VEDANTA RESOURCES PLC Preliminary Results Presentation for the year ended 31 March 2014
15 MAY 2014 Cautionary Statement and Disclaimer
The views expressed here may contain information derived from publicly available sources that have not been independently verified.
No representation or warranty is made as to the accuracy, completeness, reasonableness or reliability of this information. Any forward looking information in this presentation including, without limitation, any tables, charts and/or graphs, has been prepared on the basis of a number of assumptions which may prove to be incorrect. This presentation should not be relied upon as a recommendation or forecast by Vedanta Resources plc ("Vedanta"). Past performance of Vedanta cannot be relied upon as a guide to future performance.
This presentation contains 'forward-looking statements' – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,' 'seeks,' or 'will.' Forward– looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a environmental, climatic, natural, political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.
This presentation is not intended, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities in Vedanta or any of its subsidiary undertakings or any other invitation or inducement to engage in investment activities, nor shall this presentation (or any part of it) nor the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 2 10 Years since Vedanta listing
Anil Agarwal Executive Chairman Successful Strategy of Organic Growth and Value-Accretive M&A
Cairn India KCM Sesa Goa VS Dempo Zinc Intl Liberia iron ore assets M&A RA Mine: 3.75mt Chanderiya: BALCO: 245kt Al Chanderiya: RA mine:5mt RA mine: 6mt SK Mine: 1.5mt Dariba: 100kt Pb Rajasthan: 200mn boe 170kt Zn and smelter and Addn 170kt Zn Nchanga: 311kt Dariba: 210kt Zn mill smelter Restarted oil & cumulative at 50kt Pb 540MW CPP smelter and Cu smelter smelter Jharsuguda: Silver Refinery: gas exploration Rajasthan smelters, Tuticorin: 400kt 80MW CPP Konkola: 6mt Konkola: Mid- 2,400 MW power 500t Zinc India: BALCO: 325kt Al 154MW CPP smelter Concentrator shaft loading Nchanga: 7.5mt Expansion to 1.2 smelter 1st metal Tuticorin: 300kt Jharsuguda: East mill mtpa started Talwandi Sabo smelter 500kt Al smelter Konkola: Bottom 1,980MW: 1st unit Shaft Loading synchronized Completed Organic growth/Organic OptimizationAsset Mine-life extension across operations FY FY FY FY FY FY FY FY FY FY 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Production Growth (in Copper Equivalent kt)1
1,800 Colour Key 1,600 (kt) Oil & Gas 1,400 Iron Ore 1,200 Power 1,000 Aluminium Production in Production 800 Copper
copper equivalent copper 600 Silver
400 Zinc-Lead
200
0 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014
Note: 1. All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using average commodity prices for FY2014. Power rebased using FY2014 realisations. Copper custom smelting capacities rebased at TC/RC for FY2014. Iron Ore volumes refers to sales, with prices rebased at average 56/58% FOB prices for FY2014. For Oil & Gas, production refers to Working Interest.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 4 Creating Value over 10 Years
Share price Total Share Price Since IPO Shareholder 902p Performance Return
Vedanta 131% 200%
390p FTSE-350 Mining 137% 189%
FTSE-100 51% 114%
At IPO End FY2014
Total Shareholder 200%, $15 billion Government1 Return 12% CAGR (last 3 years)
Capital Returned to $1.4 billion Communities: $127 million Shareholders since IPO Social Investment (last 3 years)
Direct and Indirect 88,000 Dividend Yield 4% Employment
Notes: TSR data sourced from Bloomberg. Dividend Yield based on the 1 month average share price as of 2 May 2014. Employees as of 31 March 2014. Government refers to payments to various governments through direct and indirect taxes, royalty and profit petroleum. Contribution to government and communities includes FY2012 on a pro forma basis with Cairn India for the full year.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 5 Overview
Tom Albanese Chief Executive Officer CEO’s First Impressions
Chaired monthly Executive Committee and visited Rajasthan Oil & Gas, India operations since joining the Group in Sep 2013 First Impressions Dynamic teams, welcome to change Significant capabilities – exploration, engineering and project execution, production and operational excellence Strong community programs Some areas for improvement Safety performance – fatalities need to be eliminated Rampura Agucha Zinc-Lead mine, India Underground mining skills Some businesses are generating significant free cash flows, while others have opportunities to improve Diversified portfolio of world class assets
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 7 India: Strong Fundamentals for Demand and Supply
Low Per Capita Consumption India: Shared geology and mineral potential with (Metals - CY 2013 per capita consumption in kg; Africa & Australia and Abundant Natural Resources Oil - CY2012 per capita consumption in barrels) Global Ranking¹
