UNITED STATES SECURITIES AND EXCHANGE ... - Vedanta … 20F Fy'19.pdfThe name of Sesa Sterlite Limited was changed to Vedanta Limited, with effect from April 21, 2015. Cairn India

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

(Mark One)

☐ Registration statement pursuant to section 12(b) or (g) of the Securities Exchange Act of 1934

or

☒ Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

For fiscal year ended March 31, 2019

or

☐ Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

From the transition period from to

or

☐ Shell company report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Date of event requiring this shell company report

Commission file number 001-33175

Vedanta Limited (Exact Name of Registrant as specified in its charter)

Republic of India

1st Floor, ‘C’ wing, Unit 103

Corporate Avenue, Atul Projects,

Chakala, Andheri (East),

Mumbai - 400 093, Maharashtra, India

(Jurisdiction of Incorporation or Organization) (Address of Principal Executive Offices)

Prerna Halwasiya

Compliance Officer

DLF Atria, Phase-2, Jacaranda Marg, DLF City

Gurugram - 122002, Haryana, India

(91) 124 4763804

[email protected]

(Name, Telephone, E-mail and/or facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class Trading Symbol(s) Name of each exchange on which registered

American Depositary Shares

each representing four equity shares

par value ₹ 1 per equity share

VEDL New York Stock Exchange

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Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual

report.

As of March 31, 2019, 3,717,504,871 equity shares, par value ₹ 1 per equity share, were issued and outstanding, of which 248,779,452 equity shares were held in the form of 62,194,863 American Depositary Shares or ADSs.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☒ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing

requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically, every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such

files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company.

See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has

elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to

Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting

Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

US GAAP ☐ International Financial Reporting Standards as issuedby the International Accounting Standards Board ☒

Other ☐

If “Other” has been checked in the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of

1934).

Yes ☐ No ☒

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TABLE OF CONTENTS

PAGE NO.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 4

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 4

ITEM 3. KEY INFORMATION 4

ITEM 4. INFORMATION ON THE COMPANY 26

ITEM 4A. UNRESOLVED STAFF COMMENTS 96

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 96

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 124

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 141

ITEM 8. FINANCIAL INFORMATION 144

ITEM 9. THE OFFER AND LISTING 156

ITEM 10. ADDITIONAL INFORMATION 158

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 193

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 193

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 195

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 195

ITEM 15. CONTROLS AND PROCEDURES 195

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT 196

ITEM 16B. CODE OF ETHICS 197

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES 197

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES 197

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS 197

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT 197

ITEM 16G. CORPORATE GOVERNANCE 198

ITEM 16H. MINE SAFETY DISCLOSURE 198

PART III

ITEM 17. FINANCIAL STATEMENTS 199

ITEM 18. FINANCIAL STATEMENTS 199

ITEM 19. EXHIBITS 199

SIGNATURES 208

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS F-1

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CONVENTIONS USED IN THIS ANNUAL REPORT

In this Annual Report, we refer to information regarding the zinc, oil and gas, iron ore, copper, aluminium, steel and power industries and our

competitors from market research reports, analyst reports and other publicly available sources. Although we believe that this information is reliable, we

have not independently verified the accuracy and completeness of the information. We caution you not to place undue reliance on this data.

On February 25, 2012, Vedanta Resources Limited (“Vedanta”), the parent company of Sterlite Industries (India) Limited (“Sterlite” or “SIIL”), Sesa

Goa Limited (“Sesa Goa”), Vedanta Aluminium Limited (“Vedanta Aluminium”), Sterlite Energy Limited (“Sterlite Energy”), Cairn India Limited

(“Vedanta Limited - oil and gas business”) and The Madras Aluminium Company Limited (“MALCO”) announced an all-share merger of majority

owned subsidiaries, Sesa Goa and SIIL, to create Sesa Sterlite Limited (“Sesa Sterlite” or “SSL”) and a consolidation of various subsidiaries held by

Vedanta to effect the consolidation and simplification of Vedanta’s corporate structure through two series of transactions (together the “Re-organization

Transactions” consisting of the “Amalgamation and Re-organization Scheme” and the “Cairn India Consolidation”). The Re-organization transactions

were completed during fiscal year 2014 and the name of the merged entity was changed to Sesa Sterlite Limited with effect from September 18, 2013.

The name of Sesa Sterlite Limited was changed to Vedanta Limited, with effect from April 21, 2015. Cairn India Limited (now Vedanta Limited’s - oil

and gas business) has merged into Vedanta Limited by way of a scheme of arrangement and the Board of Directors of both the companies made the

merger operative on April 11, 2017 (the “Cairn India Merger”). All references to Vedanta Limited - oil and gas business and its subsidiaries is referred

to as “Cairn”. See “Item 4: Information on the Company - A. History and Development of our Company”.

Sterlite Energy was a wholly owned subsidiary of SIIL and SIIL, Vedanta Aluminium, Sesa Goa, MALCO and Cairn India Limited (now Vedanta

Limited - oil and gas business) were subsidiaries of Vedanta, the ultimate holding company. Therefore, the Re-organization Transactions and Cairn

India Merger fall within the purview of the common control business combination transactions. The accounting policies described in Notes 1 and 3.D -

“Business Combinations” of the consolidated financial statements included elsewhere in this Annual Report requires that financial statements of the

combined entity, Vedanta Limited, be retroactively adjusted, as if the transaction had occurred at the earliest reporting period (or from the date the entity

came under common control, where such a date is later).

In this Annual Report, references to the “ADS offering” is to the initial public offering of our equity shares in the form of American Depositary Shares

(“ADSs”), each currently representing four equity shares, in the United States (or the “US”) completed in June 2007.

Unless otherwise indicated, our accompanying financial information has been prepared in accordance with International Financial Reporting Standards

(“IFRS”), as issued by the International Accounting Standards Board (“IASB”), for fiscal years ended March 31 2017, 2018 and 2019. References to a

particular “fiscal year or “FY” are to our fiscal year ended March 31 of that year. Our fiscal quarters end on June 30, September 30 and December 31.

References to a year other than a “fiscal” year are to the calendar year ended December 31.

Our consolidated financial statements are reported in Indian Rupees or “₹ ”. Unless otherwise specified, translation of amounts for the convenience of the reader has been made in this Annual Report (i) from Indian Rupees to US dollars at the rate of ₹ 69.16 per $ 1 based on the exchange rate quoted by the Federal Reserve Bank of New York as of March 29, 2019; (ii) from Australian dollars to US dollars at the rate of AUD 0.71 per $ 1 based on the

exchange rate quoted by the Federal Reserve Bank of New York as of March 29, 2019; (iii) from South African Rand to US dollars at the rate of

ZAR 14.43 per $ 1 based on the exchange rate quoted by the Federal Reserve Bank of New York as of March 29, 2019; (iv) from British Pound to

US dollars at the rate of GBP 1.3032 per $ 1 based on the exchange rate quoted by the Federal Reserve Bank of New York as of March 29, 2019 and

(v) from Namibian dollars to US dollars at the rate of NAD 14.47 per $ 1 based on the exchange rate quoted by Oanda (data available at

www.oanda.com) as of March 31, 2019. As of June 21, 2019, the exchange rate between US dollars and Indian Rupees was $ 1 = ₹ 69.59 as quoted by the Federal Reserve Bank of New York. All financial information presented in US dollars has been rounded to nearest decimal. Any amount less than

US dollar 0.5 million has been presented as “0”.

In this Annual Report, references to “US” or the “United States” are to the United States of America, its territories and its possessions. References to

“UK” are to the United Kingdom. References to “India” are to the Republic of India. References to “Namibia” are to the Republic of Namibia.

