Information  X 
Enter a valid email address

Vedanta Resources (VED)

  Print      Mail a friend       Annual reports

Thursday 17 November, 2005

Vedanta Resources

Interim Results

Vedanta Resources PLC
17 November 2005


                                                               November 17, 2005
                             Vedanta Resources plc
           Interim results for the six months ended 30 September 2005

Highlights

• Financial Performance

       -  Group Revenue up 104% to $1,384.6m and Group EBITDA up 110% to
          $336.5m, driven by better prices and strong volume growth
       -  Operating profit up 114% to $258.2 million
       -  Strong balance sheet with net assets of $1.9 billion and gearing of 20%
       -  ROCE (excluding project capital work in progress) at 28%
       -  Underlying EPS up 213% at 37.6 US cents
       -  Interim dividend declared at 5.7 US cents per share

• Operations

       -  Production of all key metals significantly higher
       -  Copper expansion fully ramped up ahead of schedule
       -  Zinc expansion ramp up on schedule
       -  Commissioning of new Korba aluminium smelter on track and contributing
          to half-year production

                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
Consolidated Group Results                      H1 2006       H1 2005    Change
                                                            (restated)*
--------------------------------------------------------------------------------
Revenue                                         1,384.6         677.4     104.4%
EBITDA                                            336.5         159.9     110.4%
    EBITDA Margins                                 24.3%         23.6%
Operating Profit                                  258.2         120.7     113.9%
Attributable Profit                               107.9          34.3     214.6%
Basic Earnings per Share (in US cents)             37.6          12.0     213.3%
ROCE (excluding project capital work in progress)  27.8%         26.4%
Interim Dividend (US cents per share)               5.7           5.5
--------------------------------------------------------------------------------
(* Restated for the impact of adopting IFRS)

'Vedanta has produced another strong set of results, demonstrating delivery on
our strategy and the benefits of growth across all our metals.' said Anil
Agarwal, Executive Chairman, Vedanta Resources plc. 'The next phase of our
growth strategy across all our businesses is now underway, and I look forward to
reporting on further progress in the second half.'

For further information, please contact:

Sumanth Cidambi                              
Associate Director - Investor Relations       sumanth.cidambi@vedanta.co.in
Vedanta Resources plc                         Tel: +91 22 5646 1444

Faeth Birch                                   
Robin Walker
Finsbury                                      Tel: +44 20 7251 3801



Executive Chairman's Statement

This has been an important six month period in Vedanta's growth story. Group
revenue and operating profit in the first half of this year have more than
doubled compared to the corresponding period last year, reflecting both the
increased volumes and improved prices across the Group's metals as well as the
contribution of KCM. Our 27.8% return on capital employed after excluding
capital work in progress is higher than the corresponding period last year.

We have made excellent progress, both at existing operations, which are
operating at capacity and at the growth projects announced since our IPO. Our
zinc facilities in Chanderiya were commissioned in May 2005 and our recently
expanded copper smelter in Tuticorin is now operating at its full rated
capacity. The expansion of our aluminium smelter at Korba and the new alumina
refinery at Lanjigarh are progressing on schedule and within budget. We are
pleased that the Central Committee has submitted its recommendations. This
submission allows the approval process for the mine to move forward. We remain
confident in commissioning the Orissa Alumina refinery early in 2007. We have
also recently announced the $300 million 170,000 tpa zinc expansion at
Chanderiya, due early in 2008, as well as the $400 million KDMP expansion due in
2009. We are also expanding the capacity of the Nkana smelter to 300,000 tpa by
putting up a new primary smelting stream at a capital cost of $125 million to
cater to the requirement of additional smelting of sulphide ore. These expansion
projects are an integral part of pursuing our goal as a world class metals and
mining group.

We seek continually to improve operational efficiencies and optimise the
performance of our assets and to drive down our total costs of production.
Measures introduced in this regard have improved our controllable costs during
the period, although, like many of our peer group, we have not been immune to
external factors such as energy and fuel costs. Optimising our controllable cost
base is essential to our goal of delivering strong financial returns.

Given India's industrial growth and the consequent expanding domestic demand for
metal, our growth projects continue to look attractive. There are also signs of
growth in other markets and we expect this to yield additional export-led
opportunities. In light of this environment, we are evaluating the development
of a 500,000 tpa aluminium smelter at Jharsuguda in the state of Orissa.

Whilst greenfield and brownfield projects have been central to our growth,
another pillar of our strategy continues to be leveraging our established skills
through acquisition and KCM is a good example of this approach. KCM's
contribution to our results demonstrates our ability to integrate companies we
acquire into the Vedanta fold. We have put a strong team of experienced
professionals into KCM, and are focusing on achieving operational efficiencies
and process improvements. Vedanta has a long-standing turnaround track record
and the transfer of best practices from other parts of the Group should
facilitate achieving operational efficiencies in our Zambian operations. We
expect these measures to result in higher output and lower costs in the second
half of the financial year.

Our efforts continue with regard to the consolidation of our corporate
structure. For KCM, an independent expert has been commissioned by both parties
in relation to the exercise of our call option over a 28.4% stake in that
company, as required under the terms of that option. As previously stated, we
also aim to increase our economic interest in BALCO, but the process is taking
longer than we had originally anticipated.

Vedanta's success would not be possible without our people. It is the energy of
our people that makes our work environment exciting and challenging. Our growth
has led us to put effective strategies in place to identify and develop talent
across our organisation. These initiatives include developing career options for
our diverse workforce, cultivating cross-disciplinary competencies and offering
our managers challenging assignments and responsibility early on in their
careers. Our goal is to be regarded as an employer-of-choice in the metals and
mining industry, enabling us to readily access talent pools in the geographies
in which we operate. We have created decentralised organisations at each of our
subsidiary entities whilst aligning them to the common group goals. This enables
them to efficiently accelerate their decision-making cycles.

Mr. Peter Sydney-Smith, our Group Finance Director left the Board in August and
Mr. D D Jalan has been appointed as our Group Chief Financial Officer.

Looking ahead for the rest of the year, we continue to see solid and steady
growth in the underlying demand for our metals. The additional volumes coming
from our newly commissioned projects meet this strong demand. The prospects of
our outstanding project pipeline combined with the cost reduction and efficiency
measures which we are implementing lead me to express a positive outlook for the 
remainder of the year. I look forward to reporting further progress in our business
at the year end.

Anil Agarwal
Executive Chairman



Operating and Finance Review

Summary

During the first half of the year, the Group has delivered further growth in
Revenue and profitability. Compared with the first half of last year, Group
revenue is up 104.4% to $1,384.6 million, Group EBITDA is up 110.4% to
$336.5 million and operating profit is up 113.9% to $258.2 million. Attributable
profit was up 214.6% to $107.9 million and basic earnings per share (based on
Attributable Profit) are 213.3% higher at 37.6 US cents. These results include
the full contribution from KCM for the six month period and reflect strong
growth in production volumes in each of our key metals and a favourable price
environment. Like several of our peers we have experienced some upward pressure
on account of fuel, coal prices and other input costs, but we have sought to
manage these costs closely to limit their impact on our profitability. Operating
conditions were fairly stable, and with the completion of the ramp-up of our
newly commissioned facilities in the second half of this financial year and the
lower cost power increasingly becoming available from our captive power plants,
we expect to see an appreciable reduction in our operating costs.

Segmental Revenue and EBITDA are presented in the table below.

                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
                                                   H1 2006             H1 2005
                                                                     (restated)*
Revenue
Aluminium                                            155.8               122.8
Copper
  India                                              596.5               316.8
  Zambia                                             304.9
Zinc                                                 271.9               196.0
Others                                                55.5                41.8
                                                   1,384.6               677.4
                                                   =========             =======

EBITDA
Aluminium                                             37.6                33.8
Copper
  India / Australia                                   81.5                42.0
  Zambia                                              90.3
Zinc                                                 124.0                84.0
Others                                                 3.1                 0.1
                                                     336.5               159.9
                                                     =======             =======
--------------------------------------------------------------------------------
(* Restated for the impact of adopting IFRS)

Production volumes

We reported significant increases in production volumes across all the three
metals, in our production report release of 11 October 2005. The increase in
volumes comes largely from our newly commissioned facilities. Production of
copper at KCM was marginally affected by an industrial action, which was quickly
resolved.

Projects

As the various projects that we have started since the IPO come on line, our
production volumes continue to ramp up significantly.

The ramp up of our 120,000 tpa copper smelter at Tuticorin is now complete and
is delivering to its rated capacity.

A total of 121 pots out of 288 are now commissioned at our 250,000 tpa aluminium
expansion at Korba together with three out of the four 135 MW power units of the
540 MW captive power plant. The remaining power unit and pots are expected to be
commissioned by December 2005 and March 2006, respectively as scheduled.

