Vedanta Carin Deal - Acquisition of a Controlling stake in ... Sep 2011 (including Cairn) in $ mn...

Completion of Acquisition of a Controlling Stake in

Cairn India Ltd.

8 December 2011

Cautionary Statement and Disclaimer

The views expressed here may contain information derived from publicly available sources that have not been

independently verified.

No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this

information. Any forward looking information in this presentation including, without limitation, any tables, charts

and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. This

presentation should not be relied upon as a recommendation or forecast by Vedanta Resources plc ("Vedanta").

Past performance of Vedanta cannot be relied upon as a guide to future performance.

This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In

this context, forward-looking statements often address our expected future business and financial performance,

and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–

looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties

arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in

interest and or exchange rates and metal prices; from future integration of acquired businesses; and from

numerous other matters of national, regional and global scale, including those of a environmental, climatic, natural,

political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future

results to be materially different that those expressed in our forward-looking statements. We do not undertake to

update our forward-looking statements.

This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of

an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or any

of its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shall

this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection

with, any contract or investment decision.

2ACQUISITION OF A CONTROLLING STAKE IN CAIRN INDIA LTD. (8 DEC 2011)

Highlights

� Acquired 58.5% of Cairn India Ltd. for a total consideration of $8.67bn

− Acquisition completed on 8 December 2011

− 38.5% stake held by Vedanta plc and 20% stake held by Sesa Goa

− Acquisition funded c. 50% from own resources and balance c. 50% from acquisition debt

� Cairn India – largest private crude producer in India (>20% of India’s production)

− World class assets at Rajasthan (>6.5 bn boe in place, with substantial upside)

− Low cost operations at Rajasthan and potential to produce 240,000 bopd

− Recent exploration success in Sri Lanka− Recent exploration success in Sri Lanka

− Strong, experienced management team

− Enhances and diversifies Vedanta’s strong growth pipeline

� “Two major investment decisions made by major companies BP and Vedanta ... have re-

established faith in the hydrocarbon potential in India”

− Mr Jaipal Reddy, Minister of Petroleum and Natural Gas on 5 Dec 2011 at World Petroleum Congress


Notes: All % shareholding in Cairn India is on a fully diluted basis

Transaction immediately earnings accretive

Aluminium3%

Copper15%

Oil & Gas¹35%

Power2%

EBITDA Growth and Diversification

H1 FY2011 H1 FY2012Proforma H1 FY2012

with Cairn India

Aluminium5%

Copper24%

Iron Ore18%

Power3%Aluminium

11%

Copper21%

Iron Ore32%

Power2%

Zinc-India25%

Zinc-Int.8%

Iron Ore12%

EBITDA: $1.3bn EBITDA: $1.7bn EBITDA: $2.6bn

Notes: 1. EBITDA from Cairn India before exceptional items and foreign exchange gains


Zinc-India38%

Zinc-Int.12%

Zinc-India34%

Cairn Acquisition Funding

Consideration ($bn)

20% stake acquired by Sesa Goa 2.88

38.5% stake acquired by Vedanta plc 5.79

Total Consideration 8.67

Funding

Sesa Goa – Own resources 2.88

Sr. Secured Bank Term Loan - Tranche A (18 months) 1.47


Sr. Secured Bank Term Loan - Tranche A (18 months)

Sr. Secured Bank Term Loan - Tranche B (36 months) 1.31

Bonds (Maturing 2016 and 2021) 1.65

Own Cash 1.36

Bridge to Equity – never drawn, cancelled -

Vedanta plc – Total 5.79

Total Funding 8.67

c. 50% Funding from own resources and balance c. 50% from acquisition debt

Credit Metrics

Credit Metrics FY2011LTM H1 FY2012

ProformaLTM H1 FY2012 (incl. Cairn) Covenant

Net Debt/EBITDA 0.55 x 1.82 x 1.64 x < 2.75 x

Proforma 30 Sep 2011 (including Cairn) in $ mn DebtCash and Liquid Investments Net Debt