th 15.4 India World China 5 Coal R&R: 295 bn tonnes
6th Zinc R&R: 50 mn tonnes
6.6 7.2 4.2 4.6 7th Iron Ore 3.5 R&R: 29 bn tonnes 1.9 2.7 1.5 1.0 0.4 0.5 8th Bauxite Aluminum Copper Zinc Oil R&R: 3.5 bn tonnes
Urbanization increasing Increasing Labour Force Vedanta - Strong Market Positioning in India but below World average (% of Total Population) FY2014 India Market Shares² Vedanta Other Producers Imports India World China India World China
60% 60%
45% 45% 89%
49% 38% 30% 30% 29% 5% 5% 15% 15% Zinc Lead³ Silver Copper Aluminium Oil 1990 2000 2010 2020 2030 2000 2010 2020 2030 2040
Sources: Wood Mackenzie, BP Statistical Report, Global Insight, Indian Ministry of Petroleum and Natural Gas, IBIS, Aluminium Association of India, ILZDA, company sources. Total estimated Reserves and Resources based upon public sources including GSI, GOI, Wood Mackenzie, UNFC & IBM. Notes: 1. Ranking based on Reserves. 2. Based on domestic Consumption, except Aluminium which is based on primary production. 3. Based on Primary lead.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 8 CEO’s Priorities
Operational excellence Konkola Deeps mine, Zambia Improve business performance: Copper Zambia: Deliver an operational turnaround Aluminium: Operationalise remaining smelter capacity and work on bauxite sourcing Iron Ore: Restart operations in Goa Enhance performance of well-performing assets Zinc-India: Transition to underground mining, and expansion to 1.2mtpa of mined zinc-lead Oil & Gas: Maximize exploration and optimize production ramp-up at the Rajasthan block Iron Ore mine, Goa, India
Corporate Vedanta brand, communication and stakeholder engagement, safety and CSR Group structure: Realize synergies of the Sesa Sterlite merger Pursue minority buyouts
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 9 FY2014 Results Highlights
Operations Record oil & gas production at Rajasthan: Achieved 200kboepd during the year and cumulative production of 200 million barrels till end FY2014; 100% reserve replacement during the year Record production of mined and integrated metal at Zinc India Continued strong operating performance at Aluminium and begun commissioning new pot-lines Continued cost control and efficiency improvements across businesses Goa mining ban lifted1
Financial EBITDA of $4.5bn, EBITDA margin 45%2 Underlying Attributable Profit of $93mn3, Underlying EPS of $0.343 Free Cash Flow of $3.0bn4 (67% of EBITDA), FCF after Growth Capex of $1.6bn Net Debt reduced by c.$0.7bn over the last 12 months and by c.$2.1bn over the last 24 months Final Dividend of 39 US cents per share, up 5%
Corporate Sesa Sterlite merger completed c.$900mn buyback program at Cairn India
Note: 1. Restart of mining is subject to conditions laid out by the Supreme Court. 2. Excludes custom smelting at Copper and Zinc-India operations. 3. Based on profit for the period after excluding special items and other gains and losses, and their resultant tax and minority interest effects. 4. Free Cash Flow before Growth Capex.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 10 Financials
D.D. Jalan Chief Financial Officer Financial Highlights
Consistent and strong EBITDA margin driven by diversified portfolio Strong FCF after growth capex and continued reduction in net debt and gearing
$mn or as stated FY2013¹ FY2014 change EBITDA 4,909 4,491 (9)% EBITDA margin² (%) 45% 45% Free Cash Flow before Growth Capex 3,535 3,017 (15)% Growth Capex 2,091 1,425 (32)% Free Cash Flow after Growth Capex 1,516 1,592 5%
Net Debt 8,616 7,920 (8)% Gearing (%) 31.4% 30.6% Net Debt/EBITDA 1.8 1.8
Underlying Attributable PAT³ 368 93 (75)% Underlying EPS (USc/share)³ 135 34 (75)% Total Dividend (USc/share) 58 61 5%
Notes: 1. The comparative information has been restated so as to reflect the adoption of new accounting standards. 2. Excludes custom smelting at Copper and Zinc-India operations. 3. Based on profit for the period after excluding special items and other gains and losses, and their resultant tax and minority interest effects.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 12 EBITDA Bridge
FY2014 vs. FY2013 ($mn)
Controllable 4,909 $ 371 mn
76 19 4,491 307 (508) 170 4,121
(258) (31)
(124) (33) (36)
$ (788) mn
Non-Controllable
EBITDA Price Profit Iron Ore - Tuticorin Other one-off Currency Adjusted CMT mine Volume COP Others EBITDA FY2013 Petroleum to Mining Ban smelter items translation EBITDA temporary FY2014 GOI Impact temporary effect on suspension suspension EBITDA (Q4) (Q1)
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 13 Income Statement – Variances
