Vedanta Resources plc Interim Results for the Six Months ......Vedanta Resources plc Page 5 of 62...

Vedanta Resources plc 16 Berkeley Street London W1J 8DZ

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www.vedantaresources.com

15 November 2013

Vedanta Resources plc Interim Results for the Six Months Ended 30 September 2013

Financial Highlights

� Revenue of US$6.2 billion, down 17%

� EBITDA¹ of US$2.2 billion, EBITDA margin of 44.5%² despite volatile commodity prices

� Underlying EPS³ of 29.3 US cents, down 70%

� Free cash flow of US$1.0 billion before growth capex and US$417 million after growth capex

� Net Debt reduced by US$1.6 billion over the last 18 months

� Interim dividend of 22 US cents per share, up 5%

Business Highlights

� Group simplification completed

� Record oil & gas production

� Increased production of refined zinc, lead and silver at Zinc India

� Continued strong performance at Aluminium

� Karnataka iron ore mine awaiting final clearances to resume mining; Supreme Court’s interim order on Goa iron ore mining permits sales from inventory

� Engaged with various stakeholders, including the Zambian Government, to drive productivity, cost improvements and an overall turnaround of the Copper Zambia business

� Strong cost performance despite industry-wide inflationary trends (in $ millions, except as stated)

Consolidated Group Results H1 FY2013-14 H1 FY2012-13 % Change

Revenue 6,164.0 7,451.9 (17)%

EBITDA¹ 2,207.1 2,571.7 (14)%

EBITDA margin (%) 35.8% 34.5% -

EBITDA margin excluding custom Smelting² (%) 44.5% 47.0% -

Operating Profit before Special Items 1,114.6 1,439.7 (23)%

(Loss)/ Profit attributable to equity holders (217.0) 173.6 (225)%

Underlying attributable Profit³ 80.0 266.6 (70)%

Basic (Loss)/Earnings per Share (US cents) (79.4) 63.7 (225)%

Earnings per Share on Underlying Profit (US cents) 29.3 97.8 (70)%

ROCE (excluding project capital work in progress) (%) 15.3% 17.3% -

Total Dividend (US cents per share) 22.0 21.0 5%

1. Earnings before interest, taxation, depreciation, amortisation /impairment and special items. 2. Excludes custom smelting at Copper and Zinc-India operations. 3. Based on profit for the period after adding back special items and other gains and losses, and their resultant tax and non-controlling

interest effects (refer to note 6 of Condensed financial statements). Underlying attributable profit includes the net tax benefit from the SesaSterlite merger offset by a deferred tax charge due to the change in tax rates at Cairn India as set out on page [13].

Vedanta Resources plc of 62 Results For The Year Ended 30 September 2013

Mr Anil Agarwal, Chairman of Vedanta Resources plc said, “The successful completion of the Sesa Sterlite merger during this half year is a significant milestone. Operational performance has been particularly strong in our high margin Oil & Gas and Zinc India businesses, with record production achieved at Cairn India. We continue to focus on driving value-accretive growth across our diversified portfolio of Tier-1 assets and this, combined with efficient cost management and our strong position in fast growing emerging markets has positioned us well to sustainably create long term value for our shareholders.”

For further information, please contact:

Investors

Ashwin Bajaj

Senior Vice President – Investor Relations

Vedanta Resources plc

[email protected]

Tel: +44 20 7659 4732 / +91 22 6646 1531

Media

Gordon Simpson

Faeth Birch

Finsbury

Tel: +44 20 7251 3801

About Vedanta Resources plc

Vedanta Resources plc (“Vedanta”) is a London listed FTSE-100 diversified global resources major. The group produces Aluminium, Copper, Zinc, Lead, Silver, Iron ore, Power, and Oil and Gas. Vedanta has world-class assets in India, Zambia, South Africa, Namibia, Ireland, Liberia, Australia and Sri Lanka and a strong organic growth pipeline of projects. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information, please visit: www.vedantaresources.com.

Disclaimer

This press release 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,” “should” or “will.” Forward–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 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.

Vedanta Resources plc of 62 Results For The Year Ended 30 September 2013

CHAIRMAN’S STATEMENT

We have continued to make strong progress towards achieving our strategic priorities in the first half of the financial year (H1 FY2014). Specifically, the completion of the group structure simplification is a significant milestone. It has consolidated Vedanta’s holdings in its subsidiaries, created a more efficient capital structure by better aligning operating cash flows and debt across the group, and has delivered significant financial synergies.

Vedanta’s portfolio of Tier-1 assets with low all-in costs is well diversified across base metals, oil & gas, bulks and commercial power, and has enabled us to consistently deliver industry-leading profit margins, with our EBITDA margin¹ remain strong at 44.5% in H1, demonstrating the resilience of our low-cost diversified portfolio.

Operationally, we have continued to deliver profitable production growth at our two largest businesses, Zinc-India and Oil & Gas, which have consistently delivered lowest quartile costs, and achieved record oil & gas production in the first half. Our Aluminium operations continued to operate at lower half operating costs despite having to source third-party bauxite and alumina. Our Iron Ore operations continued to be affected by state-wide mining restrictions, but recent developments have been in the right direction and we expect to restart mining in Karnataka soon. Our Copper Zambia operations were affected by lower volumes and higher costs. We are committed to delivering an operational turnaround of the Copper Zambia business and remain engaged with various stakeholders including the Government of Zambia to improve productivity, volumes and profitability.

We continued to deliver strong free cash flows after capex during the first half as assets utilizations increased and production volumes ramped-up. We continue to carefully monitor allocation of capital to various businesses and projects. A significant part of our near term capex will be allocated to phased, brown-field projects at high-margin businesses. Our key projects include the 20% growth, to 1.2mtpa, of mined metal at Zinc-India, and exploration in the prolific Rajasthan block to realize our vision of 300kbopd. We will continue to use our strong and growing free cash flows to further deleverage the balance sheet.

Sustainability and safety remains core to our business and we have consistently reduced our lost time injury frequency rate, by more than half over the last 5 years. We need to work further to eliminate fatalities and are focused on implementing our unsafe conditions elimination programme. We are also committed to building strong relationships with our local stakeholders in order to directly and indirectly develop the local economy and communities where we operate. We have more than 250 partnerships with NGOs, local governments, academic institutions and private hospitals in place, and our community programmes benefit around 3.7 million people in India and Africa, across 2,200 villages. We have also had success in reducing our specific consumption of water and energy and continue to implement further projects. We continue to be one of the largest employers and contributors to Government exchequers in the countries where we are located, and in H1 our contribution to Government exchequers was $2.6 billion.

We have maintained a progressive dividend since the listing in 2004, and this year the Board has recommended an interim dividend of 22 US cents per share, an increase of 5%.

On behalf of the Board, I thank our 87,000 direct and indirect employees for their contribution to these results. Their commitment and efforts, combined with the strength of our management team, continue to drive our performance.

We remain positive on the prospects for our diversified portfolio of Tier-1 assets, which we believe will generate strong returns across business cycles. The strength of our portfolio and our focus on disciplined capital allocation to phased, low-risk projects with high returns will enable us to continue to consistently generate strong returns for shareholders.

Anil Agarwal

Chairman

14 November 2013 1. Excludes custom smelting at Copper and Zinc India operations.

Vedanta Resources plc of 62 Interim Results For The Six Months Ended 30 September 2013

Interim Results for the Half Year Ended 30 September 2013

Consolidated Group

(In US$ million unless otherwise stated)

Six months to

30.09.13 Six months to

30.09.12 % Change Year ended

31.03.13

Key Financial Results

Revenue 6,164.0 7,451.9 (17)% 14,989.8

EBITDA 2,207.1 2,571.7 (14)% 4,908.9

EBITDA Margin (%) 35.8% 34.5% - 32.7%

EBITDA Margin excluding custom smelting (%) 44.5% 47.0% - 45.1%

Operating Profit before special items 1,114.6 1,439.7 (23)% 2,571.7

(Loss)/profit attributable to equity holders (217.0) 173.6 (225)% 162.0

Underlying loss/profit attributable to equity shareholders¹ 80.0 266.6 (70)% 367.9

Free Cash Flow² 1,046.3 1,438.0 (27)% 3,534.7

Free Cash Flow after Project Capex 416.6 483.7 (14)% 1,515.6

Basic (Loss)/Earnings per Share (US cents)¹ (79.4) 63.7 (225)% 59.4

Underlying Earnings per Share (US cents)¹ 29.3 97.8 (70)% 134.8

EBITDA Interest Cover (times) 6.7 8.7 - 9.0

ROCE (Excluding capital work in progress and exploration assets)(%) 15.3% 17.3% - 17.5%

Gearing 33.3 34.3 - 31.3

Net Debt 8,462.7 9,835.4 - 8,615.6

Interim Dividend (US cents per share) 22 21 5% 58

1. After adding back special items and other gains and losses and their resultant tax and non-controlling interest effects. 2. Refer to calculation given on page no. 16.

Highlights:

� Group structure consolidation and simplification completed

� Robust operating results driven by improved production partially offset by lower commodity prices

� Net debt reduced by US$153 million in H1 FY 2013

� Record production of Oil & Gas and increased production of Zinc, Lead and Silver at Zinc India

� EBITDA at US$2.2 billion, a 14% decrease reflecting weaker commodity prices partly neutralised by lower costs and increased volumes at Zinc India and Oil & Gas business, a higher percentage share of profit petroleum paid to the Government of India in our oil& gas business, absence of iron ore mining in Karnataka and Goa and lower volume in KCM. EBITDA margin remained strong at 44.5% (excluding custom smelting) reflecting efficient cost management

� Attributable loss of US$217million accentuated by other gains and losses of US$433 million largely due to mark to market foreign exchange losses

� Strong free cash flow of US$1.0 billion; Free cash flow after project capital expenditure US$0.4 billion

� Interim dividend of 22 US cents per share, a 5% increase on the interim dividend of FY 2012-13


Performance Review

Progress against strategic priorities

Vedanta’s strategy remains focused on delivering growth, long-term value and sustainable development through our diversified portfolio of Tier-1 assets. Our diversified portfolio spread across base metals, bulks, oil & gas and commercial power comprises large, low cost, long life and scalable assets, located close to high growth emerging markets. Our assets have delivered consistent EBITDA margins (excluding custom smelting) of around ~45%. We are now delivering strong growth in free cash flows from most of our businesses, with production growth coming through and bulk of our investment programme in our metals business now largely complete. Growth projects in our Aluminium and Power businesses are also nearing completion and will contribute to cash generation in medium term.

This is supplemented by a disciplined approach to capital allocation, in order to generate superior shareholder returns. Our capital allocation policy prioritises low risk, phased developments, with the emphasis on those businesses that generate highest returns.

Group consolidation and simplification

The Group structure consolidation and simplification exercise, announced in February 2012, was concluded and took effect in two phases on 17 August 2013 and 19 August 2013. As part of the reorganisation Sterlite Industries India Limited (SIIL), Vedanta Aluminium Limited (VAL), Madras Aluminium Company Limited (MALCO) and Sterlite Energy Limited (SEL) were merged with Sesa Goa Limited and renamed Sesa Sterlite Limited (SSL). On 26 August 2013, Vedanta also transferred the shareholding of one of its subsidiaries which held 38.7% stake in Cairn India Limited (Cairn), to SSL, along with the associated debt of USD5.9 billion. On 19 August 2013, the Power business was transferred from VAL to SSL at its carrying value through a sale and purchase agreement on a going concern basis. The Power business consists of the 1,215MW thermal power facility at Jharsuguda and the 300MW co-generation facility (90MW operational and 210MW under development) at Lanjigarh. These transactions are within the subsidiaries of the Company and will not have any acquisition accounting impact other than a change in the economic shareholding percentage. The simplification exercise has resulted in a change in economic holding percentage mainly in VAL and Cairn. VAL's effective holding has decreased from 87.6% to 58.3% whereas Cairn's reduced from 49.8% to 34.3%. The equity and non-controlling interest have been adjusted to reflect these changes in the economic shareholding.

Particulars Appointed date Effective date

SEL January 1, 2011 August 19, 2013

Sterlite April 1, 2011 August 17, 2013

Ekaterina April 1, 2012 August 17, 2013

Malco (residual) August 17, 2013 August 17, 2013

VAL (Aluminium business demerger) April 1, 2011 August 19, 2013

Slump sale of VAL power division - August 19, 2013

Acquisition of 38.68% in Cairn India - August 26, 2013

The Group simplification has created a platform that will deliver financial and operational synergies, including improving the ability to transfer cash between divisions to facilitate debt servicing, more effective cash management and tax optimisation.

Key developments

The National Green Tribunal’s favourable order paved way for restarting Tuticorin smelter, following the temporary closure in the first quarter of the year.

Production also restarted at the 1 mtpa capacity Lanjigarh alumina refinery after a temporary shutdown. We continue to actively engage in discussions with the Orissa State Government for allotment of alternative bauxite mines. The final stage forest clearance for the Niyamgiri Mining


lease, which is one of the sources of supply of bauxite close to the Lanjigarh alumina refinery, is awaiting the final decision of The Ministry of Environment and Forests ("MOEF") following submissions by the court convened Gramsabha.

Following the lifting of restrictions on mining at Karnataka by the Supreme Court, we are now awaiting final statutory clearance and expect to resume mining at Karnataka shortly. The Supreme Court has recently announced its interim order, allowing sale of inventory of iron ore. They have also mandated the setting up of an expert committee to determine how much mining should be permitted in the state of Goa.

Work on the major mining capacity expansion projects in Zinc India is making good progress. The Rampura Agucha underground mining is operational using a ramp. Kayad mine will also commence production in the current financial year. Though the expansion project from 1 mtpa to 1.2 mtpa is going to be completed by 2019, the project is so designed that it starts delivering the cash flow from FY2014 itself. The yearly capex will be around US$250 million.

Robust performance in an uncertain environment

Vedanta delivered robust results in H1 FY 2013-14, against a backdrop of slower global growth rates and volatile commodity and currency markets. Our improved operational and cost performance partially mitigated the threat posed by this challenging economic environment, enabling us to achieve US$2.2 billion EBITDA, down by 14% compared with H1 of last year due to the impact of continued iron ore mining ban and stoppages at the Tuticorin plant. EBITDA margin excluding custom smelting, was strong at 44.5% despite weaker prices, which reflects our continued strong track record of operating performance offset by the continuing mining ban in Iron Ore operations. Our financial performance during this period reflects record production of Oil & Gas and increased production of Zinc, Lead and Silver at Zinc India. Our Aluminium business also performed well in this challenging environment and operated above its rated capacity. We have been able to retain/improve our global cost competitiveness by ensuring that we are well positioned on global cost curves.