References to “South Africa” are to the Republic of South Africa. References to “Ireland” are to the Republic of Ireland. References to “Sri Lanka” are

to the Democratic Socialist Republic of Sri Lanka. References to “UAE” are to the United Arab Emirates. References to “$”, “dollars” or “US dollars”

are to the legal currency of the United States. References to “Indian Rupees”, or “₹ ” are to the legal currency of the Republic of India. References to “AUD”, “Australian dollars” are to the legal currency of the Commonwealth of Australia. References to “NAD” or “Namibian dollars” are to the legal

currency of Namibia. References to “ZAR” or “RAND” are to the legal currency of the Republic of South Africa. References to “¢” are to US cents.

References to “RMB”, “Renminbi”, “CNY” or “Chinese Yuan” are to the legal currency of the People’s Republic of China. References to “JPY” are to

the legal currency of Japan.

References to “lb” are to the imperial pounds (mass) equivalent to 0.4536 kilograms, references to “mt” or “tons” are to metric tons, references to

“mmt” are to million metric tons, references to “tpd” are to tons per day, references to “tpa” are to tons per annum, a unit of mass equivalent to

1,000 kilograms or 2,204.6 lb, references to “mtpa” are to million tons per annum, “mmtpa” are to million metric tons per annum, references to “wmt”

are to wet metric tons, references to “dmt” are to dry metric tons, references to “oz” are to ounces, with one kilogram being equivalent to 32.1507 oz and

one ton equivalent to 32,151 oz, references to “mm” are to millimeters, references to “ha” are to hectares, references to “kms” are to kilometers, a unit

of area equal to 10,000 square meters or 107,639 square feet, references to “GW” are to giga watts, references to “kt” are to kilo tons, references to

“bbls” are to barrels, references to “blpd” are to barrels of liquid per day, references to “mmboe” are to million barrels of oil equivalent, references to

“bboe” are to billion barrels of oil equivalent, references to “mmbopd” are to million barrels of oil per day, references to “kbopd” are to kilo barrels of

oil per day, references to “bopd” are to barrels of oil per day, references to “boepd” are to barrels of oil equivalent per day, references to “tcm” are to

trillion cubic meters, references to “mmscmd” are to million metric standard cubic meter per day, references to “mscf” are to thousand standard cubic

feet, references to “mmscf” are to million metric standard cubic feet, references to “mmscfd” are to million metric standard cubic feet per day,

references to “TWh” are to terawatt TWh hours, references to “bcf” are to billion cubic feet, and references to “TcRc” are to treatment and refining

charges. References to net oil and gas production are to the entitlement interest production of Vedanta Limited’s - oil and gas business and its

subsidiaries, in which the Ravva royalty is not netted off. References to “GoI” are to Government of India.

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We conduct our businesses both directly and through a consolidated group of companies that we have ownership interests in. See “Item 4. Information

on the Company” for more information on these companies and their relationships to us. Unless otherwise stated in this Annual Report or unless the

context otherwise requires, references in this Annual Report to “we”, “us”, “our”, “Vedanta Limited”, “Sesa Sterlite Limited (SSL)”, “Sesa Sterlite”,

“our Company”, “the Company” or “our consolidated group of companies” mean Vedanta Limited, its consolidated subsidiaries and its predecessors,

collectively, including Cairn India Limited (now Vedanta Limited - oil and gas business) and its subsidiaries (“Cairn”), Monte Cello BV (“Monte

Cello”), Copper Mines of Tasmania Proprietary Limited (“CMT”), Thalanga Copper Mines Proprietary Limited, Bharat Aluminium Company Limited

(“BALCO”), Hindustan Zinc Limited (“HZL”), Fujairah Gold FZC, Sterlite (USA), Inc., (“Sterlite USA”), Talwandi Sabo Power Limited (“TSPL”),

THL Zinc Ventures Limited, THL Zinc Limited, THL Zinc Holding B.V., THL Zinc Namibia Holdings (Proprietary) Limited (“Skorpion”), Skorpion

Zinc (Proprietary) Limited, Skorpion Mining Company (Proprietary) Limited, Namzinc (Proprietary) Limited, Amica Guesthouse (Proprietary) Limited,

Rosh Pinah Health Care (Proprietary) Limited, Black Mountain Mining (Proprietary) Limited (“BMM”), Vedanta Lisheen Holdings Limited

(“Lisheen”), Vedanta Lisheen Mining Limited, Killoran Lisheen Mining Limited, Killoran Lisheen Finance Limited, Lisheen Milling Limited, Vedanta

Exploration Ireland Limited, Lisheen Mine Partnership, Sterlite Ports Limited, Vizag General Cargo Berth Private Limited, Paradip Multi Cargo Berth

Private Limited, Lakomasko B.V., MALCO Energy Limited (“MALCO Energy”) (formerly known as Vedanta Aluminium), Sesa Resources Limited,

Sesa Mining Corporation Limited, Bloom Fountain Limited (“BFL”), Goa Sea Port Private Limited, Twin Star Energy Holdings Limited (“TEHL”),

Twin Star Mauritius Holdings Limited (“TMHL”), Sesa Sterlite Mauritius Holdings Limited (“SSMHL”) Western Cluster Limited (“WCL”), Maritime

Ventures Private Limited, Sesa Sterlite Mauritius Holdings Limited, Vedanta Star Limited (“VSL”), Electrosteel Steels Limited (“ESL”) and Avanstrate

Inc.(“ASI”), Avanstrate Korea, Avanstrate Taiwan.

Our consolidated financial information does not include our controlling shareholder Vedanta, its shareholders and various companies owned directly or

indirectly by it (other than us and our consolidated group of companies described above), including without limitations, Vedanta Resources Holdings

Limited (“VRHL”), Konkola Copper Mines Plc, Twin Star Holdings Limited (“Twin Star”), Welter Trading Limited (“Welter Trading”), the Anil

Agarwal Discretionary Trust (“Trust”), Conclave PTC Limited (“Conclave”), Volcan Investments Limited (“Volcan”), Volcan Investments Cyprus

Limited, Sterlite Technologies Limited, Monte Cello Corporation NV, Valliant (Jersey) Limited, Vedanta Resources Jersey II Limited, Vedanta

Resources Finance Limited, Vedanta Resources Cyprus Limited, Richter Holding Limited (“Richter”), Westglobe Limited (“Westglobe”), Finsider

International Company Limited (“Finsider”), Vedanta Resources Jersey Limited, Vedanta Finance (Jersey) Limited, Vedanta Jersey Investments

Limited, Vedanta Finance UK Limited, and Sterlite Grid Limited. References to the “Group” is to Vedanta Limited and its subsidiaries on a

consolidated basis and references to the “Vedanta Group” is to Vedanta and its subsidiaries on a consolidated basis.

