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Vedanta Resources (VED)

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Thursday 16 November, 2006

Vedanta Resources

Interim Results

Vedanta Resources PLC
16 November 2006


                                                                16 November 2006

                             Vedanta Resources plc
           Interim Results for the Six Months Ended 30 September 2006

Highlights

• Record Financial Performance
       
  -  Group Revenue up 117% to $3.0 billion, driven by better prices and
     strong volume growth
  -  Group EBITDA up 284% to $1.3 billion, driven by better prices and
     operational efficiencies
  -  Operating profit up 355% to $1.2 billion
  -  Attributable profit up 315% to $448 million
  -  Basic EPS up 315% at 156.1 US cents, EPS on the basis of Underlying
     Profit up 330% to 161.5 US cents
  -  Interim dividend proposed at 15.0 US cents per share
  -  Free cash flows of $606 million
  -  Strong balance sheet with net assets of $3.1 billion and nil gearing
  -  ROCE (excluding project capital work in progress) significantly higher
     at 86% (annualised), up from 28%

• Strong Operational Performance

  -  Higher Aluminium, Zinc and Indian Copper production volumes
  -  245,000 tpa smelter at Korba fully restored
  -  Lanjigarh refinery in final run up for commissioning by March 2007
  -  Ongoing exploration at Hindustan Zinc increases reserves

• Strategic Initiatives

  -  Entry into commercial energy business: $1.9 billion 2,400MW power
     project approved

                                             (in US$ millions, except as stated)
-------------------------------------              --------   -------- --------
Consolidated Group Results                         H1 2007    H1 2006    Change
-------------------------------------              --------   -------- --------
Revenue                                            3,004.5    1,384.6    117.0%
EBITDA                                             1,290.5      336.5    283.5%
EBITDA Margin                                         43.0%      24.3%
Operating Profit                                   1,174.1      258.2    354.7%
Attributable Profit                                  447.6      107.9    314.8%
Basic Earnings per Share (US cents)                  156.1       37.6    315.2%
ROCE (excluding project capital work in progress)     86.0%      27.8%      NA
-------------------------------------              --------   -------- --------
Interim Dividend (US cents per share)                 15.0       5.70    163.2%
-------------------------------------              --------   -------- --------

'These strong results demonstrate the benefits of Vedanta's unique growth
profile, our low cost base and our success in delivering on our expansions since
the IPO,' said Mr. Anil Agarwal, Chairman, Vedanta Resources plc. 'The success
of our strategy supports our move to continue expanding our business both in our
existing metals, where we are implementing projects to develop a million tonnes
of each metal and in commercial energy, where we are announcing our first major
project.'

For further information, please contact:

Sumanth Cidambi                         sumanth.cidambi@vedanta.co.in
Associate Director - Investor           Tel: +44 20 7659 4732 / +91 22 6646 1531
Relations                               
Vedanta Resources plc

James Murgatroyd                        Tel: +44 20 7251 3801
Robin Walker
Finsbury

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, Australia and Armenia. The major metals produced are Aluminium,
copper, zinc, lead and gold. For further information, please visit
www.vedantaresources.com.

Disclaimer
This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities, nor shall there be any sale of the securities
described herein, in any jurisdiction, including the United States, in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of such jurisdiction. Sterlite has filed
a registration statement in the United States under the Securities Act of 1933,
as amended, in connection with the offer and sale of securities described
herein. Any public offering of the securities referred to herein to be made in
the United States will be made by means of a prospectus that forms a part of
this registration statement and that contains detailed information about
Sterlite and its management, as well as financial statements.

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,' 'should' or 'will.' Forward-looking statements by their nature address
matters that are, to different degrees, uncertain. For us, uncertainties arise
from the behaviour 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 a 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. We do not undertake to update our forward-looking
statements.


Chairman's Statement

The last six months has been a period of continuing growth for Vedanta. The
majority of our Phase I projects are complete, delivering a significant increase
in capacity which coupled with firm metal prices are yielding unparalleled
growth. Our continuing Phase II initiatives are on track to continue delivering
this growth.

EBITDA has more than trebled compared with the corresponding period last year
and attributable profits have increased by over 300%. Substantially higher
volumes, increased metal prices and tight cost control continue to be the
drivers of this growth.