Operating profit before special items was US$1.1 billion. The Group’s operating profit benefited by US$48 million from the devaluation of the rupee in the period, which also reduced costs per tonne in US Dollar terms.

Profit before tax was significantly impacted by other gains and losses mainly due to higher rupee depreciation resulting in mark to market foreign exchange losses of US$429 million as compared to foreign exchange losses of US$142 million in the prior period. An attributable loss of US$217 million was recorded as compared to a US$174 million attributable profit in H1 FY 2012-13. Underlying attributable profit (as defined) after adjustment for special items and other gains and losses was US$80 million.

Strong free cash flow of US$1.0 billion and free cash flow after project capex was US$0.4 billion.

Sustainability

Sustainability is an integral part of our business. Considering the nature of our industry safety, health and the environment are our priorities. We continue to strive for zero harm, implementing a range of structured programmes to enhance safety, focused on processes, behaviour and continuous improvement based on our experience. While the leading indicators such as Lost Time Injuries Frequency Rate per million man-hours worked have shown an improving trend, we remain concerned about high impact low probability incidents. In the first six months of the year, tragically six workers lost their lives in workplace accidents. We need to further strengthen and intensify our safety enhancement programmes.

We continue to maintain our good track record in managing health and environment performance. There were no significant environmental incidents during H1 FY 2013–14 and no significant health related observations in the same period. All our businesses continue to run structured improvement projects to continuously improve our performance on air, water and


land use performance. Over the last 2 years we have further embedded the sustainability framework and implemented its practices and standards. We are committed to ensuring that the framework is followed and managed in all our operations and any new project.

Outlook

The key trends of infrastructure development and urbanisation in emerging economies will continue to be the main drivers of demand in the near term although growth rates have moderated in most developing economies, including India and China. Volatility in developed economies continues with both, modest recovery in the US and ongoing weak conditions in the Eurozone. Constrained capital expenditure across the resources industry should limit growth in supplies thus provide fundamental support for prices in the coming years.

Against this backdrop, the mining industry is currently facing headwinds in the form of price pressures and also, our sustained focus on operational and cost efficiency will help mitigate these pressures.

We remain positive on the prospects for our diversified portfolio of assets. We remain focused on measured capital allocation, with a focus on low-risk, phased projects that generate high returns and our proximity to emerging markets, means we are well positioned to take advantage of the opportunities these markets will offer going forward.


Finance Review

Basis of presentation of financial information

Our interim financial report is prepared in accordance with International Financial Reporting Standards (‘IFRS’), as adopted by the European Union. Our reporting currency is US dollar.

Consolidated Group Results

(in US$ million, except as stated)

Consolidated Revenue

Six months to



31.03.13

Zinc 1,423.7 1,375.6 3% 3,060.5

India 1,071.5 984.2 9% 2,263.3

International 352.2 391.4 (10)% 797.2

Oil & Gas 1,472.1 1,628.6 (10)% 3,223.4

Iron Ore 139.5 345.0 (60)% 442.5

Copper 1,917.5 2,822.3 (32)% 5,733.8

India/Australia 1,230.8 1,956.9 (37)% 3,991.1

Zambia 686.7 865.4 (21)% 1,742.8

Aluminium 877.5 890.5 (1)% 1,837.8

Power 364.0 370.5 (2)% 669.0

Others (30.3) 19.4 - 22.7

Total Group Revenue 6,164.0 7,451.9 (17)% 14,989.8

Consolidated EBITDA

Zinc 675.5 644.0 5% 1477.0

India 559.0 509.1 10% 1182.5

International 116.5 134.9 (14)% 294.5

Oil & Gas 1,122.8 1,291.1 (13)% 2440.3

Iron Ore (18.0) 116.5 (116)% 84.9

Copper 177.8 293.3 (39)% 476.4

India/Australia 76.5 108.0 (29)% 219.1

Zambia 101.3 185.3 (45)% 257.3

Aluminium 125.3 100.5 25% 202.6

Power 122.6 126.8 (3)% 228.5

Others 1.1 (0.5) - (0.8)

Total Group EBITDA 2,207.1 2,571.7 (14)% 4,908.9

Consolidated Operating Profit before special items

Zinc 536.1 481.7 11% 1,183.0

India 504.0 456.0 11% 1,072.4

International 32.1 25.7 25% 110.6

Oil & Gas 436.3 633.6 (31)% 1,005.4

Iron Ore (35.3) 61.4 (157)% 0.6

Copper 71.0 177.9 (60)% 239.5

India/Australia 55.9 86.1 (35)% 175.9

Zambia 15.1 91.8 (84)% 63.6

Aluminium 37.0 5.4 585% 11.4

Power 71.5 79.5 (10)% 132.7

Others (2.0) 0.2 - (0.9)

Total Group Operating Profit before special items 1,114.6 1,439.7 (23)% 2,571.7


Operating Profit Variance

Consolidated Group

(In US$ million)

Operating Profit before special items for Six months to 30.09.12 1,440

Non- Controllable:

Sale Price (225)

LME (247)

Premium 22

Foreign Exchange fluctuation 48

Profit Petroleum to GOI at Cairn (140)

Volume(Non Controllable)

Iron Ore production stoppage due to regulatory matter (134) (167)

Sterlite Copper plant Closure in Q1 (33)

Volume (Controllable)Rest of the businesses 106 106

Cash cost of production 13

Depreciation

Amortisation

17

23

Operating Profit before special items for Six months to 30. 09.13 1,115

Prices

Metal and oil prices weakened during the reporting period, impacting our revenues. In the first half of the year, average prices fell by 9% for copper, 7% for aluminium and 3% for zinc. Average Brent prices were also lower by 2%. These lower average prices across all commodities had a negative impact of US$225 million on operating profit.

Exchange rates

Exchange rate volatility increased during the first half of the year which improved operating profit margins for our businesses located in India as the depreciation of the Indian rupee reduced the costs in dollar terms. Combined with higher sales revenues in rupee terms, this improved operating profits by US$48 million.

Profit petroleum

During the period in Cairn India, the share of profit petroleum charges increased from 20% to 30%, payable to the Government of India resulting higher charges by US$140 million.

Volumes

Higher oil and gas production, increased volume of refined zinc, lead and silver at Zinc India and strong operating performance at our Aluminium business delivered volume growth which generated a positive contribution of US$151 million to operating profits, offset by lower volume at Konkola Copper Mines (KCM) resulted in a US$45 million reduction in operating profit with a net total impact US$106 million. The temporary closure of the Tuticorin Smelter in Q1 impacted operating profit by US$33 million and the continued iron ore mining ban contributed a negative variance of US$134 million to operating profits compared with H1 FY 2012-13.

Costs

The cost-inflationary environment prevailing in the sector was largely mitigated by higher production volumes at Zinc India and Aluminium business, operational efficiencies and the depreciation of the Indian rupee against the US dollar in which most of our costs are denominated. Our overall operating profits increased by US$13 million due to the improved costs as compared with the corresponding prior period.


The following exchange rates against the US dollar have been applied:

Average Half year

ended 30.9.13

Average Half year

ended 30.9.12 As at

30.9.13 As at

30.9.12 As at

31.3.13

Indian Rupee 59.1 54.7 62.8 52.7 54.4

Australian dollar 1.05 0.98 1.07 0.96 0.96

South African Rand 9.7 8.2 10.1 8.3 9.2

Kwacha* 5.39 5,165 5.31 5,208 5.33

* Kwacha has been devalued with effect from January 2013.

Depreciation

There was no major capitalisation in the first half of FY 2013-14 with no significant changes in depreciation as a result, however depreciation reduced by US$17 million mainly due to rupee depreciation.

Amortisation

The mining reserves related to our acquisitions mainly of Cairn, Zinc International and Sesa Goa are being amortised on a unit of production basis over the total estimated remaining commercial reserves.

The reduction in amortisation charges in H1 FY 2012-13 as compared to the previous year was US$23 million, mainly due to lower production volumes in our Iron ore business as a result of the ongoing mining ban.


Income Statement

(in US$ million, unless otherwise stated)

Six months to 30.09.13

Six months to 30.09.12 % Change

Year ended 31.03.13

Revenue 6,164.0 7,451.9 (17)% 14,989.8

EBITDA 2,207.1 2,571.7 (14)% 4,908.9

EBITDA margin (%) 35.8% 34.5% - 32.7%

EBITDA margin (excluding custom smelting) (%) 44.5% 47.0% - 45.1%

Operating special items (61.8) (7.0) - (41.9)

Depreciation (647.1) (664.1) (3)% (1,391.0)

Acquisition related amortisation (445.4) (467.9) (5)% (946.2)

Operating profit 1,052.8 1,432.7 (27)% 2,529.8

Net interest (expense)/income (358.4) (235.6) 52% (520.9)

Other Gains and losses (433.3) (129.1) 235% (285.2)

Profit before tax 261.1 1,068.0 (76)% 1,723.7

Income tax expense (17.7) (124.8) - (46.1)

Tax rate (%) 6.8% 11.7% - 2.7%

Profit After Tax 243.4 943.2 (74)% 1,677.6

Non-controlling interest (460.4) (769.6) (40)% (1,515.6)

(Loss)/profit attributable to equity holders (217.0) 173.6 (225)% 162.0

Attributable(loss)/profit % (89.2)% 18.4% - 9.7%

Underlying attributable profit 80.0 266.6 (70)% 367.9

Basic (loss)/earnings per share(US cents) (79.4) 63.7 (225)% 59.4

Underlying earnings per share(US cents) 29.3 97.8 (70)% 134.8

Revenue

Volume increases at Cairn India, Zinc India and at Vedanta Aluminium and BALCO, our aluminium businesses, had a positive impact on revenue which was offset by lower commodity prices, the temporary closure of the Tuticorin copper smelter for a quarter, reduction in production at KCM and the impact of the continued mining ban on our Iron Ore business. This resulted in revenues for the first half of the year of US$6,164 million, 17% lower than the same period last year.

EBITDA Margin

Despite lower revenue and EBITDA, the EBITDA margin excluding custom smelting operations and the petroleum profit sharing charges, was 44.5%, in line with the first half of the previous year. Despite the weaker commodity price environment in the period, the strength of our diversified portfolio and high margins in our Oil & Gas business, helping us to improve overall margin performance.

Special Items

The decrease in zinc prices have resulted in an impairment charge of US$48 million (US$37 million after deferred tax) being recorded against the value of mining reserves in Lisheen, which is nearing its end of life. In addition US$14 million relating to voluntary redundancy charges and acquisition related costs (H1 FY 2012-13 US$ 7 million) at Zinc India and KCM have been accounted for in special items.

Depreciation and Amortisation

There was no major capitalisation in the first half of FY 2013-14 with US$17 million reduction in depreciation charge mainly due to rupee depreciation. Amortisation charges of our acquisition


related expenses were lower by US$23 million mainly due to reduced production volumes in our Iron Ore business following the continued mining ban.

Net interest

Gross finance costs increased marginally to US$700 million in H1 FY 2013-14 as compared to US$680 million in H1 FY 2012-13. The gross finance cost increased due to refinancing of loans at Vedanta plc and amortisation of borrowing cost due to prepayment of Cairn acquisition loan partially offset by lower interest costs in US dollar terms on rupee borrowing on account of rupee depreciation. The interest capitalised in H1 FY 2013-14 was lower at US$39 million (H1 FY 2012-13 US$134 million) due to cessation of capitalisation of borrowing cost at Jharsuguda Plant 2 due to delay in commissioning and also capitalisation of all units of the 2400 MW power plant at Jharsuguda. As a result the finance costs charged to the income statement increased to US$661 million in H1 FY 2013-14 up from US$546 million last year.

Investment revenues in H1 were marginally lower at US$303 million as compared to US$310 million in the corresponding prior period despite increase in the cash and liquid investment at Cairn India and Zinc India. The investment revenues were impacted due to unprecedented increase in interest rates in India which resulted in mark to market losses of US$50 million on investment in mutual funds and bonds. Due to stabilisation in the interest rates we expect improved investment revenues in second half of the financial year.

As a result Net interest expenses increased to US$358 million from US$236 million in H1 FY 2012-13.

Other Gains and Losses

Other gains and losses include the impact of mark to market (MTM) on foreign currency borrowings, primarily at our Indian businesses. The other gains and losses in H1 FY 2013-14 were US$433million, as compared with a loss of US$129 million in H1 FY 2012-13. During first half of this year, MTM losses on foreign currency borrowings were US$429 million (H1 FY 2012-13 US$142 million), following the unprecedented 15% depreciation of the Indian rupee against the US dollar as compared to 31 March 2013.

Taxation

The effective tax rate for H1 FY 2013-14 was lower at 7% largely due to reversal of US$263 million of current tax charge booked in earlier years due to group consolidation and simplification. This was partially offset by a period charge of US$150 million in Cairn India due to increased deferred tax liability on account of increase in tax surcharge by 5% on the acquisition fair values.

Attributable (Loss)/Profit

Attributable loss in H1 FY 2013-14 was US$217 million, significantly lower compared with US$174 million attributable profit in H1 FY 2012-13, primarily due to lower EBITDA, foreign exchange losses and higher net interest expenses. Underlying profit(as defined) in the first half of the year, excluding the impact of MTM losses and special items was lower at US$80 million as compared with US$267 million in H1 FY 2012-13.

Earnings Per Share (‘EPS’) and Dividend

Basic EPS in H1 FY 2013-14 was negative 79 US cents per share (H FY2012-13 64 US cents per share). Diluted EPS in H1 FY2012-13 was negative 77 US cents per share (H1 FY 2012-13 63 US cents per share).

However, if we exclude special items and other gains and losses, the underlying EPS for the first half of the year excluding the impact of MTM losses and gains on embedded derivatives and special items, was 29 US cents (H1 FY 2012-13 98 US cents).


The Board has declared an interim dividend of 22 US cents per share an increase of 5% as compared to 21 US cents in FY 2012-13.


Balance Sheet

(In US$ million, except as stated)

30 September 2013 30 September 2012 31 March 2013

Goodwill 16.6 16.4 16.6

Property, Plant and Equipment* 30,832.7 34,142.3 33,132.6

Other non-current assets 1,042.0 880.2 962.9

Cash and liquid investments 8,134.7 7,163.0 7,981.7

Other current assets 3,810.0 4,229.0 3,867.9

Debt (16,605.4) (17,006.0) (16,592.8)

Other current and non-current liabilities (10,295.8) (10,586.9) (10,499.9)

Net assets 16,934.8 18,838.0 18,869.0

Shareholders’ equity 3,858.0 4,592.2 4,401.3

Non-controlling interests 13,076.8 14,245.8 14,467.7

Total equity 16,934.8 18,838.0 18,869.0

* includes intangible assets US$92.5 million in H1FY2014.

