MANAGEMNET  DISCUSSION AND ANALYSIS

Vedanta Ltd., a diversified natural resource company having a portfolio of large, world-class, low-cost, scalable assets, located in proximity to high growth markets. The Company operates in the Oil & Gas, Zinc, Lead, Silver, Copper, Iron Ore, Aluminium and Commercial Power sectors.

The Company's zinc business in India is co-owned by the Government of India (29.54% share) and operated by Hindustan Zinc Limited (HZL) in which Vedanta has a 64.9% interest. 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, seven sulphuric acid plants and nine captive power plants in northwest India, and processing and refining facilities for zinc at Haridwar and for processing and refining facilities for zinc and lead, as well as a silver refinery at Pantnagar, both in state of Uttarkh and in northern India.

The Company's zinc international business comprises the Skorpion mine and refinery in Namibia, operated through THL Zinc Namibia Holdings (Proprietary) Limited (Skorpion), the Lisheen mine in Ireland operated through Vedanta Lisheen Holdings Limited (Lisheen), which has undergone the closure in November 2015 after 17 years in operation and Black Mountain Mining (Proprietary) Limited (BMM), whose assets include the Black Mountain mine and the Gamsberg mine project (at exploration stage) located in South Africa. The Company has 100% interest in Skorpion, 74% interest in BMM and 100% interest in Lisheen.

The Company's oil and gas business is owned and operated by Cairn India Limited (Cairn) in which Vedanta Limited has 59.9% interest. Cairn has a world-class resource base, with interest in seven blocks in India and one in South Africa. Cairn India's resource base is located in four strategically focused areas, namely one block in Rajasthan, two on the west coast of India, four on the east coast of India and one in South Africa

The Company's iron ore business is wholly-owned by Vedanta Limited and Sesa Resources Limited and consists of exploration, mining and processing of iron ore, pig iron and metallurgical coke and power generation. The mining operations are carried out at the Codli group and the Sonshi group of mines in Goa; the Narrain mines at Karnataka, a Met Coke and a Pig Iron plant at Goa. The iron ore business also has a power plant at Goa in India for captive use. Our iron ore business's Liberian assets have been impaired as a result of the considerable fall in the iron ore price, and it took non-cash charge of X 1,490 Crore in March FY 2015-16.

The Company's copper business is owned and operated by Vedanta Ltd, copper mines of Tasmania Pty Ltd. (CMT), Australia, and Fujairah Gold FZC in the UAE. Its custom smelting assets include a copper smelter, a refinery, a phosphoric acid plant, a sulphuric acid plant, a copper rod plant and two captive power plants at Tuticorin in Southern India, and a refinery and two copper rod plants at Silvassa in Western India.

In addition, the Company owns and operates the Mt. Lyell copper mine in Tasmania, Australia through its subsidiary, CMT, which is currently under care and maintenance, and a brcious metal refinery and copper rod plant in Fujairah through its subsidiary Fujairah Gold FZC. A non-cash impairment charge of X 341 Crore on idle assets at Copper Mines of Tasmania was taken as a consequence of its extended care and maintenance.

The Company's aluminium business is owned and operated by Vedanta Ltd. and Bharat Aluminium Company Limited (BALCO) in which it has a 51% interest and balance is owned by the Government of India. Vedanta Ltd. aluminium operations include a refinery and a 90 MW captive power plant at Lanjigarh and a smelter and a 1,215 MW captive power plant at Jharsuguda, both at Odisha in Eastern India. BALCO's operations include two bauxite mines, two power plants (used to produce  power for captive consumption), and refining, smelting and fabrication facilities in Central India. Further, Aluminium pot ramp-up commenced at 1.25mtpa smelter at Jharsuguda and 325ktpa at BALCO.

The Company's power business is owned and operated by Vedanta Limited and Talwandi Sabo Power Limited (TSPL), a wholly-owned subsidiary of the Vedanta Limited, which are engaged in the power generation business. Vedanta Limited power operations include 2,400 MW (four units of 600 MW each) thermal coal-based commercial power facility at Jharsuguda with all four units currently operational. 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 and  two units of 660 MW are operational while the third unit will be capitalised in early FY 2016-17. The power business also includes 600 MW (two units of 300 MW each) thermal coal-based commercial power plant at BALCO, existing 270 MW power plant at BALCO, 274 MW of wind power plants commissioned by HZL and 100 MW power plant at MALCO Energy Limited situated at Mettur Dam in Tamil Nadu in Southern India.

The Company's other activities include operation of its Vizag General Cargo Berth Private Limited (VGCB) in which the Company owns a 100% interest. The Vizag port project includes the mechanisation of coal handling facilities and up-gradation of general cargo berth for handling coal at the outer harbour of Visakhapatnam port on India's east coast

Financial highlights

Strong underlying results, on the back of diversified portfolio, in a weak commodity price environment

» Revenue at Rs. 63,931 Crore and EBITDA at Rs. 15,012 Crore; EBITDA margin of 30%1

» Attributable PAT (br-exceptional items) at Rs. 2,910 Crore

» Continued optimisation of opex, capex and working capital; net debt reduced by Rs. 6,254 Crore during the year, cash and cash equivalents of Rs. 52,666 Crore

» Free cash flow post capex of Rs. 11,572 Crore; efficient working capital initiatives

» Contribution of c. Rs. 20,600 Crore to the Indian Exchequer during the year, in the form of taxes, duties, royalties and profit petroleum

» Exceptional items of Rs. 12,452 Crore majorly include on br-tax basis, impairment charge of Rs. 10,358 Crore primarily relating to goodwill creation on acquisition of Cairn India, acquisition goodwill and expenditure impairment of Rs. 1,490 Crore towards exploratory assets in West Africa, Rs.115 Crore towards idle assets at Bellary and Rs. 341 Crore at Copper mine Australia given the extended care and maintenance

» No final dividend was paid, interim dividend amounted to Rs. 3.5 per share

 Revenue

Revenues for the year were at Rs. 63,931 Crore, 13% lower year-on-year on account of fall in oil and metal prices, partially offset by higher volumes at Zinc India, Iron Ore, Copper & Power units.

EBITDA and EBITDA Margin

EBITDA for the full year was Rs. 15,012 Crore, a decline of 33% due to weaker Brent, metal prices & brmia, higher profit petroleum at Oil & Gas segment driven by lower spend and regulatory headwinds. This was partially offset by improved volumes and cost efficiencies.

