Vedanta FY2013 Interim Results Presentation · FY2013 INTERIM RESULTS PRESENTATION -7 NOVEMBER 2012...

VEDANTA RESOURCES PLCVEDANTA RESOURCES PLC

Interim Results Presentation

for the six months ended

30 September 2012

7 NOVEMBER 2012

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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

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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

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update our forward-looking statements.

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with, any contract or investment decision.

FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012 2

Overview

Navin Agarwal

Deputy Executive

Chairman

H1 FY2013 Highlights

Operations

� Significant production growth across the portfolio

− 23% increase in integrated production at Copper Zambia

− Record production at Cairn India driven by 35% higher output at Rajasthan block

� Strong cost performance despite industry-wide inflationary trends

� State-wide restriction on iron ore mining in Goa

Financial

� EBITDA of $2.6bn; EBITDA margin 47%1� EBITDA of $2.6bn; EBITDA margin 47%1

� Underlying EPS of $0.972

� Free Cash Flow of $1.4bn3; Cash and Liquid Investments of $7.2bn

� Interim Dividend of 21 US cents per share, up 5%

Corporate

� Group simplification on track for completion in CY2012

Note: 1. Excludes custom smelting at Copper and Zinc-India operations

2. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects

3. Free Cash Flow before Growth Capex


Optimising Group Structure

Restructuring on track for completion in CY2012

� Consolidates and simplifies group structure,

eliminates cross-holdings

� Delivers significant synergies up to $200mn/yr

� Reduces debt service liability at plc by $5.9bn

Event Completion

BSE and NSE approval � Apr 2012

Konkola Copper Mines

Vedanta Resources

Sesa Sterlite

58.3%79.4%

5FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012

Note: Shareholding based on basic shares outstanding

Competition Commission approval � Apr 2012

Vedanta / Sesa / Sterlite / MALCO shareholder approvals

� Jun 2012

Foreign Investment Promotion Board approval

� Jun 2012

Supreme Court of Mauritius approval � Sep 2012

High Courts of India approval / Transaction completion

� CY 2012

Zinc-

Lead-

Silver

�HZL

�Zinc Int’l

Iron Ore

�Sesa Goa

�WCL

Oil & Gas

�Cairn

India

Copper

�Tuticorin

�CMT

Alumi-nium

�BALCO

�VAL

Power

�Talwandi

Sabo

� Jharsuguda

�BALCO

�MALCO

Tier-1 Diversified Asset Portfolio

Positioning CapacityR&R Life1 Sustainable Cost Position

Largest integrated zinc-lead producer 1mtpa 25+ Lowest Quartile

One of the largest undeveloped zinc deposits

400ktpa 20+2

Lower Half

One of the largest silver producers 16mozpa 25+ By-product

India’s largest private-sector crude oil producer

260kboepd3

17 Lowest Quartile

Largest Indian iron ore producer-exporter,

Zinc India

Zinc Intl.

Silver

Oil & Gas

FY2013 INTERIM RESULTS PRESENTATION - 7 NOVEMBER 2012

Largest Indian iron ore producer-exporter, developing large deposits in Liberia

20.5mtpa 18 Lowest Quartile

World class fully-invested operations 400ktpa 24+5

Lower Half

Strategically located large-scale assets 2.3mtpaCurrently Lower Half; LowestQuartile with Captive Bauxite

Iron Ore4

Copper Zambia

Aluminium

Note: 1. At capacity, as per R&R as at 31 March 2012

2. Including Gamsberg

3. Capacity expected for the assets that are currently producing, subject to approvals

4. Excluding Liberia

5. Mine life of Konkola Deeps

Large, Low-Cost, Long-Life, Scalable Assets

6

Strong and Consistent Profitability

33% 33%

41%

59%

55%

35%

43%45%

41%

47%

Group EBITDA margin¹ Average LMEX

Brent Crude Oil ($/bbl)

Consistent Profit Margins

33%

34%

38%

54%

56%

Iron Ore

Zinc- International

Power

Zinc- India

Integrated

Oil & Gas²

EBITDA Margins by SegmentH1 FY2013

50%

20%

5%

5%

4%

Share of EBITDA


Notes: 1. Excludes custom smelting at Copper and Zinc-India operations, which represents c.4% of Group EBITDA

2. Oil & Gas EBITDA margins have been calculated after adding back Rajasthan royalties and profit sharing with government to revenues. EBITDA margin based on

reported revenues was 79%

Consistent Profitability driven by Asset Quality and Diversification

1,636

3,319

29

109

FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 H1

FY13

11%

24%

32%

47%Group¹

Aluminium

Copper Zambia

Integrated

Copper Australia 1%

6%

4%

$2,562mn

Key Strategic Priorities

� Deliver industry-leading production growth across our portfolio

� Continue to add reserves and resources to drive long-term value

� Complete the simplification of the Group structure

� Minority buyouts of HZL and BALCO

� Reduce gearing from free cash flow


Long-Term Value Creation with a Focus on Sustainability

Financials

D.D. Jalan

Chief Financial Officer

� Strong growth in EBITDA and Free Cash Flows

− Cairn India has contributed to the diversity and scale of cash flow generation

� Positive Free Cash Flows post growth capex

Financial Highlights

$mn or as stated H1 FY2013 H1 FY2012 % change

EBITDA 2,562 1,721 49%

EBITDA margin1 (%) 47% 37% -

Underlying Attributable PAT2 264 189 40%

Underlying EPS($/share)2 0.97 0.69 40%Underlying EPS($/share)2 0.97 0.69 40%

Free Cash Flow before Growth Capex 1,438 746 93%

Growth Capex 954 1,195 (20)%

Free Cash Flow after Growth Capex 484 (449) -

Interim Dividend (USc/share) 21.0 20.0 5%

Notes: 1. Excludes custom smelting at Copper and Zinc-India operations

2. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects


EBITDA Reconciliation

H1 FY2013 vs. H1 FY2012 ($mn)

