Vedanta Ltd
Directors Reports
Dear Shareholders,
The Board of Directors presents the Company's Annual Report,
together with the audited financial statements for the financial year ended March 31,
2018.
During the year, your company focused on generating cash flows across
all businesses, deleveraging the balance sheet and delivering superior shareholder return
through disciplined capital allocation. The profitability improvement has been driven by
production ramp-up and complemented by the strong commodity market. There was record
production at Zinc India, aluminium and copper business.
We expect FY 2019 to be another productive year for your company with
ramp-ups across Zinc, Oil & Gas and Aluminium businesses continuing. The next phase of
growth projects announced during the year, set a strong base for the future. With a strong
balance sheet and a clear capital allocation strategy, we are confident about
Vedanta's prospects for the coming years and are optimistic about the long-term
outlook for the global resources sector.
Financial Highlights for FY 2017-18
• Revenue increased by 22% to Rs 92,922 crore (FY 2017: Rs 76,168
crore) driven by firm commodity prices and volume ramp up
• EBITDA increased by 19% to Rs 25,470 crore (FY 2017: EBITDA: Rs
21,437 crore)
• Robust EBITDA margin1 of 36% (FY 2017 39%)
• Free cash flow (FCF) post capex for the year at' 7,870
crore (FY 2017: Rs 13,312 crore)
• Gross debt at Rs 58,159 crore, reduced by Rs 13,410 crore during
the last 12 months (including repayment of Rs 7,908 crore of temporary borrowing at Zinc
India offset by issuance of preference shares)
• Net debt at' 21,958 crore (FY 2017: Rs 8,099 crore)
higher on account of special dividends paid and acquisition of AvanStrate Inc. (ASI)
• Attributable PAT (before exceptional items and DDT) increased by
10 % to Rs 8,026 crore (FY 2017: Rs 7,323 crore)
• Crisil upgraded the Company's Rating from AA/Stable to AA/
Positive
• Contribution of Exchequer of Rs 33,000 crore including
dividends.
• Strong financial position with cash and liquid investments of Rs
36,201 crore
• Record interim dividend of Rs 7,881 billion by Vedanta Ltd in
March 2018
Financial Performance Summary
Your Company's financial highlights in accordance with IND AS are
provided below:
|
Standalone |
Consolidated |
| Particulars |
Year Ended
March 31, 2018 |
Year Ended
March 31, 2017 |
Year Ended
March 31, 2018 |
Year Ended
March 31, 2017 |
| Net Sales/Income from
Operations |
45,974 |
38,540 |
92,923 |
76,171 |
| Profit from operations
before other income, finance costs and exceptional items |
3,851 |
3,665 |
18,881 |
15,040 |
| Other Income |
3,866 |
9,705 |
3,574 |
4,581 |
| Finance costs |
3,900 |
3,896 |
5,783 |
5,855 |
| Net exceptional items
gain/(loss) |
5,407 |
1,324 |
2,897 |
(114) |
| Profit /(loss) before tax |
9,224 |
10,798 |
19,569 |
13,652 |
| Tax expense/(credit) |
1,968 |
(271) |
5,877 |
2,333 |
| Net Profit/(loss) after tax |
7,256 |
11,069 |
13,692 |
11,316 |
| Share of profit/(loss) of
associate |
NA |
NA |
0 |
(3) |
| Minority Interest |
NA |
NA |
3,350 |
4,358 |
| Net Profit after taxes,
minority interest and consolidated share in profit/(loss) of associate and before other
comprehensive income |
7,256 |
11,069 |
10,342 |
6,958 |
| Paid-up equity share capital
(Face value of '1 each) |
372 |
297 |
372 |
297 |
| Reserves excluding
revaluation reserves as per balance sheet |
78,941 |
79,396 |
63,136 |
60,128 |
| Basic EPS after exceptional
items |
19.47 |
29.04 |
28.3 |
23.47 |
| Transferred to General Reserve |
Nil |
NIL |
NIL |
NIL |
| Interim Dividend |
7,881 |
7,099 |
7,881 |
7,099 |
Consolidated Financial Statement
The Company announces its Consolidated Financial Results on a quarterly
basis. As required under the Securities and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations 2015 (SEBI Listing Regulations), the Consolidated
Financial Statement of the Company and its subsidiaries, prepared in accordance with Ind
AS 110 issued by the Institute of Chartered Accountants of India, form part of the Annual
Report and are reflected in the Consolidated Financial Statement of the Company. Pursuant
to Section 129(3) of the Companies Act 2013 (the Act), a statement containing the salient
features of the financial statement of the subsidiary companies is attached to the
financial statement in Form AOC-1.
Pursuant to the provisions of Section 136 of the Act, the Standalone
and Consolidated financial statements of the Company along with relevant notes and
separate audited accounts of subsidiaries are available on the website of the Company. A
copy of the financial statements of the Company and of the subsidiary companies shall be
made available upon request by any member of the Company. Additionally these financial
statements shall be available for inspection by members at the Registered Office of the
Company.
Operational Highlights for FY 2017-18
In line with Vedanta's stated strategic priority of production
growth through continued ramp up at Aluminium and Zinc India business, we delivered strong
operational performance driven by record production at Aluminium (exit capacity c.2.0 MT),
Zinc India and Copper India. During the year, we also announced next phase of growth
projects in Oil & Gas and Copper India and continued to work on the Gamsberg project
for commencement of production in mid CY2018.
Some of the key operational highlights for FY 2018 are:
• Record annual production at Zinc India and Aluminium business
• Oil & Gas: Mar 18 Exit run rate of 200,000 boepd; Growth
projects on track to enable significant volume growth in FY 19
• Zinc International: Gamsberg project on track with production
expected by mid CY 2018
• Aluminum: Record annual production at 1.7mt; with an exit run
rate of c.2.0 mtpa
• Iron Ore: Increase in company-wise mining cap allocation in
Karnataka expected in Q1 FY2019
• Power: 1,980 MW Talwandi Sabo Power Plant operating at 93%
availability in Q4FY 18
Capital Expenditure
We continue to take a disciplined approach to growth through prudent
capital allocation. During the year FY 2018, we commenced the next phase of growth in our
Oil & Gas business with a near term target of about 300kboepd. With positive
fundamentals in place, we have also commenced the expansion of the 400kt copper smelter
atTuticorin in Southern India to 800kt. Completion of this project will place Tuticorin as
one of the largest single-location copper smelting complexes in the world. Both these
projects are having robust returns. The Zinc projects both at Zinc India & Zinc
International are progressing well. We are geared up for commencement of production at the
Gamsberg project from Mid Calendar Year 2018 (CY 2018).
During FY 2018, we have spent Rs 5,306 Cr on Growth projects and it is
likely to be higher around Rs 9,700 Cr in FY 2019 primarily driven by higher capex at Oil
& Gas.
Dividend
The Board of Directors approved the payment of 1st interim dividend
@2120% of INR 21.20 per equity share of' 1 each on March 13, 2018. In view of the record
interim dividend declared in March, 2018, no final dividend is recommended.
The Board of Directors further approved a Dividend @7.5% p.a. on the
Redeemable Non-Convertible Preference Shares (Preference Shares) of face value Rs 10/-
each as per the terms of issuance.
These preference shares were issued and allotted on April 28, 2017
pursuant to the Scheme of Arrangement between shareholders and creditors ofVedanta Limited
and Cairn India Limited ("Scheme") and the dividend was payable uptil the end of
the Financial Year March 31, 2018.