Debrciation and Amortisation

Debrciation was higher by Rs. 730 Crore year-on-year mainly on account of revision of estimated useful lives of various assets in mines and metal businesses which resulted in lower debrciation charge of X 474 Crore in FY 2014-15. Revaluation of Assets during FY 2015-16 (Rs. 210 Crore) and capitalisation of Aluminium & power assets further contributed to increase in debrciation charge during FY 2015-16.

Amortisation of goodwill for the year FY 2015-16 was lower by 1,179 Crore post impairment of goodwill during Q4 FY 2014­15 in our oil & gas segment.

Net Interest

Finance cost was 1% higher at Rs. 5,704 Crore as compared to Rs. 5,659 Crore in brvious year. The increase is primarily due to capitalisation of capacities at BALCO and Talwandi Saboo by Rs. 348 Crore and increase in finance cost due to re-financing of ~US$ 0.8 by of parent company loan offset by lower interest on account of repayment of FCCB's. The blended cost of borrowings is 7.9% during FY 2015-16 compares with 8.2% in FY 2014-15. This rebrsents a 32 bps reduction year-on-year primarily on account of low cost financing of term loan ~0.1%, lower CP interest rates 0.1% and replacement of high cost FCCBs with CP and short term loans.

Other income for the full year was at Rs. 3,482 Crore, which was higher than the corresponding brvious year at Rs. 2,367 Crore largely due to higher liquidation of mutual funds at Cairn and Zinc India during Q4 FY 2015-16. At Zinc India, substantial liquidation of investments at the year-end for payment of special dividend. As per IGAAP, income recognised based on maturing & not on accrual basis.

Exceptional Items

Exceptional items of Rs.12,452 Crore majorly include on br-tax basis Cairn impairment charge of Rs. 10,358 Crore; Rs. 10,074 Crore on account of goodwill impairment and Rs. 284 Crore of written down of exploration assets. Non-cash impairment charges taken, following carrying value test in light of further decline in crude oil price during the financial year. Further acquisition goodwill and expenditure impairment of Rs. 1,490 Crore towards exploratory assets in West Africa due to low price scenario. In addition, non cash impairment charge of Rs. 115 Crore towards idle assets at Bellary and Rs. 341 Crore at Copper mine Australia given the extended care and maintenance.

Non-Operational Forex Loss/Gain

FY 2015-16 includes a net forex gain of Rs. 972 Crore primarily due to the impact of the weaker rupee on the dollar denominated investments, advances and trade debtors.

Taxation

Tax charge in FY 2015-16 is Rs. 433 Crore (tax rate br-exceptional 8%) compared with Rs. 1,448 Crore (tax rate 16%) in FY 2014-15. The lower deferred tax charge in HZL and Cairn resulted in lower tax rate in FY 2015-16.

Attributable profit after tax (before exceptional items)

Attributable profit after tax (before exceptional items) for the year FY 2015-16 was Rs. 2,910 Crore against Rs. 5,097 Crore in FY 2014-15. The reduction was primarily due to lower EBITDA on account of weak commodity prices partially offset by lower net interest, debrciation and amortisation.

Minority interest at 53% for the year (50% in FY 2014-15) was driven by lower profitability.

Earnings per share

The earnings per share before exceptional items was Rs. 9.81 per share for the FY 2015­16, compared to Rs. 17.19 per share for the brvious year.

Dividend

The Board has not declared any final dividend. The interim dividend for FY 2015-16 is Rs. 3.5 per share.

Shareholders Fund

Total shareholders' funds as on March 31, 2016 aggregated Rs. 44,672 Crore as compared to Rs. 53,875 Crore at March 31, 2015. The decrease is mainly on account of impairment and attributable loss.

Reserves and surplus

As on March 31, 2016, reserves and surplus of the Company aggregated Rs. 44,376 Crore.

Net Fixed Assets

The net fixed assets as on March 31, 2016, was Rs. 94,365 Crore. This comprises Rs. 26,991 Crore as Capital work in progress as on March 31, 2016.

Balance Sheet

We continue to have a strong balance sheet with cash and liquid investments of Rs. 52,666 Crore as on March 31, 2016 which is mostly invested in debt related mutual funds, bank deposits and bonds. Gross debt at Vedanta Limited was Rs. 77,952 Crore as at March 31, 2016.

This comprises long term loans of Rs. 65,262 Crore and short term working capital loans of Rs. 12,690 Crore. The loan in INR currency is Rs. 40,496 Crore and balance Rs. 37,456 Crore is in US dollar. Average rate of borrowing was 7.9 % in FY 2015-16. Average debt maturity is 2.28 years.

The downward brssure on metal and oil prices has impacted the Company's credit rating. During the year, the rating agency CRISIL downgraded company rating from AA+/Stable to AA-/Negative.

 Operational highlights during the year comprise:

Record annual production of zinc, lead, silver, aluminium, power and copper cathodes

Commenced ramp-up of capacities at Aluminium, Power and Iron Ore divisions

Entire power portfolio of 9,000 MW now operational

Successful implementation of Mangala Enhanced Oil Recovery Program

Recommenced production at Goa Iron Ore operations, achieved exit run rate production of 0.8 mt per month at Goa Iron Ore operations

Strong cost performance, with lower cost of production across all businesses

Operations

Average gross production for FY 2015­16 was 203,703 barrels of oil equivalent per day (boepd), which was 3.8% lower than the brvious year. This rebrsents c.25% of the domestic production in India. Lower reservoir performance at Bhagyam and a natural decline in the Mangala and Aishwariya fields in Rajasthan were the key reasons. The decline was partially offset by successful execution of the Enhanced Oil Recovery (EOR) project at Mangala, upside from infill wells at Aishwariya and reservoir management initiatives at Bhagyam. Ravva and Cambay block production declined by 8.2% and 2.7% respectively, due to natural decline.

Mangala EOR project, the world's largest polymer flood, has shown an exemplary performance. In February 2016, polymer injection ramped up to our target levels of 400,000 barrels of liquid per day, which along with production performance has reduced the risks significantly from the perspective of surface facilities, reservoir, polymer availability, and polymer mixing and transportation technology. The integrated drilling programme was completed for all the 93 new injection wells during the year as per  plan. In October 2015, the central polymer facility was fully operational with all the four trains brparing polymer solution.