The mine expansion at Rampura Agucha is complete and is performing at its rated
capacity. The ramp up of the 170,000 tpa zinc smelter at Chanderiya is
progressing. The smelter ramp up at Chanderiya initially faced teething issues
that have since been resolved. The project is expected to stabilise shortly and
is likely to be fully ramped-up in the second half of the current financial
year. To cater for increasing Indian and global demand, a second 170,000 tpa
smelter will be built at Chanderiya at a cost of $300 million. Preliminary work
on this project in terms of ordering equipment has begun. This project is
expected to be completed by early 2008.

We have also announced the $400 million KDMP expansion to increase the copper
ore output from the Konkola mine from 2 million tpa to 6 million tpa. This
project is due for completion in late 2009. We are expanding the capacity of our
Nkana smelter to 300,000 tpa by putting up a primary smelting stream. This
expansion is expected to have a capital cost of $125 million and will cater to
the requirement of additional smelting of sulphide ore. This smelter is expected
to be completed by 2008.

The detailed engineering for our proposed 1.4 million tpa alumina refinery at
Lanjigarh is largely complete and deliveries of major equipment and vessels are
on schedule. Overall, construction at the alumina refinery is progressing well.
Mechanical completion of the refinery is expected in mid 2006. In response to
the public interest submission, we are pleased that the Central Committee has
submitted its recommendations. This submission allows the approval process for
the mine to move forward. We remain confident in commissioning the Orissa
Alumina refinery early in 2007.

Effective interest/minorities

The Company has exercised its call option over the Indian government's 49% stake
in BALCO and the completion of this process is taking longer than anticipated.
An independent valuation process of the 28.4% stake owned by ZCI in KCM is
currently underway to determine an exercise price for the group's call option
over that stake. The company has no obligation to purchase ZCI's stake, upon
conclusion of the independent expert's work, expected by the end of December
2005.

Dividend

The Board has recommended an interim dividend of 5.70 US cents per share. This
is marginally higher than one third of last year's dividend of 17.05 US cents
per share. In accordance with our dividend policy, the Board will pay an interim
dividend which is one third of the previous year's full payment.

Demand

The Indian economy is currently demonstrating a GDP growth of around 8% per 
annum.  Industrial production grew at around 9% per annum in the first half of 
financial 2006 accompanied by a robust growth of  around 10% per annum in the 
manufacturing sector, during the same period, according to estimates by the 
Centre for Monitoring Indian Economy; and is expected to grow at this pace for 
the remainder of the year. Increased activity in the manufacturing sector, 
continuing liberalisation and a high rate of infrastructure growth in areas 
such as construction and power have lead to an increased demand for metals, 
which are likely to witness double digit growth rates.

Outlook

We believe that the additional volumes delivered through our projects combined
with strong demand and a favourable price environment provides a positive
outlook for the remainder of the financial year.




Operating Review

Aluminium
                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
                              H1 2006        H1 2005      Change        FY2005
                                           (restated)*               (restated)*

Revenue                         155.8          122.8       26.9%         281.7
EBITDA                           37.6           33.8       11.2%          75.6
  EBITDA Margins                 24.1%          27.5%                     26.8%
Operating Profit                 27.8           26.1        6.5%          57.4

Production Volume (000 tons)       82             66       24.2%           136
  Aluminium                       142            130        9.2%           279
  Alumina

Average LME Prices (US$/ton)     1810           1694        6.8%          1779

Unit Costs (US$/ ton)            
  BALCO                          1551           1303       19.0%          1347     
  MALCO                          1530           1395        9.7%          1466
  
--------------------------------------------------------------------------------
(*Restated for the impact of adopting IFRS)

The existing production facilities at BALCO and MALCO continue to operate at
full capacity and have benefited from the increase in metal prices. Continual
efforts are being made to improve efficiencies and productivity at the existing
plants.

The new Korba smelter produced about 12,000 tons of metal in the six month
period and was the main contributor to the increased production compared with
H1 2005. Three out of the four power units have been commissioned and 121 pots
have now been brought on line. We expect the remaining power unit and pots to be
commissioned by December 2005 and March 2006, respectively as scheduled.

EBITDA has risen by 11% over the corresponding period of the previous year,
driven by strong metal prices and volumes. Energy costs and the rising cost of
coal, power, and other inputs during the period accounted for nearly all of the
increase in unit costs compared with H1 2005. Coal prices continue to be high
and, given the current policy framework, we plan to meet part of our requirement
of coal through imports which will have a further adverse impact on the costs of
power. Operating costs of the new Korba smelter are expected to stabilise once
operations are closer to capacity. We continue to source alumina from external
sources at prevailing market prices for the expanded capacity at Korba.

Demand for aluminium in India continues to grow at approximately 10% per annum,
driven mainly by the power and construction sectors. Power transmission and
electrical applications continue to be the largest users of aluminium in the
country. With the increased capacity coming on line, we are well positioned to
service this market.



Copper - India and Australia
                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
                                  H1 2006       H1 2005   Change        FY2005
                                              (restated)*            (restated)*
Revenue                             596.5         316.8     88.3%        765.5
EBITDA                               81.5          42.0     94.0%         87.0
  EBITDA Margins                     13.7%         13.3%                  11.4%
Operating Profit                     62.3          25.0    149.2%         50.5

Production Volume (000 tons)          
  Cathode                             124            77     61.0%          172                 
  Rod                                  80            53     50.9%          125                
  Mined metal content                  18            20    (10.0%)          40

Average LME Prices (US cents/lb)    162.3         127.9     26.9%        136.0
TC/RCs (US cents/lb)                 15.7           6.6    137.9%          8.6

Unit Costs (US cents/lb)              6.5           8.5    (23.5%)         7.1
--------------------------------------------------------------------------------
(* Restated for the impact of adopting IFRS)

Revenue rose strongly by 88% to $596.5 million on the back of both higher
volumes and LME prices. The benefit of the increase in LME prices was largely
offset by the matching rise in the purchase cost of copper concentrate. EBITDA
increased by 94% to $81.5 million primarily on account of improved TC/RCs and
lower costs of production, despite reductions in metal tariffs.

The expanded capacity of the smelter at Tuticorin has been ramped up swiftly and
ahead of schedule and the benefit of this in terms of increased volumes of
cathode production is now being achieved. Lower mine production reflects the
closure of TCM in July 2005 for which closure costs were fully provided.

Average TC/RCs improved significantly during the current six month period to
15.7 US cents/lb from 6.6 US cents/lb in the comparable prior period. We expect
average TC/RCs to improve further in the remainder of FY 2006.

Unit costs were further reduced to 6.5 US cents /lb during the current six month
period compared to 8.5 US cents/lb in the comparable prior period, as a result
of additional volumes arising out of our expanded capacity, better metal
recovery and improved by-product management.

Demand for copper in India continues to grow at around 7% per annum. This
consumption is driven mainly by the power sector, construction and the
automotive sectors. With power generation facilities set to double by 2012, the
outlook for copper demand in India looks promising.



Copper - Zambia
                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
                                 H12006     H1 2005     Change          FY2005
                                          (restated)*                (restated)*, **
Revenue                           304.9           -         NA           249.2
EBITDA                             90.3           -         NA            76.0
   EBITDA Margins                  29.6%          -         NA            30.5%
Operating Profit                   63.3           -         NA            52.7

Production Volume (000 tons)
   Cathode                           81           -         NA              68
   Mined metal content               54           -         NA              43


Average LME Prices (US cents/lb)  162.3           -         NA           136.0

Unit Costs (US cents/lb)          113.2           -         NA           106.2
--------------------------------------------------------------------------------

(* Restated for the impact of adopting IFRS, ** Pertains to the five months
from November 2004 to March 2005)

The group's 51% interest in KCM was acquired in November 2004. The results of
KCM are fully consolidated with the Group results for the six months ended 30
September 2005. No prior period comparatives are available.

Industrial action in July 2005 marginally affected production at KCM but was
quickly resolved. Despite this temporary setback and a nationwide fuel crisis in
Zambia, production levels remained relatively unchanged. We have undertaken
several initiatives including process improvements, transfer of best practices,
the construction of a new acid plant and the appointment of a new management
team. We believe the impact of these actions will be reflected in KCM's
performance for the second half of FY 2006 and onwards.

Zinc
                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
                               H12006        H1 2005       Change       FY2005
                                           (restated)*               (restated)*
Revenue                         271.9          196.0       38.7%         486.4
EBITDA                          124.0           84.0       47.6%         218.5
  EBITDA Margins                 45.6%          42.9%                     44.9%
Operating Profit                102.0           69.7       46.3%         190.6

Production Volume (000 tons)      
  Refined metal                   123            104       18.3%           212 
  Mined metal content             220            167       31.7%           355

Average LME Prices (US$/ton)     1286           1003       28.2%          1108

Unit Costs (US$/ton)              707            683        3.5%           695
--------------------------------------------------------------------------------
(* Restated for the impact of adopting IFRS)

Revenues have increased by 38.7% and EBITDA by 47.6% in the first half of
FY 2006 on higher volumes and improved prices despite the impact of tariff
reductions.