Shareholders’ equity was US$3,858 million at 30 September 2013 compared to US$4,401 million at 31 March 2013 reflecting impact of currency depreciation of the Indian rupee against the US dollar by US$757 million, attributable losses of US$217 million due to equity holders during the period, dividend payment and movement of convertible bond reserves. These negative impact were partially offset by an increase in equity attributable to shareholders of US$627 million due to changes in economic holding percentages as result of group simplification and consolidation.

Non-controlling interest decreased to US$13,077 million as at 30 September 2013 from US$14,468 million as at 31 March 2013, due to share of losses, change in economic holding percentages as well as foreign currency movements.

Tangible Fixed Assets

During the first half of the year, we added US$802 million to property, plant and equipment comprising of US$630 million for our expansion and improvement projects and US$172 million spent on sustaining or ongoing capital expenditure. Expansion project expenses were mainly incurred at Talwandi Sabo Power Limited (TSPL), at our Aluminium business and at Cairn India. The value of property, plant and equipment on the balance sheet reduced by US$1,925, reflecting the depreciation in the rupee during the period. Expansion expenditure was significantly lower by US$324 million than during the same period last year reflecting our commitment for prudent capital allocation and our aim to deleverage the balance sheet.

Net Debt

Net debt reduced by US$ 153 million, at 30 September 2013, where net debt was US$8,463 million (31 March 2013 US$8,616 million). Cash and liquid investments were US$8,135 million as at 30 September 2013. Gross debt as at 30 September 2013 was US$16,605 million (31 March 2013 US$16,593 million). The unprecedented rupee depreciation reduced the gross debt by US$941 million and correspondingly the foreign exchange fluctuation reduced cash and liquid investments by US$937 million.

The average debt in H1 FY 2013-14 was US$16,747 million, which was in line with the previous year (H1 FY 2012-13 US$16,778 million). The average debt maturity at 30 September 2013 increased to 4.0 years on exclusion of working capital loans at operating subsidiaries. External debt at our operating subsidiaries was US$8,516 million (US$12.4 billion including intercompany debt payable to Vedanta plc companies) and debt at Vedanta plc was US$8,090 million (which, net of intercompany loan to TMHL would be US$4,196 million). Of the total debt of US$16,605 million, US$1,801 million consists of convertible bonds.

During the first half of FY 2013-14, the Company refinanced the Cairn acquisition loan of US$2.7 billion by a combination of high yield bonds with an average maturity of 6.6 years and term


loans with an average maturity of 3.2 years. These issues generated an excellent response and were well received in the market. Near term debt maturities at face value of US$500 million at Vedanta plc due in January 2014 have been refinanced.

Our cash and liquid investments portfolio continues to be conservatively invested in debt mutual funds and in cash and fixed deposits with the banks.

The Company continued to maintain its ratings from Standard & Poor’s, Moody’s & Fitch: ratings are BB, Ba1 and BB+ respectively.

Our balance sheet remained strong. The net gearing increased to 33.3% on account of Rupee depreciation and reduction in shareholders equity, as compared to 31.3% in FY 2012-13.

Debt maturity profile at Vedanta Resources plc is as follows:

Notes: 1. Debt numbers shown at face value, excludes one year rolling working capital facilities of $1,365mn (of which $1,279mn is due in FY 2014

and $86mn is due in FY 2015). 2. $810mn of the $883mn convertible at Vedanta plc due in FY 2017 was put in March 2013 and was paid in April 2013. The balance $73mn

is shown at the next put date of 30 March 2015. The $1,250mn convertible at Vedanta plc due in FY 2017 (with a put option in July 2014) is shown at first put date.

0.50.1

0.7 1.00.5

4.2

1.30.3

1.6

1.00.9

1.4

2.1

0.8

3.0

1.61.9 1.9

6.3

FY2014 FY2015 FY2016 FY2017 FY2018 FY2019 and later

Debt at Ved plc Convertibles at put date Term Debt at Subsidiaries


Cash Flows


H1 2013-14 H1 2012-13 FY 2012-13

EBITDA 2,207.1 2,571.7 4,908.9

Special items (61.8) (7.1) (41.9)

Working capital movements (324.5) (424.1) 209.5

Changes in long term creditors and non-cash items 115.7 3.2 25.6

Sustaining capital expenditure* (172.2) (169.6) (378.2)

Sale of tangible fixed assets 18.5 40.9 63.4

Net interest paid and dividend received (395.3) (158.2) (355.1)

Tax paid (341.2) (418.8) (897.4)

Free Cash Flow 1,046.3 1,438.0 3,534.7

Expansion capital expenditure* (629.7) (954.3) (2,091.1)

Sale/(Purchase) of fixed asset investments 16.7 9.3 158.1

Purchase of mining assets - - (33.5)

Dividends paid to equity shareholders (101.7) (95.9) (153.5)

Dividends paid to non-controlling interests (174.9) (77.1) (257.4)

Others movements** (4.1) (91.0) 219.8

Movement in net cash/(debt) 152.6 229.0 1,449.2

* On an accruals basis. ** Includes foreign exchange movements.

Free cash flow before growth capital expenditure in H1 FY 2012-13 was US$1,046 million which represents 47% of EBITDA as compared to 56 % in H1 FY 2012-13.


PROJECTS

Projects under execution (in US$ million, except as stated)

Capex in Progress Completion Time Capex

(US$mn) Spent

H12013-14 Spent up to Sept.2013

Unspent as at30.9.13

Cairn India 3,673 223 808 2,866

Total Capex Oil & Gas 3,673 223 808 2,866

160 MW CPP at Tuticorin

80MW commissioned, next 80MW awaiting approval 161 6 157 4

KCM KDMP Project (7.5 mtpa) Completed 973 19 908 65

Aluminium Sector

BALCO - Korba 325 ktpa Smelter 1st Metal tapping by Q3 FY 2013-14 772 43 752 20

BALCO - Korba 1200 MW CPP 1st unit synchronisation in Q4 FY 2013-14 1,100 26 912 188

Balco –211 mt Coal Block Mining from Q1 FY 2014-15 150 1 14 136

Jharsuguda 1.25 mtpa smelter Line wise completion 2,920 4 2,483 437

Power Sector

Jharsuguda 2400 MW power plant Completed 1,769 5 1,736 33

Talwandi 1980 MW IPP 1st unit synchronisation in Q3 FY 2013-14 2,150 155 1,750 400

Zinc Sector

Zinc India (Mines Expansion) Phasewise Completion 1,500 90 282 1,218

Total Capex in Progress 11,495 348 8,994 2,501

Capex with Optionality Completion Time Capex

(US$mn) Spent

H12013-14 Spent up to Sept.2013

Unspent as at 30.9.13

Copper Sector

Tuticorin Smelter 400 ktpa Environment Clearance awaited 367 5 128 239

Aluminium Sector

Lanjigarh Debottlenecking 1.0 mtpa On hold 150 - 77 73

Lanjigarh Refinery (Phase II) 3.0 mtpa

Awaiting regulatory approval 1,570 - 808 762

Iron Ore

Sesa Iron Ore mine Expansion (36 mtpa) On hold 500 - 155 345

Total Capex with Optionality 2,587 5 1,168 1,419

Improvement and Enabling Capex

Capex (US$mn)

Spent H12013-14

Spent up to Sept.2013

Unspent as at 30.9.13

Zinc India 240 24 184 56

ZI – Gamsberg 24 9 17 7

Western Cluster- Liberia 97 21 87 10

Total Improvement and Enabling Capex 361 54 289 72

Total Capex (Excluding Cairn) 14,443 407 10,451 3,992

Total Capex (Including Cairn) 18,117 630 11,259 6,858


Interim Results For The Half Year Ended 30 September 2013

Operational Performance:

Zinc – India

Production Performance

Six months to



31.03.13

Production(kt)

Total mined metal 459 377 22% 870

Zinc 405 329 23% 765

Lead 54 48 13% 106

Zinc Refined metal- Total 370 324 14% 677

Integrated 368 310 19% 660

Custom 2 14 (83)% 17

Lead Refined metal – Total¹ 64 58 11% 125

Integrated 60 53 13% 107

Custom 5 5 (13)% 18

Saleable Silver Total (in m oz)² 5.98 5.06 18% 12.02

Integrated 5.16 4.62 12% 9.27

Custom 0.82 0.44 85% 2.75

1. Including captive consumption of 3kt each in H1 FY14 vs H1 FY13. 2. Excluding captive consumption of 0.57 million ounces in H1 FY 2014 vs 0.52 million ounces in H1 FY 2013.

Mined metal production increased in H1, up 22% as compared with the same period last year and integrated zinc and lead metal production in H1 was up by 18%.

Due to a significant improvement in the operational efficiency of our smelters, integrated production grew strongly with refined zinc up by 19%, lead by 13% and saleable integrated silver production up by 12%.

Markets

Zinc prices have declined following a strong start to 2013. There has however, been a sustained outflow of inventories which is resulting in lower LME stocks which may provide support for zinc prices going forward.

The tightness in the physical zinc market has firmed up premium, and it is anticipated that this upward trend will continue in the near future. In the medium term it is expected that supply growth is likely to fall short of demand growth and zinc prices are likely to firm up.

(US$ per tonne)

Six months to



31.03.13

Average Zinc LME cash settlement prices 1,850 1,906 (3)% 1,948

Average Lead LME cash settlement prices 2,076 1,974 5% 2,113

Average Silver Prices 714 952 (25%) 981

London Metal Exchange (LME) zinc prices averaged US$1,850 per tonne compared to US$1,906 per tonne in the same period in 2012.


Unit Costs

Six months to



31.03.13*

Unit costs

Zinc (US$ per tonne) 968 992 (2)% 981

Zinc excluding royalty (US$ per tonne) 810 832 (3)% 818

Unit costs of production excluding royalties were lower at US$810 per tonne in the first half of the year as compared with US$832 per tonne in the first half of last year. The business remains in the lowest cost quartile compared with the global producers, underpinned by high quality assets like the Rampura Agucha and Sindesar Khurd mines.

Financial Performance


Six months to



31.03.13

Revenue 1,071.5 984.2 9% 2,263.3

EBITDA 559.0 509.1 10% 1,182.5

EBITDA Margin(%) 52.2% 51.7% - 52.2%

Depreciation and amortisation 55.0 53.1 4% 110.1

Operating Profit 504.0 456.0 11% 1,072.4

Share in Group Operating Profit(%) 45% 32% - 42.7%

Capital expenditure 152.5 136.2 12% 287.1

Sustaining 38.9 25.5 52% 51.6

Growth 113.6 110.6 3% 235.5

EBITDA for H1 FY 2013-14 was US$559 million, 10% higher than the same period last year. The increase was driven by higher sales volumes, the positive benefit of the Indian rupee depreciation and the increase in metal premium, partially offset by lower zinc and silver prices.

Outlook

We expect mined metal production of ~950,000 MT in FY 2013-14. The momentum in integrated zinc-lead production in H1 is expected to continue in H2. Integrated saleable silver production is projected to be ~335 MT in FY 2013-14.

Projects

Work on the major mining capacity expansion projects in Zinc India is making good progress. The Rampura Agucha underground mining is operational using a ramp. Kayad mine will also commence production in the current financial year. Though the expansion project from 1 mtpa to 1.2 mtpa is going to be completed by 2019, the project is so designed that it starts delivering the cash flow from FY2014 itself. The yearly capex will be around US$250 million.


Zinc International


Six months to



31.03.13

Production (kt) 196 220 (11)% 425

Zinc mined metal content BMM and Lisheen 91 108 (16)% 208

Refined metal Skorpion 69 73 (5)% 145

Lead mined metal content 36 39 (6)% 72

In H1 FY 2013-14, total production of refined zinc and mined zinc-lead metal in concentrate (MIC) was lower due to disruptions at the Lisheen and Black Mountain Mines (BMM) in Q1. Production since then has stabilised and we expect to produce around 390,000 tonnes of refined zinc and mined zinc-lead metal in concentrate in FY 2013-14.

Unit Costs

(US$ per tonne)

Six months to



31.03.13

Zinc Wt. Avg. Cost (US$ per tonne) 1,122 1,090 3% 1,092

Production costs marginally increased to US$1,122 per tonne compared to US$1,090 per tonne for the same period last year due to lower volumes in the first quarter in Lisheen and BMM and a reduction in ore grades.



Six months to



31.03.13

Revenue 352.2 391.4 (10)% 797.2

EBITDA 116.5 134.9 (14)% 294.5

EBITDA Margin(%) 33.1% 34.5% - 36.9%

Depreciation 47.5 66.2 (28)% 122.5

Acquisition related amortisation 36.9 43.0 (14)% 61.4

Operating Profit 32.1 25.7 (25)% 110.6

Share in Group Operating Profit(%) 2.9% 2.6% - 4.4%


Sustaining 11.4 15.1 (24)% 27.4

Growth 9.4 2.6 258% 8.1

EBITDA for H1 was US$117 million lower by 14%, primarily due to lower volume and LME zinc prices with marginal increase in cash costs.

Outlook

Overall, the strategy of the business is to increase the mine life through our exploration programme, alongside developing the Gamsberg project, where a feasibility study is being carried out. Gamsberg is a 186 mt zinc deposit, one of the largest undeveloped deposits in the world.


Oil & Gas


Six months to



31.03.13

Gross Production (boepd) 212,873 207,105 3% 205,323

Rajasthan 174,503 169,486 3% 169,390

Ravva 28,704 30,591 (6)% 29,161

Cambay 9,666 7,028 38% 6,772

Gross Production (boe) 39.0 37.9 3% 74.9

Working Interest Production (boe) 24.2 23.5 3% 46.7

In H1, gross operated production reached 39.0 million barrels of oil equivalent (mmboe) with working interest production at 24.2 mmboe, 3% higher than the same period last year. The average daily gross operated production also increased by 3% to 212,873 barrels of oil equivalent per day (boepd) which was primarily driven by a 3% increase at the Rajasthan block and a 38% ramp-up in production at the Cambay block.

Development

With the current production ramp up, Cairn India remains on track for its FY 2013-14 exit gross production target of over 225,000 boepd from all producing assets including over 200,000 boepd from the Rajasthan block.

During the quarter Cairn India made significant progress in terms of its three key drivers for production enhancement, viz Well Construction, Facility uptime & cost efficiency and Government/JV approvals. With the focus on cost optimisation and enhanced operational efficiencies, Cairn India maintained its field direct operating cost within US$ 3/boe for the quarter.