Transfer to General Reserve
The Company proposes NILtransfer to General Reserve out of its total
profit of' 7256 Crore for the financial year.
Share Capital
The Authorised Share Capital of the Company is Rs 74,12,01,00,000
divided into 44,020,100,000 (Four Thousand Four Hundred and Two Crores and One Lakh only)
number of equity shares of Rs 1/- (Rupee One) each and 3,010,000,000 (Three Hundred and
One Crore) Preference Shares of' 10/- (Rupees Ten) each.
Bidding under Insolvency and Bankruptcy Code 2016
Under the Insolvency and Bankruptcy Code 2016, the Reserve Bank of
India (RBI) mandated banks to refer their defaulting customers/ NPA accounts to National
Company Law Tribunal (NCLT). The companies referred to the NCLT for initiating insolvency
proceedings, included few steel companies with significant production capacity.
Whilst globally, following two decades of significant steel expansion
in China, global steel capacity is high, India remains a significant exception to this.
Given India's size of economy, population and existing steel capacity it is expected
that the steel sector in India will grow rapidly over the coming few years. In view of
this and the synergies from its Iron ore business, your Company bid for two of the steel
assets up for auction. The companies under consideration own state of the art and
technologically advanced steel plants. These acquisitions will provide your Company ready
operating capacities instead of investing time and effort in a greenfield project.
On March 31, 2018, your Company was declared as the successful
resolution applicant by the Committee of Creditors for Electrosteel Steels Limited
("ESL") underthe Corporate Insolvency Resolution Process of the Bankruptcy Code,
and received a letter of intent from the Committee of Creditors. The Company has accepted
the terms of the letter of intent and the closing of the transaction will be subject to
compliance with applicable regulatory requirements and the final terms approved by the
NCLT.
The Company's other bid is for a steel asset in Gujarat, India.
The auction process and evaluation of bids for this asset is on-going.
Credit Rating
Your Company is rated by CRISIL Limited (CRISIL) and India Ratings and
Research Private Limited (India Rating) for its banking facilities in line with Basel II
norms.
During the year, CRISIL changed the outlook on Company's long-term
bank facilities and its Non-Convertible Debentures (NCDs) programmeto CRISILAA / Positive
Outlook fromCRISIL AA / Stable. The Company has the highest short-term rating on its
working capital and Commercial Paper programme at CRISILA1+. The agency expects that the
structural improvement in cost structure along with continued focus on deleveraging shall
help improve the credit profile of your Company. The agency shall be guided by extent of
gross debt and structural improvements in business driving the lower leverage levels for
further positive rating action.
India Ratings changed the Company's ratings on long-term scale to
IND AA / Positive from IND AA / Negative during the year and short-term rating are
maintained at IND A1+. The agency is monitoring the improvement in leverage along with
ramp-up of operations to upgrade the ratings while resolving the outlook.
Sustainability
Your Company's Sustainable Development is integral to the core
business strategy. We continue to be a transparent and responsible corporate citizen;
committed to a ‘social license to operate' and partner with communities, local
governments and academic institutions to help catalyse socio-economic development in the
areas where we operate.
The Company reaffirms its Core Values of Trust, Entrepreneurship,
Innovation, Excellence, Integrity, Respect and Care, which are the basis of Company's
Sustainable Development Model. The model continues to be centered on the four strategic
pillars: Responsible Stewardship; Building Strong Relationships; Adding and Sharing Value;
and Strategic Communications.
With the Sustainable Development model, we built the Sustainable
Development framework, which is aligned to global best practices and standards, including
the United Nations Global Compact's (UNGC) 10 principles; the International Finance
Corporation (IFC) performance standards; the International Council on Mining and Metals
(ICMM) principles; UN Sustainable Development Goals (SDGs); and the Organisation for
Economic Cooperation and Development (OECD) promoted Multinational Guidelines.
This robust framework provides the business and the leadership teams
the parameters on which to assess, monitor, review key sustainability priorities, such as
safety, health, environment, stakeholder engagement and community development activities,
as per the Company's approach on ‘social license to operate'.
The Vedanta Sustainability Assurance Programme (VSAP) has been the
bedrock in promoting transparency and compliance of all our businesses with the
Group's Sustainable Development Framework. In continuation with last year, the big
focus areas have been on implementation of six key safety performance standards across the
Group; VSAP process has categorically focused on compliance level to these standards and
highlighted areas of improvement.
During the year, we focused heavily on safety performance of your
businesses under the overarching umbrella of Health, Safety and Environment (HSE) best
practices. Community engagement and development programmes were geared with emphasis on
need assessments and longevity of the project and related outcomes/ benefits.
Our resolve is strong and we continue to work towards achieving zero
harm.
Vedanta's teams across businesses are driving various
capacitybuilding and behavioural programmes. Our awareness campaigns aim to entrench a
culture of safety and risk awareness. Training programmes on ‘Making Better Risk
decisions' is one such programme rolled out across the businesses to improve safety
decision making of leaders at all levels, particularly those on the front line. Similarly,
‘Experience Based Quantification' (EBQ) using Bow Tie Risk Assessment
methodologies were utilised to identify critical risks from safety and environmental
perspective for key businesses. In FY 2017-18, over 874,296 hours of safety training were
delivered to employees and contractors.
After an encouraging COP21 conference in Paris, which resulted in more
than 174 countries ratify the agreement, the global climate agenda continues to push
ahead, despite the United States withdrawing from the agreement. India, which had set
ambitious targets of reducing its carbon intensity by 33-35% by 2030 and to source 40% of
its electric power from non-fossil fuel based sources, continues to move forward to meet
those targets.
Our Company remains committed to decreasing its carbon footprint. Last
year we stated our expectation to reduce our GHG intensity by 16% from a 2012 baseline by
2020. This expectation emerged from the Carbon Forum that was constituted to develop our
carbon strategy and provide governance on the risk to business from climate change.
Our businesses have made significant progress on our GHG reduction
commitment. Hindustan Zinc Limited and Oil & Gas business have committed to increase
their investment in solar power, while other businesses have made significant improvements
in their process efficiencies, thereby reducing their GHG intensity emissions. As of March
31, 2018, we had been able to achieve about 14% reduction in our GHG intensity from our
baseline number. We are confident of achieving our target by 2020.
We are also committed to develop an internal carbon price mechanism to
manage our climate related financial risk. We believe that climate resilience is the best
approach we can take to safeguard our climate related business risks and we are committed
to work with all our stakeholders in achieving this goal.
We ensure that our Biodiversity Management Plans are in place, and our
environmental footprint follows the most rigorous global standards. We have developed
specific objectives and targets, particularly with regards to water and energy management.
Finding innovative ways to reduce waste is a priority for us. We remain
committed to our agenda of "Zero Harm, Zero Waste, Zero Discharge". This year we
are able to recycle more than 90% of the fly ash that was generated at our power plants.
Large volumes of our high-calorific hazardous wastes are also sent to the cement industry
to be used as clinker fuel, thereby preventing them from being sent to secure landfills.
This year, we have recycled 83% of our overall High Volume and Low Effect waste in
sustainable applications and are continuing to develop new and innovative ways to increase
the proportion of waste we recycle.
We are present in some of the world's most unique, remote and
underdeveloped regions. We are committed to respect, learn from and create a shared
understanding with our communities. Connecting with our communities is not just the right
thing to do; it is a fundamental imperative of our ‘license to operate'.
Our spend on our social investment and CSR programmes thereby reaffirm
our commitment to ensuring the well-being of the communities who live in proximity to our
operations.