The expansion and the ramp up of the Rampura Agucha mine was reflected in the
substantial increase in production of zinc concentrate. Refined zinc production
in the first half of the year reflects the ramp up of the new 170,000 tpa
smelter at Chanderiya, which contributed 21,000 tons of metal in the first half
of the year. The smelter ramp up at Chanderiya initially faced teething issues
that have since been resolved.

Costs of production of refined zinc increased to $707 per ton largely due to
increases in coal costs, and increases in royalties which are linked to the LME
price. We expect the full production ramp up and availability of cheap captive
power to result in lower costs during the second half of the year.

Demand for zinc in India continues to grow at around 12% per annum, fuelled by
demand for galvanised steel used in the infrastructure, power and automotive
sectors. The group's domestic market share in zinc remains strong and has grown
since last year. We believe the outlook for zinc continues to be strong in both
domestic and export markets. To cater to this increased demand, we are
developing a further 170,000 tpa smelter at Chanderiya. Additionally, our new
50,000 tpa lead plant is likely to be commissioned in the current quarter. As a
result of this expansion, our production of lead and silver as by-products will
increase.



Finance Review

Summary consolidated financial information
                                             (in US$ millions, except as stated)
--------------------------------------------------------------------------------
                                    H12006       H1 2005    Change        FY2005
                                               (restated)*             (restated)*
Revenue                            1,384.6         677.4     104.4%       1884.2
EBITDA                               336.5         159.9     110.4%        454.0
  EBITDA Margin                       24.3%         23.6%                  24.1%
Operating Profit                     258.2         120.7     113.9%        328.0
Profit Before Tax                    257.1         111.9     129.8%        386.3
Profit After Tax                     185.5          70.6     162.7%        299.3
Attributable Profit                  107.9          34.3     214.6%        178.9
Underlying Profit                    107.9          34.6     211.8%        140.1
Basic EPS (US cents)                  37.6          12.0     213.3%         62.5

Return on Capital Employed (excluding                           
project capital work in progress)    27.8%         26.4%                  32.0%
Net Assets (per share)                6.47          4.67     38.5%         6.09
Net (Debt)/Cash                     (455.7)        113.7                  (74.3)
Gearing                               19.7%           NA                    4.1%
Expansion capital expenditure        315.1         357.6                 1028.9
--------------------------------------------------------------------------------
(* Restated for the impact of adopting IFRS)

Operating Profit and Profit Before Tax

Group operating profit increased by 113.9% to $258.2 million compared with the
prior period. Had the impact of KCM been excluded, group operating profit would
have been $194.9 million, an increase of 61.5%. Profit before tax increased by
129.8% to $257.1 million compared with H1 2005. Had the impact of KCM been
excluded, profit before tax would have increased by 70% to $190.1 million.

Tax

The projected effective tax rate for FY 2006 is approximately 27.0% compared
with 22.5% for FY 2005. The effective tax rate in FY 2005 was 29.4%, unadjusted
for the effect of the IFRS restatement. The lower projected effective tax rate
in the current year reflects a reduction in the nominal tax rate in India from
36.6% last year to 33.7% in the current year. The tax rate is also sensitive to
the availability of various tax incentives which differ from subsidiary to
subsidiary and also due to differing tax rates in India and Zambia, which affect
the profit mix.

Attributable Profit and Earnings Per Share

Attributable profit is for H1 2006 was $107.9 million, up 214.6% as compared to
the previous period. The increase is primarily due to an increase in profit for
the period as well as a decrease in the share of minority interests in profits.
Share of minority interests in profits has reduced to 41.8% for the period as
compared to 51.4% for the comparable prior period. EPS based on Attributable
Profit has increased by 213.3% to 37.6 US cents compared with the corresponding
prior period.

Balance Sheet

Capital employed is $2.3 billion at 30 September 2005 compared with $1.8 billion
at 31 March 2005. Approximately half this increase is attributable to fixed
assets and the remainder to increases in working capital. Working capital has
increased largely due to higher levels of inventory and trade receivables.
Inventory values, across our metals, primarily reflect higher LME prices,
increasing production capacities and higher precious metal content. Trade and
other receivables reflect higher volumes and prices. We expect working capital
levels to decline in the second half of the current financial year.

ROCE (excluding project capital work in progress), one of our key performance
indicators, at 27.8 % is higher than the corresponding period of the previous
year by 1.4% reflecting the incremental returns generated by our asset
expansions and ongoing efficiency measures.

Cash flow and debt

The group's gearing continues to be low with net debt of $456 million
representing a gearing ratio of 19.7 per cent compared with 4.1 per cent at 31
March 2005. Net debt comprises cash and other liquid funds totalling $1,459
million and borrowings of $1,915 million. Net debt has increased by $381 million
since March 2005 primarily on account of project funding and higher working
capital in Sterlite. The Group's capital expenditure for the period was $355
million. Interest cover is 14.6 times and the Company's credit rating continues
to be at the level of India's sovereign rating.

Impact of IFRS

On 27 September 2005, Vedanta Resources plc issued an IFRS restatement relating
to its 2005 financial statements. The adoption of IFRS has had an immaterial
impact upon the group's EBITDA and cash flows. All comparative amounts set out
in this document are in line with the IFRS restatement.



Disclaimer
This press release contains 'forward-looking statements' - that is, statements
related to future, not past, events. In this context, forward-looking statements
often address our expected future business and financial performance, and often
contain words such as 'expects,' 'anticipates,' 'intends,' 'plans,' 'believes,'
'seeks,' or 'will.' Forward-looking statements by their nature address matters
that are, to different degrees, uncertain. For Vedanta, particular uncertainties
arise from the behavior of financial and metals markets including the London
Metal Exchange, fluctuations in interest and or exchange rates and metal prices;
from future integration of acquired businesses; and from numerous other matters
of national, regional and global scale, including those of political, economic,
business, competitive or regulatory nature. These uncertainties may cause our
actual future results to be materially different that those expressed in our
forward-looking statements. Vedanta Resources plc does not undertake to update
our forward-looking statements.'

About Vedanta Resources plc
Vedanta Resources plc is a London listed diversified metals and mining group.
Its principal operations are located throughout India, with further operations
in Zambia and Australia. The major metals produced are aluminium, copper, zinc
and lead. For further information, please visit www.vedantaresources.com.



Consolidated Income Statement
------------------------------------------------------------------------------------
                     Note      Six months ended    Six months ended       Year ended 
                              30 September 2005   30 September 2004    31 March 2005
                                   US $ million        US $ million     US $ million                                 
------------------------------------------------------------------------------------
Revenue                 
Continuing operations                   1,384.6               677.4          1,635.0
Acquisitions                                  -                   -            249.2
------------------------------------------------------------------------------------
Group revenue           3               1,384.6               677.4          1,884.2
Cost of sales                          (1,055.2)             (506.5)        (1,415.7)
------------------------------------------------------------------------------------
Gross profit                              329.4               170.9            468.5

Other operating income                     16.2                 9.7             25.9
Distribution costs                        (30.2)              (18.7)           (51.5)
Administrative expenses                   (57.2)              (40.0)           (92.6)
Administrative expenses 
 - special items        4a                    -                (1.2)           (22.3)
------------------------------------------------------------------------------------
Operating profit        3                 258.2               120.7            328.0
Investment revenues                        22.3                17.1             37.5
Finance costs                             (23.1)              (24.1)           (30.1)
Share of loss of associate                 (0.3)               (1.8)            (5.6)
Special item 
- negative goodwill     4b                    -                   -             56.5
------------------------------------------------------------------------------------
Profit before taxation                    257.1               111.9            386.3
Income tax expense      5                 (71.6)              (41.3)           (87.0)
------------------------------------------------------------------------------------
Profit for the period/year                185.5                70.6            299.3
====================================================================================

Attributable to:
Equity holders of the parent              107.9                34.3            178.9
Minority interests                         77.6                36.3            120.4
------------------------------------------------------------------------------------
                                          185.5                70.6            299.3
====================================================================================

Basic earnings per 
ordinary share 
(US Cents)
(not annualised)        6                  37.6                12.0             62.5
Diluted earnings per
ordinary share 
(US Cents)
(not annualised)        6                  37.3                11.4             61.5

------------------------------------------------------------------------------------



