4 Segment Information

A) Description of segment and principal activities

The Company is a diversified natural resource company engaged in exploring, extracting and processing minerals and oil and gas. The Company produces oil and gas, aluminium, copper, iron ore and power. The Company has five reportable segments: oil and gas, aluminium, copper, iron ore and power. The management of the Company is organised by its main products: oil and gas, aluminium, copper, iron ore and power. Each of the reportable segments derives its revenues from these main products and hence these have been identified as reportable segments by the Company’s Chief Operating Decision Maker ("CODM").

Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amount allocated on a reasonable basis. Unallocated expenditure consist of common expenditure incurred for all the segments and expenses incurred at corporate level. The assets and liabilities that cannot be allocated between the segments are shown as unallocated assets and unallocated liabilities respectively.

The accounting policies of the reportable segments are the same as the Company’s accounting policies described in Note 3. Earnings before Interest, Tax and Depreciation & Amortisation (EBITDA) are evaluated regularly by the CODM, in deciding how to allocate resources and in assessing performance. The operating segments reported are the segments of the Company for which separate financial information is available. The Company’s financing (including finance costs and finance income) and income taxes are reviewed on an overall basis and are not allocated to operating segments.

Pricing between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

The following table presents revenue and profit information and certain assets and liabilities information regarding the Company’s business segments as at and for the year ended 31 March 2024 and 31 March 2023 respectively.

e) Property, Plant and Equipment, Capital work-in-progress and exploration and evaluation assets net block includes share of jointly owned assets with the joint venture partners C 6,430 crore (31 March 2023: C 5,776 crore).

a)    Plant and equipment include refineries, smelters, power plants, railway sidings, ships, river fleet and related facilities.

b)    During the year ended 31 March 2024, interest capitalised was C 560 crore (31 March 2023: C 331 crore).

c)    Certain property, plant and equipment are pledged as security against borrowings, the details related to which have been described in Note 17 on "Borrowings".

d)    In accordance with the exemption given under Ind AS 101, which has been exercised by the Company, a first time adopter can continue its previous GAAP policy for accounting for exchange differences arising from translation of long-term foreign currency monetary items recognised in the previous GAAP financial statements for the period ending immediately before the beginning of the first Ind AS financial reporting period, i.e., 01 April 2016.

Accordingly, foreign currency exchange differences arising on translation/settlement of long-term foreign currency monetary items acquired before 01 April 2016 pertaining to the acquisition of a depreciable asset amounting to C 1 crore loss (31 March 2023: C 11 crore loss) is adjusted to the cost of respective item of property, plant and equipment.

g)    (i) During the year ended 31 March 2023, the Company had recognised a net impairment reversal of C 323 crore (after

considering impairment reversal of C 618 crore on account of ONGC partial arbitration award (Refer note (ii) for details)) on its assets in the oil and gas producing facilities and impairment charge of C 305 crore on its assets in the oil and gas exploration intangible assets under development mainly due to revision of Reserve and Capex estimates. The recoverable amount of the Company’s share in Rajasthan Oil and Gas cash generating unit "RJ CGU" was determined to be C 5,324 crore (US$ 648 million) as at 31 March 2023. The recoverable amount of the RJ CGU was determined based on the fair value less costs of disposal approach, a level-3 valuation technique in the fair value hierarchy, as it more accurately reflects the recoverable amount based on the Company’s view of the assumptions that would be used by a market participant. This was based on the cash flows expected to be generated by the projected oil and natural gas production profiles up to 2040, the expected dates of cessation of production sharing contract ("PSC')/ cessation of production from each producing field based on the current estimates of reserves and risked resources. Reserves assumptions for fair value less costs of disposal tests consider all reserves that a market participant would consider when valuing the asset, which are usually broader in scope than the reserves used in a value-in-use test. Discounted cash flow analysis used to calculate fair value less costs of disposal uses assumption for short-term oil price of US$ 84 per barrel for the next one year and tapers down to long-term nominal price of US$ 73 per barrel three years thereafter derived from a consensus of various analyst recommendations. Thereafter, these had been escalated at a rate of 2.4% per annum. The cash flows were discounted using the posttax nominal discount rate of 10.99% derived from the post-tax weighted average cost of capital after factoring in the risks ascribed to PSC extension including successful implementation of key growth projects. Based on the sensitivities carried out by the Company, change in crude price assumptions by US$ 1/bbl and changes to discount rate by 1% would lead to a change in recoverable value by C 41 crore (US$ 5 million) and C 205 crore (US$ 25 million) respectively.

(ii) In the Oil and Gas business, the Company operates the Rajasthan Block under a joint venture model with ONGC. As the operator of the block, the Company raises cash calls to ensure the smooth functioning of the petroleum operations.

During the year ended 31 March 2023, the Company received a favourable partial arbitration award on cash call claims made from ONGC, pursuant to which, reversal of previously recorded impairment of C 618 crore (US$ 78 million) had been recognised against capitalised development costs. The Company had a liability towards ONGC of C 750 crore (US$ 99 million) as of 31 March 2022 on account of revenue received in excess of entitlement. Based on the partial arbitration award, the Company had adjusted the claims received in the favour of the Company against the liability towards ONGC and the net payable as of 31 March 2023 amounted to C 135 crore (US$ 16 million).

h)    Pursuant to the merger of ACPL, the Company has recorded the gross book value of ACPL assets amounting to C 47 crore, C 39 crore, C 75 crore and C 8,537 crore as an addition to freehold land, buildings, ROU land and CWIP respectively for the year ended 31 March 2023 (Refer note 3(d)(i) for details).

i)    Freehold land includes gross block of C 353 crore (31 March 2023: C 350 crore) and accumulated depreciation of

C 319 crore (31 March 2023: C 308 crore), which is available for use during the lifetime of the Production Sharing Contract of the respective Oil and Gas blocks.

a.    Carrying value of investment in equity shares of Hindustan Zinc Limited ("HZL") is at deemed cost and for all other subsidiaries, it is at the cost of acquisition.

b.    Pursuant to the Government of India’s policy of disinvestment, the Company in April 2002 acquired 26% equity interest in HZL from the Government of India. Under the terms of the Shareholder’s Agreement ('SHA’), the Company had two call options to purchase all of the Government of India’s shares in HZL at fair market value. The Company also acquired an additional 20% of the equity capital in HZL through an open offer. The Company exercised the first call option on 29 August 2003 and acquired an additional 18.9% of HZL’s issued share capital, increasing its shareholding to 64.9%. The second call option provides the Company the right to acquire the Government of India’s remaining 29.5% share in HZL. This call option is subject to the right of the Government of India to sell 3.5% of HZL shares to HZL employees. The Company exercised the second call option on 21 July 2009. The Government of India disputed the validity of the call option and has refused to act upon the second call option. Consequently, the Company invoked arbitration. The Government of India without prejudice

to the position on the Put / Call option issue has received approval from the Cabinet for divestment and the Government is looking to divest through the auction route. Meanwhile, the Supreme Court has, in January 2016, directed status quo pertaining to disinvestment of Government of India’s residual shareholding while hearing the public interest petition filed.

On 13 August 2020, the Supreme Court passed an order partially removing the status quo order in place and has allowed the arbitration proceedings to continue via its order passed on 18 November 2021, the Supreme Court of India allowed the GoI’s proposal to divest its entire stake in HZL in the open market in accordance with the rules and regulations of SEBI and also directed the Central Bureau of India to register a regular case in relation to the process followed for the disinvestment of HZL in the year 2002 by the GoI. In line with the said order, the Company has withdrawn its arbitration proceedings.

Pursuant to the Government of India’s policy of divestment, the Company in March 2001 acquired 51% equity interest in BALCO from the Government of India. Under the terms of the SHA, the Company has a call option to purchase the Government of India’s remaining ownership interest in BALCO at any point from 02 March 2004. The Company exercised this option on 19 March 2004. However, the Government of India has contested the valuation and validity of the option and contended that the clauses of the SHA violate the (Indian) Companies Act, 1956 by restricting the rights of the Government of India to transfer its shares and that as a result such provisions of the SHA were null and void. In the arbitration filed by the Company, the arbitral tribunal by a majority award rejected the claims of the Company on the grounds that the clauses relating to the call option, the right of first refusal, the "tag-along" rights and the restriction on the transfer of shares violate the erstwhile Companies Act, 1956 and are not enforceable. The Company has challenged the validity of the majority award in the Hon'ble High Court of Delhi and sought for setting aside the arbitration award to the extent that it holds these clauses ineffective and inoperative. The Government of India also filed an application before the High Court of Delhi to partially set aside the arbitral award in respect of certain matters involving valuation. The matter is currently scheduled for hearing by the Delhi High Court. Meanwhile, the Government of India without prejudice to its position on the Put / Call option issue has received approval from the Cabinet for divestment and the Government is looking to divest through the auction route.

On 09 January 2012, the Company offered to acquire the Government of India’s interests in HZL and BALCO for C 15,492 crore and C 1,782 crore respectively. This offer was separate from the contested exercise of the call options, and Company proposed to withdraw the ongoing litigations in relation to the contested exercise of the options should the offer be accepted. To date, the offer has not been accepted by the Government of India and therefore, there is no certainty that the acquisition will proceed.

In view of the lack of resolution on the options, the non-response to the exercise and valuation request from the Government of India, the resultant uncertainty surrounding the potential transaction and the valuation of the consideration payable, the Company considers the strike price of the options to be at the fair value, which is effectively nil, and hence the call options have not been recognised in the financial statements.

c.    Reduction pursuant to merger of Cairn India Limited with Vedanta Limited accounted for in the year ended 31 March 2017.

d.    The Company through its wholly owned subsidiary, CIHL holds approximately 52% stake in AvanStrate Inc, Japan ("ASI") which has wholly owned subsidiaries in Korea and Taiwan. Majority of the balance stake in ASI is held by Hoya Corporation, Japan ("Hoya"). There are certain operational matters at ASI and the Company is currently in dialog with Hoya for a commercial settlement against their Put option and shareholder loan. In the meanwhile, the Company has applied principles of Ind AS 36 - Impairment of Assets for testing impairment for its investment in ASI and has used the fair values of net assets for the purpose of determining that there is no material impact to the net carrying value of investment in ASI amounting to C 342 crore.

e.    The Company has not recognised any deferred tax asset on impairment of investments, including amount reduced pursuant to merger (refer note c above) as the realisation of the same is not reasonably certain.

f.    During the year ended 31 March 2024, the Company has provided maximum financial guarantee of C 8,168 crore

(US$ 980 million) against the external borrowing of C 7,433 crore (US$ 900 million) taken by its wholly owned subsidiary, THL Zinc Ventures Limited ("THLZVL"). The borrowing is primarily secured by the recoverable value of the Zinc International business ("VZI") which is held under THLZVL. As at the year ended 31 March 2024, the recoverable amount of VZI has been determined based on the fair value less cost of disposal approach, using the discounted cash flow method, a level 3 valuation technique in the fair value hierarchy. This is based on the cash generated by the extraction and sale of proved and probable reserves/ natural estimated resources which are yet to be exploited during the estimated predetermined life of mine ("LOM") after deducting costs of closure and rehabilitation on expiry of LOM. The cash flows are discounted using the post tax weighted average cost of capital ("WACC") is 13.6%. The resultant recoverable amount is higher than the guarantee outstanding and hence no expected credit loss has been considered necessary. Based on the sensitivities carried out by the Company, change in WACC assumptions by 1% would lead to a change in recoverable value by C 675 crore (US$ 81 million).