1,721

1,290

170

572,562

(539) (26) (110)

Zinc $(218)mn

Copper $(143)mn

Aluminium $(133)mn


1,721

EBITDAH1 FY2012

Cairn India FX and Others

Prices Cash Costs Volume excl. Iron Ore

Volume Iron Ore

EBITDAH1 FY2013

Commodity Linked

$(18)mn

Aluminium $(133)mn

2,562

(663)

(468)

EBITDA to PAT

H1 FY2013 ($mn)

US$383mn of amortisation at Cairn India

937

171

(122)

264

(236)

(136)

(766)

EBITDA Depreciation Amortization Net Interest Expense

FX, Embedded Derivatives and Special Items

Tax PAT MinorityInterest

AttributablePAT

Underlying Attributable PAT¹

25%

Underlying Attributable


Notes: 1. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects

12

18%

Attributable

Well-Invested Capex Driving Cash Flow Growth

� $18.7bn invested over last 3 years

− $8.6bn Capex

− $10.0bn for acquisitions of Cairn India, Zinc

International and Liberia

� Capex estimates:

− $2.1bn on metals and mining up to FY2015

− $1.2bn2 on Rajasthan oil and gas up to FY2014

for development and exploration3

� Flexibility in capex

− $1.8bn4 for metals and mining up to FY2015

1.4

3.7

1.8

2.52.3

2.7

3.43.3

Free Cash Flow-H1¹ Free Cash Flow-H2¹ Capex Capex Flexibility

Cash Flow and Growth Capex Profile - $bn

� Lanjigarh refinery, Tuticorin 400kt, and India

Iron ore expansions3

� 1.25mt Jharsuguda smelter completion

− $0.8bn2 for oil and gas capex

up to FY2014 – ex-Rajasthan

� Liberia and Gamsberg – Phased capex


1.0

1.9

0.3

0.2

1.0

1.0

1.4

1.21.3

FY2010 FY2011 Proforma

FY2012

H1

FY2013

H2

FY2013

FY2014e FY2015e

Positive Free Cash Flows to drive Deleveraging

Notes: 1. Free cash flow after sustaining capex but before growth capex

2. Capex net to Cairn India; part of FY2014e capex is subject to Government of India approval; FY2015e capex has not been announced

3. Subject to approvals

4. Further capex of $0.2bn in FY 2016

Strong Financial Profile

� Cash and Liquid Investments of $7.2bn, with additional $3.1bn undrawn lines of credit

� Credit ratings of BB/Ba3/BB1

� Proforma (including Cairn) LTM Net Debt:EBITDA of 1.97x

� Net Gearing ratio 34%

2.4 3.3 3.3

4.0

4.5

Debt Maturity Profile ($bn) as of 30 September 20122

$1.6bn - Refinancing tied-up$0.9bn - Working capital facilities$0.1bn - Repaid in October 2012

$50 mn - Prepaid in October 2012$500 mn - Refinancing tied-up$200 mn - To be repaid through internal sources


Notes: 1. Issue credit Ratings as per S&P, Moody’s and Fitch respectively

2. Debt numbers shown at face value

3. Convertibles at Vedanta Plc of $883mm due in FY2017 (with a put option in April 2013) and $1,250mm due in FY2017 (with a put option in July 2014) shown at

put dates

0.8 0.5 0.1 0.5 0.8

2.2 0.9

1.3

1.5 1.3 2.5

0.4 1.4

0.5

0.6

2.4 3.3 3.3

1.0

1.4

FY2013 FY2014³ FY2015³ FY2016 FY2017³ FY2018 and later

Debt at VED plc Convertibles at Put Date Debt to be transferred from VED plc to Sesa Sterlite Debt at Subsidiaries

Financial Outlook

� Asset quality, diversification and cost control continue to drive margins and cash flows

� Goa iron ore mining suspension: Limited impact of fixed costs

� FY 2013 maturities tied up

� Impact of Sesa Sterlite merger on a pro-forma basis:

H1 FY2013 ($mn or as stated) Proforma Actual


Notes: 1. Based on profit for the year after excluding special items and other gains and losses, and their resultant tax and minority interest effects

2. Debt numbers at Face Values, as of 30 September 2012, net of intercompany receivable

3. Interest paid on external debt net of interest income on inter-company receivable

H1 FY2013 ($mn or as stated) Proforma Actual

EBITDA 2,562 2,562

Underlying Attributable PAT1 314 264

Underlying EPS($/share)1 1.15 0.97

Free Cash Flow after Growth Capex 515 484

Debt at plc2 3,835 9,736

Interest cost at plc3 91 247

Business and

Operations

M.S. Mehta

Chief Executive Officer

Aluminium16%

Copper

Aluminium4%

Copper11%

Zinc-India20%

Power5%

Continued Growth and Diversification

FY2004 (IPO)