Periodic meetings with Socially Responsible Investors (SRI) and lenders
were undertaken and an update was provided in the Group Sustainability Committee meeting.
This year, we encountered strong opposition from the local community to
our plant in Tuticorin. We are working with the communities as well as the regulatory
bodies to arrive at a solution to the questions raised. We are committed to responsibly
run our operations.
We remain positive that our overall sustainability journey is headed in
the right direction. Our sustainability framework is robust and in line with global
practices on engaging with civil society, communicating performance on community
development, human rights as well as addressing legacy issues. We are confident that it
will help us achieve higher levels of performance in the years to come.
A separate detailed report on Company's Sustainability Development
also forms part of the Annual Report.
Digitalization & Technology
The technology landscape is continuously changing at a rapid pace. This
dynamic change creates an opportunity to adopt and develop competitive advantage. Adapting
cutting edge technology to create incremental value is in Company's DNA. The agility
to inculcate technology as part of business has been demonstrated over the years in each
sphere of business.
In the current environment, Company recognises the need to develop a
comprehensive digital strategy and drive transformational change across the organisation
that instils digital expertise in all facets of the business and creates value proposition
for all its stakeholders.
In order to manage the complex digital transformations across business
units, the Company has taken on board resources for the position of ‘Chief Digital
Officer' (CDO) in each of its key business unit. These resources have brought global
expertise in digital transformation initiatives. This position is an integral part of the
Business Executive Committee. These positions are part of the top thought leadership and
shall have the critical responsibility for developing and implementing Company's
digital strategy.
Your Company is committed to adopt digital technology in the
organization to make data driven decisions, to generate efficiencies, improve planning,
lower risk, create safer working environments while unlocking more value from the
resources.
The Company is also institutionalizing ‘new ways of working'
through these digital-led business transformation programmes including:
• Adopting agile approaches accelerating time to business value;
• Taking a more persona-centric and design-thinking led approach
on new digital business solutions design;
• Driving a Minimum Viable Product (MVP) based approach in
progressively industrializing digital business solutions;
• Re-skilling and cross-skilling teams for new age technologies
and skills.
A series of measures have been put in place to drive the digital
transformation across business units. Some of these key initiatives include:
• Use of Drones for Pipeline monitoring & Mining Stockpile
Measurement;
• Digitalization of underground mining operations at HZL (SKM
& RAUG);
• Integrated Operations thru Connected Assets at Oil & Gas;
• Big Data Analytics & Decision Supportfor Predictive
Maintenance at Oil & Gas;
• Asset Optimization using Predictive Maintenance at Sterlite
Copper;
• Smart Ore Digitalization Project at Gamsberg in Zinc
International;
• Integrated Mine Operations Management System at Iron Ore;
• Asset Optimization using Machine Learning at Iron Ore;
• Coal Supply Chain Digitalization at Aluminium business,
Jharsuguda.
The focus for FY2019 shall be scale up the transformation efforts and
reap the benefits of technology adaption.
Corporate Social Responsibility
Your Company works towards a larger goal of creating enduring value for
the communities it works in. Towards that end, we undertake various need based community
programmes as part of our Corporate Social Responsibility (CSR). Putting the last as first
being the top most priority, the Company has committed to align its CSR activities to the
evolving and dynamic priorities of Nation and State besides local needs.
For almost all our programmes, a bottom up community engagement
approach is a non-negotiable. This collaborative approach ensures community ownership,
suitable project design, effective delivery and post-project sustainability. Apart from
communities, we also strongly believe in partnering with government agencies, development
organizations, corporates, civil society organisations & community based organizations
to carry our durable and meaningful initiatives.
All our CSR programmes are governed by the Vedanta CSR Policy, the
Technical Standard 19, and each entity specific Standard Operating Procedures for CSR. The
documents are periodically revised. Further, in order to benefit from diverse
perspectives, and in keeping with a culture of collective leadership, Vedanta has formed a
CSR Council. The council comprises of business leaders and CSR executives from the
different Business Units. The Council is responsible for governance, synergy and
cross-learning across the Group CSR efforts. It meets every month and reviews the
performance, spends and outcome of CSR programmes for all Business Units. The council is
instrumental in implementing improvement projects to create a seamless enabling eco-system
for Business Units to carry out best-in-class community development programmes.
We have a CSR Committee comprising majority of Independent Directors.
The Committee provides strategic direction for CSR activities, and approves its plans and
budgets. It also reviews the programmes and guides the CSR Teams towards running well-
governed and impactful community programmes.
Brief Overview on Community Development Programmes for 2017-18 is as
under:
1. Nand Ghar and Children's Well-being Projects - The Nand Ghar
Project is the company's flagship national initiative, which aims to build new-age
Anganwadis for ensuring the health and learning of young children in rural areas, and also
as a platform for women's empowerment and skilling. The Project ultimately aims to
impact 85 million children and 20 million women across 1.37 million Anganwadis in the
country. As on date, 101 Greenfield and 53 Brownfield Nand Ghars are operational across -
states of the country. Construction is on-going at another 72 Greenfield and 200
Brownfield Nand Ghars.
Khushi is a Hindustan Zinc initiative, focusing on strengthening the
functioning of the Integrated Child Development Services (ICDS) programme in 3089
Anganwadi centres of 5 Districts of Rajasthan. The programme is the largest such
Public-Private- People initiative in the ICDS space covering 64,000 children in the age
group of 3-6 years and aims to improve children's attendance, retention, learning
levels, health status and community engagement. Children's attendance at these
centres has gone up from 44% last year to 59% this year. A unique Anganwadi Grading Tool
was developed and used to rate each one of the 3089 Anganwadis. 25,000 community meetings
were held during the year, and community contributions equivalent to INR 5.43 million were
mobilized.
2. Women's empowerment - Vedanta is endeavouring to provide equal
opportunities to women through multiple initiatives. Subhalaxmi Cooperative Society
atJharsuguda is one such flagship initiative of Vedanta Limited, Jharsuguda. Subhalaxmi,
which started in 2008 with 10 women, has now emerged as one of the largest women's
cooperative in western Odisha with 3324 members and 280 Self Help Groups across 64
villages of 3 blocks of Jharsuguda. It started with INR 1000 as working capital and today
it has accumulated corpus fund of more than INR 22 million with an average net profit of
INR 6-7 lacs/annum. Loans of around INR 49.2 million were provided to women entrepreneurs
for setting up their own micro enterprises in FY'18. Subhalaxmi now has a special
fund called "UDYAMI FUND (Start-up Fund)" to support emerging & aspiring
microentrepreneurs in Jharsuguda.
On similar lines, the Sakhi programme at HZL now has 1299 SHGs
(Self-help groups) reaching to nearly 16,620 women. During the year, 9397 women took loans
amounting to INR 79 million. The main purposes for which the loans were taken were
household consumption, agriculture, health & sanitation, animal husbandry, including
280 women who used the loans to become entrepreneurs (either by setting up new or
expanding existing enterprises).
3. Health Care - Health is another critical area of engagement for us,
and we work to bring affordable healthcare within reach of our communities. Aarogya, a
healthcare Initiative of the Company at Lanjigarh, is a commitment to improve the health
status of less privileged community in Kalahandi region. Vedanta Hospital is a 20 bedded
state of art medical facility well- equipped with doctors, physiotherapist and visiting
specialists providing 24X7 ambulance service for referrals with a daily footfall of more
than 150 patients. The hospital services are recognized for sickle cell detection,
Rashtriya Bima Suraksha Yojana, Institutional delivery under Janani Suraksha Yojana, Cleft
& Palate Surgery and Antenatal check-up under Pradhan Mantri Surakshit Matrutwa
Abhiyan.