(a)    Bank deposits includes fixed deposits with maturity more than 12 months of C 193 crore (31 March 2023: C 107 crore) under lien with bank, C 4 crore (31 March 2023: C Nil crore) under lien with others, C 207 crore (31 March 2023: C 208 crore) held as reserve created against principal payment on loans from banks, C 201 crore (31 March 2023: C 146 crore) held as interest reserve created against interest payment on loans from banks, C 68 crore (31 March 2023: C 58 crore) held as margin money created against bank guarantee and C 2 crore (31 March 2023: C 2 crore) held as fixed deposit for closure cost.

(b)    Bank deposits and site restoration asset earns interest at fixed rate based on respective deposit rate.

(c)    Government of India (GoI) vide Office Memorandum ("OM") No. O-19025/10/2005-ONG-DV dated 01 February 2013 allowed for Exploration in the Mining Lease Area after expiry of Exploration period and prescribed the mechanism for recovery of such Exploration Cost incurred. Vide another Memorandum dated 24 October 2019, GoI clarified that all approved Exploration costs incurred on Exploration activities, both successful and unsuccessful, are recoverable in the manner as prescribed in the OM and as per the provisions of PSC. Accordingly, the Company has started recognising revenue, for past exploration costs, through increased share in the joint operations revenue as the Company believes that cost recovery mechanism prescribed under OM for profit petroleum payable to GoI is not applicable to its Joint operation partner. During the year, the Arbitration Tribunal has issued Final Partial Award which allowed for recovery of exploration costs (Refer Note 34(a)). Accordingly, the Company has recognised additional C 240 crore (US$ 29 million). At year end, an amount of C 1,114 crore (US$ 134 million) (31 March 2023: C 859 crore (US$ 105 million)) is receivable from its joint operation partner on account of this. The Company is actively engaging with Joint operation partner and the same will be recovered through revenue in due course.

(a)    Includes C 34 crore (31 March 2023: C 34 crore), being Company’s share of gross amount of C 97 crore (31 March 2023:

C 97 crore) paid under protest on account of Education Cess and Secondary Higher Education Cess for the financial year 2013-14.

(b)    Others include claim receivables, advance recoverable (oil and gas business), prepaid expenses and export incentive receivables.

(a)    For method of valuation for each class of inventories, refer note 3(a)(I).

(b)    Inventory held at net realisable value amounted to C 1,451 crore (31 March 2023: C 1,824 crore).

(c)    Write down of inventories amounting to C 105 crore has been charged to the Statement of Profit and Loss during the year (31 March 2023: C 43 crore).

(a)    Includes C 34 crore (31 March 2023: C 66 crore) on lien with banks and margin money of C 82 crore (31 March 2023:

C 41 crore).

(b)    Restricted funds of C 26 crore (31 March 2023: C 22 crore) on lien with others and C 258 crore (31 March 2023: C 64 crore) held as margin money created against bank guarantee.

(c)    Includes C 0 crore (31 March 2023: C 0 crore) of margin money with banks and fixed deposit under lien with others of C 0 crore (31 March 2023: C 0 crore).

(d)    Bank deposits earn interest at fixed rate based on respective deposit rates.

(e)    Earmarked unpaid dividend accounts are restricted in use as it relates to unclaimed or unpaid dividend, as per the provisions of the Act.

(f)    Earmarked escrow account is restricted in use as it relates to unclaimed redeemable preference shares.

(a)    Includes 2,98,632 (31 March 2023: 3,05,832) equity shares kept in abeyance. These shares are not part of listed equity capital and pending allotment as they are sub-judice.

(b)    Includes 78,66,397 (31 March 2023: 40,05,075) equity shares held by Vedanta Limited ESOS Trust ("VESOS Trust").

F.    Other disclosures

(i)    The Company has one class of equity shares having a par value of C 1 per share. Each shareholder is eligible for one vote per share held and dividend as and when declared by the Company. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend which is paid as and when declared by the Board of Directors. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amounts, in proportion to their shareholding.

(ii)    In terms of Scheme of Arrangement as approved by the Hon'ble High Court of Judicature at Mumbai, vide its order dated 19 April 2002, the erstwhile Sterlite Industries (India) Limited (merged with the Company during FY 2013-14) during

FY 2002-2003 reduced its paid up share capital by C 10 crore. There are 1,99,366 equity shares (31 March 2023: 2,00,038 equity shares) of C 1 each pending clearance from NSDL. The Company has filed an application in Hon'ble High Court of Mumbai to cancel these shares, the final decision on which is pending. Hon'ble High Court of Judicature at Mumbai, vide its interim order dated 06 September 2002 restrained any transaction with respect to subject shares.

15 Other equity (Refer statement of changes in equity)

a)    General reserve: Under the erstwhile Companies Act, 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable reserves for that year. Consequent to introduction of Companies Act, 2013 ("Act"), the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn.

The Board of Directors of the Company, on 29 October 2021, approved the Scheme of Arrangement between the Company and its shareholders under Section 230 and other applicable provisions of the Act ("Scheme"). The Scheme provides for capital reorganisation of the Company, inter alia, providing for transfer of amounts standing to the credit of the General Reserves to the Retained Earnings of the Company with effect from the Appointed Date.

Post the requisite approvals obtained from Stock Exchanges and pursuant to the National Company Law Tribunal ("NCLT"), Mumbai Bench Order dated 26 August 2022 ("NCLT Order"), the proposed scheme was approved by the shareholders with requisite majority on 11 October 2022.

The Company is in the process of complying with the further requirements specified in the NCLT Order.

b)    Securities premium: The amount received in excess of face value of the equity shares is recognised in securities premium. This reserve is utilised in accordance with the specific provisions of the Act.

C) Preference share redemption reserve: The Act provides that companies that issue preference shares may redeem those shares from profits of the Company which otherwise would be available for dividends, or from proceeds of a new issue of shares made for the purpose of redemption of the preference shares. If there is a premium payable on redemption, the premium must be provided for, either by reducing the additional paid in capital (securities premium account) or net income, before the shares are redeemed. If profits are used to redeem preference shares, the value of the nominal amount of shares redeemed should be transferred from profits (retained earnings) to the preference share redemption reserve. This amount should then be utilised for the purpose of redemption of redeemable preference shares. This reserve can be used to issue fully paid-up bonus shares to the shareholders of the Company.

d)    Capital reserve: The balance in capital reserve has mainly arisen consequent to merger of Cairn India Limited with the Company.

e)    Foreign currency translation reserve: The Statement of Profit and Loss of oil and gas business is translated into Indian Rupees (C) at the average rates of exchange during the year/ exchange rates as on the date of the transaction and the Balance Sheet is translated at the exchange rate as at the reporting date. Exchange difference arising on translation is recognised in other comprehensive income and would be recycled to the statement of profit and loss as and when these operations are disposed off.

f)    Share Based Payment Reserve: Share-based payments reserve represents amount of fair value, as on the date of grant, of unvested options and vested options not exercised till date, that have been recognised as expense in the statement of profit and loss till date.

g)    Hedging reserve: Hedging reserve represents the cumulative effective portion of gains or losses arising on changes in fair value of hedging instruments entered into for cash flow hedges, which is recognised in OCI and later reclassified to statement of profit and loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.

16 Capital management

The Company’s objectives when managing capital is to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth. The Company’s overall strategy remains unchanged from previous year.

The Company sets the amount of capital required on the basis of annual business and long-term operating plans which include capital and other strategic investments.

The funding requirements are met through a mixture of equity, internal fund generation and borrowings. The Company’s policy is to use current and non-current borrowings to meet anticipated funding requirements.

The Company monitors capital on the basis of the gearing ratio which is net debt divided by total capital (equity plus net debt). The Company is not subject to any externally imposed capital requirements.

Net debt are non-current and current debts as reduced by cash and cash equivalents, other bank balances and short term investments. Equity comprises all components including other comprehensive income.

(a) The constituents of 'total cash’ for the purpose of capital management disclosure include only those amounts of restricted funds that are corresponding to liabilities (e.g. margin money deposits). Consequently, restricted funds amounting to C 689 crore (31 March 2023: C 408 crore) have been excluded from 'total cash’ in the capital management disclosures.

d) The loan facilities are subject to certain financial and non-financial covenants. The primary covenants which must be complied with include interest service coverage ratio, current ratio, debt service coverage ratio, total outside liabilities to total net worth, fixed assets coverage ratio, ratio of total term liabilities to net worth and debt/EBITDA. The Company has complied with the covenants as per the terms of the loan agreement. (Refer note 2).

Further, in case of borrowings having current assets as security, the quarterly statements of current assets filed by the Company with its lenders are in agreement with the books of accounts.

Other non-cash changes comprised of amortisation of borrowing costs and foreign exchange difference on borrowings.

h) In December 2021, the Company executed a C 8,000 crore facility agreement with Union Bank of India Limited to take over a long term syndicated facility of C 10,000 crore. This loan is secured by the way of pledge over the shares held by the Company in Hindustan Zinc Limited ("HZL") equal to minimum 1x outstanding loan value (calculated quarterly at Value Weighted Average Price), currently representing 6.10% (31 March 2023: 6.77%) of the paid-up shares of HZL. Further, the Company has also signed a Non-Disposal Undertaking ("NDU") in respect of its shareholding in HZL to the extent of 50.10% of the paid-up share capital of HZL. As at 31 March 2024, the outstanding loan amount under the facility is C 6,400 crore (31 March 2023: C 7,240 crore).

