Pes university

RR campus, Bangalore

Academic year
2024-2025

Department of commerce

Course: b.com

SUBJECT: Management accounting

(UM23BC141B)

Presented by: RAKSHA.P

GUIDED BY:
AAST. PROF SANGEETHA S KUMAR
PES UNIVERSITY
 VEDANTA LTD
Abstract
This study provides an overview of the analysis of financial statements of Vedanta
company LTD using ratio analysis tools. Vedanta Mining Company Limited stands as
a global natural resources and technology conglomerate, operating extensively
across India, South Africa, Liberia, and Namibia. Distinguished by its diverse portfolio
encompassing mining, oil and gas, and power generation, Vedanta has solidified its
position as a key player in India's economic landscape while gaining recognition on a
global scale. Specializing in the extraction and processing of vital minerals such as
zinc, lead, copper, and aluminium, the company follows an integrated value chain
from resource acquisition to the delivery of finished goods. Vedanta limited was
founded in 1976 by anil Agarwal.

Keywords: Vedanta mining, natural resources, oil and gas, financial performance,
ESG, copper mining, power generation, global presence, CSR.

INTRODUCTION:
Vedanta is a leading global natural resources and technology
conglomerate operating across India, South Africa, Liberia and Namibia.
It is a singularly diversified corporation that operates in a wide range of
natural resources, including oil and gas, aluminium, steel, copper, ferro
alloys, nickel, semiconductor, glass, and zinc, lead, and zinc ore. One of
the biggest names in the natural resources industry, Vedanta Limited,
has made a name for itself as a globally diversified corporation with a
stronghold in the mining, oil and gas, and power generation industries.
Since its founding, Vedanta has expanded to play a significant role in
India's economy and gain recognition on a global scale through its
dedication to sustainable development and ethical business practices.
Vedanta is a mining company that specialises in the extraction and
processing of mineral resources. Its commodities include zinc, lead,
silver, copper, iron ore, and aluminium. The company's exploration,
production, and refining strategies are all part of a larger value chain that
extends from the procurement of resources to the delivery of finished
goods.

Vedanta is committed to supplying the changing energy needs of a

dynamic world, as demonstrated by its oil and gas enterprises and
power production capabilities. The company's objective to be a
sustainable and socially responsible business in the industries it
operates in is in line with its pursuit of operational excellence, innovation,
and environmental stewardship.

Vedanta's commitment to environmental sustainability, worker welfare,

and community engagement is ingrained in its corporate character even
as it navigates the challenges of the global marketplace. This
introduction lays the groundwork for examining Vedanta Limited's many
facets and effects in the mining, energy, and other sectors.

Vedanta has established itself as a premier natural resources and

technology conglomerate throughout the years, concentrating on
portfolio expansion on a vast scale in India while maintaining operational
excellence that is measured against international standards.

We have contributed to the national coffers and generated thousands of

employment for the past twenty years, helping to foster the expansion of
the Indian economy.

It has established a thorough framework to lead the natural resources

industry in ESG. Vedanta is committed to reducing carbon emissions to
zero by 2050 or sooner. The organisation has pledged $5 billion over the
next 10 years to accelerate the transition to net-zero operations

Products
• Copper: Vedanta limited operates the largest, In India. This
contributes to nearly 50% of Vedanta Limited's profits. In early
 2016, due to local protests related to environment pollution, the
plant was temporarily shut down by the Tamil Nadu state
government. Vedanta has contested these claims, stating that its
gas emissions are well below the state norms and the emissions of
11 other neighbouring industries. It has also stated that their plant
does not pump any water into the sea, due to a change in the plant
configuration after a previous (2013) complaints from the state
government.

• Zinc-Lead-Silver: Zinc India business is owned and operated

by Hindustan zinc limited (HZL). HZL owns and operates a fully
integrated zinc-lead business. HZL is one of the world's largest
integrated zinc-lead producers by volume. Sesa Sterlite owns
64.9% of the share capital of HZL, while the Government of India
remains an equity partner and holds a 29.5% stake. HZL is listed
on Indian stock exchanges (NSE and BSE).HZL's fully integrated
zinc operations include five lead-zinc mines, one rock phosphate
mine, four hydrometallurgical zinc smelters, two lead smelters, one
lead-zinc smelter, four sulphuric acid plants, one silver refinery and
six captive power plants at our Zawar facilities in the State of
Rajasthan, processing and refining facilities for zinc at Haridwar
and for zinc, lead and silver at both in the State of Uttarakhand
and in northern India. In FY 2013, these operations delivered
870,000 tonnes of mined zinc-lead metal-in-concentrate, and
802,000 tonnes of refined zinc and lead.