VMRF
Vedanta Medical Research Foundation (VMRF), a voluntary,
non-profitorganisation, has been initiated by BharatAluminium Company Limited, subsidiary
company (BALCO), to contribute to the prevention, control and eradication of cancer and
its related illnesses. VMRF's first flagship initiative has been the establishment of
‘Balco Medical Centre' - a 170-bed, state-of- the-art tertiary care oncology
facility in Naya Raipur, in close proximity of our Aluminium plants at Korba, Lanjigarh
and Jharsuguda. The proposed hospital envisages bringing modern, comprehensive and high
quality medical care within the reach of the population of Central India in general and
Chhattisgarh in particular.
Hospital at Kalahandi
With a commitment of ‘Giving back to Society', Vedanta
Limited has signed a Memorandum of Understanding (MoU) with Government of Odisha to
establish a 500 bed hospital for Government Medical College at Bhawanipatna with an
investment of Rs 100 crores. The MoU was signed on March 27, 2018 at Odisha State
Secretariat. The Hon'ble Chief Minister of Odisha congratulated Vedanta for coming
forward to set up the hospital for Medical College and partner the Government in crucial
areas of development for the people of Kalahandi.
4. Agriculture and Animal Husbandry - Given that most of our
neighbourhood communities still depend on agriculture and animal husbandry, we follow a
livelihood development approach of integrating agriculture, dairy, water management,
technology, farmer's organizations and market outreach. Project Unnati, a Cairn CSR
initiative, was set up to support the farmers of Barmer in enhancing their incomes through
sustainable farming. As part of a MoU with Central Arid Zone Research Institute (CAZRI),
Jodhpur - a unit of Indian Council for Agriculture Research (ICAR), 700 framers were
trained in high tech farming techniques. This was supported by the installation of drips
for 60,000 horticulture plants in 120 acres. As a result, this year, the farmers in Barmer
have harvested over 60 tonnes of Ber, Gunda, and Anar.
5. Skilling the youth - Skill development is the need of the hour, and
can have a huge impact on creating livelihoods opportunities for millions of families. Our
aim is to channelize the untapped potential of youth and help them become employable in
the growing economy. Vedanta IL&FS Institute of Skills at BALCO, Korba imparts
‘hands-on' training to youth in five different trades - Industrial Stitching,
Fitter Fabrication, Welding Assistant, Electrician and Hospitality. The Institute has
provided assured placements to more than 6,700 students since operationalisation. Sterlite
Copper's Tamira Muthukkal project has provided skills training and employability to
some 2,000 youth from the Thoothukudi district since its inception.
6. Environment protection & restoration - We understand the
interdependency between our operations and the natural environment. As a natural resource
company, our prime focus is on protecting and restoring nature. At Talwandi Sabo Power
Limited, wholly owned subsidiary (TSPL), Mansa, Punjab, individual household level soak
pits were constructed in partnership with MGNREGA and Gram Panchayat in 2 villages.
Looking to the success of the project, Department of Rural Development, Punjab directed
all 22 districts to replicate the same model on a pilot basis.
7. Sports & Culture - Sports and culture have the ability to
attract and mobilize youth as well as foster stronger community bonding. Sesa Football
Academy (SFA), an Iron Ore Business's CSR initiative, was established in 1999 on a
reclaimed mine at Sanquelim with a vision to become a premier academy in India. Until now,
the Academy at Sanquelim has passed out 123 boys, some of whom have represented India
internationally and many are pursuing their football career with major clubs. Seven alumni
of SFA have played for the Indian national team and 8 are playing in the elite Indian
Super League 2017-18 seasons. Taking forward the commitment and passion to nurture girl
child through sports, SFA launched the ‘Vedanta Women's Football League' on
November 6, 2017 with the support of Goa Football Association (GFA). Vedanta created
history through this first of its kind league by providing women footballers a prominent
platform to showcase their talent and skills. 137 women footballers hailing from all over
Goa participated in this league through 6 teams and made it a grand success.
8. Community Infrastructure - While human development is the key, but
infrastructure also plays an important role. Developing and maintaining social
infrastructure are critical for rural development and over all nation building. Company is
supporting operational villages in developing basic infrastructure in villages, such as
school toilets, drinking water projects, sports infra, local drains, community centres
etc. as per local needs.
During the year, the Company's divisions spent INR 45.19 Crore on
CSR activities, while on a consolidated basis it spent about INR 244.33 Crore on CSR.
A brief overview of CSR initiatives forms part of this Directors Report
and is annexed hereto as Annexure A'.
Your Company's CSR Policy addresses the Company's commitment
to conduct its business in a socially responsible, ethical and environmentally friendly
manner; and to continuously work towards improving the quality of life of the communities
in the areas where it operates.
The policy may be viewed here:
http://www.vedantalimited.com/media/85867/csr-policy-final.pdf Business
Responsibility Report
A detailed Business Responsibility Report in terms of the provisions of
Regulation 34 of the SEBI Listing Regulations is available as a separate section in this
annual report.
Human Resources (HR)
Human resources play a significant role in your Company's growth
strategy. Your Company emphasised on talent nurturing, retention and engaging in a
constructive relationship with employees with a focus on productivity and efficiency and
underlining safe working practices. The significant focus areas during the year comprised
the following:
V - Perform:
One Performance System for One Vedanta
V-Perform is a pan-Vedanta initiative to standardize the Performance
Management System (PMS) system and process across all Vedanta Group companies by
leveraging technology. This would enable the functions, teams and individuals in tracking
performance, generating analytics and taking proactive decisions towards achieving
Company's overall business plan and targets.
The online V-perform portal delivers a consistent user experience for
all ~12k professionals across Vedanta, starting from goal setting to the quarterly /
mid-year appraisal and finally the year-end assessment. In addition to this, the portal
facilitates open dialogue and feedback discussion between the managers and the team
members to ensure transparency and efficiency in all PMS related activities.
As a next step toward enhancing our Safety performance at workplace and
achieving our ultimate vision of "Zero Harm", Safety Competency Assessment
process was initiated as part of V-Perform to strengthen our existing Safety Management
System by means of training, skills, experience and knowledge that an employee's
possess and their ability to apply them to perform a task safely which will enable to
mitigate the risk and ensure that employees are well organized and safe all the time at
Workplace.
Leadership Development and Talent Management
Internal Growth Workshops: Vedanta has always aspired to design an
organization which is led by our "Leaders from Within". Identifying internal
talent and elevating them to enhanced leadership roles has been the driving factor in our
journey of rapid growth. In line with this philosophy, the Group conducts
‘Chairman's Internal Growth Workshops' through which we have identified
500+ high potential New Leaders till date across various functions in the Group's
businesses who have taken up significantly elevated roles and responsibilities. Meeting
Growth Aspirations of the employees and ensuring Internal Mobility of High Quality Talent
has been the highlight of this endeavor. The New Leaders have been empowered through
various key strategic initiatives across
the Group and regular feedback sessions which have ensured they are in
the right track of being the "Leaders of Tomorrow". Our Internal Growth
Workshops have also enabled us to reduce our lateral hiring significantly for critical
roles across the Group in past two years.