In this Annual Report, references to The London Metal Exchange Limited (“LME”) price of zinc, copper, aluminium are to the cash seller and

settlement price on the LME for copper, zinc or aluminium for the period indicated. References to primary market share in this Annual Report are to the

market that includes sales by producers of metal from copper concentrate or alumina, as applicable, and do not include sales by producers of recycled

metal or imports.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains “forward-looking statements” as defined in the safe harbor provisions of the US Private Securities Litigation Reform Act

of 1995. These forward-looking statements are based on our current expectations, assumptions, estimates and projections about our company and our

industry. These forward-looking statements are subject to various risks and uncertainties. Generally, these forward-looking statements can be identified

by the use of forward-looking terminology such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “will,” “project,” “seek,” “should” and similar

expressions. These forward-looking statements include, among other things, the discussions of our business strategy and expectations concerning our

market position, future operations, margins, profitability, liquidity and capital resources. We caution you that reliance on any forward-looking statement

involves risks and uncertainties, and that, although we believe that the assumptions on which our forward-looking statements are based are reasonable,

any of those assumptions could prove to be inaccurate and, as a result, the forward-looking statements based on those assumptions could be materially

incorrect. Factors which could cause these assumptions to be incorrect include, but are not limited to:

• a decline or volatility in the prices of or demand for zinc, oil and gas, iron ore, copper, aluminium, steel or power or increase in supply of

zinc, oil and gas, iron ore, copper, aluminium, steel or power;

• events that could cause a decrease in our production and higher cost of production for zinc, oil and gas, iron ore, copper, aluminium or

power;

• unavailability or increased costs of raw materials for our products;

• dependence on obtaining and maintaining mining leases for our mining sites and approvals from regulatory authorities for increasing oil and

gas production;

• general risks related to Vedanta Limited’s commercial power business and challenges in operationalization of investment in aluminium and

power business;

• fluctuations in metal prices on LME, ore prices, oil and gas prices or power prices;

• fluctuations in currency exchange rates;

• interruptions in the availability of exploration, production or supply equipment or infrastructure and/or increased costs;

• construction of pipeline and terminal may take longer than planned, may not work as intended and the cost of construction may be greater

than forecast;

• our actual economically recoverable lead-zinc ore, copper ore or bauxite reserves being lower than we have estimated;

• our ability to expand our business, effectively manage our growth or implement our strategy;

• our ability to retain our senior management team and hire and retain sufficiently skilled labor to support our operations;

• regulatory, legislative and judicial developments and future regulatory actions and conditions in our operating areas;

• increasing competition in the zinc, oil and gas, iron ore, copper, aluminium, steel or power industries;

• political or economic instability in and around India or around the regions in which we operate;

• worldwide economic and business conditions;

• reliance on third party contractors and providers of equipment which may not be readily available and whose costs may increase;

• compliance with extensive environmental and health and safety regulations;

• our ability to successfully consummate strategic acquisitions; our ability to simplify our group structure and reduction in non-controlling

stake in group companies;

• the outcome of outstanding litigation in which we are involved;

• our ability to maintain good relations with respective local communities and our trade unions and avoid protests, strikes and lock-outs;

• any actions of our controlling shareholder, Vedanta;

• the future capital requirements of our business and the availability of financing on favorable terms;

• the continuation of tax holidays, exemptions and deferred tax schemes we currently enjoy;

• changes in tariffs, royalties, customs duties and government assistance;

• terrorist attacks and other acts of violence, natural disasters, increasing impact of climate change and other environmental conditions and

outbreaks of infectious diseases and other public health concerns in India, Asia and elsewhere;

• failure of digital infrastructure and cyber security attacks due to negligence or IT security failures;

• our ability to discover new reserves, enhance existing reserves or develop new operations in sufficient quantities to maintain or grow the

current level of our reserves; and

• transitioning of zinc and lead mining operations from open pit to underground mining.

These and other factors are more fully discussed in “Item 3. Key Information - D. Risk Factors,” “Item 5. Operating and Financial Review and

Prospects” and elsewhere in this Annual Report. In light of these and other uncertainties, you should not conclude that we will necessarily achieve any

plans, objectives or projected financial results referred to in any of the forward-looking statements. Except as required by law, we do not undertake to

release revisions to any of these forward-looking statements to reflect future events or circumstances.

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PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3. KEY INFORMATION

A. Selected Consolidated Financial Data

The selected consolidated financial data presented below as of March 31, 2018 and 2019 and for the years ended March 31, 2017, 2018 and 2019 has

been derived from our consolidated financial statements included herein, which have been prepared in conformity with IFRS as issued by the IASB. The

consolidated financial statements as of March 31, 2018 and 2019 and for the years ended March 31, 2017, 2018 and 2019 have been audited by S.R.

Batliboi & Co. LLP, India, our independent registered public accounting firm, and included elsewhere in this Annual Report.

The selected consolidated financial data presented below as of March 31, 2015, 2016 and 2017, and for the years ended March 31, 2015 and 2016 has

been derived from our consolidated financial statements, which also have been prepared in conformity with IFRS as issued by the IASB, and which

have not been included elsewhere in this Annual Report.

Our historical results do not necessarily indicate our expected results for any future period. The translations of Indian Rupee amounts to US dollars

presented in the tables below, are solely for the convenience of the reader and are based on the noon buying rate of ₹ 69.16 per $ 1 in the City of New York for cable transfers of Indian Rupees, respectively, as certified for customs purposes by the Federal Reserve Bank of New York on

March 29, 2019. 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 rates or at any other rates.

You should read the following information in conjunction with “Item 5. Operating and Financial Review and Prospects” and the consolidated financial

statements included elsewhere in this Annual Report.

For the Year Ended March 31,(a)

2015 2016 2017 2018 2019 2019

(₹ in millions except shares and per share data)

(US dollars in

millions except

shares and per

share data)

INCOME STATEMENT DATA

Revenue from sales 733,579 639,493 714,644 909,549 909,012 13,144

Profit/ (Loss) for the year (203,139) (181,348) 98,545 47,284 76,229 1,102

Earnings per share

Basic (43.29) (42.21) 18.57 3.80 13.43 0.19

Diluted (43.29) (42.21) 18.56 3.79 13.38 0.19

CASH FLOW DATA

Cash flow from operating Activities 125,710 107,352 212,105 348,407 208,420 3,014

Cash flow from Investing Activities (43,939) (42,613) (79,910) (52,153) (133,147) (1,925)

Cash flow from Financing Activities (86,448) (52,714) (49,123) (357,144) (45,643) (659)

BALANCE SHEET DATA

Total assets 2,161,704 1,869,255 1,918,861 1,764,429 1,930,910 27,920

Short-term borrowings 161,728 182,328 413,126 313,700 315,053 4,555

Long-term borrowings 517,852 493,784 332,654 267,888 347,209 5,020

Non-controlling interests 467,489 365,098 137,250 157,377 150,608 2,178

Equity attributable to equity holders of the

parent 561,119 411,160 576,538 596,800 581,388 8,407

DIVIDENDS

Dividend per share ($) 2.35 3.5 19.45 21.2 18.85 0.27

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 3,709,778,760 3,705,502,141 3,705,502,141

Diluted 2,965,004,871 2,965,004,871 2,965,560,871 3,717,466,311 3,721,449,633 3,721,449,633

(a) During the year ended March 31, 2019, the Company has made few changes in the presentation (refer Note 2(b) of Notes to the consolidated

financial statements). Accordingly, the comparative period amounts for the year ended March 31, 2017 and 2018 have been reclassified. The

amounts for the financial years 2015 and 2016 are based on the financial statements as approved at the respective Board meeting and have not

been revised for this change

B. Capitalization and Indebtedness

Not applicable

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C. Reasons for the Offer and Use of Proceeds

Not applicable

D. Risk Factors

This Annual Report contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those

anticipated in these forward-looking statements as a result of a number of factors, including those described in the following risk factors and elsewhere

in this Annual Report. If any of the following risks actually occur, our business, financial condition and results of operations could suffer and the

trading price of our equity shares and ADSs could decline.

