with 50% legal costs reimbursable to the Joint venture partners. High Court of Kuala Lumpur dismissed Government of India’s (GOI) application of setting aside the part of the Award on August 30, 2012 with costs. GOI appealed before the Court of Appeal against the High Court’s order and the Court of Appeal dismissed the GOI’s appeal on June 27, 2014. However, GOI still preferred to challenge the same before the Federal Court, Kuala Lumpur which was dismissed by the Federal Court on May 17, 2016. GOI has also issued Show Cause Notice on this matter which Cairn has replied to and also filed an application for enforcement of Award before Delhi High Court as an abundant caution. Furthermore, GOI is yet to agree on quantum of arbitration costs and expenses (legal fee & expenses) for reimbursing to Cairn as per the award. Therefore, Cairn has approached the Tribunal to quantify the costs. The GOI has obtained a stay order from Hon’ble High Court of Delhi, on August 14, 2015, against the Tribunal proceedings on quantum of arbitration costs on the grounds of Tribunal being functus officio. Cairn has filed an appeal before the Hon’ble High Court of Delhi against the aforesaid ‘stay order’ granted by the Hon’ble High Court of Delhi against the Tribunal ‘proceedings on determination of costs’. The suit is listed for October 27, 2017. The division bench allowed the appeal and dismissed single bench order. The GOI has filed a Special Leave Petition in Supreme Court against the above Division Bench Order on costs, the next date for the matter will be made available by Court. The enforcement application has been filed in High Court of Delhi, but with delay of 268 days and the Company has requested for condonation of delay in filing for enforcement. The pleadings are complete in the matter and it is listed on 06 September 2017.
Erstwhile Cairn India Limited: Tax Holiday
In case of Cairn, Section 80-IB (9) of the Income Tax Act, 1961 allows the deduction of 100% of profits from the commercial production or refining of mineral oil. The term ‘mineral oil’ is not defined but has always been understood to refer to both oil and gas, either separately or collectively. The 2008 Indian Finance Bill appeared to remove this deduction by stating [without amending section 80-IB (9)] that “for the purpose of section 80-IB (9), the term ‘mineral oil’ does not include petroleum and natural gas, unlike in other sections of the Act”. Subsequent announcements by the Finance Minister and the Ministry of Petroleum and Natural Gas have confirmed that tax holiday would be available on production of crude oil but have continued to exclude gas. Cairn filed a writ petition to the Gujarat High Court in December 2008 challenging the restriction of section 80-IB to the production of oil. Gujarat High Court did not admit the writ petition on the ground that the matter needs to be first decided by lower tax authorities. A Special Leave Petition has been filed before Supreme Court against the decision of Gujarat High court. However in a similar case, the Gujarat High Court has held that tax holiday benefit would extend to production of gas. In the event this challenge is unsuccessful, the potential liability for tax and related interest on tax holiday claimed on gas is approximately Rs. 3,200 million ($49.4 million).
Scheme of Amalgamation
(b) The Scheme of Amalgamation and Arrangement amongst Sterlite Energy Limited (‘SEL’), Sterlite Industries (India) Limited (‘Sterlite’), Vedanta Aluminium Limited (‘VAL’), Ekaterina Limited (‘Ekaterina’), Madras Aluminium Company Limited (‘Malco’) and the Company (the “Scheme”) had been sanctioned by the Honourable High Court of Madras and the Honourable High Court of Judicature of Bombay at Goa and was given effect to in the year ended March 31, 2014. Subsequently the above orders of the Honourablehonourable High Court of Bombay and Madras have been challenged by Commissioner of Income Tax, Goa and Ministry of Corporate Affairs through a Special Leave Petition before the Honourablehonourable Supreme Court and also by a creditor and a shareholder of the Company. The said petitions are currently pending for hearing and admission.hearing. TNPCB
In an appeal(c) The Company is purchasing bauxite under long term linkage arrangement with Orissa Mining Corporation Ltd (hereafter referred as OMC) at provisional prices of ₹ 1,000/MT from October 2020 onwards (based on interim order dated October 08, 2020 of the Hon’ble high court of Odisha), which is subject to final outcome of the writ petition filed by the company as mentioned below. The last successful e-auction based price discovery was done by OMC in April 2019 at ₹ 673/MT and supplied bauxite at this rate from Sep 2019 to Sep 2020 against an undertaking furnished by the Company to compensate any differential price discovered through future successful national e-auctions. Though the OMC conducted the next e-auction on August 31, 2020 with floor price of ₹ 1,707/MT determined on the basis of Rule 45 of Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016 (hereafter referred as the Rules), no bidder at that floor price participated and hence, the auction was not successful. However, OMC raised demand of ₹ 2,810 million ($ 38 million) on the Company towards differential pricing and interest for bauxite supplied till September 2020 considering the auction base price of INR 1,707/MT.
The Company had then filed a writ petition before Hon’ble High Court of Odisha in September 2020 for resumption of bauxite supply in accordance with applicable Government of Odisha Gazette notification dated February 24, 2018. Hon’ble High Court has issued interim Order dated October 8, 2020 directing that the petitioner shall be permitted to lift the quantity of bauxite mutually agreed under the terms of the long term linkage arrangement for the remaining period of the financial year 2020-21 on payment of ₹ 1,000/MT and furnishing an undertaking for the differential amount with the floor price arrived at by OMC under the rules, along with applicable interest, subject to final outcome of the writ petition. OMC re-conducted e-auction on March 9, 2021 with floor price of ₹ 2,011/MT determined on the basis of the Rules. However, again as no bidder participated at that floor price, the auction was not successful. On March 18, 2021, Cuttack High Court issued an order disposing off the writ petition, directing that the current arrangement of bauxite price at 1000/T will continue for the FY 2021-22. Supported by legal opinions obtained and its own internal legal analysis the Company does not anticipate any additional material liability other than what it has already paid to the OMC and recorded as an expense in these financial statements. (d) The Department of Mines and Geology (DMG) of the State of Rajasthan initiated the royalty assessment process from Jan 2008 to 2019 and issued a show cause notice vide an office order dated January 31, 2020 amounting to ₹ 19,250 million, further an additional demand was issued vide an office order dated December 14, 2020 for ₹ 3,110 million ($ 43 million) on similar questions of law. The Group againsthas challenged the closureshow cause notice and computation mechanism of the royalty on the ground that the State has not complied with the previous orders of Rajasthan High Court where a similar computation mechanism was challenged and Court had directed DMG to reassess basis the judicial precedents and mining concession rules. Pending compliance of previous orders, 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 in order 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 in favour of the Group is remote. (e) In terms of various notifications issued by the Ministry of Environment, Forest and Climate Change (MoEF&CC), ash produced from thermal power plant is required to be disposed of by the Group in the manner specified in those notifications. However, compliance with manner of disposal as specified in those notifications is not fully achieved due to lack of demand from user agencies. Consequently, the Group is storing some of the ash produced in ash dyke in accordance with conditions of the Environmental Clearance & Consent to Operate granted by the MOEF&CC & Odisha State Pollution Control Board & Chhattisgarh Environment Conservation Board (OSPCB & CECB) respectively while giving preference to supplying the same to user agencies. Management believes storage of ash in ash dykes/ ash pond in accordance with environmental clearances received by the Group are sufficient compliance with the applicable notifications issued by MoEF&CC which is supported by a legal opinion obtained. The National Green Tribunal (NGT) has also taken cognizance of the matter and vide its order dated February 12, 2020 has ordered for levy of environmental compensation on generating companies on account of their failure to comply the aforesaid notifications. The Group has filed Special Leave Petitions (SLP) before the Hon’ble Supreme Court of India challenging the order of the Tuticorin Copper smelterNGT the same was heard by Tamil Nadu Pollution Control Board (“TNPCB”), the appellate authority National GreenCourt on September 11, 2020 and granted an ad interim stay against recoveries in pursuance of NGT order. Management believes that the outcome of the appeal will not have any significant adverse financial impact on the Group which is supported by a legal opinion obtained. (f) During the current year, the Company executed a ₹ 100,000 million ($ 1,367 million) long-term syndicated loan facility agreement. This loan is secured by the way of pledge over the shares held by the Company in Hindustan Zinc Limited (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 March 31, 2021, the principal amount participated for and outstanding under the facility is ₹ 86,500 million ($ 1,183 million) and carrying value of facility is ₹ 85,380 million ($ 1,152 million) (net of unamortised cost ₹ 1,120 million ($ 15 million)). (g) Flue-gas desulfurization (FGD) implementation: 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. Ministry of Power issued notification dated July 02, 2020 to restrict imports from China. Power China SEPCO1 has communicated their inability to execute the FGD project quoting aforementioned notification and prevailing COVID situation in India. TSPL is proceeding with further steps for retendering the FGD project. TSPL filed a petition before Punjab State Electricity Regulatory Commission (PSERC) for approval of MoEF notification as change in law in terms of Article 13 of PPA on June 30, 2017. PSERC vide its order dated December 21, 2018 has held that MoEF 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 (“NGT”) passed an interimfor Electricity (APTEL) challenging the said order on May 31, 2013of PSERC. APTEL has pronounced the order August 28, 2020 in favour of TSPL allowing the copper smelter to recommence operations and appointed an Expert Committee to submit a report on the plant operations. Post the interim order, the plant recommenced operations on June 23, 2013. Based on Expert Committee’s report on the operations of the plant stating that the plant’s emission were within prescribed standards and based on this report, NGT ruled on July 15, 2013 that the Copper smelter could continue its operations and recommendations made by the Expert Committee be implemented in a time bound manner. The Group has implemented all of the recommendations. TNPCBcost pass through. PSPCL has filed an appeal against thethis order of the NGT before thein Supreme Court of India, which is yet to be listed for hearing.Court. Income Tax Disputes
The Group is involved in various tax disputes amounting to Rs. 34,205 million and Rs. 60,148 million ($ 927.5 million) as at March 31, 2016 and March 31, 2017 respectively relating to income tax. These mainly relates 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, tax holiday for undertakings located in certain notified areas under section 80IC of the Income Tax Act, 1961, disallowance of tax holiday benefit for power plants under section 80IA of the Income Tax Act, 1961, on account of depreciation disallowances, disallowance under section 14A of the Income Tax Act and interest thereon which are pending at various appellate levels.
Miscellaneous disputes – Vedanta Limited, HZL, MEL, BALCO and other subsidiaries
The Group is subject to various claims and exposures which arise in the ordinary course of conducting and financing its business from the indirect tax authorities and others. These claims and exposures mostly relate to the assessable values of sales and purchases or to incomplete documentation supporting the companies’ returns or other claims.
The approximate value of claims against the Group companies excluding claims shown above total Rs. 22,025 million and Rs. 29,028 million ($447.6 million) as at March 31, 2016 and March 31, 2017 respectively.
The Group considers that it can take steps such that all the above risks can be mitigated and that there are no significant unprovided liabilities arising.
C. Operating Lease commitments
| i. | Operating leases are in relation to the office premises, office equipment and other assets, some of which are cancellable and some arenon-cancellable. There is an escalation clause in the lease agreements during the primary lease period. There are no restrictions imposed by lease arrangements and there are no sub leases. The total of the future minimum lease payments undernon-cancellable lease are as follow: |
| | | | | | | | | | | | | | | As at 31 March 2016 | | | As at 31 March 2017 | | | As at 31 March 2017 | | Particulars | | (Rs. in million) | | | (Rs. in million) | | | (US Dollars in million) | | Within one year of the balance sheet date | | | 285 | | | | 12 | | | | 0.2 | | Due in a period between one year and five years | | | 140 | | | | 51 | | | | 0.8 | | Total | | | 425 | | | | 63 | | | | 1.0 | |
Lease payments recognized as expenses onnon-cancellable lease during the year is Rs.259 million and Rs. 285 million ($4.4 million) as at March 31, 2016 and March 31, 2017 respectively.
| ii. | TSPL has ascertained that the Power Purchase Agreement (PPA) entered with Punjab State Power Corporation Limited (PSPCL) qualifies to be an operating lease under IAS 17 ‘Leases’. Based on the assessment that the lease payments by PSPCL are subject to variations on account of various factors like availability of coal, water, etc., the management has determined the entire consideration receivable under the PPA relating to recovery of capacity charges towards capital cost contingent rent under IAS 17. The contingent rent recognised as revenue in the statement of profit and loss during the year ended March 31, 2016 and March 31, 2017 is Rs. 5,822 million and Rs. 12,287 million ($ 189.5 million) respectively. |
30. Segment information
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 and commercial power and has a presence across India, South Africa, U.A.E, Namibia, Ireland, Australia and Liberia. The Group has seven reportable segments: copper, aluminum, iron ore, power, Zinc India (comprises of zinc & lead India), Zinc international, oil and gas and other. The management of the Group is organized by its main products: copper, Zinc (comprises of zinc & lead India, silver India and zinc international), aluminum, iron ore, oil and gas and power. 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”).
Copper
The Group’s copper business is owned and operated by Vedanta Limited, Copper Mines of Tasmania Pty Ltd (“CMT”) and Fujairah Gold FZC and principally one of custom smelting and includes a copper smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and three captive power plants at Tuticorin in Southern India, and a refinery and two copper rod plants at Silvassa in Western India. In addition, the Group owns and operates the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary, CMT, which provides a small percentage of the copper concentrate requirements (presently under care and maintenance), and a precious metal refinery and copper rod plant in Fujairah through its subsidiary Fujairah Gold FZC in the UAE.