Sesa Sterlite Merger completed in H1 $mn or as stated FY2013 FY2014 EBITDA margins maintained at 45%¹ EBITDA 4,909 4,491 Depreciation & Amortization (2,337) (2,203) Higher net interest cost due to: EBIT 2,572 2,288 One time amortization of borrowing cost due to prepayment of Cairn India Net Interest Expense (521) (668) acquisition loans, partly offset by Special Items, FX & Emb. Derivative MTM (327) (502) favourable refinancings Profit Before Tax 1,724 1,118 Stopped capitalizing interest costs related to the Jharsuguda-II smelter Tax Expense (46) (129) from FY2014 Effective Tax Rate(%) 2.7 11.5 INR Depreciation (from 54.5 to 60.5/USD) PAT 1,678 989 Favourable impact on EBITDA Attributable PAT 162 (196) Unfavourable one-time MTM impact on Minorities % 90% 120% foreign currency debt (net of favourable impact on investments) of Underlying PAT 1,966 1,451 Indian subsidiaries: $364mn Underlying Attributable PAT 368 93 Special items: $138mn Underlying Minorities % 81% 94% $82mn asset impairments
Note: 1. Excludes custom smelting at Copper and Zinc-India operations.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 14 Well-Invested Assets Driving Cash Flow Growth
Continued growth in Free Cash Cash Flow and Growth Capex Profile - $bn Flow with production ramp-up Free Cash Flow-FY² M&M Capex O&G Capex¹ 3.7 $1.6bn free cash flow (post 3.5 growth capex) in FY2014
3 3.1 Capex up to FY2017 : $4.7bn 3.0 Oil & Gas: c.$3.0bn1 2.7 2.5 Proven and high-margin 2.3 0.5 Rajasthan block: $2.6bn 2.0 1.9 1.9 Zinc India: $0.75bn for 1.8 0.4 brownfield expansion 1.4 Other : $0.95bn3 on Talwandi 1.2 1.2 Sabo, Aluminium smelters and 2.2 0.6 1.0 refinery, and other ongoing 1.6 projects 0.6 0.8 0.7 0.6 0.4
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015e FY2016e FY2017e PF Notes: M&M refers to Metals and Mining, O&G refers to Oil & Gas. 1. Capex net to Cairn India; subject to Government of India approval. 2. Free cash flow after sustaining capex but before growth capex. 3. Excludes flexible capex of a further 1.4bn (Lanjigarh Refinery, Tuticorin Smelter and India Iron Ore Expansions): Awaiting regulatory approvals and subject to review. Positive Free Cash Flows post growth capex to drive Deleveraging
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 15 Strengthened Financial Profile
1 Cash and Liquid Investments of $9bn, with Metric FY2012 PF FY2013 FY2014 Gross Debt 17.0 16.6 16.9 additional $1.5bn undrawn lines of credit Net Debt 10.1 8.6 7.9 Net debt reduced by $0.7bn over last 12 EBITDA 5.3 4.9 4.5 months and by $2.1bn over last 24 months Net Debt/ EBITDA 1.9x 1.8x 1.8x Gearing 35.3% 31.4% 30.6%
Term Debt Maturity Profile (as of 31 March 20142) Debt at VED Plc Convertibles at put date Term Debt at Subsidiaries
3.9 4.1
1.4 2.5 2.4 2.4 2.1 1.6 1.0 1.1 1.2 $1.3bn Convertible Puts 1.0 2.7 – $1bn term loan tied up 1.3 1.5 through bank loans 1.0 1.1 0.2 0.7 FY2015³ FY2016 FY2017 FY2018 FY2019 FY2020 and later
Notes: 1. FY2012 is shown on a pro forma basis considering Cairn India for full year. 2. Debt numbers shown at face value, excludes one-year rolling working capital facilities of $586mn due in FY 2015. 3. $810mn of the $883mn convertible at Vedanta plc due in FY2017 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 $1,248.3mn convertible at Vedanta plc due in FY2017 (with a put option in July 2014) is shown at first put date.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 16 Capital Allocation and Returns
World class assets and operational excellence to deliver strong, stable and sustainable cash flows
Improve Capacity Utilization (Copper Zambia, Aluminium, Iron Ore)
Strong Shareholder Strengthen Enhance Returns since IPO Balance Sheet Asset Portfolio
• $1.4bn returned to • Debt Reduction • Prioritizing capex for high- shareholders • Cash Fungibility margin Zinc and Oil & Gas projects • 200% shareholder return • Achieve Investment Grade (12% per annum) credit rating • Robust approach to investment • Maintained Progressive decisions to achieve hurdle rate of return Dividend
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 17 Business Performance
Tom Albanese Chief Executive Officer Sustainability: Integral to our Business
Responsible Stewardship Mock Drill by Mine Safety Team Fatalities: 19 in FY2014; focus on elimination of fatalities Ranked 9th among FTSE 350 material & mining companies in Carbon Disclosure Project 50%+ increase in waste heat power generation capacity to 139 MW 74% of non-hazardous waste recycled Building Strong Relationships Focus on stakeholder engagement Human Rights: Conducting a gap analysis as a step towards becoming a signatory of UNCHR Water Recycled (in million cubic metres) 25.1 Community relations: 250+ partnerships with NGOs, local governments, academia and private hospitals 24.0 Focus on local consent prior to accessing resources Adding & Sharing Value 22.7 Contribution to exchequers globally in FY2014: $5.3bn Community infrastructure development projects Community reach: 4.1mn people FY12 FY13 FY14
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 19 Case Study: Transforming Water Footprint at Copper Zambia Copper at Case Footprint Transforming Water Study: FY2014 PRELIMINARY RESULTS PRESENTATION RESULTS PRELIMINARY FY2014
Effluent Treatment Ponds Treatment Effluent TSS (mg/L) 500 100 200 300 400 0 Total Suspended Solids SuspendedTotal