Consolidated Balance Sheet
------------------------------------------------------------------------------------
                                     As at                 As at               As at
                         30 September 2005     30 September 2004       31 March 2005
                              US $ million          US $ million        US $ million
------------------------------------------------------------------------------------
ASSETS
Non-current assets
Goodwill                              12.1                  11.5                12.2
Property, plant and equipment      2,550.9               1,533.6             2,288.6
Investment in associate                2.9                   5.1                 3.3
Financial asset investments           27.3                  23.5                24.8
Other non-current assets              21.0                  23.4                34.6
Other financial assets (derivatives)  37.5                     -                   -
Deferred tax asset                    87.7                     -                90.0
------------------------------------------------------------------------------------
                                   2,739.4               1,597.1             2,453.5
------------------------------------------------------------------------------------
Current assets 
Inventories                          646.8                265.2               337.7
Trade and other receivables          441.1                241.9               339.6
Current asset investments            292.9                132.9               262.0
Cash and cash equivalents          1,166.3                838.1             1,185.6
------------------------------------------------------------------------------------
                                   2,547.1              1,478.1             2,124.9
------------------------------------------------------------------------------------
TOTAL ASSETS                       5,286.5              3,075.2             4,578.4
------------------------------------------------------------------------------------
LIABILITIES
Current liabilities
Short term borrowings              (516.5)               (198.0)             (194.7)
Convertible loan notes               (5.9)                (49.5)              (23.7)
Trade and other payables           (817.0)               (583.8)             (675.0)
Other current financial 
liabilities (derivatives)           (46.6)                    -                   -
Provisions                          (12.8)                (11.6)              (37.0)
Current tax liabilities             (19.6)                (23.6)              (15.1)
------------------------------------------------------------------------------------
                                 (1,418.4)               (866.5)             (945.5)
------------------------------------------------------------------------------------
Net current assets                1,128.7                 611.6             1,179.4
------------------------------------------------------------------------------------
Non-current liabilities
Medium and long term
borrowings                      (1,349.8)                (609.8)           (1,303.5)
Trade and other payables           (12.1)                 (12.1)              (41.2)
Other financial liabilities
(derivatives)                      (76.9)                     -                   -
Deferred tax liabilities          (245.8)                (226.1)             (234.9)
Provisions                        (266.8)                 (22.0)             (247.2)
Non equity minority interests      (59.4)                     -               (59.4)
------------------------------------------------------------------------------------
                                (2,010.8)                (870.0)           (1,886.2)
------------------------------------------------------------------------------------
Total liabilities               (3,429.2)              (1,736.5)           (2,831.7)
------------------------------------------------------------------------------------
Net Assets                       1,857.3                1,338.7             1,746.7
====================================================================================  
EQUITY
Share capital                       28.7                   28.6                28.7
Share premium account               18.6                   18.6                18.6
Share based payment reserves         3.1                    1.8                 2.5
Other reserves                     143.5                  (20.6)               43.9
Retained earnings                  958.5                  918.9             1,016.8
------------------------------------------------------------------------------------
Equity attributable to
equity holders of the parent     1,152.4                  947.3             1,110.5
Minority interests                 704.9                  391.4               636.2
------------------------------------------------------------------------------------
Total Equity                     1,857.3                1,338.7             1,746.7
====================================================================================  


Consolidated Cash Flow Statement
--------------------------------------------------------------------------------------
                               Six months ended      Six months ended       Year ended
                              30 September 2005     30 September 2004    31 March 2005
                                   US $ million          US $ million     US $ million
--------------------------------------------------------------------------------------

Operating activities  
Profit before taxation                    257.1                 111.9            386.3
Adjustments for:
Depreciation                               78.4                  38.1            103.8
Investment income                         (22.3)                (17.1)           (37.5)
Interest expense                           23.1                  24.1             30.1
Other non-cash items                       (5.9)                  2.2            (27.3)
Other adjustments                           0.3                  (1.6)             6.0
--------------------------------------------------------------------------------------
Operating cash flows before movements
in working capital                        330.7                 157.6            461.4
Increase in inventories                  (304.1)                (79.6)           (61.0)
Increase in receivables                   (96.2)                (38.2)           (79.1)
Increase/(decrease) in payables           106.9                  57.0            (18.1)
--------------------------------------------------------------------------------------
Cash generated from operations             37.3                  96.8            303.2
Interest / investment income received      20.5                  33.1             60.6
Interest paid                             (26.6)                (31.8)           (64.1)
Income taxes paid                         (37.9)                (15.0)           (65.8)
Dividends paid                            (33.1)                (15.8)           (15.8)
--------------------------------------------------------------------------------------
Net cash from operating activities        (39.8)                 67.3            218.1
--------------------------------------------------------------------------------------

Cash flows from investing activities
Acquisition of subsidiary                     -                  (4.4)           (28.3)
Cash acquired with subsidiary                 -                     -             41.2
Purchases of property, plant 
and equipment                            (270.7)               (270.2)          (535.3)
Proceeds on disposal of 
property, plant and equipment                 -                   1.6             14.1
Dividends paid to minority 
interests of subsidiaries                  (9.0)                 (1.7)            (7.7)
Purchase of current asset investments     (32.3)                (74.3)          (193.4)
Investment in associate                       -                     -             (6.2)
Purchase of financial asset investments       -                  (0.2)               -
Buyback of shares from minority 
interests of subsidiaries                     -                     -             (2.3)
Other movements                               -                     -             29.4
--------------------------------------------------------------------------------------
Net cash used in
investing activities                     (312.0)               (349.2)          (688.5)
--------------------------------------------------------------------------------------

Cash flows from financing activities
Issue of ordinary shares                      -                     -              0.1
Proceeds from rights issue of 
subsidiary company                            -                   0.6                -
Increase/(decrease) in short
term borrowings                           258.9                (195.8)           (96.6)
Increase in long-term borrowings           80.8                 169.0            607.0
Proceeds from issue of shares to
minority interests of subsidiaries            -                     -              1.7
--------------------------------------------------------------------------------------
Net cash from financing activities        339.7                 (26.2)           512.2
--------------------------------------------------------------------------------------
Net (decrease)/increase in 
cash and cash equivalents                 (12.1)               (308.1)            41.8
--------------------------------------------------------------------------------------
Exchange difference                        (7.2)                 (1.1)            (3.5)
Cash and cash  equivalents at
beginning of period/year                1,185.6               1,147.3          1,147.3
--------------------------------------------------------------------------------------
Cash and cash equivalents at
end of period/year                      1,166.3                 838.1          1,185.6
======================================================================================



Consolidated Statement of Changes in Equity
------------------------------------------------------------------------------------------------------------------------
                                 Attributable to equity holders of the Company
------------------------------------------------------------------------------------------------------------------------
                                      
                                                   Share 
                                                   based 
S$ million                Share      Share       payment         Other     Retained               Minority        Total
                        capital    premium      reserves      reserves*    earnings     Total    interests       equity
------------------------------------------------------------------------------------------------------------------------
As at 31 March 2005        28.7       18.6           2.5         43.9       1,016.8   1,110.5        636.2      1,746.7
Adjustment for adoption
of IAS 39**                   -          -             -         (3.2)         (8.9)    (12.1)        (2.1)       (14.2)
------------------------------------------------------------------------------------------------------------------------
As at 1 April 2005         28.7       18.6           2.5         40.7       1,007.9   1,098.4        634.1      1,732.5
Profit for the period         -          -             -            -         107.9     107.9         77.6        185.5
Movement on increase in
minority interests            -          -             -            -           0.2       0.2         16.8         17.0
Exchange differences on
translation of foreign
operations                    -          -             -         (5.5)            -      (5.5)        (4.0)        (9.5)
Transfers                     -          -             -        125.0        (125.0)        -            -            -
IPO related credit            -          -             -            -           0.6       0.6            -          0.6
Movement in fair value of
cash flow hedges and
financial investments         -          -             -        (16.7)            -     (16.7)       (10.6)       (27.3)
Dividends paid                -          -             -            -         (33.1)    (33.1)        (9.0)       (42.1)
Recognition of share 
based payment                 -          -           0.6            -             -       0.6            -          0.6
------------------------------------------------------------------------------------------------------------------------
As at 30 September 2005    28.7       18.6           3.1        143.5         958.5   1,152.4        704.9      1,857.3
========================================================================================================================


------------------------------------------------------------------------------------------------------------------------
                                 Attributable to equity holders of the Company
------------------------------------------------------------------------------------------------------------------------
                                     
                                                   Share 
                                                   based 
S$ million                Share      Share       payment         Other     Retained               Minority        Total
                        capital    premium      reserves      reserves*    earnings     Total    interests       equity
------------------------------------------------------------------------------------------------------------------------
As at 1 April 2004         28.6       18.6             -          12.7        919.9     979.8        367.0      1,346.8
Profit for the period         -          -             -             -         34.3      34.3         36.3         70.6
Movement on decrease in
minority interests            -          -             -             -        (19.5)    (19.5)        18.3         (1.2)
Exchange differences on
translation of foreign
operations                    -          -             -         (33.3)           -     (33.3)       (22.6)       (55.9)
Dividends paid                -          -             -             -         15.8)    (15.8)        (7.6)       (23.4)
Recognition of share 
based payment                 -          -           1.8             -            -       1.8            -          1.8
------------------------------------------------------------------------------------------------------------------------
As at 30 September 2004    28.6       18.6           1.8         (20.6)        918.9    947.3        391.4      1,338.7
========================================================================================================================