In the Rajasthan block, Cairn India received the partner approval for the Mangala polymer Enhanced Oil Recovery (EOR) project, for which the contracting is in advanced stages and full field implementation is expected to commence in FY2015. Further, we continue to focus on the low permeability reservoirs within the Barmer Hill formation through use of advanced technology in order to monetize the significant resources.

Further on the regulatory front, the government issued a policy on the Integrated Development Plan. The prime objective of the policy is to reduce the time consumed from discovery to production.

Market

(US$ per barrel)

Six months to



31.03.13

Average Brent Prices 106.5 108.9 (2)% 110.1

The average crude oil price for the six months to September 2013 was 2% lower than during the same period last year. Rajasthan crude is well established in the market catering to strong demand from public and private sector refineries.

In accordance with the Rajasthan block Production Sharing Contract, the crude is benchmarked to Bonny Light, West African low sulphur crude that is frequently traded in the region, with appropriate adjustments for crude quality. The implied crude price realised for H1 FY 2013-14 (average of six months up to September 2013) lies within the stated guidance of 8%-13% discount to Brent.


The approval of operating partners been secured for implementation of the world’s largest polymer Enhanced Oil Recovery (EOR) project in the Mangala Field. Technical alignment is also in place for Field Development Plans for the Barmer Hill, NI and NE fields.


(in US$ millions, except as stated)

Six months to



31.03.13

Revenue 1,472.1 1,628.6 (10)% 3223.4

EBITDA 1,122.8 1,291.1 (13)% 2440.3

EBITDA Margin (%) 76.3% 79.3% - 75.7%

Depreciation 287.4 274.7 5% 600.4

Acquisition related amortisation 399.1 382.8 4% 834.5

Operating Profit 436.3 633.6 (31)% 1,005.4

Share in Group Operating Profit (%) 39.1% 44.0% - 40.0%


Sustaining 0.0 0.0 - 0.0

Projects 223.1 136.0 64% 423.6

EBITDA for H1 was US$1,123 million lower by 13%, despite higher volumes mainly due to an increase in the share of profit petroleum charges from 20% to 30%, payable to the Government of India and marginally lower oil prices.

In Cairn India, the oil & gas reserve created on acquisition is amortised on a unit of production basis over the total estimated remaining commercial reserves. Unit of production is calculated as the ratio of oil & gas production in the period to the estimated quantities of commercial reserves. Commercial reserves are proven and probable (2P) oil & gas reserves, which are estimated quantities of crude oil, natural gas and natural gas liquids with a specified degree of certainty to be recoverable in future from known reservoirs and which are considered commercially producible.

Exploration

Cairn India is actively pursuing exploration and appraisal (E&A) activities in all its assets.

Cairn India has drilled 6 E&A wells in the RJ block in H1 FY14. Out of these, 4 wells found hydrocarbons. A Declaration of potential commerciality has been submitted for one of the discoveries. In Rajasthan, Cairn India plans to drill several high impact exploration wells to drill out 50% of the 530 million barrels of gross recoverable risked prospective resources by end FY 2013-14.

The appraisal drilling in the Krishna Godavari (KG-ONN- 2003/1) block witnessed three-fold productivity increase post successful drilling and fracking, significantly improving the commerciality of the Nagayalanka discovery. The Declaration of commerciality is expected to be submitted in this financial year. Cairn India also plans to drill an exploration well in the Ravva block within this financial year, in addition to further exploration activities in other blocks in the India, Sri Lanka and South Africa.

Outlook

Cairn India remains on track for our FY 2013-14 exit gross production target of over 225,000 boepd including over 200,000 boepd from the Rajasthan block. With the Mangala polymer EOR project securing partner approval, contracting is in advanced stages for full field implementation to follow this, with the aim of sustaining production and increasing the field’s ultimate oil recovery. Focus is on the significant resources in the low permeability reservoirs within the Rajasthan Barmer Hill formation exploiting advanced technology to achieve optimal commercial rates, with infrastructure and development facilities in place.


Iron Ore

Production and Sales

Six months to



31.03.13

Production

Saleable ore(mt) 0.0 3.7 (100)% 3.7

Goa 0.0 3.7 (100)% 3.7

Karnataka 0.0 0.0 - 0.0

Pig iron(kt) 238 121 97% 308

Sales

Iron Ore(mt) 0.0 3.1 (99)% 3.1

Goa 0.0 3.0 (100)% 3.0

Karnataka 0.0 0.1 (61)% 0.1

Pig iron(kt) 258 117 120% 275

The suspension of iron ore operations at Goa and Karnataka continued in Q2 FY 2013-14. Following the lifting of restriction on mining at Karnataka by the Supreme Court, we are now awaiting final statutory clearances to restart mining. We expect to resume mining at Karnataka soon. Regarding the suspension of mining in Goa, the Supreme Court has recently announced its interim order, allowing sale of inventory of iron ore. They have also mandated the setting up

of an expert committee to determine how much mining should be permitted in the state of Goa. Following the commissioning of new capacity, the production of pig iron increased substantially, up by 97% to 238,000 tonnes.

Market

In 2013, world steel consumption is forecast to increase by 3 per cent, compared with 2012, to total 1.57 billion tonnes. The growth will be supported mostly by increased infrastructure construction activity in emerging economies, particularly in Asia.

China forecasts that it will increase its imports of iron ore by 12 per cent to total 831 million tonnes in 2013.

India’s steel consumption forecast to increase 6 per cent to total 83 million tonnes. The increase in consumption is expected as a result of government spending on infrastructure projects and higher consumption of consumer durables.



Six months to



31.03.13

Revenue 139.5 345.0 (60)% 442.5

EBITDA (18.0) 116.5 (116)% 84.9

EBITDA Margin(%) (12.9)% 33.8% - 19.2%

Depreciation 17.2 18.6 (7)% 44.1

Acquisition related amortisation 0.1 36.5 (100)% 40.2

Operating Profit (35.3) 61.4 (158)% 0.6

Share of Group Operating Profit(%) (3.2)% 4.3% - 0.0%

Capital expenditure 30.2 51.8 (42)% 128.1

Sustaining 9.5 11.9 (20)% 49.3

Growth 20.7 39.9 (48)% 78.8


Industry wide suspension of mining resulted in negative EBITDA in H1 FY 2013-14 at US$18 million (H1 FY 2012-13 positive US$117 million).

Projects

At Liberia, we have established by extensive drilling, contours of large iron ore deposits with further upside. We are reviewing the different phased options, including the first phase of 2 mt.

Outlook

Following the lifting of restriction on mining at Karnataka by the Supreme Court, we are now awaiting final statutory clearances to restart mining. The Supreme Court has recently announced its interim order, allowing sale of inventory of iron ore in the state of Goa.


Copper

Copper India/Australia


Six months to



31.03.13

Production (kt)

Australia – mined metal content 12 13 (8)% 26

India – cathode 98 175 (44)% 353

Following a temporary closure in Q1, post favourable order of National Green Tribunal, the smelter had restarted in end June and is now operating at full capacity. The copper anode production in Q2 was 90,000 tonnes, in line with the rated capacity. Copper cathode production was 82,000 tonnes in Q2 and 98,000 tonnes in H1.

Mined metal production in Australia was 12,000 tonnes during the first half of the year.

Market

Six months to



31.03.13

Average LME cash settlement prices (US$ per tonne) 7,110 7,785 (9)% 7,853

Realised TC/RCs (US cents per lb) 14.6 11.8 23% 12.8

Average LME copper price fell by 9% and Treatment charges/Refining charges (TC/RC) increased by 23% during the six months to September 2013 compared to the corresponding prior period.

Global refined copper production in H1 FY 2013-14 was 10.5mt and is expected to be 10.7mt in H2 projecting a total growth of 4.7% year on year. Global refined copper consumption is expected to grow by 5.6%. TC/RC terms are expected to rise in favour of smelters on the back of rising mine supply from brownfield and greenfield expansions.

Unit Cost

Six months to



31.03.12

Unit conversion costs – US cents per lb 13.8 6.3 120% 8.7

Net unit conversion cost at Copper India was 13.8 US cents per lb in H1 FY2013-14, compared with 6.3 US cents per lb in the H1 FY 2012-13, largely due to lower sulphuric acid by-product sale prices.




Six months to



31.03.13

Revenue 1,230.8 1,956.9 (37)% 3,991.1

EBITDA 76.5 108.0 (29)% 219.1

EBITDA Margin(%) 6.2% 5.5% - 5.5%

Depreciation and amortisation 20.6 21.9 (6)% 43.2


Share in Group Operating Profit (%) 5.1% 6.0% - 6.8%


Sustaining 11.0 24.9 (56)% 47.6

Growth 11.3 25.6 (56)% 41.8

EBITDA for H1 was lower reflecting lower volumes due to the temporary plant closure in Q1 and lower sulphuric acid income.

The National Green Tribunal gave environmental clearance for our Tuticorin smelter and it became operational again following the temporary closure in the first quarter of the year.

Projects

The second unit of the 80MW power plant is awaiting consent and 400 ktpa copper smelter expansion project is on hold, pending consent from the State Pollution Control Board.

Outlook

We expect to operate smelter at full capacity in H2 2014. We expect improved profitability due to higher TC/RC in FY2014-15. The plant will undergo a bi-annual shutdown in the first half of the year FY 2014-15.

Copper Zambia


Six months to



31.03.13

Production(kt)

Mined metal 70 86 (19)% 159

Cathode 94 110 (15)% 216

Integrated 65 83 (22)% 160

Custom 29 27 6% 56

Mined metal production was lower at 34,000 tonnes in Q2 FY 2013-14 and 70,000 tonnes in H1 mainly due to the suspension of mining operations at the COP F&D mine in Zambia from January 2013, which was partially offset by higher output from the Tailings Leach Plant (TLP). Integrated production was lower in H1 due to furnace leakage in the Nchanga smelter in Q1.


Unit Costs

Six months to



31.03.13

Unit costs (US cents per lb) 227.9 225.7 1% 255.1

Unit cash costs of integrated production in H1 FY 2013-14 were 228 US cents per lb, in line with the same period last year.



Six months to



31.03.13

Revenue 686.7 865.4 (21)% 1,742.8

EBITDA 101.3 185.3 (45)% 257.3

EBITDA margin(%) 14.8% 21.4% - 14.8%



Share of Group Operating Profit(%) 0.3% 6.4% - 2.5%


Sustaining 85.9 72.9 18% 171.4

Growth 19.6 63.5 (69)% 88.4

EBITDA in H1 FY 2013-14 was US$101 million, 45% lower than the EBITDA of US$185 million in H1 FY 2012-13, primarily due to lower volumes and LME prices.

Outlook

KCM is facing challenges to improve production and control the cost of production for which we are engaging ourselves with the stakeholders and cost control measures are being taken. Our key focus at the Zambian operations would be to improve the operational performance and rationalising the cost base which are required to make the operations sustainable and realise potential of the assets. We expect to deliver 140,000 tonnes of integrated production volume in the current financial year and achieve costs of around 220 US c/lb in H2 FY 2013-14.


Aluminium


Six months to



31.03.13

Production (kt)

Alumina – Lanjigarh 116 423 (73)% 527

Aluminium – Jharsuguda Plant 1 271 259 5% 527

Aluminium – Korba 124 123 1% 247

Total Aluminium 395 382 3% 774

Surplus power sales (Million units) 72 183 (60)% 323

The Lanjigarh alumina refinery recommenced operations in July 2013 and produced 116,000 tonnes in Q2. During Q2, the refinery supplied 17% of the alumina consumed by our smelters as compared with 100% use of imported alumina feed by the smelters in Q1. We expect the refinery to ramp-up to its rated capacity 1mtpa in Q3 FY2014.

In Q2, the Jharsuguda-I and Korba-II smelters continued to operate above their rated capacities. Around 60% of the total production was converted into value added products in Q2, in line with the corresponding prior period.

Market

Six months to



31.03.13

Average LME cash settlement prices (US$ per tonne) 1,807 1,947 (7)% 1,974

Power sales realisation (US cents/kwh) 2.5 5.1 (50)% 4.8

Average LME prices for aluminium for the six months to September 2013 were US$1,807, a decline of 7% from the average price level during same period last year (H1 FY 2013-14 US$1,947). Tightness in physical market had led to an increase of US$ 140 (benchmark) in the premium in H2 FY 2013, even though it has come off somewhat in Q2, it is strong and expected to stay steady. Global primary aluminium consumption however, is expected to be 50.4 million tonnes in FY 2013-14, a growth of 6.6% year-on-year. Aluminium is expected to continue to lead the metals pack in term of consumption growth rates.

Unit Costs

(in US$ per tonne)

Six months to



31.03.13

Alumina Cost 329 340 (3)% 353

Aluminium Business 1,702 1,873 (9)% 1,879

BALCO Production Cost 1,844 1,871 (1)% 1,901

BALCO Smelting Cost¹ 1,124 1,170 (4)% 1,165

Jharsuguda Production Cost 1,637 1,874 (13)% 1,869

Jharsuguda Smelting Cost¹ 928 1,152 (19)% 1,090

1. Smelting cost comprises production cost excluding alumina cost.

Alumina COP for at Lanjigarh was US$ 329 per tonne as compared to US$ 340 per tonne in H1 FY 2013.

We continue to improve our cost performance and maintain our position is second quartile of global cost curve, despite purchased alumina and bauxite. At Jharsuguda, aluminium COP was lower due to improved coal sourcing mix and operational efficiencies partially offset by higher


alumina cost. At BALCO, aluminium COP was higher on account of higher alumina cost and further tapering of coal linkage, partially offset by lower specific power consumption and other operational efficiencies.



Six months to



31.03.13

Revenue 877.5 890.5 (1)% 1,837.8

EBITDA 125.3 100.5 25% 202.6

EBITDA Margin(%) 14.3% 11.3% - 11.0%


Operating Profit 37.0 5.4 585% 11.4

Share of Group Operating Profit(%) 2.6% 0.4% - 0.4%


Sustaining 11.1 24.0 (54)% 41.2

Projects 72.0 217.2 (67)% 382.9

EBITDA increased by 25% at US$125 million as compared to US$101 million generated in H1 FY 2012-13 due to lower cost of production and improved operational efficiency despite a decrease in LME prices.

Expansion Project

We continue to evaluate the potential start-up date of the 1.25 million tonnes smelter at Jharsuguda. We are currently working on completing the project.

We expect to tap first metal at the 325 ktpa BALCO-III Aluminium smelter in Q3 FY2014. The first unit of the 1200 MW Power plant at BALCO is expected to be synchronized in Q4 FY2014. On receipt of remaining regulatory clearances, we expect to commence mining at our BALCO coal block in Q1 FY2015.