• Oil & Gas: Sesa Sterlite's Oil & Gas operations comprise the
assets of cairn India in India, Sri Lanka and South Africa. Cairn
India is India's largest private-sector crude oil producer,
contributing to over 25% of India's crude oil production. Sesa
Sterlite owns 58.9% of Cairn India, which is also the fastest-
growing Asian E&P company (Platts 2011) and one of the top 20
independent E&P companies worldwide. Cairn India has interest in
eight blocks in India, one in Sri Lanka and one in South Africa.
Cairn India's resource base is located in four areas – the onshore
RJ-ON-90/1 (Rajasthan) block, two blocks on the west coast of
India, four blocks on the east coast of India (including one in Sri
Lanka) and one block in South Africa. Cairn India's Rajasthan
block is the largest onshore discovery in India in the last 20 years
and has an estimated 7.3 billion in place with a basin potential to
support a production rate of 300,000 barrels of oil per day. Cairn
 India has a strong track record of exploration, with nearly 50%
exploration success ratio.

• Iron Ore: Sesa Sterlite is largest private sector exporter of iron ore
in India and is developing large iron ore deposits in Liberia Iron ore
mining operations are carried out in the Indian States of Goa and
Karnataka. We also manufacture pig iron and metallurgical coke.
During FY 2013, our Indian iron ore operations were affected by a
suspension of iron ore mining activities across the states of Goa
and Karnataka. The Honourable Supreme Court allowed
resumption of Karnataka mine in April, 13 subject to statutory
clearances. Subsequent to receiving all the approvals they have
started mining in Karnataka from 28 December 13. In 2011, Sesa
Goa limited had acquired iron ore assets in Liberia, with around 1
billion in reserves and resources across three deposits – Bomi
Hills, Bea Mountain and Mano River, located at a distance of 70–
140 Km from the port at Monrovia. Extensive drilling at our Liberia
assets has confirmed a billion tonne of Iron Ore deposit last year
with further upside. Currently, they are reviewing the different
phased options including the first phase of 2 million tons. Sesa
Sterlite is the largest private sector exporter of iron ore in India. Its
subsidiary, Western Cluster Ltd is developing large iron ore
deposits in Liberia.

• Aluminium: Balco has a smelter capacity of 345 KTPA with

capabilities to produce ingots, wire-rods, billets, busbars and rolled
products. BALCO's operations include mines, refineries, smelters
and captive power plants in the state of Chhattisgarh in India. Sesa
Sterlite holds a controlling 51% stake in BALCO, while the
Government of India remains an equity partner and holds the
remaining 49% stake

• Power: Sesa Sterlite is one of India's leading power producers

with a capacity of 3,900 MW in commercial power. They have
commercial power generation business that currently operates
2,400 MW Jharsuguda Power Plant in Odisha, 270 MW BALCO
power plant in Chhattisgarh, 100 MW MALCO power plant in Tamil
Nadu and 274 MW HZL wind power plants at various locations in
India. They are also setting up a 1,980 MW Talwandi Sabo power
plant in the state of Punjab. Talwandi Sabo Power Limited, a 100%
subsidiary of Sesa Sterlite is setting up a 1,980 MW thermal power
project in Punjab, with the first unit starting operations by Q3
 FY2014. Hindustan Zinc has 274 MW of wind power generational
capacity, making it one of the largest producers of wind power in
India.

Core Purpose
Its primary objective is to use research, discovery, acquisition,
sustainable development, and utilisation of a variety of natural resources
to provide long-term value for all stakeholders. As a company that
upholds the highest standards of social responsibility, sustainability,
safety, and governance, Vedanta Limited is traded on both the National
and Bombay Stock Exchanges.

Background of the company

Based in London, Vedanta Resources Limited is a worldwide diversified
natural resources business that primarily operates in India.

Since its founding in 1976 by Anil Agarwal, Vedanta has developed into
one of the world's most renowned mining and metals corporations.
Concerns regarding the company's corporate responsibility policies have
arisen as a result of the company's operations being the subject of
criticism and controversy regarding social and environmental issues.

Hindustan Zinc Limited, Sterlite Copper, Sesa Goa Iron Ore, Cairn India
(now a part of Vedanta Limited), and other companies are among
Vedanta's subsidiaries. To learn about the most recent advancements or
modifications to Vedanta's business practices and corporate
environment, see more recent sources.
Overview
Vedanta Limited was established on June 25, 1965, and is a publicly
traded business. It is situated in Mumbai City, Maharashtra, and is
categorised as a public limited corporation. Its total paid-up capital is
INR 371.75 cr, while its authorised share capital is INR 7,412.01 cr.