Vedanta plc 9,127 178 8,949

Vedanta Consolidated 16,620 6,438 10,182


Net Debt/EBITDA 0.55 x 1.82 x 1.64 x < 2.75 x

EBITDA/Gross Interest Expense1 5.0 x 4.3 x 5.29 x > 4.0 x

Net Assets/Debt 2.61 x 2.05 x 2.43 x > 1.75 x

Gearing2 13% 37% 36%

Notes: 1. Interest includes Capitalized Interest

2. Gearing is calculated as Net Debt divided by the sum of Net Debt and Equity

Cairn India – A World Class Asset Base

Cambay (CB/OSCambay (CB/OSCambay (CB/OSCambay (CB/OS----2)2)2)2)

Cairn (Operator) 40%

ONGC 50%

Rajasthan (RJRajasthan (RJRajasthan (RJRajasthan (RJ----ONONONON----90/1)90/1)90/1)90/1)

Cairn (Operator) 70%

ONGC 30%

Production Blocks Exploration Potential

East CoastEast CoastEast CoastEast Coast

KG-DWN-98/2 WI 10%

KG-ONN-2003/1 WI 49%

PKGM-1 (Ravva) WI 22.5%

KG-OSN-2009/3*

WI 100%

RajasthanRajasthanRajasthanRajasthan

RJ-ON-90/1 WI 70%

10 blocks in the Portfolio


ONGC 50%

Tata Petrodyne 10%

Ravva (PKGMRavva (PKGMRavva (PKGMRavva (PKGM----1)1)1)1)

Cairn (Operator) 22.5%

ONGC 40%

Videocon 25%

Ravva Oil 12.5%

Sri LankaSri LankaSri LankaSri Lanka

SL 2007-01-001 WI 100%

PR-OSN-2004/1* WI 35%

West CoastWest CoastWest CoastWest Coast

CB/OS-2 WI 40%

KK-DWN-2004/1 WI 40%

MB-DWN-2009/1*

WI 100%

Q2 FY 2011-12: Average Daily Gross operated production at 169,944 boe;

Cairn (Working Interest) at 99,220 boe

* Under Force Majure

Financial HighlightsFinancial HighlightsFinancial HighlightsFinancial Highlights

165

174

161

172

170

68

74

92

104

100

0 50 100 150 200

Q2 FY11

Q3 FY11

Q4 FY11

Q1 FY12

Q2 FY12

Price Realization (USD/boe) Gross Production (Kbopd)

577

691

808

830

578

0 200 400 600 800

Revenue

USD Million

341

448

543

610

461

0 200 400 600 800

Q2 FY11

Q3 FY11

Q4 FY11

Q1 FY12

Q2 …

PAT

USD Million

337

455

577

576

428

0 200 400 600 800

Cash Flow from Operations

USD Million

*PAT and CFFO are without adjusting one time exceptional item of past Rajasthan royalty costs

Net Cash as on 30 September 2011 was USD 1,458 million

ACQUISITION OF A CONTROLLING STAKE IN CAIRN INDIA LTD. (8 DEC 2011)

Rajasthan Update

� Mangala production ~125,000 bopd; reservoir

performance as per expectations

� Produced and sold >60 mmbbls of crude to

Indian refiners; gross cumulative field

revenue in excess of USD 5 billion to date

� Bhagyam ready to commence production,

subject to GoI approval

� Expect to exit FY 2011-12 at 175,000bopd

with the support of JV and GoITotal Pipe Diameter

790 mm (32”)

MPT

Pipeline

with the support of JV and GoI

� Development of Aishwariya underway; plan to

commence production in H2 CY 2012, subject

to JV and GoI approval

� Significant part of currently envisaged basin

potential of 240,000 bopd to be met from

MBA fields

� Augmentation of processing capacity and

pipeline infrastructure to deliver currently

envisaged basin potential in CY 2013


790 mm (32”)

Poly Urethane

Foam

Insulation

Heat Tube

High Density

Polyethylene Wrap

Notes: Data as per 20 Oct 2011 press release of Cairn India Ltd

Rajasthan Royalty

� Payable at 20% of the post well-head value of the crude oil produced (on an ex-royalty basis);

translates to ~15% of the sale value

� Post the acceptance of pre conditions royalty becomes part of the contract cost for the cost

recovery purpose and the calculation of profit petroleum

� The cost recoverability is effective on a retrospective basis since the production startup