Risks Relating to Our Business

Our operations are subject to governmental, health and safety and environmental regulations, which require us to obtain and comply with the terms

of various approvals, licenses and permits. Any failure to obtain, renew or comply with the terms of such approvals, licenses and permits in a timely

manner may have a material adverse effect on our business, financial condition and results of operations

Numerous governmental permits, approvals and licenses are required for our operations as the industries in which we operate and seek to operate are

subject to numerous laws and extensive regulation by national, state and local authorities in jurisdictions including India, South Africa, Namibia, UAE,

Ireland, Australia, Japan, South Korea, Taiwan, Liberia and any other jurisdictions where we may operate in future. Our operations are also subject to

laws, regulations and standards relating to employment, protecting health and safety of our employees, as well as the environment, including

conservation and climate change. Evolving regulations, standards and stakeholder expectations could result in increased cost, litigation or threaten the

viability of operations in extreme cases. For instance, we are required to obtain various environmental and labor-related approvals in connection with

our operations in India, including clearances from the Ministry of Environment and Forests (“MoEF”), GoI and from the relevant pollution control

boards in various states in India in which we operate in order to establish and operate our facilities. Certain of such approvals are valid for certain

specified periods of time and require periodic renewals, such as consents to operate under the Air (Prevention and Control of Pollution) Act, 1981, as

amended, and the Water (Prevention and Control of Pollution) Act, 1981 from the relevant Pollution Control Boards, which are generally granted for a

period of one year.

Further, our oil and gas exploration and mining activities depend on the grant or renewal of various exploration and mining licenses and production

sharing contracts and other regulatory approvals that are valid for a specific period of time. In addition, such licenses and contracts contain various

obligations and restrictions, including restrictions on assignment or any other form of transfer of a mining lease or on the employment of a person who

is not an Indian national. For instance, in connection with our mining operations in India, mining leases are typically granted for a period of 20 to 30

years and stipulate conditions including approved limits on extraction. Similarly, in connection with our oil and gas operations in India, Cairn is required

to enter into a production sharing contract and obtain an exploration license, which typically extends to 7 or 8 years following the award of a block

before it can commence exploration activities and if exploration is successful, Cairn is then required to procure a petroleum mining lease from the

relevant government authority which typically extends for 20 years in order to conduct extraction operations for oil and gas.

Our current oil and gas reserves and production are significantly dependent on the Rajasthan block in India. The current production sharing contract for

the block is valid until May 2020. On April 7, 2017, the Ministry of Petroleum and Natural Gas issued a policy for the grant of extension to the

production sharing contracts signed by the GoI awarding Pre-New Exploration Licensing Policy Exploration Blocks (“Pre-NELP Extension Policy”).

The Pre-NELP Extension Policy defines the framework for granting of extension for Pre-New Exploration Licensing Policy (“Pre-NELP”) blocks.

Under the Pre-NELP Extension Policy, the Government’s share of profit petroleum during the extended period of contracts would be at higher rates for

the applicable fields. The GoI has granted its approval for a ten year extension of the production sharing contract for the Rajasthan Block. The extension

has been granted by the GoI under the Pre-NELP Extension Policy, subject to certain conditions.

The applicability of the Pre-NELP Extension Policy (entailing 10% higher profit petroleum) to Rajasthan Block production sharing contract has been

challenged by Cairn before the Delhi High court. This matter is currently sub judice. Separately, DGH has sought an unconditional acceptance of the

conditions for grant of extension, which includes non-finalization of Cost Oil between the companies and ONGC, and payment of additional profit

petroleum to GoI on account of certain audit observations. Cairn has initiated arbitration and filed a Notice of Arbitration dated March 1, 2019 against

ONGC with respect to issue of Cost Oil finalization. If the production sharing contract is not extended on same terms, it could entail substantial loss of

value and any adverse outcome arising out of the conditions imposed issues may lead to delays in PSC extension or financial liability which might cause

a material and adverse effect on our results of operations and financial condition. See “Item 8. Financial Information— A. Consolidated Statements and

Other Financial Information— Legal Proceedings.” for further details. Furthermore, under the terms of the production sharing contracts, we are obliged

to sell our entitlement of crude oil in the domestic Indian market until such time as the total availability of the crude oil and condensate from all

domestic petroleum production activities meets the total national demand and India achieves self-sufficiency. There is currently a mismatch between the

demand and the supply for crude oil in India, with the demand outweighing the domestic production of crude oil, and this mismatch is expected to

continue in the long term. Further, to the extent our Indian blocks yield crude oil that is not suitable for processing by refineries in India or on account of

any downward shift in its demand from our buyers, it may be difficult for us to monetize such domestic crude oil reserves and this could have a material

adverse effect on our oil and gas business, financial condition and results of operations.

Government approval is also required, generally, for the continuation of mining as well as oil and gas exploration and production activities in India and

other jurisdictions, and such approval can be revoked for a variety of circumstances by the GoI, Indian courts or other authorities. Any general

suspension of mining activities by the government of a jurisdiction containing our mining operations could have the effect of closing or limiting

production from our operations. For example, our total iron ore production declined from 13.8 mmt in fiscal year 2012 to 0.6 mmt in fiscal year 2015

due to the suspension of mining activities in Goa. The suspension orders were withdrawn by the state government in 2015 and operations were

recommenced in January 2015. 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 Mines and Minerals (Development and Regulation) (“MMDR”) Act. Our mines in Goa were impacted as a result of this judgement of

the Supreme Court of India. We recognised an impairment of assets in fiscal year 2018 (primarily with respect to mining reserves) as a result of

Supreme Court order of an amount equal to $ 531.1 million net of tax ($ 755.1 million pre-tax). Our operations in Goa represent only a small portion of

our consolidated revenue, and represented approximately 1% of our revenue for the year ended March 31, 2018.

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Even after receiving appropriate orders for continuation of mining operations in Goa, our iron ore business will remain largely dependent on export sales

of iron ore to China. For instance, in fiscal year 2017, 100% of sales to external customers for Goa was from exports to customers in China. As a result,

the performance and growth of our iron ore business is necessarily dependent on the health of the Chinese economy, which may be materially and

adversely affected by political instability or regional conflicts, economic slowdown elsewhere in the world or otherwise. In addition, any worsening of

international relations between India and China, any negative changes in Chinese regulatory or trade policies relating to the import of iron ore or other

limitations, restrictions or negative changes in our ability to export iron ore to China, could have a material adverse effect on our iron ore business.

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. The Expert Committee on Iron ore’s report is yet to be accepted and the matter is pending before the Supreme Court. Our mines in the

state of Goa were impacted consequent to the judgement of the Supreme Court.

The state government of Goa had appointed an independent firm in August 2014 to undertake an audit of production levels in excess of environmental

clearances of all mining companies operating in the state of Goa, including our Company for the period from fiscal year 2008 to fiscal year 2013. The

independent firm submitted its final report to the state Directorate of Mines and Geology (“DMG”) on May 5, 2015. Observations raised by the audit

with respect to our Company included production levels to be in excess of environmental clearances for the leases of the Company and whether the

royalty can be payable on a dry metric ton (“DMT”) basis instead of wet metric ton (“WMT”) basis. The audit process was based on the formats and

procedures specified by DMG and the report was submitted accordingly. The Company has refuted these observations and provided its responses to

these observations to the firm based upon a legal opinion of our Indian counsel, and these responses have been filed in the audit report of the

Independent firm to the state DMG. In doing so, the Company has reserved its rights without prejudice to its responses and requested an opportunity to

furnish further documentation and information as may be appropriate before any further steps in this regard are taken by the state government. We

received a show cause notice from DMG on August 5, 2016 to which we filed a reply on November 24, 2016. Hearings before the DMG has been

concluded and we have filed our written submissions. Regarding the WMT matter, we received an order from DMG on August 28, 2018, directing us to

pay the principal amount of ₹ 544.8 million along with interest as on date of payment. The interest calculated by the committee of auditor’s till the date of preparation of report was ₹ 430.0 million. We have submitted a reply to DMG on September 11, 2018 stating that we will be challenging the order before the appropriate forum. However, under protest we are agreeable to pay ₹ 40.7 million, which is the shortfall on WMT dispatch basis, after adjusting excess royalty paid on production basis.