Outlook

In H2 we expect stable output from the existing Jharsuguda and BALCO smelters and the weighted average cost of aluminium is expected to remain stable and in lower half of global cost curve. Higher alumina output from the Lanjigarh refinery, which recommenced operations in July 2013, will therefore help reduce cost.


Power


Six months to



31.03.13

Total Power Sales (million units) 5,087 5,364 (5)% 10,129

MALCO and HZL Wind Power 758 801 (5)% 1,358

BALCO 270MW 231 684 (66)% 1,241

SEL 4,098 3,879 6% 7,530

* Includes SEL trial run production of 339 million units in H1 FY 2013.

Power sales were lower at 5,087 million units in H1 as compared to 5,364 million units in the corresponding previous period. Higher power sales from Jharsuguda 2,400MW power plant which was operating at a reduced Plant Load Factor (PLF) was more than offset by lower sales at BALCO 270MW power plant. The lower PLF at Jharsuguda and BALCO 270MW was largely due to lower demand.

Market

The last five years have witnessed more than 23,000 MW of Independent Power Producers (IPP) capacity addition, not only exceeded the Government target but also adding more than the total capacity in the fifteen years preceding it. With economic growth falling below 5%, the power sector is seeing sharp slowdown in demand. The poor financial health of the distribution companies have further worsened the power tariff. However, in run up to the elections and peak season the lower tariff is expected to rise.

Six months to



31.03.13

Sales Realization (US cents/kwh) 6.2 6.6 (6)% 6.5

Cost of Production (US cents/kwh) 3.9 4.2 (7)% 4.1

Unit Costs

Average power generation costs in H1 FY 2013-14 were 3.9 US cents per unit compared with 4.2 US cents per unit in H1 FY 2012-13.



Six months to



31.03.13

Revenue 364.0 370.5 (5)% 669.0

EBITDA 122.6 126.8 (3)% 228.5

EBITDA Margin(%) 33.7% 34.2% - 34.7%

Depreciation and amortisation 51.1 47.3 8% 95.8


Share in Group Operating Profit(%) 6.4% 5.5% - 5.2%

Capital Expenditure 164.4 314.0 (47)% 702.9

Sustaining 4.3 0.0 - 1.7

Project 160.0 314.0 (49)% 701.2

Note- Revenue includes US$17.9 mn to Balco smelter in H1 FY 2013-14, US$ 7.0 mn in H1 FY 2012-13 and US$ 9.9 mn in FY 2012-13.

EBITDA in H1 FY 2013-14 was US$123 million, marginally lower than the previous year largely due to lower power sales volume.


Projects

Work at the Talwandi Sabo power project is progressing well and the first unit is expected to be synchronised in Q3 FY 2013-14.

Outlook

We expect 50% PLF at 2400MW IPP in the second half of the year which will improve power sale. However, in run up to the elections and peak season the lower tariff is expected to rise.


Going Concern

The directors have considered the Group's cash flow forecasts for the period to the end of 31 March 2015. The Board is satisfied that the Group's forecasts and projections, taking into account reasonably possible changes in trading performance, show that the Group will be able to operate within the level of its current facilities for the foreseeable future. For this reason the Group continues to adopt the going concern basis in preparing its Condensed financial statements. Further analysis of net debt is set out in note 9 of the interim financial statements and details of borrowings and facilities are set out in the Financial Review on page 14-15.

Risks and Uncertainties

The Vedanta Group is exposed to a variety of risks which are inherent in an international mining and resources business. Manifestation of any or all of these risks could have a significant impact on the operational or financial performance of our Group.

Principal risks and uncertainties and detailed information on the impact of these risks as well as the identification and mitigation measures adopted by management have been documented in Vedanta’s Annual Report for FY 2012-13. A summary of these risks and their possible impact is presented below:


Risks Possible Impact

External Risks

Commodity prices Volatility in the Group’s earnings and cash flows

Regulatory, economic, social and political uncertainty

Higher operating costs, restriction on mining rights or legal restrictions on the movement of funds within Group entities carrying minority stakeholders

Financial Risks

Currency fluctuations Adverse impact on our financial results, and higher costs of funds borrowed

Liquidity risks Inability to raise sufficient funds to develop new projects, fund acquisitions or meet the ongoing financial needs

Strategic Risks

Delays in expansions and new projects Adverse effect on the Group’s businesses, operating results, financial condition, borrowing capacity and prospects

Health, safety and environmental risks Adverse impact on the Group’s operation and reputation

Employee risks Significant loss or diminution in collective pool of Vedanta's executive management or other key employees would have material adverse impact on its businesses, operating results and future prospects

Discovery risks Negative impact on the Group’s future results and financial condition

Failure to meet production and cost targets

Reduction in the Group’s profitability and market competitiveness

Responsibility Statement

We confirm that to the best of our knowledge:

� The condensed set of financial statements has been prepared in accordance with IAS 34, Interim Financial Reporting; and give a true and fair view of the assets, liabilities, financial position and profit of the undertakings included in the consolidation as a whole by DTR 4.2.4R

� The interim management report includes a fair view of the information required by DTR 4.2.7R (indication of important events during the first six months and description of principal risks and uncertainties for the remaining six months of the year); and

� The interim management report includes a fair view of the information required by DTR 4.2.8R (disclosure of related party transactions and changes therein)

By order of the Board

M S Mehta D D Jalan Chief Executive Officer Chief Financial Officer 14 November 2013 14 November 2013


CONDENSED CONSOLIDATED INCOME STATEMENT

For the six month period ended 30 September 2013

(US$ million except as stated)

Note

Six months ended 30 September 2013

(Unaudited)

Six months* ended 30 September 2012

(Unaudited)

Year ended* 31 March 2013

(Audited)

Revenue 3 6,164.0 7,451.9 14,989.8

Cost of sales (4,749.8) (5,632.6) (11,684.5)

Gross profit 1,414.2 1,819.3 3,305.3

Other operating income 41.1 53.7 90.3

Distribution costs (112.3) (182.9) (295.0)

Administrative expenses (228.4) (250.4) (528.9)

Special items 4 (61.8) (7.0) (41.9)

Operating profit 3 1,052.8 1,432.7 2,529.8

Investment revenues 302.6 310.5 673.1

Finance costs (661.0) (546.1) (1,194.0)

Other gains and (losses) (net) 5 (433.3) (129.1) (285.2)

Profit before taxation 3 261.1 1,068.0 1,723.7

Net tax expense 6 (17.7) (124.8) (46.1) Profit for the period/year from continuing operations 243.4 943.2 1,677.6

Attributable to:

Equity holders of the parent (217.0) 173.6 162.0

Non-controlling interests 460.4 769.6 1,515.6

243.4 943.2 1,677.6

Earnings per share

Basic (loss)/earnings per ordinary share (US cents) 7a (79.4) 63.7 59.4

Diluted (loss)/earnings per ordinary share (US cents) 7a (76.7) 62.6 58.3

Underlying basic earnings per ordinary share (US cents) 7b 29.3 97.8 134.8

Underlying diluted earnings per ordinary share (US cents) 7b 28.3 96.1 132.5

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 12.


CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


(US$ million)


(Unaudited)


(Unaudited)


(Audited)

Profit for the period/year 243.4 943.2 1,677.6

Income and expenses recognised directly in equity: Items that will not be reclassified subsequently to income statement:

Actuarial losses on post retirement defined benefit plan (0.4) (4.5) (6.3)

Tax effects on items recognised directly in the equity - 1.5 2.1

Total (a) (0.4) (3.0) (4.2)

Items that may be reclassified subsequently to profit or loss:

Exchange differences arising on translation of foreign operations (1,712.8) (340.9) (707.9)

Change in fair value of available-for-sale financial assets (0.4) (17.7) (1.3)

Change in fair value of cash flow hedges deferred in reserves (72.3) (43.9) (60.5)

Tax effects arising on cash flow hedges deferred in reserves (2.0) 13.9 (1.4)

Gain on available-for-sale financial asset transferred to income statement - - (70.5)

Change in fair value of cash flow hedges transferred to income statement (27.3) 43.1 94.8

Tax effects arising on cash flow hedges transferred to income statement 8.9 (14.2) (5.3)

Total (b) (1,805.9) (359.7) (752.1)

Other comprehensive expense for the period/year (a+b) (1,806.3) (362.7) (756.3)

Total comprehensive (expense)/income for the period/year (1,562.9) 580.5 921.3

Attributable to:

Equity holders of the parent (973.7) 26.5 (121.4)

Non-controlling interests (589.2) 554.0 1,042.7



CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 September 2013

(US$ million)

Note

As at 30 September 2013

(Unaudited)

As at 30 September 2012*

(Unaudited)

As at 31 March 2013*

(Audited)

Assets

Non-current assets

Goodwill 16.6 16.4 16.6

Intangible assets 92.5 - -

Property, plant and equipment 30,740.2 34,142.1 33,132.6

Financial asset investments 1.8 180.9 2.4

Other non-current assets 242.3 55.9 113.4

Financial Instruments (derivatives) 8.0 33.5 -

Deferred tax assets 789.8 609.9 847.1

31,891.2 35,038.7 34,112.1

Current assets

Inventories 1,851.9 1,958.9 1,965.6

Trade and other receivables 1,768.8 2,069.8 1,706.0

Financial asset investments - - 18.2

Financial instruments (derivatives) 122.9 144.1 31.1

Current tax assets 66.5 56.2 147.0

Liquid investments 9 5,787.6 5,610.4 5,781.5

Cash and cash equivalents 9 2,347.1 1,552.6 2,200.2

11,944.8 11,392.0 11,849.6

Total assets 43,836.0 46,430.7 45,961.7

Liabilities

Current liabilities

Short-term borrowings 9 (2,831.1) (5,086.2) (3,705.7)

Convertible bonds 9 - (697.7) (694.4)

Trade and other payables (4,592.2) (3,811.2) (4,563.7)

Financial instruments (derivatives) (73.8) (189.7) (44.5)

Retirement benefits (8.1) (7.2) (8.3)

Provisions (72.5) (14.4) (68.4)

Current tax liabilities (61.4) (53.9) (125.3)

(7,639.1) (9,860.3) (9,210.3)

Net current assets 4,305.7 1,531.7 2,639.3

Non-current liabilities

Medium and long-term borrowings 9 (11,973.0) (9,580.3) (10,452.6)

Convertible bonds 9 (1,801.3) (1,641.8) (1,740.1)

Trade and other payables (154.8) (226.5) (232.2)

Financial instruments (derivatives) (42.1) (42.5) (28.0)

Deferred tax liabilities (4,851.2) (5,771.7) (4,996.6)

Retirement benefits (62.7) (61.4) (58.4)

Provisions (365.1) (396.3) (362.6)

Non-equity non-controlling interests (11.9) (11.9) (11.9)


Note

As at 30 September 2013

(Unaudited)

As at 30 September 2012*

(Unaudited)

As at 31 March 2013*

(Audited)

(19,262.1) (17,732.4) (17,882.4)

Total liabilities (26,901.2) (27,592.7) (27,092.7)

Net assets 16,934.8 18,838.0 18,869.0

Equity

Share capital 29.8 29.7 29.8

Share premium account 196.8 196.8 196.8

Treasury shares (556.9) (556.9) (556.9)

Share-based payment reserves 49.8 14.6 29.0

Convertible bond reserve 159.1 343.5 302.9

Hedging reserve (69.2) (56.0) (22.2)

Other reserves 143.8 953.3 789.3

Retained earnings 3,904.8 3,667.2 3,632.6

Equity attributable to equity holders of the parent 3,858.0 4,592.2 4,401.3

Non-controlling interests 13,076.8 14,245.8 14,467.7

Total equity 16,934.8 18,838.0 18,869.0


Financial statements of Vedanta Resources plc, registration number 4740415 were approved by the Board on 14 November 2013.

MS Mehta- Director


CONDENSED CONSOLIDATED CASH FLOW STATEMENT


(US$ million)

Note


(Unaudited)


(Unaudited)


(Audited)

Operating activities

Profit before taxation 261.1 1,068.0 1,723.7

Adjustments for:

Depreciation and amortisation 1,092.5 1,132.0 2,337.2

Investment revenues (302.6) (310.5) (673.1)

Finance costs 661.0 546.1 1,194.0

Other gains and losses (net) 433.3 129.1 285.2

Profit on disposal of property, plant and equipment (3.2) (11.8)

(11.6)

Write-off of unsuccessful exploration costs 4.8 - 51.8

Share-based payment charge 20.8 11.0 25.5

Other non-cash items 94.6 (7.8) (0.1)

Operating cash flows before movements in working capital 2,262.9 2,556.1 4,932.6

Increase in inventories (98.7) (286.8) (347.0)

(Increase)/decrease in receivables (206.3) (240.8) 29.8

Increase in payables 816.8 75.8 323.9

Cash generated from operations 2,774.7 2,104.3 4,939.3

Dividend received 1.0 14.8 91.4

Interest income received 127.7 175.6 362.7

Interest paid (573.1) (607.1) (1,150.9)

Income taxes paid (341.2) (418.9) (897.4)

Dividends paid (101.8) (96.0) (153.5)

Net cash from operating activities 1,887.3 1,172.7 3,191.6

Cash flows from investing activities

Purchases of property, plant and equipment (1,209.6) (945.3) (2,221.2)

Proceeds on disposal of property, plant and equipment 18.5 40.9 63.4

Purchase of liquid investments 9 (458.7) (677.2) (941.7)

Disposal of financial asset investments 16.7 9.3 158.1

Net cash used in investing activities (1,633.1) (1,572.3) (2,941.4)

Cash flows from financing activities

Issue of ordinary shares - - 0.1

Dividends paid to non-controlling interests of subsidiaries (174.9) (77.1)

(257.4)

Acquisition of additional interest in subsidiary - - (33.5)

(Decrease)/Increase in short-term borrowings 9 (2,071.3) (455.4) 159.9

Proceeds from long-term borrowings 9 4,443.7 705.6 2,307.9

Repayment of long-term borrowings 9 (1,994.5) (234.6) (2,352.4)

Net cash from/(used in) financing activities 203.0 (61.5) (175.4)

Net increase/(decrease)in cash and cash equivalents 9 457.2 (461.1)

74.8

Effect of foreign exchange rate changes 9 (310.3) 68.7 180.4

Cash and cash equivalents at beginning of period/year 9 2,200.2 1,945.0 1,945.0

Cash and cash equivalents at end of period/year 9 2,347.1 1,552.6

2,200.2



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 30 September 2013

(US$ million)