Gas development in the Raageshwari Deep Gas (RDG) field in Rajasthan continues to be a strategic priority. The Company continues to invest capex in the project including further plans in FY 2016-17. During FY 2015-16, average gas production from RDG increased to 27mmscfd higher than guidance provided last year, up 68% year-on-year, with an average Q4 production of 31 mmscfd. This was achieved by a better than expected performance from the fracked well, and stabilised combrssor operations that were installed at the Raageshwari and Viramgam terminals. In FY 2015-16, the RDG project has shown robust progress with significantly higher volume than the brvious year and will be continued in FY 2016-17 in line with the project plan.

During the year, we commissioned the Salaya Bhogat Pipeline (SBPL), the storage terminal and the marine export facilities at Bhogat which provides an opportunity to expand customer base and realised better pricing.

According to the International Energy Agency's Oil Market Report (January 2016), 2015 saw one of the highest volume increases in global oil production this century. For FY 2015-16, the Brent crude oil price averaged US$ 47.5 per barrel with Q4 FY 2015-16 at US$ 33.9 per barrel — the lowest level since 2005. Supply continued to grow faster than demand. This has led to a situation where commercial stock levels within the Organisation for Economic Co-operation and Development (OECD) are at a record high. As a result, crude oil prices started falling in late FY 2014-15 and weakened further in FY 2015-16. Lately in April 2016, the prices have recovered from  record lows due to the weakening US dollar and improved global growth sentiment.

Key factors adversely affecting the oil & gas market includes the advent and resilience of shale oil production; increased oil production by members of the Organization of the Petroleum Exporting Countries (OPEC); lack of production cuts (volume consensus) by OPEC and non-OPEC countries; and lower gross domestic product (GDP) growth globally. The decline in the benchmark Brent price was also followed by greater incentives for processing light grades. As a result, our crudes attracted higher discounts.

Revenue for the year was lower at X 8,626 Crore (after profit and royalty sharing with the Government of India), driven by weaker crude prices. As a result, EBITDA for FY 2015-16 was lower by 60% at X 3,504 Crore. The Rajasthan water flood operating cost was reduced to US$ 5.2 per barrel compared to US$ 5.8 per barrel in the brvious year, which is one of the lowest in the world. An increase in polymer injection volumes lifted blended operating cost to US$ 6.5 per barrel during FY 2015-16.

In the Union Budget FY 2016-17, oil cess, a tax on crude oil production, has effectively been reduced at current price level from Rs. 4,500 per tonne to 20% ad-valorem on realised price.

The Company has shown continued tight fiscal discipline and has actively renegotiated its existing contracts to improve prices and contain activities. The Company has realised a c. 20% cost saving on polymer through on going interventions. We have also sourced 10 MW power from the open access markets at 25% lower cost. Efficiencies for instance have improved at RDG gas with reduction in both days per franc and also the per frac cost.

In FY 2015-16, we invested US$ 214 mn in capital expenditure, which primarily included Mangala Polymer Project, Raageswari Deep Gas Project, Aishwariya infill, and exploration (appraisal, testing and seismic activities).

Exploration & Development

In FY 2015-16, the Company started with working interest 2P reserves of 242 mmboe and ended with working interest 2P reserves of 175 mmboe. Excluding production, our Working Interest 2P reserves for the year declined by approximately 18 mmboe due to project deferrals in low oil price scenario. We made some additions from reservoir performance and projects in Aishwariya and Offshore fields. This will reverse itself once price levels move up.

Since the recommencement of exploration in the Rajasthan block in 2013, the Company has discovered 1.7 bn boe of drilled and tested HIIP with an additional 0.45 bn boe drilled but yet to be tested. During this period, the Company has discovered 2C resources of 200 mn boe in Rajasthan. During FY 2015-16, activity continued to be focused upon the appraisal of new discoveries and processing of the new 3D seismic data over high priority areas, in line with our re-phased exploration programme. Earlier in the year, oil was discovered in volcanic reservoirs, in three zones in well Raageshwari Deep North and in two  zones in well Raageshwari Deep Main. The subsurface data pertaining to the deeper layers within the volcanic reservoirs in the Raageshwari area were analysed during the fourth quarter.

The 3D seismic acquisition programme continued in Rajasthan, with a total of 432 km2 acquired during this year. The processing of newly acquired 3D seismic data is ongoing with a focus on identifying additional prospects that will act to replenish the exploration prospect inventory.

» Krishna-Godavari Basin Onshore -(BLOCK KG-ONN-2003/1)

Our joint venture partner and operator ONGC has submitted the FDP to the management committee for approval, initiating the JV approval process for the block.

» Krishna-Godavari Basin Offshore -(BLOCK KG-OSN-2009/3)

We continue to engage with the Ministry of Petroleum & Natural Gas for an extension contingent upon full life clearances. Phase-I expired on March 8, 2016. Interbrtation of the new seismic volumes has resulted in identification of four prospects and a number of smaller leads over different play types.

Due to the current low oil price environment, the carrying value of Block

KG-ONN-2003/1, Block KG-OSN-2009/3,

South Africa (Block 1) and Block MB-DWN-2009/1 have been fully impaired as of March 2016.

Outlook

We remain committed to maintaining a healthy cash flow post capex from Oil & Gas business. In FY 2016-17, Rajasthan production volumes will be broadly at FY 2015-16 levels, with natural declines being offset by EOR programme. In line with global peers, capex for FY 2016-17 has been reduced to c. US$ 100 mn, which will be invested 80% on development (primarily RDG Gas and Mangala EOR completion activities) and 20% in exploration.

We will continue investing in br-development activities of our key projects in Core MBA fields, Barmer Hills and Satellite fields, to ensure project readiness for development with rebound in oil prices. We maintain the flexibility to raise our capital investment as oil price improves

Our strategic priorities

> Generate healthy cash flows post capex(

> Consistent cash generation from core assets with focus on operating cost and efficient reservoir management;

> Continue investing in Raageshwari Deep gas Project;

> Option for growth by capital investment in a pipeline of projects at Barmer Hill, Bhagyam and Aishwariya EOR to take advantage of any upswing in oil price(

> Resilience from robust balance sheet and world class resource base; and

> Capitalise on strengths - geology, technology, talent pool, strong partnerships and financial discipline.

 Operations

Mined metal production for the full year was recorded at 889,000 tonnes, in line with the brvious year. Production during the second half of FY 2015-16 was lower than the first half of year, due mainly to reduced output from Rampura Agucha (RA) open pit, particularly in Q4 FY 2015-16 as per the mine plan. This was partially offset by record production from all the underground mines, and in particular the Sindesar Khurd (SK) and Kayad mines, which also resulted in higher lead and silver volumes.