For the shortfall in royalty payment on basis of WMT issue for SRL, we received an order from DMG on September 3, 2018, directing us to pay the

principal amount of ₹ 74.4 million along with interest as on date of payment. The interest calculated by the committee of auditor’s till the date of preparation of report was ₹ 64.2 million. We have submitted a reply to DMG on September 17, 2018 stating that we will be challenging the order in appropriate forum. However, under protest we are agreeable to pay ₹ 23.3 million, which is the shortfall on WMT dispatch basis, after adjusting excess royalty paid on production basis.

If the Company is subject to any subsequent action based upon the recommendations of the audit report, we could be subject to significantly higher

royalty payments and / or other penalties. Such an outcome or any other adverse outcome could result in a material adverse effect on our financial

condition and results of operations.

Our global presence exposes us to a number of jurisdictions in which regulations or laws have been or are being considered to limit or reduce emissions.

The likely effect of these changes will be to increase the cost for fossil fuels, impose levies for emissions in excess of certain permitted levels and

increased administrative costs for monitoring and reporting. Increasing regulation of greenhouse gas (“GHG”) emissions, including the progressive

introduction of carbon emissions trading mechanisms and tighter emission reduction targets, is likely to raise costs and reduce demand growth. These

regulations in the jurisdictions of our major customers and in relation to international shipping could also have an adverse effect on the demand for our

products. Our smelting and mineral processing operations are energy intensive and depend heavily on fossil fuels. Any failure to comply with applicable

laws, regulations or recognized international standards, or to obtain or renew the necessary permits, approvals and licenses may result in the loss of the

right to operate our facilities or continue our operations, the imposition of significant administrative liabilities, or costly compliance procedures, or other

enforcement measures that could have the effect of closing or limiting production from our operations. If we were to fail to meet environmental

requirements or to have a major accident or disaster, we may also be subject to administrative, civil and criminal proceedings by governmental

authorities, as well as civil proceedings by environmental groups and other individuals, which could result in substantial fines, penalties and damages

against us, as well as subject to orders that could limit or halt or even cause closure of our operations, any of which could have a material adverse effect

on our business, financial condition and results of operations.

For example, in March 2013, the Tamil Nadu Pollution Control Board (“TNPCB”) ordered the closure of the copper smelter at Tuticorin due to

complaints regarding a noxious gas leak by local residents. The National Green Tribunal thereafter passed an interim order in May 2013 allowing the

copper smelter to recommence operations subject to certain conditions, and we recommenced operations in June 2013. However, the TNPCB filed a

notice of appeal against the orders of the National Green Tribunal, at Supreme Court of India.

TNPCB through its order dated April 9, 2018 rejected the Company’s application for renewal of consent to operate for its existing 400,000 tpa copper

smelter plant in Tuticorin in Tamil Nadu, India and operations at the plant have been suspended. The Company had filed an appeal with the TNPCB

Appellate authority against the aforesaid rejection order. During the pendency of the appeal, TNPCB through its order dated May 23, 2018 ordered for

electricity supply to the plant to be discontinued and the State Government ordered the closure of the copper smelter plant. Prolonged shutdown of our

copper smelter at Tuticorin could be credit negative and marginally increase its leverage. See “Item 8: Financial Information - A. Consolidated

Statements and Other Financial Information - Legal Proceedings” for further details.

In addition, the expansion of the alumina refinery at Lanjigarh has been on hold since October 2010 because the environmental approval has been

withheld by the MoEF. On November 20, 2015, the MoEF granted environmental clearance for the expansion of the Alumina Refinery up to 4 mtpa and

environmental clearance up to 6 mtpa will be received as an amendment to existing EC after the completion of the land acquisition of the balance area

of 666.03 HA. Further, consent to establish for 6 mtpa and consent to operate 2 mtpa has also been obtained. However the environmental clearance for

the expansion of Alumina Refinery at Lanjigarh was challenged by an individual, Prafulla Samantra before the National Green Tribunal, wherein MoEF,

Odisha State Pollution Control Board and Vedanta Limited have been made parties. We filed our response to challenge and the matter is yet to be heard.

In addition, another individual has filed an interlocutory application to be impleaded in the matter before National Green Tribunal, Kolkata, which will

be heard with the matter discussed above. See “Item 8: Financial Information - A. Consolidated Statements and Other Financial Information - Legal

Proceedings” for further details.

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The consent to operate for our steel plant, Electrosteel steels Limited at Bokaro was due to expire on December 31, 2017. ESL filed an application in

August 2017, before the Jharkhand State Pollution Control Board (“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. On August 25, 2018 High Court of Jharkhand granted a stay against order of JSPCB where they denied

extension of consent to operate. The court granted permission to operate the plant till September 27, 2018 and in the interim asked The Ministry of

Environment, Forest and Climate Change (MOEFCC) 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, MOEFCC provided ESL an opportunity of personal hearing on October 10, 2018 against the

show cause notice dated June 6, 2012. Vide order dated September 20, 2018, MOEFCC passed an order for revocation of the environmental clearance of

ESL. ESL challenged the said order of MOEFCC 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 proposal is in advance

stages and based on the progress of the proposal the interim relief of order dated September 27, 2018 has further been extended vide orders dated

May 23, 2019 till the next hearing of July 25, 2019. Any unfavourable judgement will result in adverse impact on our operations at ESL.

We experienced an ash pond rupture in Odisha in September 2017, resulting in 4,224,000 tons of ash being spilled into the Bhenden River. As a result,

relevant authorities shut five out of the 11 thermal power plants. As a result, we had to purchase 200MW power from the state electricity grid and

incurred a cost of $0.9 million as of December 31, 2017. Recovery of the ash spilled over, strengthening of the ash pond and rehabilitation of the

affected village is being discussed with authorities. All the negotiation has been settled with the local villagers and as per latest communication from

Tehsildar and the total compensation has been paid to all the aggrieved. Based on the position as on March 31, 2019 the Company do not expect any

further financial implications on the Ash Pond Leakage other than those mentioned above.

In 2017 the thermal power plant at Talwandi Sabo was fined ₹ 0.5 million as a result of blowing ash that damaged nearby cotton crops. The plant was also directed to compensate farmers who had suffered losses and to submit a surety amount of ₹ 3 million as an assurance against future pollution. The compensation was duly paid to the farmers and no further directions have been received from the Punjab Pollution Control Board. TSPL has taken

measures to prevent such incidents in the future such as installation of additional ash disposal pump, maintenance of ash level in silo of 5 m out of 14 m,

an auto alarm system in silo when silo level reaches 8m and ash conveying stops at 10 m as well as an installation sparkling system at silo.

In addition, if we were to fail to meet environmental requirements or to have a major accident or disaster, it may also be subject to administrative, civil

and criminal proceedings by governmental authorities, as well as civil proceedings by environmental groups and other individuals, which could result in

substantial fines, penalties and damages against it as well as orders that could limit or halt or even cause closure of its operations, any of which could

have a material adverse effect on its business, results of operations and financial condition.