The operating revenue range for Vedanta Limited for the fiscal year that
ends on March 31, 2023, is greater than INR 500 cr. EBITDA was lower
by -46.60% compared to the prior year. Its book net worth has dropped
by -12.67% concurrently. Here are more performance and liquidity ratios
that are available.

The corporation runs power plants and distributes commodities like

copper, silver, aluminium, zinc, iron ore, and silver.

Products and Services: Lead, Copper, Gold, Iron Ore, Zinc, Lead Oil and
Gas, and Silver. Vedanta Limited is now in an active state.

According to the records, Vedanta Limited's most recent AGM (Annual

General Meeting) took place on July 12, 2023.

Vedanta Limited's Corporate Identification Number (CIN) is

L13209MH1965PLC291394. The first floor, C wing, Unit 103, Corporate
Avenue Atul Projects, Andheri (East) NA, Mumbai, Mumbai City,
Maharashtra is the address of Vedanta Limited's registered office.

There are two reported top management employees and eight directors
in the company.

Currently serving as the longest-standing director is Navin Agarwal, who

was appointed on August 17, 2013. For over a decade, Navin Agarwal
has served on the board. Arun Misra was the most recent director to be
appointed, having started work on August 1, 2023.

Padmini Sekh saria holds the most directorships overall, with a seat at
14 different companies. Through its directors, the corporation is in total
tied to forty-six additional companies.
Stock market- Vedanta limited

Company profile
Type = public

Traded as = BSE: 500295, NSE: VEDL

Industry = mining, oil and gas, electricity utility

Predecessor = Sesa goa, Sesa sterlite

Founded = 1979,44 years ago

Headquarters = Mumbai, India

Key people = anil Agarwal (non- executive chairman), Sunil Duggal

(CEO)

Products = zinc, crude oil, iron ore, steel, aluminium, copper, electric
power
Research Methodology

This particular research paper involves several methodological

considerations, including the choice of ratios, the selection of data
sources, and the interpretation of results. Researchers have discussed
these considerations in detail and provided guidelines for conducting
effective ratio analysis. The methodology used in this paper is published
data, i.e., Secondary data and not first-hand data.

Business description

Vedanta Ltd (Vedanta), formerly Sesa Sterlite Ltd, and a subsidiary

of Vedanta Resources Plc, is an integrated metal and mining company.
The company carries out the exploration, extraction, processing, and
refining activities of minerals. It also produces and sells metallurgical
coke and pig iron. The company operates through eight reportable
business segments: Copper, Aluminium, Iron Ore, Power, Zinc India,
Zinc International, Oil and Gas and Others. The company has operations
in Australia, the Netherlands, Namibia, the US, UAE, India, South Africa,
Ireland, Liberia, Jersey, Scotland, Mauritius, Sri Lanka, Japan, South
Korea, Europe, China, and Taiwan.

Industry analysis
Vedanta Ltd is a diversified natural resources company with interests in
metals and mining, oil and gas, and power. The industry analysis of
Vedanta would involve examining these sectors:

1. Metals and Mining:

- Vedanta is a major player in the metals and mining industry, involved

in the extraction of zinc, lead, silver, copper, and iron ore.
 - Factors influencing this sector include commodity prices, demand-
supply dynamics, geopolitical stability, and environmental regulations.

2. Oil and Gas:

- Vedanta has operations in the oil and gas sector, including

exploration and production activities.

- Industry factors include global oil prices, exploration success,

geopolitical tensions affecting oil markets, and regulatory changes.

3. Power:

- Vedanta has a presence in the power sector, generating electricity

through various sources.

- Analysis would involve factors such as energy demand, regulatory

policies, fuel prices, and advancements in renewable energy
technologies.

4. Market Trends:

- Monitor trends in commodity prices as they directly impact Vedanta's

revenue and profitability.

- Analyse global and domestic demand for metals, oil, and power to
assess market conditions.

5. Regulatory Environment:

- Explore regulatory developments in the countries where Vedanta

operates, especially regarding environmental standards and resource
extraction policies.
6. Financial Performance:

- Assess Vedanta's financial health, including revenue growth, profit

margins, debt levels, and cash flow.

7. Competitive Landscape:

- Analyse competitors in each sector to understand market positioning

and potential threats or opportunities.