Zinc India
The Group’s zinc India business is owned and operated by Hindustan Zinc Limited (“HZL”) in which it has a 64.92% interest as at March 31, 2017, March 31, 2016 and March 31, 2015. HZL’s operations include five lead-zinc mines, one rock phosphate mine, four hydrometallurgical zinc smelters, two lead smelters, one pyro metallurgical lead-zinc smelter, six sulphuric acid plants, a silver refinery and six captive power plants in State of Rajasthan in Northwest India and one zinc ingot melting and casting plant at Haridwar and one silver refinery, one zinc ingot melting and casting plant and one lead ingot melting and casting plant at Pantnagar in the State of Uttarakhand in North India.
Zinc International
The Group’s 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”) and Black Mountain Mining (Proprietary) Limited (“BMM”), whose assets include the Black Mountain mine and the Gamsberg mine project which is in exploration stage, located in South Africa. The Group has 100% interest in Skorpion, 74.00% interest in BMM and 100% interest in Lisheen (which owns the Lisheen mine in Ireland which has ceased operations in December 2015).
Aluminum
The Group’s aluminium business is owned and operated by Vedanta Limited and Bharat Aluminium Company Limited (“BALCO”) in which it has a 51% interest as at March 31, 2017, March 31, 2016 and March 31, 2015. Vedanta Limited’s Aluminium operations include a refinery and a captive power plant at Lanjigarh and a smelter, a thermal coal based captive power facility at Jharsuguda both situated in the State of Odisha in India. The pots are in the stage of commissioning in the 1.25 mtpaJharsuguda-II Aluminium smelter with 530 pots having been commissioned by March 31, 2017. BALCO’s partially integrated aluminium operations are comprised of two bauxite mines, captive power plants, smelting and fabrication facilities in central India. TheBALCO-II smelter was commissioned, with all 336 pots operational in August 2016.
Power
The Group’s power business is owned and operated by Vedanta Limited, BALCO and Talwandi Sabo Power Limited (“TSPL”), a wholly owned subsidiary of the Vedanta Limited which are engaged in the power generation business in India. Vedanta Limited’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 include 600MW (2 units of 300MW each) thermal coal based power plant at Korba. The first 300 MW unit of the IPP 600 MW was capitalized on August 1, 2015. The second unit was commissioned and started commercial production from May 1, 2016. TSPL had signed a power purchase agreement with the Punjab State Power Corporation Limited (“PSPCL”) for the establishment of 1,980 MW (three units of 660 MW each) thermal coal-based commercial power facilities. The first 660MW unit of the Talwandi Sabo power plant (TSPL) was capitalized in financial year 2015 and second 660 MW unit was capitalized on December 1, 2015. The third 660MW unit at TSPL was capitalized on September 1, 2016. Power business also includes the wind power plants commissioned by HZL and a power plant at MALCO Energy Limited situated at Mettur Dam in the State of Tamil Nadu in southern India (presently under care and maintenance).
Iron ore
The Group’s iron ore business is owned by Vedanta Limited and by two wholly owned subsidiaries, Sesa Resources Limited and Sesa Mining Corporation Limited and consists of exploration, mining and processing of iron ore, pig iron and metallurgical coke. The mining operations are carried out at Codli group, Bicholim mine, Surla mine and the Sonshi group of mines in state of Goa and Narrain mine, situated at state of Karnataka in India, a Metallurgical Coke and Pig Iron plant in state of Goa in India and also has a power plant in state of Goa in India for captive use. Group’s iron ore business also comprises Western Cluster Limited (“WCL”) in Liberia which has iron ore assets and is wholly owned subsidiary of the Group. WCL’s assets include development rights to western cluster and a network of iron ore deposits in West Africa. WCL’s assets were fully impaired in the year ended March 31, 2016.
Oil and gas
The Group’s oil and gas business is owned and operated by the Company and its subsidiary Cairn Energy Hydrocarbon Limited and engaged in business of exploration and development and production of oil and gas. The Group has a diversified asset base with seven blocks, one in state of Rajasthan in India, one on the west coast of India, four on the east coast of India and one in South Africa.
Other
The Group’s other activities include Vizag General Cargo Berth Private Limited (“VGCB”) and Maritime Ventures Private Limited (“MVPL) in which the Group owns a 100% interest. Vizag port project includes mechanisation of coal handling facilities and up gradation of general cargo berth for handling coal at the outer harbor of Vishakhapatnam 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.
Segment Revenue, Result, Assets and Liabilities include the respective amounts identifiable to each of the segments and amount allocated on a reasonable basis. Unallocated expenditure consists 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 described in Note 3. The operating segments reported are the segments of the Group for which separate financial information is available. Earnings before interest, depreciation and amortization and tax (Segment profit) 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. Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties except from power segment sales amounting to Rs. 3,684 million and Rs. 413 million ($ 6.4 million) which is at cost for the year ended March 31, 2016 and March 31, 2017 respectively.
The following table presents revenue and profit information and certain assets information regarding the Group’s business segments as at and for the year ended March 31, 2015 ,March 31, 2016 and March 31, 2017.
a. For the year ended March 31, 2015
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Copper | | | Zinc India | | | Zinc International | | | Aluminium | | | Power | | | Iron Ore | | | Oil and Gas | | | Others | | | Elimination | | | Total | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales# | | | 225,198 | | | | 144,127 | | | | 35,886 | | | | 126,900 | | | | 33,906 | | | | 19,039 | | | | 146,945 | | | | 1,578 | | | | — | | | | 733,579 | | Inter-segment sales | | | 1,100 | | | | — | | | | — | | | | 230 | | | | 7,280 | | | | 924 | | | | — | | | | 220 | | | | (9,754) | | | | — | | Segment revenue | | | 226,298 | | | | 144,127 | | | | 35,886 | | | | 127,130 | | | | 41,186 | | | | 19,963 | | | | 146,945 | | | | 1,798 | | | | (9,754) | | | | 733,579 | | Cost of Sales and expenses | | | (208,913) | | | | (73,522) | | | | (24,827) | | | | (104,601) | | | | (32,762) | | | | (20,854) | | | | (58,274) | | | | (1,266) | | | | 9,754 | | | | (515,265) | | Segment profit / (loss) | | | 17,385 | | | | 70,605 | | | | 11,059 | | | | 22,529 | | | | 8,424 | | | | (891) | | | | 88,671 | | | | 532 | | | | — | | | | 218,314 | | Depreciation and amortization | | | (3,041) | | | | (8,338) | | | | (6,791) | | | | (8,483) | | | | (3,940) | | | | (2,531) | | | | (77,673) | | | | (294) | | | | — | | | | (111,091) | | Impairment (Refer Note 8) | | | — | | | | — | | | | — | | | | (294) | | | | — | | | | — | | | | (406,144) | | | | — | | | | — | | | | (406,438) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | 14,344 | | | | 62,267 | | | | 4,268 | | | | 13,752 | | | | 4,484 | | | | (3,422) | | | | (395,146) | | | | 238 | | | | — | | | | (299,215) | | Finance and other costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (63,398) | | Investment and other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 51,154 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loss before tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (311,459) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets and liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment assets | | | 77,428 | | | | 136,998 | | | | 36,235 | | | | 413,312 | | | | 199,622 | | | | 115,222 | | | | 556,271 | | | | 5,300 | | | | — | | | | 1,540,338 | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 262 | | Deferred tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 76,487 | | Short-term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 496,482 | | Cash and cash equivalents (including restricted cash and cash equivalents) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12,711 | | Loan to related parties | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 160 | | Current tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,792 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,422 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,161,704 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment liabilities | | | 89,602 | | | | 19,794 | | | | 10,539 | | | | 60,324 | | | | 27,359 | | | | 9,408 | | | | 64,208 | | | | 1,920 | | | | — | | | | 283,154 | | Short-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 161,233 | | Current tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 3,842 | | Long-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 517,852 | | Deferred tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 155,812 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 11,203 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,133,096 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions to property, plant and equipments | | | 1,796 | | | | 13,372 | | | | 1,121 | | | | 9,254 | | | | 8,670 | | | | 1,632 | | | | 44,821 | | | | 30 | | | | — | | | | 80,696 | | Additions to Leasehold Land | | | — | | | | 160 | | | | — | | | | 30 | | | | — | | | | — | | | | — | | | | 1 | | | | — | | | | 191 | | Additions to exploration and evaluation assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | 439 | | | | 20,999 | | | | — | | | | — | | | | 21,438 | | Additions to other intangibles assets | | | — | | | | 27 | | | | 43 | | | | — | | | | — | | | | — | | | | 225 | | | | 61 | | | | — | | | | 356 | |
# | includes sale to external customers and export incentives. |
b. For the year ended March 31, 2016
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Copper | | | Zinc India | | | Zinc International | | | Aluminium | | | Power | | | Iron Ore | | | Oil and Gas | | | Others | | | Elimination | | | Total | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales# | | | 209,239 | | | | 137,945 | | | | 25,631 | | | | 110,781 | | | | 45,523 | | | | 22,233 | | | | 86,559 | | | | 1,582 | | | | — | | | | 639,493 | | Inter-segment sales | | | 23 | | | | — | | | | — | | | | 129 | | | | 4,303 | | | | 541 | | | | — | | | | 245 | | | | (5,241) | | | | — | | Segment revenue | | | 209,262 | | | | 137,945 | | | | 25,631 | | | | 110,910 | | | | 49,826 | | | | 22,774 | | | | 86,559 | | | | 1,827 | | | | (5,241) | | | | 639,493 | | Cost of Sales and expenses | | | (187,057) | | | | (70,975) | | | | (21,070) | | | | (102,443) | | | | (37,167) | | | | (18,407) | | | | (52,286) | | | | (1,259) | | | | 5,241 | | | | (485,423) | | Segment profit | | | 22,205 | | | | 66,970 | | | | 4,561 | | | | 8,467 | | | | 12,659 | | | | 4,367 | | | | 34,273 | | | | 568 | | | | — | | | | 154,070 | | Depreciation and amortization | | | (2,048) | | | | (7,558) | | | | (3,730) | | | | (7,051) | | | | (4,438) | | | | (4,106) | | | | (54,088) | | | | (324) | | | | — | | | | (83,343) | | Impairment (Refer Note 8) | | | (497) | | | | — | | | | — | | | | — | | | | — | | | | (16,054) | | | | (322,998) | | | | — | | | | — | | | | (339,549) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | 19,660 | | | | 59,412 | | | | 831 | | | | 1,416 | | | | 8,221 | | | | (15,793) | | | | (342,813) | | | | 244 | | | | — | | | | (268,822) | | Finance and other costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (59,584) | | Investment and other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 43,998 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Loss before tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (284,408) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets and liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment assets* | | | 77,083 | | | | 139,767 | | | | 31,362 | | | | 383,614 | | | | 224,786 | | | | 93,901 | | | | 205,389 | | | | 5,344 | | | | — | | | | 1,161,246 | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 432 | | Deferred tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 82,481 | | Short-term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 566,192 | | Cash and cash equivalents (including restricted cash and cash equivalents) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,237 | | Loan to related parties | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 805 | | Current tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 26,764 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,098 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,869,255 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment liabilities* | | | 124,011 | | | | 29,366 | | | | 8,396 | | | | 46,353 | | | | 38,482 | | | | 11,322 | | | | 56,627 | | | | 1,161 | | | | — | | | | 315,718 | | Short-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 182,328 | | Current tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 703 | | Long-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 493,784 | | Deferred tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 30,212 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 70,252 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,092,997 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions to property, plant and equipments | | | 1,170 | | | | 15,704 | | | | 2,500 | | | | 4,042 | | | | 6,949 | | | | 829 | | | | 8,996 | | | | 48 | | | | — | | | | 40,238 | | Additions to Leasehold Land | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Additions to exploration and evaluation assets | | | — | | | | — | | | | 1,060 | | | | — | | | | — | | | | — | | | | 4,912 | | | | — | | | | — | | | | 5,972 | | Additions to other intangibles assets | | | — | | | | 139 | | | | — | | | | 16 | | | | — | | | | 7 | | | | 99 | | | | 3 | | | | — | | | | 264 | |
* | During the year ended March 31, 2016, consequent to certain power facilities at a subsidiary being used for generation and sale of commercial power, capital employed in respect of capitalwork-in-progress for the previous periods relating to power facilities used/ to be used in the generation and sale of commercial power has been reclassified from ‘ Aluminium’ segment to ‘ Power’ segment. |
# | Includes sale to external customers and export incentives. |
c. For the year ended March 31, 2017
