PEOPLE

Driving our achievements and success is our dedicated and talented workforce of nearly 29,000 people. I would like to thank them for their superior efforts this year. We remain committed to continuing to provide a challenging and rewarding work environment for all our employees.

In April 2008, I announced that Kuldip Kaura will retire as Chief Executive on the completion of his term on 30 September 2008. He will be succeeded by MS Mehta, currently Chief Executive of our Zinc business. During the intervening period, MS Mehta will work closely with Kuldip to ensure a smooth transfer of responsibilities. 

I would like to thank Kuldip, who has been a tremendous support to me during this phase of multifold growth and has played an instrumental role in the transformation of Vedanta into a well admired and robust organisation, ready to take on opportunities of the future.

I would also like to thank all my fellow Directors for their invaluable contribution to our decision making and the healthy and constructive direction and support they provide our management team.

SUSTAINABLE DEVELOPMENT

We see sustainable development and CSR matters as central to the way that we conduct our business and recognise that our obligations to society include ensuring that we manage our health, safety, environmental and social impacts, risks and opportunities effectively.

Our approach and engagement with communities within which we operate is holistic and robust. Our work encompasses 383 villages across India and Zambia, positively enhancing the quality of life of over 2.5 million people.

We conceived the ‘Integrated Village Development Program’ as a benchmark to address the sustainable and inclusive growth goals of the communities where we operate. This community development model is aligned to the Millennium Goals to best provide for a longer-term socio-economic impact and inclusive growth. It has been successfully implemented in 32 villages in Rajasthan and is now being implemented in both Lanjigarh and Jharsuguda.

The Public Private Partnership between the State Government of Rajasthan, Naandi Foundation and Hindustan Zinc to provide nutritious meals daily to nearly 200,000 children in Chittorgarh, Rajasthan is progressing splendidly. We are convinced that this tripartite social investment is one of the main factors contributing to widening primary education and intend to replicate this success story in Rajsamand district of Rajasthan, Chattisgarh and Orissa.

Our focus has also remained on achieving best practice in the management of the health and safety of our employees and contractors as well as impact upon the environment. I am particularly pleased to note significant progress in various areas including reductions in injury rates and improvements in specific water and energy consumption levels. Effective management of these areas is a management imperative and is the subject of regular and detailed scrutiny at all levels of management throughout our Group.

I am pleased with our achievements in sustainable development in the last year. Going forward, we aim to be an industry-leading company in this area and to work closely with all of our stakeholders.

OUTLOOK

Global demand for metals continues to be strong and we are well placed to serve this growing demand. The industry faces challenges in terms of cost pressures and the ability to bring new capacities to production on time and within budget. We believe that we have an unrivalled track record in this challenging environment in our ability to deliver projects at global benchmark costs and aggressive timelines.

We will continue to build upon our 2008 achievements responsibly and I eagerly look forward to reporting on our progress on various initiatives in 2009.

ANIL AGARWAL
Chairman
15 May 2008

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