Vedanta Resources plc FY 2016 Interim Results€¦ · VEDANTA RESOURCES PLC - FY2016 INTERIM...

Vedanta Resources plcFY 2016 Interim Results

4 November 2015

VEDANTA RESOURCES PLC - FY2016 INTERIM RESULTS PRESENTATION

Cautionary Statement and Disclaimer

The views expressed here may contain information derived from publicly available sources that have not been independentlyverified.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, hasbeen prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not berelied upon as a recommendation or forecast by Vedanta Resources plc and Vedanta Limited (formerly known as SesaSterlite Ltd.) and any of their subsidiaries. Past performance of Vedanta Resources plc and Vedanta Limited (formerly knownas Sesa Sterlite Ltd.) and any of their subsidiaries 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 thiscontext, forward-looking statements often address our expected future business and financial performance, and oftencontain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward–looking statements bytheir nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour offinancial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metalprices; from future integration of acquired businesses; and from numerous other matters of national, regional and globalscale, 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. We caution you that reliance on anyforward-looking statement involves risk and uncertainties, and that, although we believe that the assumption on which ourforward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate and, as aresult, the forward-looking statement based on those assumptions could be materially incorrect.This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offerto purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta Resources plc andVedanta Limited (formerly known as Sesa Sterlite Ltd) and any of their subsidiaries or undertakings or any other invitationor inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distributionform the basis of, or be relied on in connection with, any contract or investment decision.

2

OverviewAnil Agarwal

Executive Chairman

Strategic UpdateTom Albanese

Chief Executive Officer


Talwandi Sabo attempted a world record for planting 200,000saplings in an hour

Safety and Sustainability

5

Safety 7 fatalities in H1 FY2016 LTIFR for H1 at 0.55 compared to 0.46 in FY2015, higher

due to shift to ICMM 2014 Health & Safety methodology:restricted injuries considered as LTI unlike earlier

Focus on bringing in a culture of Zero-Harm Formal risk assessments carried out for critical risk

events at Aluminium, Zinc – India and Oil & Gas Roll out of standards to eliminate fatalities in progress

Environment Implementation of Biodiversity Management Plan in progress Continued implementation of Waste to Wealth approach: Red

Mud, Fly Ash and Gypsum projects Water and Energy savings– Process Innovation and

technological interventions Completed internal sustainability risk assessment for FY 2015

through Vedanta Sustainability Assurance Programme (VSAP)

Society Supporting UN -Women Empowerment Principles and

Sustainable Development Goals Strengthening social “license to operate” by doing community

projects as per need assessment Social impact assessment completed for Zinc India & Oil &

Gas 120+ government and non-government partnerships in place

20 19

8 7

FY2013 FY2014 FY2015 H1 FY2016

Fatal Incidents


H1 FY2016 Results Highlights

6

Strong Operational Performance Zinc-India: Strong mined and refined metal production;

integrated silver production up 50%; U/G mine ramping up Oil & Gas: Q2 production up 6% & H1 in line with guidance Aluminium: Stable volumes from existing smelters; cost

reduction initiatives in progress; further pots at Jharsuguda–IIsmelter to commence ramp up in Q3

Copper India: Stable operations at 96% capacity utilization Copper Zambia: Higher integrated metal production; lower

cost of production Iron Ore: Mining commenced in Goa, 1st export shipment

made in October Power: TSPL Unit-I achieved 71% availability; Unit-II

commissioning activities commenced, to be synchronized in Q3

Financial: Strong free cash flow EBITDA of US$1.3 bn, adjusted EBITDA margin 30%2

Free cash flow post capex of US$1.3 bn supporting strongsubsidiary dividends

Underlying Attributable Profit of US$(159) mn3, underlyingEPS of Usc (57.6) 3

Gross Debt reduced by $200 mn and Net Debt reduced by$0.9 bn in H1

No interim dividend in light of current market volatility, boardto review at year-end

Corporate Cairn India merger: Indian stock exchange approvals

received, further steps in progress FY 2016 maturities refinanced at Vedanta plc, progressing on

refinancing FY 2017 maturities

Commodity Prices and EBITDA Margins

H1 FY2015 H1 FY2016

$/ tonne unlessotherwise indicated

Commodityprice

Margin(%)

Commodityprice

Margin(%)

Oil & Gas ($/bbl) 106 72% 56 49%

Zinc India 2,196 50% 2,013 51%

Zinc Intl. 30% 23%

Aluminium 1,896 18% 1,675 3%

Power 35% 27%

Iron Ore1 62 16% 39 5%

Copper Zambia 6,894 3% 5,639 (5)%4

Group- Adjusted2 43% 30%

Notes:1. Mysteel Iron Ore Index Prices for 56% Fe FoB India.2. Excludes custom smelting at Copper and Zinc India operations.3. Based on profit for the period after excluding special items and other gains and losses, and their resultant tax and minority interest effects.4. Includes impact of Kwacha depreciation on VAT receivables; margin would be positive 5% excluding this.


Taking measures to maximise cash flows and deleverage

Positive FCF at each segment is a top priority

Strong focus on opex Cost in 1st/2nd quartile of the global cost curve across all major businesses Cost restructuring and optimisation at all businesses: Group-wide assessment completed, continued planning &

evaluation in progress and simultaneous implementation underway Significant reduction in C1 cost at Copper-Zambia despite power shortages

Ready to restructure operations to protect free cash flows BALCO rolled product facility temporarily shut One stream at Lanjigarh alumina refinery temporarily shut

Optimising capex for returns at lower commodity price assumptions Reduced FY 2016 capex guidance by 30% Gamsberg: Rephased FY2016 capex, and reduced overall project capex by $100mn

Disciplined approach towards ramp up Jharsuguda-II ramp-up to commence in Q3 FY2016 TSPL Unit-II under commissioning; Unit-III to follow Goa iron ore mining re-commenced, first export shipment made in October BALCO 325kt further ramp-up deferred until costs lowered