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Copper | | | Zinc India | | | Zinc International | | | Aluminium | | | Power | | | Iron Ore | | | Oil and Gas | | | Others | | | Elimination | | | Total | | | Total | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | | | | | | | | | | | | | Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales# | | | 210,021 | | | | 169,194 | | | | 22,302 | | | | 136,667 | | | | 55,189 | | | | 40,880 | | | | 82,041 | | | | 913 | | | | — | | | | 717,207 | | | | 11,059.5 | | Inter-segment sales | | | 155 | | | | 206 | | | | — | | | | 195 | | | | 890 | | | | 410 | | | | — | | | | 70 | | | | (1,926) | | | | — | | | | — | | Segment revenue | | | 210,176 | | | | 169,400 | | | | 22,302 | | | | 136,862 | | | | 56,079 | | | | 41,290 | | | | 82,041 | | | | 983 | | | | (1,926) | | | | 717,207 | | | | 11,059.5 | | Cost of Sales and expenses | | | (193,212) | | | | (73,901) | | | | (13,121) | | | | (113,662) | | | | (39,637) | | | | (28,199) | | | | (41,149) | | | | (869) | | | | 1,926 | | | | (501,824) | | | | (7,738.3) | | Segment profit | | | 16,964 | | | | 95,499 | | | | 9,181 | | | | 23,200 | | | | 16,442 | | | | 13,091 | | | | 40,892 | | | | 114 | | | | — | | | | 215,383 | | | | 3,321.2 | | Depreciation and amortization | | | (1,938) | | | | (10,008) | | | | (1,845) | | | | (9,468) | | | | (5,685) | | | | (4,688) | | | | (27,532) | | | | (313) | | | | — | | | | (61,477) | | | | (948.0) | | Impairment (Refer Note 8) | | | — | | | | — | | | | — | | | | (2,007) | | | | — | | | | — | | | | 845 | | | | — | | | | — | | | | (1,162) | | | | (17.9) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Operating profit / (loss) | | | 15,026 | | | | 85,491 | | | | 7,336 | | | | 11,725 | | | | 10,757 | | | | 8,403 | | | | 14,205 | | | | (199) | | | | — | | | | 152,744 | | | | 2,355.3 | | Finance and other costs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (61,600) | | | | (949.8) | | Investment and other income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 45,428 | | | | 700.5 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Profit before tax | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 136,572 | | | | 2,106.0 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets and liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment assets* | | | 77,864 | | | | 156,661 | | | | 35,950 | | | | 460,532 | | | | 178,762 | | | | 91,323 | | | | 165,262 | | | | 5,318 | | | | — | | | | 1,171,672 | | | | 18,067.4 | | Financial assets investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 695 | | | | 10.7 | | Deferred tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 77,582 | | | | 1,196.3 | | Short-term investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 524,685 | | | | 8,090.7 | | Cash and cash equivalents (including restricted cash and cash equivalents) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 108,949 | | | | 1,680.0 | | Loan to related parties | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 692 | | | | 10.7 | | Current tax asset | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 28,312 | | | | 436.6 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,274 | | | | 96.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,918,861 | | | | 29,589.2 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Segment liabilities* | | | 110,783 | | | | 40,424 | | | | 11,268 | | | | 102,290 | | | | 14,858 | | | | 14,508 | | | | 46,542 | | | | 302 | | | | — | | | | 340,975 | | | | 5,257.9 | | Short-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 413,126 | | | | 6,370.5 | | Current tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2,028 | | | | 31.3 | | Long-term borrowings | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 332,654 | | | | 5,129.6 | | Deferred tax liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 24,015 | | | | 370.3 | | Others | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 92,275 | | | | 1,422.8 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,205,073 | | | | 18,582.4 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Additions to property, plant and equipments | | | 1,626 | | | | 21,788 | | | | 4,850 | | | | 18,956 | | | | 5,223 | | | | 650 | | | | 8,886 | | | | 2 | | | | — | | | | 61,981 | | | | 955.9 | | Additions to Leasehold Land | | | — | | | | — | | | | — | | | | 290 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 290 | | | | 4.5 | | Additions to exploration and evaluation assets | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 1,234 | | | | — | | | | — | | | | 1,234 | | | | 19.0 | | Additions to other intangibles assets | | | 54 | | | | 178 | | | | — | | | | 204 | | | | 32 | | | | 56 | | | | 29 | | | | 28 | | | | — | | | | 581 | | | | 9.0 | |
* | During the current year, three units of 600 MW each at Jharsuguda and 1 unit of 270 MW at Balco, Korba have been converted from commercial power plant to captive power plant, pursuant to an order of Orissa Electricity Regulatory Authority and increased inhouse demand respectively. Accordingly, the revenue, results, segment assets and segment liabilities of these plants have been disclosed as part of Aluminium segment. |
# | Includes sale to external customers and export incentives. |
Geographical Segment Analysis
The Group’s operations are primarily located in India. The following table provides an analysis of the Group’s sales by geographical market irrespective of the origin of the goods:
| | | | | | | | | | | | | | | | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | India | | | 481,451 | | | | 443,287 | | | | 441,954 | | | | 6,815.0 | | China | | | 57,846 | | | | 34,556 | | | | 61,179 | | | | 943.4 | | UAE | | | 40,705 | | | | 32,759 | | | | 48,070 | | | | 741.2 | | Others | | | 153,577 | | | | 128,891 | | | | 166,004 | | | | 2,559.9 | | | | | | | | | | | | | | | | | | | | | 733,579 | | | 639,493 | | | 717,207 | | | 11,059.5 | | | | | | | | | | | | | | | | | | |
The following is an analysis of the carrying amount ofnon-current assets, being property, plant and equipment, exploration and evaluation assets and other intangible assets and leasehold land analysed by the geographical area in which the assets are located: —
| | | | | | | | | | | | | | | As at March 31 | | | | 2016 | | | 2017 | | | 2017 | | | | Carrying amount | | | Carrying amount | | | Carrying amount | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | India | | | 963,954 | | | | 955,815 | | | | 14,738.9 | | Australia | | | 290 | | | | 223 | | | | 3.4 | | South Africa | | | 16,338 | | | | 20,898 | | | | 322.3 | | Namibia | | | 7,863 | | | | 7,310 | | | | 112.7 | | Ireland | | | 447 | | | | 387 | | | | 6.0 | | UAE | | | 1,428 | | | | 1,318 | | | | 20.2 | | | | | | | | | | | | | | | | | 990,320 | | | 985,951 | | | 15,203.5 | | | | | | | | | | | | | | |
All other non-current assets (non-financial) are situated in India.
No single customer has accounted for more than 10% of the Group’s revenue for the year ended March 31, 2015, March 31, 2016 and March 31, 2017.
31. Related party transactions –
The Group’s subsidiaries as at March 31, 2017 are as follows:
| | | | | | | | | | | | | | | Subsidiaries | | Principal activities | | Immediate holding company | | Country of Incorporation | | The Company’s / Immediate percentage holding (in % as at March 31, 2016) | | | The Company’s / Immediate percentage holding (in % as at March 31, 2017) | | Bharat Aluminium Company Ltd (BALCO). | | Aluminium mining and smelting | | Vedanta Limited | | India | | | 51 | | | | 51 | | Copper Mines of Tasmania (CMT) | | Copper mining | | MCBV | | Australia | | | 100 | | | | 100 | | Fujairah Gold FZC1 | | Copper and precious metals processing | | MEL | | UAE | | | 100 | | | | 100 | | Hindustan Zinc Limited (HZL) | | Zinc mining and smelting | | Vedanta Limited | | India | | | 64.92 | | | | 64.92 | | Monte Cello BV (MCBV) | | Investment Company | | Vedanta Limited | | Netherland | | | 100 | | | | 100 | | Thalanga Copper Mines (“TCM”) | | Copper mining | | MCBV | | Australia | | | 100 | | | | 100 | | Sterlite (USA) Inc. | | Investment Company | | Vedanta Limited | | USA | | | 100 | | | | 100 | | Talwandi Saboo Power Limited | | Power generation | | Vedanta Limited | | India | | | 100 | | | | 100 | | THL Zinc Ventures Ltd | | Investment Company | | Vedanta Limited | | Mauritius | | | 100 | | | | 100 | | THL Zinc Ltd | | Investment Company | | THL Zinc Ventures Ltd | | Mauritius | | | 100 | | | | 100 | | THL Zinc Holding B.V. | | Investment Company | | Vedanta Limited | | Netherland | | | 100 | | | | 100 | | THL Zinc Namibia Holdings (Proprietary) Ltd | | Mining and exploration | | THL Zinc Ltd | | Namibia | | | 100 | | | | 100 | | Skorpion Zinc (Proprietary) Ltd | | Acquisition of immovable and movable properties | | THL Zinc Namibia Holdings (Proprietary) Ltd | | Namibia | | | 100 | | | | 100 | | Skorpion Mining Company (Proprietary) Ltd | | Zinc mining | | Skorpion Zinc (Proprietary) Ltd | | Namibia | | | 100 | | | | 100 | | Namzinc (Proprietary) Ltd | | Zinc refinery | | Skorpion Zinc (Proprietary) Ltd | | Namibia | | | 100 | | | | 100 | | Amica Guesthouse (Proprietary) Ltd | | Accomodation and catering services | | Skorpion Zinc (Proprietary) Ltd | | Namibia | | | 100 | | | | 100 | | Rosh Pinah Health Care (Proprietary) Ltd | | Leasing out of medical equipment and building and conducting services related thereto | | Skorpion Zinc (Proprietary) Ltd | | Namibia | | | 69 | | | | 69 | | Black Mountain Mining (Proprietary) Limited | | Zinc and Lead mining and milling | | THL Zinc Ltd | | South Africa | | | 74 | | | | 74 | | Vedanta Lisheen Holdings Limited | | Investment Company | | THL Zinc Holding B.V. | | Ireland | | | 100 | | | | 100 | | Vedanta Lisheen Mining Limited | | Zinc and lead mining | | Vedanta Lisheen Holdings Limited | | Ireland | | | 100 | | | | 100 | | Killoran Lisheen Mining Limited | | Zinc and lead mining | | Vedanta Lisheen Holdings Limited | | Ireland | | | 100 | | | | 100 | | Killoran Lisheen Finance Limited | | Investment Company | | Vedanta Lisheen Holdings Limited | | Ireland | | | 100 | | | | 100 | | Lisheen Milling Limited | | Manufacturing | | Vedanta Lisheen Holdings Limited | | Ireland | | | 100 | | | | 100 | | Vedanta Exploration Ireland Limited | | Exploration company | | Vedanta Lisheen Holdings Limited | | Ireland | | | 100 | | | | 100 | | Malco Energy Limited (MEL) | | Power generation | | Vedanta Limited | | India | | | 100 | | | | 100 | | Vizag General Cargo Berth Private Ltd | | Infrastructure | | Vedanta Limited | | India | | | 99.99 | | | | 100 | |
| | | | | | | | | | | | | | | Subsidiaries | | Principal activities | | Immediate holding company | | Country of Incorporation | | The Company’s / Immediate percentage holding (in % as at March 31, 2016) | | | The Company’s / Immediate percentage holding (in % as at March 31, 2017) | | Paradip Multi Cargo Berth Private Limited | | Infrastructure | | Vedanta Limited | | India | | | 74 | | | | 100 | | Pecvest 17 Proprietary Limited * | | Investment Company | | THL Zinc Ltd | | South Africa | | | 100 | | | | — | | Lisheen Mine Partnership**** | | Zinc and lead mining | | Killoran Lisheen Mining Limited and Vedanta Lisheen Mining Limited | | Ireland | | | 100 | | | | 100 | | Sterlite Ports Limited | | Infrastructure | | Vedanta Limited | | India | | | 100 | | | | 100 | | Maritime Ventures Limited | | Infrastructure | | Sterlite Ports Limited | | India | | | 100 | | | | 100 | | Sterlite Infraventures Limited ** | | Infrastructure | | Vedanta Limited | | India | | | 100 | | | | — | | Lakomasko B.V. | | Investment Company | | THL Zinc Holding B.V. | | Netherland | | | 100 | | | | 100 | | Sesa Resources Limited | | Iron Ore mining | | Vedanta Limited | | India | | | 100 | | | | 100 | | Bloom Fountain Limited | | Iron ore mining and Investment Company | | Vedanta Limited | | Mauritius | | | 100 | | | | 100 | | Sesa Mining Corporation Private Limited | | Iron Ore mining | | Sesa Resources Limited | | India | | | 100 | | | | 100 | | Goa Sea Ports Private Limited2 | | Infrastructure | | Sterlite Ports Limited | | India | | | — | | | | 100 | | Western Clusters Limited | | Iron Ore mining | | Bloom Fountain Limited | | Liberia | | | 100 | | | | 100 | | Twinstar Energy Holding Limited | | Investment Company | | Bloom Fountain Limited | | Mauritius | | | 100 | | | | 100 | | Twinstar Mauritius Holding Limited | | Investment Company | | Twinstar Energy Holding Limited | | Mauritius | | | 100 | | | | 100 | | Cairn India Limited (“Cairn”)3 | | Oil and Gas exploration, development and production | | Vedanta Limited | | India | | | 59.88 | | | | — | | CIG Mauritius Holding Private Limited | | Investment Company | | Cairn Energy Hydrocarbons Limited | | Mauritius | | | 59.88 | | | | 100 | | Cairn India Holdings Limited3 | | Investment Company | | Vedanta Limited | | Jersey | | | 59.88 | | | | 100 | | CIG Mauritius Private Limited | | Investment Company | | CIG Mauritius Holding Private Limited | | Mauritius | | | 59.88 | | | | 100 | | Cairn Lanka Private Limited | | Exploration and Production | | CIG Mauritius Private Limited | | Sri Lanka | | | 59.88 | | | | 100 | | Cairn Energy Australia Pty Limited * | | Investment company | | Cairn India Holdings Limited | | Australia | | | 59.88 | | | | — | | Cairn Energy Holdings Limited * | | Investment Company | | Cairn India Holdings Limited | | United Kingdom (UK) | | | 59.88 | | | | — | | Cairn Energy India Pty Limited | | Exploration and Production | | Cairn India Holdings Limited | | Australia | | | 59.88 | | | | 100 | | Cairn Exploration No 2 Limited | | Exploration and Production | | Cairn India Holdings Limited | | UK | | | 59.88 | | | | 100 | | Cairn Exploration No 7 Limited * | | Exploration and Production | | Cairn India Holdings Limited | | UK | | | 59.88 | | | | — | | Cairn Exploration No 6 Limited*** | | Exploration and Production | | Cairn India Holdings Limited | | UK | | | — | | | | — | | Cairn Energy Gujarat Block 1 Limited | | Exploration and Production | | Cairn India Holdings Limited | | UK | | | 59.88 | | | | 100 | | Cairn Energy Discovery Limited | | Exploration and Production | | Cairn India Holdings Limited | | UK | | | 59.88 | | | | 100 | | Cairn Energy Hydrocarbons Limited | | Exploration and Production | | Cairn India Holdings Limited | | UK | | | 59.88 | | | | 100 | | Cairn South Africa Proprietary Limited | | Exploration and Production | | Cairn Energy Hydrocarbons Limited | | South Africa | | | 59.88 | | | | 100 | | Sesa Sterlite Mauritius Holdings Limited***** | | Investment Company | | Bloom Fountain Limited | | Mauritius | | | — | | | | 100 | |
* | Dissolved during the year. |
** | Sold during the year to Sterlite Power Transmission Limited |
*** | Dissolved in previous year |
**** | Entities registered as other than corporate entity |
***** | Purchased during the year |
1 | Pursuant to transfer of holding in Fujairah Gold from TCM and CMT to MEL in July 2016 |
2 | Goa Sea Port Private Limited incorporated on 5th July, 2016 as a 100% subsidiary of Sterlite Ports Limited (SPL) |
3 | Cairn India Limited merged with Vedanta Limited. Post merger Cairn India Holdings Limited became direct subsidiary of Vedanta Limited (Refer note 1). |
4 | The Group also has interest in certain trust which are neither significant nor material to the Group. |
The Company owns directly or indirectly through subsidiaries, more than half of the voting power of all of its subsidiaries as mentioned in the list above, and the Group is able to govern its subsidiaries’ financial and operating policies so as to benefit from their activities.