‘V Connect' Initiative: The V - Connect programme was
launched across Vedanta Group as one of a kind anchoring/ mentoring programme covering all
12,000 professionals with regular talent stories and anchoring conversations across all
the businesses. It was launched in association with AON and the key output from this
initiative has been to derive enhanced engagement levels from the employees. This
initiative has also ensured transparent communication of organizational growth vision and
key priorities in our roadmap for being the best in class employer in the industry. To
facilitate smooth functioning of the programme, a specialized app - "Aon Lead"
was introduced. The App allows participants to schedule their connects; get latest
business updates from around the globe; access to articles and videos that focus on
effective leadership, skill-building; and participate in quizzes/learning challenges. Till
date, more than 5000 conversations have been completed for the employees across Vedanta.
Right Management in Place (RMIP) - Strategic Hiring
In our endeavour to strengthen management teams across business,
realigning the organisation structure and bridging the critical gaps in each of the
business, we initiated recruitment drive along with the business for various leadership
positions including Expats /
Specialist Positions. Hiring for these positions was initiated with
focus on recruitment from best practices companies / diversity.
During the year, we focused on building and strengthening HSE function
and technical capability in the organization. We hired around 28 technical experts across
businesses which include 10 global HSE experts to head the HSE function at each of our
businesses in India and Africa and these individuals bring onboard rich and diverse
experience from their past global organizations like BHP, Rio Tinto, BP, Sheel, Chevron,
GE, DuPont, Alcoa, Anglo etc.
Global Internship Programme (GIP)
The Programme was introduced in FY 2016-17 with the aim to hire bright
students from premier global university. Vedanta attracts first year MBA students from
premier B-schools with the aim to create lasting business value by bringing on board world
class talent. The B-Schools include Harvard, Wharton, INSEAD & London Business School
among the international campuses and the top three IIM's- Ahmedabad, Bangalore &
Calcutta among the national campuses.
The interns work with top management, especially the C-suite on
real-time projects impacting business directly. They work in a fast-paced dynamic team
environment, and finish the internship having gained broad experience in various aspects
of the natural resources industry.
The programme would help us in the following ways:
1. The Young Talent will bring in fresh insights and global benchmark
practices to our business.
2. Add value by driving projects which leverage their analytical
skills.
3. This Young Talent can potentially become Brand Ambassadors for
Vedanta globally and help in building our Employer Brand. Approximately 39 students have
been a part of the programme:
Last year we also launched a similar programme for full time hires
VLDP- Vedanta Leadership Development Programme. In VLDP our focus is to hire full time
employees from the top management and technology institutes which include IIM Ahmedabad,
Bangalore, Calcutta and I IT Bombay, Kharagpur, Madras. The aim of VLDP is to build
organizational capability for the future by bringing on board best-in-class young talent
from premier institutes and developing them to be the future Leaders of Vedanta by
providing them with the right induction, roles, opportunities, job rotations and
anchoring.
During the first year 19 students joined and in the second year 28
students will be joining us for the programme.
"Vedanta's unprecedented growth over the years is owing to
its entrepreneurial culture and strong focus on continuous benchmarking and innovation. As
part of this continuous improvement journey, Manpower Analytics forms an integral piece in
the strategic decision making to embark on the next level of growth. The recent study
conducted by a reputed firm on Manpower Analytics brought out some interesting facts -
• Vedanta believes in growth from within and giving enhanced roles
to the High potential employees within the organization thereby maintaining the Value
Systems and Culture fabric intact. The Pay for performance Culture emerged clearly during
the study as the Mid Layer in the organizational pyramid came out to be higher than
benchmark owing to early career growth and higher responsibilities at relatively younger
experience level.
• Although Executive Diversity at Vedanta is one of the leading in
the industry, the company has taken stringent targets to further bridge the gap and move
upto 33% at Board & 20% at the professional employee population level. When looked at
providing avenues for growth and higher compensation, the study also showcased that
Vedanta is an equal opportunity employer.
• The Benchmarking exercise of comparing to the Global Best in the
industry we operate in highlighted improvement Potential in Manpower Productivity.
During the year, Company has received recognitions at Forums like Cll,
Golden Peacock, Ek Kaam Desh Ke Naam (NGO) in fields of HR excellence, HR Tech and HR
Innovation. The Company is committed to provide equal opportunities to all its employees,
irrespective of gender, nationality and background.
Your Company's, Jharsuguda unit has received special recognition
towards their Commitment to Engagement. Aon Hewitt has acknowledged the efforts your
organization is putting in, to be an Employer of Choice and its continued efforts on
yourjourney towards being a Best Employer.
Employee Information and Related Disclosures
The statement of Disclosure of Remuneration under Section 197 of the
Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014 ("Rules") is appended as Annexure B to the Report.
The information, as per Rule 5(2) of the Rules, forms part of this
Report. However, as per provision of Section 136 of the Act and Rule 5(2), the Report and
the Financial Statements are being sent to the Members of the Company excluding the
statement of particulars of employees under Rule 5(2) of the Rules. The statement shall be
available for inspection at the Company's Registered Office and any Member interested
in obtaining a copy of the said statement may write to the Company Secretary.
Employees Stock Option Plan
In order to motivate, incentivize and reward employees, your Company
introduced ‘Vedanta Limited Employee Stock Option Scheme 2016' ("the
Scheme") to provide equity based incentives to thepermanent employees of the Company
including holding/ subsidiary companies. The Scheme is a conditional share plan for
rewarding performance on pre-determined performance criteria and continued employment with
the Company. The predetermined performance criteria shall focus on rewarding employees for
Company performance vis a vis competition and also for achievement of internal operational
metrics. The Scheme is currently administered through Vedanta Limited ESOS Trust (ESOS
Trust) which is authorized by the Shareholders to acquire the Company's shares from
secondary market from time to time, for implementation of the Scheme.
The Company's shareholders by way of postal ballot on December 12,
2016 have approved the Scheme.
During the year under review 10,088,960 options were granted to 2806
employees including Whole Time Director and Key Managerial Personnel.
Pursuant to the provisions of SEBI (Share Based Employee Benefits),
Regulations, 2014 ("Employee Benefits Regulations"), disclosure with respect to
the ESOS Scheme of the Company as on March 31, 2018 is annexed as Annexure C to this
report and has also been uploaded on the Company's website at www.Vedantalimited.com .
The stock option Scheme is in compliance with Employee Benefits
Regulations and there have been no material changes to the plan during the financial year.
A certificate from M/s S.R. Batliboi & Co. LLP, Chartered
Accountants, Statutory Auditors, with respect to the implementation of the Company's
ESOS schemes, would be placed before the shareholders at the ensuing AGM. A copy of the
same will also be available for inspection at the Company's Registered Office.
Vigil Mechanism
The Company has in place a robust vigil mechanism for reporting genuine
concerns through the Company's Whistle Blower Policy. As per the Policy adopted by
various businesses in the Group, all complaints are reported to the Director - Management
Assurance, who is independent of operating management and the businesses. In line with
global practices, dedicated email IDs, a centralised database, a 24X7 whistle blower
hotline and a web-based portal have been created to facilitate receipt of complaints. All
employees and stakeholders can register their integrity related concerns either by calling
the toll free number or by writing on the web-based portal which is managed by an
independent third party. The hotline provides multiple local language options. All cases
reported as part of whistle blower mechanism are taken to their logical conclusion within
a reasonable timeframe. After the investigation, established cases are brought to the
Group Ethics Committee for decisionmaking. All Whistle Blower cases are periodically
presented and reported to the Company's Audit Committee. The details of this process
are also provided in the Corporate Governance Report and the Whistle Blower Policy is
posted on the Company's website.
