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Vedanta Ltd.

BSE: 500295 | NSE: VEDL |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE205A01025 | SECTOR: Mining & Minerals

BSE Live

May 29, 11:58
91.50 1.55 (1.72%)
Volume
AVERAGE VOLUME
5-Day
804,961
10-Day
1,452,804
30-Day
1,737,352
625,942
  • Prev. Close

    89.95

  • Open Price

    89.00

  • Bid Price (Qty.)

    91.40 (289)

  • Offer Price (Qty.)

    91.50 (9299)

NSE Live

May 29, 11:58
91.40 1.45 (1.61%)
Volume
AVERAGE VOLUME
5-Day
20,934,443
10-Day
36,426,433
30-Day
40,435,053
14,649,338
  • Prev. Close

    89.95

  • Open Price

    89.60

  • Bid Price (Qty.)

    91.40 (7365)

  • Offer Price (Qty.)

    91.45 (1205)

Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Chairman's Speech

Chairman''s statement

We Are...

Delivering for our people, investors, communities and India

It gives me immense pleasure to report a strong operating and financial performance for the year. We have constantly challenged ourselves to ^deliver more and set new benchmarks in the process. _

This year as well, alongside robust financials, we have again delivered meaningful returns to our shareholders and significantly contributed to the exchequer as a proud corporate citizen. The Company has set rigid standards and strong processes to further improve its environmental and social performance.

On each aspect, we are proud of what we achieved in FY2019.

RISING TO A POSITIVE CLIMATE

Commodity prices rebounded in the last quarter of FY2019 from a decline in the previous quarters. The price increase reflected the supply concerns, progress in trade negotiations between US and China and expectation of fiscal stimulus in China. Metal prices are expected to continue rebounding from 2018 troughs and face upside risks from the possibility of tighter than expected environmental policies and slower than expected easing of commodity-specific supply bottlenecks .

We responded to the market''s opportunities in FY2019 by maximising our productivity and increasing production while driving down cost. Indeed, we broke our previous production records in lead, silver, aluminium and alumina, and set further records in steel and power generation.

THESE ABUNDANT VOLUMES TRANSLATED INTO ROBUST FINANCIALS. WE REGISTERED A REVENUE OF Rs.90,901 CRORE WITH A HEALTHY ADJUSTED EBITDA MARGIN OF 30% AT Rs.24,012 CRORE. OUR STRONG OPERATIONAL DELIVERY SUPPORTED BY PRODUCTIVITY FOCUS HELPED IN DELIVERING FCF AT Rs.11,553 CRORE WITH AN INCREASE OF 47% Y-O-Y. IN KEEPING WITH OUR PHILOSOPHY OF CONTINUALLY REWARDING OUR SHAREHOLDERS, WE PAID A DIVIDEND OF Rs.18.85 PER SHARE IN FY2019, AGGREGATING TO A TOTAL PAYOUT OF Rs.7,005 CRORE DURING THE YEAR.

A GROWING PORTFOLIO

During the year we welcomed Electrosteel Steels Ltd (ESL) into the Vedanta fold, taking a 90% stake in the business. This very rapidly became a turnaround success story, as we applied our experience and methods to ramp up output and to focus on achieving a more profitable product mix, commercial excellence and cost efficiencies. Production run rate has now increased by c.50%, from around 1 million tonnes per annum before the acquisition to 1.5 million tonnes per annum now.

In our Oil & Gas business, the acquisition of 41 blocks in the Open Acreage Licensing Policy (OALP) bid has established Cairn as one of the largest private acreage holders in the country, with a tenfold leap from c.5,000 to c.55,000 sq. km. These blocks have prospective resource bases of ~1.4 -4.2 billion boe. Over the next 2-4 years, we have a work programme commitment of US$550 million, comprising seismic acquisition and the drilling of over 150 exploratory wells.

In our Zinc business, our long-standing dream to commence production at Gamsberg was achieved this year, when the mine started trial production in November 2018 and subsequently shipped the first parcel of concentrate produced in December. This is the first large-scale mine to open in South Africa for more than a decade.

With one of the largest deposits in the world, Gamsberg is a significant addition to our Zinc business. Add this to our reserves, skills and capacity in aluminium and oil & gas, and we have three high-performing businesses that are creating a world-class powerhouse in natural resources.