Aluminium5%

Copper24%

Iron Ore18%

Power3%

H1 FY2012 H1 FY2013

Copper29%

Zinc India55%

EBITDA: $323mn

Zinc-Int.5%

Iron Ore5%

Oil & Gas50%

Zinc-India38%

Zinc-Int.12%

EBITDA: $1.7 bn EBITDA: $2.6bn


4%

Proximity to Rapidly Growing Markets

Other Far East and

Asia

Middle East and Africa

11%

Rest of the World7%

Vedanta Revenues by GeographyH1 FY2013

80%

Strong Market Positioning in IndiaH1 FY2013 India Market Shares

#1 #1 #1 #1 #2#1


India62%

China16%

Asia4%

36%

16%

40% 40%

5%

Zinc Lead Silver Copper Aluminium Oil

Notes: Rank excludes imports. Oil & Gas production numbers considered instead of sales.

Source: Wood Mackenzie, Indian Ministry of Petroleum and Natural Gas, IBIS, company sources

H1 Production Growth and Cost Performance

29%

(17)%

59%

66%

(5)%

23%

13%

9%

(47)%

18%

Oil & Gas¹

Zinc India - Zinc²

Zinc India - Lead²

Zinc India - Silver²

Zinc Intl

Copper Zambia²

Copper Australia

Copper India

Iron Ore³

Aluminium

H1 FY2013 Production (% change vs. H1 FY2012)


Notes: 1. Working Interest

2. Integrated production

3. Sales

18%

64%

Aluminium

Power

(2)%

(7)%

1%

(18)%

(34)%

Zinc India - Zinc

Zinc Intl

Copper Zambia²

Aluminium

Commercial Power

Delivering significant production growth and cost reduction across the portfolio

H1 FY2013 Dollar Unit Costs (% change vs. H1 FY2012)

Sustainability – Integral to our Business

� Safety

− Sustained reduction in LTIFR: 0.87 in

LTM H1 FY2013 vs. 0.99 in FY2012

− Focus on safety culture to eliminate fatalities

due to low-probability high-impact events

� Climate Change – Carbon Disclosure Project

− 8th among the 38 FTSE 350 material companies

− Scored 76 versus 62 in 2011

� Sustainability Framework – Scott Wilson

Review

− 21 of 29 recommendations implemented

LTIFR(per million man hours)

-54%

Vedanta

1.9 1.7

1.5

1.1 0.99

0.87

2.1

FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 LTM H1 FY2013

Peer Average

− 21 of 29 recommendations implemented

− Final sign-off audit in June 2013

� Communities

− 3.1 million people benefited through community

development programmes in collaboration with

NGOs and government administration

− Focus: Health and Nutrition, Education, Women

Empowerment, Water & Sanitation, and

Sustainable Livelihood


Source: Peer average of last reported numbers for FTSE-100 metal companies who

report LTIFR

Oil & Gas

Oil & Gas H1 FY2012 H1 FY2013

Average Daily Gross Operated Production (boepd)

170,867 207,105

Rajasthan 125,189 169,486

Ravva 36,997 30,591

Cambay 8,680 7,028

Average Daily Working Interest Production (boepd)

99,429 128,335

Rajasthan 87,633 118,641

Ravva 8,324 6,883

Cambay 3,472 2,811

Brent (US$/boe) 114.8 108.9

Average realizations – oil & gas(US$/boe)

101.9 98.0

Operations and Development

� H1 gross production 21% higher at 207,105 boepd

− Low cost operator

� Cairn India declares maiden dividend

� Rajasthan block ramped-up by 35% to c.175kbopd

− More than 20% of India’s domestic crude

production

� Rajasthan block basin potential of 300kbopd1

− Development on track to achieve significant part

of 240kbopd by CY20131

Exploration and New Ventures

� India


878

1,290

H1 FY2012¹ H1 FY2013²

Note: 1. Subject to approvals

2. Subject to South African regulatory approvals

Note: 1. Prior to completion of acquisition, numbers are in Indian GAAP as

reported by Cairn India Ltd

2. Numbers post acquisition, in IFRS

EBITDA ($mn)

21

� India

− KG-ONN-2003/1, largest onshore discovery in KG

basin to date - appraisal drilling in Q1 FY2014

− Ravva operating for more than 15 years,

additional exploratory well drilling planned in H1

FY2014

� International

− Sri Lanka: Opened up frontier Mannar basin with

two discoveries - phase 2 exploration drilling in

mid CY2013

− South Africa: Farm-in agreement in offshore

Block 12 in proven Orange Basin, with 60% stake

and as operator

125

c.175

2401

3001

At Acqn.Dec 2012

Apr-12 Sometime in CY 2013

BasinPotential

Gross In Place Gross EUR

Rajasthan Block Update

Fast Track Development and Production Ramp-up

� Sold more than 120 mn boe of crude to Indian refiners

− Generated gross revenues of more than US$11bn to date

� Mangala field production at approved FDP capacity over last two

years

− Currently producing c.150,000 bopd post government approval

− Polymer EOR implementation expected to commence in FY2015

� 70 mn bbls booked as gross 2P reserves

� Bhagyam field currently producing at c.25,000 bopd

− Focus on drilling wells and de-bottlenecking of pipeline

� Aishwariya field development in progress

Rajasthan Gross Production(in kbopd)