Sindesar Khurd has outperformed and achieved the target of 3.0 mt of production in FY 2015-16 ahead of plan. The current mining run rate is 3.75 mt per annum, ahead of schedule. Consequently, silver production has also benefited from higher volumes from this mine and recorded integrated production of 13.56 mn ounces, with a 58% increase year-on-year.

Our Kayad mine surpassed the targeted production capacity of 1 mt per annum during the quarter.

Rampur Agucha mine is in the midst of transition from open pit to underground mine production, with the underground project picking up pace after a slower than planned ramp up due to difficult geotech conditions. The main shaft has reached a depth of 860 metres (out of a planned depth of 950 metres) with completion of the north and south vent work. We also achieved a record decline development of 1,425 meters during the month of March 2016. However, to de-risk any potential delay in development of Rampura Agucha underground project, the open cast mine deepening project, referred to as 'Stage V', is progressing satisfactorily.

Refined metal production during the year was the highest ever and higher than mined metal production primarily on account of conversion of existing mined metal inventory and enhanced smelter efficiencies. Integrated refined zinc, lead and silver metal production increased by 5%, 33% and 58% respectively over FY 2014-15

Prices

Commodity prices weakened during FY 2015-16 due to the stronger US dollar and the slowdown in the Chinese economy. However, Zinc prices showed a degree of resilience during the first quarter of the year and recovered back to US$ 2,400 per tonne in May 2015, backed by better fundamentals than its peers. However, in line with global commodity cues, Zinc prices fell below US$ 1,600 per tonne during Q3 FY 2015­16, the lowest in more than six years. LME Zinc prices averaged US$ 1,829 per tonne during FY 2015-16 compared to US$ 2,177 per tonne in FY 2014-15, a decrease of 15.9%. Consequently, the spot prices have recovered to above US$ 1,800 per tonne.

Average prices for lead have weakened by 12.5% due to subdued Chinese consumption and lower demand.

Silver's average price also reduced significantly, by 16% in line with the general weakness in brcious metals and on the back of a stronger US dollar.

Zinc Benchmark Premium (the average of Shanghai, Zohar & Singapore) was lower during FY 2015-16 at US$ 91 per tonne, compared to US$ 135 per tonne during  FY 2014-15

Unit costs 

The unit cost of zinc production decreased by 4.6% to US$ 1,045 per tonne, compared to FY 2014-15. Excluding royalty, there was a 7.7% decline in cost at US$ 804 per tonne which is amongst the lowest quartile globally. The decrease was due mainly to higher volumes of integrated production, better smelter efficiencies, reduced coal and commodity prices, higher by-product credit and cost reduction initiatives. In FY 2015-16, the unit cost of zinc production post Silver credit was at c. US$ 500 per tonne (excluding royalty). The increased royalty rates impacted the unit cost of Zinc production by

c. US$ 57 per tonne. This and other regulatory headwinds, including renewal power obligations and electricity duty by US$ 36 per tonne, were partly offset by 7% rupee debrciation during FY 2015-16. Zinc India's zinc composite cost of production remains in the first quartile on the global cost curves position, according to the Wood Mackenzie Report for CY2016. Out of the total zinc unit cost of production of US$ 1,045 per tonne, total government levies were c. US$ 277 per tonne primarily due to Royalty & District Mineral Fund (DMF).

With a focused objective of cost optimisation, the Company has deployed a clean sheet costing methodology to work on the existing contract, and has further negotiated the cost spend across the businesses. We have also

optimised the transport routes with faster turnarounds, exploring alternative ports to optimise spend. The cost of production excluding royalty is expected to remain stable during FY 2016-17 even as we transition to a higher share of underground production as a result of various cost & efficiency initiatives.

On September 1, 2014, the Indian royalty rates for zinc rose from 8.4% to 10.0%, while lead royalties increased from 12.7% to 14.5%. These increased rates are among the highest in the world, and beyond other based metals. In addition, an amount equal to 30% of royalties was provided with effect from January 12, 2015 to contribute to the District Mineral Fund (DMF), and an amount equal to 2% of royalties for the National Mineral Exploration Trust (NMET).

Financial performance

 EBITDA in FY 2015-16 was Rs. 6,484 Crore, a decrease of 11.0% compared to FY 2014­15. This decrease was primarily driven by lower zinc, lead and silver prices, and brmia as well as statutory headwinds in FY 2015­16. However, these were partially offset by higher volumes, lower cost of production and rupee debrciation.

The decline phase of both Rampura Agucha and Sindesar Khurd underground mines are in commercial production with their operating results recognised in the income statement.

Projects

The announced mining projects, with the objective of reaching 1.2 mt per annum, are progressing well; and we expect to achieve the target within the next three years.

Zinc India's transition from open cast to underground mining continues. Open cast contributed 60% of production during

FY 2015-16, and historically it has accounted for about 80% of total Metal in Concentrate (MIC) production. Open cast will now be replaced progressively by underground mines, and by FY 2020-21 all our production will be underground.

At Rampura Agucha open cast mine, work to deepen the pit by an additional 50 metres (referred to as 'Stage V') is progressing satisfactorily and, has contributed towards de-risking any potential delay in development of Rampura Agucha underground project.

At Sindesar Khurd, the shaft sinking project is ahead of schedule and reached the planned depth of 1.05 km with the completion of the main shaft sinking work, where development of associated infrastructure is also progressing well ahead of its timelines. Production from the shaft is expected to commence during the second half of FY 2017-18.

At Zawar, the debottlenecking of the existing mill is progressing well, and the capacity will increase to 2.7 mt per annum by year end.

The Company continues to allocate capex in zinc growth projects.

Exploration

During the year, gross additions of 25.3mt were made to reserves and resources (R&R), prior to a depletion of 10.5mt. As of March 31, 2016, Zinc India's combined mineral resources and ore reserves were estimated to be 389.9 mt, containing 36.1mt of zinc-lead metal and 1,007moz of silver. Overall mine life continues to be over 25 years.

Outlook

In FY 2016-17, mined metal production is expected to be marginally higher than FY 2015-16, while refined integrated zinc metal production will be at similar level of FY 2015-16. Integrated lead and silver production will be higher on account of greater ore volumes from the Sindesar Khurd mine. Significant progress is expected in terms of mine development and ore production from the underground mine projects as we expect about 60% mined metal production from underground mines in FY 2016-17. Similar to recent years, quarterly variations in production is expected due to waste and ore sequence at Rampura Agucha open cast mine partly offset by ramp up of underground mines. Production during second half of the year will be much higher than the first half; in the first half, Q1 will be much lower than Q2. Volumes will gradually ramp up as the year progresses, as per mine plan.

