Cairn - Vedanta India

Name Vedanta Resources plc

Domain Metals and mining

Key people Anil Agarwal

(Group Chairman)
Navin Agarwal
(Deputy Executive Chairman)
Tom Albanese
(Chief Executive Officer)
Headquarters London, United Kingdom (Founded in
Mumbai in 1976)

Company History

Vedanta Resources plc is a global diversified metals and mining company with its headquarters
in London, United Kingdom. It is the largest mining and non-ferrous metals company in India and has
mining operations in Australia and Zambia and oil and gas operations in three countries. Its main
products are copper, zinc, aluminium, lead, iron ore and petroleum. It is also developing
commercial power stations in India in Odisha (2,400 MW) and Punjab (1,980 MW) The company is
principally owned by Indian billionaire Anil Agarwal through Volcan Investments, a holding vehicle
with a 61.7% stake in the business.

Vedanta is listed on the London Stock Exchange.

They continue to place utmost IMPORTANCE on safety, responsibility, sustainability and on continuing
a growing relationship with the community we operate in.

Social media presence:

The Board of Vedanta Resources plc believes that high standards of Corporate Governance are critical
to business success. Vedanta is committed to high standards of corporate governance for which the
Board of directors are accountable to shareholders.

The Board also believes that, in the interests of shareholders, the application of corporate
governance standards must reflect the nature and location of the Group's businesses, the ownership
of the Company and its subsidiaries, and the Group's development needs whilst ensuring the talents
within the Group are utilised to their fullest potential.

Operation: Copper, Zinc, Aluminium, iron ore, oil and gas

2016 Highlights

Vedanta demonstrated resilience this year: delivering healthy EBITDA margins, strong free CASH flow
and lower gross and net debt in a volatile commodities market. In India, we achieved record
production in aluminium, zinc, lead, silver and copper cathodes, with significant increases in power
generation. We made good progress on the turnaround of our Copper business in Zambia and broke
ground at the Gamsberg zinc deposit in South Africa. With our combination of low-cost and well
invested assets, we look forward to the future with cautious optimism.

Financial Highlights

 Revenue of US$10.7 billion and EBITDA1 of US$2.3 billion, lower than FY2015 primarily due
to lower COMMODITY PRICES (FY2015 Revenue: US$12.9 billion, FY2015 EBITDA:
US$3.7 billion)

 Adjusted EBITDA margin2 of 28% (FY2015: 38%), driven by low commodity PRICES

 Free cash flow3 of US$1.7 billion, up 63% (FY2015: US$1.0 billion), driven by optimisation of
operational, capital expenditure and working capital initiatives

 Net debt reduced by US$1.1 billion and gross debt reduced by US$0.4 billion during the year

 Underlying (loss) per share4 of (131.9) US cents (FY2015: (14.2) US cents)

 Basic loss per share of (665.8) US cents primarily due to a non-cash impairment of
US$3.3 billion (net of tax) and lower EBITDA, reflecting lower commodity prices

 Covenant modifications on bank loans at Vedanta Resources plc secured until the period
ending 30 September 2018 and complied with as on 31 March 2016

 S&P downgraded issuer credit rating from ‘BB’ to ‘B’ and Moody’s downgraded its corporate
family rating from ‘Ba1’ to ‘B2’ due to weak commodity prices – S&P subsequently revised the
outlook to ‘Stable’ in April 2016

 Hindustan Zinc Limited announced its highest ever SPECIAL dividend in Q4 (c. US$1.8 billion
including dividend distribution tax)

 Final dividend of 30 US cents per share

Business Highlights

 Simplification of the Group structure continues to be a priority

 Record production of zinc, lead and silver at Zinc India; aluminum, power and copper cathodes
at Copper India

 Commenced ramp-up of capacities at Aluminum, Power and Iron Ore divisions

 Entire Power portfolio of 9,000MW now operational

 Successful implementation of MangalaENHANCED Oil Recovery Programme at Cairn India

 Recommenced production at Goa Iron Ore operations, achieved exit run rate production of
0.8 million tonnes per month

 Continued ramp-up of production at the Konkola mines at Copper Zambia

 Strong cost performance, with lower cost of production across all businesses; cost SAVINGS of
c.US$325 million delivered in the year

Sustainability highlights

 2.25 million beneficiaries of our community investment

  US$ 37 million invested in community development

 42 million mt carbon footprint

 0.46 lost time INJURY frequency rate

 US$3.2 billion tax payments to exchequers

 2,283 full-time female employees

 100% of sites conduct periodic medical examinations for employees

 4,176 village meetings held

 1.53 million training hours delivered to all staff

 0 category 4 or 5 (severe) environmental incidents

 50% non-hazardous waste recycling rate

 23% water recycling rate

 42,240 man hours training on Code of Business Conduct & Ethics

SUSTAINABLE DEVELOPMENT

Our Sustainable Development Model resides at the heart of our business strategy. Developed keeping
in mind multiple sustainability imperatives - materiality and core values of Vedanta, UNGC's 10
principles, United Nation's SDGs and standards set by International Finance Corporation (IFC), ICMM
and OECD - the model acts as a driving force behind every intention, decision and action at Vedanta.
CAIRN VEDANTA MERGER

Vedanta Limited, Cairn India Limited (“Cairn India”) and Vedanta Resources plc (“Vedanta plc”
together with its subsidiaries, the “Group”), today announce revised and final terms to the
recommended merger between Vedanta Limited and Cairn India (the “Transaction”), that was
announced on 14 June 2015.