7

Achieved c.$200mn of opex, capex, and marketing savings;

reduced net debt by c. $0.9 bn in H1 FY2016


0

500

1,000

1,500

2,000

2,500

3,000

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12PF² FY13 FY14 FY15 NearTerm

Cop

per

Eq

uiv

alen

t P

rod

uct

ion

(kt

)

Zinc-Lead Silver Copper Aluminium Power Iron Ore Oil & Gas

+66%

Well-invested assets to deliver near-term growth with minimal capex

8

FY2016 capex guidance reduced from $1bn to $0.7bn, FY2017 capex at $1bn

8%1

16%

42%

2%

15%

10%

6%

Contribution to copperequivalent production

growth (%)

All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using average commodity prices for FY2015. Power rebased using FY2015realisations, copper custom smelting capacities rebased at TC/RC for FY2015, iron ore volumes refers to sales with prices rebased at average 56/58% FOB prices for FY2015.1. Based on O&G announced capex.

Total Production (copper equivalent kt)

Near Term


India: Macro and Regulatory Update

9

Strong Macroeconomic Indicators India is the fastest growing major economy (IMF) India was no.1 FDI destination in H1 CY2015 (EY) Capital inflows of US$31 bn in H1 CY2015

Lower inflation, lower energy costs and further interest ratecuts to fuel economic growth

Vedanta – Regulatory Updates Iron Ore: Mining re-commenced in Goa, first export shipment

in Oct Working with government to resolve:

Removal of export duty and Duplication of taxes (GoaPermanent Fund and DMF)

EC limits/mining cap enhancements MMRDA Act passed: Provides for auction of natural resources District Mineral Foundation (DMF) at 30% of royalty, and

National Mineral Exploration Trust at 2% of royalty forexisting mines

Strong incentive for state government given auctionrevenue + DMF + 80% Royalty goes to the states

A total of 185 mining blocks identified 71 mining blocks up for the first phase of auctions

expected in November 2015 O&G: Revenue sharing regime replacing production sharing

model for the auctioning of 69 marginal O&G fields

90

100

110

120

130

140

150

160

2015 2016 2017 2018 2019 2020

World Brazil China

Russia South Africa India

Indian GDP to grow 44% by 2020,highest among the BRICS

Source: IMF estimates as of October 2015


Strategic Priorities Remain Unchanged

10

Production Growth and Asset optimisation− Disciplined approach towards ramp up: positive FCF at each segment a top priority

Deliver the Balance Sheet− Optimising opex and capex to maximise cash flows− Deliver cost and marketing savings of US$1.3bn− Reduce net gearing and efficiently refinance upcoming maturities

Identify next generation of Resources− Disciplined approach towards exploration

Simplification of the Group structure− Merger with Cairn India improves our ability to allocate capital to highest return projects− Pursue further simplification

Protect and preserve our License to Operate− Achieve zero harm− Obtain local consent prior to accessing resources

Financial UpdateD.D. Jalan

Chief Financial officer


Financial Highlights

EBITDA at $1.3 bn down 39%, due to lower commodity prices partly offset by higher volume and lower costs Net debt reduced by $1.5 bn over 1 year, driven by strong focus on FCF and working capital initiatives Underlying attributable PAT and EPS impacted by lower EBITDA No interim dividend in light of current market volatility, board to review at year-end

12

$mn or as stated H1 FY2015 H1 FY2016 Change

EBITDA 2,105 1,286 (39)%Adjusted EBITDA margin1 (%) 43% 30%

Free Cash Flow before Growth Capex 986 1,728 75%

Growth Capex 821 432 (47)%

Free Cash Flow after Growth Capex 165 1,296 NA

Gross Debt 17,234 16,451 (5)%

Net Debt 9,055 7,536 (17)%

Gearing (%)2 34.9% 40.3%

Net Debt/EBITDA (LTM) 2.1 2.6

Underlying Attributable PAT3 26 (159)

Underlying EPS (USc/share)3 9.4 (57.6)Total Dividend (USc/share) 23 - -

Notes:1. Excludes custom smelting at Copper and Zinc-India operations.2. Gearing moves higher for H1 FY2016 post $4.6 bn impairment (net of taxes) in March 2015.3. Based on profit for the period after excluding special items and other gains and losses, and their resultant tax and minority interest effects.


816

43

205

153

95

2,105

817

1,286

(1,032)

(203)

(105)

EBITDAH1 FY2015

Comm.price /Premiums

InputCommoditydeflation

Currency Regulatory ProfitPetroleum

Adjusted EBITDA

Volume CostInitiative

Marketing Initiative

Others¹ EBITDAH1 FY2016

EBITDA Bridge

H1 FY2016 vs. H1 FY2015 ($mn)

Market & Regulatory$(1,289) mn

Operational$470 mn

Primarily RPO,royalty, electricityduty & energy cess

Primarily ZincIndia, TSPL and

Copper India

13

Notes:1. Others includes one-off of $41m, technology, prior period items, & allied business

Lower premiumsc.$(200) mn

(1,032)


Cost Savings and Marketing Initiatives

Announced c.$1.3 bn savings program over 4 years in March 2015 $800 mn in cost and $500 mn in marketing

Program commenced in Q4 FY 2015 c. $400 mn in FY2016 Realized $191 mn in H1 FY2016: $153 mn in cost, $17 mn in marketing and $21 mn in eliminated

capex Cost and marketing savings exclude: Input commodity deflation/inflation Impact of regulatory changes Technology-related cost changes Capex deferrals

14

Continued Planning & Evaluation: In Progress

Simultaneous execution underwayGroup-wide Assessment: Completed

Performance Management and Change Management

Approach


(1,240)

(574)

8,460

87

432277 94 7,536

Opening Net Debt(1 Apr 2015)

Operational cashflows

Debtors cash cycle² Sustaining Capex Project Capex Shareholder andMinority Dividends

Translation andOthers

Closing Net Debt(30 Sept 2015)

Net Debt Reduction in H1

H1 FY2016 ($mn)

EBITDA: 1,286WC1: 324Net Interest: (244)Tax & Others : (125)

15

Notes:1. One time benefits and timing; likely to unwind.2. Debtors Initiative: Advance on sales, factoring without recourse, to continue through the year.