The cost of production (excluding royalties) is expected to remain stable with various efficiency improvement programmes and cost reduction initiatives aided by a benign commodity environment. This is despite the additional regulatory levies and lower average grades resulting from a change in the mining mix and transitioning to more underground production.

Our strategic priorities

To progress the Brownfield expansion of mines to achieve 1.2 mt per annum of mined zinc-lead;

Manage the smooth transition from open-pit to underground mining at Rampura Agucha;

Achieve the life extension of the Rampura Agucha open cast mine Stage V;

Achieve cost reductions with various operational and commercial initiatives;

Ramp up silver production volumes; and

Continue our focus on adding more reserves and resources than we deplete through exploration.

Operations

Total production for FY 2015-16 was 28% lower than in FY 2014-15, due mainly to the closure of the Lisheen mine in Ireland in November 2015 after 17 years in operation, maintenance shutdown and partial industrial action at Skorpion. This was partially offset by higher volumes from Black Mountain Mines production.

At Skorpion in Namibia, production was lower by 20,000 tonnes. The main causes were temporary industrial action during Q2 FY 2015-16, the planned refinery  maintenance extended shutdown in Q3 FY 2015-16, a slower than anticipated ramp-up post the shutdown, and a decline in the mine grade. During Q4 FY 2015-16 Skorpion production volumes were back to normal, following a planned maintenance shutdown in Q3 FY 2015-16, and it recorded 27,000 tonnes in Q4 FY 2015-16.

Production at BMM was 7% higher due to a 10% increase in mine volume, supported by a change in mining method from cut-and-fill to the more productive longhole mining

Projects

With the improved outlook on zinc price and reduction in the project capex envisaged at the Gamsberg mine on account of engineering improvements and renegotiations, we have decided to now  accelerate the project. Consequently, the project will see the much higher level of capital allocation in FY 2016-17.

Pre-start activities at the project site began in July 2015, by which stage BMM had obtained all regulatory and environmental permits in line with the relevant South African legislation. Pre-stripping and surface work to access the ore body is progressing  in line with the re-phased plan. To date, we have excavated c.6.5 mt of waste rock.

The first phase of the project is expected to have a life of mine of approximately 13 years, and there is significant potential for further expansion at the Gamsberg North deposit.

Gamsberg Phase 1 is expected to partially replace the production lost due to the closure of Lisheen, and restore production to over 300ktpa. The first ore production is planned for 2018, with 9 to 12 month ramp-up to full production. The engineering improvements and renegotiations resulted in lower project capex of US$ 400 mn.

The Skorpion refinery conversion is under Detailed Feasibility Study(DFS). The basis engineering is in the final stage of evaluation and we are currently reviewing the capex and opex.

We continue to develop the project using a modular approach, with project execution carried out in a phased manner. This allows us to adapt the capital expenditure programme and increase the ramp-up as market conditions improve. Project IRR remains in mid-teens despite the current commodity price scenario therefore developing it further looks quite attractive.

Outlook

In FY 2016-17 production volumes are expected to be c.170 - 190kt.

Cost of production is expected to reduce to c. US$ 1,200 per tonne - US$ 1,300 per tonne, with continued focus on labour and equipment productivity improvements and cost reduction initiatives. Given the current economic climate, the business is in the process of optimising short-time mine plans while re-aligning the fixed cost base.

At Skorpion, the high wall pushback has been deferred in the light of current market conditions, and plans are currently underway to review various future options for mine life extension. Current reserves are at 5.2 mt (at 9% grade).

At BMM, our focus continues to be around executing on the Gamsberg project. Further, near-mine resource potential is being explored to extend mine life along with other changes in the mining method.

Our strategic priorities

> Execution of the Gamsberg Project (Phase 1) using a modular approach to project execution and development;

> Extending the mine life at Skorpion; andManaging a world-class closure at the Lisheen mine site.

Operations

During August 2015, production recommenced in Goa after obtaining all necessary approvals to produce 5.4 mt per annum of saleable ore. During the year, production was 2.2 mt with sales of 2.2 mt. Production was impacted by a transportation strike on account of rate negotiations; these were later resolved in March 2016 and we achieved an exit run rate of 0.8 mt per month. Sales include 1.4 mt of traded ore purchased from the e-auction.

At Karnataka, production was 3.0 mt, achieved by fully utilising our environment clearance limit of 2.2 mt and our opening crude ore inventory of 0.8 mt.

A rigorous plan is being implemented, focusing on operational efficiency and commercial spend reduction.

As part of the Company's cost reduction initiatives, logistics contracts have been optimised across transportation routes, modes and rates. Iron ore sourcing from the nearby mines has been maximised along with plant team requirements to reduce the freight cost. Also, a change in the blend and mix of coking coal has contributed to better cost efficiency. 

In view of recession in Iron Ore prices and industry wide rebrsentation, export duty on less than 58% Fe has been reduced from 10% to NIL effective from March 1, 2016 in the Union Budget FY 2016-17.

During the year, production of pig iron ramped up from 611,000 tonnes last year to a record production of 654,000 tonnes, with available de-bottlenecked capacity of 785,000 tonnes.

Prices

FY 2015-16 witnessed a significant decline in prices on the back of rising supplies from Australia and Brazil, and slackening demand from China. Prices for 62 Fe grade per tonne averaged US$ 42.6 (FOB), 37% down on FY 2014-15. In April 2016, the price has recovered following lower production forecast from the majors and uptick in China demand scenario.

While global iron ore demand is projected to remain relatively flat, continued substitution in China of domestically produced iron ore with seaborne stocks is expected to result in a modest increase in international trade, some of which is already seen in April 2016 as mentioned above. Reflecting this, global iron ore trade is projected to increase by 1.3% a year between 2015 and 2021, to reach 1.6 bt.

Because of its logistical proximity to the port, along with inland waterways, Vedanta's iron ore business in Goa caters primarily to the global seaborne iron ore trade. Goan low grade exports are primarily destined for Chinese steel mills that are able to blend the low grades with other high grade expensive ores from Brazil or within China.

By contrast, the iron ore business in Karnataka caters primarily to the domestic steel industry in the state of Karnataka, which is located within a 200 km radius of the mine. While current exports are subject to constraints due to Subrme Court instructions, the iron ore mine in Karnataka is logistically well connected to the port by good rail connections.