Prevention of Sexual Harassment at Workplace
The Company has zero tolerance for sexual harassment at workplace and
has adopted a Policy on prevention, prohibition and redressal of sexual harassment at
workplace in line with the provisions of the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention
and redressal of complaints of sexual harassment at workplace.
As part of Vedanta Group, your Company is an equal opportunity employer
and believes in providing opportunity and key positions to women professionals. The Group
has endeavoured to encourage women professionals by creating proper policies to tackle
issues relating to safe and proper working conditions, and create and maintain a healthy
and conducive work environment that is free from discrimination. This includes
discrimination on any basis, including gender, as well as any form of sexual harassment.
During the period under review, 11 complaints were received and resolved. Seven employees
were separated on account of complaints. Your Company has constituted Internal Complaints
Committee (ICC) for various business divisions and offices, as per the requirements of the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
Corporate Governance Report
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out by the SEBI. The
Company has also implemented several best Corporate Governance practices as prevalent
globally. The report on Corporate Governance as stipulated under the SEBI Listing
Regulations forms an integral part of this Report
The requisite certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance is attached to the report on
Corporate Governance.
Internal Financial Controls
Your Board has devised systems, policies and procedures / frameworks,
which are currently operational within your Company for ensuring the orderly and efficient
conduct of its business, which includes adherence to policies, safeguarding its assets,
prevention and detection of frauds and errors, accuracy and completeness of the accounting
records and timely preparation of reliable financial information. In line with best
practices, the Audit Committee and the Board reviews these internal control systems to
ensure they remain effective and are achieving their intended purpose. Where weaknesses,
if any, are identified as a result of the reviews, new procedures are put in place to
strengthen controls. These controls are in turn reviewed at regular intervals.
The systems/frameworks include proper delegation of authority,
operating philosophies, policies and procedures, effective IT systems aligned to business
requirements, an internal audit framework, an ethics framework, a risk management
framework and adequate segregation of duties to ensure an acceptable level of risk.
Documented controls are in place for business processes and IT general controls. Key
controls are tested by entities to assure that these are operating effectively. Besides,
the Company has also adopted an SAP GRC (Governance, Risk and Compliance) framework to
strengthen the internal control and segregation of duties/access. It also follows a
half-yearly process of management certification through the Control Self-Assessment
framework, which includesfinancial controls/exposures.
The Company has documented Standard Operating Procedures (SOP) for
procurement, project / expansion management capital expenditure, human resources, sales
and marketing, finance, treasury, compliance, safety, health, and environment (SHE), and
manufacturing.
The Group's internal audit activity is managed through the
Management Assurance Services (‘MAS') function. It is an important element of
the overall process by which the Audit Committee and the Board obtains the assurance on
the effectiveness of relevant internal controls.
The scope of work, authority, and resources of MAS are regularly
reviewed by the Audit Committee. Besides, its work is supported by the services of leading
international accountancy firms.
The Company's system of internal audit includes: covering monthly
physical verification of inventory, a monthly review of accounts and a quarterly review of
critical business processes. To enhance internal controls, the internal audit follows a
stringent grading mechanism, focusing on the implementation of recommendations of internal
auditors. The internal auditors make periodic presentations on audit observations,
including the status of follow-up to the Audit Committee.
The Company is also required to comply with the Sarbanes Oxley Act Sec
404, which pertains to Internal Controls over Financial Reporting (ICOFR). Through the SOX
404 compliance programme, which is aligned to the COSO framework, the Audit Committee and
the Board also gains assurance from the management on the adequacy and effectiveness of
ICOFR.
In addition, as part of their role, the Board and its Committees
routinely monitor the Group's material business risks. Due to the limitations
inherent in any risk management system, the process for identifying, evaluating, and
managing the material business risks is designed to manage, rather than eliminate risk.
Besides it created to provide reasonable, but not absolute assurance against material
misstatement or loss.
Since the Company has strong internal control systems which are further
strengthened by periodic reviews as required under the SEBI Listing Regulations and SOX
compliance by the Statutory Auditors, the CEO and CFO recommend to the Board continued
strong internal financial controls.
Based on the information provided, nothing has come to the attention of
the Directors to indicate that any material breakdown in the function of these controls,
procedures or systems occurred during the year under review. There have been no
significant changes in the Company's internal financial controls during the year that
have materially affected, or are reasonably likely to materially affect its internal
financial controls.
There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human error and the
circumvention or overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can only provide reasonable assurance of achieving
their objectives. Moreover, in the design and evaluation of the Company's disclosure
controls and procedures, the management was required to apply its judgment in evaluating
the cost-benefit relationship of possible controls and procedures.
Further, the Audit Committee annually evaluates the internal financial
controls for ensuring that the Company has implemented robust systems/ framework of
internal financial controls viz. the policies and procedures adopted by the company for
ensuring the orderly and efficient conduct of its business, including adherence to
companys policies, the safeguarding of its assets, the prevention and detection of frauds
and errors, the accuracy and completeness of the accounting records, and the timely
preparation of reliable financial information.
Risk Management
Your businesses are exposed to a variety of risks, which are inherent
to a global mining and resources organisation. The effective management of risk is
critical to support the delivery of the Group's strategic objectives. Risk management
is embedded in the organization's processes and the risk framework helps the
organisation meet its objectives by aligning operating controls with the mission and
vision of the Group set by the Board.
As part of our governance philosophy, the Board has a Risk Management
Committee to ensure a robust risk management system. The details of Committee and its
terms of reference are set out in the Corporate Governance Report, which is part of the
Board's Report and is available as a separate section in this Annual Report.
Our risk-management framework is designed to be simple, consistent and
clear for managing and reporting risks from the Group's businesses to the Board. Our
management systems, organisational structures, processes, standards and code of conduct
together form the system of internal controls that govern how we conduct business and
manage associated risks. We have a multi-layered risk management framework to effectively
mitigate the various risks, which our businesses are exposed to in the course of their
operations.
The Risk Management Committee supports the Audit Committee and the
Board in developing the group-wide risk-management framework. Risks are identified through
a consistently applied methodology. The Company has put in place a mechanism to identify,
assess, monitor and mitigate various risks to key business objectives.
Major risks identified by businesses and functions are systematically
addressed through mitigating actions. Risk officers have also been formally nominated at
operating businesses, as well as at Group level, to develop the risk-management culture
within the businesses.
For a detailed risk analysis, you may like to refer to the risk section
in the Management Discussion Analysis Report which forms part of this Annual Report.
Management Discussion and Analysis
A detailed report on the Management Discussion and Analysis in terms of
the provisions of Regulation 34 of the SEBI Listing Regulations is provided as a separate
chapter in this Annual Report.
Significant & Material Orders passed by the Regulators or Courts or
Tribunals
Provided below are the significant and material orders which have been
passed by any regulators or courts or tribunals against the Company impacting the going
concern status and Company's operations in future:
1. Iron-Ore Division - Goa Operations
Supreme Court in the Goa Mining matter in 2014 declared that the deemed
mining leases of the lessees in Goa expired on 22.11.1987 and the maximum of 20 years
renewal period of the deemed mining leases in Goa under the MMDR Act had also expired on
22.11.2007 and directed state to grant fresh mining leases.
Thereafter, various mining leases were renewed by the state government
before and on the date the MMDR Amendment Ordinance 2015 came into effect (i.e. January
12, 2015).