1.1

0.2 0.10.5

0.2

0.1 0.1

0.4

0.3

0.1 0.1

0.1

1.5

2.6

0.4

1.7

0.3

1.0

FY2015 H1 FY2016 H2 2016e FY2017e

Oil & Gas Capex¹ Zinc Capex M&M Capex² Free Cash Flow³ Free Cash Flow post growth Capex

Optimising Capex to drive Cash Flow Generation

Free cash flow post growth capex higher at $1.3bn despite lower commodity prices Prioritising capital to high-return, low-risk projects, to maximise cash flows: Further cut in FY2016 capex to $0.7bn from

$1.0bn Oil & Gas

FY2016 capex further revised to $0.3bn from $0.5bn FY2017 capex at $0.5bn

Gamsberg project rephased based on modular approach FY2016 capex revised to c.$40mn from c.$80mn FY2017 capex in the range of $60mn to $100m

16

FY2016 capex further reduced to $0.7bn

Cash Flow and Growth Capex Profile - $bn

FY 2015 H1 FY2016 H2 FY2016e FY 2017e

Notes:1. Capex net to Cairn India; subject to Government of India approval; O&G refers to Oil & Gas.2. M&M refers to Metals and Mining and Power, excludes Zinc.3. Free Cash Flow after sustaining capex but before growth Capex.

1.1

1.3


Income Statement

17

Depreciation Lower on account of useful life revision in metals and

mining assets w.e.f 1st Oct 2014

Amortisation Lower on account of lower base, post impairment

Interest Expense Lower due to refinancing at lower rates and lower gross

debt, partly offset by capitalization of new capacities atBALCO & Talwandi Sabo

Investment Revenue Lower compared to H1 FY2015 primarily due to lower

interest rates and mark to market gains in H1 FY2015

Tax Expense Higher effective tax rates at HZL & Cairn India Deferred tax charge ($174 mn) at Copper Zambia due

to change in legislation (not included in U/L PAT)

$mn or as statedH1

FY2015H1

FY2016

EBITDA 2,105 1,286Depreciation (688) (558)

Amortisation (387) (150)

EBIT 1,030 578

Interest Expense (743) (639)

Investment Revenues 444 373

Special Items, FX & Emb. Derivative MTM (92) (68)

Profit Before Tax 640 244

(Tax Expense)/ Tax Credit (145) (397)

Effective Tax Rate1 23% 92%

PAT 494 (154)

Attributable PAT (13) (325)Minorities % 103% NA

Underlying PAT 569 78

Underlying Attributable PAT 26 (159)

Underlying Minorities %2 95% NANotes:1. Excluding special items.2. Excluding special items, FX and embedded derivatives.


Strong Financial Profile

Credit rating of B+/Ba31 Cash and Liquid Investments of $8.9bn, additional $0.7bn undrawn committed lines of credit FY2016 Maturities Vedanta Plc: $0.4bn refinancing in place Subsidiaries: $0.5bn term loans committed, $0.9bn term loans approved in-principle

FY2017 Vedanta plc Maturities: $0.7-0.9bn: Term Loan proposals in final stages of discussion $1.1-1.3bn: Part repayment of $2.6bn inter-company loan from Vedanta Ltd.

18

Term Debt Maturity Profile 2 (as of 30 September 2015)

0.4

2.01.0

2.6

0.3

1.91.6

1.1

1.7

1.7

0.6

1.22.0

3.22.6

4.3

0.9

3.1

FY2016 FY2017 FY2018 FY2019 FY2020 FY2021 and later

Debt at VED Plc Term Debt at Subsidiaries

Notes:1. Issue Credit rating of B+ (negative outlook) by S&P (revised in October 2015) and Ba3(Negative) by Moody’s.2. Debt numbers shown at face value, exclude one-year rolling working capital facilities of $522mn due in FY 2016.


Focus on reducing net debt and maximising free cash flows

19

Net Debtreduced by $1.5bn

over 1 year

Cash & LiquidInvestments

$8.9 bnFree cash flow

$1.3bn in H1

Optimising opex and capex Cost in 1st/2nd quartile of the cost curve across major businesses FY2016 capex further reduced by $300 mn from $1 bn announced earlier Improved capacity utilisation on invested assets Reviewing high cost operations: Rolled product facility at Balco temporarily shut, Lanjigarh refinery down-sized

Reduction of Net Debt and strong liquidity Reduced net debt by 11% in H1 Reduction of working capital Maintained strong liquidity

Deliver c.$1.3 bn cost savings Delivered $191 mn cost and marketing savings in H1 Target to deliver c. $200 mn in H2 FY2016

Business ReviewTom Albanese

Chief Executive Officer


Fracking operations at RJ Block, Rajasthan

Central Polymer Facility, Rajasthan

Oil & Gas

21

Results Q2 production up 6% YoY and H1 production in line with guidance

Rajasthan production 3% higher at 168,126 boepd Ravva & Cambay production 19% higher at 37,236 boepd

Gas production from Raag Deep Gas (RDG) field increased to30mmscfd in Q2 from 19 mmscfd in Q1, recording a peak of 34mmscfd

Rajasthan water flood opex remained low at $5.5/boe in H1 Well cost cut by c.15%: Realized better cost efficiency for drilling &

completion of wells at Barmer Hill tight reservoir formation over 1 year Procurement savings of c.13% driven by negotiations & leveraging the

lower service costs

Growth projects Mangala EOR program in full swing: Polymer injection ramped up from

80,000 blpd to 200,000 blpd QoQ; 75% of the planned wells drilled Raag Deep Gas Development: Signed an agreement with GSPL for

pipeline, reduces capex by c.$100mn Significant progress made on key projects:

