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VEDANTA RESOURCES PLC

Credit Summary

(As of 30 September 2017)

http://www.vedantaresources.com/


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TABLE OF CONTENTS

Introduction ................................................................................................................................................................................. 3

Investment Case .......................................................................................................................................................................... 3

Strategic Priorities........................................................................................................................................................................ 8

Key Credit Metrics ....................................................................................................................................................................... 8

Credit Ratings ............................................................................................................................................................................... 9

Appendix .................................................................................................................................................................................... 10

Group Structure ..................................................................................................................................................................... 10

Financial Summary and Key Financial Ratios ......................................................................................................................... 11

Group Borrowings Summary.................................................................................................................................................. 12



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Introduction

Vedanta Resources plc (“Vedanta” or the “Group”) is a global diversified natural resources group. Vedanta has

interests in zinc, lead, silver, copper, aluminium, oil and gas, iron ore and commercial power.

Vedanta Resources plc has listed and unlisted operating subsidiaries across India and Africa.

For the half year ended 30 September 2017, the Vedanta Group generated revenue of US$6.8 billion, EBITDA of

US$1.7 billion and US$232 million of free cash flow post expansion capex.

Consolidated Group Results (in US$ mn or as stated) H1 FY2018 H1 FY2017 FY2017

Revenue 6,767 4,868 11,520

EBITDA 1,694 1,233 3,191

EBITDA margin excluding custom Smelting1 (%) 34% 33% 36%

Operating Profit before special items 1,168 720 2,161

Free Cash Flow after Growth Capex 232 166 1,544

Underlying attributable Profit2 26 (52) 453

Earnings per Share on Underlying Profit (US cents) 9.5 (18.8) 16.13

ROCE (excluding project capital work in progress) 12.1% 7.8%* 15.6%

Total Dividend (US cents per share) 24 20 55

1 Excludes custom smelting revenue and EBITDA at Copper and Zinc-India operations as custom smelting has different business economics

2 Based on profit for the period, after adding back special items and other gains and losses, and their resultant tax and non-controlling interest effects

3 The Group has reclassified US $ 41.6 million arising on the bond buybacks completed during the year ended FY2017 as special items

* Restated based on annualized operating profit net of taxes for H1 FY2017. Capital employed excludes project work in progress and exploratory assets

Investment Case

Our strategy is focused on delivering sustainable long-term returns to our stakeholders. This is demonstrated by our stable shareholder returns coupled with our proactive deleveraging and liability management, low-cost production ethos and focus on growth in cash flows.

Large, Low Cost and Diversified Asset Base

A low cost production profile, in the lowest quartile at our major assets, enables the Company to generate positive free cash flow even at low commodity prices. Our competitive cost base combined with our portfolio of large, high quality, diversified assets enables us to deliver value throughout the commodity cycle.



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Note: Peers include BHP Billiton, Rio Tinto, Anglo American, Glencore, Teck Resources and Freeport

Attractive Commodity Mix

Vedanta’s operations cover a range of attractive commodities with strong fundamentals and this has enabled

the Company to deliver strong margins through the commodity cycle. This year, markets have seen an upturn

driven by improved demand and supply side constraints, which has benefited the commodities sector,

particularly zinc. Our portfolio of base metals and oil & gas have the highest projected demand growth in the

coming years among commodities. Our attractive and balanced mix of commodities helps to reduce any possible

impact from single commodity volatility.

Sources: Wood Mackenzie, US EIA

Oil and Gas Zinc Aluminium Copper Power Iron Ore Coal Precious Other

% Revenue (CY 2016)

Peers



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Ideally Positioned to Capitalise on India’s Growth Potential

India is the fastest growing G20 economy in the world with strong fundamentals and demographics. Currently,

per capita consumption of metals in India is 70 to 80% below global averages. As the country expands to

become a US$6 trillion economy with a population of 1.5 billion by 2030, domestic consumption of key

commodities will only increase. Furthermore, the Government of India has introduced a number of important

reforms, which will help to improve the business environment, attract global investment and drive faster

growth.

Vedanta, as the only diversified natural resources company in India, is uniquely positioned to cater to that

demand.

Source: Wood Mackenzie, Global Insight, EIA, BMI Research

Well-invested Assets Driving Industry Leading Growth

With a significant amount of our capital investment programme completed, we are now ramping up and have

commenced reaping benefits of those investments. We will be able to reach our full capacities with limited

incremental capex spend and consequently, our cash flows are poised for a significant increase. Further details

on our capex is set out below:

Prioritised capital to high-return, low-risk projects to maximise cash flows

Disciplined capex spend for FY2017 at $0.7bn against original guidance of $1bn

H1 FY2018 capex spent $0.3bn, H2 FY2018 expected at $0.8bn



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Revised capex guidance to $1.1bn for FY2018 ($1.0bn+$0.1bn optional capex) compared to original guidance

of $1.2bn (1bn+$0.2bn optional capex)

o $0.3bn for Zinc India and $0.2bn for Gamsberg

o $0.1bn for Aluminium and Power

o $0.3bn for O&G – capex cycle to restart from H2

o $0.1bn for Copper – 400ktpa smelter expansion

o Optionality capex includes Lanjigarh refinery expansion

Strong Financial Profile

Our strong operational and cost performance coupled with our continued focus on proactive balance sheet

management has strengthened the financial profile.