2007 Statutory Limit (mg/l) Limit Statutory 2008 (mg/l) TSS Ave. 2009 Underground rehabilitation for water handling & pumpingwater& handlingrehabilitation for Underground 2010 Konkola:for ProgramReduction SolidsTotal Suspended 2011 2012 2013 2014 YTD Recycled WaterRecycled Usage Today 2007 - 15 MAY 2014 MAY 15 Hippo Hippo Pool – Upstream and Downstreamand Upstream Control DamControl Pollution 20 Copper Zambia: Delivering Operational Turnaround
Key initiatives: Konkola: Large, long-life, high-grade Copper mine Incoming CEO to lead and improve business Production lower as COP F&D remain closed; Konkola shafts affected by unplanned stoppages in H2 Konkola mine development - initiatives: Augmented team of underground mining experts Changing mining method to reduce secondary development requirement Improved grade through dilution controls Other assets: Record throughput at TLP Copper-Zambia FY2013 FY2014 Smelter - Highest recovery since commissioning Mined Metal (kt) 159 128
Cost control and productivity improvement initiatives: Finished Metal – Total (kt) 216 177
New 10hr shift at Konkola to improve productivity Integrated (kt) 160 124 Focusing on recovery improvements Custom Smelting (kt) 56 53 Mitigating labor cost escalation through wage control Copper LME ($/t) 7,853 7,103 Improving power consumption and efficiencies C1 Cash Cost– Integrated1 (USc/lb) 255 238 Vedanta is committed to improving operating performance at 2 KCM Total Cash Cost – Integrated (USc/lb) 354 334 Financial support to operations EBITDA ($mn) 257 156 Actively engaged with the government PAT ($mn)3 (6) (90) VAT credit: Working with peers and government Notes: 1. C1 cash cost excludes royalty, logistics, depreciation, interest, sustaining capex. 2. Total cash cost includes sustaining capex. 3. Includes special items of $(12)mn in FY2013 and $(51)mn in FY2014.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 21 Aluminium: Putting capacity to work
Operations Aluminium Costs and Margins (in $/t, for FY2014) Smelters delivered high operating efficiencies 276 84 2,134 nd 2 quartile costs with third-party bauxite and 1,773 Captive bauxite can alumina significantly reduce this High ingot premiums of $276/t (707)
58% of metal production converted to value-added (560) 363 (392) products (39) (49) (24)
Project Ramp-ups - LME
Korba-III 325kt (BALCO): First metal tapped in Q4, EBITDA Costs Power Cost Power st Costs
1 phase of 84 pots ramping up Cost Alumina Value Addition Value Ingot Premium Ingot Other Hot Metal Hot Other Total Realization Total Value Addition Value Other Overheads Other Ingot Conversion Ingot Further pots to be started after commissioning Costs Conversion of BALCO 1,200 MW power plant Roadmap to 2.3mtpa Aluminium Capacity Other key issues: (in ktpa) Refinery feed: Pursuing options with Odisha 1,250 2,320 Government First metal Phase1: 50 pots of Niyamgiri: Not pursuing bauxite without local tapped in FY2014 1st line of 312.5kt consent 325
Focusing on other abundant bauxite in the state 500 86% capex completed Coal block: BALCO 211mt coal block mining in 92% capex 245 FY2015 completed
BALCO 245kt J'guda 500kt BALCO 325kt J'guda 1.25mt Total (Operating) (Operating) Project Project Aluminium Capacity
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 22 Iron Ore: Regaining momentum for the business
Karnataka Geologic Potential similar to Pilbara Banded Haematite Quartzite Formations Mining restarted end Dec’2013 Annual capacity capped at 2.29mt Produced 1.5mt in Q4 Sales: e-auction in the domestic market Goa Mining ban lifted conditionally in April 2014 Sonshi, Goa Conditions include additional royalty, new overburden dumping constraints, and lease renewals Mt Newman, Pilbara Working with State Government and MoEF to restart mining Goa Iron Ore Mines – Proximity to Coast Inventory sales through e-auction as per Supreme Court conditions R&R1 (in million tonnes) 433 431 374 306 275
159 Arabian Sea
Scale (km) FY09 FY10 FY11 FY12 FY13 FY14 0 10
Note: 1. Excludes Odisha operations that were closed in FY2011.
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 23 Zinc India: Brownfield Expansion
Rampura Agucha: Rampura Agucha Mine – Isometric View Evaluating optimizing the RAM open pit, to ensure consistent output from the mine Delivered steady increase in underground mine development rates Record mined and refined metal production Maintained lowest quartile costs Integrated mined and refined metal production (including silver) expected to be marginally higher in FY2015
RAM Open Cast Mine
RA Underground Mine Development (in meters per month) 1000
500
0 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14
FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 24 Oil & Gas: A world class asset getting better
Rajasthan Rajasthan – A World Class Asset (production in kboepd) Operations: Strong execution focus 250 200kboepd rate and cumulative production of over 200 million barrels achieved 200 7% production growth driven by rapid well construction - 150 129 new wells 100