These renewal of mining leases were challenged before the SC by Goa
Foundation and others in 2015 as being arbitrary and against the judgment of the SC in the
earlier Goa mining matter. The Supreme Court passed the judgment in the matters on
February 7, 2018 wherein it set aside the second renewal of the mining leases granted by
the State of Goa. The court directed all lease holders operating under a second renewal to
stop all mining operations with effect from March 16, 2018 until fresh mining leases (not
fresh renewals or other renewals) in accordance with the provisions of the MMDR Act, 1957
and fresh environmental clearances are granted. For further course of action we are in the
process of evaluation and are awaiting clarity from the government.
2. Copper Division
Copper division of Vedanta Limited has received an order from Tamil
Nadu Pollution Control Boardon 09.04.2018wherebythey have rejected the Company's
application for renewal of Consent to Operate (CTO) for the 400,000 Metric Tonnes Per
Annum(MTPA) Copper Smelter plant in Tuticorin. In furtherance to the order of TNPCB
rejecting the Company's application, the Company decided to shut its Copper smelting
operations atTuticorin and has filed an appeal with TNPCB Appellate authority against the
order. During the pendency of the appeal the TNPCB vide its order dated May 23, 2018
ordered disconnection of electricity supply and closure of the Company's Copper
Smelter plant. Post this the Govt of Tamil Nadu on May 28, 2018 ordered the permanent
closure of the plant. The Company is taking all the necessary steps to restart its
operations in Tuticorin.
In a separate proceeding, the Madurai Bench of the Madras High Court in
a PIL filed against the company, has stated that the application for renewal for
Environmental Clearance for Copper Smelter Plant 2 project, shall be processed after
conduct of mandatory public hearing and the application shall be decided by the competent
authority on or before September 23, 2018. In the interim, High Court ordered the company
to cease construction and all other activities onsite for the proposed project. The
company is taking all necessary steps to restart the project.
Board of Directors Appointment(s)
The Board on the recommendation of the Nomination & Remuneration
Committee (NRC) at its meeting held on March 13, 2018, approved the appointment of Mr. UK
Sinha (0)IN: 00010336), as an Additional Non Executive Independent Director w.e.f. March
13, 2018 to August 10, 2021. The appointment is subject to the approval of the Members at
the ensuing Annual General Meeting (AGM).
Mr. Sinha has served as the Chairman ofSEBI from February 2011 to March
2017. He was instrumental in bringing about key capital market reforms. Under his
leadership, SEBI introduced significant regulatory amendments to the various acts
enhancing corporate governance and disclosure norms.
Mr. K. Venkataramanan and Mr. Aman Mehta were appointed as Independent
Non Executive Directors w.e.f April 01, 2017 and May 17, 2017 respectively and Ms. Priya
Agarwal was appointed as a Non Executive Director w.e.f. May 17, 2017. The said
appointments were confirmed by the Members at the 52nd AGM on July 14, 2017.
Mr. Kuldip Kumar Kaura was appointed as an Interim CEO of the Company
w.e.f September 01, 2017. In his over four decades of experience across engineering and
mining roles, Mr. Kaura has served at senior levels in various reputable companies,
including Vedanta Resources Pic as Chief Executive Officer, Managing Director at ABB,
India and Managing Director and Chief Executive Officer of a cement major in India, ACC
Limited (LafargeHolcim).
Re-appointment(s)
In accordance with the provisions of Act and the Articles of
Association of the Company, Mr. GR Arun Kumar (0)IN:01874769), Whole Time Director &
CFO, is retiring by rotation and has offered himself for re-appointment.
Further, on the recommendation of the Nomination & Remuneration and
based on the performance evaluation, the Board through circular resolution dated January
20, 2018 reappointed Mr. Ravi Kant & Ms. Lalita D Gupte as Independent Directors for a
second and final term from January 29, 2018 till August 10, 2021. The reappointment is
subject to the shareholder's approval at the forthcoming AGM.
The Board on the recommendation of the NRC reappointed Mr. Tarun Jain
as the Company's Whole Time Director for a further period from April 01, 2018 till
March 31, 2019. The appointment is subject to the shareholder's approval.
Brief profiles of Mr. UKSinha, Mr. Ravi Kant, Ms. Lalita D Gupte,
Mr. Tarun Jain and Mr. GR Arun Kumar along with the disclosures
required pursuant to SEBI Listing Regulations and the Act are given in the Notice of the
AGM.
Attention of the Members is invited to the relevant items in the Notice
of the AGM and the Explanatory Statement thereto.
All Independent Directors have provided declarations that they meet the
criteria of independence as laid out under Section 149(6) of Act and the SEBI Listing
Regulations.
Cessation(s)
We express our profound grief and sorrow over the sad demise of Mr.
Naresh Chandra on July 09, 2017 who served as an Independent Director of your Company. Mr.
Chandra was a statesman and a visionary, and was instrumental in the industrial reforms
and progressive policies. The Board places its deep sympathy and condolences to his
family.
Mr. Thomas Albanese superannuated as the Whole Time Director and CEO of
the Company w.e.f. August 31, 2017.
The Board places on record its appreciation for the valuable services
and significant contribution rendered by Mr. Albanese during his tenure.
The details of training and familiarization programmes and Annual Board
Evaluation process for Directors have been provided under the Corporate Governance Report.
The policy on Director's appointment and remuneration including
criteria for determining qualifications, positive attributes, independence of Director,
and also remuneration for Key Managerial Personnel and other employees forms part of
Corporate Governance Report of this Annual Report.
Key Managerial Personnel
The following Directors/Executives are KMPs of the Company during
Fiscal 2018:
Mr. Navin Agarwal, Executive Chairman Mr. Tarun Jain, Whole Time
Director
Mr. GR Arun Kumar, Whole Time Director & Chief Financial Officer
Ms. Bhumika Sood, Company Secretary & Compliance Officer
Number of Board Meetings
The Board of Directors met nine times during the year. The details of
Board Meetings are laid out in Corporate Governance report, which forms a part of this
annual report.
Audit Committee
The composition of the Audit Committee is in compliance with the
provisions of Section 177 of the Act and Regulation 18 of the SEBI Listing Regulations. As
on March 31, 2018, the Audit Committee of the Board comprises of four (4) Non-Executive
Directors all of whom are Independent. The Chairperson of the Audit Committee isa
Non-Executive Independent Director.
The Board has accepted all recommendations made by the Audit Committee
during the year.
Auditors
• StatutoryAuditors
M/s S.R. Batliboi & Co. LLP, Chartered Accountants (FRN: 301003E)
were appointed as Statutory Auditors of your Company at the AGM held on June 29, 2016 for
a term of five consecutive years i.e., until the conclusion of the 56th AGM.
M/s S.R. Batliboi & Co. LLP have confirmed their independence and eligibility under
the provisions of the Act &SEBI Listing Regulations.
The report of the Statutory Auditors along with notes to Schedules is
enclosed to this Report. The observations made in the Auditors' Report are
self-explanatory and therefore do not call for any further comments.
During the year under review, the Auditors have not reported any matter
under Section 143 (12) of the Act, therefore no detail is required to be disclosed under
Section 134 (3)(ca) of the Act.
• Cost Auditor
As per Section 148 of the Act, the Company is required to have the
audit of its cost records conducted by a Cost Accountant in practice. The Board of your
Company has on the recommendation of the Audit Committee, approved the appointment of M/s
Shome and Banerjee as Cost Auditors for its oil & gas Business and M/s Ramnath Iyer
& Co as Cost Auditors for its copper, aluminium, iron ore and electricity Business to
conduct cost audits pertaining to relevant products prescribed under the Companies (Cost
Records and Audit) Rules, 2014 as amended from time to time for the year ending March 31,
2018 at a remuneration of Rs 5,00,000 p.a and Rs 14,00,000/-p.a (plus applicable taxes and
reimbursement of out of pocket expenses, if any), respectively. Further M/s Ramnath Iyer
& Co have been appointed as the Lead Cost Auditors of the Company.
