OVERVIEW

Highlights

    FINANCIAL HIGHLIGHTS

  • Revenue increased by 7% to US$11.5 billion (FY2016: US$10.7 billion) driven by firmer commodity prices and volume ramp up
  • EBITDA increased by 37% to US$3.2 billion (FY2016: EBITDA: US$2.3 billion)
  • Adjusted EBITDA margin of 36% (FY2016: 28%), driven by firmer commodity prices and operational efficiencies
  • Free cash flow (FCF) post capex of US$1.5 billion (FY2016: US$1.8 billion). Excluding one-time working capital initiatives FCF at US$1.4 billion (FY2016: US$0.9 billion)...

    BUSINESS HIGHLIGHTS

  • Record annual production at Aluminium, Power, Zinc India (zinc and silver) and Copper India
  • Successful ramp up from Mangala EOR with production level of 56,000boepd in Q4 at Cairn Oil & Gas
  • Zinc International
    • Highest quarterly production in Q4 at Black Mountain in four years
    • Mobilisation on Skorpion Pit layback commenced in April
    • Gamsberg project on track to commence production in mid CY2018...
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Chairman’s Statement

As an efficient and experienced natural resources player, we offer investors an opportunity to take part in the extraordinary growth story of India as it seeks to improve its infrastructure, house its growing population and develop its manufacturing base.

Anil Agarwal Chairman

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Vedanta at a Glance

  • Cairn Oil & Gas

    190kboepd

    (average daily gross operating production)

    1st quartile

    Zinc India (HZL)
    Zinc International

    907kt
    156kt

    1st quartile
    2nd quartile

    Iron Ore India

    10.9mt

    1st quartile

  • Copper India
    Konkola Copper Mines (KCM)

    402kt
    180kt

    1st quartile
    4th quartile

    Lanjigarh refinery
    Jharsuguda and Balco aluminium smelters

    Alumina: 1.2 mt
    Aluminium: 1.2 mt

    2nd quartile

    Talwandi Sabo
    Jharsuguda and Korba Power Plants

    12.9 billion kwh

     
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strategy

Investment Case

Our strategy is focused on delivering sustainable long-term returns to our shareholders. This is demonstrated by our strong shareholder returns. We have returned c. $2 billion to shareholders since the IPO in 2003.

  • Large, Low Cost And Diversified Asset Base
  • Attractive Commodity Mix
  • Ideally Positioned To Capitalise On India’s Growth Potential
  • Well-invested Assets Are Driving Cash Flow Growth
  • Strong Financial Profile
  • Proven Track Record
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Strategic Overview

STRONGER

Stronger: Financial position and production growth

SMARTER

Smarter: Innovation and use of technology

SUSTAINABLE

Sustainable: Contribution to communities, employees and the environment

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Chief Executive’s Statement

In FY2017, Vedanta delivered a strong performance across each of the key financial metrics and this has given us a good springboard into FY2018.

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Business Model

EXPLORE

We invest selectively in exploration and appraisal to extend mine and reservoir life.

DEVELOP

We develop world-class assets, using the latest technology to optimise productivity.

EXTRACT

We operate low-cost mines and oil fields, with a clear focus on safety and efficiency.

PROCESS

We focus on operational excellence and high asset utilisation to deliver top quartile cost performance and strong cash flow.

MARKET

We supply our commodities to customers in a wide range of industry sectors, from automotive to construction, from energy to consumer goods.

RESTORE

We manage our long-life assets as effectively as possible and return them to a natural state at the end of their useful life.

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Strategic Framework

We intend to deliver growth and long-term value while upholding sustainable development through our diversified portfolio of large, long-life and low-cost assets.

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Key Performance Indicators

  • GROWTH
  • LONG-TERM VALUE
  • SUSTAINABLE DEVELOPMENT

GROWTH

REVENUE (US$ MILLION)

EBITDA (US$ MILLION)

ROCE (%)

LONG-TERM VALUE

GROWTH CAPEX
(US$ MILLION)

UNDERLYING EPS
(US CENTS)

DIVIDEND
(US CENTS PER SHARE)

SUSTAINABLE DEVELOPMENT

LTIFR (Million Man Hours)

Gender Diversity (%)

CSR FOOTPRINT
(Million Beneficiaries)

1 As per revised ICMM definition, LTIFR stands at 0.50.
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Principal Risks and Uncertainties

Our risk management framework supports the organisation to meet its objectives by aligning operating controls with the mission and vision of the Group.