While the FOB price for 56Fe grade was US$ 32 per tonne for Q4 FY 2015-16, the  realisation for our Goa ore was lower given the 10% export duty for part of the period., Karnataka ex-works realisation was at c. US$ 14 per tonne for Q4 FY 2015-16 as domestic prices are largely determined by the government mining companies and local demand and supply factors.

EBITDA in FY 2015-16 increased to Rs.402 Crore compared with Rs. 135 Crore in FY 2015-16, primarily due to the restarting of production at Goa and volume ramp-up.

Due to considerable recession and uncertainties in the Iron Ore price, acquisition and exploration expenses of Rs. 1,490 Crore incurred at Liberia, West Africa to date have been impaired in our books. Further, an impairment of Rs. 115 Crore has been taken towards unused plant & machinery at Bellary, Karnataka.

Outlook

The Company has been engaging with respective state governments to enhance the mining cap in Goa and Karnataka. The Expert Advisory Committee (EAC) at Goa has already recommended to the Subrme Court a higher cap of 30 mt, increasing to 37 mt (conditional on the successful completion of an environmental impact assessment) for future, up from the current level of 20 mt applicable to FY 2015-16. Regarding Karnataka, the Company already has the mine plan which will enable a higher  production from the current level of 2.3 mt. We will follow the approval process for the same. We are also continuing to work towards resolving the matter of duplication of tax (Goa Permanent Fund & District Mineral Foundation), which is currently being heard by the Honourable Subrme Court.

The Company has signed the MOU with the government of Jharkhand on May 6, 2016 for setting up 1 mt pig iron and ductile pipe plant in the state.

Our strategic priorities remain:

» To enhance environment clearance limits in Goa (in line with EAC recommendation) and Karnataka and ramp-up to full capacity;

» Focused cost reduction through various operational & commercial initiatives; and

> Continue to work with government to remove the duplication of taxes (Goa Permanent Fund and District Mineral Foundation).

 Operations

FY 2015-16 copper cathode production at Tuticorin was at the record level of 384,000 tonnes, despite a few unplanned outages during the year that included 3-days stoppage of a flood incident due to heavy rains. The smelter is now producing at a normalised plant capacity level. FY 2014-15 production was lower due to the biennial 23-day planned maintenance shutdown in Q1 FY 2014-15, therefore the year-on-year performance is not comparable.

The 160MW power plant at Tuticorin operated at a plant load factor of 71% (FY 2014-15: 86%). This was lower than in FY 2014-15 due to less off-take by Tamil

Nadu Electricity Board (TNEB) due to higher availability of power from wind generators in the state; however, we were compensated at the rate of 20% of realisation, for the off­take below 85% of the contracted quantity. The state government has also imposed restriction on supply of power outside state.

In FY 2015-16, phosphoric acid production was 199,000 tonnes, 5% higher compared to 189,000 tonnes in FY 2014-15.

Our copper mine in Australia remains under extended care and since 2013. We continue to evaluate various options for its profitable restart

Prices 

Global copper production is estimated to have risen by 3.5% to 19.1mt in CY2015, while refined primary copper production is estimated to have totalled 18.9mt, 1.8% higher than that the brvious year. Copper usage across geographies, however, is essentially static at around 22.8mt, in line with the brvious year. The copper market is still in an adjustment phase and remains over-supplied in the near-term. Demand growth for Chinese copper has showed a structural slowdown at 3% in CY2015, compared to 7% growth in CY2014 and weighed on copper prices in CY2015 and at the start of 2016. The average copper price for the year was US$ 5,211 per tonne, which is lower by 20.5% compared with the brvious year.

Treatment & refining charges (TC/RCs) for FY 2015-16 remained strong, due to increase supply from new copper mines and smelting  disruptions. The Company realised 24.1 US cents per lb during FY 2015-16, higher by 12.6% (FY 2014-15: 21.4 US cents per lb.).

In concentrates, annual benchmark settlements for the year 2016 concluded at 97.35/9.73 TCs/RCs. This was around a 10% reduction on the brvious year, mainly due to uncertainties surrounding mine projects as LME prices continued to fall. However, several new projects commenced full production in 2015 and further expected new mine production/expansion in 2016 will support higher concentrate availability in 2016. Global smelter production increases during the same period are not expected to keep pace with the mine production. This will ensure that the custom concentrate market in 2016 remains well-supplied,. The Company expects to realise over 22 US cents per lb for FY 2016-17

Unit costs

At the Tuticorin smelter, the cost of production decreased from USc 4.2 per lb to 3.2 USc per lb, mainly due to higher volumes, lower input commodity costs (fuel and power) and higher by-product credits. We are positioned in the lowest cost quartile with ever improving smelter recovery rates. These improved credits were due mainly to better sulphuric acids realisation in the domestic markets. The sulphuric acid markets are largely regional and dependent on local demand-supply dynamics. The realisation was healthy during the year due to the improved market and customer mix

EBITDA for FY 2015-16 was Rs. 2,205 Crore, higher compared with Rs. 1,636 Crore in the brvious year. This increase was mainly driven by higher volumes, higher TC/RC and lower cost of production. In addition, a one-off benefit of Rs.  166 Crore has been recognised on account of the Target-Plus-Scheme (an export incentive scheme) that was operational in FY 2004-05. This incentive scheme on incremental exports over the brvious year was retrospectively withdrawn. After several years of litigation by the exporters, the Subrme Court ruled in their favour and the benefit was restored. This enabled us to recognise the income which will be collected as a refund from the government during FY 2016-17.

A non-cash impairment charge of Rs.  341 Crore on idle assets at Copper Mines  of Tasmania was taken as a consequence of its extended care & maintenance.

Outlook

Production is expected to remain above 400kt with over 10 days' planned maintenance activities scheduled inFY 2016-17.

Our strategic priorities

> To sustain operating efficiencies, reducing our cost profile;

> Maximising TC/RC; and

> Debottleneck existing capacity to 425 ktpa and additional 400 ktpa capacity expansion  

Operations

The Lanjigarh alumina refinery produced 971,000 tonnes in FY 2015-16. In order to improve cost efficiencies, operations at the refinery were operated for seven months since September 2015 as a single stream operation with an annual capacity of 800,000 tonnes. In FY 2015-16, production was stable at the 500kt Jharsuguda-I and 245kt Korba-I smelters. The 1,250kt Jharsuguda II smelter produced 76,000 tonnes during FY 2015-16 with 82 pots operational. The 325kt Korba-II smelter produced 75,000 tonnes with 84 pots operational during the year.