Aishwariya Infill – 6 new wells brought online increasing wellcount to 12 wells, balance 8 wells will be online in H2

Bhagyam EOR- Contracts awarded for FEED, tendering started forrigs, drilling

Aishwariya Barmer Hill- FDP will be submitted to the JV partnershortly

Outlook Rajasthan FY2016 production expected to remain stable at y-o-y level Routine maintenance shutdown planned at MPT in Q3, rescheduled to

Q1FY2017 FY2016 net capex guidance reduced from $500mn to $300mn


Rampura Agucha Mine Isometric

Zinc India

22

Results Strong mined and refined metal production

Record quarterly integrated saleable lead & silver production inQ2

Maintained lowest quartile cost position; H1 Zinc CoP lower by 13%at $788/t DMF contribution notified at 30% w.e.f 12 January 2015:

Earlier excess provision of $22 mn reversed in H1

Projects RAM U/G main shaft sunk to 850m out of 950m; mine development

rate at c.1000 meters per month SK mine expansion to 3.75mtpa progressing ahead of schedule:

capacity to reach 3mtpa by end FY2016 Extension of RAM open pit : Environmental clearance received, pre-

stripping underway Substantial production from RAM U/G ramp in H2FY2016

Outlook Significant zinc capacity to go offline globally

Century (500 ktpa) closed in September and Lisheen (160ktpa) to close in November

c.4% of global mined zinc production to reduce by recentlyannounced closures

FY 2016 mined and refined volumes expected to be higher thanFY2015

Silver production expected at 350-400 tonnes (11-13 mn oz.) withhigher grades & volumes at SK mine

RA Underground Mine Development(in meters per month)

0

200

400

600

800

1,000

1,200

Sep 2014 Dec 2014 Mar 2015 Jun 2015 Sep 2015


Blast haul drilling at the greater Gamsberg area

Zinc International

23

Results Production of 133 kt in line with guidance

Lower Lisheen production in line with closure plan; expected toend production in November 2015

Volumes impacted by partial industrial action and a planned30-day maintenance shutdown at Skorpion in Sept 15

COP at $1,439/t in line with guidance

Projects 250kt Gamsberg Project: Modular approach

Pre-stripping commenced in July 2015 and progressing in linewith re-phased plan

Flexibility to adjust pace of development depending on marketconditions: Assessing further re-phasing, which could lead to aslower than planned ramp-up

Skorpion Refinery conversion: Feasibility study ongoing, to becompleted by end FY2016

Skorpion Mine Life Extension: Pre-stripping activities underway toextend pit by 3 years

Capex: FY2016 reduced from $80 mn to c.$40 mn

Outlook FY2016 volume expected at c.220-230kt COP expected to remain at current levels of

c. $1450-$1500/t : cost savings initiatives underway

Production Break-up

31 31

72 60

6042

H1FY2015 H1FY2016

BMM Lisheen Skorpion

163

133


Mobile Fleet workshops Maintenance improvement 70% + availability

Waste management 950 level debottlenecking Remote control units

403

4

11 60

FY 2015 ShaftRemediation

Other pivotinitiative

Equipment FY 2016e

Current Production run rate 55ktpa

Copper – Zambia

24

Results and Initiatives Higher mined metal production at 62 kt and integrated finished

production at 60 kt in line with guidance Focus on ramping up production at Konkola

Shaft #1 resumed hoisting in Q1 FY2016 Improved partial hoisting capacity at Shaft #4, remediation to

complete in Q3 FY2016 Equipment utilization steadily improved from 56% in Q1 to

61% in Q2 Production at Nchanga affected by power interruptions and

throughput constraints at old east mill; reviewing options to reducecosts

TLP production stable at c.5kt per month of primary copper C1 costs at Usc 199/lb before one-time items (reported C1 cost of

USc 210/lb)

Regulatory Update Reduction in royalty rates from 20% to 9% for open pit and from

8% to 6% for underground w.e.f. 1st July 2015 with re-introductionof corporate tax

30% power cut announced by CEC Energy saving programmes underway High-cost imported power offered at additional price is unviable Engagement with CEC and government continues

VAT refunds: Receipt of VAT refunds commenced March 2015 Refund of past VAT outstandings under discussion

Integrated volumes and C1 cash costs

Konkola Production Ramp up (kt)

8.9 9.9 10.2 10.9 10.9 11.4

227

161

April May June July Aug Sept¹

C1 cash cost in U

S c/lb

Ave

rage

mon

thly

inte

grat

ed p

rodu

ctio

n(k

t)

Integrated Production (kt) C1 cash cost (US c/lb)

H1 avg.: 199c/lb

Notes:1. Sept C1 cash cost excluding impact of one-time items.


100 9584

72 73

Q2 FY2015 Q3 FY2015 Q4 FY2015 Q1 FY2016 Q2 FY2016

Spend Base - Indexed²

Notes:1. Includes $20 mn volume related absorption.2. Operational Spend base rebased with Q2 FY2015 as 100.3. Annualised.

Copper – Zambia (contd.)