GOVERNANCE

As a global natural resources organisation, our businesses are exposed to a variety of risks. We recognise the importance of identifying and actively managing the risks facing the Group. It is therefore essential to have in place the necessary systems and a robust Governance framework to manage associated risks, while balancing the relative risk reward equation demanded by stakeholders.

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Sustainability Report

Protecting and preserving our licence to operate
across our value chain is one of our strategic
priorities.

  • COMMUNITY
    BENEFICIARIES1

    2.2m (2016: 2.3m)

  • CARBON
    FOOTPRINT

    53m mt (2016: 42m mt)

  • ENVIRONMENT
    INVESTMENT

    US$49m (2016: US$39m)


  • LTIFR

    0.39 (2016: 0.462)

  • WATER
    RECYCLING RATE

    24% (2016: 23%)

  • COMMUNITY
    INVESTMENT

    US$18m (2016: US$37m)

  • PAYMENT TO
    EXCHEQUER

    US$6.0bn (2016: US$3.2bn)

  • 1 Some beneficiaries may be enrolled in more than one project
    2 With the new ICMM definition it is 0.50

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Divisional Review

  • zinc India
  • zinc international
  • oil & gas
  • aluminium
  • copper India / Australia
  • copper Zambia
  • iron ore
  • power

Zinc India

FY2017 was a year of achievement at Zinc India; one in which we broke our production records for mined metal and silver.

PRODUCTION – ZINC MINED METAL
(KT)

PRODUCTION – REFINED ZINC/LEAD
(KT)

PRODUCTION – SALEABLE SILVER
(M OZ)

R&R
(MT)

EBITDA
(US$ MILLION)

UNIT COSTS
(US$ PER TONNE)

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Zinc International

FY2017 saw outright shortages in the supply side of Zinc, making our major investment focus on Zinc International particularly well timed.

EBITDA
(US$ MILLION)

UNIT COSTS
(US$ PER TONNE)

PRODUCTION – REFINED ZINC
(MT)

PRODUCTION – ZINC-LEAD MINED METAL
(DMT)

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Oil & Gas

We remain committed to maintaining a healthy free cash flow post-capex from the Oil & Gas business.

DIRECT OPERATING COSTS
(US$/BBL)

EBITDA
(US$ MILLION)

PRODUCTION – AVERAGE DAILY GROSS OPERATED PRODUCTION
(BOEPD)

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Aluminium

We achieved record production of aluminium and alumina, leading to a strong growth in revenues and EBITDA with ramp up of capacities.

PRODUCTION – ALUMINA
(KT)

PRODUCTION – TOTAL ALUMINIUM
(KT)

UNIT COSTS – HOT METAL PRODUCTION
(US$ PER TONNE)

EBITDA
(US$ MILLION)

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Copper India/Australia

FY2017 was a strong year for Copper India from a volume perspective.

PRODUCTION
(KT)

EBITDA
(US$ MILLION)

UNIT COSTS
(US CENTS PER LB)

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Copper Zambia

FY2017 was a challenging year for production at Copper Zambia.

PRODUCTION – MINED METAL
(KT)

PRODUCTION – FINISHED COPPER
(KT)

EBITDA
(US$ MILLION)

UNIT COSTS
(US CENTS PER LB)

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Iron Ore

A productive year from our Iron Ore business, with full permitted allocations achieved at both our Goa and Karnataka mines.

PRODUCTION
(MT)

R & R
(MT)

EBITDA
(US$ MILLION)

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Power

A series of positive metrics underpinned a successful FY2017 in Power with the entire Power assets operational.

SALES
(MILLION KWH)

EBITDA
(US$ MILLION)

UNIT COSTS
(US CENTS/KWH)

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