8. Sustainability Practices:

- Evaluate Vedanta's sustainability initiatives and adherence to

environmental and social responsibility standards.

9. Global Economic Factors:

- Consider macroeconomic trends that may impact the overall demand

for commodities and energy resources.

10. Technological Advancements:

- Stay informed about technological developments in mining, oil

extraction, and power generation that could impact Vedanta's
operations.

Impacts during covid -19 pandemic

1. Operational Disruptions:

- Mining operations often faced disruptions due to lockdowns,

restrictions, and workforce challenges during the pandemic.

- Supply chain disruptions may have affected the availability of key

resources for Vedanta's operations.
2. Commodity Price Volatility:

- The pandemic led to fluctuations in commodity prices, impacting the

revenue and profitability of mining companies.

- Vedanta, with its diverse portfolio, may have experienced varying

effects on different commodities.

3. Global Demand and Supply Chain Challenges:

- Changes in global demand, especially in the early stages of the

pandemic, could have affected Vedanta's market positioning.

- Supply chain challenges might have impacted the delivery of finished

goods.

4. Cost Management and Efficiency:

- Vedanta, like other companies, may have implemented cost-cutting

measures and operational efficiency strategies in response to economic
uncertainties.

5. Health and Safety Measures:

- The pandemic necessitated the implementation of stringent health

and safety measures at mining sites, affecting operational protocols and
possibly causing delays.

6. Impact on Exploration and Expansion Plans:

- Exploration and expansion plans might have been temporarily halted

or delayed due to uncertainties surrounding the pandemic and its
economic consequences.
7. Financial Performance:

- Vedanta's financial performance could have been influenced by the

economic downturn and market uncertainties associated with the
pandemic.

8. Government Regulations and Permitting:

- Changes in government regulations and permitting processes, which

could have been influenced by the need to manage the pandemic, may
have affected Vedanta's operations.

Analysis

VEDANTA Income Statement Analysis

▪ Operating income during the year fell 48.7% on a year-on-year
(YoY) basis.

▪ The company's operating profit decreased by 68.7% YoY

during the fiscal. Operating profit margins witnessed a fall
and stood at 20.3% in FY23 as against 33.2% in FY22.

▪ Depreciation charges decreased by 58.8% and finance costs

decreased by 8.6% YoY, respectively.

▪ Other income grew by 717.8% YoY.

▪ Net profit for the year grew by 15.4% YoY.

▪ Net profit margins during the year grew from 17.9% in FY22
to 40.2% in FY23.
VEDANTA Income Statement 2022-23

VEDANTA Balance Sheet Analysis

▪ The company's current liabilities during FY23 down at Rs 546 billion as

compared to Rs 657 billion in FY22, thereby witnessing an decrease of -17.0%.

▪ Long-term debt down at Rs 326 billion as compared to Rs 362 billion during

FY22, a fall of 9.9%.

▪ Current assets fell 52% and stood at Rs 331 billion, while fixed assets fell 4%
and stood at Rs 1,204 billion in FY23.

▪ Overall, the total assets and liabilities for FY23 stood at Rs 1,535 billion as
against Rs 1,935 billion during FY22, thereby witnessing a fall of 21%.
 VEDANTA Balance Sheet as on March 2023

VEDANTA Cash Flow Statement Analysis

▪ VEDANTA's cash flow from operating activities (CFO) during FY23 stood at Rs
125 billion on a YoY basis.

▪ Cash flow from investing activities (CFI) during FY23 stood at Rs 163 billion
on a YoY basis.

▪ Cash flow from financial activities (CFF) during FY23 stood at Rs -292 billion
on a YoY basis.

▪ Overall, net cash flows for the company during FY23 stood at Rs -4 billion from
the Rs 38 billion net cash flows seen during FY22.

VEDANTA Cash Flow Statement 2022-23

Ratio Analysis for VEDANTA

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.6x
during FY23, from 1.0x during FY22. The current ratio measures the company's
ability to pay short-term and long-term obligations.
 Interest Coverage Ratio: The company's interest coverage ratio deteriorated
and stood at 7.2x during FY23, from 7.9x during FY22. The interest coverage
ratio of a company states how easily a company can pay its interest expense
on outstanding debt. A higher ratio is preferable.
• Profitability Ratios

RETURN ON EQUITY: The ROE for the company improved and stood at 40.4%
during FY23, from 36.3% during FY23. The ROE measures the ability of a firm
to generate profits from its shareholders capital in the company.
Return on Capital Employed (ROCE): The ROCE for the company declined and
down at 31.3% during FY23, from 37.2% during FY22. The ROCE measures the
ability of a firm to generate profits from its total capital (shareholder capital
plus debt capital) employed in the company.
Return on assets: The ROA of the company improved and stood at 20.7%
during FY23, from 14.7% during FY22. The ROA measures how efficiently the
company uses its assets to generate earnings.