Rajasthan Resource and Value Potential(in mn boe)

Under Development

Future Development & Prospective Resource

2,168 2,010

3,100

7,278

1,044

165530

1,739

MBARS BH+19 Disc. Exploration Total

Gross In Place Gross EUR� Aishwariya field development in progress

− Expected to commence production by end FY2013

Underexplored basin with significant exploration upside

� Block’s potential resource estimated at 7.3 bn boe gross in-place

− Expected Ultimate Recovery (EUR) at 1.7 bn boe

− Resource base supports basin production potential of 300,000

bopd

� Exploration potential estimated at 530 mn boe gross recoverable

risked prospective resource

− “Drill-Ready” preparation at advanced stage


Note: 1. Subject to approvals2. Gross EUR Includes EOR (Enhanced Oil Recovery) potential of 308 mmbbls (70mmbbls booked as reserves)

(in mn boe)

Zinc

Zinc-India

� Strong ramp-up of lead and silver production

− FY2013 expected integrated production of 11.3moz

silver and 100kt lead

� Mined metal in line with mine plan: FY2013 production

expected to be more than FY2012

� Maintained lowest quartile cost position

� Kayar and RA underground mining from FY2014

� Focused on R&R net addition at existing mines

� Feasibility study underway for next leg of growth

Zinc-India H1 FY2012 H1 FY2013

Mined Metal (kt) 398 377

Refined Zinc (kt) 378 324

Refined Lead (kt)1 33 58

Silver – Integrated (moz)1 3.09 5.58

Zinc LME 2,236 1,906

Zinc CoP2 ($/t) 861 845

Zinc-International H1 FY2012 H1 FY2013

Mined Metal – Lisheen & BMM (kt) 157 147

Refined Zinc – Skorpion (kt) 76 73

658504

214

135

871

638

H1 FY2012 H1 FY2013

India International

Zinc-International

� H1 production volumes in line with mine plan

− FY2013 volumes expected to be 420kt

� Significant cost reduction driven by on-going efficiency

improvement programs

� 186mt Gamsberg project

− Feasibility study by FY2013

− Phased development


EBITDA ($mn)

Refined Zinc – Skorpion (kt) 76 73

CoP ($/t) 1,164 1,087

Notes: 1. Includes captive consumption

2. Excluding royalty

23

Iron Ore

India

� Karnataka mining ban – regulatory reviews underway to

allow mining to resume

− Some other mines have been allowed to resume

− CEC has approved our R&R plan at a provisional

capacity of 2.29mtpa

� Goa mining ban from 11 September 2012

Liberia

� Aeromagnetic survey completed; scoping study underway

Iron Ore H1 FY2012 H1 FY2013

Sales1 5.8 3.1

Goa 4.0 3.0

Karnataka 1.8 0.1

Production 5.5 3.7

Pig iron - Production (kt) 126 121

Met coke - Production (kt) 128 146

Average Net Sales Realizations ($/t) 79.6 69.6

Note: 1. Iron ore sales includes captive consumption of 0.1 mt in H1 FY2012 and

0.2 mt in H1 FY2013. Sales of iron ore from Karnataka were 0.06 mt in

H1 FY2013 through court sponsored e-auctions of inventory.

� Aeromagnetic survey completed; scoping study underway

− c.3x upside to earlier 1bn tonnes R&R est.

− Potential for ramp-up to 27mtpa

� Favourable project parameters: Two brownfield assets,

capex flexibility, proximity to port, low opex ($30-35/t)

� First shipment expected in FY2014


307

115

H1 FY2012 H1 FY2013

EBITDA ($mn)

Copper-India/Australia

� Strong mined volumes at Australia

− Stabilized mining operations

� Strong operating performance: higher refined volumes at

Tuticorin

− Efficient copper recovery

− Overall improved operational efficiencies

� EBITDA lower due to lower sulphuric acid realizations,

partially made-up by higher volumes

Copper-India/Australia H1 FY2012 H1 FY2013

Mined Metal 11 13

Refined Metal – India (kt) 161 175

Copper LME 9,057 7,785

Copper Tc/Rc realization 13.4 11.8

Conversion cost – India (c/lb) (3.3) 6.3

.

� 160MW CPP Project - First 80MW synchronised

− Captive power expected to further lower gross costs


EBITDA ($mn)

25

34 33

128

75

162

108

H1 FY2012 H1 FY2013

Copper Australia Copper India

Copper-Zambia

� Integrated production up 23%

− Ramp-up at Konkola due to faster mine development

− Higher volumes from Nchanga

� Bottom shaft loading commissioned at KDMP shaft#4

− Shaft equipping complete, waste hoisting commenced

− Platform for 25-30% annual growth in mined metal

Copper-Zambia H1 FY2012 H1 FY2013

Mined Metal 76 86

Refined Metal – Integrated 68 83

Refined Metal - Custom Smelting 34 27

Copper LME 9,057 7,785

CoP – Integrated ($/lb) 2.24 2.26

244185

H1 FY2012 H1 FY2013

� Nchanga 3mt West Mill commissioned

� Integrated copper production targets

− 175kt in FY2013

− 200kt in FY2014


EBITDA ($mn)