Ultimate controlling party
As at March 31, 2017, the Group is majorly owned by Twin Star Holdings Limited, Finsider International Company Limited, Westglobe Limited and Welter Trading Limited which are in turn wholly-owned subsidiaries of Vedanta Resources Plc (Intermediate Holding Company). The ultimate controlling party of the Group is Volcan Investments Limited (“Volcan”), which is controlled by persons related to the Chairman Emeritus, Mr. Anil Agarwal. Volcan Investment Limited, Twin Star Holdings Limited, Finsider International Company Limited, Westglobe Limited and Welter Trading Limited do not produce Group financial statements.
List of related parties and relationships –
The Group enters into transactions in the normal course of business with its related parties, including its parent Vedanta, and the companies over which it has significant influence. A summary of significant related party transactions for the year ended March 31, 2015, 2016 and 2017 are noted below.
A) | Entities Controlling the Company (Holding Companies) |
Volcan Investments Limited (‘Volcan’)
Intermediate Holding Companies
Vedanta Resources Plc. (‘Vedanta’)
Vedanta Resources Holdings Limited (‘VRHL’)
Twin Star Holdings Limited (‘TSHL’)
Finsider International Company Limited (‘Finsider’)
Westglobe Limited (‘Westglobe’)
Welter Trading Limited (‘Welter’)
Richter Holdings Limited (‘Richter’)
Vedanta Resources Finance Limited
Vedanta Resources Cyprus Limited
Konkola Copper Mines (‘KCM’)
Vedanta Resources Jersey II Limited (‘VRJ2’)
Vedanta Resources Jersey Limited (‘VRJL’)
Vedanta Jersey Investments Limited (‘VJIL’)
Sterlite Technologies Limited (‘STL’)
Sterlite Power Transmission Limited (‘SPTL’)
Sterlite Iron and Steel Company Limited (‘SISCOL’)
Sesa Community Development Foundation
Vedanta Medical Research Foundation (‘VMRF’)
Vedanta Foundation
Balco Employees Provident Fund Trust
Hindustan Zinc Ltd Employees Contributory Provident Fund Trust
Sesa Group Employees Provident Fund Trust
Sesa Mining Corporation Limited Employees Provident Fund Trust
Sesa Resources Limited Employees Provident Fund Trust
The below details provide the total amount of transactions that have been entered into with related parties for the relevant financial year. The significant transactions relate to the normal sale and purchase of goods and loans and investments. All inter-company transactions and balances are eliminated on consolidation.
The significant transactions with related parties for the year ended March 31, 2015, March 31, 2016 and March 31, 2017 are set out below:
| | | | | | | | | | | | | | | | | | | For the year ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Sales | | | | | | | | | | | | | | | | | STL | | | 7,828 | | | | 9,188 | | | | 8,577 | | | | 132.3 | | SPTL | | | — | | | | — | | | | 177 | | | | 2.7 | | Total | | | 7,828 | | | | 9,188 | | | | 8,754 | | | | 135.0 | | | | | | | | | | | | | | | | | | | Purchases of goods/services | | | | | | | | | | | | | | | | | KCM | | | 11,809 | | | | 382 | | | | 2,977 | | | | 45.9 | | STL | | | 69 | | | | 74 | | | | 174 | | | | 2.7 | | SPTL | | | — | | | | — | | | | 28 | | | | 0.4 | | | | | | | | | | | | | | | | | | | Total | | | 11,878 | | | | 456 | | | | 3,179 | | | | 49.0 | | | | | | | | | | | | | | | | | | | | | | | | Interest income / (Finance costs) | | | | | | | | | | | | | | | | | VRJ2 | | | (13,842) | | | | (11,563) | | | | (2,179) | | | | (33.6) | | VRJL | | | — | | | | — | | | | (36) | | | | (0.6) | | Vedanta | | | 312 | | | | 438 | | | | 394 | | | | 6.1 | | KCM | | | — | | | | — | | | | 26 | | | | 0.4 | | TSHL | | | — | | | | 5 | | | | 14 | | | | 0.2 | | SISCOL | | | 7 | | | | 5 | | | | 2 | | | | 0.0 | | STL | | | 34 | | | | 14 | | | | 90 | | | | 1.4 | | | | | | | | | | | | | | | | | | | Total | | | (13,489) | | | | (11,101) | | | | (1,689) | | | | (26.1) | | | | | | | | | | | | | | | | | | | | | | | | Dividend paid | | | | | | | | | | | | | | | | | TSHL | | | 4,701 | | | | 8,069 | | | | 26,829 | | | | 413.7 | | Finsider | | | 1,405 | | | | 2,349 | | | | 7,809 | | | | 120.4 | | Westglobe | | | 155 | | | | 259 | | | | 862 | | | | 13.3 | | Welter | | | 134 | | | | 224 | | | | 744 | | | | 11.5 | | | | | | | | | | | | | | | | | | | Total | | | 6,395 | | | | 10,901 | | | | 36,244 | | | | 558.9 | | | | | | | | | | | | | | | | | | | | | | | | Management fees expenses | | | | | | | | | | | | | | | | | Vedanta | | | 306 | | | | 330 | | | | 335 | | | | 5.2 | | | | | | | | | | | | | | | | | | | Total | | | 306 | | | | 330 | | | | 335 | | | | 5.2 | | | | | | | | | | | | | | | | | | | | | | | | Dividend Income | | | | | | | | | | | | | | | | | STL | | | 1 | | | | 3 | | | | 7 | | | | 0.1 | | | | | | | | | | | | | | | | | | | Total | | | 1 | | | | 3 | | | | 7 | | | | 0.1 | | | | | | | | | | | | | | | | | | | | | | | | Service Income | | | | | | | | | | | | | | | | | Vedanta | | | 24 | | | | 28 | | | | 32 | | | | 0.5 | | | | | | | | | | | | | | | | | | | Total | | | 24 | | | | 28 | | | | 32 | | | | 0.5 | | | | | | | | | | | | | | | | | | | | | | | | Long Term Incentive Plan Expenses | | | | | | | | | | | | | | | | | Vedanta | | | 1,572 | | | | 876 | | | | 628 | | | | 9.7 | | | | | | | | | | | | | | | | | | | Total | | | 1,572 | | | | 876 | | | | 628 | | | | 9.7 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Loans given/(repaid) during the year | | | | | | | | | | | | | | | | | TSHL | | | — | | | | 655 | | | | — | | | | — | | SISCOL | | | 1 | | | | 1 | | | | 0 | | | | 0.0 | | SISCOL | | | (14) | | | | (25) | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total | | | (13) | | | | 631 | | | | 0 | | | | 0.0 | | | | | | | | | | | | | | | | | | | | | | | | Loan taken/(repaid) during the year | | | | | | | | | | | | | | | | | VRJ2 | | | (80,463) | | | | (51,182) | | | | (126,187) | | | | (1,945.8) | | VRJ2 | | | 730 | | | | 3,856 | | | | 939 | | | | 14.5 | | VRJL | | | — | | | | — | | | | 1,907 | | | | 29.4 | | VRJL | | | — | | | | — | | | | (1,907) | | | | (29.4) | | | | | | | | | | | | | | | | | | | Total | | | (79,733) | | | | (47,326) | | | | (125,248) | | | | (1,931.3) | | | | | | | | | | | | | | | | | | | | | | | | Guarantee given/(taken) | | | | | | | | | | | | | | | | | Vedanta | | | (30,574) | | | | (58,915) | | | | (168,483) | | | | (2,598.0) | | | | | | | | | | | | | | | | | | | Total | | | (30,574) | | | | (58,915) | | | | (168,483) | | | | (2,598.0) | | | | | | | | | | | | | | | �� | | | | | | | | | Corporate social responsibility expenditure/ donation | | | | | | | | | | | | | | | | | Sesa Community Development Foundation | | | 42 | | | | 23 | | | | 19 | | | | 0.3 | | Vedanta Foundation* | | | 41 | | | | 31 | | | | 683 | | | | 10.5 | | VMRF | | | 42 | | | | 176 | | | | 348 | | | | 5.4 | | | | | | | | | | | | | | | | | | | Total | | | 125 | | | | 230 | | | | 1,050 | | | | 16.2 | | | | | | | | | | | | | | | | | | |
* | includes donation in kind, having fair market value of Rs. 112 million ($ 1.7 million) for the year ended March 31, 2017. |
The significant receivables from and payables to related parties as at March 31, 2016 and March 31, 2017 are set out below:
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Receivable from: | | | | | | | | | | | | | STL | | | 79 | | | | 263 | | | | 4.1 | | SPTL | | | — | | | | 1 | | | | 0.0 | | KCM | | | 332 | | | | 1,475 | | | | 22.8 | | Vedanta | | | 288 | | | | 68 | | | | 1.1 | | SISCOL | | | 22 | | | | 122 | | | | 1.9 | | Volcan | | | 10 | | | | 23 | | | | 0.4 | | TSHL | | | 5 | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 736 | | | | 1,952 | | | | 30.3 | | | | | | | | | | | | | | | | | | | Loans to: | | | | | | | | | | | | | SISCOL | | | 142 | | | | 44 | | | | 0.7 | | TSHL | | | 663 | | | | 648 | | | | 10.0 | | | | | | | | | | | | | | | Total | | | 805 | | | | 692 | | | | 10.7 | | | | | | | | | | | | | | | | | | | Payable to: | | | | | | | | | | | | | VRJ2 | | | 3,313 | | | | — | | | | — | | Vedanta | | | 175 | | | | 223 | | | | 3.4 | | KCM | | | 5 | | | | 79 | | | | 1.2 | | STL | | | 90 | | | | 147 | | | | 2.3 | | Hindustan Zinc Ltd Employees Contributory provident Fund Trust | | | 39 | | | | 29 | | | | 0.4 | | Sesa Resources Limited Employees Provident Fund | | | | | | | 1 | | | | 0.0 | | Sesa Mining Corporation Limited Employees Provident Fund | | | | | | | 2 | | | | 0.0 | | Sesa Group Employees Provident Fund | | | 19 | | | | 16 | | | | 0.2 | | Balco Employees Provident Fund Trust | | | 8 | | | | 47 | | | | 0.7 | | TSHL | | | — | | | | 24,415 | | | | 376.5 | | Finsider | | | — | | | | 7,106 | | | | 109.6 | | Westglobe | | | — | | | | 785 | | | | 12.1 | | Welter | | | — | | | | 677 | | | | 10.4 | | | | | | | | | | | | | | | Total | | | 3,649 | | | | 33,527 | | | | 516.8 | | | | | | | | | | | | | | | | | | | Borrowings from: | | | | | | | | | | | | | VRJ2 | | | 123,835 | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 123,835 | | | | — | | | | — | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | As at March 31, | | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Guarantees outstanding given / (taken) | | | | | | | | | | | | | Vedanta# | | | (233,823) | | | | (391,806) | | | | (6,041.7) | | Volcan* | | | 1,150 | | | | 1,150 | | | | 17.7 | | | | | | | | | | | | | | | Total | | | (232,673) | | | | (390,656) | | | | (6,024.0) | | | | | | | | | | | | | | | | | | | Investment in Equity Shares – Quoted | | | | | | | | | | | | | STL | | | 432 | | | | 600 | | | | 9.2 | | | | | | | | | | | | | | | Total | | | 432 | | | | 600 | | | | 9.2 | | | | | | | | | | | | | | | | | | | Investment in Equity Shares – Unquoted | | | | | | | | | | | | | SPTL | | | — | | | | 95 | | | | 1.5 | | | | | | | | | | | | | | | Total | | | — | | | | 95 | | | | 1.5 | | | | | | | | | | | | | | | Investment in Vedanta Bonds | | | 5,704 | | | | 4,854 | | | | 74.8 | | | | | | | | | | | | | | | Total | | | 5,704 | | | | 4,854 | | | | 74.8 | | | | | | | | | | | | | | |
* | Bank guarantee given by the Company on behalf of Volcan in favour of Income tax department, India as collateral in respect of certain tax disputes of Volcan. |
# | Post the balance sheet date, guarantee worth Rs. 282,048 million has been withdrawn by Vedanta and the guarantees worth Rs. 68,081 million is extinguished as the underlying external loan has been repaid. |
Cairn PSC guarantee to Government
Vedanta Resources PLC as a parent company has provided a financial and performance guarantee to Government of India for erstwhile Cairn India Group’s obligation under the Production Sharing Contract (‘PSC’). The guarantee provides for making available financial resources equivalent to Cairn India’s share for its obligation under PSC, personnel and technical services in accordance with industry practices and any other resources in case Cairn India is unable to fulfill its obligations under PSC
Cairn Investment in Vedanta Bonds
Cairn India Holdings Limited had invested Rs. 5,704 million and Rs. 4,854 million ($ 74.8 million) as at March 31, 2016 and March 31, 2017, respectively in bonds issued by Vedanta, which have maturities ranging from June 2016 to May 2023 at coupon ranging from 6% to 9.5% p.a. The carrying values of these bonds including interest accrued are Rs 4,309 million and Rs 5,246 million ($80.9 million) as at March 31, 2016 and March 31, 2017, respectively.