PLAYING OUR PART

In FY2019, we contributed around 47% of our turnover, amounting to c Rs.42,400 crore, to the public exchequer of the countries in which we operate. We also provided high-quality employment for 76,000 men and women.

In addition, Vedanta invested Rs.309 crore in social programmes, directly touching the lives of three million people across more than 1,169 villages. The year included the milestone inauguration of our 500th ''Nand Ghar''. These community resource centres are especially created for women and their children, providing everything from nutritious meals and healthcare to safe play areas and e-learning resources. This is just the beginning as we have budgeted to invest Rs.800 crore to set up a network of 4,000 Nand Ghars across India.

Meanwhile, our outreach programmes helped to deliver health services to more than 1.5 million patients; provided clean, safe drinking water to well over 0.4 million people; reached over 35,000 women through dedicated self-help groups; and guided numerous people through youth skills programmes, sports coaching and sustainable farming training.

Vedanta''s Medical Research Foundation, which in the prior year inaugurated Central India''s first world-class cancer facility in Raipur, Chhattisgarh, delivered healthcare to more than 1,000 patients during the year.

Our outreach activities are delivered by a team of over 180 dedicated engagement professionals, who represent Vedanta in the communities and become valued local points of contact.

INDIA''S GROWTH: WE STAND READY

I believe India is the most exciting economy in the world as of today. It is a nation teeming with opportunity and potential, as the country looks to modernise, expand and accommodate the rising aspirations of a growing population. Indeed, in just a decade from now, India is expected to be home to 1.5 billion people and have an economy worth US$6 trillion.

This presents Vedanta, as India''s only diversified natural resources group, with a unique opportunity to provide the vital commodities the country needs for infrastructure development, asset creation, mobility, housing, consumer goods and general consumption.

The demand potential for our metals such as aluminium, zinc and steel, therefore, is immense.

Companies such as Vedanta will also be instrumental in addressing a major national mineral deficit as India currently imports around 80% of its oil and mineral needs.

We stand ready to supply ''home-grown'' products that the nation requires.

POLICY AND REGULATION

Against this backdrop, we were naturally pleased to see a renewed focus by the Government of India on the mining sector as an engine of economic growth.

Its National Mineral Policy (NMP), launched during the year, aims to increase mineral production in India by 200% and to reduce India''s trade deficit in minerals by 50% in the next seven years. NMP brings in a more effective and meaningful policy, with more transparency and better regulation enforcement. A pro-growth ambition requires a pro-business environment, and the NMP will encourage private sector participation in exploration.

We have offered our suggestions to NITI Aayog in its deliberations on a new pathway for the regulatory framework for mining.

In a similar vein, we welcomed landmark policy reforms in the oil & gas sector, aimed at raising domestic output and cutting imports, while also providing a smooth transition to cleaner fuels.

In South Africa, the revised Mining Charter III, announced by the Minister for Mineral Resources, addressed the needs of the country and provided a highly welcome certainty to the sector, and we support the efforts of the Government in this regard. As evidenced during the formal inauguration of our Gamsberg mine by His Excellency, Cyril Ramaphosa, the President of the Republic, our project is in keeping with the spirit of the Charter.

OUR PEOPLE

On March 1, 2019 we welcomed Srinivasan Venkatakrishnan (Venkat) as the Company CEO. He is a widely respected business leader and brings extensive global experience in the natural resources space.

My special thanks to Kuldip Kaura, who served us well as interim CEO before Venkat''s arrival.

On March 1, 2019, Venkat was also appointed as the Executive Director on the Board. There were no other Board changes during the year.

I also want to place on record my thanks to the 76,000 people who make up the Vedanta family and who, during this year, have innovated, broken records, and driven up our output with ever-increasing efficiency.

FY2020 AND BEYOND

Vedanta sits at the heart of the world''s fastest-growing economy, and the outlook for our products, both domestically and globally, remains positive.

In every aspect of our business, I see a Company inspired and focused on the opportunities ahead of us.

We will continue to innovate and reap the benefits of digitalised mining technologies. We will further drive up efficiencies and, in particular, focus on creating a safety culture to match our other world-class standards.

As we grow, we will continue to deliver for you, our shareholders and stakeholders including our own people and their development; our communities and the environments in which we operate. These are exciting times for us all.

Navin Agarwal

Chairman

May 7, 2019