25

Cost Reduction Initiatives driving turnaround Rigorous cost saving initiatives being implemented:

Reduction of power usage, fuel and chemicals consumption,and repair & maintenance costs

Power usage reduced by 5%, targeting 10% Dedicated team working on identified initiatives Realized $61mn1 savings in H1 FY2016 compared to H1 FY2015

Outlook Vision of 25-50 years of mining at world-class asset

Turnaround well underway, still work to be done FY2016 volumes and costs in line with earlier guidance

Production expected to be 190-210 kt with integratedproduction of 120-130 kt

C1 cash cost of c. USc 180/lb – USc 200/lb

Declining Trend of Spend Base

46 40 55

27 2419

56 5259

5352

60

181168

193190-210

FY2014 FY2015 Q2 FY2016³ FY 2016

Konkola Nchanga TLP Custom

Integrated120-130kt

Custom70-80kt

Volumes


Casting Machine at Jharsuguda

Aluminium

26

Results Stable volumes at 500kt Jharsuguda-I & 245kt Korba-I smelters Higher production of 541kt at Lanjigarh alumina refinery Aluminium COP at $1,668/t Jharsuguda COP at $1,598/t, down 5% due to lower prices for imported

alumina and coal, and INR depreciation BALCO COP at $1,722/t¹ lower due to currency depreciation, lower

alumina COP and power costs Ingot premium remained low; focus on value added products

Vedanta - pragmatic decisions in low price environment & lack ofcaptive bauxite:BALCO High cost rolled product facility shutdown; one time impact of c.$18 mn ($12

mn in H1), c.$10 mn annual savings from FY2017 High cost 270MW CPP on standby post start up of 300MW CPP in Q3 Start up of additional pots on hold until visibility of positive cash flowJharsuguda-II Ramp up of 1st line of 312kt to commence in Q3Lanjigarh Shut one of two streams to reduce fixed costs & capacity from 1mtpa to

c.800ktpa. COP was $299/t in Sept’15 as against $340/t in Q1 Decline in Alumina Price Index by 13% in H1 (avg price $315 in H1 over H1

exit of $273)

Outlook FY 2016 Production expected to be c.0.9 mn tonnes; H2 COP $1,500 –

1,550/t BALCO CPPs: 2 units of 300MW of the 1200 MW power plant: Generation to commence in Q3 & Q4

Commence production from laterite mines in FY2016 post receipt of ML

Aluminium Costs and Margins(in $/t, for H1 FY2016)

1,675160 75 1,910

158

(666)

(671)

(332)

(44) (38) (2)

LME IngotPremium

ValueAddition

TotalRealisation

AluminaCost

Power Cost Other HotMetalCosts

IngotConversion

Costs

ValueAddition -Conversion

Costs

Others² EBITDA

Value addedproduction at 47%

Reduction in seabornealumina prices to materiallyreduce alumina cost Q2 FY2016:

c.$99/t

Notes:1. COP pertaining to 245kt Korba I smelter.2. Excludes $45 million on account of Voluntary Retirement charge at BALCO and prior period reversal of Renewable power obligation.


Power

27

Results Jharsuguda 2400 MW: 40% PLF due to lower demand & softer

power rates TSPL: Unit-I availability of 86% in Q2 as per guidance, Unit-II

commissioning activities commenced, to be synchronized in Q3 300MW IPP unit of 1200MW plant at BALCO commenced

operations; Unit-II synchronized in October 2015

Outlook Jharsuguda 2400MW: PLF to increase as Jharsuguda-II aluminium

smelter ramps up in Q3 TSPL: Unit-I availability to be maintained at 80%, Unit-II

commissioning activities commenced, to be synchronized in Q3 Unit-II of 300MW at BALCO expected to be commissioned in Q3

Coal Outlook FY2016 est. coal requirement of 28 mt; 45 mt at full capacity Chotia coal block (1 mtpa) to commence mining in FY2016 Gare Palma IV/1: Filed writ petition in High Court Coal supply scenario

Coal available for IPPs with PPA; CPPs still facing shortages 8%-12% reduction in imported coal prices; import volumes

increased from 18% of coal mix in Q1 to 25% in Q2 E-auction prices for CPPs remain high: higher demand as

production yet to re-commence at auctioned mines

CaptivePower

c. 3 GW

Power Generation Capacity:c. 9 GW

80%commencedoperations

70%commencedoperations

41%

34%

25%

Linkage E-auction Imports

Q2 FY2016 Coal Mix (6 mt)

Landed Coal Cost - Indexed (Rs./t)¹

85

90

95

100

105

110

Q1 FY 2016 Jul'15 Aug'15 Sep'15

Linkage Auction Imports

Notes:1. For CPPs and IPPs at Jharsuguda, Lanjigarh and BALCO (Q1 FY2016 = 100).

CommercialPowerc.6 GW


Copper India

Hon. Chief Minister of Goaflags off Vedanta’s 1st shipment of Iron Ore in October

Tuticorin Smelter: Q2 production was impacted by maintenance shut down

90%+ utilisation going forward

Positioned in the lowest cost quartile

Strong TCRC outlook and acid realisation

Karnataka: Sales at 1.2million tonnes

Goa Approvals in place for production of 5.5mtpa saleable ore

Mining resumed in Q2 with first export shipment made on 19 Oct2015

Progressive ramp up of production in Q3 FY2016

Cost reduction initiatives being pursued

Working closely with Government to resolve:

Duplication of taxes: Goa Permanent Fund and DMF

Removal of export duty

EC limits/mining cap enhancements

Pig iron production at c.300kt impacted by planned maintenanceactivities

Other Assets: Iron Ore and Copper - India

Iron Ore

Copper India

28


Strategic Priorities Remain Unchanged

29

Production Growth and Asset optimisation− Disciplined approach towards ramp up: positive FCF at each segment a top priority

Deliver the Balance Sheet− Optimising opex and capex to maximise cash flows− Deliver cost and marketing savings of US$1.3bn− Reduce net gearing and efficiently refinance upcoming maturities

Identify next generation of Resources− Disciplined approach towards exploration

Simplification of the Group structure− Merger with Cairn India improves our ability to allocate capital to highest return projects− Pursue further simplification

Protect and preserve our License to Operate− Achieve zero harm− Obtain local consent prior to accessing resources

Appendix


Segment Wise Summary

Oil & Gas H1 FY2015 H1 FY2016

Average Daily Gross Operated

Production (boepd) 206,125 207,538

Rajasthan 173,158 170,164

Ravva 22,259 27,303

Cambay 10,708 10,071

Average Daily Working Interest

Production (boepd) 130,502 129,286

Rajasthan 121,211 119,115

Ravva 5,008 6,143

Cambay 4,283 4,028

Average Brent (US$/bbl) 105.7 56.0

Average realizations Oil & gas (US$/boe) 94.3 49.9

EBITDA ($mn) 1,012 374

Zinc-India H1 FY2015 H1 FY2016

Mined Metal (kt) 376 472

Refined Zinc – Integrated (kt) 312 398

Refined Lead – Integrated (kt)1 47 67

Saleable Silver – Integrated (moz)1 3.952 5.920

Average Zinc LME ($/t) 2,196 2,013

Zinc CoP2 ($/t) 906 788

EBITDA ($mn) 551 5821. Excludes captive consumption.2. Revenues from silver not credited to CoP and with IFRIC adjustment. Without IFRIC adjustment,

the COP was $944/t in H1 FY2015 and $787/t in H1 FY2016.