Loans to holding companies
During the year ended March 31, 2016, Lisheen Milling Limited entered into a loan agreement with Twin Star Holding Limited for Rs. 667 million ($10.0 million) at an interest rate of 2.1%. The loan is unsecured and the outstanding balance under the facility at March 31, 2016 and March 31, 2017 is Rs. 663 million and Rs 648 million ($10.0 million) respectively. The loan was due in March 2017. The loan has been renewed for a further period of 12 months and is now due in March 2018.
Loans to fellow subsidiaries
During the year ended March 31, 2017 Group had renewed loan provided to SISCOL to finance project in earlier years. The loan balance as at March 31, 2017 was Rs. 44 million ($0.7 million). The loan is unsecured in nature and carries an interest rate of 8.50% per annum. The loan was due in March 2017. The loan has been renewed for a further period of 12 months in March 2017 and is due in March 2018.
Loan from holding company
During the year the Group has repaid Rs. 125,248 million ($ 1,931.3 million) to VRJ2. The loan balance as at March 31, 2017 was NIL.
Sale of Subsidiary
During the year ended March 31, 2017, the Group sold one of its subsidiary - Sterlite Infraventures Limited (SIVL) to a fellow subsidiary - Sterlite Power Transmission Limited for a net consideration of Rs. 2 million ($ 0.03 million).
Purchase of Subsidiary
During the year ended March 31, 2017, the Group purchased 100% of the shareholders in - Sesa Sterlite Mauritius Holdings Limited from VRHL at $1.
Terms and conditions of transactions with related parties
All transactions with related parties are made in ordinary course of business. For the year ended March 31 2017, the Group has not recorded any impairment of receivables relating to amounts owed by related parties. This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Remuneration of key management personnel
The remuneration of the key management personnel of the Group are set out below in aggregate for each of the categories specified in IAS 24 Related party disclosures.
| | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Short term employee benefits | | | 305 | | | | 341 | | | | 348 | | | | 5.4 | | Post-employment benefits* | | | 27 | | | | 26 | | | | 26 | | | | 0.4 | | Share based payments | | | 75 | | | | 66 | | | | 77 | | | | 1.2 | | | | | | | | | | | | | | | | | | | Total | | | 407 | | | | 433 | | | | 451 | | | | 7.0 | | | | | | | | | | | | | | | | | | |
* | Does not include the provision made for gratuity and leave benefits, as they are determined on an actuarial basis for all the employees together. |
| | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Salary of relatives of Key management personnel | | | 65 | | | | 71 | | | | 79 | | | | 1.2 | | | | | | | | | | | | | | | | | | | Total | | | 65 | | | | 71 | | | | 79 | | | | 1.2 | | | | | | | | | | | | | | | | | | |
Commission/ Sitting fees paid to Independent directors during the year ended March 31, 2017 is Rs. 33 million ($0.5 million)
Relative of Key Management Personnel -
| | | | | | | | | | | | | | | | | | | Year ended March 31, | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Short term interest bearing salary advance given / (repaid) during the year | | | 89 | | | | (91) | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Total | | | 89 | | | | (91) | | | | — | | | | — | | | | | | | | | | | | | | | | | | |
Details of transactions during the year with post retirement trusts:
| | | | | | | | | | | | | | | | | | | Year ended March 31 | | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | PF Trust | | | | | | | | | | | | | | | | | Balco Employees Provident Fund Trust | | | 138 | | | | 113 | | | | 159 | | | | 2.5 | | Hindustan Zinc Ltd Employees Contributory | | | | | | | | | | | | | | | | | Provident Fund Trust | | | 321 | | | | 327 | | | | 309 | | | | 4.8 | | Sesa Resources Limited Employees Provident Fund Trust | | | — | | | | 22 | | | | 3 | | | | 0.0 | | Sesa Mining Corporation Limited Employees Provident Fund Trust | | | — | | | | 23 | | | | 6 | | | | 0.1 | | Sesa Group Employees Provident Fund Trust | | | 207 | | | | 157 | | | | 59 | | | | 0.9 | | | | | | | | | | | | | | | | | | | Total | | | 666 | | | | 642 | | | | 536 | | | | 8.3 | | | | | | | | | | | | | | | | | | |
32. Other notes
(a) Components of other comprehensive income –cash flow hedges
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Net gain/(loss) arising during the year | | | (112) | | | | (55) | | | | 522 | | | | 8.1 | | Reclassification adjustments for net (gain)/loss included in the consolidated statements of profit or loss | | | (646) | | | | 218 | | | | (538) | | | | (8.3) | | | | | | | | | | | | | | | | | | | Net gain/(loss) on cash flow hedges recognised in other comprehensive income, net of tax | | | (758) | | | | 163 | | | | (16) | | | | (0.2) | | | | | | | | | | | | | | | | | | |
(b) Exchange gain/ (loss) recognised in the consolidated statements of profit or loss:
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Other operating income | | | (11) | | | | — | | | | — | | | | — | | Cost of sales | | | 562 | | | | 277 | | | | 295 | | | | 4.5 | | Administration cost | | | (3,177) | | | | (3,667) | | | | 736 | | | | 11.3 | | Investment and other income | | | 750 | | | | 461 | | | | (184) | | | | (2.8) | | Finance and other costs | | | (5,344) | | | | (3,669) | | | | (2,187) | | | | (33.7) | | | | | | | | | | | | | | | | | | | Total | | | (7,220) | | | | (6,598) | | | | (1,340) | | | | (20.7) | | | | | | | | | | | | | | | | | | |
c) The Group presents the consolidated statements of profit or loss by disclosing expenses by function. The consolidated statements of profit or loss disclosing expenses by nature is presented below:
CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
| | | | | | | | | | | | | | | | | | | | | For the year ended March 31, | | Notes | | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Revenue | | | 4 | | | | 733,579 | | | | 639,493 | | | | 717,207 | | | | 11,059.5 | | Other operating income | | | | | | | 4,802 | | | | 4,785 | | | | 5,186 | | | | 79.9 | | Investment and other income | | | 5 | | | | 51,154 | | | | 43,998 | | | | 45,428 | | | | 700.5 | | | | | | | | | | | | | | | | | | | | | | | Total Income | | | | | | | 789,535 | | | | 688,276 | | | | 767,821 | | | | 11,839.9 | | (Decrease)/increase in inventories of finished goods andwork-in-progress | | | | | | | (2,799) | | | | (3,943) | | | | 11,907 | | | | 183.6 | | Raw materials and other consumables used* | | | | | | | (453,462) | | | | (426,665) | | | | (462,748) | | | | (7,135.7) | | Employee costs | | | | | | | (32,505) | | | | (30,542) | | | | (26,241) | | | | (404.6) | | Other costs | | | | | | | (31,300) | | | | (29,058) | | | | (29,928) | | | | (461.5) | | Depreciation and amortization | | | | | | | (111,091) | | | | (83,343) | | | | (61,477) | | | | (948.0) | | Impairment | | | | | | | (406,438) | | | | (339,549) | | | | (1,162) | | | | (17.9) | | Finance and other costs | | | 6 | | | | (63,398) | | | | (59,584) | | | | (61,600) | | | | (949.8) | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) before tax | | | | | | | (311,459) | | | | (284,408) | | | | 136,572 | | | | 2,106.0 | | | | | | | | | | | | | | | | | | | | | | | Income tax (expense) / credit | | | 7 | | | | 108,320 | | | | 103,060 | | | | (38,027) | | | | (586.4) | | | | | | | | | | | | | | | | | | | | | | | Profit / (loss) for the year | | | | | | | (203,139) | | | | (181,348) | | | | 98,545 | | | | 1,519.6 | | | | | | | | | | | | | | | | | | | | | | |
* | includes power and fuel charges, repairs, royalty, cess, mining and other operating expenses. |
(d). Employee costs
| | | | | | | | | | | | | | | | | For the year ended March 31, | | 2015 | | | 2016 | | | 2017 | | | 2017 | | | | (Rs. in million) | | | (Rs. in million) | | | (Rs. in million) | | | (US dollars in million) | | Salaries, wages and bonus | | | 30,019 | | | | 27,543 | | | | 24,097 | | | | 371.5 | | Defined contribution pension scheme costs | | | 1,392 | | | | 1,551 | | | | 1,632 | | | | 25.2 | | Defined benefit pension scheme costs | | | 396 | | | | 273 | | | | 376 | | | | 5.8 | | Voluntary retirement expenses | | | 698 | | | | 1,175 | | | | 136 | | | | 2.1 | | | | | | | | | | | | | | | | | | | | | | 32,505 | | | | 30,542 | | | | 26,241 | | | | 404.6 | | | | | | | | | | | | | | | | | | |
33. Subsequent Events –
Subsequent to the Balance Sheet date,
| a) | 500,000 tonnesJharsuguda-I smelter suffered a pot outage incident wherein 228 pots out of the total 608 pots were damaged and taken out of production, resulting in reduced production for a temporary period. |
| b) | A fire took place in the coal handling facility on April 17, 2017 at the 1,980 MW TSPL power plant in Punjab state. This has resulted in a shut-down of all the three units of the power plant for 65 days. There were no injuries in the incident and the plant achieved full load on June 22, 2017. No material loss was incurred as a result of the same. |
34. The Group has made the following changes to some of its disclosures, as compared to those reported in prior year’s consolidated financial statements, none of which it believes are material:
| a) | In Note 17, under long term borrowings the amount of non-convertible debentures as at March 31, 2016 as reported in the previous year, has been regrouped upwards by Rs. 30,710 million with a corresponding adjustment in Borrowings from Banks and Financial institutions. There is no change in the total long term borrowings. |
| b) | In Note22, the Group has revised its disclosures in respect of the provident fund trusts under Defined Benefit Plans which hitherto was classified as defined contribution plans. Such plans were in a net asset position as at March 31, 2015 and March 31, 2016. The Group does not have a legal right to these net assets and therefore this adjustment had no impact on the consolidated statement of financial position as at March 31, 2016. |
| i. | commodity price risk: for the provisionally priced financial instruments, the group has disclosed the sensitivity for exposures outstanding at March 31, 2016 which was hitherto disclosed on the aggregate of transactions of purchases and sales made during the year 2015-16. |
| ii. | for foreign exchange risk, the group has disclosed the sensitivity for the exposures outstanding at March 31, 2016 as against the sensitivity of costs and revenues denominated in foreign currency. The foreign exchange risk also now includes the INR exposure related exchange risk in respect of the Oil and Gas business where the functional currency is USD. |
| iii. | for the interest rate risk sensitivity, the sensitivity was disclosed on the floating rate financial liabilities which has now been presented on the floating rate financial liabilities net of financial assets. |
| iv. | for the counterparty and concentration of credit risk, the group has now presented the disclosure for counter party and concentration of credit risks for financial assets as against the disclosure for credit risks for financial and non-financial assets as at March 31, 2016. |
| d) | In Note 30, in the current year, certain balances such as dividend payable, interest accrued on investments and borrowings, etc. that were hitherto being allocated to segments have been considered in Unallocated category, as presented to the CODM. The segments assets and segment liabilities as at March 31, 2015 and March 31, 2016 have been recast to conform to current year’s classification. |
Additionally, certain balances for March 2016 and 2015 have been regrouped/ reclassified by the Group to conform with current period’s presentation.