Solid revenue generation (US$11.5 billion in FY2017) and EBITDA performance (US$3.2 billion in FY2017)

Strong and growing free cash flow post growth capex of US$1.5 billion in FY2017.

Our cost saving programme which is currently underway, achieved US$814 million over the two years to

FY2017, ahead of our plan to deliver US$1.3 billion in four years by FY2019

As of 30 Sep 2017, Vedanta Resources Plc standalone average debt maturity enhanced to > 4 years with no

large maturities over the next 12-15 months

As of 30 Sep 2017, cash and liquid investments of $6.1 billion and undrawn committed lines of US$0.8 billion

0.20.1

0.2 0.3

0.20.3

0.2

0.3

0.50.2 0.3

0.1

0.1

0.1

0.1

0.2

0.1

0.2

0.6

2.3

0.7

2.2

0.3

0.5

0.8

1.3

Oil & Gas Capex Zinc Capex Al & Power Capex

Copper Capex Optionality Capex Free Cash Flow (pre-capex)

FY2016 FY2017 FY2019e H1 FY2018e H1 FY2018e



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Focus on FCF and return on capital

Proven Track Record

We have a proven management team with a diverse and extensive range of sector and global experience who ensure that operations are run efficiently and responsibly. We have taken a disciplined approach to development, growing our production steadily with an ongoing focus on operational efficiency and cost savings. Since our listing in 2003, our assets have delivered 16% annualised growth in copper equivalent terms.

Note: 1. All commodity and power capacities rebased to copper equivalent capacity (defined as production x commodity price / copper price) using average commodity prices for FY17. Power rebased using FY16 realisations, copper custom smelting production rebased at TC/RC for FY17, iron ore volumes refers to sales with prices rebased at average 58% FOB prices for FY17. Iron ore assumed at FY2017 production of 10.2 million tonnes

1.0 1.8 1.5

8.7%6.2%

15.6%

FY 2015 FY 2016 FY 2017

FCF ($ bn) ROCE, RHS

0

500

1,000

1,500

2,000

2,500

3,000

FY04

FY05

FY06

FY07

FY08

FY09

FY10

FY11

FY12

FY13

FY14

FY15

FY16

FY17

Targ

et

Co

pp

er E

qu

ivale

nt

Pro

du

cti

on

(kt)

Zinc-Lead Silver Copper Aluminium Power Iron Ore Oil & Gas

Design

Capacity1

+65%



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Strategic Priorities

Vedanta’s strategic priorities remain largely unchanged. We are progressing on the ramp ups in a disciplined

manner. We remain focused on optimizing capital expenditure and operating costs to generate strong free cash

flow and using that to de-lever the balance sheet. We remain committed to achieve our objective of zero harm

and creating sustainable value to all shareholders. We are also constantly investing in exploration to continue

our successful track record in identifying the next generation resources.

Key Credit Metrics

Metric H1 FY2018 FY2017 Covenant

(Up to Sep’17)

Net Debt/ EBITDA 2.5x 2.7x < 3.75x

EBITDA/Net Interest Expense1 3.6x 4.0x > 3.00x

Net Assets/Debt 1.48x 1.42x > 1.40x

Notes: 1 .Interest includes Capitalized Interest

Several of our facilities initially had the covenants of Net Debt/EBITDA of <2.75x and EBITDA/Net Interest of >4.0x, as disclosed in previous periods. These

have been waived /relaxed by lenders for the period ended September 30, 2017 and progressively revert to original levels by March 2019. The above table

shows the strictest of the covenants.



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Credit Ratings

Vedanta Plc is rated by two major rating agencies, S&P and Moody’s:

Agency Issuer Rating Issue Rating Outlook

S&P * B+ B+ Stable

Moody’s** Ba3 B2 Stable

* Last rating action on Jan 15 2017

**Last rating action on Nov 20, 2017

Additionally, some of our key subsidiaries are rated by domestic Indian rating agencies as summarised below:

Subsidiary Long Term Rating – CRISIL*

Long Term Rating – India Ratings**

Long Term Rating – ICRA***

Vedanta Ltd AA / Stable AA / Positive

Hindustan Zinc AAA / Stable -

BALCO AA- / Stable - AA- / Stable

TSPL - A+ / Positive

* Last rating action for the Group on April 29, 2017

**Last rating action for VEDL on Nov 1, 2017 and TSPL on Nov 24, 2017

***Last rating action for BALCO on Nov 20, 2017



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APPENDIX

GROUP STRUCTURE

Note: Shareholding post Cairn merger

1. 50% of the share in the RJ block is held by a 100% subsidiary of Vedanta Limited



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FINANCIAL SUMMARY AND KEY FINANCIAL RATIOS

FY2016 FY2017 H1 FY2018

Revenues 10,738 11,520 6,767 % Growth yoy -17% 7% 39% EBITDA 2,336 3,191 1,694 % margin 22% 28% 25% % margin(excluding custom smelting) 28% 36% 34%