26

Aluminium

� Continued focus on operational efficiency

− VAL and BALCO smelters operating at rated capacity

− Improving trend in specific consumption parameters

− Value added product sales up 11%, at 215kt

� Delivering 11% EBITDA margin

− 2nd quartile costs at $1,873/t, without bauxite linkage

− Increase in premiums supported realisations

� Committed to an integrated Aluminium Strategy

− Well invested plant with world-class technology,

captive power and infrastructure at benchmark

Aluminium and Alumina H1 FY2012 H1 FY2013

Aluminium Production (kt) 324 382

BALCO 121 123

VAL 203 259

Aluminium LME 2,495 1,947

Aluminium COP ($/t) 2,282 1,873

BALCO 2,036 1,871

VAL 2,427 1,874

Alumina Production (kt) 451 423

Alumina COP ($/t) 364 340

Power – BALCO 270MW

Sales (mu) 811 684

Realisation (Rs/unit) 3.3 3.0

Cost of Generation (Rs/unit) 2.2 2.6captive power and infrastructure at benchmark

project costs

− Working with government on bauxite allocation to

enable efficient operations at Lanjigarh refinery

� Projects

− BALCO 1200MW: 1st unit synchronization in Q3

FY20131

− BALCO 325kt smelter - First metal in Q4 FY2013

− BALCO 211mt coal block mining in FY20131


91106

H1 FY2012 H1 FY2013

EBITDA ($mn)

27

Note: 1. Subject to approvals

Cost of Generation (Rs/unit) 2.2 2.6

Power

� Sales growth driven by 2,400MW Jharsuguda power plant

− Three 600MW units operating, 4th unit under trial run

− 80% availability and operating near design efficiencies

− 50% PLF in H1, constrained by transmission

� Working with transmission authorities to

overcome current short term restriction

� Additional 1000MW transmission capacity by Q4

FY2013

� Strong cost performance: Cost of generation trend

reflects benefits of plant stabilisation and improving coal

scenario

Power H1 FY2012 H1 FY2013

Total Sales (mu) 2,851 4,680

SEL 1 2,404 3,879

MALCO & HZL WPP 446 801

Realisation (USc/u) 8.2 6.8

Cost of generation (USc/u) 6.2 4.1

Realisation (INR/u) 3.7 3.7

Cost of generation (INR/u) 2.8 2.2

Notes: 1. Includes units generated under trial run of 288mu in H1 FY2012 vs. 339mu in H1

FY2013

scenario

� 1st 660 MW unit of 1,980MW Talwandi Sabo on track for

synchronisation by Q2 FY2014


51

121

H1 FY2012 H1 FY2013

EBITDA ($mn)

28

Summary

Key Strategic Priorities

� Deliver industry-leading production growth across our portfolio

� Continue to add reserves and resources to drive long-term value

� Complete the simplification of the Group structure

� Minority buyouts of HZL and BALCO

� Reduce gearing from free cash flow

5,353

EBITDA (US$mn) Free Cash Flow (US$mn) Underlying EPS (USc/share)


323

5,353

FY2004 (IPO)

FY2012 proforma

+42% CAGR

Note: FY2012 numbers are proforma with Cairn India for full year

353

3,128

FY2004 (IPO)

FY2012 proforma

+32% CAGR

27

209

FY2004 (IPO)

FY2012 proforma

+29% CAGR

Appendix

Entity Wise Financials

H1 FY2013 ($mn or as stated)VED

Consol HZL Zinc-Intl SesaSIIL

(incl CMT) KCM BALCO VALSEL & TSPL

Cairn India VED Plc1

Others & Elim

EBITDA 2,562 532 135 115 111 185 32 74 81 1,290 12 (4)

Depreciation (663) (63) (66) (19) (22) (94) (20) (73) (30) (275) (3) 1

Amortization (468) (3) (43) (37) 0 0 (3) 0 0 (383) 0 0

Special Items (7) 0 0 (4) 0 (1) 0 0 0 0 (2) 0

Net Interest Income (Expense) (236) 194 1 (18) 124 (21) 0 (179) (20) 28 (223) (123)

FX and Embedded Derivative MTM (129) 0 0 2 (20) 0 (7) (64) (17) (19) (4) 0

Profit before Tax 1,059 660 27 40 194 70 2 (242) 13 642 (218) (128)

Effective Tax Rate (%) 11.5 13.9 18.5 37.5 21.6 31.4 -50.0 0.0 46.2 -10.3 -0.9 -3.9

Tax (122) (92) (5) (15) (42) (22) 2 0 (6) 66 (2) (7)

Profit after Tax 937 568 22 25 152 48 4 (242) 7 709 (219) (135)


Attributable (%) 18.3 37.7 45.5 56.0 58.6 79.2 25.0 87.6 57.1 49.8 100.0 88.1

Attributable PAT 171 214 10 14 89 38 1 (212) 4 353 (219) (119)

Underlying Attributable PAT 264 214 10 15 97 39 2 (156) 14 362 (214) (119)

As of 30 September 2012

Property Plant and Equipment2 17,250 1,794 515 588 517 2,123 1,915 5,375 2,549 1,827 51 (4)