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) In accordance with Codification Topic 932 - Extractive Activities - Oil and gas, this section provides supplemental information on oil and gas exploration and producing activities of the Company for the years ended March 31, 2017, 20162021, 2020 and 2015.2019. The information included in items (i) through (iii) provides historical cost information pertaining to costs incurred in exploration, property acquisition and development, capitalized costs and results of operations. The information included in items (iv) and (v) present information on our estimated net proved reserve quantities, standardized measure of estimated discounted future net cash flows related to proved reserves, and changes in estimated discounted future net cash flows. Activities not directly associated with oil and gas producing activities are excluded from all aspects of this supplemental information. Method of accounting for costs incurred in oil and gas producing activities and manner of disposing of capitalized costs relating to those activities We follow a successful efforts based accounting policy for oil and gas assets. Costs incurred prior to obtaining the legal rights to explore an area are expensed immediately to the Income Statement. Expenditure incurred on the acquisition of a licencelicense interest is initially capitalised on a licencelicense by licencelicense basis. Costs are held,un-depleted, within intangible exploration/appraisal assets until such time as the exploration phase on the licencelicense area is complete or commercial reserves have been discovered. Exploration expenditure incurred in the process of determining oil and gas exploration targets is capitalised initially within intangible exploration/appraisal assets and subsequently allocated to drilling activities. Exploration/appraisal drilling costs are initially capitalised on awell–by-wellwell-by-well basis until the success or otherwise of the well has been established. The success or failure of each exploration/appraisal effort is judged on awell-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 intangible exploration/appraisal costs are transferred into a single field cost center within property, plant and equipment - development/producing assets 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 Income Statement. All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons has been demonstrated are capitalised within property, plant and equipment - development/producing assets on afield-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 an intangible exploration/appraisal asset are initially credited against the previously capitalised costs. Any surplus proceeds are credited to the Income Statement. 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 Income Statement to the extent that the net proceeds exceed or are less than the appropriate portion of the net capitalised costs of the asset. Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (i) | Capitalized costs relating to oil and gas producing activities |
The following table summarizes capitalized costs for oil and gas exploration and production activities with the related accumulated depreciation, depletion and amortization, and asset retirement obligation assets: | | | India | | | Sri Lanka | | | South Africa | | | India | | | Sri Lanka | | | South Africa | | | (Rs in millions) | | | (Rs in millions) | | | (Rs in millions) | | | (₹ in millions) | | | (₹ in millions) | | | (₹ in millions) | | March 31, 2017 | | | | | | | | March 31, 2021 | | | | | | | | Unproved oil and gas properties | | | 16,388 | | | | 51,100 | | | | 2,351 | | | | 37,333 | | | | 57,766 | | | | 2,668 | | Proved oil and gas properties | | | 1,264,044 | | | | — | | | | — | | | | 1,521,179 | | | | — | | | | — | | Support equipment | | | 4,656 | | | | — | | | | — | | | | 6,657 | | | | | | | | | | | | | | | | | | | | | | | | | Gross Capitalized costs | | | 1,285,088 | | | | 51,100 | | | | 2,351 | | | | 1,565,170 | | | | 57,766 | | | | 2,668 | | Accumulated depreciation, depletion, and amortization, and valuation allowances (including impairment loss) | | | (1,136,079) | | | | (51,100) | | | | (2,351) | | | | (1,456,963 | ) | | | (57,766 | ) | | | (2,673 | ) | | | | | | | | | | | | | | | | | | | | Net Capitalized costs | | | 149,009 | | | | — | | | | — | | | | 108,207 | | | | — | | | | (5 | ) | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | | | | | | March 31, 2020 | | | | | | | | Unproved oil and gas properties | | | 16,352 | | | | 52,277 | | | | 2,405 | | | | 33,033 | | | | 58,959 | | | | 2,728 | | Proved oil and gas properties | | | 1,284,002 | | | | — | | | | — | | | | 1,542,710 | | | | — | | | | — | | Support equipment | | | 4,906 | | | | — | | | | — | | | | 6,553 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Gross Capitalized costs | | | 1,305,260 | | | | 52,277 | | | | 2,405 | | | | 1,582,296 | | | | 58,959 | | | | 2,728 | | Accumulated depreciation, depletion, and amortization, and valuation allowances (including impairment loss) | | | (1,135,740) | | | | (52,277) | | | | (2,405) | | | | (1,465,495 | ) | | | (58,959 | ) | | | (2,728 | ) | | | | | | | | | | | | | | | | | | | | Net Capitalized costs | | | 169,520 | | | | — | | | | — | | | | 116,801 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | March 31, 2015 | | | | | | | | March 31, 2019 | | | | | | | | Unproved oil and gas properties | | | 14,792 | | | | 49,328 | | | | 2,189 | | | | 26,311 | | | | 54,514 | | | | 2,522 | | Proved oil and gas properties | | | 1,199,345 | | | | — | | | | — | | | | 1,386,994 | | | | — | | | | — | | Support equipment | | | 4,962 | | | | — | | | | — | | | | 5,231 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Gross Capitalized costs | | | 1,219,099 | | | | 49,328 | | | | 2,189 | | | | 1,418,536 | | | | 54,514 | | | | 2,522 | | Accumulated depreciation, depletion, and amortization, and valuation allowances (including impairment loss) | | | (713,885) | | | | (49,328) | | | | — | | | | (1,183,462 | ) | | | (54,514 | ) | | | (2,522 | ) | | | | | | | | | | | | | | | | | | | | Net Capitalized costs | | | 505,214 | | | | — | | | | 2,189 | | | | 235,073 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (ii) | Costs incurred in oil and gas property acquisition, exploration and development activities |
Costs incurred are summarized below and include both amounts expensed and capitalized: | | | India | | | Sri Lanka | | | South Africa | | | India | | | Sri Lanka | | | South Africa | | | | (Rs in millions) | | | (Rs in millions) | | | (Rs in millions) | | | (₹ in millions) | | | (₹ in millions) | | | (₹ in millions) | | March 31, 2017 | | | | | | | | March 31, 2021 | | | | | | | | Acquisition of properties | | | | | | | | | | | | | Proved | | | | | | | | | | | | | Unproved | | | | | | | | | | | | | Exploration costs | | | (84) | | | | 70 | | | | 45 | | | | 6,168 | | | | 1 | | | | — | | Development costs | | | 10,104 | | | | — | | | | — | | | | 8,640 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Total | | | 10,020 | | | | 70 | | | | 45 | | | | 14,808 | | | | 1 | | | | — | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | | | | | | March 31, 2020 | | | | | | | | Acquisition of properties | | | | | | | | | | | | | Proved | | | | | | | | | | | | | Unproved | | | | | | | | | | | | | Exploration costs | | | 4,689 | | | | 97 | | | | 107 | | | | 3,061 | | | | 4 | | | | 1 | | Development costs | | | 8,934 | | | | — | | | | — | | | | 41,677 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Total | | | 13,623 | | | | 97 | | | | 107 | | | | 44,738 | | | | 4 | | | | 1 | | | | | | | | | | | | | | | | | | | | | | March 31, 2015 | | | | | | | | March 31, 2019 | | | | | | | | Acquisition of properties | | | | | | | | | | | | | Proved | | | | | | | | | | | | | Unproved | | | | | | | | | | | | | Exploration costs | | | 20,485 | | | | 165 | | | | 349 | | | | (37,060 | ) | | | 5 | | | | 9 | | Development costs | | | 43,911 | | | | — | | | | — | | | | 75,158 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Total | | | 64,396 | | | | 165 | | | | 349 | | | | 38,099 | | | | 5 | | | | 9 | | | | | | | | | | | | | | | | | | | | |
* Figures in brackets ( ) represents reversal.reversal/ transfers between exploration and development costs. Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (iii) | Results of operations for oil and gas producing activities |
The Company’s results of operations from oil and gas producing activities for the years ended March 31, 2017, 20162020, 2019 and 20152018 are shown in the following table. Production costs are lifting costs incurred to operate and maintain productive wells and related equipment and facilities, including operating employees’ compensation, materials, supplies, fuel consumed in operations and operating costs related to natural gas processing plants. Exploration expenses include the costs of geological and geophysical activities andnon-productive exploratory wells. Depreciation and amortization expenses relate to assets employed in exploration and development activities. In accordance with Codification Topic 932 – Extractive Activities – Oil and gas, income taxes are based on statutory tax rates, reflecting allowable deductions. We haveTill March 31, 2016, the Company had an effective tax rate lower than the statutory rate, benefiting from tax holiday in Rajasthan blockRJ Block under section80-IB (9) of the Income Tax Act, 1961. Interest income and expense are excluded from the results reported in this table. | | | India (Rs in millions) | | | Sri Lanka (Rs in millions) | | | South Africa (Rs in millions) | | | India | | | Sri Lanka | | | South Africa | | March 31, 2017 | | | | | | | | | | | (₹ in millions) | | | (₹ in millions) | | | (₹ in millions) | | March 31, 2021 | | | | | | | | Revenues | | | | | | | | | | | | | Sales | | | 82,041 | | | | — | | | | — | | | | 75,308 | | | | — | | | | — | | Transfers | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Operating Income | | | 70 | | | | — | | | | — | | | | 342 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Total | | | 82,111 | | | | — | | | | — | | | | 75,650 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Production costs | | | (38,613) | | | | — | | | | — | | | | (39,582 | ) | | | — | | | | — | | Exploration expenses | | | (292) | | | | (70) | | | | (45) | | | Depreciation, depletion and amortization and valuation provisions (net of impairment reversal) | | | (26,687) | | | | — | | | | — | | | Exploration (expenses)/ reversal | | | | (69 | ) | | | (1 | ) | | | — | | Depreciation, depletion and amortization and valuation provisions (including impairment loss/reversal) | | | | (21,235 | ) | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Results before income tax expenses | | | 16,519 | | | | (70) | | | | (45) | | | | 14764 | | | | (1 | ) | | | — | | Income tax expenses | | | (5,028) | | | | — | | | | — | | | | 3,031 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Results of operations from producing activities (excluding corporate overhead and interest costs) | | | 11,491 | | | | (70) | | | | (45) | | | | 11,734 | | | | (1 | ) | | | — | | | | | | | | | | | | | | | | | | | | | | March 31, 2016 | | | | | | | | March 31, 2020 | | | | | | | | Revenues | | | | | | | | | | | | | Sales | | | 86,559 | | | | — | | | | — | | | | 126,608 | | | | — | | | | — | | Transfers | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Operating Income | | | 176 | | | | — | | | | — | | | | 188 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Total | | | 86,735 | | | | — | | | | — | | | | 126,975 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Production costs | | | (47,272) | | | | — | | | | — | | | | (50,251 | ) | | | — | | | | — | | Exploration expenses | | | (174) | | | | (97) | | | | (23) | | | | (22 | ) | | | (4 | ) | | | (1 | ) | Depreciation, depletion and amortization and valuation provisions (including impairment loss) | | | (374,166) | | | | — | | | | (2,374) | | | | (175,086 | ) | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Results before income tax expenses | | | (334,877) | | | | (97) | | | | (2,397) | | | | (98,564 | ) | | | (4 | ) | | | (1 | ) | Income tax expenses | | | (1,606) | | | | — | | | | — | | | | 33,868 | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | Results of operations from producing activities (excluding corporate overhead and interest costs) | | | (336,483) | | | | (97) | | | | (2,397) | | | | (64,695 | ) | | | (4 | ) | | | (1 | ) | | | | | | | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) | | | | | | | | | | | | | | | India (Rs in millions) | | | Sri Lanka (Rs in millions) | | | South Africa (Rs in millions) | | March 31, 2015 | | | | | | | | | | | | | Revenues | | | | | | | | | | | | | Sales | | | 146,945 | | | | — | | | | — | | Transfers | | | — | | | | — | | | | — | | Operating Income | | | 103 | | | | — | | | | — | | Total | | | 147,048 | | | | — | | | | — | | Production costs | | | (45,261) | | | | — | | | | — | | Exploration expenses | | | (7,788) | | | | (67) | | | | (12) | | Depreciation, depletion and amortization and valuation provisions (including impairment loss) | | | (434,947) | | | | (48,126) | | | | — | | Results before income tax expenses | | | (340,948) | | | | (48,193) | | | | (12) | | Income tax expenses | | | (11,962) | | | | — | | | | — | | Results of operations from producing activities (excluding corporate overhead and interest costs) | | | (352,910) | | | | (48,193) | | | | (12) | |
(iii) | Results of operations for oil and gas producing activities (continued) |