(a)    Trade payables are non-interest bearing and are normally settled upto 180 days (31 March 2023: 180 days) terms.

(b)    For amount due and terms and conditions relating to related party payables. Refer note 39.

19 Operational Buyers'/ Suppliers' Credit is availed in foreign currency from offshore branches of Indian banks or foreign banks at an interest rate ranging from 4.85% to 8.43% (31 March 2023: 0.69% to 7.38%) per annum and in rupee from domestic banks at interest rate ranging from 6.25% to 8.48% (31 March 2023: 4.35% to 8.80%) per annum. These trade credits are largely repayable within 180 days from the date of draw down. Operational Buyers' credit availed in foreign currency is backed by Standby Letter of Credit issued under working capital facilities sanctioned by domestic banks. Part of these facilities are secured by first pari passu charge over the present and future current assets of the Company.

(a)    Does not include any amounts, due and outstanding, to be credited to Investor Education and Protection Fund except C 0.03 crore (31 March 2023: C 0.23 crore) which is held in abeyance due to a pending legal case.

(b)    Matured deposits of C 0.00 crore (31 March 2023: C 0.01 crore) due for transfer to Investor Education and Protection Fund have not been transferred in view of pending litigation between the beneficiaries.

(c)    Includes revenue received in excess of entitlement interest of C 238 crore (31 March 2023: C 239 crore) of which C 145 crore (31 March 2023: C 135 crore) is payable to ONGC, reimbursement of expenses, provision for expenses, liabilities related to compensation/ claim etc.

The fair value of the financial assets and liabilities are at the amount that would be received to sell an asset and paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values:

Investments traded in active markets are determined by reference to quoted prices in an active market in case of listed securities and by quotes from the financial institutions; for example: Net asset value (NAV) for investments in mutual funds declared by mutual fund house. For other listed securities traded in markets which are not active, the quoted price is used wherever the pricing mechanism is same as for other marketable securities traded in active markets. Other investments, inputs for which are not based on observable market data (unobservable inputs), are valued on the basis of net assets value method.

Other current investments are valued on the basis of market trades, poll and primary issuances for securities issued by the same or similar issuer and for similar maturities or based on the applicable spread movement for the security derived based on the aforementioned factor(s).

Trade receivables, cash and cash equivalents, other bank balances, loans, other financial assets, current borrowings, trade payables and other current financial liabilities: Fair values approximate their carrying amounts largely due to the shortterm maturities of these instruments.

Non-current fixed-rate and variable-rate borrowings: Fair value has been determined using discounted cash flow model based on parameters such as interest rates, specific country risk factors, and the risk characteristics of the financed project.

Other non-current financial assets and liabilities: Fair value is calculated using a discounted cash flow model with market assumptions, unless the carrying value is considered to approximate to fair value.

Derivative financial assets/ liabilities: The Company executes derivative financial instruments with various counterparties. Interest rate swaps, foreign exchange forward contracts and commodity forward contracts are valued using valuation

techniques, which employs the use of market observable inputs. The most frequently applied valuation techniques include the forward pricing and swap models, using present value calculations. The models incorporate various inputs including foreign exchange spot and forward rates, yield curves of the respective currencies, currency basis spreads between the respective currencies, interest rate curves and forward rate curves of the underlying commodity. Commodity contracts are valued using the forward LME rates of commodities actively traded on the listed metal exchange, i.e., London Metal Exchange, United Kingdom (U.K.).

For all other financial instruments, the carrying amount is either the fair value, or approximates the fair value.

The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for derivatives designated in hedge relationship and the value of other financial instruments recognised at fair value.

The estimated fair value amounts as at 31 March 2024 and 31 March 2023 have been measured as at that date. As such, the fair values of these financial instruments subsequent to reporting date may be different than the amounts reported at each year-end.

There are no transfers between Level 1, Level 2 and Level 3 during the year.

C Risk management framework

The Company’s businesses are subject to several risks and uncertainties including financial risks.

The Company’s documented risk management policies act as an effective tool in mitigating the various financial risks to which the businesses are exposed in the course of their daily operations. The risk management policies cover areas such as liquidity risk, commodity price risk, foreign exchange risk, interest rate risk, counterparty credit risk and capital management. Risks are identified at both the corporate and individual subsidiary level with active involvement of senior management. Each operating subsidiary in the Company has in place risk management processes which are in line with the Company’s policy. Each significant risk has a designated 'owner’ within the Company at an appropriate senior level. The potential financial impact of the risk and its likelihood of a negative outcome are regularly updated.

The risk management process is coordinated by the Management Assurance function and is regularly reviewed by the Company’s Audit and Risk Management Committee ("ARC"). The ARC is aided by the other Committees of the Board including the Risk Management Committee, which meets regularly to review risks as well as the progress against the planned actions. Key business decisions are discussed at the periodic meetings of the Executive Committee. The overall internal control environment and risk management programme including financial risk management is reviewed by the Audit Committee on behalf of the Board.

The risk management framework aims to:

-    improve financial risk awareness and risk transparency

-    identify, control and monitor key risks

-    identify risk accumulations

-    provide management with reliable information on the Company’s risk situation

-    improve financial returns

Treasury management

Treasury management focuses on liability management, capital protection, liquidity maintenance and yield maximisation. The treasury policies are approved by the Committee of the Board. Daily treasury operations of the business units are managed by their respective finance teams within the framework of the overall Group treasury policies. Long-term fund raising including strategic treasury initiatives are managed jointly by the business treasury team and the central team at corporate treasury while short-term funding for routine working capital requirements is delegated to business units. A monthly reporting system exists to inform senior management of the Company’s investments and debt position, exposure to currency, commodity and interest rate risk and their mitigants including the derivative position. The Company has a strong system of internal control which enables effective monitoring of adherence to Company’s policies. The internal control measures are effectively supplemented by regular internal audits.

The Company uses derivative instruments to manage the exposure in foreign currency exchange rates, interest rates and commodity prices. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The Company does not enter into complex derivative transactions to manage the treasury and commodity risks. Both treasury and commodities derivative transactions are normally in the form of forward contracts, interest rate and currency swaps and these are in line with the Company's policies.

Commodity price risk

The Company is exposed to the movement of base metal commodity prices on the London Metal Exchange. Any decline in the prices of the base metals that the Company produces and sells will have an immediate and direct impact on the profitability of the businesses. As a general policy, the Company aims to sell the products at prevailing market prices.

The commodity price risk in imported input commodity such as of alumina, anodes, etc., for our aluminium and copper business respectively, is hedged on back-to-back basis ensuring no price risk for the business. Hedging is used primarily as a risk management tool and, in some cases, to secure future cash flows in cases of high volatility by entering into forward contracts or similar instruments. The hedging activities are subject to strict limits set out by the Board and to a strictly defined internal control and monitoring mechanism. Decisions relating to hedging of commodities are taken at the Executive Committee level, basis clearly laid down guidelines.

Whilst the Company aims to achieve average LME prices for a month or a year, average realised prices may not necessarily reflect the LME price movements because of a variety of reasons such as uneven sales during the year and timing of shipments.

The Company is also exposed to the movement of international crude oil price and the discount in the price of Rajasthan crude oil to Brent price.

Financial instruments with commodity price risk are entered into in relation to following activities:

•    economic hedging of prices realised on commodity contracts

•    cash flow hedging of revenues, forecasted highly probable transactions

Aluminium

The requirement of the primary raw material, alumina, is partly met from own sources and the rest is purchased primarily on negotiated price terms. Sales prices are linked to the LME prices. At present, the Company, on selective basis hedges the aluminium content in outsourced alumina to protect its margins. The Company also executes hedging arrangements for its aluminium sales to realise average month of sale LME prices.

Copper

The Company’s custom refining copper operations at Silvassa is benefitted by a natural hedge except to the extent of a possible mismatch in quotational periods between the purchase of anodes / blisters and the sale of finished copper.

The Company’s policy on custom smelting is to generate margins from Refining Charges or "RC", improving operational efficiencies, minimising conversion cost, generating a premium over LME on sale of finished copper, sale of by-products and from achieving import parity on domestic sales. Hence, mismatches in quotational periods are managed to ensure that the gains or losses are minimised. The Company hedges this variability of LME prices through forward contracts and tries to make the LME price a pass-through cost between purchases of anodes/ blisters and sales of finished products, both of which are linked to the LME price.

RCs are a major source of income for the Indian copper refining operations. Fluctuations in RCs are influenced by factors including demand and supply conditions prevailing in the market for smelters output. The Company’s copper business has a strategy of securing a majority of its anodes/ blisters feed requirement under long-term contracts with smelters/ traders.

Iron ore

The Company sells its Iron Ore production from Goa on the prevailing market prices and from Karnataka through e-auction route as mandated by State Government of Karnataka in India.

Oil and Gas

The prices of various crude oils are based upon the price of the key physical benchmark crude oil such as Dated Brent, West Texas Intermediate, and Dubai/ Oman etc. The crude oil prices move based upon market factors like supply and demand. The regional producers price their crude basis these benchmark crude with a premium or discount over the benchmark based upon quality differential and competitiveness of various grades. The Company also hedges variability of crude price through forward contracts on selective basis.

Natural gas markets are evolving differently in important geographical markets. There is no single global market for natural gas. This could be owing to difficulties in large-scale transportation over long distances as compared to crude oil. Globally, there are three main regional hubs for pricing of natural gas, which are USA (Henry Hub Prices), UK (NBP Price) and Japan (imported gas price, mostly linked to crude oil).

Provisionally priced financial instruments

On 31 March 2024, the value of net financial liabilities linked to commodities (excluding derivatives) accounted for on provisional prices was C 434 crore (31 March 2023: liabilities of C 728 crore). These instruments are subject to price movements at the time of final settlement and the final price of these instruments will be determined in the financial year beginning 01 April 2024.

Set out below is the impact of 10% increase in LME prices on pre-tax profit/ (loss) for the year and pre-tax total equity as a result of changes in value of the Company’s commodity financial instruments:

(a) Liquidity

The Company requires funds both for short-term operational needs as well as for long-term investment programmes mainly in growth projects. The Company generates sufficient cash flows from the current operations which together with the available cash and cash equivalents and short-term investments provide liquidity both in the short-term as well as in the long-term. The Company has been rated by CRISIL Limited (CRISIL) and India Ratings and Research Private Limited (India Rating) for its capital market issuance in the form of CPs and NCDs and for its banking facilities in line with Basel II norms.