Mining Reserve 6,129 69 276 1,109 4 - 28 - - 4,644 - -

Exploratory Assets 10,759 - 171 177 - - - 42 - 10,370 - -

Note: 1. Includes Vedanta plc and Investment companies at 100% attributable and MALCO at 94.8% attributable

2. Includes Capital Work in Progress

31

Proforma Entity Wise Financials – with Sesa Sterlite

H1 FY2013 ($mn or as stated)VED

ConsolVED Plc1

Others& Elim KCM

Sesa Sterlite Consol

Sesa Sterlite Standalone

Cairn India HZL

Zinc-Intl. BALCO TSPL TSMHL2

Others & Elim

EBITDA 2,562 0 0 185 2,377 359 1,290 532 135 32 0 0 29

Depreciation (663) 0 1 (94) (571) (139) (275) (63) (66) (20) 0 0 (8)

Amortization (468) 0 0 0 (468) (37) (383) (3) (43) (3) 0 0 0

Special Items (7) (2) 0 (1) (4) (4) 0 0 0 0 0 0 0

Net Interest Income (Expense) (236) (61) (73) (21) (81) (91) 28 194 1 0 0 (165) (49)

FX and Embedded Derivative MTM (129) (4) 0 0 (125) (94) (19) 0 0 (7) (5) 0 (1)

Profit before Tax 1,059 (67) (72) 70 1,128 (5) 642 660 27 2 (5) (165) (29)

Effective Tax Rate (%) 6.2 0.0 -5.6 31.4 3.5 0.0 -10.3 13.9 18.5 -50.0 0.0 0.0 -37.9

Tax (66) 0 (4) (22) (40) 0 66 (92) (5) 2 0 0 (11)

Profit after Tax 993 (66) (76) 48 1,088 (5) 709 568 22 4 (5) (165) (40)

Proforma Entity Wise Financials assuming completion of Group Structure Simplification


Attributable (%) 24.5 98.5 97.4 79.2 31.7 60.0 34.3 37.9 50.0 25.0 60.0 58.2 57.5

Attributable PAT 243 (66) (74) 38 345 (3) 243 215 11 1 (3) (96) (23)

Underlying Attributable PAT 314 (60) (74) 39 409 50 250 215 11 2 0 (96) (22)

As of 30 September 2012

Property Plant and Equipment3 17,250 - (26) 2,123 15,153 7,921 1,827 1,794 515 1,915 1,138 - 43

Mining Reserve 6,129 - - - 6,129 1,109 4.644 69 276 28 - - 4

Exploratory Assets 10,759 - - - 10,759 218 10,730 - 171 - - - -

Note: 1. Includes Vedanta plc and Investment companies

2. Twin Star Mauritius Holdings Limited (SPV holding the 38.7% stake in Cairn India with associated debt of $5.9bn)

3. Includes Capital Work in Progress

32

Entity-Wise Cash and Debt Details

Net Debt Summary ($mn)

30 Sep 2011 31 Mar 2012 30 Sep 2012

Company Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt

Vedanta plc2 6,340 942 5,398 9,263 184 9,080 9,259 43 9,216

Sterlite standalone incl. CMT 636 769 (134) 544 758 (214) 457 569 (112)

Zinc India - 3,384 (3,384) - 3,574 (3,574) - 3,698 (3,698)

Zinc International 28 306 (278) 9 215 (206) - 208 (208)

BALCO 618 26 592 711 49 662 692 0 692

Sterlite Energy Ltd 910 15 895 1,175 37 1,138 1,284 6 1,278

Others3 52 196 (144) 74 23 52 117 29 88

Sterlite Consolidated 2,244 4,696 (2,452) 2,513 4,655 (2,142) 2,550 4,510 (1,960)

Vedanta Aluminium Ltd 2,825 15 2,811 3,505 85 3,420 3,652 5 3,647


Vedanta Aluminium Ltd 2,825 15 2,811 3,505 85 3,420 3,652 5 3,647

Copper Zambia 765 - 765 750 42 708 769 4 765

Sesa Goa 867 220 647 681 118 563 657 81 576

MALCO 16 17 (1) - 6 (6) - 21 (21)

Cairn India - - - 244 1,797 (1,553) 119 2,499 (2,381)

Total (in $mn) 13,056 5,889 7,1664 16,955 6,885 10,0645 17,006 7,163 9,8356

Debt numbers at Book Values, as of 30 September 2012

Note: 1. Cash and Liquid Investments; Vedanta plc had an additional $265million of undrawn credit facilities as of 30 September 2012

2. Includes Investment Companies

3. Others include: VGCB, Fujairah Gold, and SIIL investment companies

4. Includes $2 million debt related derivative



33

Entity-Wise Cash and Debt (Sesa Sterlite Proforma)

Net Debt Summary ($mn)

30 Sep 2011 31 Mar 2012 30 Sep 2012

Company Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt Debt Cash & LI1 Net Debt

Vedanta plc2 6,340 942 5,398 6,521 184 6,337 6,506 43 6,463

KCM 765 0 765 750 42 708 769 4 765

Sesa Sterlite Standalone 4,820 1,024 3,797 5,248 978 4,270 5,336 673 4,663

Zinc International 28 306 (278) 9 215 (206) - 208 (208)