Zinc-International H1 FY2015 H1 FY2016

Mined Metal – Lisheen & BMM (kt) 103 91

- Lisheen 72 60

- BMM 31 31

Refined Zinc – Skorpion (kt) 60 42

Total Zinc-Lead Metal 163 133

CoP ($/t) 1,331 1,439

EBITDA ($mn) 93 57

31


Segment Wise Summary contd.

Copper-India/Australia H1 FY2015 H1 FY2016

Mined Metal – Australia (kt) - -

Copper Cathodes– India (kt) 166 193

Tuticorin Power Plant (mu) 319 293

Average Copper LME ($/t) 6,894 5,639

Copper Tc/Rc 20.0 24.1

Conversion cost – India (c/lb) 4.8 2.4

EBITDA ($mn) 110 170

Copper-Zambia H1 FY2015 H1 FY2016

Mined Metal (kt) 59 62

Finished Metal – Total (kt) 76 90

Integrated (kt) 56 60

Custom Smelting (kt) 20 30

Copper LME ($/t) 6,894 5,639

C1 Cash Cost – Integrated1 (USc/lb) 273 210

Total Cash Cost– Integrated2 (USc/lb) 356 274

EBITDA ($mn) 16 (24)

PAT ($mn)3 (77) (312)1. C1 cash cost, excludes royalty, logistics, depreciation, interest, sustaining capex.2. Total Cash Cost includes C1 cash cost, royalty, interest and sustaining capex.3. Includes special items – deferred tax charge of $174mn in H1 FY2016.

Aluminium H1 FY2015 H1 FY2016

Aluminium Production (kt) 424 464

Jharsuguda-I 270 262

Jharsuguda-II - 38

Korba-I 245kt 125 127

Korba-II 325kt 29 37

Aluminium LME ($/t) 1,896 1,675

Aluminium COP ($/t) 1,775 1,639

BALCO – I 1,964 1,722

Jharsuguda-I 1,688 1,598

Alumina Production (kt) 460 541

Alumina COP ($/t) 366 331

EBITDA ($mn) 180 22

32


Segment Wise Summary contd.

Iron Ore and Pig Iron H1 FY2015 H1 FY2016

Sales (mt) 1.1 1.2

Goa - -

Karnataka 1.1 1.2

Production 0.3 1.0

Goa - 0.0

Karnataka 0.3 1.0

Average Net Sales Realizations ($/t) 28.5 18.2

Pig iron - Production (kt) 300 320

Met coke – Production (kt) 250 248

EBITDA ($mn) 28 7

Power H1 FY2015 H1 FY2016

Power Sales (mu) 4,627 5,789

Jharsuguda 2,400MW 3,807 3,820

BALCO 270MW 71 128

BALCO 600MW - 158

MEL 433 320

Talwandi Sabo - 1,077

HZL Wind Power 316 286

Power Realisation (Rs/u)1 3.35 3.12

Power Cost of generation (Rs/u)1 2.09 2.21

EBITDA ($mn) 109 93

1. Excluding Talwandi Sabo.

33


Entity Wise Financials

($mn or as stated)VED plcConsol KCM

plcCos Elim

VED LtdConsol

VED Ltdstand-alone

CairnIndia HZL ZI BALCO CMT MEL TS TSMHL Others¹ Elim

Group Revenue 5,699 525 - (5) 5,179 2,350 755 1,168 244 370 - 30 92 - 455 (286)

EBITDA 1,286 (24) (2) 1 1,311 298 374 602 57 (40) (7) 9 24 (0) (5) 1

Depreciation (558) (95) (0) 1 (464) (72) (283) (50) (25) (15) (2) (0) (12) - (6) -

Amortisation (150) - - - (150) (6) (124) (12) (5) (2) (1) - - - - -

Operating Profit 578 (119) (2) 1 697 220 (33) 540 27 (57) (9) 8 12 (0) (11) 1

Investment Revenue 373 0 173 (161) 360 175 112 217 9 2 0 0 - 41 38 (234)

Finance Cost (639) (34) (262) 106 (448) (281) (5) (0) (2) (15) (0) (0) (21) (154) (27) 57

Other Net Gains / (Losses) - Net (68) - (2) - (66) (14) (34) - - (7) (2) 0 (9) - (1) -

Profit Before Taxation 244 (153) (93) (54) 545 101 41 757 34 (77) (12) 8 (17) (114) 0 (177)

Current Tax (206) (0) - (36) (170) (1) (9) (161) (4) - - (2) - - 6 -

Deferred Tax (191) (159) - 2 (34) 2 (60) 14 (0) 11 - - - - (1) (0)

Profit after tax (154) (312) (93) (88) 340 102 (29) 610 30 (66) (12) 6 (17) (114) 5 (177)

Attributable to equity holders (324) (248) (93) (88) 105 64 (11) 249 17 (21) (7) 4 (11) (231) 3 49

Underlying PAT (before non-controlling interests) 78 (139) (91) (88) 396 108 5 610 30 (61) (10) 6 (9) (114) 5 (177)

Underlying Attributable PAT (159) (110) (91) (88) 130 68 2 249 17 (20) (6) 4 (5) (71) 3 (111)

Property Plant and Equipment² 14,915 1,816 0 - 13,099 5,820 1,616 1,831 320 1,752 12 22 1,626 - 100 -

Mining Reserve 2,099 - - - 2,099 647 1,082 49 74 19 - - - - 228 -

Exploratory Assets 5,475 - - - 5,475 31 5,218 - - - - - - - 226 -

Notes:1. Includes Fujairah Gold, Sesa Resources Ltd, SMCL, VGCB, WCL and other Vedanta Ltd Investment companies.2. Includes Capital Work in Progress.