During FY 2024, CRISIL Ratings has downgraded its rating on the long-term bank facilities and debt instruments of the Company from 'CRISIL AA’ to 'CRISIL AA-' while the rating on short-term facilities and commercial paper has been reaffirmed at 'CRISIL A1+'. The ratings have also been placed on Watch with Developing Implications.

During FY 2024, India Ratings has downgraded the Company’s rating on the long-term instruments from 'IND AA’ to 'IND A+’ and on short-term facilities and commercial paper from 'IND A1+’ to 'IND A1’. The ratings have also been placed on Watch with Developing Implications.

The ratings downgrade is driven by higher than expected leverage and increase in borrowing costs. However, they expect reduced refinancing risk for Vedanta Resources Limited to support the Company’s financial flexibility, with improved access and cost of borrowing from the banks and capital markets. The Rating Watch is due to the demerger announcement of the company as clarity on allocation of assets and liabilities and it’s probable impact on liquidity of the company is awaited by the rating agencies.

Anticipated future cash flows, together with undrawn fund based committed facilities of C 480 crore, and cash, bank and short term investments of C 2,384 crore as at 31 March 2024, are expected to be sufficient to meet the liquidity requirement of the Company in the near future.

The Company remains committed to maintaining a healthy liquidity, a low gearing ratio, deleveraging and strengthening its balance sheet. The maturity profile of the Company’s financial liabilities based on the remaining period from the date of balance sheet to the contractual maturity date is given in the table below. The figures reflect the contractual undiscounted cash obligation of the Company.

The above sensitivities are based on volumes, costs, exchange rates and other variables and provide the estimated impact of a change in LME prices on profit and equity assuming that all other variables remain constant. A 10% decrease in LME prices would have an equal and opposite effect on the Company’s financial statements.

The impact on pre-tax profit/ (loss) mentioned above includes the impact of a 10% increase in closing copper LME for provisionally priced copper concentrate purchased at Copper division custom smelting operations in India of C 89 crore loss (31 March 2023: C 129 crore loss), which is pass through in nature and as such will not have any impact on the profitability.

Financial risk

The Company’s Board approved financial risk policies include monitoring, measuring and mitigating the liquidity, currency, interest rate and counterparty risk. The Company does not engage in speculative treasury activity but seeks to manage risk and optimise interest and commodity pricing through proven financial instruments.

Set out below is the impact of a 10% strengthening in the functional currencies of the respective businesses on pretax profit/ (loss) and pre-tax equity arising as a result of the revaluation of the Company’s foreign currency monetary financial assets/ liabilities:

(b) Foreign exchange risk

Fluctuations in foreign currency exchange rates may have an impact on the statement of profit and loss, the statement of changes in equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.

Exposures on foreign currency loans are managed through the Company wide hedging policy, which is reviewed periodically to ensure that the results from fluctuating currency exchange rates are appropriately managed. The Company strives to achieve asset liability offset of foreign currency exposures and only the net position is hedged.

The Company’s presentation currency is the Indian Rupee (INR). The assets are located in India and the Indian Rupee is the functional currency except for Oil and Gas business operations which have a dual functional currency. Natural hedges available in the business are identified at each entity level and hedges are placed only for the net exposure. Short-term net exposures are hedged progressively based on their maturity. A more conservative approach has been adopted for project expenditures to avoid budget overruns, where cost of the project is calculated taking into account the hedge cost. The hedge mechanisms are reviewed periodically to ensure that the risk from fluctuating currency exchange rates is appropriately managed.

The following analysis is based on the gross exposure as at the reporting date which could affect the statement of profit and loss. The exposure is mitigated by some of the derivative contracts entered into by the Company as disclosed under the section on "Derivative financial instruments".

The Company’s exposure to foreign currency arises where an entity holds monetary assets and liabilities denominated in a currency different to the functional currency of the respective business, with US dollar being the major non-functional currency.

The foreign exchange rate sensitivity is calculated by the aggregation of the net foreign exchange rate exposure with a simultaneous parallel foreign exchange rates shift in the foreign currencies by 10% against the functional currency of the respective businesses.

A 10% weakening of functional currencies of the respective businesses would have an equal and opposite effect on the Company’s financial statements.

(c) Interest rate risk

At 31 March 2024, the Company’s net debt of C 39,848 crore (31 March 2023: C 34,659 crore) comprises debt of C 42,232 crore (31 March 2023: C 42,023 crore) offset by cash, bank and short term investments of C 2,384 crore (31 March 2023: C 7,364 crore).

The Company is exposed to interest rate risk on short-term and long-term floating rate instruments and on the refinancing of fixed rate debt. The Company’s policy is to maintain a balance of fixed and floating interest rate borrowings and the proportion of fixed and floating rate debt is determined by current market interest rates. The borrowings of the Company are principally denominated in Indian Rupees and US dollars with mix of fixed and floating rates of interest. The USD floating rate debt is linked to US dollar LIBOR and INR Floating rate debt to Bank’s base rate. The Company has a policy of selectively using interest rate swaps, option contracts and other derivative instruments to manage its exposure to interest rate movements. These exposures are reviewed by appropriate levels of management on a monthly basis. The Company invests cash and liquid investments in short-term deposits and debt mutual funds, some of which generate a tax-free return, to achieve the Company’s goal of maintaining liquidity, carrying manageable risk and achieving satisfactory returns.

Floating rate financial assets are largely mutual fund investments which have debt securities as underlying assets. The returns from these financial assets are linked to market interest rate movements; however the counterparty invests in the agreed securities with known maturity tenure and return and hence has manageable risk.

Considering the net debt position as at 31 March 2024 and the investment in bank deposits, corporate bonds and debt mutual funds, any increase in interest rates would result in a net loss and any decrease in interest rates would result in a net gain. The sensitivity analysis below has been determined based on the exposure to interest rates for financial instruments at the balance sheet date.

The table below illustrates the impact of a 0.5% to 2.0% movement in interest rates on floating rate financial assets/ liabilities (net) on profit/ (loss) and equity assuming that the changes occur at the reporting date and has been calculated based on risk exposure outstanding as of that date. The year-end balances are not necessarily representative of the average debt outstanding during the year. This analysis also assumes that all other variables, in particular foreign currency rates, remain constant.

(d) Counterparty and concentration of credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults.

The Company is exposed to credit risk from trade receivables, contract assets, investments, loans, other financial assets, and derivative financial instruments.

Credit risk on receivables is limited as almost all credit sales are against letters of credit and guarantees of banks of national standing.

Moreover, given the diverse nature of the Company’s businesses trade receivables are spread over a number of customers with no significant concentration of credit risk. The history of trade receivables shows a negligible provision for bad and doubtful debts. Therefore, the Company does not expect any material risk on account of nonperformance by any of the Company’s counterparties.

The Company has clearly defined policies to mitigate counterparty risks. For current investments, counterparty limits are in place to limit the amount of credit exposure to any one counterparty. This, therefore, results in diversification of credit risk for our mutual fund and bond investments. For derivative and financial instruments, the Company attempts to limit the credit risk by only dealing with reputable banks and financial institutions.

The carrying value of the financial assets represents the maximum credit exposure. The Company’s maximum exposure to credit risk is C 18,417 crore and C 20,057 crore as at 31 March 2024 and 31 March 2023 respectively.

The maximum credit exposure on financial guarantees given by the Company for various financial facilities is described in Note 38 on "Commitments, contingencies, and guarantees".

None of the Company’s cash equivalents, including time deposits with banks, are past due or impaired. Regarding trade receivables, loans and other financial assets (both current and non-current), there were no indications as at the year end, that defaults in payment obligations will occur except as described in Notes 7, 8 and 9 on allowance for impairment of trade receivables, loans and other financial assets.

Of the year end trade receivables, loans and other financial assets (excluding bank deposits, site restoration fund and derivatives) balance the following, though overdue, are expected to be realised in the normal course of business and hence, are not considered impaired as at 31 March 2024 and 31 March 2023:

D. Derivative financial instruments

The Company uses derivative instruments as part of its management of exposure to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. The Company does not enter into complex derivative transactions to manage the treasury and commodity risks. Both treasury and commodities derivative transactions are normally in the form of forward contracts and these are subject to the Company guidelines and policies.

The fair values of all derivatives are separately recorded in the balance sheet within current and non-current assets and liabilities. Derivatives that are designated as hedges are classified as current or non-current depending on the maturity of the derivative.

The use of derivatives can give rise to credit and market risk. The Company tries to control credit risk as far as possible by only entering into contracts with reputable banks and financial institutions. The use of derivative instruments is subject to limits, authorities and regular monitoring by appropriate levels of management. The limits, authorities and monitoring systems are periodically reviewed by management and the Board. The market risk on derivatives is mitigated by changes in the valuation of the underlying assets, liabilities or transactions, as derivatives are used only for risk management purposes.

(i) Cash flow hedges

The Company enters into forward exchange and commodity price contracts for hedging highly probable forecast transaction and account for them as cash flow hedges and states them at fair value. Subsequent changes in fair value are recognised in equity through OCI until the hedged transaction occurs, at which time, the respective gain or losses are reclassified to profit or loss. These hedges have been effective for the year ended 31 March 2024.

The Company uses foreign exchange contracts from time to time to optimise currency risk exposure on its foreign currency transactions. The Company hedged part of its foreign currency exposure on capital commitments during the year ended 2023. Fair value changes on such forward contracts are recognised in other comprehensive income.

The majority of cash flow hedges taken out by the Company during the year comprise non-derivative hedging instruments for hedging the foreign exchange rate of highly probable forecast transactions and commodity price contracts for hedging the commodity price risk of highly probable forecast transactions.

The cash flows related to above are expected to occur during the year ended 31 March 2025 and consequently may impact profit or loss for that year depending upon the change in the commodity prices and foreign exchange rates movements. For cash flow hedges regarded as basis adjustments to initial carrying value of the property, plant and equipment, the depreciation on the basis adjustments made is expected to affect profit or loss over the expected useful life of the property, plant and equipment.

(ii)    Fair value hedge

The fair value hedges relate to forward covers taken to hedge currency exposure and commodity price risks.

The Company’s sales are on a quotational period basis, generally one month to three months after the date of delivery at a customer’s facility. The Company enters into forward contracts for the respective quotational period to hedge its commodity price risk based on average LME prices. Gains and losses on these hedge transactions are substantially offset by the amount of gains or losses on the underlying sales. Net gains and losses are recognised in the statement of profit and loss.