Our clear roadmap continues to be to enhance shareholder value significantly by
achieving annual production levels of 1 million tonnes in each of our primary
metals. An amount of $1.7 billion has already been either spent or committed as
part of our Phase II growth programme due to be completed by 2010. These Phase
II projects, most of which are close replicas of projects that we have
undertaken already, remain on track. Volumes have been increased substantially
across our Aluminium, Zinc and Indian Copper Businesses.

I am also pleased to announce our plans to enter the commercial energy business
in India. The growth and development of India's electricity sector is a critical
component of growth in the Indian economy. As part of our strategy to play a
leading role in this growth and given our level of expertise in developing power
assets, the Group proposes to set up a 2,400MW coal based thermal power plant at
Jharsuguda, Orissa at a total cost of approximately $1.9 billion. This also
allows us to bid for and participate in developing Ultra Mega Power Projects
tendered by the Government of India.

Throughout the first half, the domestic Indian economy and the economies of our
other main markets in Asia have continued to register healthy growth in demand
and the outlook remains good.

At this important half year stage, I would like once again to acknowledge the
leading contribution of our employees to our continued growth. I would also like
to thank the communities in which we operate for their continued support. With
the outlook being positive for the remainder of the year, I look forward to
communicating further progress at the year-end.

Anil Agarwal
Chairman

London
16 November 2006

Business Review

Summary

Production volumes for the Aluminium, Zinc and Indian Copper Businesses during
the six months ended 30 September 2006 ('H1 2007') were higher than in the
corresponding six months of the previous year ('H1 2006') due to the progressive
commissioning and ramp up of our Phase I expansion projects at Korba, Chanderiya
and Tuticorin. While mined metal production at KCM improved as compared to the
preceding two quarters, refined copper production was lower primarily due to a
planned shutdown of our Nkana smelter.

The de-bottlenecking project at our Tuticorin copper smelter to enhance capacity
to 400,000 tpa is progressing well. The alumina refinery at Lanjigarh is in the
final stages of commissioning. Our Phase II expansion projects are progressing
on schedule with orders for critical equipment and packages placed and with
preconstruction activities having been commenced.

Group revenues have more than doubled from the corresponding previous period and
have passed the $3.0 billion mark in H1 2007, with EBITDA at $1.3 billion and
operating profit at $1.2 billion surpassing the full previous year's EBITDA of
$1.1 billion and operating profit of $0.9 billion. The key drivers of higher
revenue and EBITDA were the increase in volumes across the Aluminium, Copper and
Zinc Businesses due to capacity expansions and a significant increase in
commodity prices, with ongoing focus operational efficiencies in reducing unit
costs.

The EBITDA margin increased to 43.0% in H1 2007 from 24.3% in H1 2006, with an
increase in margins across all the Group's Businesses, on account of higher
commodity prices and tight control on costs.

Segmental revenues and EBITDA are presented in the table below.

                                            (in US$ millions, except as stated)
                                    H12007            H12006             Change
Revenue
Aluminium                            396.2             155.8             154.3%
Copper
- India/Australia                   1190.2             596.5              99.5%
- Zambia                             488.2             304.9              60.1%
Zinc                                 881.5             271.9             224.2%
Others                                48.4              55.5             (12.8%)
                                    3004.5            1384.6             117.0%

EBITDA
Aluminium                            136.4              37.6             262.8%
Copper
- India/Australia                    211.7              81.5             159.8%
- Zambia                             244.4              90.3             170.7%
Zinc                                 703.5             124.0             467.3%
Others                                (5.5)              3.1                NA
                                    1290.5             336.5             283.5%


Effective Interest/Minorities

There has been no change in the Group's ownership in subsidiaries other than in
respect of newly acquired subsidiaries during H1 2007. The decrease in Vedanta
shareholders' share of profits from 57.1% at 31 March 2006 to 52.9% at
30 September 2006 is entirely due to a change in profit mix with higher
contribution to profits from subsidiaries where minority ownership is higher
than that in the previous full year.

We are continuing to focus on increasing the Group's shareholding in
subsidiaries. In the case of BALCO, Vedanta has exercised its call option to buy
the 49% stake held by Government of India in BALCO and the independent valuer's
report has been submitted to the Government. A dispute has arisen between the
Government of India and Sterlite and both parties are currently in discussion to
resolve the dispute.