| | | | | | | | | | | | | | | India | | | Sri Lanka | | | South Africa | | | | (₹ in millions) | | | (₹ in millions) | | | (₹ in millions) | | March 31, 2019 | | | | | | | | | | | | | Revenues | | | | | | | | | | | | | Sales | | | 132,228 | | | | — | | | | — | | Transfers | | | — | | | | — | | | | — | | Operating Income | | | 283 | | | | — | | | | — | | | | | | | | | | | | | | | Total | | | 132,511 | | | | — | | | | — | | | | | | | | | | | | | | | Production costs | | | (53,991 | ) | | | — | | | | — | | Exploration expenses | | | (483 | ) | | | (5 | ) | | | (9 | ) | Depreciation, depletion and amortization and valuation provisions(including impairment loss) | | | (39,942 | ) | | | — | | | | — | | | | | | | | | | | | | | | Results before income tax expenses | | | 38,095 | | | | (5 | ) | | | (9 | ) | Income tax expenses | | | (13,787 | ) | | | — | | | | — | | | | | | | | | | | | | | | Results of operations from producing activities (excluding corporate overhead and interest costs) | | | 24,307 | | | | (5 | ) | | | (9 | ) | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (iv) | Reserve quantities information |
The following tables represent estimates for oil and gas reserves by geographic area as of March 31, 2017, 20162021, 2020, and 2015.2019. Quantities mentioned below represent proved developed and proved undeveloped reserves together with changes in quantities for the fiscal years 2017, 2016,2021, 2020, and 2015.2019. The definitions used for proved, proved developed and proved undeveloped oil and gas reserves are in accordance with United States Securities and Exchange Commission (SEC) Rule4-10 of RegulationS-X. Proved oil and natural gas reserves are those estimated quantities of crude oil, natural gas and natural gas liquids that geological and engineering data demonstrate with reasonable certainty to be economically producible in future years from known reservoirs, under existing economic and operating conditions including a12-month average price prior to the end of the reporting period, unless prices are defined by contract, and cost at the date of estimation. All the proved reserves presented herein are based on PSCs with the GoI. As such, all net reserves are based on an entitlement calculation which converts our share of cost recovery and profit petroleum under each contract to a volume equivalent of net reserves in accordance with SEC guidance on calculating net reserves subject to these agreements A summary of the annual changes in the proved reserves of oil is as follows (in mmbbls): | Proved developed and undeveloped reserves | | India | | | Sri Lanka | | | South Africa | | | Total | | | India | | | Sri Lanka | | | South Africa | | | Total | | Reserves at March 31, 2014 | | | 111.53 | | | | — | | | | — | | | | 111.53 | | | Reserves at March 31, 2018 | | | | 47.36 | | | | — | | | | — | | | | 47.36 | | | | | | | | | | | | | | | | | | | | | | | | | | | Revisions of previous estimates | | | 7.70 | | | | — | | | | — | | | | 7.70 | | | | 99.82 | | | | — | | | | — | | | | 99.82 | | Extensions and discoveries | | | 2.28 | | | | — | | | | — | | | | 2.28 | | | | 2.31 | | | | — | | | | — | | | | 2.31 | | Improved Recovery | | | — | | | | — | | | | — | | | | — | | | | 4.87 | | | | — | | | | — | | | | 4.87 | | Sales of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Purchases of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Production for the year | | | (31.42) | | | | — | | | | — | | | | (31.42) | | | | (27.53 | ) | | | — | | | | — | | | | (27.53 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Reserves at March 31, 2015 | | | 90.09 | | | | — | | | | — | | | | 90.09 | | | Reserves at March 31, 2019 | | | | 126.83 | | | | — | | | | — | | | | 126.83 | | | | | | | | | | | | | | | | | | | | | | | | | | | Revisions of previous estimates | | | 20.7 | | | | — | | | | — | | | | 20.7 | | | | 5.40 | | | | — | | | | — | | | | 5.40 | | Extensions and discoveries | | | — | | | | — | | | | — | | | | — | | | | 0.04 | | | | — | | | | — | | | | 0.04 | | Improved Recovery | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Sales of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Purchases of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Production for the year | | | (32.69) | | | | — | | | | — | | | | (32.69) | | | | (28.23 | ) | | | — | | | | — | | | | (28.23 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Reserves at March 31, 2016 | | | 78.10 | | | | — | | | | — | | | | 78.10 | | | Reserves at March 31, 2020 | | | | 104.04 | | | | — | | | | — | | | | 104.04 | | | | | | | | | | | | | | | | | | | | | | | | | | | Revisions of previous estimates | | | 12.06 | | | | — | | | | — | | | | 12.06 | | | | 21.47 | | | | — | | | | — | | | | 21.47 | | | | | | | | | | | | | | | | Extensions and discoveries | | | — | | | | — | | | | — | | | | — | | | | 0.67 | | | | — | | | | — | | | | 0.67 | | | | | | | | | | | | | | | | Improved Recovery | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Sales of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | �� | | | | | | | | | | | Purchases of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Production for the year | | | (32.60) | | | | — | | | | — | | | | (32.60) | | | | (21.88 | ) | | | — | | | | — | | | | (21.88 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Reserves at March 31, 2017 | | | 57.56 | | | | — | | | | — | | | | 57.56 | | | Reserves at March 31, 2021 | | | | 104.30 | | | | — | | | | — | | | | 104.30 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (iv) | Reserve Quantities Information (continued) |
A summary of the annual changes in the proved reserves of natural gas is as follows (in bcf): | Proved developed and undeveloped reserves | | India | | | Sri Lanka | | | South Africa | | | Total | | | India | | | Sri Lanka | | | South Africa | | | Total | | Reserves at March 31, 2014 | | | 6.95 | | | | — | | | | — | | | | 6.95 | | | Reserves at March 31, 2018 | | | | 11.16 | | | | — | | | | — | | | | 11.16 | | | | | | | | | | | | | | | | | | | | | | | | | | | Revisions of previous estimates | | | 1.29 | | | | — | | | | — | | | | 1.29 | | | | 89.22 | | | | — | | | | — | | | | 89.22 | | Extensions and discoveries | | | 0.16 | | | | — | | | | — | | | | 0.16 | | | | 2.75 | | | | — | | | | — | | | | 2.75 | | Improved Recovery | | | — | | | | — | | | | — | | | | — | | | | 0.05 | | | | — | | | | — | | | | 0.05 | | Sales of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Purchases of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Production for the year | | | (3.51) | | | | — | | | | — | | | | (3.51) | | | | (7.81 | ) | | | — | | | | — | | | | (7.81 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Reserves at March 31, 2015 | | | 4.89 | | | | — | | | | — | | | | 4.89 | | | Reserves at March 31, 2019 | | | | 95.37 | | | | — | | | | — | | | | 95.37 | | | | | | | | | | | | | | | | | | | | | | | | | | | Revisions of previous estimates | | | 4.95 | | | | — | | | | — | | | | 4.95 | | | | 42.37 | | | | — | | | | — | | | | 42.37 | | Extensions and discoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Improved Recovery | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Sales of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Purchases of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Production for the year | | | (4.33) | | | | — | | | | — | | | | (4.33) | | | | (18.71 | ) | | | — | | | | — | | | | (18.71 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Reserves at March 31, 2016 | | | 5.51 | | | | — | | | | — | | | | 5.51 | | | Reserves at March 31, 2020 | | | | 119.02 | | | | — | | | | — | | | | 119.02 | | | | | | | | | | | | | | | | | | | | | | | | | | | Revisions of previous estimates | | | 4.56 | | | | — | | | | — | | | | 4.56 | | | | 9.21 | | | | — | | | | — | | | | 9.21 | | | | | | | | | | | | | | | | Extensions and discoveries | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Improved Recovery | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Sales of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Purchases of reserves | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Production for the year | | | (4.36) | | | | — | | | | — | | | | (4.36) | | | | (18.46 | ) | | | — | | | | — | | | | (18.46 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Reserves at March 31, 2017 | | | 5.71 | | | | — | | | | — | | | | 5.71 | | | Reserves at March 31, 2021 | | | | 109.77 | | | | — | | | | — | | | | 109.77 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Year ending March 31, 2019 Total proved reserves as of March 31, 2018, were 49.22 mmboe. For the year ending March 31, 2019, total revisions of 114.68 mmboe comprised an increase of 127.59 mmboe based on technical revisions due to improved production performance, the approval of proved undeveloped projects, and 10-year extensions of the RJ-ON-90/1 and PKGM-1 PSCs, and a decrease of 12.91 mmboe due to revisions based on commodity prices. These total revisions comprised an increase of 0.67 mmboe for the Cambay block (CB/OS-2), 112.76 mmboe for the RJ Block (RJ-ON-90/1), and 1.25 mmboe for the Ravva block (PKGM-1). In fiscal year 2019, improved recovery of 4.88 mmboe were added from the approved polymer injection project in the Bhagyam field and expansion of water injection in the Ravva field. These improved recoveries comprised an increase of 4.54 mmboe for the RJ Block and 0.34 mmboe for the Ravva block. Extensions and discoveries of 2.77 mmboe were on account of inclusion of the Nagayalanka, GS-V, Kaameshwari-1, Shakti, and Tukaram fields which were approved for development, and extension through drilling in the Lakshmi and Ravva fields. These extensions and discoveries comprised an increase of 0.32 mmboe for the Cambay block, 1.55 mmboe for the Nagayalanka block (KG-ONN-2003/1), 0.86 mmboe for the RJ Block, and 0.04 mmboe for the Ravva block. After adjusting for the production of 28.83 mmboe, the total proved reserves as at March 31, 2019, were 142.72 mmboe. Year ending March 31, 2020 Total proved reserves as of March 31, 2019, were 142.72 mmboe. For the year ending March 31, 2020, total revisions of 12.47 mmboe were comprised of an increase of 8.94 mmboe based on technical revisions due to improved production performance and an increase of 3.53 mmboe due to revisions based on commodity prices. These total revisions comprised an increase of 0.06 mmboe for the Cambay block (CB/OS-2), a decrease of 0.16 mmboe for the Nagayalanka block (KG-ONN-2003/1), an increase of 12.23 mmboe for the RJ Block (RJ-ON-90/1), and an increase of 0.34 mmboe for the Ravva block (PKGM-1). In fiscal year 2020, no revisions were made due to improved recovery. Extensions and discoveries of 0.04 mmboe were on account of inclusion of the Saraswati-4 Basement field which was approved for development in the RJ Block. After adjusting for the production of 31.35 mmboe, the total proved reserves as at March 31, 2020, were 123.88 mmboe. Year ending March 31, 2021 Total proved reserves as of March 31, 2020, were 123.88 mmboe. For the year ending March 31, 2021, total revisions of 23.01 mmboe comprised an increase of 9.66 mmboe based on technical revisions due to improved production performance and an increase of 13.35 mmboe due to revisions based on commodity prices. These total revisions comprised an increase of 0.51 mmboe for the Cambay block (CB/OS-2), no change for the Nagayalanka block (KG-ONN-2003/1), an increase of 21.41 mmboe for the Rajasthan block (RJ-ON-90/1), and an increase of 1.09 mmboe for the Ravva block (PKGM-1). No revisions were made due to improved recovery. Extensions and discoveries of 0.67 mmboe were on account of inclusion of the NL and Raageshwari South-1 fields which were approved for development in the Rajasthan block. After adjusting for production of 24.96 mmboe, the total proved reserves as of March 31, 2021, were 122.60 mmboe. Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (iv) | Reserve quantities information (Continued) |
| | | 2017 | | | 2016 | | | 2015 | | | 2021 | | | 2020 | | | 2019 | | | | Crude Oil | | | Natural gas | | | Crude Oil | | | Natural gas | | | Crude Oil | | | Natural gas | | | Crude Oil | | | Natural gas | | | Crude Oil | | | Natural gas | | | Crude Oil | | | Natural gas | | | | (mmbbls) | | | (bcf) | | | (mmbbls) | | | (bcf) | | | (mmbbls) | | | (bcf) | | | (mmbbls) | | | (bcf) | | | (mmbbls) | | | (bcf) | | | (mmbbls) | | | (bcf) | | Net proved developed reserves: | | | | | | | | | | | | | | | | | | | | | | | | | India | | | 57.08 | | | | 4.76 | | | | 76.54 | | | | 4.47 | | | | 73.94 | | | | 3.55 | | | | 98.96 | | | | 98.75 | | | | 91.49 | | | | 100.45 | | | | 101.40 | | | | 56.45 | | Sri Lanka | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | South Africa | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total net proved developed reserves | | | 57.08 | | | | 4.76 | | | | 76.54 | | �� | | 4.47 | | | | 73.94 | | | | 3.55 | | | | 98.96 | | | | 98.75 | | | | 91.49 | | | | 100.45 | | | | 101.40 | | | | 56.45 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Net proved undeveloped reserves: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | India | | | 0.48 | | | | 0.95 | | | | 1.56 | | | | 1.04 | | | | 16.15 | | | | 1.34 | | | | 5.34 | | | | 11.02 | | | | 12.55 | | | | 18.57 | | | | 25.43 | | | | 38.92 | | Sri Lanka | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | South Africa | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total net proved undeveloped reserves | | | 0.48 | | | | 0.95 | | | | 1.56 | | | | 1.04 | | | | 16.15 | | | | 1.34 | | | | 5.34 | | | | 11.02 | | | | 12.55 | | | | 18.57 | | | | 25.43 | | | | 38.92 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (v) | Standardized measure of discounted future net cash flows relating to proved oil and gas quantities and changes therein |