H1 FY2016

34


Entity Wise Cash and Debt

Notes:Debt numbers at Book Values. Since the table above shows only external debt, it does not include the following:- $2.6bn inter-company receivable at Vedanta plc from TSMHL. There was an accrued interest of $81mn on the inter-company receivable, as of 30 Sep 2015.- $1.25bn two-year intercompany facility from Cairn India Limited to a wholly owned overseas subsidiary of Vedanta Ltd. at arm’s length terms and conditions with an annual interest rate of LIBOR+300bps.- $319mn receivable at plc from KCM.1. Includes Investment Companies.2. Twin Star Mauritius Holdings Limited (SPV holding the 34.4% stake in Cairn India as on 30 Sep 2015).3. Others include: CMT, Fujairah Gold, MEL, VGCB, Sesa Resources Ltd, other Iron Ore companies, and Vedanta Ltd. Investment companies.4. Includes $8mn debt related derivative asset.5. Includes $2mn debt related derivative liability.

Net Debt Summary ($mn)

30 Sept 2014 31 March 2015 30 Sept 2015

Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt

Vedanta plc1 7,532 59 7,473 7,707 34 7,673 8,053 17 8,036

KCM 813 0 813 802 65 738 728 38 690

Vedanta Ltd. Standalone 5,407 519 4,889 4,574 139 4,435 4,422 334 4,088

Zinc International - 189 (189) - 137 (137) - 158 (158)

Zinc India - 4,478 (4,478) - 4,937 (4,937) - 5,306 (5,306)

Cairn India - 2,732 (2,732) - 2,857 (2,857) - 2,976 (2,976)

BALCO 739 5 734 767 0 766 769 12 757

Talwandi Sabo 940 2 939 1,037 24 1,013 1,032 30 1,002

TSMHL2 1,680 166 1,514 1,679 9 1,670 1,382 30 1,352

Others3 123 23 100 102 8 94 65 16 49

Vedanta Ltd. Consolidated 8,889 8,112 777 8,159 8,111 48 7,670 8,862 (1,192)

Total (in $mn) 17,234 8,171 9,0554 16,668 8,210 8,4605 16,451 8,917 7,5365

35


Debt Profile

53% of the debt is fixed interest rate, 47% floating rate 67% of the debt is USD-denominated, 33% is INR-denominated

Diversified Funding Sources for Term Debt(as of 30 September 2015)

BondsUSD25%

BondsINR13%

Convertible BondsUSD7%

Term LoanINR12%

Term LoanUSD34%

Short Term Loans9%

36

Numbers based on face value.


Inter-company Debt

Vedanta Ltd.(excluding Cairn India) 31 March 2015 30 Sept 2015

AnnualizedInterest Cost

Gross External Debt 8,202 7,711 c.600

Intercompany Payable to Vedanta 2,590 2,611 200

Intercompany Payable to Cairn India 1,250 1,250 40

Debt Service Liability 12,042 11,572 840

Vedanta Resources plc 31 March 2015 30 Sept 2015Annualized

Interest Cost

Gross External Debt 7,891 8,216 c.500

Intercompany Receivable at Plc from Vedanta Ltd (2,590) (2,611) (200)

Debt Service Liability 5,301 5,605 300

Cairn India Ltd. 31 March 2015 30 Sept 2015Annualized

Interest Cost

Intercompany Receivable at Cairn India fromVedanta Ltd (1,250) (1,250) (40)

Debt Service Liability(in $mn)

Notes:Debt numbers at Face Values. Annualized interest cost represents an approximate annual interest cost based on debt levels as of 30 September 2015, and excludes accretive interest on convertible bonds andamortisation of borrowing costs.

37


Credit Metrics

FY2015 LTM Sept’15 Covenant

Net Debt/EBITDA (LTM) 2.3x 2.6x < 2.75x

EBITDA/Net Interest Expense1 6.8x 5.1x > 4.0x

Net Assets/Debt 1.9x 1.9x > 1.75x

Gearing2 40.8% 40.3%

Gearing – pre-impairment2 33.5% NA

Notes:1. Interest includes Capitalized Interest.2. Gearing is calculated as Net Debt divided by the sum of Net Debt and Equity.

38


Currency and Commodity Sensitivities

Commodity prices – Impact of a 10% increase in Commodity Prices

CommodityH1 FY2016

Average price

Impact onH1 FY2016

EBITDA ($mn)

Oil ($/bbl) 56 58.5

Zinc ($/t) 2,013 93.7

Aluminium ($/t) 1,675 59.3

Copper ($/t) 5,639 51.6

Lead ($/t) 1,824 13.9

Silver ($/oz) 15.6 10.0

Foreign Currency - Impact of a 10% depreciation in FX Rate

CurrencyH1 FY2016

Average FX rate

Impact onH1 FY2016

EBITDA ($mn)

INR/USD 64.2304 101.4

39


Project Capex

Capex in Progress StatusCapex

(US$mn)Spent up toMarch 2015

Spent inH1 FY16

Unspent as at 30Sep 2015

Cairn India Phase wise Completion (c$180 mn to bespent in H2 FY16 and retain theflexibility to invest balance $1 billion asoil prices improve and cost bottom out)

3,030 1,080 211 1,739

Total Capex in Progress - Oil & Gas 3,030 1,080 211 1,739Aluminium SectorBALCO – Korba-II 325ktpa Smelter and1200MW power plant(4x300MW)

Smelter: 84 post capitalised in Sep 2014300MW unit capitalized in August 2015 1,872 1,818 37 17