Attributable to equity holders of the Company

Share

capital

Share

premium

Treasury

shares

Share-based

payment

reserves

Convertible

bond

reserve

Hedging

reserve

Other

reserves¹

Retained

earnings Total

Non-controlling

interests Total equity

At 1 April 2013* 29.8 196.8 (556.9) 29.0 302.9 (22.2) 789.3 3,632.6 4,401.3 14,467.7 18,869.0

Profit for the period - - - - - - - (217.0) (217.0) 460.4 243.4

Other comprehensive income for the period - - - - - (47.0) (709.7) - (756.7) (1,049.6) (1,806.3)

Total comprehensive income for the period - - - - - (47.0) (709.7) (217.0) (973.7) (589.2) (1,562.9)

Convertible bond transfers - - - - (28.3) - - 28.3 - - -

Repayment of Convertible bond - - - - (115.5) - - - (115.5) - (115.5)

Transfers¹ - - - - - - 64.2 (64.2) - - -

Exercise of LTIP awards - - - - - - - - - - -

Dividends paid - - - - - - - (101.7) (101.7) (174.9) (276.6)

Change in non-controlling interests due to merger (note 14) - - - - - - - 626.8 626.8 (626.8) -

Recognition of share-based payment - - - 20.8 - - - - 20.8 - 20.8

At 30 September 2013 (Unaudited) 29.8 196.8 (556.9) 49.8 159.1 (69.2) 143.8 3,904.8 3,858.0 13,076.8 16,934.8


For the year ended 31 March 2013:

(US$ million)


Share

capital

Share

premium

Treasury

shares

Share-based

payment

reserves

Convertible

bond

reserve

Hedging

reserve

*Other

reserves¹

*Retained

earnings *Total

*Non-

controlling

interests *Total equity

At 1 April 2012 29.7 196.8 (556.9) 39.8 382.0 (55.6) 1,008.5 3,606.3 4,650.6 13,768.9 18,419.5

Profit for the year - - - - - - - 162.0 162.0 1,515.6 1,677.6

Other comprehensive income for the year - - - - - 33.4 (316.8) - (283.4) (472.9) (756.3)

Total comprehensive income for the year - - - - 33.4 (316.8) 162.0 (121.4)

1,042.7 921.3


Transfers¹ - - - - - - 97.6 (97.6) - - -

Dividends paid - - - - - - - (153.5) (153.5) (257.4) (410.9)

Exercise of LTIP awards 0.1 - - (36.3) - - - 36.3 0.1 - 0.1

Additional investment in assets - - - - - - - - - (86.5) (86.5)


At 31 March 2013 (Audited) 29.8 196.8 (556.9) 29.0 302.9 (22.2) 789.3 3,632.6 4,401.3 14,467.7 18,869.0


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

For the period ended 30 September 2012

(US$ million)


Share

capital

Share

premium

Treasury

shares

Share-based

payment

reserves

Convertible

bond

reserve

Hedging

reserve

*Other

reserves¹

*Retained

earnings *Total

*Non-

controlling

interests *Total equity

At 1 April 2012 29.7 196.8 (556.9) 39.8 382.0 (55.6) 1,008.5 3,606.3 4,650.6 13,768.9 18,419.5

Profit for the period - - - - - 173.6 173.6 769.6 943.2

Other comprehensive income for the period (0.4) (146.7) - (147.1) (215.6) (362.7)

Total comprehensive income for the period (0.4) (146.7) 173.6 26.5 554.0 580.5


Transfers¹ - - - - - - 91.5 (91.5) - - -

Exercise of LTIP awards - - - (36.2) - - - 36.2 - - -

Dividends paid - - - - - - - (95.9) (95.9) (77.1) (173.0)


At 30 September 2012 (Unaudited) 29.7 196.8 (556.9) 14.6 343.5 (56.0) 953.3 3,667.2 4,592.2 14,245.8 18,838.0

* The comparative information has been restated so as to reflect the adoption of new accounting standards, details of which have been set out in note 12. 1 Other reserves comprise the currency translation reserve, merger reserve, investment revaluation reserve and the general reserves established in the statutory accounts of the Group’s Indian subsidiaries. Under

Indian law, a general reserve is created through an annual transfer of net income to general reserves at a specified percentage in accordance with applicable regulations. The purpose of these transfers is to ensure that the total dividend distribution is less than the total distributable results for that year.


Notes to the financial information

1. Basis of Preparation

The Condensed financial statements for the six month period ended 30 September 2013 have been prepared in accordance with International Accounting Standard (IAS) 34 Interim Financial Reporting as adopted by the European Union (‘EU’) and the requirements of the Disclosure and Transparency Rules (DTR) of the Financial Conduct Authority (FCA) in the United Kingdom as applicable to interim financial reporting.

The Condensed financial statements represent a ‘condensed set of financial statements’ as referred to in the DTR issued by the FCA. Accordingly, they do not include all of the information required for a full annual financial report and are to be read in conjunction with the Group’s financial statements for the year ended 31 March 2013, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by EU. The financial statements for the period ended 30 September 2013 and 30 September 2012 do not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2013 does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. This information was derived from the statutory accounts for the year ended 31 March 2013, a copy of which has been delivered to the Registrar of Companies. The auditor’s report on these accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of an emphasis of matter and did not contain a statement under sections 498 (2) or (3) of the Companies Act 2006.

The financial information prepared under IFRS in respect of six months ended 30 September 2013 and 30 September 2012 are unaudited but has been reviewed by the auditor and their report is set out on page 62.

The Group published full financial statements that comply with IFRS as adopted by the European Union for the year ended 31 March 2013.

The set of financial statements included in the interim financial report has been prepared using the going concern basis of accounting for the reasons set out in the Going Concern section of the Financial Review.

2. Accounting Policies

The condensed consolidated financial statements are prepared using the same accounting policies as applied in the audited 31 March 2013 annual report. However, during the interim period the following new standards, amendments to existing standards and interpretations have become applicable and adopted for preparation of the condensed consolidated financial statements.

IAS 1: Presentation of items of other comprehensive income (Amended)

This amendment to IAS 1 requires entities to separate items presented in other comprehensive income that can be recycled in the income statement at a future period separately from items that will not be recycled in a future period together with their tax effect. This amendment has been applied retrospectively and affected the presentation of items of comprehensive income and had no impact on the financial performance of the Group.

IAS 19: Employee benefits-(Revised)

The revised IAS 19 standard on employee benefits has introduced amendments to the accounting for defined benefit plans. It requires all actuarial gains and losses arising on defined benefits plans to be recognised immediately in other comprehensive income and requires the expected return on plan assets which is recognised in the income statement to be calculated based on the rate used to discount the defined benefit obligation. This differs from the Group’s previous policy which was to charge any actuarial gain/losses in the income statement. Hence


the Group has recognised all actuarial gains and losses arising on defined benefits plans in other comprehensive income.

The Group has applied the standard retrospectively in accordance with the transitional provisions. The adoption the amendment in IAS 19 has not materially impacted the financial statement. The impact on the half-year financial statements is set out in note 12.

IFRS 7: Disclosure-Offsetting financial assets and financial liabilities

IFRS 7 requires additional disclosures in connection with assets and liabilities which are offset under a master netting agreement. The amendments to IFRS 7 have not impacted the Group’s half-year financial statements.

IFRS 10: Consolidated financial statements

IFRS 10 establishes the principal for the preparation and presentation of consolidated financial statements with a new definition of control based on power to direct the activities of the investee, replacing previous guidance on control and consolidation under IAS 27 (Separate Financial Statements) and SIC 12 (Consolidation-Special Purpose Entities). IFRS 10 does not have any impact on the financial statements of the Group.

IFRS 11: Joint arrangements

IFRS 11 (Joint Arrangements) replaced IAS 31 (Interest in Joint Ventures) and requires investments in joint arrangements classified as either joint ventures or joint operations based on the rights and obligations of the parties to the arrangement. The standard removes the option to account for joint ventures using proportionate consolidation and instead joint arrangements that meet the definition of a joint venture under IFRS 11 must be accounted for using the equity method. IFRS 11 has not significantly affected the Group.

IFRS 12: Disclosure of interest in other entities

IFRS 12 applies to entities that have an interest in a subsidiary, a joint arrangement, an associate or unconsolidated structured entities. IFRS 12 requires an entity to disclose information that enables users of financial statements to evaluate the nature and risk associated with the interest in other entities. These disclosure requirements are not applicable for consolidated financial statements, unless required as a result of significant events and transactions in the period. Accordingly these disclosures will be provided in the Group financial statements for the year ending 31 March 2014.

IFRS 13: Fair value measurement:

IFRS 13 provides for a framework for measuring fair value when such measurements are required or permitted by other standards. IFRS 13 also results in an amendment to IAS 34 requiring that some of these disclosures relating to financial instruments are made in the financial statements and also requires specific disclosures on fair values. These disclosures replace some of the existing disclosure requirements in other standards, including IFRS 7 Financial Instruments: Disclosures. The application of IFRS 13 has not materially affected the fair value measurements carried out by the Group.

IFRIC 20: Stripping Costs in the Production Phase of a Surface Mine

IFRIC 20 specifies the accounting for costs associated with waste removal (stripping) during the production phase of a surface mine. When the benefit from the stripping activity is realised in the current period, the stripping costs are accounted for as the cost of inventory. When the benefit is the improved access to ore in future periods, the costs are recognised as a non-current asset, if certain criteria are met. After initial recognition, the stripping activity asset is depreciated on a systematic basis (unit of production method) over the expected useful life of the identified component of the ore body that becomes more accessible as a result of the stripping activity.


As a result of adoption of IFRIC 20, the two key changes to the Group’s existing accounting policy is upon initial recognition of the stripping assets and its depreciation based on unit of production basis compared to recognising it in the income statement as is currently done. Accordingly, the application of IFRIC 20 has resulted in increased capitalisation of stripping costs and its depreciation and consequential adjustment to the cost of sales and inventories. Comparatives numbers have been restated to give the retrospective impact of adopting IFRIC 20. The impact on the Group financial statements is set out in note 12.

Foreign Exchange Rate

The following exchange rate to US dollar ($) have been applied:

Average rate for six months

ended 30 September

2013

Average rate for six months

ended 30 September

2012

Average rate for year ended 31 March 2013

As at 30 September

2013

As at 30 September

2012

As at

31 March 2013

Indian rupee 59.11 54.74 54.45 62.78 52.70 54.39

3. Segmental Reporting

The Group’s primary format for segmental reporting is based on its business segments. The business segments consist of zinc, oil and gas, iron ore, copper, aluminium and power with components not meeting the quantitative threshold for reporting being reported as “Others”. Business segment financial data includes certain corporate costs, which have been allocated on an appropriate basis. The risks and returns of the Group’s operations are primarily determined by the nature of the different activities in which the Group is engaged. Inter-segment sales are charged based on prevailing market prices. The Group’s activities are organised on a global basis.

Vedanta Resources plc is company incorporated in the United Kingdom under the Companies Act. The Group’s reportable segments defined in accordance with IFRS 8 are as follows:

� Zinc-India

� Zinc-International

� Oil and gas

� Iron Ore

� Copper-India/Australia

� Copper-Zambia

� Aluminium

� Power

Management monitors the operating results of reportable segments for the purpose of making decisions about resources to be allocated and for assessing performance. Segment performance is evaluated based on the EBITDA of each segment.

The following tables present revenue and profit information and certain asset and liability information regarding the Group’s reportable segments for the six months ended 30 September 2013 and 30 September 2012 and for the year ended 31 March 2013. Items after operating profit are not allocated by segment. Power segment now includes BALCO 270 MW power plant, which was earlier part of the Aluminium segment. The reclassification has been done as the power generated from the 270 MW power facility is being largely sold to third parties as opposed to being used internally. Accordingly numbers for the prior periods have been regrouped.


(a) Reportable Segments

Period ended 30 September 2013

(US$ million)

Zinc-India

Zinc-

International

Oil and gas Iron Ore

Copper-

India/

Australia

Copper-

Zambia Aluminium Power

Total

reportable

segment

Elimination/

Others

Total

operations

REVENUE

Sales to external customers 1,057.4 352.2 1,472.1 139.5 1,228.3 686.7 876.0 344.5 6,156.7 7.3 6,164.0

Inter-segment sales 14.1 - - - 2.5 - 1.5 19.5 37.6 (37.6) -

Segment revenue 1,071.5 352.2 1,472.1 139.5 1,230.8 686.7 877.5 364.0 6,194.3 (30.3) 6,164.0

Segment result

EBITDA¹ 559.0 116.5 1,122.8 (18.0) 76.5 101.3 125.3 122.6 2,206.0 1.1 2,207.1

Depreciation and amortisation² (55.0) (84.4) (686.5) (17.3) (20.6) (86.2) (88.3) (51.1) (1,089.4) (3.1) (1,092.5)

Operating profit before special item 504.0 32.1 436.3 (35.3) 55.9 15.1 37.0 71.5 1,116.6 (2.0) 1,114.6

Special items (note 4) (10.4) (47.5) - - - (4.4) - - (62.3) 0.5 (61.8)

Operating profit 493.6 (15.4) 436.3 (35.3) 55.9 10.7 37.0 71.5 1,054.3 (1.5) 1,052.8

Investment revenue 302.6

Finance costs (661.0)

Other gains and losses (net) (433.3)

PROFIT BEFORE TAXATION 261.1

Segments assets 5,757.5 987.3 20,264.1 1,960.4 2,106.6 2,499.7 6,809.8 3,013.4 43,398.8 102.1 43,500.9

Unallocated assets 335.1

TOTAL ASSETS 43,836.0

Segment liabilities (19 7.0) (754.3) (4,833.9) (1,239.7) (1,726.8) (1,562.3) (4,775.6) (2,343.7) (17,433.3) (81.3) (17,514.6)

Unallocated liabilities (9,386.6)

TOTAL LIABILITIES (26,901.2)

Other segment information

Additions to property, plant and equipment 152.5 20.8 223.1 30.2 22.3 105.5 83.1 164.4 801.9 - 801.9

Depreciation and amortisation (55.0) (84.4) (686.5) (17.3) (20.6) (86.2) (88.3) (51.1) (1,089.4) (3.1) (1,092.5)

1 EBITDA is a non-IFRS measure and represents operating profit before special items, depreciation and amortisation. 2 Depreciation and amortisation is also provided to the chief operating decision maker on a regular basis.