------------------------------------------------------------------------------------------------------------------------
                                 Attributable to equity holders of the Company
------------------------------------------------------------------------------------------------------------------------
                                     
                                                   Share 
                                                   based 
S$ million                Share      Share       payment         Other     Retained               Minority        Total
                        capital    premium      reserves      reserves*    earnings     Total    interests       equity
------------------------------------------------------------------------------------------------------------------------
As at 1 April 2004         28.6       18.6             -          12.7        919.9     979.8       367.0       1,346.8
Profit for the year           -          -             -             -        178.9     178.9       120.4         299.3
Acquisition of subsidiary     -          -             -             -            -         -        98.7          98.7
Movement on decrease in
minority interests            -          -             -             -       (32.4)     (32.4)       56.3          23.9
Exchange differences on
translation of foreign
operations                    -          -             -          13.2           -       13.2         1.5          14.7
Transfers                     -          -             -          18.0       (18.0)         -           -             -
Shares issued under
Reward Plan                 0.1          -             -             -           -        0.1           -           0.1
Dividends paid                -          -             -             -       (31.6)     (31.6)       (7.7)        (39.3)
Recognition of share 
based payment                 -          -           2.5             -           -        2.5           -           2.5
------------------------------------------------------------------------------------------------------------------------
As at 31 March 2005        28.7       18.6           2.5          43.9     1,016.8    1,110.5       636.2       1,746.7
========================================================================================================================

*  Other reserves comprise hedging reserves, currency translation reserve, merger reserve, investment revaluation 
   reserve and the general reserves established in the statutory accounts of the Group's Indian subsidiaries.
** Details of the accounting policy change are provided in note 10.


Notes to the Financial Information

1. Basis of preparation

The financial information in this interim financial report is stated under
International Financial Reporting Standards ('IFRS'). The financial information
for the year ended 31 March 2005 has been derived from the Group's statutory
accounts prepared under United Kingdom Generally Accepted Accounting Principles
('UK GAAP'), for that period as filed with the Registrar of Companies and
subsequently under IFRS. The auditors' report on the statutory accounts for the
year ended 31 March 2005 was unqualified and did not contain statements under
section 237(2) of the Companies Act 1985 (regarding adequacy of accounting
records and returns) or under section 237(3) (regarding provision of necessary
information and explanations).

The Company published details of the restatement of its financial information
under IFRS for the year ended 31 March 2005 and the six month period ended 30
September 2004 on 27 September 2005 entitled 'Adoption of International
Financial Reporting Standards'. Details of the Company's news release, including
full disclosure of its accounting policies, the restatements under IFRS,
together with the auditors' reports thereon, are available on the Company's
website at www.vedantaresources.com . A summary of the IFRS reconciliations
derived from this news release is included herewith as note 9.

The financial information prepared under International Financial Reporting
Standards ('IFRSs') in respect of the six months ended 30 September 2005 is
unaudited but has been reviewed by the auditors and their report is set out on
page 28. The interim financial information including comparatives does not
constitute statutory accounts as defined under section 240 of the Companies Act
1985.

2. Accounting policies

This interim financial report, including all comparatives, has been prepared
using the same accounting policies and methods of computation as are followed in
the report published by the Company in its news release on 27 September 2005.
These financial statements are covered by IFRS 1 First-time adoption of
International Financial Reporting Standards, because they form part of the
period included in the Group's first IFRS financial statements for the year
ending 31 March 2006. The policies have been consistently applied to all periods
presented, except for those relating to the classification and measurement of
financial instruments. In addition, this interim report for the six month period
ended 30 September 2005 has been prepared under International Accounting
Standard ('IAS') 34 Interim financial reporting.

IFRSs and International Financial Reporting Interpretations Committee ('IFRIC')
interpretations are subject to ongoing review and possible amendment or
interpretative guidance which may affect the financial statements for the year
ending 31 March 2006.

Financial instruments

The Group has taken the exemption under IFRS 1 whichc enables it to apply IAS 32
Financial Instruments: Disclosure and Presentation and IAS 39 Financial
Instruments: Recognition and Measurement prospectively from 1 April 2005. As
such, the financial information presented for the periods ended 30 September
2004 and 31 March 2005 exclude any adjustments relating to adoption of these two
standards. The effects on the balance sheet as at 1 April 2005 of the adoption
of IAS 32 and 39 are detailed in note 10.

3. Segmental analysis

(a) Business segments

The following tables present revenue and profit information regarding the
Group's business segments for the six months ended 30 September 2005 and 30
September 2004 and for the year ended 31 March 2005. Items after operating
profit are not allocated by segment.



Six months ended            Continuing Operations                              
30 September 2005                                                                 
US$ million       Aluminium    Copper     Zinc    Other  Elimination   Total Operations
---------------------------------------------------------------------------------------
Revenue
Sales to external            
customers             155.8     901.4    271.9    55.5             -            1,384.6
Inter-segment         
sales                  14.5     109.5        -       -        (124.0)                 -
                   --------------------------------------------------------------------
Segment revenue       170.3   1,010.9    271.9    55.5        (124.0)           1,384.6
                   --------------------------------------------------------------------
Result
Operating    
profit                 27.8     125.6    102.0     2.8             -              258.2
---------------------------------------------------------------------------------------



Six months ended            Continuing Operations                              
30 September 2004                                                                 
US$ million       Aluminium    Copper     Zinc    Other  Elimination   Total Operations
---------------------------------------------------------------------------------------
Revenue
Sales to external
customers             122.8     316.8    196.0     41.8            -              677.4
Inter-segment sales       -      90.3        -        -        (90.3)                 -
                   --------------------------------------------------------------------
Segment revenue       122.8     407.1    196.0     41.8        (90.3)             677.4
                   --------------------------------------------------------------------
Result 
Operating       
profit                 26.1      25.0     69.7     (0.1)           -              120.7
---------------------------------------------------------------------------------------





Six months ended            Continuing Operations                              
31 March 2005                                                                 
US$ million       Aluminium    Copper     Zinc    Other  Elimination   Total Operations
---------------------------------------------------------------------------------------

Revenue
Sales to external
customers             281.7   1,014.7    486.4    101.4            -            1,884.2
Inter-segment sales    26.3     193.0        -        -       (219.3)                 -
                   --------------------------------------------------------------------
Segment revenue       308.0   1,207.7     486.4    101.4      (219.3)           1,884.2
                   --------------------------------------------------------------------
Result
Operating profit       57.4     103.2     190.6    (23.2)          -              328.0
---------------------------------------------------------------------------------------


(b) EBITDA(*) by Segment

                          months ended     Six months ended 30           Year ended
                     30 September 2005          September 2004        31 March 2005
                             $ million               $ million            $ million
-----------------------------------------------------------------------------------
Copper                           171.8                    42.0                163.0
-----------------------------------------------------------------------------------
- India/Australia                 81.5                    42.0                 87.0
- Zambia                          90.3                       -                 76.0
-----------------------------------------------------------------------------------
Aluminium                         37.6                    33.8                 75.6
Zinc                             124.0                    84.0                218.5
Others                             3.1                     0.1                 (3.1)
-----------------------------------------------------------------------------------
Group EBITDA                     336.5                   159.9                454.0
Depreciation                     (78.3)                  (38.0)              (103.7)
Operating special items              -                    (1.2)               (22.3)
-----------------------------------------------------------------------------------
Group operating profit           258.2                   120.7                328.0
-----------------------------------------------------------------------------------

(*) EBITDA being Earnings before interest, taxation, depreciation and
    amortisation, and special items (note 4).

4. Special items

(a) Administrative expenses

                      Six months ended       Six months ended 30           Year ended
                     30 September 2005            September 2004        31 March 2005
                             $ million                 $ million            $ million
-------------------------------------------------------------------------------------
Restructuring and 
redundancies                         -                      (2.6)                (4.1)
Impairment of non-core assets        -                         -                (17.8)
Profit/(loss)on sale of assets       -                       1.4                 (0.4)
-------------------------------------------------------------------------------------
                                     -                      (1.2)               (22.3)
-------------------------------------------------------------------------------------

(b) Negative goodwill

                      Six months ended       Six months ended 30           Year ended
                     30 September 2005            September 2004        31 March 2005
                             $ million                 $ million            $ million
-------------------------------------------------------------------------------------
Release of negative 
goodwill (**)                         -                         -                56.5
-------------------------------------------------------------------------------------
                                     -                         -                 56.5
-------------------------------------------------------------------------------------

(**) As set out in note 26 of the Group's financial statements for the year ended
     31 March 2005 as presented under UK GAAP, the Group acquired KCM in November
     2004. The assets and liabilities acquired were included at provisional fair
     values. The difference between the total consideration of $46.1 million and
     provisional fair value of net assets acquired ($102.0 million) was recognised in
     the UK GAAP financial statements as negative goodwill totaling $56.5 million.