Operating costs at $3.9/bbl 50
2P Reserve Replacement: 100% 0 Exploration: FY10 FY12 FY14 FY15e FY16e FY17e Note: 1. From known discoveries. On track: 50% success, 6 discoveries, 5 play types Exploration: Significant Potential Upside Added 1bboe-in-place to discovered resources Reserves and Resources - 7.3bn boe in place Finding costs maintained Note: 1. Includes EOR potential. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 25 Oil & Gas: Rajasthan – Jewel in the crown Rajasthan Block – 31 discoveries to date Rajasthan 3 Year Plan: $2.6bn net capex Shakti Bhagyam Shakti NE Rajasthan Development: $2.4bn net capex to drive 150% RRR and 7-10% N-I North N-C-West-A production CAGR1 Mangala MBA: 180-200kbopd, net capex of $1.6bn Bhagyam N-I South Mangala BH EOR/Polymer flood: Aishwariya N-E N-P Aishwariya BH Mangala: EOR injection in Q4’15, ASP pilot started Vijaya Vandana Bhagyam: Plan in place, JV alignment in progress V2Y Channel NR3-2100 Aishwarya: Plans being prepared Kaam-W-6 7 rigs in place to drill 120-150 wells in FY15 Upgrade fluid handling capacity and augment water injection Kaameshwari-W-8 facilities GS-V Kaameshwari-W-3 Saraswati Crest Pipeline tested at 227kbopd, upgrades possible to reach 300kbopd Barmer Hill: 10-30kboepd, net capex of $0.6bn Saraswati Kaam-West-2 (Oil) Kaameshwari Exploration confirmed BH potential across block Tukaram-P50 Permeability better than shales Raageshwari S-1 Legend Gas: 10-20kboepd, net capex of 0.2bn DA-1 Raageshwari DA-2 Raageshwari Oil Deep Gas Develop existing Raageshwari Deep Gas DA-3 Oil Discoveries (26) Guda-GRF Upgrade RDG terminal capacity and plans for higher capacity gas Gas Discoveries (5) pipelines Block Highlights Guda-South-7 On-shore Rajasthan Exploration: $200million, for significant upside to reserves and Low-cost & Scalable Primarily Oil resources Exploration Upside Close to Markets Continue exploration and appraisal program across the portfolio, with a sharper focus on Rajasthan Notes: 1. Production from known discoveries, exploration subject to PSC extension. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 26 Other Assets: Significant part of the portfolio Zinc International Skorpion Mine and Refinery Working on extending life of assets Lisheen: Extension beyond FY2015 depends on discovery of new ore Skorpion: Refinery conversion to tap feed sources in large sulphide belt, including BMM - Technical feasibility in progress BMM: Swartberg and Gamsberg projects feasibility Copper India Tuticorin copper smelter Strong utilizations through debottlenecking Planned maintenance shutdown in progress 2nd 80MW power unit commissioned in Q4 Power Generation Capacity – c. 8.7 GW CMT: Working with Work Safe Tasmania to resume modified operations Temporarily Captive Power Commercial Power Power 2.4 GW Power sales affected by weak demand and evacuation (to become (75% commenced constraint captive) operations) 1.8 GW Talwandi Sabo: 1st unit synchronized and trial runs in Q1 (100% commenced FY2015 operations) Liberia Iron Ore Commercial Working with government on infrastructure solutions for ore Power 3.8 GW evacuation (33% commenced operations) Successful exploration results Notes: Pie chart excludes 0.6 GW of captive power at Zinc India and Copper India. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 27 Key Strategic Priorities remain unchanged Disciplined capital allocation: Low-risk and phased development Production growth across portfolio with a focus on Sustained operational excellence and cost efficiencies returns Active engagement with Governments Production ramp-up from well-invested assets driving strong free cash flow Reduce gearing from Generate positive free cash flow from all businesses increasing free cash flow Utilise cash flows to de-lever Continue to add R&R in our existing portfolio Development and exploration on track to realise Rajasthan basin potential of assets to drive Continued focus to more than replace production long-term value Consolidation and Sesa Sterlite merger: Realize full synergies Simplification of the Group structure Buyout of GoI’s stake in HZL and BALCO Continued focus on Protect and preserve our Eliminating fatalities License to Operate Stakeholder Engagement FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 28 Summary: Building on Operational Momentum Delivered 10 years of growth and created India: The next growth market shareholder value Built a diversified portfolio of high-quality world- class assets Cash flows ramping up from well-invested assets to drive deleveraging Focus on delivering operational excellence and exploration upside Sustainability is core to our operations and long term value for all stakeholders Strategy remains unchanged FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 29 Appendix Segment Wise Summary Copper-Zambia FY2013 FY2014 Aluminium FY2013 FY2014 Mined Metal (kt) 159 128 