Period ended 30 September 2012 (restated)

(US$ million)

Zinc-India

Zinc-

International


Copper-

India/

Australia

Copper-

Zambia Aluminium Power

Total

reportable

segment

Elimination/

Others

Total

operations

REVENUE

Sales to external customers 984.2 391.4 1,628.6 344.7 1,956.9 865.4 890.0 341.4 7,402.6 49.3 7,451.9

Inter-segment sales - - - 0.3 - - 0.5 29.1 29.9 (29.9) -

Segment revenue 984.2 391.4 1,628.6 345.0 1,956.9 865.4 890.5 370.5 7,432.5 19.4 7,451.9

Segment result

EBITDA¹ 509.1 134.9 1,291.1 116.5 108.0 185.3 100.5 126.8 2,572.2 (0.5) 2,571.7

Depreciation and amortisation² (53.1) (109.2) (657.5) (55.1) (21.9) (93.5) (95.1) (47.3) (1,132.7) 0.7 (1,132.0)

Operating profit before special item 456.0 25.7 633.6 61.4 86.1 91.8 5.4 79.5 1,439.5 0.2 1,439.7

Special items (note 4) - - - (3.7) - (1.1) - - (4.9) (2.2) (7.0)

Operating profit 456.0 25.7 633.6 57.7 86.1 90.7 5.4 79.5 1,434.7 (2.0) 1,432.7


Finance costs (546.1)


PROFIT BEFORE TAXATION 1,068.0

Segments assets 5,863.1 1,299.8 20,770.7 2,385.1 2,073.5 2,557.3 8,057.2 3,127.9 46,134.8 102.7 46,237.3



Segment liabilities (332.7) (338.4) (5,365.8) (1,362.9) (1,824.4) (1,541.0) (5,487.0) (1,781.9) (18,034.3) (73.4) (18,107.5)




Additions to property, plant and equipment 136.2 17.7 136.0 51.8 50.4 136.4 241.2 314.0 1,083.7 44.8 1,128.5

Depreciation and amortisation (53.1) (109.2) (657.5) (55.1) (21.9) (93.5) (95.1) (47.3) (1,132.7) 0.7 (1,132.0)


Year ended 31 March 2013 (restated)

(US$ million)

Zinc-India Zinc-

International


Copper-India/

Australia Copper- Zambia Aluminium Power

Total reportable segment

Elimination/ Others

Total operations

REVENUE

Sales to external customers 2,263.3 797.2 3,223.4 441.3 3,989.0 1,742.8 1,835.8 631.7 14,924.5 65.3 14,989.8

Inter-segment sales - - - 1.2 2.1 - 2.0 37.3 42.6 (42.6) -

Segment revenue 2,263.3 797.2 3,223.4 442.5 3,991.1 1,742.8 1,837.8 669.0 14,967.1 22.7 14,989.8

Segment result

EBITDA¹ 1,182.5 294.5 2,440.3 84.9 219.1 257.3 202.6 228.5 4,909.7 (0.8) 4,908.9

Depreciation and amortisation² (110.1) (183.9) (1,434.9) (84.3) (43.2) (193.7) (191.2) (95.8) (2,337.1) (0.1) (2,337.2)

Operating profit before special item 1,072.4 110.6 1,005.4 0.6 175.9 63.6 11.4 132.7 2,572.6 (0.9) 2,571.7

Special items (note 4) (3.2) - - (3.9) (18.4) (11.6) - - (37.1) (4.8) (41.9)

Operating profit 1,069.2 110.6 1,005.4 (3.3) 157.5 52.0 11.4 132.7 2,535.5 (5.7) 2,529.8


Finance costs (1,194.0)


PROFIT BEFORE TAXATION 1,723.7

Segments assets 6,165.9 1,132.7 20,581.8 2,239.6 2,129.2 2,448.6 7,644.7 3,338.3 45,680.8 115.8 45,796.6



Segment liabilities (229.8) (621.8) (4,794.0) (1,367.8) (2,478.6) (1,492.7) (5,537.8) (1,318.5) (17,841.0) (86.9) (17,927.9)




Additions to property, plant and equipment 287.1 35.5 423.6 128.1 89.4 259.8 424.1 702.9 2,350.5 58.8 2,409.3

Depreciation and amortisation (110.1) (183.9) (1,434.9) (84.3) (43.2) (193.7) (191.2) (95.8) (2,337.1) (0.1) (2,337.2)


4. Special Items

(US$ million)



Year ended 31 March 2013

Voluntary retirement schemes (14.8) (4.9) (9.4)

Acquisition and restructuring related costs 0.5 (2.1) (4.7)

Tuticorin plant compensation - - (18.4)

Impairment of mining reserves and assets* (47.5) - -

Project cost write off - - (9.4)

(61.8) (7.0) (41.9)

* Impairment for the period ended 30 September 2013 of US$47.5 million (net of tax US$36.6 million) pertains to Impairment of mining reserves and assets at Lisheen

5. Other Gains and (Losses) (net)

(US$ million)




Exchange losses on borrowings and capital creditors (463.9) (127.7) (336.2)

Qualifyingexchange losses capitalised 40.7 35.6 86.3

Change in fair value of financial liabilities measured at fair value - (0.6) (5.3)

Change in fair value of embedded derivative on convertible bonds (4.2) 12.9 24.7

Loss arising on qualifying hedges and non-qualifying hedges (5.9) (49.3) (54.7)

(433.3) (129.1) (285.2)

6. Income Tax Expense

(US$ million)




Current tax:

UK Corporation tax - - 0.9

Foreign tax:

India 108.6 431.8 855.3

Australia 3.2 8.1 16.1

Africa and Europe 23.9 15.5 39.3

Others 1.2 2.2 6.6

136.9 457.6 918.2

Deferred tax:

Current year movement in deferred tax (119.2) (332.8) (872.1)

(119.2) (332.8) (872.1)

Total income tax expense 17.7 124.8 46.1

Effective tax rate 6.8% 11.7% 2.7%

Consequent to the effectiveness of the scheme of merger (refer note 14), tax effects on current/deferred tax has been given effect to in the financial statements for the six month period ended 30 September 2013.

7. Earnings Per Share

(a) Basic earnings per share amounts are calculated by dividing net profit for the period attributable to ordinary equity holders of the parent by the weighted average number of Ordinary Shares outstanding during the period.


Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary shareholders by the weighted average number of Ordinary Shares outstanding during the period (adjusted for the effects of dilutive options and convertible loan notes).

The following reflects the income and share data used in the basic and diluted earnings per share computations:

(US$ million)




Net (loss)/profit attributable to equity holders of the parent (217.0) 173.6 162.0

(US$ million)




Weighted average number of Ordinary Shares for basic earnings per share 273.4 272.7 272.9

Effect of dilution:

Share options 9.6 4.7 4.8

Adjusted weighted average number of Ordinary Shares for diluted earnings per share 283.0 277.4 277.7

Basic (loss)/earnings per share on the (loss)/profit for the period/year

(US$ million)




(Loss)/profit for the period/year attributable to equity holders of the parent ($ million) (217.0) 173.6 162.0

Weighted average number of Ordinary Shares of the Company in issue (million) 273.4 272.7 272.9

(Loss)/earnings per share on (loss)/profit for the period/year

(US cents per share) (79.4) 63.7 59.4

Diluted (loss)/earnings per share on the (loss)/profit for the period/year

(US$ million)




(Loss)/profit for the period/year attributable to equity holders of the parent ($ million) (217.0) 173.6 162.0

(Loss)/profit for the period/year after dilutive adjustment (217.0) 173.6 162.0

Adjusted weighted average number of Ordinary Shares of the Company in issue for basic EPS (million) 283.0 277.4 277.7

Diluted (loss)/earnings per share on (loss)/profit/for the period/year (US cents per share) (76.7) 62.6 58.3

The (Loss)/profit for the period/year would be impacted if holders of the convertible bonds in Vedanta exercised their right to convert their bond holdings into Vedanta equity. The impact on profit for the period/year of this conversion would be the interest payable on the convertible bond.

The adjustment in respect of the convertible bonds has an anti-dilutive impact on the number of shares and earnings and is thus not disclosed.


The outstanding awards under the Long-Term Incentive Plan (‘LTIP’) are reflected in the diluted EPS figure through an increased number of weighted average shares.

(b) Earnings per share based on underlying profit for the period/year

The Group’s Underlying Profit is the attributable profit for the period/year after adding back special items, Other losses/(gains)¹ and their resultant tax and Non-controlling interest effects:

(US$ million)




(Loss)/profit for the period/year attributable to equity holders of the parent (217.0) 173.6 162.0

Special items 61.8 7.0 41.9

Other losses/(gains)¹ 433.3 129.1 285.2

Tax and non-controlling interest effect of special items and other losses/(gains) (198.1) (43.1) (121.2)

Underlying profit for the period/year 80.0 266.6 367.9

1 Includes exchange losses/ (gains) on borrowings and capital creditors, change in fair value of financial liabilities and embedded derivatives and losses/ (gains) on qualifying and non-qualifying hedges.


Basic earnings per share on Underlying Profit for the period/year

(US$ million)


Six months ended

30 September 2012 Year ended

31 March 2013


Weighted average number of Ordinary Shares of the Company in issue (million) 273.4 272.7 272.9

Earnings per share on Underlying Profit for the period/year (US cents per share) 29.3 97.8 134.8

Diluted earnings per share on Underlying Profit for the period/year

(US$ million)





Underlying profit for the year after dilutive adjustment 80.0 266.6 367.9

Adjusted weighted average number of shares of the Company (million) 283.0 277.4 277.7

Diluted earnings per share on Underlying Profit for the period/year (US cents per share) 28.3 96.1 132.5

8. Dividends

(US$ million)




Amounts paid as distributions to equity holders:

Final dividend paid

Final dividend 2011-12 : 35 US cents per share 96.0 96.0

Final dividend 2012-13 : 37 US cents per share 101.8 - -

Interim dividend paid

Interim dividend 2012-13 : 21 US cents per share* - - 57.5

Total 101.8 96.0 153.5

* The proposed interim dividend for the six months ended 30 September 2013 was 22 US cents per share. This was approved by the Board of Directors on 14 November 2013 and has not been included as a liability as at 30 September 2013.


9. Movement in Net Debt¹

(US$ million)

Cash and cash equivalents

Liquid

investments Total cash and

liquid investments

Debt due within one year

Debt due after one year Total debt

Debt-related derivatives² Total net debt

Debt carrying value Debt carrying value

At 1 April 2013 2,200.2 5,781.5 7,981.7 (4,400.1) (12,192.7) (16,592.8) (4.5) (8,615.6)

Cash flow 457.2 458.7 915.9 2,071.3 (2,449.2) (377.9) - 538.0

Other non-cash changes³ - 173.6 173.6 (760.3) 184.1 (576.2) 12.5 (390.1)

Foreign exchange differences (310.3) (626.2) (936.5) 258.0 683.5 941.5 - 5.0

At 30 September 2013 2,347.1 5,787.6 8,134.7 (2,831.1) (13,774.3) (16,605.4) 8.0 (8,462.7)

(US$ million)


Liquid


liquid investments





At 1 April 2012 1,945.0 4,940.3 6,885.3 (4,151.6) (12,803.8) (16,955.4) 5.7 (10,064.4)

Cash flow 74.8 941.7 1,016.5 (159.9) 44.5 (115.4) - 901.1

Other non-cash changes³ - 158.7 158.7 (221.8) 339.7 117.9 (10.2) 266.4

Foreign exchange differences 180.4 (259.2) (78.8) 133.2 226.9 360.1 - 281.3

At 31 March 2013 2,200.2 5,781.5 7,981.7 (4,400.1) (12,192.7) (16,592.8) (4.5) (8,615.6)

(US$ million)


Liquid


liquid investments





At 1 April 2012 1,945.0 4,940.3 6,885.3 (4,151.6) (12,803.8) (16,955.4) 5.7 (10,064.4)

Cash flow (461.1) 677.2 216.1 455.4 (471.0) (15.6) - 200.5

Other non-cash changes³ - 118.8 118.8 (2,158.0) 1,958.7 (199.3) 1.9 (78.6)

Foreign exchange differences 68.7 (125.9) (57.2) 70.3 94 164.3 - 107.1

At 30 September 2012 1,552.6 5,610.4 7,163.0 (5,783.9) (11,222.1) (17,006.0) 7.6 (9,835.4)

1. Net debt being total debt after fair value adjustments under IAS 32 and 39 as reduced by cash and cash equivalents and liquid investments. 2. Debt-related derivatives exclude commodity-related derivative financial assets and liabilities. 3. Other non-cash changes comprises of exchanges losses and gains on borrowings and capital creditors, MTM of embedded derivatives, interest accretion on convertible bonds and amortisation of borrowing costs for

which there is no cash movement. It also includes US$173.6 million (30 September 2012: US$118.8 million, 31 March 2013: US$158.7 million) of fair value movement in investments.


10. Other Disclosures

Capital Commitments

Contractual commitments to acquire fixed assets were US$2,104.6 million at 30 September 2013 (31 March 2013: US$2,305.9 million, 30 September 2012: US$2,844.3 million).

Contingent Liabilities and Guarantees

Significant changes to legal cases have been discussed below; however for full disclosure please refer to the 31 March 2013 annual report.

Guarantees

As at 30 September 2013, US$216.9 million of guarantees had been issued to banks in the normal course of business (31 March 2013: US$217.1 million, 30 September 2012: US$228.8 million). The Group has also entered into guarantees advanced to the customs authorities in India of US$ 1,392.3million (31 March 2013: US$1,638.8 million, 30 September 2012: US$1,754.4 million) relating to payment of import duty.

Export Obligations

The Indian entities of the Group have export obligations of US$4,293.3 million (31 March 2013: US$4,013.4 million, 30 September 2012: US$4,551.0 million) on account of concessional rates of import duty paid on capital goods under the Export Promotion Capital Goods Scheme and under the Advance Licence Scheme for import of raw material laid down by the Government of India.

In the event of the Group’s inability to meet its obligations, the Group’s liability would be US$536.7 million (31 March 2013: US$501.7 million, 30 September 2012: US$568.9 million) reduced in proportion to actual exports, plus applicable interest.

Guarantees to Suppliers

The Group has given corporate guarantees to certain suppliers of concentrate. The value of these guarantees was US$ 50.0 million at 30 September 2013 (31 March 2013: US$50.0 million, 30 September 2012: US$50.0 million).

Miscellaneous Disputes

The Indian excise and related indirect tax authorities have made several claims against the Group companies for additional excise and indirect duties. The claims mostly relate either to the assessable values of sales and purchases or to incomplete documentation supporting the companies’ returns.