     As explained in the press release dated 27 September 2005 (see note 1), under
     IFRS negative goodwill is not recognised in the balance sheet but is recognised
     immediately in the income statement.


5. Income tax expense
-------------------------------------------------------------------------------------
                       Six months ended         Six months ended           Year ended
                      30 September 2005        30 September 2004        31 March 2005
                              $ million                $ million            $ million
-------------------------------------------------------------------------------------
Current tax:
UK Corporation tax                  0.4                        -                 (0.6)
Foreign tax                        42.3                     28.8                 66.0
-------------------------------------------------------------------------------------
                                   42.7                     28.8                 65.4
-------------------------------------------------------------------------------------
Deferred tax:
Current year                       28.9                     12.5                 37.0
Attributable to decrease 
in the rate of corporation tax        -                        -                (15.4)
-------------------------------------------------------------------------------------
                                   28.9                     12.5                 21.6
-------------------------------------------------------------------------------------
Total income tax expense           71.6                     41.3                 87.0
-------------------------------------------------------------------------------------
Effective tax rate                 27.8%                    36.9%                22.5%
=====================================================================================


6. Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the
period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the period.

Diluted earnings per share amounts are calculated by dividing the net profit
attributable to ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period (adjusted for the effects of dilutive
options).

The following reflects the income and share data used in the basic and diluted
earnings per share computations:

-------------------------------------------------------------------------------------
                       Six months ended         Six months ended           Year ended
                      30 September 2005           September 2004        31 March 2005
                              $ million                $ million            $ million
-------------------------------------------------------------------------------------
Net profit
attributable to equity
holders of the parent             107.9                     34.3               178.9
-------------------------------------------------------------------------------------


-------------------------------------------------------------------------------------
                       Six months ended         Six months ended           Year ended
                      30 September 2005           September 2004        31 March 2005
                              $ million                $ million            $ million
-------------------------------------------------------------------------------------
Weighted average number
of ordinary shares for
basic earnings per share          286.7                    286.4                286.4
Effect of dilution:
  Share options                     1.5                      2.0                  1.5
-------------------------------------------------------------------------------------
Adjusted weighted
average number of ordinary
shares for diluted earnings
per share                         288.2                    288.4                287.9
=====================================================================================


(a) Earnings per share based on profit for the period/year

-------------------------------------------------------------------------------------
Basic earnings per share on the profit         
for the period/year
                              Six months ended     Six months ended        Year ended
                             30 September 2005    30 September 2005     31 March 2005
-------------------------------------------------------------------------------------
Profit for the period
attributable to equity holders
of the parent($ million)                 107.9                 34.3             178.9
Weighted average number of 
shares of the Company in issue
(million)                                286.7                286.4             286.4
-------------------------------------------------------------------------------------
Earnings per share on profit for the
period/year 
(US cents per share)                      37.6                 12.0              62.5
====================================================================================== 


-------------------------------------------------------------------------------------
Diluted earnings per share on the        
profit for the period/year               


                                 Six months ended    Six months ended      Year ended
                                30 September 2005   30 September 2004   31 March 2005
-------------------------------------------------------------------------------------
Profit for the period/year
attributable to equity
holders of the parent
($ million)                                107.9                 34.3           178.9
Adjustment in respect of
convertible bonds in Sterlite
(million)                                   (0.4)                (1.4)           (1.9)
-------------------------------------------------------------------------------------
Profit for the period/year
after dilutive adjustment                  107.5                 32.9           177.0
-------------------------------------------------------------------------------------
Adjusted weighted average number
of shares of the Company in
issue (million)                            288.2                288.4           287.9
-------------------------------------------------------------------------------------
Diluted earnings per share on
profit for the period/year
(US cents per share)                        37.3                 11.4            61.5
=====================================================================================


Shares issued during the year ended 31 March 2005 were 303,000 on 18 March 2005
and 85,000 on 31 March 2005 pursuant to the exercise of the second tranche of
awards under the Reward Plan. The issue of these shares has been included in
determining the 2005 weighted average number of shares. No shares have been
issued during the six months ended 30 September 2005.

Profit for the period would be diluted if holders of the convertible bonds in
Sterlite exercised their right to convert their bond holdings into Sterlite
equity. The impact on profit for the period of this conversion would be the
difference between interest payable on the convertible bond and the higher
charge attributable to minority interests if conversion was to occur.

The outstanding awards under the LTIP are reflected in the diluted EPS figure
through an increased number of weighted average shares.

There have been no other transactions involving ordinary shares or potential
ordinary shares since the reporting date and before the completion of these
financial statements.

(b) Earnings per share based on Underlying Profit for the period/year

The Group's Underlying Profit is the profit for the period/year after adding
back special items and their resultant tax and minority interest effects, as
shown in the table below:

--------------------------------------------------------------------------------------
                              Six months ended     Six months ended         Year ended
                             30 September 2005    30 September 2004      31 March 2005
                                     $ million            $ million          $ million
--------------------------------------------------------------------------------------
Profit for the period/year
attributable to equity
holders of the parent                    107.9                 34.3              178.9
Administrative expenses 
- special items                              -                  1.2               22.3
Special item 
- negative goodwill                          -                    -              (56.5)
Tax effect of special items                  -                 (0.4)              (1.6)
Minority interest effect of
special items                                -                 (0.5)              (3.0)
--------------------------------------------------------------------------------------
Underlying profit for the
period/year                              107.9                 34.6              140.1
======================================================================================

--------------------------------------------------------------------------------------
Basic earnings per share on Underlying   
Profit for the period/year        
                        
                                 Six months ended    Six months ended       Year ended
                                30 September 2005   30 September 2004    31 March 2005
--------------------------------------------------------------------------------------
Underlying profit for the
period/year ($million)                      107.9                34.6            140.1
Weighted average number of shares
of the Company in issue (million)           286.7               286.4            286.4
--------------------------------------------------------------------------------------
Earnings per share on Underlying
Profit for the period/year
(US cents per share)                         37.6                12.1             48.9
======================================================================================

--------------------------------------------------------------------------------------
Diluted earnings per share on      
Underlying Profit for the period/year

                                      Six months ended   Six months ended      Year ended
                                     30 September 2005  30 September 2004   31 March 2005
-----------------------------------------------------------------------------------------
Underlying profit for the
period/year ($million)                           107.9               34.6           140.1
-----------------------------------------------------------------------------------------
Adjustment in respect of
convertible bonds in
Sterlite ($million)                               (0.4)              (1.4)           (1.9)
-----------------------------------------------------------------------------------------
Underlying profit for the
period/year after dilutive
adjustment ($ million)                           107.5               33.2           138.2
-----------------------------------------------------------------------------------------
Adjusted weighted average
number of shares of the 
Company in issue (million)                       288.2              288.4           287.9
-----------------------------------------------------------------------------------------
Diluted earnings per 
share on Underlying
Profit/year for the period
(US cents per share)                              37.3               11.5            48.0
=========================================================================================


7. Movement in net debt (*)

                                Debt due within one year       Debt due after one year
------------------------------------------------------------------------------------------------------------------------
                                                                                               Current
US$ million        Cash and        Debt                          Debt                        financial
                       cash    carrying    Debt related      carrying    Debt related            asset     Total net 
                 equivalent       value     derivatives(**)     value     derivatives(**)  investments          debt    
------------------------------------------------------------------------------------------------------------------------
Opening balance at 
1 April 2005        1,185.6      (218.4)              -      (1,303.5)              -            262.0         (74.3)
IAS 32 and IAS
39 adjustments          1.0         5.4           (15.1)         15.8           (17.5)               -         (10.4)
------------------------------------------------------------------------------------------------------------------------
Adjusted opening
balance sheet
at 1 April 2005     1,186.6      (213.0)          (15.1)     (1,287.7)          (17.5)          262.0          (84.7)
Cash flow             (12.1)     (258.9)              -         (80.8)              -            32.3         (319.5)
Other non-cash 
changes                (1.0)      (52.7)           11.7          14.0           (21.9)              -          (49.9)
Foreign exchange
differences            (7.2)        2.2               -           4.8               -            (1.4)          (1.6)
------------------------------------------------------------------------------------------------------------------------
As at 
30 September 2005   1,166.3      (522.4)           (3.4)     (1,349.7)          (39.4)          292.9         (455.7)

========================================================================================================================

(*)  Net debt being total debt after fair value adjustments under IAS 32 and 39,
     cash and cash equivalents and current asset investments.

(**) Debt related derivatives exclude commodity related derivative financial
     assets and liabilities.

8. Other disclosures

Capital commitments

Contractual commitments to acquire fixed assets were US$434.2 million at 30
September 2005 (at 31 March 2005: US$538.3 million).

Contingent liabilities

There were no material changes in contingent liabilities during the period.

Related party transactions

The information below sets out transactions and balances between the Group and
various related parties for the period. These related parties include SOTL,
Sterlite Gold Limited ('Sterlite Gold'), Volcan and Duratube Limited
('Duratube') which are related by virtue of having the same controlling party as
the Group. As IFL is an associate of the Group, it is also regarded as a related
party.