We are exposed to the political, economic, legal, regulatory and social risks of the countries in which we operate and these may have a material

adverse effect on our business, results of operations, financial condition or prospects

We have operations and projects in India, South Africa, Namibia, UAE, Ireland, Australia, Japan, South Korea, Taiwan and Liberia. We are exposed to

the political, economic, legal, regulatory and social risks of the countries in which we operate or intend to operate. These risks potentially include

expropriation and nationalization of property, instability in political, economic or financial systems, uncertainty arising from underdeveloped legal and

regulatory systems, corruption, civil strife or labor unrest, acts of war, armed conflict, terrorism, outbreaks of infectious diseases, prohibitions,

limitations or price controls on hydrocarbon exports and limitations or the imposition of tariffs or duties on imports of certain goods. Countries in which

we have operations or intend to have operations have transportation, telecommunications and financial services infrastructures that may present

logistical challenges not associated with doing business in more developed locales. Furthermore, we may have difficulty in ascertaining our legal

obligations and enforcing any rights that we may have.

For example, under the terms of the shareholders’ agreement between the GoI and us, we were granted 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. The GoI has disputed and refused to act upon the second

call option. Also, GoI has disputed our exercise of the call option to purchase the remaining ownership interest of the GoI in BALCO. See “Item 4:

Information on the Company - B. Business Overview - Our Business - Options to Increase Interests in HZL and BALCO”.

Further, during fiscal year 2015, the Board of Directors were made aware that charges have been filed against several persons unconnected with the

Group and one employee of our oil and gas business who was previously arrested and subsequently released, for alleged possession and access to

government information. Our oil and gas business has not been named in the charges. Our oil and gas business has in place a comprehensive compliance

program and controls. Further, on an annual basis all directors and employees including senior management of our oil and gas business provide

affirmation of compliance of the code of business ethics adopted by the Company. Our oil and gas business also regularly undertakes review of its

controls.

Political, legal, economic and commercial instability or community disputes in the countries and territories in which we operate could affect our

operations. Some of our current and potential operations are located in or near communities that may regard such operations as having a detrimental

effect on their environmental, economic or social circumstances.

The continued success of our existing operations and future projects are in part dependent upon maintaining broad support and a healthy relationship

with the respective local communities. Failure to identify and manage local concerns and expectations can give rise to disputes or have a negative

impact on relations with local communities, and therefore affect our business and reputation. The consequences of community reaction, on various

media including social media, could also have a material adverse impact on the cost, profitability, and ability to finance or even the viability of an

operation. Such events could lead to disputes with national or local governments or with local communities and give rise to material reputational

damage. For instance, community protests were recently organized to protest the expansion of Vedanta Limited’s copper plant in Tamil Nadu,

subsequently TNPCB rejected the application filed to renew our consent to operate, for our existing 400,000 tpa copper smelter plant at Tuticorin, which

expired on March 31, 2018. Currently, we have 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. See “Item 8: Financial Information - A. Consolidated Statements and Other

Financial Information - Legal Proceedings” for further details.

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If our operations are delayed or shut down as a result of political and community instability, our revenue growth may be constrained and the long-term

value of our business could be adversely impacted. Once we establish operations in a particular country, it may be expensive and logistically difficult to

discontinue such operations, should economic, political, physical or other conditions deteriorate subsequently. All of these factors could have a material

adverse effect on our business, results of operations, financial condition or prospects.

Material changes in the regulations that govern our businesses, or the interpretation of recent legislation, could have a material adverse effect on

our business, financial condition and result of operations

Mining in India is subject to a complex and comprehensive set of laws and regulatory requirements. See “Item 4: Information on the Company - B.

Business Overview - Our Business - Regulatory matters.” These laws and regulatory requirements are subject to change. If we are affected, directly or

indirectly, by the application or interpretation of any such statute, enforcement proceedings initiated under it, it may have a material adverse effect on

our business, financial condition and result of operations.

For example, the Mines (Amendment) Bill, 2011 (“Mines Bill”) proposes several amendments to the Mines Act, 1952, including significant

enhancement to the monetary penalties and terms of imprisonment for violations under the Mines Act, 1952. The Mines and Minerals (Development and

Regulation) Amendment Act, 2016 received presidential assent on May 6, 2016 and amended the Mines and Minerals (Development and Regulation)

Act, 1957. The amendments permit the transfer of captive mine leases (granted before January 12, 2015) without having to go through an auction

process and also allow the dumping of waste outside of the mining area by including dumping sites within the definition of lease area. Further, the

National Mineral Policy of 2019, which replaced the erstwhile National Mineral Policy 2008, introduces incentives to enhance mergers and acquisitions

in the mining sector. If Vedanta Limited is affected, directly or indirectly, by the application or interpretation of any such statute, as and when notified,

including any enforcement proceedings initiated under it and any adverse publicity that may be generated due to prosecution, it may have a material

adverse effect on its business, financial condition and result of operations.

In addition, our oil and gas business is also subject to complex and comprehensive regulations in India. New or changed regulations could require

changes to the manner in which we conduct our business, and result in an increase in compliance costs, which could have a material adverse effect on

our business, financial condition and results of operation.

For example, upon the expiry of oil and gas licenses in India, contractors are generally required under the terms of relevant licenses or local law to

conduct decommissioning or abandonment activities with regard to the equipment and wells and generally make good production sites. There can be no

assurance that we will not in the future incur decommissioning charges in excess of those currently provided for, since local or national governments

may require decommissioning to be carried out in circumstances where there is no express obligation to do so, particularly in case of future oil and gas

license renewals.

The provisions of Chapter X-A (sections 95 to 102) of the Income Tax Act, 1961, relating to General Anti-Avoidance Rules (“GAAR”) are applicable

with effect from assessment year 2019 (fiscal year 2018). The GAAR provisions propose to identify any arrangement where the primary purpose or one

of the main purposes of such arrangement is to obtain a tax benefit, and satisfies at least one of the following tests (i) creates rights, or obligations,

which are not ordinarily created between persons dealing at arm’s length; (ii) results, directly or indirectly, in misuse, or abuse, of the provisions of the

Income Tax Act, 1961; (iii) lacks commercial substance or is deemed to lack commercial substance in whole or in part; or (iv) is entered into, or carried

out, by means, or in a manner, that is not ordinarily engaged for bona fide purposes. If GAAR provisions are invoked, the tax authorities will have wider

powers, including denial of tax benefit or a benefit under a tax treaty. In the absence of any precedents on the subject, the impact of the application of

these provisions is uncertain.

While interest payments made by us to our non-resident “associated enterprises” are eligible to be deducted as an expense when used by it for its

business purpose, such payments are required to be in compliance with thin capitalisation norms as introduced by the Finance Act, 2017, in terms of

which, we would not be permitted a deduction of interest exceeding 30% of the earnings before interest, taxes, depreciation and amortisation if the total

amount of such interest exceeds ₹ 10 million per year. Such thin capitalisation norms would apply even where the debt is issued by an independent third party lender, but an “associated enterprise” provides an implicit or explicit guarantee to such lender.

If the interest is not eligible for deduction in a particular year, the same can be carried forward for 8 years and the same shall be allowed to the extent of

maximum allowable interest expenditure for the relevant year.

The costs, liabilities and requirements associated with complying with existing and future laws and regulations may also be substantial and time-

consuming and may delay the commencement or continuation of oil and gas exploration or metal mining and production activities. This and any

changes to the regulations could require changes to the manner in which we conduct our business and result in an increase in compliance costs, which

could have a material adverse effect on our business, financial condition and results of operations.

We have significant asset concentration risks, and any interruption in the operations at those assets could have a material adverse effect on our

business, financial condition and results of operations

Our results of operations have been and are expected to continue to be substantially dependent on the reserves, production and the cost of production at

certain of our key assets, and any interruption in the operations, exploration and development activities at those assets for any reason could have a

material adverse effect on our business, financial condition and results of operations.