In FY 2015-16, both 300 MW CPP units of the BALCO 600 MW power plant at Korba were commissioned. The first 300 MW CPP unit was capitalised on December 1, 2015 and the second 300 MW CPP unit on March 31, 2016

Prices

Global aluminium consumption rose by 4% to 56mt in CY2015, compared to CY2014. This growth was primarily driven by China where consumption was up 6.7%; in contrast, consumption outside of China grew by only 1.2% to 27.2mt. Supply has grown by 6% to 57.5mt in CY2015; however, production outside China was flat at 26mt, due to production cuts. World-wide, supply has outpaced the demand which continues to put brssure on aluminium price and brmium. Specifically, China’s consistently high production backed by subsidised power costs and government aided subsidies which resulted into the higher exports to the rest of the world leading to higher stocks across the globe. Average LME prices for aluminium for the year fell to US$ 1,590 per tonne, a 15.9% decrease on the brvious year’s average price level of US$ 1,890 per tonne. Aluminium Ingot Benchmark Main Japanese Port (MJP) brmium during FY 2015-16 was lower at US$ 119 per tonne compared to US$ 392 per tonne during FY 2014-15 thus, resulting in lower realisations for the Company.

Unit costs

The Company has initiated various cost savings projects to increase operational efficiencies and reduce commercial spend. The initiatives include opportunistically procuring the raw materials and using alternative vendors to reduce the spend; changing the specification of raw materials; renegotiating service contracts; and reducing logistics costs by optimising rake movements.

During FY 2015-16, the cost of production of alumina was US$ 315 per tonne, 11.5% lower than in FY 2014-15. The COP for H2 FY 2015-16 was US$ 297 per tonne with single-stream operation (US$ 276 per tonne excluding high cost bauxite inventory). In FY 2015-16, total bauxite requirements of c. 3.4 mt were met from captive mines at BALCO, domestic sources and imports approximately one third each. Higher volumes in FY 2016-17 will be supported by laterite mining and increased supply from BALCO and domestic sources. The other key raw material being coal was sourced mainly from the combination of linkage coal allocation domestic e-auctions/adhoc allocation and imports. This mix was similar to FY 2014-15, will however change in FY 2016-17 due to higher volumes with increased reliance on auction and imports given the fixed quantity of linkage coal allocation.

The cost of production of hot metal at Jharsuguda-I was US$ 1,511 per tonne, lower by 7.3% (FY 2014-15: US$ 1,630 per tonne). The decrease was due to lower alumina prices, lower coal prices, rupee debrciation and the implementation of various cost-saving initiatives.

The cost of production at the 245kt Korba-I decreased substantially by 15% to US$ 1,619 per tonne compared to FY 2014- 15. This fall was achieved through reduced coal prices, a lower alumina price, rupee debrciation and by implementing various cost-saving initiatives.

The high-cost rolled product facility at BALCO, which produced approximately 47,000 tonnes in FY 2014-15, has been temporarily suspended and resulting in further cost savings. We will continue to sell ingots and wire rods from BALCO. The cost of production of hot metal at Jharsuguda-I was US$ 1,511 per tonne, lower by 7.3% (FY 2014-15: US$ 1,630 per tonne).

Financial Performance

EBITDA for FY 2015-16 was lower by 74% at Rs. 661 Crore, compared with Rs. 2,560 Crore in the brvious year. This was primarily due to lower LME prices and brmia on metals, and a one-off charge of Rs. 236 Crore for prior periods’ Renewable Power Obligations. These were partially offset by input commodity deflation, rupee debrciation and various cost savings initiatives. Projects Lanjigarh Refinery

The Company has prospecting licences for three laterite mines in Odisha and exploration is in progress. We expect to start production in H1 FY 2016-17. We have received approvals for expansion of the Lanjigarh refinery to 4 mt per annum. Hence, second stream operation has commenced at the Alumina refinery from April 2016 thus, taking it to the debottlenecked capacity of 1.7 - 2.0 mt per annum contingent on bauxite quality). Further ramp up to 4 mt will be considered when we have further visibility on bauxite sources.

Korba II Smelter

At the 325kt Korba- II smelter, brcommissioning activities commenced for further ramp-up from April 22, 2016 with an additional 18 pots commissioned by end April 2016. With commissioning of the new 600 MW CPP units complete, the 270 MW CPP unit will be maintained as a back-up for aluminium smelters.

Jharsuguda II Smelter

On January 27, we received approval from the regulatory authority (Orissa Electricity Regulatory Commission) to use the power generated from three units of the 2,400 MW (4 x 600 MW) Jharsuguda power plant for captive use. This will enable ramp-up of the 1.25 mt per annum Jharsuguda-II smelter. Consequently, we have commenced rampup of the first pot line of 312.5kt since the FY 2015-16 year end with an additional 49 pots commissioned by the end of April 2016. We have started production at the Chotia coal mine during Q4 FY 2015-16 after securing all the pending approvals.

Outlook

Volume & cost

In FY 2016-17, aluminium volume is expected to be in the range of 1.2 mt, mainly on account of progressive ramp-up at Jharsuguda-II and Korba II smelters and the progressive ramp-up of three lines at the 1.25 mt Jharsuguda-II smelter. With continued focus on cost reduction, we expect to achieve hot metal cost below US$ 1,400 per tonne.

Alumina

During FY 2016-17, the Company will move to double-stream operation to support the aluminium pot ramp-ups. The main sources of bauxite will be mix of mines at BALCO, and the balance will be met from laterite mines, other domestic sources and imports.

Coal

Numerous initiatives are being taken to meet our coal requirements. We will source our overall coal mix from low-cost imports and auctioned coal to optimise the cost in FY 2016-17. Imported coal prices softened by c.20% during FY 2015-16. We are also looking to optimise our coal mix further by securing linkage coal through the auction route.

Strategic priorities

Full capacity ramp up at Jharsuguda II & Korba II smelters; Laterite mining; Hot metal cost reduction by optimising raw material sourcing, and through various cost reduction initiatives; Secure the captive refinery feed to realise the full potential of cost efficiencies and to increase capacity utilisation; and Lanjigarh refinery expansion to 6 mtpa

Operations

In FY 2015-16, power sales increased by 23% year-on-year, due to the commissioning 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.

At the Talwandi Sabo power plant, the second 660 MW unit started commercial production in December 2015. The two operating units operated at 80% availability and supplied 2,792 mn units to the Punjab State Electricity Board (PSEB). TSPL’s Power Purchase Agreement with PSEB compensates according to the availability of the plant. The third 660 MW unit was synchronised during March 2016 and is expected to achieve commercial production during Q1 FY 2016-17.