Operating Profit before special items 881 2,161 1,168 % margin 8% 19% 17% Profit After Tax (3,502) 880 410 Attributable Profit (1,837) (23) (66)

Underlying Attributable Profit (385)1 452 26 Gross Interest Expense# (1,377)1 (1,441)2 (718) Cash generated from Operations 3,502 3,494 1,246 Capital Expenditure- Expansion 566 668 272

Capital Expenditure- Sustaining 185 145 109

Total Assets 30,319 31,503 28,142 Cash and Liquid Investments3 8,937 9,725 6,103 Total Debt3 16,263 18,229 15,121 Net Debt 7,329 8,504 9,018

# Includes capitalised interest; FY2016 numbers considers non-cash impairment of $3.3 bn (net of tax)

1. Adjusted for one off gain on bond buyback of $21m

2. The Group has reclassified US $ 41.6 million arising on the bond buybacks completed during the year ended FY2017 as special items

3. Includes HZL temporary short term borrowing of $ 1.2bn as of 31 Mar 2017 and $ 91mn as of 30 Sep 2017



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GROUP BORROWINGS SUMMARY

CASH AND DEBT – ENTITY WISE (AS OF 30 SEPTEMBER 2017)

The Group’s cash and liquid investments are held primarily in high-quality debt mutual funds and banks with high credit ratings. The underlying investment portfolios of the Indian subsidiaries are reviewed by CRISIL (a subsidiary of Standard & Poor) and they have rated Cash and Liquid investments at Vedanta Limited as “Very Good” for FY2017.

Debt numbers at Book Values. Since the table above shows only external debt, it excludes any inter-company loans As on 30 Sep 2017, there was no outstanding on the receivable at Vedanta plc from TSMHL. 1. Includes Investment Companies 2. Cairn India Holdings limited is a 100% subsidiary of Vedanta Limited which holds 50% of the share in the RJ block 3. Merged with Vedanta Limited w.e.f April 2017 4. Others include: CMT, Fujairah Gold, MEL, VGCB, Sesa Resources Ltd, other Iron Ore companies, and Vedanta Ltd. Investment companies



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TERM DEBT MATURITY PROFILE (AS OF 30 SEPTEMBER 2017)

Notes: Debt numbers at face value; As of date, term debt of $12.2bn ($6.1bn at Vedanta plc and $6.1bn at Subsidiaries); Numbers may not foot due to rounding Excludes working capital of $0.2bn, short term debt of $2.1bn, Zinc India borrowing of $0.1bn and preference share of $0.5bn

Vedanta plc Maturities

Mega refinancing successfully completed o Raised 1.84bn in August 2017 through a combination of $1bn bond and $840m bank loans to

address near term debt maturities; o Average maturity of PLC debt increased to over 4 years and avg cost of borrowings reduced by

25bps.

Residual FY2018 maturities: shall be settled on due date in Q4 FY2018

Refinancing for 2019 maturities in process Vedanta Ltd Maturities

Gross debt reduction and maturity extension o Reduced gross debt by $2.0bn1 since April 2017 o Raised $300mn through competitively priced capital market instruments to refinance high cost bank

debt o Lowered the avg cost of borrowing by ~70-80bps on bank debt portfolio with improving credit

profile

Strong credit profile: CRISIL (A S & P subsidiary) AA with stable outlook; India Ratings (A Fitch Subsidiary) revised Outlook from AA Stable to AA Positive

Cash and liquid investments of $6.1bn and undrawn committed lines of $0.8bn 1. Excluding temporary borrowing at Zinc India



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DIVERSIFIED FUNDING SOURCES – TERM DEBT BREAKDOWN BY TYPE

(As of 30 September 2017, Numbers as a % of total term debt of $12.2 billion)

56% of the gross debt is fixed interest rate, 44% floating rate

49% of the gross debt is USD-denominated, 51% is INR-denominated



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BONDS OUTSTANDING (AS OF 30 SEPTEMBER 2017)

The group has USD-denominated bonds issued by Vedanta Resources plc as tabulated below:

Issuer ISIN Maturity Date

Issue Date

Currency

Issue Amount ($ mn)

O/S Amount ($ mn)

Coupon Listing Coupon Dates

Bonds

Vedanta Resources plc RegS: USG9328DAH38

144A: US92241TAH59 Jan 2019 May 2013 USD 1,200 252 6.00% SGX

June

and Dec

Vedanta Resources plc RegS: USG9328DAG54 144A: US92241TAG76

June 2021 June 2011 USD 900 670 8.25% SGX June

and Dec

Vedanta Resources plc RegS: USG9328DAM23 144A: US92241TAK88

July 2022 Jan 2017 USD 1,000 1,000 6.375% SGX Jan and

July

Vedanta Resources plc RegS: USG9321DAJ93

144A: US92241TAJ16 May 2023 May 2013 USD 500 500 7.125% SGX

June

and Dec

Vedanta Resources plc

RegS: USG9328DAP53

144A: US92241TAM45

Aug 2024 Aug 2017 USD 1,000 1,000 6.125% SGX Feb and

Aug


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