The approximate value of claims against these companies total US$1,407.5 million (31 March 2013: US$1,508.7 million, 30 September 2012: US$873.8 million) of which US$65.1 million (31 March 2013: US$60.3 million, 30 September 2012: US$13.5 million) is included as a provision in the Statement of financial position as at 30 September 2013. The above is in addition to Tamil Nadu Electricity Board (‘TNEB’) claims with MALCO amounting to US$16.3 million (31 March 2013: US$18.8 million, 30 September 2012: US$19.8 million) and Department of Mines and Geology claims with HZL amounting to US$53.2 million (31 March 2013: US$61.4 million, 30 September 2012: US$63.4 million). In the view of the Directors, there are no significant unprovided liabilities arising from these claims.

Richter and Westglobe: Income Tax

The Indian Tax Authorities have served a show cause notice on an indirect subsidiary of Vedanta Resources plc, Richter Holding Limited (‘Richter’), for alleged failure to deduct withholding tax on capital gain on the alleged indirect acquisition of shares in Sesa Goa Limited in April 2007. Richter has applied to the Karnataka High Court to seek to quash the notice in view of the established legal position. The court directed Richter to approach the tax office to


decide the jurisdiction and granted liberty to approach the court directly in the event Richter is not satisfied with the conclusion of the tax office. During the course of proceedings, Westglobe was also served notices and made party to the proceedings. Meanwhile in another case the Supreme Court of India has held that overseas share transfers are not subject to taxation in India. Subsequent to this decision, the Finance Bill, 2012 seeks to amend the tax laws retrospectively to clarify the legislative intent. Subsequent to 30 September 2013, Richter and Westglobe were served orders holding them to be ‘assessee in default’ for alleged non-deduction of tax. Richter and Westglobe believe that they are not liable to any withholding tax and intend to challenge the orders in the appropriate appellate forum.

11. Financial Instruments

The accounting classification of each category of financial instruments, and their carrying amounts, are set out below:

(US$ million)

As at

30 September 2013 As at

31 March 2013

Financial assets

At fair value through profit or loss

- Held for trading 5,787.6 5,781.5

- Other financial assets (derivatives) 130.9 31.1

Cash and cash equivalents 2,347.1 2,200.2

Loan and receivables

- Trade and other receivables 1,768.8 1,706.0

- Other non-current assets 242.3 113.4

Available-for-sale investments

- Financial asset investments held at fair value 1.8 2.4

- Financial asset investments held at cost - 18.2

Total 10,278.5 9,852.8

Financial liabilities


- Other financial liabilities (derivatives) (115.9) (72.5)

Designated into fair value hedge

- Borrowings¹ (9.2) (4.7)

Financial liabilities at amortised cost

- Trade and other payables (4,747.0) (4,795.9)

- Borrowings² (16,596.2) (16,588.1)

Total (21,468.3) (21,461.2)

1. Includes embedded derivative liability portion of convertible bonds US$9.2 million (2013: US$4.7 million). 2. Includes amortised cost liability portion of convertible bonds US$1,792.1 million (2013: US$2,429.8 million).

IFRS 7 requires additional information regarding the methodologies employed to measure the fair value of financial instruments which are recognised or disclosed in the accounts. These methodologies are categorised per the standard as:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 fair value measurements are those derived from inputs other than quoted prices that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).


The below table summarises the categories of financial assets and liabilities measured at fair value:

(US$ million)

As at

30 September 2013

Level 1 Level 2

Financial assets


- Held for trading 5,705.9 81.7

- Financial instruments (derivatives) - 131.0


- Financial asset investments held at fair value 1.8 -

Total 5,707.7 212.7



- Financial instruments (derivatives) - (115.9)

Designated as fair value hedge

- Borrowings - (9.2)

Total - (125.1)

As at

31 March 2013

Level 1 Level 2

Financial assets


- Held for trading 5,781.5 -

- Financial instruments (derivatives) - 31.1


- Financial asset investments held at fair value 2.2 -

Total 5,783.7 31.1



- Financial instruments (derivatives) - (72.5)

Designated into fair value hedge

- Borrowings - (4.7)

Total - (77.2)

No financial assets or liabilities that are measured at fair value were Level 3 fair value measurements.

The fair value of borrowings is US$16,782.3 million (2013: US$16,420.2 million). For all other financial instruments, the carrying amount is either the fair value, or approximates the fair value.

The fair value of financial asset investments represents the market value of the quoted investments and other traded instruments. For other financials assets the carrying value is considered to approximate fair value.

The fair value of financial liabilities is the market value of the traded instruments, where applicable. Otherwise fair value is calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered to approximate fair value.


The fair value of the embedded derivative liability of convertible bond has been calculated using the Black-Scholes model with market assumptions.

The Group has no financial instruments with fair values that are determined by reference to significant observable and unobservable inputs. The use of fair valuation technique for fair valuation of financial instrument is either not applicable or don't have any significant impact on financial as their carrying value reflects the approximate fair value.

12. Accounting Policy Changes - Restatement

Consequent to amendments in new accounting standards as enumerated in note 1, the Group has restated the statement of financial performance and position of the Group for the six month period ended 30 September 2012 and the year ended 31 March 2013 so as to show the impact of applicable accounting standards for the Group. The impact of adoption of these new accounting standards is as follows:

A. Items of Income statement, other comprehensive income and Statement of financial position for the six months ended 30 September 2012.

(US$ million)

As reported at 30 September 2012 IFRIC 20 IAS 19 (R)

As restated at 30 September 2012

Revenue 7,451.9 - - 7,451.9

Cost of sales (5,641.2) 4.1 4.5 (5,632.6)

Gross profit 1,810.7 4.1 4.5 1,819.3

Other operating income 53.7 - - 53.7

Other operating costs (440.3) - - (440.3)

Operating profit 1,424.1 4.1 4.5 1,432.7

Net finance cost (364.7) - - (364.7)

Profit before taxation 1,059.4 4.1 4.5 1,068.0

Tax expense (121.9) (1.4) (1.5) (124.8)

Profit for the period/year 937.5 2.7 3.0 943.2

Attributable to:

Equity holders of the parent 171.2 1.0 1.4 173.6

Non-controlling interests 766.3 1.7 1.6 769.6


(US$ million)

As reported at

30 September 2012 IFRIC 20 IAS 19 (R) As restated at

30 September 2012

Profit for the period/year 937.5 2.7 3.0 943.2

Income and expenses recognised directly in equity:

Items that will not be reclassified subsequently to income statement:

Actuarial gain/(losses) on post retirement defined benefit plan - - (4.5) (4.5)

Tax effects on items recognised directly in the equity - - 1.5 1.5

Total (a) - - (3.0) (3.0)

Items that may be reclassified subsequently to profit or loss :

Exchange differences arising on translation of foreign operations (340.9) - - (340.9)

Other comprehensive income (18.5) - - (18.5)

Tax effect on other comprehensive income (0.3) - - (0.3)

Total (b) (359.7) - - (359.7)

Other comprehensive income for the period (a+b) (359.7) - (3.0) (362.7)

Total comprehensive income/(expense) for the period/year 577.8 2.7 - 580.5

Attributable to:

Equity holders of the parent 25.5 1.0 - 26.5

Non-controlling interests 552.3 1.7 - 554.0


(US$ million)

As reported at

30 September 2012 IFRIC 20 IAS 19 (R) As restated at

30 September 2012

Property, plant and equipment 34,137.7 4.4 - 34,142.1

Inventories 1,959.2 (0.3) - 1,958.9

Deferred tax liabilities (5,770.3) (1.4) - (5,771.7)

Other reserves 954.7 - (1.4) 953.3

Retained earnings 3,664.8 1.0 1.4 3,667.2

Equity attributable to equity holders of the parent 4,591.2 1.0 - 4,592.2

Non-controlling interests 14,244.1 1.7 - 14,245.8

B. Income statement, Other comprehensive income and Statement of financial position for the year ended 31 March 2013.

(US$ million)

As reported at 31 March 2013 IFRIC 20 IAS 19 (R)

As restated at 31 March 2013

Continuing operations

Revenue 14,989.8 14,989.8

Cost of sales (11,702.3) 11.5 6.3 (11,684.5)

Gross profit 3,287.5 11.5 6.3 3,305.3

Other operating income 90.3 90.3

Other operating costs (865.8) (865.8)

Operating profit 2,512.0 11.5 6.3 2,529.8

Finance costs (net) (806.1) (806.1)

Profit before taxation 1,705.9 11.5 6.3 1,723.7

Tax expense (40.1) (3.9) (2.1) (46.1)

Profit for the year 1,665.8 7.6 4.2 1,677.6

Attributable to:

Equity holders of the parent 157.4 2.9 1.7 162.0

Non-controlling interests 1,508.4 4.7 2.5 1,515.6


(US$ million)



Profit for the period/year 1,665.8 7.6 4.2 1,677.6

Income and expenses recognised directly in equity: Items that will not be reclassified subsequently to income statement:

Actuarial gain/(losses) on post retirement defined benefit plan -

- (6.3) (6.3)

Tax effects on items recognised directly in the equity - - 2.1 2.1

Total (a) - - (4.2) (4.2)

Items that may be reclassified subsequently to profit or loss :

Exchange differences arising on translation of foreign operations (707.9)

- - (707.9)

Other comprehensive income (37.5) - - (37.5)

Tax effect on other comprehensive (6.7) - - (6.7)

Total (b) (752.1) - - (752.1)

Other comprehensive income for the period (a+b) (752.1) - (4.2) (756.3)

Total comprehensive income/(expense) for the period/year 913.7

7.6 - 921.3

Attributable to:

Equity holders of the parent (124.3) 2.9 - (121.4)



(US$ million)



Property, plant and equipment 33,120.6 12.0 - 33,132.6

Inventories 1,966.1 (0.5) - 1,965.6

Deferred tax liabilities (4,992.7) (3.9) - (4,996.6)

Other reserves 791.0 - (1.7) 789.3

Retained earnings 3,628.0 2.9 1.7 3,632.6

Equity attributable to equity holders of the parent 4,398.4 2.9 - 4,401.3


13. Share Transactions

a. Call option — HZL

The Group had two call options to purchase all of the Government of India’s shares in HZL at fair market value. The Group exercised the first call option on 29 August 2003 and acquired an additional 18.9% of HZL’s issued share capital, increasing its shareholding to 64.9%. The Government of India’s holding in HZL is 29.5%. The second call option provides Group the right to acquire the Government of India’s remaining 29.5% share in HZL. This call option is subject to the right of the Government of India to sell 3.5% of HZL shares to HZL employees. The Company exercised the second call option via its letter dated 21 July 2009. The Government of India disputed the validity of call option and has refused to act upon the second call option. Consequently the Company invoked arbitration and filed a statement of claim. The arbitration proceedings are under progress. The next date of hearing is fixed on 12 April 2014.

b. Call option — BALCO

Group purchased a 51.0% holding in BALCO from the Government of India on March 2, 2001. Under the terms of the shareholder’s agreement (“SHA”) for BALCO, Group has a call option that allows it to purchase the Government of India’s remaining ownership interest in BALCO at any point from 2 March 2004. Group exercised this option on 19 March 2004. However, the Government of India has contested the purchase price and validity of the option and contended that the clauses of the shareholders agreement relating to the Company’s option violated the provision of Section 111A of the Indian Companies Act by restricting the rights of Government of India to transfer its shares and that as a result the shareholders agreement was null and void. Subsequently arbitration proceedings commenced. The arbitration tribunal rejected the claims of the Company on the ground that the clauses relating to the call option, the right of first refusal, the “tag-along” rights and the restriction on the transfer of shares violate section 111A(2) of the Indian Companies Act, 1956. Hence the Group filed an application under section 34 of the Arbitration and Conciliation Act, 1996 in the High Court of Delhi to set aside the arbitration award to the extent that it holds these clauses ineffective and inoperative. The Government of India also filed an application before the High Court of Delhi to partially set aside the arbitral award in respect of certain matters involving valuation. The High Court of Delhi passed an order dated 10 August 2011 directing our application and the application by the Government of India to be heard together as they arise from a common arbitral award. The matter is currently pending before the High Court of Delhi and scheduled for final hearing on 30 April 2014.

On 9 January 2012, Group offered to acquire the Government of India’s interests in HZL and BALCO for INR 154,920 million (US$2,467.8 million) and INR 17,820 million (US$283.7 million), respectively. Group has, by way of letters dated 10 April 2012 and 6 July 2012, sought to engage with the Government of India on the same terms as the offer. This offer was separate from the contested exercise of the call options, and Group proposed to withdraw the ongoing litigations in relation to the contested exercise of the options should the offer be accepted. To date, the


offer has not been accepted by the Government of India and therefore there is no certainty that the acquisition will proceed.

The Group continues to include the shareholding in the two companies HZL and BALCO, in respect of which the Group has a call option as non-controlling interest.

14. Group Restructuring:

Pursuant of the Scheme of Amalgamation (the "Scheme") sanctioned by the Indian and Mauritius Courts, Group’s subsidiary companies viz. Sterlite Energy Limited, Sterlite Industries (India) Limited, Aluminium Business of Vedanta Aluminium Limited, Ekaterina Limited and Residual business of Madras Aluminium Company Limited merged with Sesa Goa Limited (‘SGL’) (A subsidiary of the Group) Bloom Fountain Limited, a subsidiary of Sesa Goa Limited acquired a 38.7% stake in Cairn India Limited (‘Cairn’). Consequent to this, Cairn became a subsidiary of SGL. By way of a slump sale agreement dated 19 August 2013 between Vedanta Aluminium Limited (‘VAL’) and SSL, the power business consisting of 1,215 MW thermal power facility situated at Jharsuguda and 300 MW co-generation facility (90MW operational and 210 MW under development) at Lanjigarh, was transferred on a going concern basis at its carrying value.

Subsequently, the name of SGL has been changed to Sesa Sterlite Limited (‘SSL’).

These transactions are within subsidiaries of the Company and will not have any acquisition accounting impact other than change in the economic shareholding percentage. The simplification exercise has resulted in simplifying the structure, cross holding and aligning the debt with cash flow and change in economic holding percentage mainly in VAL and Cairn. VAL's effective holding has changed from 87.6% to 58.3% whereas Cairn's reduced from 49.8% to 34.3%.

15. Subsequent Events

Subsequent to the balance sheet date of 30 September 2013, there are no subsequent significant events to report.


INDEPENDENT REVIEW REPORT TO VEDANTA RESOURCES PLC

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2013 which comprises the condensed consolidated income statement, the condensed consolidated statement of comprehensive income, the condensed consolidated statement of financial position, the condensed consolidated statement of changes in equity, the condensed consolidated cash flow statement and related notes 1 to 15. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the company in accordance with International Standard on Review Engagements (UK and Ireland) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board. Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusions we have formed.

Directors’ responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRS as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting,” as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2013 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.

Deloitte LLP

Chartered Accountants and Statutory Auditor

London, UK

14 November 2013

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