The Company uses foreign exchange contracts from time to time to optimise currency risk exposure on its foreign currency transactions. Fair value changes on such forward contracts are recognised in the statement of profit and loss.

(iii)    Non- designated economic hedge

The Company enters into derivative contracts which are not designated as hedges for accounting purposes, but provide an economic hedge of a particular transaction risk or a risk component of a transaction. Hedging instruments include copper, aluminium future contracts on the LME and certain other derivative instruments. Fair value changes on such derivative instruments are recognised in the statement of profit and loss.

a)    Provision for employee benefits includes gratuity, compensated absences, deferred cash bonus, etc.

b)    The movement in provisions for restoration, rehabilitation and environmental costs is as follows [Refer note 3(a)(O)]:

c) Restoration, rehabilitation and environmental costs

The provisions for restoration, rehabilitation and environmental liabilities represent the management's best estimate of the costs which will be incurred in the future to meet the Company's obligations under existing Indian law and the terms of the Company's exploration and other licences and contractual arrangements.

The principal restoration and rehabilitation provisions are recorded within oil and gas business where a legal obligation exists relating to the oil and gas fields, where costs are expected to be incurred in restoring the site of production facilities at the end of the producing life of an oil field. The Company recognises the full cost of site restoration as a liability when the obligation to rectify environmental damage arises.

These amounts are calculated by considering discount rates within the range of 2% to 3%, and become payable at the end of the producing life of an oil field and are expected to be incurred over a period of twenty one years.

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production from a producing field.

25 Employee Benefit Plans

The Company participates in defined contribution and benefit plans, the assets of which are held (where funded) in separately administered funds.

For defined contribution plans, the amount charged to the statement of profit and loss is the total amount of contributions payable in the year.

For defined benefit plans, the cost of providing benefits under the plans is determined by actuarial valuation separately each year for each plan using the projected unit credit method by independent qualified actuaries as at the year end. Remeasurement gains and losses arising in the year are recognised in full in other comprehensive income for the year.

Central recognised provident fund

In accordance with the Employees' Provident Funds and Miscellaneous Provisions Act ,1952, employees are entitled to receive benefits under the Provident Fund. Both the employee and the employer make monthly contributions to the plan at a predetermined rate (12% for the year ended 31 March 2024 and 12% for the year ended 31 March 2023) of an employee's basic salary, and includes contribution made to Family Pension fund as explained below. All employees have an option to make additional voluntary contributions. These contributions are made to the fund administered and managed by the Government of India (GOI) or to independently managed and approved funds. The Company has no further obligations under the fund managed by the GOI beyond its monthly contributions which are charged to the statement of profit and loss in the year they are incurred.

Family pension fund

The Pension Fund was established in 1995 and is managed by the Government of India. The employee makes no contribution to this fund but the employer makes a contribution of 8.33% of salary each month subject to a specified ceiling per employee (included in the 12% rate specified above). This is provided for every permanent employee on the payroll.

At the age of superannuation, contributions ceases and the individual receives a monthly payment based on the level of contributions through the years, and on their salary scale at the time they retire, subject to a maximum ceiling of salary level. The Government funds these payments, thus the Company has no additional liability beyond the contributions that it makes, regardless of whether the central fund is in surplus or deficit.

Superannuation

Superannuation, another pension scheme applicable in India, is applicable only to senior executives. The Company holds a policy with Life Insurance Corporation of India ("LIC"), to which it contributes a fixed amount relating to superannuation and the pension annuity is met by LIC as required, taking into consideration the contributions made. The Company has no further obligations under the scheme beyond its monthly contributions which are charged to the statement of profit and loss in the year they are incurred.

National Pension Scheme

National Pension Scheme is a retirement savings account for social security and welfare applicable for executives covered under the superannuation benefit of Vedanta Limited, on a choice basis. It was introduced to enable employees to select the treatment of superannuation component of their fixed salaries and avail the benefits offered by National Pension Scheme launched by Government of India. Vedanta Limited holds a corporate account with one of the pension fund managers authorised by the Government of India to which the Company contributes a fixed amount relating to superannuation and the pension annuity will be met by the fund manager as per rules of National Pension Scheme.

The Company has no further obligations under the scheme beyond its monthly contributions which are charged to the statement of profit and loss in the year they are incurred.

ii) Defined benefit plans

(a) Contribution to provident fund trust (the "trust")

The provident fund of the Iron Ore division is exempted under Section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. Conditions for grant of exemption stipulates that the employer shall make good deficiency, if any, between the return guaranteed by the statute and actual earning of the Fund. Based on actuarial valuation in accordance with Ind AS 19 and the Guidance note issued by the Institute of Actuaries of India for interest rate guarantee of exempted provident fund liability of employees, there is no interest shortfall in the funds managed by the trust as at 31 March 2024 and 31 March 2023. Having regard to the assets of the Fund and the return on the investments, the Company does not expect any deficiencies in the foreseeable future.

The Company contributed a total of C 13 crore for the year ended 31 March 2024 and C 8 crore for the year ended 31 March 2023. The present value of obligation and the fair value of plan assets of the trust are summarised below.

(b) Gratuity plan

In accordance with the Payment of Gratuity Act, 1972, the Company contributes to a defined benefit plan (the "Gratuity Plan") covering certain categories of employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, disability or termination of employment being an amount based on the respective employee's last drawn salary and the number of years of employment with the Company. The Gratuity plan is a funded plan and the Company makes contribution to recognised funds in India.

Based on actuarial valuations conducted as at year end using the projected unit credit method, a provision is recognised in full for the benefit obligation over and above the funds held in the Gratuity Plan.

The iron ore and oil & gas division of the Company have constituted a trust recognised by Indian Income Tax Authorities for gratuity to employees, contributions to the trust are funded with the Life Insurance Corporation of India (LIC) and ICICI Prudential Life Insurance Company Limited (ICICI).

The above plan assets have been invested in the qualified insurance policies.

The actual return on plan assets was C 11 crore for the year ended 31 March 2024 and C 9 crore for the year ended 31 March 2023.

The weighted average duration of the defined benefit obligation is 14.59 years and 14.03 years as at 31 March 2024 and 31 March 2023 respectively.

The Company expects to contribute C 18 crore to the funded defined benefit plans in during the year ended 31 March 2025. Sensitivity analysis

Below is the sensitivity analysis determined for significant actuarial assumptions for the determination of defined benefit obligations and based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period while holding all other assumptions constant.

The above sensitivity analysis may not be representative of the actual benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

In presenting the above sensitivity analysis, the present value of defined benefit obligation has been calculated using the projected unit credit method at the end of reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.

Risk analysis

The Company is exposed to a number of risks in the defined benefit plans. Most significant risks pertaining to defined benefit plans and management's estimation of the impact of these risks are as follows:

Investment risk

The Gratuity plan is funded with the LIC and ICICI. The Company does not have any liberty to manage the fund provided to LIC and ICICI.

The present value of the defined benefit plan obligation is calculated using a discount rate determined by reference to Government of India bonds. If the return on plan asset is below this rate, it will create a plan deficit.

Interest risk

A decrease in the interest rate on plan assets will increase the net plan obligation.

Longevity risk / Life expectancy

The present value of the defined benefit plan obligation is calculated by reference to the best estimate of the mortality of plan participants both during and at the end of the employment. An increase in the life expectancy of the plan participants will increase the plan obligation.

Salary growth risk

The present value of the defined benefit plan obligation is calculated by reference to the future salaries of plan participants. An increase in the salary of the plan participants will increase the plan obligation.

# Code on Social Security, 2020

The Code on Social Security, 2020 ('Code') relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified and the final rules/interpretation have not yet been issued. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.

27 Share based payments

The Company offers equity based and cash based option plans to its employees, officers and directors through the Company's stock option plan introduced in 2016 and Cairn India's stock option plan now administered by the Company pursuant to its merger with the Company.

The Vedanta Limited Employee Stock Option Scheme (ESOS) 2016

The Company introduced an Employee Stock Option Scheme 2016 ("ESOS"), which was approved by the Vedanta Limited shareholders to provide equity settled incentive to all employees of the Company including subsidiary companies. The ESOS scheme includes tenure based, business performance based and market performance based stock options. The maximum value of options that can be awarded to members of the wider management group is calculated by reference to the grade average cost-to-company ("CTC") and individual grade of the employee. The ESOS schemes are administered through VESOS trust and have underlying Vedanta Limited equity shares.

Options granted during the year ended 31 March 2024 and year ended 31 March 2023 includes business performance based, sustained individual performance based, management discretion and fatality multiplier based stock options. Business performances will be measured using Volume, Cost, Net Sales Realisation, EBITDA, Free Cash Flows, ESG & Carbon footprint or a combination of these for the respective business/ SBU entities.

The exercise price of the options is C 1 per share and the performance period is three years, with no re-testing being allowed.

Business Performance-Based and Sustained Individual Performance-Based Options:

The fair values of stock options following these types of vesting conditions have been estimating using the Black-Scholes-Merton Option Pricing model. The value arrived at under this model has been then multiplied by the expected % vesting based on business performance conditions (only for business performance-based options) and the expected multiplier on account of sustained individual performance (for both type of options). The inputs used in the Black-Scholes-Merton Option Pricing model include the share price considered as of the valuation date, exercise price as per the scheme/ plan of the options, expected dividend yield (estimated based on actual/ expected dividend trend of the company), expected tenure (estimated as the remaining vesting period of the options), the risk-free rate (considered as the zero coupon yield as of the valuation date for a term commensurate with the expected tenure of the options) and expected volatility (estimated based on the historical volatility of the return in company’s share prices for a term commensurate with the expected tenure of the options). The exercise period of 6 months post vesting period has not been considered as the options are expected to be exercised immediately post the completion of the vesting period.

Weighted average share price at the date of exercise of stock options and exercise price for stock options during the year ended 31 March 2023 was C 411.80 and C 286.85, respectively.

Out of the total expense of C 49 crore (31 March 2023: C 50 crore) pertaining to above options for the year ended 31 March 2024, the Company has capitalised C 2 crore (31 March 2023: C 2 crore) expense for the year ended 31 March 2024.

Weighted average share price at the date of exercise of stock options was C 210.14 (31 March 2023: C 303.80)

The weighted average remaining contractual life for the share options outstanding was 1.87 years (31 March 2023: 1.76 years).