The tables below set out transactions with related parties that occurred in the
normal course of trading.

SOTL
--------------------------------------------------------------------------------
                                          Six months ended            Year ended
                                         30 September 2005         31 March 2005
                                                 $ million             $ million
--------------------------------------------------------------------------------
Sales to SOTL                                          2.6                  24.7
Acquisition of fixed assets                              -                   0.1
--------------------------------------------------------------------------------
Amounts receivable at period/year end                  1.9                  16.7
--------------------------------------------------------------------------------


Sterlite Gold
--------------------------------------------------------------------------------
                                          Six months ended            Year ended
                                         30 September 2005         31 March 2005
                                                 $ million             $ million
--------------------------------------------------------------------------------
Provision of commercial services and others              -                   0.2
--------------------------------------------------------------------------------
Amounts receivable at period/year end                    -                   0.2
--------------------------------------------------------------------------------

Volcan
--------------------------------------------------------------------------------
                                          Six months ended            Year ended
                                         30 September 2005         31 March 2005
                                                 $ million             $ million
--------------------------------------------------------------------------------                           
Benefit of tax deduction gained by Vedanta               -                   3.8
Reimbursement of bank charges                          0.2                  (0.5)
--------------------------------------------------------------------------------
Amounts receivable at period/year end                    -                     -
--------------------------------------------------------------------------------                           

Duratube
--------------------------------------------------------------------------------                           
                                          Six months ended            Year ended
                                         30 September 2005         31 March 2005
                                                 $ million             $ million
--------------------------------------------------------------------------------                           
  
Acquisition of fixed assets                              -                   0.1
--------------------------------------------------------------------------------

IFL
--------------------------------------------------------------------------------
                                          Six months ended            Year ended
                                         30 September 2005         31 March 2005
                                                 $ million             $ million
--------------------------------------------------------------------------------
Sales to IFL                                         16.2                   24.4
Net interest received                                 0.3                    0.3
--------------------------------------------------------------------------------
Trade debtors receivable                              2.9                    3.6
Loan balance receivable                               6.2                    6.2
--------------------------------------------------------------------------------
Amounts receivable at period/year end                 9.1                    9.8
--------------------------------------------------------------------------------

In addition, a limited number of employees are seconded from Sterlite to IFL,
SOTL and Sterlite Gold and similarly from IFL, SOTL and Sterlite Gold to
Sterlite. The company which benefits from the seconded employee bears their
employment costs.

During the year ended 31 March 2005, Sterlite advanced loans to IFL amounting to
$6.2 million for working capital purposes. The loans were advanced from 2 April
2004 to 7 February 2005 and are repayable within two years. The loans bear
interest at 7% per annum and interest accrued during the year ended 31 March
2005 amounted to $0.3 million. The loan has been classified as investment in
associate. During the period ended 30 September 2005, Sterlite advanced no
further loans to IFL.

Transactions with Volcan

• Vedanta Resources plc

Pursuant to the terms of the Tax Deed of Indemnity dated 1 December 2003 entered
into by the Company, Volcan and its shareholders, Volcan was paid $3.8 million
by the Company on 4 January 2005. The payment equated to the estimated tax
deduction that was expected to be utilised by the Company in its tax computation
for the period ended 31 March 2004, and related to the shares transferred to Mr
BP Gilbertson, a former Chairman of the Company at the time of Listing. To the
extent the Company does not benefit from this tax deduction, including the
circumstance where the deduction may be disallowed by HM Revenue & Customs,
Volcan has agreed that it will reimburse the Company.

Transactions with Sterlite Gold and SOTL

Pursuant to the terms of the Shared Services Agreement dated 5 December 2003
entered into by the Company, Sterlite, SOTL and Sterlite Gold, the Company and
Sterlite provide various commercial services in relation to SOTL's and Sterlite
Gold's businesses on an arms length basis and at normal commercial terms.

For the period from 10 December 2003 to 31 March 2005, the commercial services
provided to SOTL and Sterlite Gold were performed by certain senior employees of
the Group on terms set out in the Shared Services Agreement. The services
provided to SOTL and Sterlite Gold during this period amounted to $0.03 million
and $0.1 million, respectively. There was no material charge during the six
months ended 30 September 2005.

Political and Public Awareness Trust

During the period, the Group contributed did not contribute to the Political and
Public Awareness Trust in the period (2005: $1.3 million). This trust makes
contributions to political parties and related causes. The trust is a related
party as it is controlled by members of the Agarwal family.

Sterlite Foundation

During the period, $0.3 million was paid by HZL to the Sterlite Foundation
(2005: $0.8 million paid by Balco and HZL). The Sterlite Foundation is a
registered not-for-profit entity engaged in computer education and other related
social and charitable activities. The major activity of the Sterlite Foundation
is providing computer education for disadvantaged students. The Sterlite
Foundation is a related party as it is controlled by members of the Agarwal
family.

9. IFRS Reconciliations

(a) Reconciliation of 'shareholders' equity' under UK GAAP to 'equity
    attributable to equity holders of the parent' under IFRS (excluding IAS 32/39)

--------------------------------------------------------------------------------
                                   As at               As at               As at
                           31 March 2005        30 September       01 April 2004
                           -----------------------------------------------------
                            US $ million        US $ million        US $ million
--------------------------------------------------------------------------------
Shareholders' equity under 
UK GAAP                          1,047.1               956.2               990.9
Reversal of negative
goodwill and amortisation           64.6                 8.2                 8.6
Post retirement benefits            (6.6)               (6.2)               (6.6)
Deferred tax                       (88.6)              (94.8)             (100.3)
Interim dividend                   (15.8)                  -                   -
Proposed dividend                   48.9                15.8                15.8
Minority interest                   45.3                52.3                56.3
Capitalisation of trial 
run expenses                        12.8                12.1                12.9
Capitalisation of major
overhaul expenses                    0.5                 1.1                 0.6
Capitalisation of interest cost      0.8                 0.9                 0.3
Depreciation                        (1.2)               (1.1)               (1.2)
Discounting of long term provision   0.8                 0.8                 0.3
Dismantling cost                     0.4                 0.4                 0.5
Inventory valuation                  1.5                 1.6                 1.7
--------------------------------------------------------------------------------
Equity attributable to
equity holders of the
parent under IFRS                1,110.5               947.3               979.8
================================================================================

(b) Reconciliation of 'Profit for the year/period' under UK GAAP to 'equity
    attributable to equity holders of the parent' under IFRS (excluding IAS 32/39)
    
                                                   Year ended        Six months ended
                                                31 March 2005       30 September 2004

                                                 US $ million            US $ million
-------------------------------------------------------------------------------------
Profit for the year/period under UK GAAP                234.7                    70.6
Overhaul expenses                                        (0.1)                    0.6
Share based payments                                     (2.5)                   (1.8)
Capitalisation of interest income/ expense                0.9                     0.6
Deferred tax                                             10.6                     0.2
Reversal of goodwill amortisation                        (0.4)                    0.2
Inventory valuation                                      (0.4)                    0.2
Negative goodwill generated during the year/period       56.5                       -
-------------------------------------------------------------------------------------
Profit for the year/period under IFRS                   299.3                    70.6
=====================================================================================


10. Adoption of IAS 32 and IAS 39

The consolidated balance sheet as at 31 March 2005 has been adjusted to apply
IAS 32 and IAS 39 prospectively from 1 April 2005 as set out below:

--------------------------------------------------------------------------------
                                            IFRS                            IFRS
                                   31 March 2005       IAS 32/39    1 April 2005
                                    US $ million    US $ million    US $ million
--------------------------------------------------------------------------------
ASSETS
Non-current assets
Goodwill                                    12.2               -            12.2
Property, plant and equipment            2,288.6               -         2,288.6
Investment in associate                      3.3               -             3.3
Financial asset investments                 24.8             1.3            26.1
Other non-current assets                    34.6           (12.4)           22.2
Other financial assets (derivatives)           -            12.4            12.4
Deferred tax asset                          90.0               -            90.0
--------------------------------------------------------------------------------
                                         2,453.5             1.3         2,454.8
--------------------------------------------------------------------------------
Current assets
Inventories                                337.7               -           337.7
Trade and other receivables                339.6               -           339.6
Other current financial assets 
(derivatives)                                  -             2.5             2.5
Current asset investments                  262.0               -           262.0
Cash and cash equivalents                1,185.6             1.0         1,186.6
--------------------------------------------------------------------------------
                                         2,124.9             3.5         2,128.4
--------------------------------------------------------------------------------
TOTAL ASSETS                             4,578.4             4.8         4,583.2
--------------------------------------------------------------------------------
LIABILITIES
Current liabilities
Short term borrowings                     (194.7)              -          (194.7)
Convertible loan notes                     (23.7)            5.4           (18.3)
Trade and other payables                  (675.0)            3.2          (671.8)
Other current financial 
liabilities (derivatives)                      -           (38.7)          (38.7)
Provisions                                 (37.0)              -           (37.0)
Current tax liabilities                    (15.1)              -           (15.1)
--------------------------------------------------------------------------------
                                          (945.5)          (30.1)         (975.6)
--------------------------------------------------------------------------------
Net current assets/(liabilities)         1,179.4           (26.6)        1,152.8
--------------------------------------------------------------------------------
Non-current liabilities
Medium and long term borrowings         (1,303.5)           15.8        (1,287.7)
Trade and other payables                   (41.2)           18.6           (22.6)
Other financials liabilities
(derivatives)                                  -           (29.9)          (29.9)
Deferred tax liabilities                  (234.9)            6.6          (228.3)
Provisions                                (247.2)              -          (247.2)
Non equity minority interests              (59.4)              -           (59.4)
--------------------------------------------------------------------------------
                                        (1,886.2)           11.1        (1,875.1)
--------------------------------------------------------------------------------
Total liabilities                       (2,831.7)          (19.0)       (2,850.7)
--------------------------------------------------------------------------------
Net Assets                               1,746.7           (14.2)        1,732.5
================================================================================