Key Highlights

o The Boards of Vedanta Limited and Cairn India have today approved revised and final terms for the
Transaction, taking into account prevailing market conditions and having regard to underlying
commercial factors.

o Pursuant to the revised and final terms, each Cairn India minority shareholder will receive for each
equity share held:

- 1 equity share in Vedanta Limited; and

- 4 Redeemable Preference Shares with a face value of INR 10 in Vedanta Limited, with a
coupon of 7.5% and tenure of 18 months from issuance.

- Implied premium of 20% to one month VWAP of Cairn India share price.

o The recent commodity price environment has further strengthened the strategic rationale of the
Transaction outlined at the announcement:

- Diversified Tier-I portfolio de-risks earnings volatility and drives stable cash flows through
the cycle.

- Strong historical evidence over the last 10 years, of diversified resources companies
generating total shareholder returns superior to single-commodity companies.

- Improved ability to allocate capital to the highest return projects across the portfolio. -
Greater financial flexibility to sustain strong dividend distribution.

- Cost savings and greater capital efficiency, with potential re-rating to benefit all
shareholders.

- Stronger balance sheet will allow for the Group’s overall cost of capital to be reduced. -
Consistent with stated corporate strategy to simplify the Group structure.

- Offers significant long term sustainable value enhancement for all shareholders.

o The Transaction offers significant benefits for Cairn India shareholders

- De-risked earnings and stable cash flows supporting investment and dividends through the
cycle, driving long term value.

- Attractive transaction terms.

- Exposure to Vedanta Limited’s world class metals and mining assets – low cost, long life and
well invested, delivering strong growth through production ramp ups.
 - Improved optionality to allocate capital and increased participation in cost savings. -
Increased free float and trading liquidity.

- Potential re-rating of the merged company.

o The Jurisdictional High Courts have convened the shareholder meetings for each of Vedanta Limited
and Cairn India on 8 September 2016 and 12 September 2016, respectively. - The Notice convening
the shareholder meetings will be sent to shareholders in due course.

o As previously announced, following completion of the Transaction:

- Vedanta plc ownership in Vedanta Limited is expected to decrease to 50.1% from its current
62.9% shareholding.

- Cairn India minority shareholders will own 20.2% and Vedanta Limited minority shareholders
will own a 29.7% stake in the enlarged entity.

Recommendations, Financial Advisers and Fairness Opinions The non-conflicted, independent

members of the Boards of Directors of Vedanta Limited, Cairn India and Vedanta plc unanimously
approved the revised merger terms. Independent valuers, Price Waterhouse & Co LLP and Walker
Chandiok & Co LLP, have provided their joint recommendation on the exchange ratio for consideration
by the Boards of Vedanta Limited and Cairn India. Lazard & Co., Limited has acted as financial advisor
to Vedanta Limited in relation to the Transaction and the Board of Directors of Vedanta Limited has
received a fairness opinion from Lazard India Private Limited with regard to the fairness of the
exchange ratio to Vedanta Limited, from a financial point of view. The Board of Directors of Cairn India
has received opinions from DSP Merrill Lynch Limited and JM Financial Institutional Securities Limited
as to the fairness of the exchange ratio to Cairn India, from a financial point of view. J.P. Morgan
Cazenove and Morgan Stanley are acting as joint financial advisors and joint corporate brokers to
Vedanta plc in relation to the Transaction.

Key Transaction Approvals Completion of the Transaction will be conditional on receipt of the
following approvals:

o Vedanta Limited and Cairn India shareholder approvals through postal ballot including e-voting :

- Majority of the minority shareholders voting required to vote in favour of the Transaction.

o At a High Court directed meeting (scheduled for 8 September 2016 for Vedanta Limited and 12
September 2016 for Cairn India):

- Majority in number and 75% in value of shareholders present and voting at the shareholder
meeting, required to vote in favour of the Transaction;

- Vedanta plc and Vedanta Limited can vote at the meetings for Vedanta Limited and Cairn
India, respectively.

- Additionally, for Vedanta Limited, majority in number and 75% in value of creditors present
and voting at the secured and unsecured creditor meeting (held separately), required to vote in favour
of the Transaction;

o Vedanta plc shareholder approval:

 - Simple majority of holders present and voting at the shareholder meeting planned for
September 2016 required to vote in favour of the Transaction.

o Ministry of Petroleum & Natural Gas

- vesting of Cairn PSC’s to Vedanta Limited.

o Jurisdictional High Courts where the registered offices of Vedanta Limited and Cairn India are
situated.

o Foreign Investment Promotion Board

- issue of redeemable preference shares to non-resident Cairn India shareholders.

o Regulatory and other approvals as may be required. The appointed date for the scheme has been
revised to 1 April 2016 from 1 April 2015 earlier. The Transaction is expected to close in Q1 CY2017.