Zinc India 0 3,384 (3,384) 0 3,574 (3,574) - 3,698 (3,698)

Cairn India - - - 244 1,797 (1,553) 119 2,499 (2,381)

Balco 618 26 592 711 49 662 692 - 692

Talwandi Sabo 434 8 425 657 5 653 714 3 711

TSMHL3 - - - 2,741 0 2,741 2,753 - 2,753


Debt numbers at Book Values, as of 30 September 2012

Note: 1. Cash and Liquid Investments; Vedanta plc had an additional $265million of undrawn credit facilities as of 30 September 2012

2. Includes Investment Companies

3. Twin Star Mauritius Holdings Limited (SPV holding the 38.7% stake in Cairn India with associated debt of $5.9bn). Since the table above shows external debt, it

does not include the $3.1 bn inter-company receivable at Vedanta Plc from TSMHL.

4. Others include: CMT, VGCB, Fujairah Gold, and SIIL investment companies




TSMHL - - - 2,741 0 2,741 2,753 - 2,753

Others4 52 200 (148) 74 43 31 118 35 83

Sesa Sterlite Consolidated 5,952 4,947 1,004 9,683 6,660 3,023 9,731 7,116 2,615

Total (in $mn) 13,056 5,889 7,1665 16,955 6,885 10,0646 17,006 7,163 9,8357

82

(1,612)

10,064

174

954 173 9,835

Net Debt Reconciliation

H1 FY2013 ($mn)

Opening Net Debt(1 Apr 2012)

Cash Flow from Operations¹

Sustaining Capex Project Capex Shareholder and Minority Dividends

Others Closing Net Debt(30 Sep 2012)


Note: 1. Excludes sustaining capex

35

Group Simplification to Reduce Debt at plc

� Post group structure simplification, debt service

liability at plc reduces by 61% to $3.8bn

� Debt service cost at Vedanta reduces from $500mn

to $190mn in FY2013

� Payout-based dividend policies at subsidiaries to

result in significantly higher dividends to plc

Debt Service Liability at plc ($bn)

9.7

3.8

(2.8)

Debt transferred to Sesa Sterlite;

guarantee continued by

Vedanta


(3.1)

Service Liability Pre Transaction

Service Liability Post Transaction

Note: Debt numbers at Face Value, and as of 30 September 2012

Intercompany receivable created

at Vedanta, from Sesa Sterlite

Project Capex

Capacity Completion TimeCapex

(US$mn)Spent up to 31

March 2012 Spent

H1 FY2013Unspent as

on 30-Sep-12Capex in progressCopper Sector

160 MW CPP at Tuticorin 160 MW 1st unit synchronised in Q2 FY 2012-13 132.8 125.4 17.4KCM KDMP Project 7.5mtpa Q3 FY 2012-13 973.0 830.2 36.5 106.3

Aluminium SectorBALCO - Korba II Smelter 325ktpa Ist Metal tapping by Q4 FY 2012-13 720.0 596.1 70.5 53.5BALCO - Korba 1200 MW CPP 1200 MW Ist unit synchronisation in Q3 FY 2012-

13,thereafter one unit every quarter1,100.0 803.8 44.6 251.6

Balco - Coal Block 211mt 150.0 12.0 1.2 136.8Power Sector

Sterlite Energy 2,400 MW 4th unit under Trial run 1,900.0 1,651.7 60.7 187.6Talwandi 1980 MW IPP 1,980 MW Ist unit synchronisation in Q2 FY 2013-14 2,150.0 973.5 253.3 923.2

Zinc SectorHZL - Zinc & Lead Dariba Project SK mine work progressing, Smelter &

CPP completed900.0 799.8 16.6 83.6

Iron OrePig Iron Expansion 375 ktpa Completed 150.0 138.7 7.7 3.6

InfrastructureVizag General Coal Berth 150.0 58.7 44.8 46.5Paradeep Multi Cargo Berth 88.0 - 88.0


Paradeep Multi Cargo Berth 88.0 --

88.0

Total Capex in Progress 8,413.8 5,989.8 553.3 1,880.7Capex Flexibility

Copper SectorSIIL Smelter 400 ktpa EC awaited 367.2 109.8 5.4 252.1

Aluminium SectorVAL - Lanjigarh Debottlenecking 1.0 mtpa Approval pending, on hold 150.0 73.7 1.4 74.9VAL - Lanjigarh Refinery (Phase II) 3.0mtpa Approval pending 1,570.0 825.2 - 744.8VAL - Jharsuguda (Smelter II) 1.25mtpa 2,920.0 2,280.8 99.6 539.6

Iron OreSesa Iron Ore mine Expansion 36mt Approval pending, on hold 500.0 128.9 17.7 353.4

Total Capex Flexibility 5,507.2 3,418.4 124.1 1,964.8Improvement and Enabling Capex

KCM 306.7 249.5 29.8 27.4Zinc India 291.2 120.8 94.0 76.4

ZI – Gamsberg 24.0 0.0 2.6 21.4Western Cluster- Liberia 97.1 27.5 14.5 55.1Total Improvement and Enabling Capex 719.0 397.8 140.9 180.3Total Capex 14,640.0 9,806.0 818.3 4,025.8Cairn India 2,260.5 161.2 136.0 1,963.3Total Capex (Including Cairn) 16,900.5 9,967.2 954.3 5,989.1