Aluminium Production (kt) 774 794 Finished Metal – Total (kt) 216 177 Jharsuguda-I 527 542 Integrated (kt) 160 124 Korba-II 247 251 Custom Smelting (kt) 56 53 Korba-III - 1 Copper LME ($/t) 7,853 7,103 Aluminium LME ($/t) 1,974 1,773 C1 Cash Cost – Integrated1 (USc/lb) 255 238 Aluminium COP ($/t) 1,879 1,659 Total Cash Cost– Integrated2 (USc/lb) 354 334 BALCO 1,901 1,781 EBITDA ($mn) 257 156 Jharsuguda-I 1,869 1,602 PAT ($mn)3 (6) (90) Alumina Production (kt) 527 524 Notes: 1. C1 cash cost, excludes royalty, logistics, depreciation, interest, sustaining capex. Alumina COP ($/t) 353 358 2. Total Cash Cost includes C1 cash cost, royalty, interest and sustaining capex. EBITDA ($mn) 203 287 3. Includes special items of $(12)mn in FY2013 and $(51)mn in FY2014. Zinc-India FY2013 FY2014 Iron Ore and Pig Iron FY2013 FY2014 Mined Metal (kt) 870 880 Sales (mt) 3.1 0.0 Refined Zinc – Integrated (kt) 660 743 Goa 3.0 - 1 Refined Lead – Integrated (kt)1 107 118 Karnataka 0.1 0.0 Saleable Silver – Integrated (moz) 9.267 9.663 Production 3.7 1.5 Average Zinc LME ($/t) 1,948 1,909 Goa 3.7 - Zinc CoP2 ($/t) 835 844 Karnataka - 1.5 EBITDA ($ mn) 1,182 1,145 Average Net Sales Realizations ($/t) 61.9 31.1 Notes: 1. Includes captive consumption. Pig iron - Production (kt) 308 510 2. Excluding royalty. Revenues from silver not credited to CoP. Without IFRIC Met coke – Production (kt) 331 408 adjustment. With IFRIC adjustment, the COP was $818/t in FY2013 and $824/t in FY2014 EBITDA ($ mn) 85 (24) Notes: 1. Sales of 27kt. Zinc-International FY2013 FY2014 Mined Metal – Lisheen & BMM (kt) 280 239 Refined Zinc – Skorpion (kt) 145 125 Total Zinc-Lead Metal 426 364 CoP ($/t) 1,092 1,167 EBITDA ($ mn) 295 213 FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 31 Segment Wise Summary contd. Oil & Gas FY2013 FY2014 Power FY2013 FY2014 Average Daily Gross Operated Power Sales (mu) 10,129 9,374 205,323 218,651 Production (boepd) Jharsuguda 2,400 MW 1 7,530 7,625 Rajasthan 169,390 181,530 BALCO 270MW 1,241 390 Ravva 29,161 27,386 MALCO 847 911 Cambay 6,772 9,735 HZL Wind Power 511 448 Average Daily Working Interest Power Realisation (Rs/u) 3.55 3.54 127,843 137,127 Production (boepd) Power Cost of generation (Rs/u) 2.23 2.23 Rajasthan 118,573 127,071 EBITDA ($mn) 228 169 Ravva 6,561 6,162 Notes: 1. Includes trial run generation of 795 million units in FY2013. Cambay 2,709 3,894 Average Brent (US$/boe) 110.1 107.6 Copper-India/Australia FY2013 FY2014 Average realizations – oil & gas Mined Metal – Australia (kt) 26 18 97.6 94.5 (US$/boe) Copper Cathodes– India (kt) 353 294 EBITDA ($ mn) 2,440 2,347 Tuticorin Power Plant (mu) 42 601 Average Copper LME ($/t) 7,853 7,103 Copper Tc/Rc 12.8 16.6 Conversion cost – India (c/lb) 8.7 9.7 EBITDA ($ mn) 219 198 FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 32 Entity Wise Financials VED SSLT Cairn FY2014 ($mn or as stated) Consol KCM Plc Cos standalone India HZL ZI BALCO CMT MALCO TS TSMHL Others¹ Elim Group Revenue 12,945 1,271 - 4,680 3,093 2,225 661 594 123 85 - - 967 (754) EBITDA 4,491 156 1 510 2,347 1,173 214 53 3 24 (1) - (1) 13 Depreciation (1,410) (171) (0) (262) (692) (129) (90) (37) (10) (4) - - (14) 1 Amortisation (793) - - (12) (721) (10) (47) (3) ------ Special Items (138) (51) (3) (22) - (10) (47) - - - - 1 (332) 326 Operating Profit 2,150 (66) (3) 214 934 1,023 29 14 (7) 20 (1) 1 (347) 340 Investment Revenue 688 0 385 284 254 312 7 3 0 3 - 153 178 (893) Finance Cost (1,356) (46) (664) (547) (14) (7) (4) (4) 1 (0) 0 (381) (8) 316 Other Gains/ (Losses) (364) - 1 (242) (45) (3) - (29) (0) - (47) - (0) (0) Profit Before Taxation 1,118 (112) (280) (291) 1,128 1,325 32 (15) (6) 23 (47) (227) (177) (237) Current Tax (554) (0) (19) 261 (418) (271) (36) (1) 1 (0) - - (6) (64) Deferred Tax 426 22 - 121 196 92 21 10 2 0 - - 2 (40) Profit after tax 989 (90) (300) 90 906 1,146 17 (5) (3) 23 (47) (227) (182) (341) Attributable to equity holders (196) (72) (300) (26) 355 433 5 (1) (2) 17 (28) (165) (106) (307) Underlying PAT 1,451 (54) (298) 354 952 1,155 53 14 (3) 23 (1) (228) 150 (667) Underlying Attributable PAT 93 (42) (298) 154 372 436 27 4 (2) 17 (0) (166) 90 (499) Property Plant and Equipment² 16,055 2,086 1 6,150 1,561 1,837 341 1,826 24 26 1,606 - 597 - Mining Reserve 4,730 - - 714 3,533 78 138 21 - - - - 246 - Exploratory Assets 10,259 - - 30 9,973 - 132 - - - - - 124 - Notes: 1. Includes DMCL, Fujairah Gold, GEPL, Sesa Resources Ltd, VGCB, WCL, and other Sesa Sterlite Investment companies. 2. Includes Capital Work in Progress. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 33 Proforma Entity Wise Financials Proforma for Sesa Sterlite Merger and Group Simplification VED SSLT SSLT Cairn FY2014 ($mn or as stated) Consol KCM Plc Cos Elim Consol standalone India HZL ZI BALCO CMT MALCO TS TSMHL Others¹ Elim Group Revenue 12,945 1,271 - (307) 11,981 4,680 3,093 2,225 661 594 123 85 - - 967 (447) EBITDA 4,491 156 1 - 4,334 510 2,347 1,173 214 53 3 24 (1) - (1) 13 Depreciation (1,410) (171) (0) 1 (1,240) (262) (692) (129) (90) (37) (10) (4) - - (14) - Amortisation (793) - - - (793) (12) (721) (10) (47) (3) ------ Special Items (138) (51) (3) (0) (85) (22) - (10) (47) - - - - 1 (332) 326 Operating Profit 2,150 (66) (3) 1 2,218 214 934 1,023 29 14 (7) 20 (1) 1 (347) 339 Investment Revenue 688 0 385 (395) 697 284 254 312 7 3 0 3 - 153 178 (498) Finance Cost (1,356) (46) (664) 309 (956) (547) (14) (7) (4) (4) 1 (0) 0 (381) (8) 8 Other Gains/ (Losses) (364) - 1 (0) (365) (242) (45) (3) - (29) (0) - (47) - (0) - Profit Before Taxation 1,118 (112) (280) (86) 1,594 (291) 1,128 1,325 32 (15) (6) 23 (47) (227) (177) (151) Current Tax (554) (0) (19) (64) (471) 261 (418) (271) (36) (1) 1 (0) - - (6) - Deferred Tax 426 22 - (40) 444 121 196 92 21 10 2 0 - - 2 - Profit after tax 989 (90) (300) (190) 1,568 90 906 1,146 17 (5) (3) 23 (47) (227) (182) (151) Attributable to equity holders (131) (72) (300) (187) 427 53 312 434 5 (2) (2) 13 (28) (132) (106) (119) Underlying PAT 1,451 (54) (298) (190) 1,993 354 952 1,155 53 14 (3) 23 (1) (228) 150 (477) Underlying Attributable PAT 158 (43) (298) (190) 689 207 326 437 27 4 (2) 13 (0) (133) 88 (278) Property Plant and Equipment² 16,055 2,086 1 - 13,968 6,150 1,561 1,837 341 1,826 24 26 1,606 - 597 - Mining Reserve 4,730 - - - 4,730 714 3,533 78 138 21 - - - - 246 - Exploratory Assets 10,259 - - - 10,259 30 9,973 - 132 - - - - - 124 - Notes: 1. Includes DMCL, Fujairah Gold, GEPL, Sesa Resources Ltd, VGCB, WCL, and other Sesa Sterlite Investment companies. 2. Includes Capital Work in Progress. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 34 Entity Wise Cash and Debt Net Debt Summary ($mn) 31 Mar 2013 30 Sep 2013 31 Mar 2014 Company Debt Cash & LI Net Debt Debt Cash & LI Net Debt Debt Cash & LI Net Debt Vedanta plc1 6,424 91 6,334 8,090 85 8,005 8,323 16 8,307 KCM 761 10 751 743 32 711 733 10 723 Sesa Sterlite Standalone 5,263 515 4,748 5,116 598 4,518 5,011 427 4,585 Zinc International - 197 (197) - 188 (188) - 169 (169) Zinc India 0 4,045 (4,045) 0 3,886 (3,886) 0 4,345 (4,345) Cairn India - 3,102 (3,102) - 3,299 (3,299) - 3,912 (3,912) Balco 687 0 687 633 14 619 679 0 679 Talwandi Sabo 706 1 705 723 2 721 835 4 831 TSMHL2 2,638 10 2,628 1,188 15 1,173 1,190 8 1,181 Others3 113 10 103 113 16 97 100 47 53 Sesa Sterlite Consolidated 9,407 7,881 1,526 7,773 8,018 (245) 7,815 8,912 (1,097) (Total (in $mn) 16,593 7,982 8,6164 16,605 8,135 8,4635 16,871 8,938 7,9206 Debt numbers at Book Values, as of 31 March 2014. Notes: 1. Includes Investment Companies. 2. Twin Star Mauritius Holdings Limited (SPV holding the 38.7% stake in Cairn India with associated debt of $6.0bn). Since the table above shows external debt, it does not include the $3.89bn inter-company receivable at Vedanta plc from TSMHL. There was an accrued interest of $405mn on the inter-company receivable, as of 31 March 2014. 3. Others include: CMT, Fujairah Gold, MALCO (MEL), Sesa Resources Ltd, VGCB, and Sesa Sterlite Investment companies. 4. Includes $5 million debt related derivative liability. 5. Includes $8 million debt related derivative asset. 6. Includes $14 million debt related derivative asset. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 35 Net Debt Reconciliation FY2014 ($mn) 8,616 387 7,920 508 1,425 322 (3,338) Opening Net Debt Cash Flow from Sustaining Capex Project Capex Shareholder and Others Closing Net Debt (1 Apr 2013) Operations¹ Minority Dividends (31 Mar 2014) Notes: 1. Excludes sustaining capex. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 36 Impact of Sesa Sterlite Merger on pro-forma basis Group Simplification to Reduce Debt at plc Debt Service Liability³ On a pro forma basis for FY2014: Vedanta Debt Service Annual Interest Resources plc Liability ($ mn) Cost ($ mn) Post group structure simplification, debt service Gross External Debt 8,511 c. 500 liability at plc reduces to $4.6bn Effect of Intercompany Receivable (3,894) c. (300) Debt service cost at plc reduces from c.$500mn at Plc from Sesa Sterlite to c.$200mn Debt Service Liability 4,617 c. 200 FY2014 FY2014 ($mn or as stated) Actual Proforma Inter-company Debt ($ mn) Intercompany Receivable at plc from EBITDA 4,491 4,491 3,894 Sesa Sterlite due to Cairn acquisition Underlying Attributable PAT¹ 93 158 Underlying EPS($/share)¹ 34 58 SESA Free Cash Flow after Growth Capex 3,017 3,017 STERLITE Interest cost at plc² 343 200 Debt Service Sesa Sterlite Liability ($ mn) Gross External Debt 7,919 Intercompany Payable to Vedanta 3,894 Debt Service Liability 11,813 Notes: 1. Based on profit for the period after excluding special items and other gains and losses, and their resultant tax and minority interest effects. 2. Interest paid on external debt net of interest income on inter-company receivable. Interest excludes accretive interest on convertible bonds and amortisation of borrowing costs. 3. Debt numbers at Face Values, as of 31 March 2014. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 37 Project Capex Capex Spent up to Unspent as at Capex in Progress Completion Time (US$mn) Spent FY2014 March 2014 31.3.2014 Cairn India Phase wise completion 3,679 649 649 3,030 Total Capex Oil & Gas 3,679 649 649 3,030 Copper Sector 160 MW CPP at Tuticorin Completed 164 13 164 - KCM KDMP Project (7.5 mtpa) Completed 973 37 926 47 Aluminium Sector BALCO – Korba-III 325 ktpa Smelter and Smelter: 1st metal tapped in Q4 FY 2014 1200 MW CPP (4x300MW) Power: 1st unit synchronization in Q1 FY2015 1,872 125 1,721 151 BALCO – 211 mt Coal Block Mining from Q1 FY 2015 150 1 15 135 Jharsuguda 1.25 mtpa smelter 2,920 21 2,500 420 Power Sector Jharsuguda 2400 MW power plant Completed 1,769 9 1,740 29 Talwandi 1980 MW IPP 1st unit synchronised in Q3 FY2014 2,150 274 1,869 281 Zinc Sector Zinc India (Mines Expansion) Phasewise Completion 1,500 243 435 1,065 Infrastructure Vizag General Coal Berth Completed 119 1 119 - Total Capex in Progress 11,617 725 9,489 2,128 FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 38 Project Capex Capex Spent up to Unspent as at Enabling Capex Completion Time (US$mn) Spent FY2014 March 2014 31.3.2014 ZI – Gamsberg 29 15 23 6 Western Cluster- Liberia 106 29 96 10 Total Enabling Capex 135 45 119 16 Capex Spent up to Unspent as at Capex in Optionality Completion Time (US$mn) Spent FY2014 March 2014 31.3.2014 Copper Sector Tuticorin Smelter 400 ktpa EC awaited 367 6 129 239 Aluminium Sector Lanjigarh Debottlenecking 1.0 mtpa Approval pending, on hold 150 1 77 73 Lanjigarh Refinery (Phase II) 3.0 mtpa Approval pending 1,570 (1) 809 761 Iron Ore Sesa Iron Ore mine Expansion (36 mtpa) Approval pending, on hold 500 - 155 345 Total Capex with Optionality 2,587 6 1,169 1,418 Total Capex (Excluding Cairn) 14,339 776 10,777 3,562 Total Capex (Including Cairn) 18,018 1,425 11,427 6,591 FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 39 Credit Metrics FY2013 FY2014 Covenant Net Debt/EBITDA 1.85x 1.79x < 2.75x EBITDA/Net Interest Expense1 9.0x 8.4x > 4.0x Tangible Net Worth ($bn) 4.3 3.8 > 3.0 Net Assets/Debt 2.38x 2.24x > 1.75x Gearing2 31.4% 30.6% Notes: 1. Interest includes Capitalized Interest. 2. Gearing is calculated as Net Debt divided by the sum of Net Debt and Equity. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 40 Currency and Commodity Sensitivities Foreign Currency - Impact of a 10% depreciation in FX Rate FY2014 FY2014 Currency Average FX rate EBITDA ($mn) INR/USD 60.4962 151 Commodity prices – Impact of a 10% increase in Commodity Prices FY2014 FY2014 Commodity Average price EBITDA ($mn) Oil ($/bbl) 108 277 Zinc ($/t) 1,909 187 Aluminium ($/t) 1,773 110 Copper ($/t) 7,103 140 Lead ($/t) 2,092 32 Silver ($/oz) 21.43 23 FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 41 Sales Summary Sales volume FY2013 FY2014 Sales volume FY2013 FY2014 Zinc-India Sales Iron-Ore Sales Refined Zinc (kt) 675 751 Goa (mn DMT) 3.0 - Refined Lead (kt) 117 121 Karnataka (mn DMT) 0.1 0.01 Zinc Concentrate (DMT) 120 - Total (mn DMT) 3.1 0.0 Lead Concentrate (DMT) - - MetCoke (kt) 302 413 Total Zinc (Refined+Conc) kt 795 751 Pig Iron (kt) 275 544 Total Lead (Refined+Conc) kt 117 121 Copper-India Sales Total Zinc-Lead (kt) 912 872 Copper Cathodes (kt) 179 173 Silver (moz) 12.0 11.3 Copper Rods (kt) 172 123 Zinc-International Sales Sulphuric Acid (kt) 731 514 Refined Zinc (kt) 146 125 Phosphoric Acid (kt) 119 116 Zinc Concentrate (MIC) 210 176 Copper-Zambia Sales Total Zinc (Refined+Conc) 355 301 Copper Cathodes (kt) 216 177 Lead Concentrate (MIC) 72 59 Power Sales (mu) Total Zinc-Lead (kt) 427 360 Jharsuguda 2,400 MW 7,530 7,625 Aluminium Sales BALCO 270 MW 1,241 390 MALCO 847 911 Sales - Wire rods (kt) 295 286 HZL Wind power 511 448 Sales - Rolled products (kt) 58 51 Total sales 10,129 9,374 Sales - Busbar and Billets (kt) 98 121 Power Realisations (INR/kWh) Total Value added products (kt) 452 458 Jharsuguda 2,400 MW 3.3 3.3 Sales - Ingots (kt) 321 335 BALCO 270 MW 3.2 3.9 Total Aluminium sales (kt) 773 793 MALCO 5.6 5.5 HZL Wind power 4.0 4.0 Average Realisations 3.6 3.5 Power Costs (USc/kWh) Jharsuguda 2,400 MW 2.1 2.1 BALCO 270 MW 2.7 2.9 MALCO 4.0 3.9 HZL Wind power 0.2 0.5 Average costs 2.2 2.2 Notes: 1. Sales of 27kt. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 42 Group Structure Vedanta Resources Divisions of Sesa Sterlite 79.4% 58.3% Iron Ore (Sesa Goa) Konkola Copper Smelting (Tuticorin) Copper Sesa Sterlite Mines (KCM) Power (2,400 MW Jharsuguda) Aluminium & Power assets (VAL) Subsidiaries of Sesa Sterlite 58.9% 64.9% 51% 100% 100% 100% 100% 100% Skorpion & Bharat Western Talwandi MALCO Australian Zinc India Lisheen - Cairn India Aluminium Cluster Sabo Power Power Copper (HZL) 100% (BALCO) (Liberia) (1,980 MW) (100 MW) Mines BMM -74% Option to Option to Zinc increase stake increase stake International to 94.4% to 100% Listed entities Unlisted entities Note: Shareholding based on basic shares outstanding as on 31 March 2014. FY2014 PRELIMINARY RESULTS PRESENTATION - 15 MAY 2014 43