For example, the Rajasthan block produced 82.5% of our average daily net operated production from our oil and gas business in fiscal year 2019 and oil

and gas from the Rajasthan block constituted 95.5% of our net aggregate proved oil and gas reserves on a barrel of oil equivalent basis as of March 31,

2019. Our ongoing capital expenditure program has focused on development and exploration activities across all the assets with approximately 81.0% of

the capital expenditure for fiscal year 2019 having been invested in the Rajasthan block.

Further, our Rampura Agucha zinc mine produced 47.6% of the total mined zinc metal in concentrate that we produced in fiscal year 2019 and

constituted 38.1% of our total proven and probable zinc ore reserves as of March 31, 2019 in India. Any interruption in the operations at these assets

could have a material adverse effect on our results of business, financial condition, results of operations and prospects.

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Our business requires substantial capital expenditures and other resources to maintain ongoing operations and to grow our business through

projects, expansions and acquisitions, where these projects, expansions and acquisitions are subject to additional risks that could adversely affect

our business, financial condition and results of operations

Capital requirements. We require capital for, among other purposes, expanding our operations, making acquisitions, managing acquired assets,

acquiring new equipment, maintaining the condition of our existing equipment and maintaining compliance with environmental laws and regulations.

To the extent that cash generated internally and cash available under our existing credit facilities are not sufficient to fund our capital requirements, we

will require additional debt or equity financing, which may not be available on favorable terms, or at all. Future debt financing, if available, may result

in increased finance charges, increased financial leverage, and decreased income available to fund further acquisitions and expansions and the

imposition of restrictive covenants on our business and operations. In addition, future debt financing may limit our ability to withstand competitive

pressures and render us more vulnerable to economic downturns. If we fail to generate or obtain sufficient additional capital in the future, we could be

forced to reduce or delay capital expenditures, sell assets or restructure or refinance our indebtedness.

Oil and gas exploration activities are capital intensive and inherently uncertain in their outcome. There is a risk that we or the operators of assets in

which we have an interest may undertake exploration activities and incur significant costs in so doing with no assurance that such expenditure will result

in the discovery of hydrocarbons in commercially viable quantities.

In addition, there can be no assurance that our planned or any proposed future expansions and projects will be completed on time or within budget,

which may adversely affect our cash flow.

Demands on management. Our efforts to continue our growth will place significant demands on our management and other resources and we will be

required to continue to improve operational, financial and other internal controls, both in India and elsewhere. Our ability to maintain and grow our

existing business and integrate new businesses will depend on our ability to maintain the necessary management resources and on our ability to attract,

train and retain personnel with skills that enable us to keep pace with growing demands and evolving industry standards.

Acquisition risks. As part of our growth strategy, we intend to continue to pursue acquisitions to expand our business. There can be no assurance that we

will be able to identify suitable acquisition, strategic investment or joint venture opportunities, obtain the financing necessary to complete and support

such acquisitions or investments, integrate such businesses or investments, satisfy regulatory requirements for such acquisitions or that any business

acquired will be profitable. If we attempt to acquire non-Indian companies, we may not be able to satisfy certain Indian regulatory requirements for such

acquisitions and may need to obtain the prior approval of the RBI which we may not be able to obtain. The funding of such acquisitions by us may

require certain approvals from regulatory authorities in India. In addition, acquisitions and investments involve a number of risks, including possible

adverse effects on our operating results, diversion of management’s attention, failure to retain key personnel, risks associated with unanticipated events

or liabilities and difficulties in the assimilation of the operations, technologies, systems, services and products of the acquired businesses or investments.

Any failure to achieve successful integration of such acquisitions or investments could have a material adverse effect on our business, financial

condition and results of operations.

If our planned expansions and new projects are delayed, or if we experience cost overruns in our projects, our business, financial condition and

results of operations may be materially and adversely affected

We have in recent years initiated significant expansion plans for our existing operations and planned greenfield projects, which involve significant

capital expenditure. The timing, implementation and cost of such expansion are subject to a number of risks, including the failure to obtain necessary

leases, licenses, permits, consents and approvals, or funding for the expansion. We do not currently have all of the leases, licenses, permits, consents and

approvals that are or will be required for our planned expansion and new projects. There can be no assurance that we will be able to obtain or renew all

necessary leases, licenses, permits, consents and approvals in a timely manner.

For example, a writ petition was filed at the High Court of Madras challenging the grant of an environmental clearance for the expansion of our copper

smelting unit at Tuticorin, which was dismissed by the High Court of Madras through its order dated April 28, 2016. Further, the expansion of our

alumina refinery at Lanjigarh has been on hold since October 2010 because the environmental approval was rendered non-operational by the MoEF. On

November 20, 2015, the MoEF granted environmental clearance for the expansion of the Alumina Refinery for up to 4 mtpa and EC up to 6 mtpa will

be received as an amendment to existing EC after the completion of the land acquisition of the balance area of 666.03 HA. Further, consent to establish

for 6 mtpa and consent to operate 2 mtpa has also been obtained. However the environmental clearance for the expansion of the Alumina Refinery at

Lanjigarh was challenged by an individual, Prafulla Samantra, before the National Green Tribunal, where the MoEF, the Odisha State Pollution Control

Board and Vedanta Limited have been made parties. We filed our response to challenge and the matter is yet to be heard. In addition, another individual

has filed an interlocutory application to be impleaded in the matter before National Green Tribunal, Kolkata, which will be heard with the matter

described above. See “Item 8. Financial Information— A. Consolidated Statements and Other Financial Information— Legal Proceedings.” for further

details.

Moreover, we are currently undertaking exploration programs in our Rajasthan and other oil blocks and any delays in this exploration program or

shortfall in achieving the necessary output levels could materially and adversely affect our business, financial condition and results of operations.

In fiscal year 2013, we announced an expansion of our zinc-lead mines capacity to 1.2 mtpa (later on revised to 1.25 mtpa) in a phased manner until

fiscal year 2020 in our Zinc India business. This will involve sinking of underground shafts and developing underground mines. Benefits from these

growth projects started in fiscal year 2016, even though project activities will continue until fiscal year 2020. Annual capital expenditure towards these

projects is expected to be approximately $ 250 million. Any delays in the execution of the expansion plans or any shortfall in achievement of the

expansion objectives may adversely affect our business, financial condition and results of operations.

We recently acquired ESL under the Insolvency and Bankruptcy Code, 2016, in line with the Resolution Plan approved by National Company Law

Tribunal (NCLT), Kolkata. ESL was incorporated in December, 2006 to set up an integrated steel plant designed to produce 2.5 mtpa of steel. This

project started operations in year 2009 and the first phase of 1.5 mtpa steel plant was completed in fiscal year 2012. Subsequently, the next phase to

reach to the full design capacity was started but was not completed due to various reasons including, weak financial condition. As a result, project

materials including semi-constructed blast furnace and horizontal coke oven plant is underutilized. The usability of project material will depend on life

cycle assessment, finalization of technology and detailed project report. Hence expansion cost may increase if it is discovered later that some of the

project material is not usable.

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Furthermore, the GoI is contemplating a proposal to demarcate certain forest areas in India, based on the permissibility of using such land for mining

purposes. The identification of designated areas where mining activities will, or will not, be permitted will be based on mapping forest and coal reserves

as well as field-level studies. While this proposal remains in discussion, the MoEF has denied the grant of environmental and forest diversion clearances

applied for in certain areas identified as restricted areas. In the event the proposal is implemented, our current and any future mining activities and

related expansion plans and new projects may be affected, which would adversely affect our business prospects and results of operations or otherwise

hinder its borrowing capabilities. Any delay in completing planned expansions, revocation of existing clearances, failure to obtain or renew regulatory

approvals, non-compliance with applicable regulations or conditions stipulated in the approvals obtained, suspension of current projects, or cost

overruns or operational difficulties once the projects are commissioned may have a material adverse effect on our business, results of operations or

financial condition. Further, our decision to undertake or continue any of these projects will be based on assumptions of future demand for our products

which may not materialize. As a consequence of project delays, cost overruns, changes in demand for our products and other reasons, we may not

achieve the reductions in the cost of production or other economic benefits expected from these projects, which could adversely affect our business,

financial condition and results of operations.