Credit Metrics

FY2012 LTM H1 FY2013 Covenant

Net Debt/EBITDA 1.9x 2.0x < 2.75x

EBITDA/Net Interest Expense1 11.1x 8.6x > 4.0x

Tangible Net Worth ($bn) 4.5 4.5 > 3.0

Net Assets/Debt 2.47x 2.38x > 1.75x

Gearing2 35% 34%


Note: 1. Interest includes Capitalized Interest

2. Gearing is calculated as Net Debt divided by the sum of Net Debt and Equity

38

EBITDA Sensitivities

Commodity prices – Impact of a 10% increase in Commodity Prices (LME/Prices in $/t, or as stated)

Commodity

H1 FY2013

Average price

H1 FY2013 EBITDA

($mn)

Oil ($/bbl) 109 150

Zinc 1,906 87

Aluminium 1,947 77

Copper 7,785 73

Iron Ore 70 22

Lead 1,974 16

Silver ($/oz) 29.6 13


Foreign Currency - Impact of a 10% depreciation in FX Rate

Currency

H1 FY2013

Average FX rate

H1 FY2013 EBITDA

($mn)

INR/USD 54.737 66

39

Sales Summary

Sales volume H1 FY2012 H1 FY2013

Zinc-India Sales


Refined Lead (kt) 29 55

Zinc Concentrate (DMT) - -

Lead Concentrate (DMT) 10 -

Total Zinc (Refined+Conc) kt 376 322

Total Lead (Refined+Conc) kt 39 55

Total Zinc-Lead (kt) 415 377

Silver (moz) 2.6 5.0

Zinc-International Sales


Zinc Concentrate (MIC) 118 110

Total Zinc (Refined+Conc) 192 180

Lead Concentrate (MIC) 44 37

Sales volume H1 FY2012 H1 FY2013

Iron-Ore Sales

Goa (mn DMT) 4.0 3.0

Karnataka (mn DMT) 1.8 0.1

Orissa (mn DMT) 0.0 -

Total (mn DMT) 5.8 3.1

MetCoke (kt) 112 133

Pig Iron (kt) 123 117

Copper-India Sales

Copper Cathodes (kt) 78 91

Copper Rods (kt) 81 80

Sulphuric Acid (kt) 284 328

Phosphoric Acid (kt) 81 82

Copper-Zambia Sales



Lead Concentrate (MIC) 44 37

Total Zinc-Lead (kt) 236 216

Aluminium Sales

Sales - Wire rods (kt) 120 147

Sales - Rolled products (kt) 29 28

Sales - Busbar and Billets (kt) 28 36

Total Value added products (kt) 177 211

Sales - Ingots (kt) 131 167

Sales - Total (kt) 308 377


Power Sales (mu)

SEL 2,404 3,879

Non-SEL 446 801

Total sales 2,851 4,680

BALCO 270 MW 811 684

Power Realisations (USc/mu)

SEL 7.8 6.3

Non-SEL 9.8 8.8

Average Realisations 8.2 6.8

BALCO 270 MW 7.3 5.5

Power Costs (USc/mu)

SEL 6.3 4.1

Non-SEL 5.6 4.1

Average costs 6.2 4.1

BALCO 270 MW 4.8 4.8

40

Proposed New Group Structure

Konkola Copper

Mines (KCM)

58.3%

Vedanta Resources

Sesa Sterlite

79.4%

� Iron Ore (Sesa Goa)

� Copper Smelting (Tuticorin)

� Power (2,400MW Jharsuguda)

� Aluminium (VAL aluminium assets)

Divisions of Sesa Sterlite


100%64.9%

Zinc India (HZL)

AustralianCopper Mines

Cairn India

58.8%

Subsidiaries of Sesa Sterlite

Option to increase stake

to 94.4%

Unlisted entitiesListed entities

Note: Shareholding based on basic shares outstanding

Talwandi Sabo Power (1,980MW)

100%

VAL Power and MALCO Power

(1,405MW)

100%

Skorpion & Lisheen -100%

BMM -74%

100%

Zinc International

51%

Bharat Aluminium (BALCO)


to 100%

51%

Western Cluster (Liberia)


to 100%

41

Vedanta Group Structure

Konkola Copper

Mines (KCM)

54.6%

Vedanta Resources(Listed on LSE)

Madras Aluminium (MALCO)

94.8%70.5%

29.5% Sterlite Industries(Listed on BSE, NSE and NYSE)

VedantaAluminium

(VAL)

79.4%

Sesa Goa (Listed on BSE

and NSE)

55.1%

3.6% Cairn India Ltd(Listed on BSE

and NSE)

38.7%

20.1%


Zinc IndiaCopperAluminium Iron ore Power

KEY

51.0% 100%64.9%

Zinc India(HZL)(Listed on BSE

and NSE)

AustralianCopper Mines

Bharat Aluminium (BALCO)

Sterlite Energy

100% 51%

Skorpion and Lisheen

Black Mountain

100% 74%

Zinc International

Liberia Iron Ore Assets

Oil & GasZinc International

Note: Structure as at 30 September 2012

42

Vedanta FY2013 Interim Results Presentation · FY2013 INTERIM RESULTS PRESENTATION -7 NOVEMBER 2012...

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