� Cairn India has taken the impact of total past royalty in its Q2 FY 2011-12 financial results


� Cairn India has taken the impact of total past royalty in its Q2 FY 2011-12 financial results

Q2 FY 2011-12PAT

(USD million)EPS

(INR/share)

Including net Q2 FY 2011-12 Rajasthan royalty estimate adjustment

461 11.13

Net Rajasthan royalty one-time estimate up to Q1 FY2011-12 (net of Profit Petroleum)

294

Reported 167 4.01

Rajasthan - Future Resource And Value Potential

Gross

Initial

In Place

Volumes

20 additional20 additional20 additional20 additional

discovereddiscovereddiscovereddiscovered

fields including fields including fields including fields including

Barmer HillBarmer HillBarmer HillBarmer Hill

~4 Billion boe~4 Billion boe~4 Billion boe~4 Billion boe

~6.5 Billion boe~6.5 Billion boe~6.5 Billion boe~6.5 Billion boe

ContingentIn Place

In Place

Prospective

Most Likely

GasGasGasGas

GIIP GIIP GIIP GIIP

OilOilOilOil

STOIIPSTOIIPSTOIIPSTOIIP

R & S 12R & S 12R & S 12R & S 12

707707707707MBA MBA MBA MBA EOREOREOREOR

308308308308

140140140140

BHBHBHBH+ Others+ Others+ Others+ Others

Risked

Prospective

Resource

250250250250

~2.5 Billion boe in~2.5 Billion boe in~2.5 Billion boe in~2.5 Billion boe in

35+ prospects35+ prospects35+ prospects35+ prospects

Gross Reserves,

Resources1111 and

Potential2222

1111 The independent estimates of Reserves and Contingent Resources recently carried out by D&M are in line with the CIL estimates


Notes: Data as per 23 Mar 2010 press release of Cairn India Ltd

mmbblsmmbblsmmbblsmmbblsmmbblsmmbblsmmbblsmmbbls

MBA Fields,MBA Fields,MBA Fields,MBA Fields,

Raageshwari Raageshwari Raageshwari Raageshwari

and and and and

SaraswatiSaraswatiSaraswatiSaraswati

FDP FDP FDP FDP

approvedapprovedapprovedapproved

2.1 Billion boe2.1 Billion boe2.1 Billion boe2.1 Billion boe

MBAMBAMBAMBASTOIIPSTOIIPSTOIIPSTOIIP

R & S STOIIP

1,2931,2931,2931,293

MMMM

468468468468

BBBB

293293293293

AAAA

78787878

R & SR & SR & SR & SContingentContingentContingentContingent

ResourceResourceResourceResource

R & S 12R & S 12R & S 12R & S 12

MMMM477477477477

BBBB151151151151

A 66A 66A 66A 66

2P+2C2P+2C2P+2C2P+2C MBA EORMBA EORMBA EORMBA EORBarmer HillBarmer HillBarmer HillBarmer Hill

+Other Fields+Other Fields+Other Fields+Other Fields

RiskedRiskedRiskedRisked

Prospects, Prospects, Prospects, Prospects,

Leads & Leads & Leads & Leads &

ConceptsConceptsConceptsConcepts

in line with the CIL estimates

2222 Top 35 prospects audited by D&M risked resource 178 mmbbls

Exploration Programme

KG-ONN-2003/1

Nagayalanka-1Z discovery; Phase II Exploration & Appraisal well drilling in

progress

RJ-ON-90/1

Assessing new plays, generate new prospects

� Major long term player

� Large proprietary database

� Experienced team

� Successful exploration over

10 years: Success ratio

~50%

� Play based approach to building portfolio

� Diversity of basin, plays and environments

� Ongoing regional petroleum system studies

� “Drill Bit exploration”: >190 exploratory

/appraisal wells


RAVVAInfill drilling completed

progress

PR-OSN-2004/1

Under Force Majeure

SL-2007-01-0013 exploration well program: 1st & 2nd wells encountered

hydrocarbons, 3rd well drilling in progress

SRI LANKA

KK-DWN-2004/1

Acquired 300 km2 3D;data processing in

progress

NON-OPERATED

OPERATED

I N D I AI N D I AI N D I AI N D I AMB-DWN-2009/1

Under Force Majeure

KG-DWN-98/2

3 appraisal wells drilled

KG-OSN-2009/3

Under Force Majeure

Exploration - Sri Lanka Block (SL 2007-01-001)