If we are unable to secure additional reserves of oil and gas, zinc, copper, iron ore and bauxite that can be extracted at competitive costs or cannot

extract existing reserves at competitive costs, our profitability and operating margins could decline

If our existing oil and gas, zinc, copper, iron ore and bauxite reserves cannot be extracted at competitive costs or if we cannot secure additional reserves

that can be extracted at competitive costs, we may become more dependent upon third parties for the metal ore, or our production volumes will decline.

As our reserves decline as we extract the mineral ore or crude oil, our future profitability and operating margins depend upon our ability to access

reserves that have geological characteristics enabling extraction at competitive costs. Replacement reserves may not be available when required or, if

available, may not be of a quality capable of being extracted at costs comparable to the existing or exhausted mines and fields.

We may not be able to accurately assess the geological characteristics of any reserves that we acquire, which may adversely affect our business,

financial condition and results of operation. Because the value of reserves is calculated based on that part of our mineral and oil and gas deposits that are

economically and legally exploitable at the time of the reserve calculation, a decrease in commodity prices may result in a reduction in the value of any

reserves that we obtain as less of the deposits contained therein would be economically exploitable at lower prices. For example, during fiscal year

2016, we recorded impairment charge on oil and gas assets of ₹ 322,998 million primarily relating to the Rajasthan block, triggered by the significant fall in crude oil prices. Similarly, with a substantial reduction in iron ore prices we recorded an impairment of ₹ 14,900 million in fiscal year 2016 for our Liberia assets.

Exhaustion of reserves at particular mines or oil fields may also have an adverse effect on our operating results that is disproportionate to the percentage

of overall production represented by such mines or oil fields. Further, with depletion of reserves we will face higher unit extraction costs.

Our future production depends significantly upon our success in finding or acquiring and developing additional reserves, adopting and using the

appropriate technology. If we are unsuccessful, we may not meet our production targets, which could adversely affect our business, financial condition

and results of operations.

Our ability to obtain additional reserves in the future could be limited by restrictions under our existing or future debt agreements, competition from

other metal and oil and gas companies, lack of suitable acquisition candidates, government regulatory and licensing restrictions, difficulties in obtaining

mining leases and surface rights or the inability to acquire such properties on commercially reasonable terms, or at all. To increase production from our

existing mines or oil fields, we must apply for governmental and joint operation partner approvals, which we may not be able to obtain in a timely

manner, or at all.

The results of appraising discoveries are uncertain which may result in reductions in projected reserves and production declines and may involve

unprofitable efforts, not only from dry wells, but also from wells that are productive but uneconomic to develop. Furthermore, as our Ore Reserves

decline as we mine the ore, our future segment results and segment margins depends upon our ability to access Ore Reserves with geological

characteristics that allow mining at competitive costs and replacement reserves may not be available when required. Appraisal and development

activities may be subject to delays in obtaining governmental approvals or consents, shut-ins of connected wells, insufficient storage or transportation

capacity or exhaustion and depletion of reserves or other geological and mechanical conditions all of which may result in a material increase of our costs

of operations or delay anticipated revenues.

Our operations are subject to risks that could result in decreased production, increased cost of production and increased cost of or disruptions in

transportation, power generation, mining and oil exploration

We are subject to operating conditions and events common to the industry in which we operate which is beyond our control that could, among other

things, increase our mining, transportation or production costs, disrupt or halt operations at our mines and production facilities permanently or for

varying lengths of time or interrupt the delivery of our products to our customers. The occurrence of any of these conditions or events could have a

material adverse effect on our business, financial condition and results of operations. These conditions and events include:

• Disruptions in extraction and production due to equipment failures, unexpected maintenance problems and other interruptions. All of the

Company’s operations are vulnerable to disruptions. Metal processing plants are especially vulnerable to interruptions, particularly where an event

causes a stoppage which necessitates a shut down in operations. Stoppages in certain types of our smelters, even if lasting only a few hours, can

cause the contents of furnaces or cells to solidify, resulting in a plant closure for a significant period and necessitating expensive repairs, any of

which could materially and adversely affect our results of operations or financial condition. For example, our aluminium smelters have suffered

due to a pot failure incident during fiscal year 2017 resulting in part stoppage of smelter and cost of repairs.

Further, our oil processing facility in the northern fields of the Rajasthan block designed to separate oil, gas and water may not function as designed over

the life of the fields. This may result in the crude oil not meeting sales specifications of pipelines, which may mean that any such crude oil either cannot

be sold or will be sold at a significant discount to the agreed crude oil sales price.

• Availability of raw materials for energy requirements. Any shortage of, or increase in the prices of any of the raw materials needed to satisfy our

businesses’ requirements may interrupt our operations or increase our cost of production. We are particularly dependent on coal, which is used in

many of our captive power plants. Our aluminium business, which has high energy consumption due to the energy-intensive nature of aluminium

smelting, is significantly dependent on receiving allocations from Coal India, the government owned coal monopoly in India.

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For example, we established our aluminium business in Odisha through an agreement with Odisha Mining Corporation Limited (“OMC”) to establish an

aluminium smelter and associated captive power plants in the Lanjigarh and Jharsuguda district in Odisha. A memorandum of understanding with the

Government of Odisha (through OMC) provides that the Government of Odisha would supply us 150 million tons of bauxite ore. During fiscal year

2016, OMC has, by a separate action, terminated the joint venture agreement for which the Company is pursuing the appropriate course of action. The

matter is pending with the OMC. However, the delay in obtaining captive bauxite supply as per the terms of memorandum of understanding has resulted

in our Odisha aluminium business reporting losses since inception. Any further delays in securing assured bauxite supplies for our Odisha aluminium

business could continue to adversely affect our business, financial condition and results of operations. However, in April 2018, we entered in to a long

term contract with OMC for the supply of bauxite for five years from its Kodingamali bauxite mines.

Further, we may not receive the coal block allocations that we expect or may not be allowed to use such allocations for our commercial power

generation business. Any coal block allocations that we receive may not be sufficient for our planned operations and we may not be successful in

procuring a sufficient supply of coal at economically attractive prices, or at all. Additionally, we are subject to certain restrictive covenants contained in

the coal block allocation agreements including specified end use and submission of mining plans within a specified period.

Our oil processing facility in the northern fields of the Rajasthan block require reliable fuel supply for power generation and heating, to ensure the

quality of our crude oil production. Currently, the fuel supply for power generation and heating requirements are being met through associated natural

gas from the Mangala field, supplemented as required by natural gas from the Raageshwari Deep gas field. While the current gas supply is adequate to

ensure a sufficient fuel supply, there is no guarantee that the current estimates of the future fuel requirements can be supplied from the gas associated

with existing and future oil production, supplemented by gas supply from the Raageshwari Deep gas field. In such an event, an alternative energy source

would need to be obtained. Further, this has been augmented by alternative energy source in form of grid power supply of 14 MW capacity. Sustained

failure of power systems due to unavailability of fuel supply and/

Documents

UNITED STATES SECURITIES AND EXCHANGE ... - Vedanta … 20F Fy'19.pdfThe name of Sesa Sterlite Limited was changed to Vedanta Limited, with effect from April 21, 2015. Cairn India