The table below shows the standardized measure of future net cash flows relating to proved reserves. The analysis is computed in accordance with Topic 932 – Extractive Activities – Oil and gas, by applying average prices during the12-month period prior to the ending date of the period covered by the report, determined as anun-weighted arithmetic average of thefirst-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions, as defined by the SEC, fiscalyear-end costs, fiscalyear-end statutory tax rates and a discount factor of 10% to fiscalyear-end quantities of net proved reserves. The standardized measure of discounted future net cash flows is a forward-looking statement. Future price changes are limited to those provided by existing contractual arrangements at the end of each reporting year. Future development and production costs are those estimated future expenditures necessary to develop and produce fiscalyear-end estimated proved reserves based on fiscalyear-end costs, assuming continuation of fiscalyear-end economic conditions.Pre-tax future net cash flow is net of decommissioning and removal costs. Estimated future income taxes are calculated by applying the appropriateyear-end statutory tax rates. These rates reflect allowable deductions and tax credits and are applied to estimated future pretax net cash flows, less the tax basis of related assets. We have an effective tax rate lower than the statutory rate, benefiting from tax holiday in Rajasthan blockRJ Block under section80-IB (9) of the Income Tax Act, 1961. Discounted future net cash flows are calculated using a discount rate of 10% per year. Discounting requires ayear-by-year estimate of when future expenditures will be incurred and when reserves will be produced. The standardized measure of discounted future net cash flows prescribed under Topic 932 requires assumptions as to the timing and amount of future development and production costs and income from the production of proved reserves. The information does not represent management’s estimate or our expected future cash flows or the value of its proved reserves and therefore should not be relied upon as an indication of our future cash flow or value of its proved reserves. Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (v) | Standardized measure of discounted future net cash flows relating to proved oil and gas quantities and changes therein (continued) |
| | | India (Rs in millions) | | | Sri Lanka (Rs in millions) | | | South Africa (Rs in millions) | | | Total (Rs in millions) | | | India (₹ in millions) | | | Sri Lanka (₹ in millions) | | | South Africa (₹ in millions) | | | Total (₹ in millions) | | | At March 31 2017 | | | | | | | | | | At March 31 2021 | | | | | | | | | | Future cash inflows | | | 165,148 | | | | — | | | | — | | | | 165,148 | | | | 3,33,722 | | | | — | | | | — | | | | 3,33,722 | | Future production costs | | | (93,326) | | | | — | | | | — | | | | (93,326) | | | | 2,32,675 | | | | — | | | | — | | | | 2,32,675 | | Future development costs | | | (16,485) | | | | — | | | | — | | | | (16,485) | | | | 31,722 | | | | — | | | | — | | | | 31,722 | | Future income tax expenses | | | (1,375) | | | | — | | | | — | | | | (1,375) | | | | 10,603 | | | | — | | | | — | | | | 10,603 | | | | | | | | | | | | | | | | | | | | | | | | | | | Undiscounted future net cash flows | | | 53,962 | | | | — | | | | — | | | | 53,962 | | | | 58,722 | | | | — | | | | — | | | | 58,722 | | 10 percent midyear annual discount for timing of estimated cash flows | | | (6,469) | | | | — | | | | — | | | | (6,469) | | | | (19,577 | ) | | | — | | | | — | | | | (19,577 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Standardized measure of discounted future net cash flows | | | 47,493 | | | | — | | | | — | | | | 47,493 | | | | 39,145 | | | | — | | | | — | | | | 39,145 | | | | | | | | | | | | | | | | | | | | | | | | | | | | At March 31 2016 | | | | | | | | | | At March 31 2020 | | | | | | | | | | Future cash inflows | | | 212,729 | | | | — | | | | — | | | | 212,729 | | | | 493,984 | | | | — | | | | — | | | | 493,984 | | Future production costs | | | (127,002) | | | | — | | | | — | | | | (127,002) | | | | (301,972 | ) | | | — | | | | — | | | | (301,972 | ) | Future development costs | | | (22,492) | | | | — | | | | — | | | | (22,492) | | | | (28,465 | ) | | | — | | | | — | | | | (28,465 | ) | Future income tax expenses | | | (710) | | | | — | | | | — | | | | (710) | | | | (43,544 | ) | | | — | | | | — | | | | (43,544 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Undiscounted future net cash flows | | | 62,525 | | | | — | | | | — | | | | 62,525 | | | | 120,003 | | | | — | | | | — | | | | 120,003 | | 10 percent midyear annual discount for timing of estimated cash flows | | | (8,075) | | | | — | | | | — | | | | (8,075) | | | | (33,298 | ) | | | — | | | | — | | | | (33,298 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Standardized measure of discounted future net cash flows | | | 54,450 | | | | — | | | | — | | | | 54,450 | | | | 86,705 | | | | — | | | | — | | | | 86,705 | | | | | | | | | | | | | | | | | | | | | | | | | | | | At March 31, 2015 | | | | | | | | | | At March 31 2019 | | | | | | | | | | Future cash inflows | | | 424,446 | | | | — | | | | — | | | | 424,446 | | | | 629,770 | | | | — | | | | — | | | | 629,770 | | Future production costs | | | (175,304) | | | | — | | | | — | | | | (175,304) | | | | (349,686 | ) | | | — | | | | — | | | | (349,686 | ) | Future development costs | | | (45,859) | | | | — | | | | — | | | | (45,859) | | | | (55,167 | ) | | | — | | | | — | | | | (55,167 | ) | Future income tax expenses | | | (10,246) | | | | — | | | | — | | | | (10,246) | | | | (67,890 | ) | | | — | | | | — | | | | (67,890 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Undiscounted future net cash flows | | | 193,037 | | | | — | | | | — | | | | 193,037 | | | | 157,025 | | | | — | | | | — | | | | 157,025 | | 10 percent midyear annual discount for timing of estimated cash flows | | | (35,668) | | | | — | | | | — | | | | (35,668) | | | | (42,981 | ) | | | — | | | | — | | | | (42,981 | ) | | | | | | | | | | | | | | | | | | | | | | | | | | Standardized measure of discounted future net cash flows | | | 157,369 | | | | — | | | | — | | | | 157,369 | | | | 114,044 | | | | — | | | | — | | | | 114,044 | | | | | | | | | | | | | | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited) (v) | Standardized measure of discounted future net cash flows relating to proved oil and gas quantities and changes therein (Continued)(continued) |
| | | | | | | | | | | | | | | | | | | India (Rs in millions) | | | Sri Lanka (Rs in millions) | | | South Africa (Rs in millions) | | | Total (Rs in millions) | | | | | | | | | | | | | | | | | | | Balance at April 1, 2016 | | | 54,450 | | | | — | | | | — | | | | 54,450 | | | | | | | | | | | | | | | | | | | Sales and transfers of oil and gas, net of production cost | | | (41,355) | | | | — | | | | — | | | | (41,355) | | Development cost incurred | | | 10,341 | | | | — | | | | — | | | | 10,341 | | Net change due to purchases and sales of minerals in place | | | — | | | | — | | | | — | | | | — | | Net change due to extensions, discoveries and improved recovery less related costs | | | — | | | | — | | | | — | | | | — | | Net change due to revisions in quantity estimates | | | 9,377 | | | | — | | | | — | | | | 9,377 | | Net change in prices, transfer prices and in production cost | | | 7,644 | | | | — | | | | — | | | | 7,644 | | Changes in estimated future development costs | | | 2,059 | | | | — | | | | — | | | | 2,059 | | Accretion of discount | | | 5,517 | | | | — | | | | — | | | | 5,517 | | Net change in income taxes | | | (540) | | | | — | | | | — | | | | (540) | | Timing | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Balance at March 31, 2017 | | | 47,493 | | | | — | | | | — | | | | 47,493 | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | India (Rs in millions) | | | Sri Lanka (Rs in millions) | | | South Africa (Rs in millions) | | | Total (Rs in millions) | | | | | | | | | | | | | | | | | | | Balance at April 1, 2015 | | | 157,369 | | | | — | | | | — | | | | 157,369 | | | | | | | | | | | | | | | | | | | Sales and transfers of oil and gas, net of production cost | | | (40,465) | | | | — | | | | — | | | | (40,465) | | Development cost incurred | | | 8,910 | | | | — | | | | — | | | | 8,910 | | Net change due to purchases and sales of minerals in place | | | — | | | | — | | | | — | | | | — | | Net change due to extensions, discoveries and improved recovery less related costs | | | — | | | | — | | | | — | | | | — | | Net change due to revisions in quantity estimates | | | 20,538 | | | | — | | | | — | | | | 20,538 | | Net change in prices, transfer prices and in production costs | | | (135,831) | | | | — | | | | — | | | | (135,831) | | Changes in estimated future development costs | | | 19,030 | | | | — | | | | — | | | | 19,030 | | Accretion of discount | | | 17,060 | | | | — | | | | — | | | | 17,060 | | Net change in income taxes | | | 7,839 | | | | — | | | | — | | | | 7,839 | | Timing | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | Balance at March 31, 2016 | | | 54,450 | | | | — | | | | — | | | | 54,450 | | | | | | | | | | | | | | | | | | |
Supplementary Information on Oil and Gas Exploration and Production (Unaudited)
(v) | Standardized measure of discounted future net cash flows relating to proved oil and gas quantities and changes therein (Continued) |
| | | India (Rs in millions) | | | Sri Lanka (Rs in millions) | | | South Africa (Rs in millions) | | | Total (Rs in millions) | | | India (₹ in millions) | | | Sri Lanka (₹ in millions) | | | South Africa (₹ in millions) | | | Total (₹ in millions) | | | | | | | | | | | | | | | | Balance at April 1, 2014 | | | 235,486 | | | | — | | | | — | | | | 235,486 | | | Balance at April 1, 2020 | | | | 86,705 | | | | — | | | | — | | | | 86,705 | | | | | | | | | | | | | | | | | | | | | | | | | | | Sales and transfers of oil and gas, net of production cost | | | (99,909) | | | | — | | | | — | | | | (99,909) | | | | (35,349 | ) | | | — | | | | — | | | | (35,349 | )�� | Development cost incurred | | | 43,829 | | | | — | | | | — | | | | 43,829 | | | | 8,720 | | | | — | | | | — | | | | 8,720 | | Net change due to purchases and sales of minerals in place | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | Net change due to extensions, discoveries and improved recovery less related costs | | | 5,384 | | | | — | | | | — | | | | 5,384 | | | | 354 | | | | — | | | | — | | | | 354 | | Net change due to revisions in quantity estimates | | | 17,798 | | | | — | | | | — | | | | 17,798 | | | | 12,944 | | | | — | | | | — | | | | 12,944 | | Net change in prices, transfer prices and in production costs | | | (81,576) | | | | — | | | | — | | | | (81,576) | | | Net change in prices, transfer prices and in production cost | | | | (58,612 | ) | | | — | | | | — | | | | (58,612 | ) | Changes in estimated future development costs | | | (19,292) | | | | — | | | | — | | | | (19,292) | | | | (13,021 | ) | | | — | | | | — | | | | (13,021 | ) | Accretion of discount | | | 28,321 | | | | — | | | | — | | | | 28,321 | | | | 13,026 | | | | — | | | | — | | | | 13,026 | | Net change in income taxes | | | 27,328 | | | | — | | | | — | | | | 27,328 | | | | 24,378 | | | | — | | | | — | | | | 24,378 | | Timing | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance at March 31, 2015 | | | 157,369 | | | | — | | | | — | | | | 157,369 | | | Balance at March 31, 2021 | | | | 39,145 | | | | — | | | | — | | | | 39,145 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | India (₹ in millions) | | | Sri Lanka (₹ in millions) | | | South Africa (₹ in millions) | | | Total (₹ in millions) | | | | | | | | | | | | | | | | Balance at April 1, 2019 | | | | 114,044 | | | | — | | | | — | | | | 114,044 | | | | | | | | | | | | | | | | Sales and transfers of oil and gas, net of production cost | | | | (80,409 | ) | | | — | | | | — | | | | (80,409 | ) | Development cost incurred | | | | 39,114 | | | | — | | | | — | | | | 39,114 | | Net change due to purchases and sales of minerals in place | | | | — | | | | — | | | | — | | | | — | | Net change due to extensions, discoveries and improved recovery less related costs | | | | 43 | | | | — | | | | — | | | | 43 | | Net change due to revisions in quantity estimates | | | | 13,595 | | | | — | | | | — | | | | 13,595 | | Net change in prices, transfer prices and in production cost | | | | (35,288 | ) | | | — | | | | — | | | | (35,288 | ) | Changes in estimated future development costs | | | | (436 | ) | | | — | | | | — | | | | (436 | ) | Accretion of discount | | | | 18,193 | | | | — | | | | — | | | | 18,193 | | Net change in income taxes | | | | 17,849 | | | | — | | | | — | | | | 17,849 | | Timing | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Balance at March 31, 2020 | | | | 86,705 | | | | — | | | | — | | | | 86,705 | | | | | | | | | | | | | | | | | | | | India (₹ in millions) | | | Sri Lanka (₹ in millions) | | | South Africa (₹ in millions) | | | Total (₹ in millions) | | | | | | | | | | | | | | | | Balance at April 1, 2018 | | | | 46,315 | | | | — | | | | — | | | | 46,315 | | | | | | | | | | | | | | | | Sales and transfers of oil and gas, net of production cost | | | | (77,131 | ) | | | — | | | | — | | | | (77,131 | ) | Development cost incurred | | | | 58,242 | | | | — | | | | — | | | | 58,242 | | Net change due to purchases and sales of minerals in place | | | | — | | | | — | | | | — | | | | — | | Net change due to extensions, discoveries and improved recovery less related costs | | | | 12,071 | | | | — | | | | — | | | | 12,071 | | Net change due to revisions in quantity estimates | | | | 158,825 | | | | — | | | | — | | | | 158,825 | | Net change in prices, transfer prices and in production cost | | | | 42,652 | | | | — | | | | — | | | | 42,652 | | Changes in estimated future development costs | | | | (85,499 | ) | | | — | | | | — | | | | (85,499 | ) | Accretion of discount | | | | 4,985 | | | | — | | | | — | | | | 4,985 | | Net change in income taxes | | | | (46,416 | ) | | | — | | | | — | | | | (46,416 | ) | Timing | | | | — | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | Balance at March 31, 2019 | | | | 114,044 | | | | — | | | | — | | | | 114,044 | | | | | | | | | | | 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