� Cairn Lanka 100% Working Interest (NOC

back-in 15%)

− Cairn India’s first overseas venture

− Block Area: ~3,000 km2

− Water depth: 400 -1,900m

� Under explored, frontier basin with multiple

plays

India

� Exploration Program

− 3 well drilling campaign commenced in

August 2011

− Successive discoveries in the two

exploration wells drilled

− Establishment of working hydrocarbon

system in the basin

− 3rd exploration well drilling in progress


SRI LANKA

50km

SLSLSLSL----2007200720072007----01010101----001001001001

Summary

� Immediately earnings accretive

� World class asset and management team

� Common operating philosophy – focus on delivery and costs

� Maintain strong credit metrics – funded through c.50% own resources and c.50% debt

� Unique opportunity to create value - enhances and diversifies Vedanta’s strong growth profile


Appendix

The Transaction

Description Date Sesa Goa Vedanta plc Total

Purchase from Petronas 19-Apr 10.4% - 10.4%

Open Offer 30-Apr 8.1% - 8.1%

Purchase from Cairn Energy 12-Jul - 10.0% 10.0%

Purchase from Cairn Energy 7-Dec 1.5% 28.5% 30.0%

Total 20.0% 38.5% 58.5%


Total 20.0% 38.5% 58.5%

Notes: All % shareholding in Cairn India is on a fully diluted basis

Accounting Treatment

� Associate Accounting for Vedanta: 11-Jul to 7-Dec

� Accounting from 8-Dec:

− Consolidation by Vedanta

− Associate Accounting by Sesa Goa

1.3

5.9

Debt at Vedanta Plc

Debt at Subsidiaries

Proforma Addn Debt at VED plc for Cairn Acquisition

Debt Maturity Profile

� $5.9bn of cash and liquid investments as of 30 Sep

� FY2012 maturities largely tied up

� Credit ratings of BB/Ba2/BB1

Debt Maturity Profile2

(in $bn)

1.0 0.5 0.1 0.2

4.6

2.4

1.5

0.40.9

0.1

1.5 1.3

2.42.8

2.32.6

0.3

FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 and later³


Notes: 1. Issue credit Ratings as per S&P, Moody’s and Fitch respectively

2. Maturity Profile as of September 30, 2011

3. Convertibles at Vedanta plc of $1,250 million due in FY2017 (with a put option in FY2015) is included at book value of $988mn

Convertibles of $883 million due in FY2017 (with a put option in FY2013) is included at book value of $666mn

Vedanta Group Structure

Konkola Copper

Mines (KCM)

54.6%

Vedanta Resources(Listed on LSE)

Madras Aluminium (MALCO)

94.8%70.5%

29.5% Sterlite Industries(Listed on BSE, NSE and NYSE)

VedantaAluminium

(VAL)

79.4%

Sesa Goa (Listed on BSE

and NSE)

55.1%

3.6% Cairn India Ltd(Listed on BSE

and NSE)

38.5%1

20%1


Notes: 1 On a fully diluted basis

Structure as at 30 September 2011 updated for Completion of Acquisition of a Controlling Stake in Cairn India Ltd.

Zinc-IndiaCopperAluminium Iron ore Power

KEY

51.0% 100%64.9%

Zinc-India(HZL)(Listed on BSE

and NSE)

AustralianCopper Mines

Bharat Aluminium (BALCO)

Sterlite Energy

100% 51%

Skorpion and Lisheen

Black Mountain

100% 74%

Zinc-International

Liberia Iron Ore Assets

Vedanta Carin Deal - Acquisition of a Controlling stake in ... Sep 2011 (including Cairn) in $ mn...

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