EQUITY
Share capital                               28.7               -            28.7
Share premium account                       18.6               -            18.6
Share based payment reserves                 2.5               -             2.5
Other reserves                              43.9            (3.2)           40.7
Retained earnings                        1,016.8            (8.9)        1,007.9
--------------------------------------------------------------------------------
Equity attributable to equity
holders of the parent                    1,110.5           (12.1)        1,098.4
Minority interests                         636.2            (2.1)          634.1
--------------------------------------------------------------------------------
Total Equity                             1,746.7           (14.2)        1,732.5
================================================================================

Independent Review Report to Vedanta Resources plc

We have been instructed by the company to review the financial information for
the six months ended 30 September 2005 which comprises the consolidated income
statement, the consolidated balance sheet, the consolidated cash flow statement,
the consolidated statement of changes in equity, and related notes 1 to 10. We
have read the other information contained in the interim report and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.

This report is made solely to the company in accordance with Bulletin 1999/4
issued by the Auditing Practices Board. Our work has been undertaken so that we
might state to the company those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than
the company, for our review work, for this report, or for the conclusions we
have formed.

Directors' responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
are responsible for preparing the interim report in accordance with the Listing
Rules of the Financial Services Authority and the requirements of International
Accounting Standard 34, 'Interim Financial Reporting' (IAS 34) which require
that the accounting policies and presentation applied to the interim figures are
consistent with those applied in preparing the preceding annual accounts except
where any changes, and the reasons for them, are disclosed.

International Financial Reporting Standards (IFRSs)

As disclosed in note 2, the next annual financial statements of the Group will
be prepared in accordance with IFRSs as adopted for use in the EU. Accordingly,
the interim report has been prepared in accordance with and the requirements of
IFRS 1, 'First-time Adoption of International Financial Reporting Standards' and
IAS 34 relevant to interim reports. The accounting policies are consistent with
those that the directors intend to use in the annual financial statements. There
is, however, a possibility that the directors may determine that some changes to
these policies are necessary when preparing the full annual financial statements
for the first time in accordance with IFRSs as adopted for use in the EU.

Review work performed

We conducted our review in accordance with the guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and, based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with International Standards on Auditing (UK and
Ireland) and therefore provides a lower level of assurance than an audit.
Accordingly, we do not express an audit opinion on the financial information.

Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 September 2005.

Deloitte & Touche LLP
Chartered Accountants
London
16 November 2005




Glossary and Definitions

Aluminium Business
  The aluminium business of the Group comprising its Fully-integrated bauxite
  mining, alumina refining and aluminium smelting in India

Attributable Profit
  Profit for the financial year before dividends to the shareholders of Vedanta
  Resources plc

BALCO
  Bharat Aluminium Company Limited, a company incorporated in India

Board
  The board of directors of the Company

Businesses
  The Aluminium Business, the Copper Business and the Zinc Business together

Capital Employed
  Net assets before net (debt)/cash

Cash Tax Rate
  Current taxation as a percentage of profit on ordinary activities before
  taxation

CMT
  Copper Mines of Tasmania Pty Ltd, a company incorporated in Australia

Company or Vedanta
  Vedanta Resources plc

Copper Business
  The copper business of the Group comprising a copper smelter, a refinery and two
  copper rod plants in India, two copper mines in Australia and an integrated
  operation in Zambia consisting of three mines, a leaching plant and a smelter

CSR
  Corporate social responsibility

Directors
  The directors of the Company

Dollar or $
  United States dollars, the currency of the United States of America

EBITDA
  Earnings before interest, taxation, depreciation, goodwill amortisation and
  special items (see note 3)

EBITDA Margin
  EBITDA as a percentage of turnover


Effective Holdings and Economic Interest
  The Group's Economic Interest in operating companies is different from its
  Effective Holdings as a consequence of the Sterlite shares owned by the SEWT.
  The Effective Holdings are derived by combining the Group's direct and indirect
  shareholdings in the operating companies. The shares held by the SEWT in
  Sterlite are recorded as a reduction in shareholders' funds, as if the shares
  were cancelled. This has the effect of the Group's Economic Interest being
  higher compared to its Effective Holdings. The Group's Economic Interest is the
  basis on which the Attributable Profit and net assets are determined in the
  consolidated accounts

EPS
  Earnings per Ordinary Share

Executive Directors
  The executive directors of the Company

Expansion Capital Expenditure
  Capital expenditure that increases the Group's operating capacity

Free Cash Flow
  Cash flow arising from EBITDA after net interest, taxation, Sustaining Capital
  Expenditure and working capital movements (see Financial Review)

GAAP
  Generally Accepted Accounting Principles

Gearing
  Net debt as a percentage of Capital Employed

Government
  The Government of the Republic of India

Group
  The Company and its subsidiary undertakings and, where appropriate, its
  associate undertaking

HSE
  Health, safety and environment

HZL
  Hindustan Zinc Limited, a company incorporated in India

IFL
  India Foils Limited, a company incorporated in India

IFRS
  International Financial Reporting Standards

Interest Cover
  EBITDA divided by finance cost

KCM or Konkola Copper Mines
  Konkola Copper Mines PLC, a company incorporated in Zambia

KDMP
  Konkola Deep Mining Project

LIBOR
  London Inter Bank Offered Rate

Listing
  The listing of the Company's Ordinary Shares on the London Stock Exchange on 10
  December 2003

Listing Particulars
  The listing particulars dated 5 December 2003 issued by the Company in
  connection with its Listing

LME
  London Metals Exchange
  London Stock Exchange
  London Stock Exchange plc

LTIP
  Vedanta Resources Long Term Incentive Plan

MALCO
  The Madras Aluminium Company Limited, a company incorporated in India

mt or tonnes
  Metric tonnes

MW
  Megawatts of electrical power

Non-executive Directors
  The non-executive directors of the Company

Ordinary Shares
  Ordinary shares of $0.10 each in the Company

Return on Capital Employed or ROCE
  Profit before interest, taxation, special items, tax effected at the Group's
  effective tax rate as a percentage of Capital Employed

Reward Plan
  Vedanta Resources Share Reward Plan

SEWT
  Sterlite Employee Welfare Trust, a long-term investment plan for Sterlite senior
  management

SOTL
  Sterlite Optical Technologies Limited, a company incorporated in India

SOVL
  Sterlite Opportunities and Ventures Limited, a company incorporated in India

Special items
  Items which derive from events and transactions that need to be disclosed
  separately by virtue of their size or nature

Sterlite
  Sterlite Industries (India) Limited, a company incorporated in India

Sustaining Capital Expenditure
  Capital expenditure to maintain the Group's operating capacity

TC/RC
  Treatment charge/refining charge being the terms used to set the smelting and
  refining costs

tpa
  Metric tonnes per annum

TCM
  Thalanga Copper Mines Pty Limited, a company incorporated in Australia

Twin Star
  Twin Star Holdings Limited, a company incorporated in Mauritius

Twin Star Holdings Group
  Twin Star and its subsidiaries and associated undertaking

Underlying Profit
  Profit for the year after adding back special items and their resultant tax and
  minority interest effects

VAL
  Vedanta Alumina Limited, a company incorporated in India

Volcan
  Volcan Investments Limited, a company incorporated in the Bahamas

VRHL
  Vedanta Resources Holdings Limited, a company incorporated in the United Kingdom

ZCI
  Zambia Copper Investment Limited, a company incorporated in Bermuda

ZCCM
  ZCCM Investments Holdings plc, a company incorporated in Zambia

Zinc Business
  The zinc-lead business of the Group comprising its fully integrated zinc-lead
  mining and smelting operations in India




                      This information is provided by RNS
            The company news service from the London Stock Exchange