The Jharsuguda 2,400 MW power plant operated at a lower Plant Load Factor (PLF) of 39% during FY 2015-16, due to a weak power market and power evacuation constraints for open access power sales. During FY 2016-17, one 600 MW unit is being supplied to the grid and the remaining 1,800 MW (3X600MW) will supply power to the Jharsuguda-II smelter with sales of surplus power on the open market. Accordingly, capacity utilisation is expected to increase significantly.

At BALCO, the first 300 MW IPP unit of the 1,200 MW power plant commenced commercial production in July 2015, and the second 300 MW IPP unit achieved commercial production in March 2016.

Unit sales and costs

Average power sale prices excluding TSPL, were lower in FY 2015-16 at Rs. 2.9 per unit compared with Rs. 3.3 per unit in the brvious year due to lower demand.

Currently, power demand has been supbrssed due to the financially stretched position of the distribution companies. With the new initiatives taken by government (UJWAL Discom Assurance Yojna – ‘UDAY’) to encourage them to restructure their balance sheets, it is expected to create new demand for the power thereby improving health of power industry. However, TSPL is not affected currently by sluggish power demand due mainly to its Case II business model as compensation is linked to availability of plant

Financial performance

EBITDA improved by 49% compared to FY 2014-15, despite lower demand and softer power rates. This was due to additional power sold from the newly commissioned unit of the Talwandi Sabo power plant and BALCO.

Outlook

During FY 2016-17, we will continue to increase capacity utilisation at Jharsuguda and increase power sales with newly commissioned power units at Talwandi Sabo and Balco.

Our strategic priorities

Tie up all capacities under long-or medium-term open access; Achieve over 90% availability; and Achieve a successful outcome in regulatory matters.

Port business

The Vizag General Cargo Berth (VGCB) operation remains stable. Despite the reduced coal imports driven by the weaker power market, dispatch tonnage increased marginally by 3% to 7.1 mt (FY 2014-15: 6.9 mt) and generated an EBITDA of Rs. 75 Crore. VGCB is one of the deepest coal terminals on the eastern coast of India, which enables docking of large Cape-size vessels.

PRINCIPAL RISKS AND UNCERTAINTIES

The resources sector is currently in the midst of a correction, with an extended period of lower and volatile commodity prices impacting earnings, balance sheets and investor perceptions. Our businesses are also exposed to a variety of risks, which are inherent to a global natural resources organisation. It is therefore essential to have in place necessary systems to manage these risks, while balancing the relative risk reward equation demanded by our stakeholders. Our management systems, organisational structures, processes, standards, code of conduct together form the system of internal control that governs how we conduct the Group’s business and manage the associated risks. Our risk management framework is designed to be simple, consistent and clear for managing and reporting risks from the Group’s businesses to the Board.

Risk management is embedded in our critical business activities, functions and processes. It helps Vedanta meet its objectives through aligning operating controls with mission and vision. The effective management of risk is critical to support the delivery of the Group’s strategic objectives. The framework helps the organisation meet its objectives through alignment of operating controls to the mission and vision of the Group.

We have a multi-layered risk management framework aimed at effectively mitigating the various risks, which our businesses are exposed to in the course of their operations as well as in their strategic actions. We identify risk at the individual business level for existing operations, as well as for ongoing projects through a consistently applied methodology.

Formal discussion on risk management happens in business level review meetings at least once in a quarter. The respective businesses review the risks, change in the nature and extent of the major risks since the last assessment, control measures established for the risk and further action plans. The control measures stated in the risk matrix are also periodically reviewed by the business management teams to verify their effectiveness.

Ensuring effective tone at the top is vital for the risk management process to function effectively. These meetings are chaired by business CEOs and attended by CXOs, senior management and concerned functional heads. Risk officers have been formally nominated at all operating businesses as well as Group level whose role is to create awareness on risks at senior management level and to develop and nurture a risk management culture within the businesses. Risk mitigation plans form an integral part of performance management process. Structured discussion on risk management also happens at SBU levels on their respective risk matrix and mitigation plans. Governance of risk management framework in the businesses is anchored with their leadership team.

The Board of Directors has the ultimate responsibility for management of risks and for ensuring the effectiveness of internal control systems. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss. The Audit Committee aids the Board in this process by identification and assessment of any changes in risk exposure, review of risk control measures and by approval of remedial actions, where appropriate.

The Audit Committee is in turn supported by the Group Level Risk Management Committee which helps the Audit Committee in evaluating the design and operating effectiveness of the risk mitigation programme and the control systems. Group Risk Management Committee (GRMC) comprising of Group CEO, Group CFO, Director Finance, Director - Management Assurance and Group Head – HSE meets every quarter. GRMC discusses key events impacting the risk profile, emerging risks and progress against the planned actions apart from other things.

Materiality and tolerance for risk are key considerations in our decision-making. The responsibility for identifying and managing risk lies with all the managers and business leaders in the Group.

The Group’s approach to risk management, elaborated in its risk policy and the risk charter, is aimed at embedding a risk aware culture in all decision making process. Accountability for risk management is clear throughout the Group and is a key performance area for line managers. As stated above, every business division in the Group has developed its own risk matrix of top 20 risks, which get reviewed at business management committee/business ExCo chaired by the CEO. In addition, business divisions have also developed their own risk registers depending on the size of operations and number of SBUs / locations. These risks get reviewed in SBU level meetings.

The order in which these risks appear in the section below does not necessarily reflect the likelihood of their occurrence or the relative magnitude of their impact on our business. Risk direction of each risk was reviewed based on events, economic conditions, changes in business environment and regulatory changes. While our risk management framework is designed to help the organisation meet its objectives, there can be no guarantee that our risk management activities will mitigate or brvent these or other risks from occurring.

In addition to the above structure, other key risk governance and oversight committees include the following:

CFO Committee has an oversight on the treasury related risks. This committee comprises of Group CFO, Deputy CFO, business CFOs, Group Treasury Head and Treasury Heads at respective businesses Group Capex Sub-Committee which evaluates the risks while reviewing any capital investment decisions as well as institutes a risk management framework in expansion projects Vedanta Board Level Sustainability Committee looks at sustainability related risks. This Committee is headed by a non- Executive Director and has Group CEO and other business leaders as its members.

The Board with the assistance of management has carried out a robust assessment of the principal risks and uncertainties of the Group (including those that threaten the business model, future performance, solvency or liquidity) and tested the financial plans for the Group for each of the principal risks and uncertainties mentioned below