The Company recognised total expenses of C 92 crore (31 March 2023: C 85 crore) related to equity settled share based payment transactions for the year ended 31 March 2024 out of which C 44 crore (31 March 2023: C 33 crore) was recovered from group companies. The total charge/ (reversal) recognised on account of cash settled share based plan during the year ended 31 March 2024 is C 1 crore (31 March 2023: C (2) crore) and the carrying value of cash settled share based compensation liability as at 31 March 2024 is C 1 crore (31 March 2023: C 2 crore).

Employee stock option plans of erstwhile Cairn India Limited:

The Company has provided CIESOP share based payment scheme to its employees.

CIESOP plan

There are no specific vesting conditions under CIESOP plan other than completion of the minimum service period of 3 years from the date of grant. Phantom options are exercisable proportionate to the period of service rendered by the employee subject to completion of one year. The exercise period is 7 years from the vesting date.

a)    Revenue from sale of products and from sale of services for the year ended 31 March 2024 includes revenue from contracts with customers of C 69,967 crore (31 March 2023: C 67,778 crore) and a net loss on mark-to-market of

C 304 crore (31 March 2023: loss of C 585 crore) on account of gains/ losses relating to sales that were provisionally priced as at the beginning of the year with the final price settled in the current year, gains/ losses relating to sales fully priced during the year, and marked to market gains/ losses relating to sales that were provisionally priced as at the end of the year.

b)    Majority of the Company’s sales are against advance or are against letters of credit/ cash against documents/ guarantees of banks of national standing. Where sales are made on credit, the amount of consideration does not contain any significant financing component as payment terms are within three months.

As per the terms of the contract with its customers, either all performance obligations are to be completed within one year from the date of such contracts or the Company has a right to receive consideration from its customers for all completed performance obligations. Accordingly, the Company has availed the practical expedient available under paragraph 121 of Ind AS 115 and dispensed with the additional disclosures with respect to performance obligations that remained unsatisfied (or partially unsatisfied) at the balance sheet date. Further, since the terms of the contracts directly identify the transaction price for each of the completed performance obligations there are no elements of transaction price which have not been included in the revenue recognised in the financial statements. Further, there is no material difference between the contract price and the revenue from contract with customers.

a. (i) The Government of India ("GoI"), acting through the Directorate General of Hydrocarbons ("DGH"), had raised a

demand up to 14 May 2020 for Government’s additional share of Profit Oil based on its computation of disallowance of cost incurred over retrospective re-allocation of certain common costs between Development Areas (DAs) of Rajasthan Block and certain other matters aggregating to C 9,545 crore (US$ 1,162 million) and applicable interest thereon representing share of Vedanta Limited and its subsidiary.

The Company had disputed the aforesaid demand and invoked arbitration as per the provisions of the Production Sharing Contract. The Company has received the Final Partial Award dated 22 August 2023 from the Arbitration Tribunal ('the Tribunal") as amended by order dated 15 November 2023 and 08 December 2023 ("the Award"), dismissing the Government’s contention of additional Profit Petroleum in relation to allocation of common development costs across Development Areas and certain other matters in accordance with terms of the Production Sharing Contract for Rajasthan Block, while disallowing some matters. Further, the Tribunal has decided that the Company was allowed to claim cost recovery of exploration cost for the purpose of computation of Profit Oil.

Pursuant to the Award, the Company has recognised a benefit of C 2,381 crore (US$ 289 million) in revenue from operations and reversed previously recognised impairment on PPE of C 550 crore (US$ 67 million) during the year ended 31 March 2024 (refer note (ii) for details of recoverable value). Further, the Company has reversed previously recognised impairment on investments in wholly owned subsidiary, Cairn India Holding Limited ("CIHL") of C 1,082 crore (US$ 131 million) on account of increase in valuation of CIHL pursuant to the Award.

GoI has sought an additional award or interpretation/ clarification on certain matters decided by the Tribunal under the Indian Arbitration and Conciliation Act, 1996 ("the Act") ("GoI Application"). The Tribunal vide its orders dated 15 November 2023 and 08 December 2023 has dismissed GOI’s interpretation and additional award applications in favour of the Company. The Company has adjusted the liability during the current year of C 970 crore (US$ 116 million) against the aforesaid benefits recognised as per the Award.

GoI has filed interim relief application on 03 February 2024 stating that the Company has unilaterally enforced the award although the quantification of the same is pending.

The Company is of the view that it is bound to implement the award. Further, the application by GoI does not meet the strict criteria for grant of interim injunction. The matter was heard on 26 March 2024 and order of the Tribunal is awaited.

GoI also has filed an appeal on 07 March 2024 against the Award in Delhi High Court and the matter was heard on 14 March 2024. No stay was granted and petition was not admitted. Next date of hearing is 01 May 2024.The Company is of the view that there is no merit in the challenge filed by GoI, as the Court cannot re-appreciate the evidence in Section 34 appeal as the interpretation by the Tribunal is plausible.

(ii) As at 30 September 2023, the Company has recognised a net impairment reversal of C 550 crore (US$ 67 million) on its assets in the oil and gas producing facilities pursuant to Final partial arbitration award (Refer note (i) above). The recoverable amount of the Company’s share in Rajasthan Oil and Gas cash generating unit ("RJ CGU") is determined to be C 5,897 crore (US$ 709 million) as at 30 September 2023. The recoverable amount of the RJ CGU is determined based on the fair value less costs of disposal approach, a level-3 valuation technique in the fair value hierarchy, as it more accurately reflects the recoverable amount based on the Company’s view of the assumptions that would be used by a market participant. This is based on the cash flows expected to be generated by the projected oil and natural gas production profiles up to 2040, the expected dates of cessation of production sharing contract (PSC)/ cessation of production from each producing field based on the current estimates of reserves and risked resources. Reserves assumptions for fair value less costs of disposal tests consider all reserves that a market participant would consider when valuing the asset, which are usually broader in scope than the reserves used in a value-in-use test. Discounted cash flow analysis used to calculate fair value less costs of disposal uses assumption for short-term oil price of US$ 79 per barrel for the next one year and tapers down to long-term nominal price of US$ 74 per barrel three years thereafter derived from a consensus of various analyst recommendations. Thereafter, these have been escalated at a rate of 2.4% per annum. The cash flows are discounted using the post-tax nominal discount rate of 11.32% derived from the post-tax weighted average cost of capital after factoring in the risks ascribed to PSC extension including successful implementation of key growth projects. Based on the sensitivities carried out by the Company, change in crude price assumptions by US $ 1/bbl and changes to discount rate by 1% would lead to a change in recoverable value by C 50 crore (US$ 6 million) and C 199 crore (US$ 24 million) respectively.

b.    During the year ended 31 March 2023, the Board of Cairn India Holdings Limited ("CIHL"), a wholly owned subsidiary of the Company, approved the scheme of buyback upto US$ 500 million @ approximately US$ 3.3 per share. Pursuant to the same, CIHL has bought back 5,18,51,837 shares for C 1,389 crore (US$ 168 million) (31 March 2023: 10,24,69,151 shares for C 2,665 crore (US$ 332 million)). Consequently, the Company has recorded a net loss of C 33 crore (31 March 2023: gain of C 910 crore), on account of:

i.    Realised loss of C 326 crore (31 March 2023: C 630 crore) on account of buy back of investment set off by reversal of previously recorded impairment of C 293 crore (31 March 2023: C 813 crore) on investment bought back.

ii.    An earlier impairment charge of C 727 crore had been reversed during the year year ended 31 March 2023 on remaining investment in CIHL.

c.    Represents certain items of CWIP which have been written off during the year ended 31 March 2024 as they are no longer expected to be used.

d.    During the year ended 31 March 2023, the Company had recognised an impairment reversal of C 3,187 crore on the investments in OCRPS ("Optionally Convertible Redeemable Preference Shares") of THL Zinc Ventures Limited ("THLZVL"), a wholly owned subsidiary of the Company.

Recoverable amount of the OCRPS had been determined based on the valuation of Zinc International business ("VZI") held under THLZVL. The recoverable amount of VZI had been determined based on the fair value less cost of disposal approach, using the discounted cash flow method ("DCF method"), a level 3 valuation technique in the fair value hierarchy. This was based on the cash generated by the extraction and sale of proved and probable reserves/ natural estimated resources which are yet to be exploited during the estimated predetermined life of mine ("LOM") after deducting costs of closure and rehabilitation after expiry of LOM. The cash flows were discounted using the post tax weighted average cost of capital ranging 8.40% to 10.44%. Based on the sensitivities carried out by the Company using the risk adjustment factor of 5%, the recoverable amount was higher than the carrying value, resulting in impairment reversal.

During the current year ended 31 March 2024, these OCRPS have been redeemed and the Company has recorded a foreign exchange gain of C 2,597 crore on this redemption.

Further, the Company held investments in OCRPS of C 2,495 crore in THL Zinc Holding BV ("THLZBV"), a wholly owned subsidiary of the Company which was fully impaired in the books of the Company. During the year ended 31 March 2024, THLZBV redeemed investments amounting to C 860 crore. Accordingly, the Company has recorded an impairment reversal of C 860 crore and foreign exchange gain of C 690 crore on the redemption of these OCRPS in THLZBV.

e.    Refer note 3(d)(iv)

f.    During the year ended 31 March 2023, the Company had recognised an impairment reversal of C 780 crore on its investments in Bloom Fountain Limited ("BFL"), a wholly owned subsidiary of the Company, mainly due to restart of commercial mining operations at Western Cluster Limited, Liberia ("WCL"), a wholly owned subsidiary of BFL.

During the previous year, WCL had signed a Memorandum of Understanding with the Government of Liberia to restart its mining operations and commenced commercial production at its Bomi Mines from July 2022.

g.    The GoI vide its notification dated 30 June 2022 levied Special Additional Excise Duty ("SAED") on production of crude oil, i.e., cess on windfall gain triggered by increase in crude oil prices which was effective from 01 July 2022. The consequential net impact of the said duty had on the results was presented as an exceptional item for the year ended 31 March 2023. SAED is continuing as levy like other duty of excise, that forms part of ordinary business of production of crude oil and hence, consequential impact of the said duty has been presented as an ordinary item in these financial statements for the year ended 31 March 2024.

38 Commitments, contingencies and guarantees A) Commitments

The Company has a number of continuing operational and financial commitments in the normal course of business including:

•    Exploratory mining commitments;

•    Oil & gas commitments;

•    Mining commitments arising under production sharing agreements; and

•    Completion of the construction of certain assets.