Jharsuguda 1.25mtpa smelter Potline-wise commissioning: 1st phase of50 pots started 2,920 2,535 26 359

Power SectorTalwandi 1980MW IPP 2nd & 3rd unit expected in H2 FY 2016 2,150 2,011 46 93Zinc SectorZinc India (Mines Expansion) Phase-wise by FY2017 1,500 602 102 796Zinc InternationalGamsberg Mining Project To be completed by 2018-19 524 5 7 512Skorpion Refinery Conversion 156 4 3 149Total Capex in Progress –Metals & Mining 9,122 6,976 221 1,925

Capex Flexibility

Metals and MiningLanjigarh Refinery (Phase II) – 4mtpa Awaiting approval 1,570 809 - 761Iron ore, Liberia 237 226 11Tuticorin Smelter 400ktpa EC awaited 367 129 - 239Total Capex Flexibility 2,174 1,163 - 1,011

Total Capex (Excluding Cairn) 11,296 8,139 221 2,936Total Capex (Including Cairn) 14,326 9,219 432 4,675

40


Sales Summary

Sales volume H1 FY2015 H1 FY2016Copper-India SalesCopper Cathodes (kt) 87 86Copper Rods (kt) 79 102Sulphuric Acid (kt) 241 229Phosphoric Acid (kt) 83 97Copper-Zambia SalesCopper Cathodes (kt) 75 91Power Sales (mu)Jharsuguda 2,400MW 3,807 3,820TSPL 1,077BALCO 270MW 71 128BALCO 300MW 158MALCO 433 320HZL Wind power 316 286Total sales 4,627 5,789Power Realisations (INR/kWh)Jharsuguda 2,400MW 3.1 2.8TSPL 5.5BALCO 270MW 2.8 3.3BALCO 300MW 3.3MALCO 5.6 5.7HZL Wind power 4.0 4.0Average Realisations1 3.4 3.1Power Costs (INR/kWh)Jharsuguda 2,400MW 2.0 2.2TSPL 4.0BALCO 270MW 3.9 3.8BALCO 300MW 2.9MALCO 3.9 3.9HZL Wind power 0.4 (0.2)2

Average costs1 2.1 2.2

Sales volume H1 FY2015 H1 FY2016Zinc-India SalesRefined Zinc (kt) 320 398Refined Lead (kt) 62 70Zinc Concentrate (DMT) - -Lead Concentrate (DMT) - -Total Zinc (Refined+Conc) kt 320 398Total Lead (Refined+Conc) kt 62 70Total Zinc-Lead (kt) 381 467Silver (moz) 5.2 6.1Zinc-International SalesZinc Refined (kt) 52 48Zinc Concentrate (MIC) 79 70Total Zinc (Refined+Conc) 131 118Lead Concentrate (MIC) 22 23Total Zinc-Lead (kt) 153 141Aluminium SalesSales - Wire rods (kt) 149 165Sales - Rolled products (kt) 24 19Sales - Busbar and Billets (kt) 57 47Total Value added products (kt) 229 231Sales - Ingots (kt) 182 229Total Aluminium sales (kt) 411 460Iron-Ore SalesGoa (mn DMT) - -Karnataka (mn DMT) 1.1 1.2Total (mn DMT) 1.1 1.2MetCoke (kt) 243 249Pig Iron (kt) 303 304

Notes:1. Excluding TSPL.2. Post reversal of one-off items; normalised cost was 0.57 INR/kWh.

41


Case Studies – Cost Savings & Marketing Initiatives

42

Polishing Filter Package Alternate methodology of modifying existing

infrastructure and using new media for treatment oftertiary water

Cost savings due to new methodology

Using technology to drive efficiency (Cairn)

Single stream operation at Lanjigarh Run one line at 100% capacity instead of two lines at

part capacity Reduce overhead and improve efficiency Drive Aluminium cost down by $35/tonne

Better utilisation of production line

Aluminium premium improvement strategy Continuous effort to optimise premium by improving

product mix and different sales strategy Focus on higher domestic sales

Better price realisation (Aluminium)

Rolled Product facility at BALCO Temporarily suspended with effect in H2 FY2016 Negative contribution due to higher cost – To be fixed

through restructuring in H2 Leaner & more effective operation

Strategy around high cost operations

Impact: Annualised Cost Saving of c. $10 mnImpact: Capex Saving of c. $15 mn

Impact: Annualised Cost Saving of c. $35 mn Impact: Annualized benefit of c. $70 mn


Timeline: Merger of Vedanta Ltd and Cairn India Ltd

Event Completion

BSE, NSE and SEBI approvals sought Q2 CY2015

BSE, NSE and SEBI approvals Q3 CY2015

Vedanta plc posting of UK Circular Q4 CY2015

Application to High Court in India Q4 CY2015

Vedanta plc EGM Q4 CY2015

Vedanta Limited and Cairn India shareholder meetings Q1 CY2016

Foreign Investment Promotion Board approval Q1 CY2016

High Court of India approval Q2 CY2016

MoPNG approval Q2 CY2016

Transaction Completion Q2 CY2016

43


Group Structure

44

KonkolaCopper

Mines (KCM)

62.9%

VedantaResources Plc

100%64.9%

Zinc India(HZL)

AustralianCopperMines

Vedanta Ltd

Cairn India

59.9%

79.4%

Subsidiaries of Vedanta Ltd

Sesa Iron Ore

Sterlite Copper (Tuticorin)

Power (2,400 MW Jharsuguda)

Aluminium(Odisha aluminium and power assets)

Divisions of Vedanta Limited

Unlisted entitiesListed entities

TalwandiSabo Power(1,980 MW)

100%

MALCOPower

(100 MW)

100%

Skorpion &Lisheen -

100%BMM -74%

100%

ZincInternational

51%

BharatAluminium(BALCO)

100%

WesternCluster

(Liberia)

Notes:Shareholding based on basic shares outstanding as on 30 September 2015.

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