Key Ratio Analysis

Findings:

1. Financial Performance:

- Vedanta's revenue has shown a consistent growth trend over the

past few years, primarily driven by strong performances in the metals
and mining sector.

- Profit margins have fluctuated due to changes in commodity prices,

indicating vulnerability to market dynamics.

2. Operational Efficiency:
 - Production volumes have seen stability in key commodities like zinc
and copper, showcasing operational resilience.

- Operating costs per unit have slightly increased, warranting a closer

look into cost management strategies.

3. Market and Industry Trends:

- Vedanta remains exposed to commodity price volatility, especially in

the global metals market.

- The industry faces challenges related to geopolitical tensions,

environmental regulations, and shifting global demand patterns.

4. Governance and Sustainability:

- Vedanta has implemented robust governance policies, as evidenced

by an independent board and transparent reporting practices.

- Sustainability initiatives are in place, but there might be opportunities

to enhance environmental and social responsibility efforts.

Suggestions:

1. Diversification Strategy:

- Explore opportunities for diversification within the mining sector or

into related industries to mitigate the impact of commodity price
fluctuations.

2. Cost Management:

- Implement measures to optimize operating costs, focusing on

efficiency improvements and cost-saving initiatives.
3. Risk Mitigation:

- Strengthen risk management strategies to address geopolitical,

regulatory, and market risks more effectively.

4. Sustainability Enhancement:

- Enhance sustainability efforts by investing in environmentally friendly

technologies and community development projects to improve social
responsibility.

5. Strategic Partnerships:

- Explore strategic partnerships or collaborations to share risks and

resources, especially in the context of large-scale mining projects.

6. Technological Advancements:

- Invest in innovative technologies for mining operations to improve

efficiency, reduce environmental impact, and stay competitive in the
industry.

7. Stakeholder Engagement:

- Strengthen communication and engagement with stakeholders,

including local communities, to foster positive relationships and address
concerns effectively.

8. Continuous Monitoring:

- Establish a systematic process for continuous monitoring of market

trends, regulatory changes, and competitor activities to make informed
strategic decisions.
9. Adaptability to Market Conditions:

- Develop a flexible business strategy that can adapt to changing

market conditions, ensuring resilience against unforeseen challenges.

10. Investor Relations:

- Enhance investor relations by providing clear guidance, transparent

financial reporting, and regular communication on the company's
strategic direction.

Conclusion:
Vedanta Mining Company Limited, as a diversified natural resources
company, has demonstrated a resilient performance in the metals and
mining industry. Key findings from the analysis indicate positive revenue
growth driven by the company's operations in metals such as zinc,
copper, and iron ore. Operational efficiency, marked by stable
production volumes, underscores Vedanta's robust capabilities in
resource extraction.

However, the company faces challenges associated with commodity

price volatility and exposure to global market trends. The fluctuation in
profit margins reflects the inherent risks associated with the industry.
The management has implemented strong governance policies, as seen
in the composition of the board and transparent reporting practices.

Suggestions for Vedanta Mining include exploring diversification

strategies, optimizing operating costs, and reinforcing risk management
to navigate the dynamic market environment effectively. Strengthening
sustainability initiatives and engaging with stakeholders can further
enhance Vedanta's corporate responsibility profile.
In conclusion, Vedanta Mining Company Limited has a solid foundation
in the natural resources sector, but strategic adaptations and a proactive
approach to market challenges will be vital for sustained growth and
resilience. Continuous monitoring of industry trends and a commitment
to innovation and sustainability will contribute to the company's long-
term success. It is crucial for stakeholders to stay informed about the
company's latest developments and strategic decisions to make well-
informed assessments.

Reference

1. "Balance Sheet 2023" (PDF). p. 13. Retrieved 11

August 2023.
2. "Annual report 2022" (PDF).
3. "Vedanta's copper smelting plant ordered to stop
operations". Deccan Herald. 30 March 2013. Retrieved 17
February 2014.
4. ^ Jump up to: Vedanta's billions: regulatory failure, environment
and human rights (PDF). Sussex: Foil Vedanta. 1 September
2018. Retrieved 30 September 2018.
5. ^ Annual report 2017-2018
6. "Vedanta Limited registered office". www.vedantalimited.com.
Retrieved 5 June 2017.