Other Commitments

(i)    The Power division of the Company has signed a long term power purchase agreement (PPA) with GRIDCO Limited for supply of 25% of power generated from the power station with additional right to purchase power (5%/7%) at variable cost as per the conditions referred to in PPA. The PPA has a tenure of twenty five years, expiring in FY 2037. The Company received favourable order from OERC dated 05 October 2021 for conversion of Independent Power Plant ("IPP") to Captive Power Plant ("CPP") w.e.f from 01 January 2022 subject to certain terms and conditions. However, OERC vide order dated 19 February 2022 directed the Company to supply power to GRIDCO from

19 February 2022 onwards. Thereafter, the Company has resumed supplying power to GRIDCO from 01 April 2022 as per GRIDCO’s requisition. The OERC vide its order dated 03 May 2023 has reviewed its previous order dated 05 October 2021 and directed the Company to operate Unit 2 as an IPP. Against the final order passed by the OERC, the Company has preferred an appeal before Appellate Tribunal for Electricity on 03 May 2023.

(ii)    During the year ended 31 March 2023, the Company had executed new Power Delivery Agreements ("PDA") with Serentica group companies (Serentica Renewables India 3 Private Limited, Serentica Renewables India 6 Private Limited and Serentica Renewables India 9 Private Limited), which are associates of Vedanta Inc, for procuring renewable power over twenty five years from date of commissioning of the combined renewable energy power projects ("the Projects") on a group captive basis. These Serentica group companies were incorporated for building

the Projects of approximately 871 MW (31 March 2023: 691 MW). During the current year, the Company has invested C 101 crore (31 March 2023: C 69 crore) in Optionally Convertible Redeemable Preference shares ("OCRPS") of C 10 each, of Serentica group companies. These OCRPS will be converted into equity basis conversion terms of the PDA, resulting in the Company holding twenty six percent stake in its equity. As at 31 March 2024, total outstanding commitments related to PDA with Serentica group companies are C 504 crore (31 March 2023: C 605 crore).

B)    Guarantees

The aggregate amount of indemnities and other guarantees on which the Company does not expect any material losses is C 25,690 crore (31 March 2023: C 16,899 crore). The Company has given guarantees in the normal course of business as stated below:

a)    Guarantees and bonds advanced to the customs authorities in India of C 1,681 crore relating to the export and payment of import duties on purchases of raw material and capital goods (31 March 2023: C 1,304 crore).

b)    Guarantees issued for the Company’s share of minimum work programme commitments of C 3,071 crore (31 March 2023: C 2,742 crore).

c)    Guarantees of C 59 crore (31 March 2023: C 65 crore) issued under bid bond.

d)    Bank guarantees of C 115 crore (31 March 2023: C 115 crore) has been provided by the Company on behalf of Vedanta Inc to Income tax department, India as a collateral in respect of certain tax disputes.

e)    The Company has given corporate guarantees, bank guarantees and also assigned its bank limits to other group companies primarily in respect of certain short-term and long-term borrowings amounting to C 17,772 crore

(31 March 2023: C 9,603 crore) (Refer Note 39).

f)    Other guarantees worth C 2,992 crore (31 March 2023: C 3,070 crore) issued for securing supplies of materials and services, in lieu of advances received from customers, litigation, for provisional valuation of custom duty and also to various agencies, suppliers and government authorities for various purposes. The Company does not anticipate any liability on these guarantees.

C)    Export Obligations

The Company has export obligations of C 1,800 crore (31 March 2023: C 1,262 crore) on account of concessional rates of import duty paid on capital goods under the Export Promotion Capital Goods Scheme and under the Advance Licence Scheme for the import of raw material laid down by the Government of India.

In the event of the Company’s inability to meet its obligations, the Company’s liability would be C 438 crore (31 March 2023: C 307 crore) reduced in proportion to actual exports, plus applicable interest.

The Company has given bonds of C 523 crore (31 March 2023: C 367 crore) to custom authorities against these export obligations.

D)    Contingent Liabilities

The Company discloses the following legal and tax cases as contingent liabilities:

a) Ravva Joint Operations arbitration proceedings

The Ravva Production Sharing Contract (PSC) obliges the contractor parties (including the Company (Cairn India Limited which subsequently merged with the Company, accordingly now referred to as the Company)) to pay a proportionate share of ONGC’s exploration, development, production and contract costs in consideration for ONGC’s payment of costs related to the construction and other activities it conducted in Ravva prior to the effective date of the Ravva PSC (the ONGC Carry). The question as to how the ONGC Carry is to be recovered and calculated, along with other issues, was submitted to an International Arbitration Tribunal in August 2002 which rendered a decision on the ONGC Carry in favour of the contractor parties whereas four other issues were decided in favour of Government of India (GoI) in October 2004 (Partial Award).

The GoI then proceeded to challenge the ONGC Carry decision before the Malaysian courts, as Kuala Lumpur was the seat of the arbitration. The Federal Court of Malaysia upheld the Partial Award. As the Partial Award did not quantify the sums, therefore, contractor parties approached the same Arbitration Tribunal to pass a Final Award in the subject matter since it had retained the jurisdiction to do so. The Arbitral Tribunal was reconstituted and the Final Award

was passed in October 2016 in the Company’s favour. GoI’s challenge of the Final Award has been dismissed by the Malaysian High Court and the next appellate court in Malaysia i.e. Malaysian Court of Appeal. GoI then filed an appeal at Federal Court of Malaysia. The matter was heard on 28 February 2019 and the Federal Court dismissed GoI’s leave to appeal. The Company has also filed for the enforcement of the Partial Award and Final Award before the Hon'ble Delhi High Court. The matter is currently being heard.

While the Company does not believe the GoI will be successful in its challenge, if the Arbitral Awards in above matters are reversed and such reversals are binding, the Company would be liable for approximately C 533 crore (US$ 64 million) plus interest (31 March 2023: C 526 crore (US$ 64 million) plus interest).

b)    Proceedings related to the imposition of entry tax

The Company challenged the constitutional validity of the local statutes and related notifications in the states of Odisha and Rajasthan pertaining to the levy of entry tax on the entry of goods brought into the respective states from outside. Post some contradictory orders of High Courts across India adjudicating on similar challenges, the Supreme Court referred the matters to a nine judge bench. Post a detailed hearing, although the bench rejected the compensatory nature of tax as a ground of challenge, it maintained status quo with respect to all other issues which have been left open for adjudication by regular benches hearing the matters.

Following the order of the nine judge bench, the regular bench of the Supreme Court heard the matters and remanded the entry tax matters relating to the issue of discrimination against domestic goods bought from other States to the respective High Courts for final determination but retained the issue of jurisdiction for levy on imported goods, for determination by the regular bench of the Supreme Court. Following the order of the Supreme Court, the Company filed writ petitions in respective High Courts.

On 09 October 2017, the Supreme Court has held that states have the jurisdiction to levy entry tax on imported goods. With this Supreme Court judgement, imported goods will rank pari-passu with domestic goods for the purpose of levy of Entry tax. The Company has amended its appeal (writ petitions) in Odisha to include imported goods as well.

The issue pertaining to the levy of entry tax on the movement of goods into a Special Economic Zone (SEZ) remains pending before the Odisha High Court. The Company has challenged the levy of entry tax on any movement of goods into SEZ based on the definition of 'local area’ under the Odisha Entry Tax Act which is very clear and does not include a SEZ. In addition, the Government of Odisha further through its SEZ Policy 2015 and the operational guidelines for administration of this policy dated 22 August 2016, exempted the entry tax levy on SEZ operations.

The total claims against the Company (net of provisions made) are C 767 crore (31 March 2023: C 774 crore) including interest and penalty till the date of order. Further, interest and penalty if any, would be additional.

c)    Miscellaneous disputes- Income tax

The Company is involved in various tax disputes amounting to C 543 crore (31 March 2023: C 543 crore) relating to income tax for the periods for which initial assessments have been completed. These mainly relate to the disallowance of tax holiday for 100% Export Oriented Undertaking under section 10B of the Income Tax Act, 1961, disallowance of tax holiday benefit on production of gas under section 80IB of the Income Tax Act, 1961, on account of depreciation disallowances under the Income Tax Act and interest thereon which are pending at various appellate levels.

The Company believes that these disallowances are not tenable and accordingly no provision is considered necessary.

d)    Miscellaneous disputes- Others

The Company is subject to various claims and exposures which arise in the ordinary course of conducting and financing its business from the excise, indirect tax authorities and others. These claims and exposures mostly relate to the assessable values of sales and purchases or to incomplete documentation supporting the Company’s returns or other claims.

The approximate value of claims (excluding the items as set out separately above) against the Company totals to C 2,673 crore (31 March 2023: C 2,733 crore).

Based on evaluations of the matters and legal advice obtained, the Company believes that it has strong merits in its favor. Accordingly, no provision is considered at this stage.

Except as described above, there are no pending litigations which the Company believes could reasonably be expected to have a material adverse effect on the results of operations, cash flows or the financial position of the Company.

a.    The name of ultimate holding Company "Volcan Investments Limited" has been changed to “Vedanta Incorporated", effective 13 October 2023.

b.    These entities are subsidiary companies of VRL and VRL through its certain subsidiaries holds 61.95% in the Company.

c.    During the year ended 31 March 2023, due to change in shareholding of the intermediate holding company of Serentica group companies, the relationship of Vedanta group with these companies has changed from fellow subsidiaries to associates of Vedanta Incorporated (formerly known as Volcan Investments Limited) ("Vedanta Inc").

d.    Merged with the Company during the year ended 31 March 2024 (Refer note 3(d)(i)).

e.    Liquidated during the year ended 31 March 2023.

f.    Disposed off during the year ended 31 March 2024 (Refer note 3(d)(iv)).

g.    Facor Power Limited ("FPL") merged into Ferro Alloys Corporation Limited ("FACOR"), effective 21 November 2022.

h.    Refer Note 41(c)

i.    Incorporated during the year ended 31 March 2023.

j.    Acquired during the year ended 31 March 2024.

k.    Incorporated during the year ended 31 March 2024.

Ultimate Controlling party

Vedanta Limited is a majority-owned and controlled subsidiary of Vedanta Resources Limited ("VRL"). Vedanta Inc and its wholly owned subsidiary together hold 100 % of the share capital and 100 % of the voting rights of VRL. Vedanta Inc is 100 % beneficially owned and controlled by the Anil Agarwal Discretionary Trust ("Trust"). Vedanta Inc, Volcan Investments Cyprus Limited and other intermediate holding companies except VRL do not produce Group financial statements.

H) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries). The Company has not received any fund from any party(s) (Funding Party) with the understanding that the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by or on behalf of the Company (Ultimate Beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

K)    The Company reduced its loan receivable from Vedanta Limited ESOS Trust by C 99 crore (31 March 2023: C 125 crore) on exercise of stock options by employees. Further, the Company has given an additional loan of C 200 crore to Vedanta Limited ESOS Trust for purchase of shares.

L)    Bank guarantee given by the Company on behalf of Vedanta Inc (formerly known as Volcan Investments Limited) in favour of Income Tax department, India as collateral in respect of certain tax disputes of Vedanta Inc.

M)    The Company has a Brand license and strategic service fee agreement ("the Agreement") with Vedanta Resources Limited ("VRL") for the use of brand 'Vedanta' and providing strategic services which envisaged payment to VRL at 3% of turnover of the Company. The Company has recorded an expense of C 1,879 crore (net of discount) (31 March 2023:

C 1,344 crore) for the year ended 31 March 2024. The Company generally pays such fee in advance, based on its estimated annual turnover.

During the year ended 31 March 2023, the Company executed a sub-licensing agreement for its existing Brand License and Strategic Services Fee agreement with VRL consequent to which it had sub-licensed the brand license and strategic services to its subsidiary HZL with effect from 01 October 2022. Based on independent benchmarking analysis, an annual fee of 2% of HZL's annual consolidated turnover was agreed, of which 1.70% would be passed on as a sub-licensing fee to VRL. Consequently, the Company has recognised an income of C 561 crore (31 March 2023: C 318 crore) and an expense of C 477 crore (31 March 2023: C 270 crore) for the year ended 31 March 2024.

During the year, VRL has assigned the Agreement to its wholly owned subsidiary, Vedanta Resources Investments Limited ("VRIL"), whereby the Company will fulfil its future obligations under the Agreement via VRIL.

N)    During the year ended 31 March 2021, the Directorate General of Foreign Trade ("DGFT") had issued scrips worth

C 216 crore to the Company under the Target Plus Scheme ("TPS") that must be utilised by February 2023. Out of these, scrips amounting to C 48 crore and C 3 crore had been allocated to HZL and BALCO, respectively and corresponding liabilities to HZL and BALCO has been recorded in the books of the Company. As at 31 March 2024, scrips of C 28 crore and C 3 crore are yet to be utilised with respect to HZL and BALCO, respectively. As the TPS license had expired, the Company had created a provision against these scrips and written back its payable to HZL and BALCO in the year ended 31 March 2023.

O)    During the year ended 31 March 2024, the Company has renewed loan provided to Sterlite Iron and Steel Company Limited for a further period of 12 months. The loan balance as at 31 March 2024 is C 5 crore (31 March 2023: C 5 crore). The loan

is unsecured in nature and carries an interest rate of 12.80% per annum. The loan including accrued interest thereon have been fully provided for in the books of the Company.

P)    During the year ended 31 March 2023, the Company executed an agency contract with VRL. Pursuant to which, the Company procured calcined alumina amounting to C 1,054 crore (31 March 2023: C735 crore) on which an agency commission of C 5 crore (31 March 2023: C 4 crore) is paid to VRL.

Q)    Vedanta Resources Limited ("VRL"), as a parent company, has provided financial and performance guarantee to the Government of India for erstwhile Cairn India group's ("Cairn") obligations under the Production Sharing Contract ('PSC') provided for onshore block RJ-ON-90/1, for making available financial resources equivalent to Cairn's share for its obligations under the PSC, personnel and technical services in accordance with industry practices and any other resources in case Cairn is unable to fulfil its obligations under the PSC.

Similarly, VRL has also provided financial and performance guarantee to the Government of India for the Company's obligations under the Revenue Sharing Contract (“RSC“) in respect of 51 Blocks awarded under the Open Acreage Licensing Policy ("OALP") by the Government of India, out of which 5 blocks were relinquished during the previous year.

As a consideration for the guarantee with respect to the PSC, the Company pays an annual charge of 1.2% of net exploration and development spend, subject to a minimum annual fee of C 41 crore (US$ 5 million), in ratio of participating interests held equally by the Company and its step-down subsidiary, Cairn Energy Hydrocarbons Ltd ("CEHL"). As regards the RSC, the Company paid a one-time charge of C 183 crore (US$ 25 million), i.e., 2.5% of the total estimated cost of initial exploration phase of approx.C 7,330 crore (US$ 1 billion), in the year ended 31 March 2021, and pays an annual charge of 1% of spend, subject to a minimum fee of C 80 crore (US$ 10 million) and maximum fee of C 160 crore (US$ 20 million) per annum.

Accordingly, the Company has recorded a guarantee commission expense of C 123 crore ($ 15 million) (31 March 2023:

C 157 crore ($ 20 million)) for the year ended 31 March 2024 and C 58 crore ($ 7 million) (31 March 2023: C 75 crore ($ 9 million)) is outstanding as a pre-payment as at 31 March 2024.

40    Subsequent events

Subsequent to the year end, the Regional Controller of Mines, Bengaluru issued an order (“the Order") for temporary suspension of mining operations for iron ore mines at Chitradurga, Karnataka, citing non-compliances with the approved mining plan. The Company believes that there is no material impact from this Order, since the Company has sufficient mining and evacuation capacity. The Company is confident of demonstrating compliance with the approved mining plan and obtaining revocation of the said Order, as envisaged in the Order.

There are no other material adjusting or non-adjusting subsequent events, except as already disclosed.

41    (a) The Company has incurred gross amount of C 246 crore (31 March 2023: C 227 crore) towards Corporate Social

Responsibility (CSR) as per Section 135 of the Companies Act, 2013:

Investment made by SMCL in Desai Cement Company Private Limited - 18,52,646 equity shares of C 10 each.

Investment made by MEL in Fujairah Gold FZC - 33,590,300 equity shares of AED 100 each.

Investments made by THLZVL in THL Zinc Ltd - 1,000 ordinary shares of $ 1 each, 90,000 ordinary shares of $ 100 each and 70,00,000 OCRPS of $ 1 each.

3    During the year ended 31 March 2024, the Company has created charge over the below assets in respect of borrowings availed by its wholly owned subsidiaries:

i)    13,94,35,527 equity shares of HZL, 89,001 equity shares of THLZVL and 37,38,000 equity shares of THL Zinc Holding BV having an aggregate carrying amount of C 2,257 crore against the loan facility of US$ 900 million availed by THLZVL.

ii)    12,50,000 equity shares of SRL having a net aggregate carrying amount of C 7 crore and movable fixed assets of the Company and certain intangible assets to the extent of 1x of the outstanding NCDs amounting to C 1,600 crore issued by SRL.

4    Details of investments made and guarantees provided are given in Note 6 and Note 38B, respectively.

5    The underlying loans have been given for business purpose.

(d) The Company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that audit trail feature is not enabled in the SAP application for direct changes to data in certain database tables, which is restricted to certain IDs with system administrator user access in order to optimise system performance. However, these system administrator rights have been disabled subsequent to the year end. Further, no instance of audit trail feature being tampered with was noted in respect of software.

44 Other matters

a) The Company purchases bauxite under long term linkage ("LTL") arrangement with Orissa Mining Corporation Ltd (hereafter referred as "OMC") at provisional price of C 1,000/MT from October 2020 onwards based on interim order dated 08 October 2020 of the Hon’ble High Court of Odisha, which is subject to final outcome of the writ petition filed by the Company.

The last successful e-auction based price discovery was done by OMC in April 2019 at C 673/MT and supplied bauxite at this rate from September 2019 to September 2020 against an undertaking furnished by the Company to compensate any differential price discovered through future successful national e-auctions. Though OMC conducted the next e-auction on 31 August 2020 with floor price of C 1,707/MT determined on the basis of Rule 45 of Minerals Concession Rules, 2016 (hereafter referred as the 'Rules’), no bidder participated at that floor price and hence the auction was not successful. However, OMC raised demand of C 281 crore on the Company towards differential pricing and interest for bauxite supplied till September 2020 considering the auction base price of C 1,707/MT.

The Company had then filed a writ petition before Hon’ble High Court ("HC") of Odisha in September 2020, which issued an interim Order dated 08 October 2020 directing that the petitioner shall be permitted to lift the quantity of bauxite mutually agreed on payment of C 1,000/MT and furnishing an undertaking for the differential amount, subject to final outcome of the writ petition.

OMC re-conducted e-auction on 09 March 2021 with floor price of C 2,011/MT, which again was not successful. On 18 March 2021, Cuttack HC issued an order that the current arrangement of bauxite price @ C 1000/MT will continue for the FY 2021-22. Further, on 06 April 2022, the Hon’ble Cuttack HC directed that the current arrangement will continue for the FY 2022-23 also.

An interim application was filed on 11 May 2023 in Odisha High Court seeking directions for OMC to continue the supplies for FY 2023-24 and extend the LTL agreement. Honourable Odisha High Court vide order dated 15 May 2023, passed an order that unless the fresh agreement is not executed interim arrangement cannot be granted. Accordingly, as per the direction of honourable court, LTL was executed with OMC on 16 May 2023 for supply of 2.4 MT bauxite annually at a price of C 1000/MT. On 26 September 2023, OMC conducted the 10^th National e-auction tender for sale of 300 KT bauxite

at floor price of C 2,429/MT after considering the pricing as per Rule 45 of the Rules. The said auction was not successful since no participation was observed in the bidding.

Supported by legal opinions, management believes that the provisions of Rule 45 of the Rules are not applicable to commercial sale of bauxite ore and hence, it is not probable that the Company will have any financial obligation towards the aforesaid commitments over and above the price of C 673/MT discovered vide last successful e-auction.

However, as an abundant precaution, the Company has recognised purchase of Bauxite from September 2019 onwards at the aforesaid rate of C 1,000/MT.

(b) The Ministry of Environment, Forest and Climate Change ("MOEF&CC") has revised emission norms for coal-based power plants in India. Accordingly, both captive and independent coal-based power plants in India are required to comply with these revised norms for reduction of sulphur oxide (SOx) emissions for which the current plant infrastructure is to be modified or new equipments have to be installed. The Company is required to comply with the norms by 31 December 2026 via MoEF&CC’s notification dated 05 September 2022.

45 Other Statutory Information

a)    The Company does not have any material transactions with companies struck off as per the Companies Act, 2013.

b)    The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.

c)    The Company has not been declared wilful defaulter by any bank or financial institution or other lender.

d)    The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

e)    The Company has not traded or invested in Crypto currency or Virtual currency during the financial year.

f)    The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961).