• Secretarial Auditor
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of managerial Personnel) Rules, 2014, the Company has
appointed M/s Chandrasekaran & Associates, a firm of Company Secretaries in practice
to undertake the Secretarial Audit of the Company for FY 2018. The Report of the
Secretarial Audit in Form MR-3 is annexed herewith as Annexure D. The Secretarial Audit
Report does not contain any qualifications, reservation, adverse remarks or disclaimer.
Subsidiaries/Joint Ventures/Associate Companies
The Company has 52 subsidiaries (15 direct and 37 indirect) as at March
31, 2018, as disclosed in the accounts.
During the year and till date the following changes have taken place in
subsidiary companies:
Subsidiary companies formed/acquired:
• Avanstrate (Japan) Inc. (ASI) acquired on December 28, 2017
• Avanstrate (Korea) Inc. acquired on December 28, 2017
• Avanstrate (Taiwan) Inc. acquired on December 28, 2017
• Vedanta Star Limited incorporated on April 23, 2018
As at March 31, 2018, the Company has 5 associate companies and joint
ventures.
Associate Companies and Joint Ventures:
• RoshSkorTownship(Pty)Ltd
• Gaurav Overseas Private Limited
• Goa Maritime Private Limited
• MadanpurSouth Coal Company Limited
• Rampia Coal Mines and Energy Private Limited
Details of Loans/Guarantees/Investment made by the Company
Particulars of loans given, investments made, guarantees given and
securities provided along with the purpose for which the loan or guarantee or security is
proposed to be utilised as per the provisions of Section 186 of the Act are provided in
the standalone financial statement (Please refer to Notes to the standalone financial
statement).
As per the SEBI Listing Regulations, a policy on material subsidiaries
as approved by the Board of Directors, may be accessed on the Company's website:
www.vedantalimited.com.
Transfer of Unpaid and Unclaimed amounts to Investor Education and
Protection Fund (IEPF)
The Company sends letters to all shareholders, whose dividends are
unclaimed so as to ensure that they receive their rightful dues.
During the year, the Company has transferred a sum of Rs 1,49,03,948/-
to Investor Education & Protection Fund (IEPF), the amount which was due & payable
and remained unclaimed and unpaid for a period of seven (7) years as provided in Section
125 of the Act and the rules made thereunder. Despite the reminder letters sent to each
shareholder, this amount remained unclaimed and hence was transferred.
In accordance with the provisions of the Section 124(6) of the Act and
Rule 6(3)(a) of the Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016, (IEPF Rules), the Company is required to Transfer
10,60,879 equity shares of Re.1 each held by 986 shareholders to IEPF. The said shares
correspond to the dividend which has remained unclaimed for a period of seven consecutive
years from the financial year 2009-10. The equity shares wherein, disputes are pending and
Court Order(s) are Nil. All the remaining shares, as mentioned above, have been
transferred to IEPF. Subsequent to the transfer, the concerned shareholders can claim the
said shares along with the dividend(s) from IEPF in accordance with the prescribed
procedure and on submission of such documents as prescribed under the IEPF Rules.
The Company has already sent a specific communication to the concerned
shareholders at their address registered with the Company and also published notice in The
Free Press Journal and Navshakti providing the details of the shares due for transfer and
to enable shareholders to take appropriate action.
Fixed Deposits
As reported last year, the Company has discontinued the renewal of its
fixed deposits on maturity. As at March 31, 2018, all fixed deposits had matured, while
deposits amounting to Rs 54,000 remained unclaimed. Since the matter is subjudice, the
Company is maintaining status quo.
Extract of Annual Return
The details forming part of the extract of the Annual Return in form
MGT 9 is annexed hereto as ‘Annexure E'
Related Party Transactions
In line with the requirements of the Act and SEBI Listing Regulations,
your Company has formulated a Policy on Related Party Transaction (RPT) which is also
available on Company's website (http://www.vedantalimited.com/investor-relations/
corporate-governance.aspx). The Policy intends to ensure that proper reporting, approval
and disclosure processes are in place for all transactions between the Company and Related
Parties.
The Company presents a detailed landscape of all RPTs to the Audit
Committee, specifying the nature, value, and terms and conditions of the transaction. The
Company has developed a Related PartyTransactions Manual-Standard Operating Procedures to
identify and monitor all such transactions.
All contracts/arrangements/transactions entered by the Company during
the financial year with related parties were on an arm's length basis, in the
ordinary course of business and were in compliance with the applicable provisions of the
Act and SEBI Listing Regulations.
During the Fiscal 2018, there have been no materially significant RPTs
between the Company and Directors, management, subsidiaries or relatives, as defined under
Section 188 of the Act and Regulations 23 the SEBI Listing Regulations.
Accordingly, the disclosure required u/s 134(3)(h) of the Act in Form
AOC-2 is not applicable to your Company.
Material Changes & Commitment affecting the Financial Position of
the Company
There are no material changes affecting the financial position of the
Company subsequent to the close of the Fiscal 2018 till the date of this Report.
Energy Conservation, Technology Absorption, Foreign Exchange Earnings
And Outgo
The information on conservation of energy, technology absorption
stipulated under Section 134(3)(m) of the Act read with Rule, 8 of The Companies
(Accounts) Rules, 2014, is annexed herewith as ‘Annexure F'
The details of the Foreign Exchange Earnings and Outgo are as follows:
|
|
(Rs Crores) |
| Particulars |
Year Ended
31 March, 2018 |
Year Ended
31 March, 2017 |
| Expenditure in foreign
currency |
1,551 |
1,282 |
| Earnings in foreign currency |
28,394 |
21,138 |
| GIF Value of Imports |
28,900 |
19,322 |
Directors Responsibility Statement
Pursuant to section 134 of the Act, with respect to Directors'
Responsibility Statement it is hereby confirmed that:
a. in the preparation of the annual accounts, the applicable accounting
standards has been followed and there is no material departures from the same;
b. your Directors selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year, i.e., 31 March, 2018 and of the profit and loss of the Company for that
period;
c. your Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the provisions of the
Companies Act, 2013 for safeguarding the Company's assets and for preventing and
detecting fraud and other irregularities;
d. your Directors have prepared the annual accounts on a going concern
basis;
e. your Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are adequate and are
operating effectively; and
f. your Directors have devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were adequate and operating
effectively.
Acknowledgement
Your Directors place on record their deep appreciation to employees at
all levels for their hard work, dedication and commitment. The enthusiasm and unstinting
efforts of the employees have enabled the Company to remain as industry leader.
The Board also extends its appreciation for the support and
co-operation your Company has been receiving from its customers, vendors, dealers,
investors, suppliers, business associates and others associated with the Company. Your
Company looks upon them as partners in its progress and has shared with them the rewards
of growth. It will be the Company's endeavour to build and nurture relationships with
all its stakeholders.
The Directors also take this opportunity to acknowledge the support and
assistance extended to us by the Government of India, various State Governments and
government departments, financial institutions, bankers, stock exchanges, communities,
shareholders and investors at large for their continued support.
|
For and on behalf of the
Board of Directors |
| Place: Mumbai |
Navin Agarwal |
| Dated: May 03, 2018 |
Executive Chairman |
|
|
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