In the case of KCM, a notice expressing Vedanta's interest to acquire ZCI's
stake of 28.4% has been sent, and the process of appointing an independent
valuer is under way. A dispute has arisen as part of this process and ZCI have
submitted a notice of arbitration.

Dividend

Vedanta has a progressive dividend policy in place, as announced at the time of
the Group's IPO in December 2003. Taking account of the fact that, as a result
of the Group's exceptional performance, the dividend payout ratio has been
decreasing rapidly, the Board is proposing a half year dividend of 15.0 US cents
per ordinary share.

Outlook

Demand for commodities is expected to remain healthy in the second half of
FY 2007.

We expect volumes in our Indian Copper Businesses to increase progressively with
the additional debottlenecking of capacity. Additionally, mine production at CMT
is expected to remain steady for the rest of the year. The ongoing stabilisation
efforts at KCM are expected to yield results in the second half of FY 2007 and
we expect production levels to increase progressively. Zinc and lead production
volumes are expected to increase in the second half of the year due to the ramp
up of the Chanderiya smelter. Aluminium production is expected to improve
marginally in the second half on the back of the full commissioning of the Korba
II smelter.

TC/RCs are showing signs of softening globally due to low mine supply forecasts,
which may affect smelter margins going forward.

While there is pressure on input costs, we expect that unit costs of production
will remain steady or show a slight improvement due to production efficiencies
and continuous improvement measures.

Aluminium
                                            (in US$ millions, except as stated)
                                           H12007   H12006   Change    FY 2006

Revenue                                     396.2    155.8    154.3%     453.0
EBITDA                                      136.4     37.6    262.8%     135.3
EBITDA margin                                34.4%    24.1%      NA       29.9%
Operating profit                            109.6     27.8    294.2%     102.8
Production volumes ('000 mt)                  
- Alumina                                     150      142      5.6%       211
- Aluminium                                   155       82     89.0%       296

Average LME cash settlement prices ($/mt)   2,565    1,810     41.7%     2,028

Unit costs($/mt)                            
- BALCO                                     1,555    1,551      0.3%     1,497
- MALCO                                     1,633    1,530      6.7%     1,671

Note: BALCO unit costs represents costs of old Korba plant only

The existing plants at BALCO and MALCO continue to operate at their rated
capacity and produced 70,000 tonnes in H1 2007.

The new Korba smelter achieved production of 85,000 tonnes in H1 2007 with
progressive commissioning of pots that were disrupted in May 2006. All of the
pots taken out of line as a result of the power tripping incident are now fully
restored. As at 30 September 2006, a total of 265 pots were commissioned. The
performance of all pots has been improving steadily and are expected to reach
full capacity of 245,000 tpa by the end of this financial year. All four units
of the new 540 MW captive power plant continue to operate well.

In spite of a sharp increase in input costs, mainly carbon and fluoride, the
unit costs of BALCO 1 smelter were steady at $1,555 per tonne in H1 2007
compared with $1,551 per tonne in H1 2006, primarily due to savings from
improved operational efficiencies and a reduction in power generation costs.
Unit costs at MALCO have also been affected by similar factors and together with
the impact of a planned power plant shutdown that required power to be drawn
from the State grid, have increased costs to $1,633 per tonne.

The unit costs of BALCO's new Korba smelter were $2,051 per tonne. We sourced
alumina from third party vendors, at an average cost of $1,239 per tonne of
aluminium metal produced in H1 2007. Other manufacturing costs were $812 per
tonne. These costs are progressively reducing with increases in volumes and the
stabilisation of pots, despite the increase in carbon and fluoride costs. With
international spot alumina prices softening and now below $300 per tonne levels,
a reduction in overall costs is expected in the second half of the financial
year.

Revenues in the Aluminium business increased by 154.3% to $396.2 million, with
EBITDA at $136.4 million, an increase of 262.8% from the previous corresponding
period. The increase in revenue and profitability was mainly as a result of an
increase in production volumes from BALCO's new Korba plant, higher LME prices
and operational efficiencies achieved. This was achieved despite the higher
prices of the alumina sourced for the new Korba smelter from third party vendors
during the period. The EBITDA margin for the Aluminium business was 34.4% in
H1 2007 compared with 24.1% in H1 2006.

The alumina refinery at Lanjigarh is in the final commissioning stage and is
expected to be commissioned before March 2007. As regards the issue of
environmental clearances for developing the Lanjigarh bauxite deposits, the
Ministry of Environment and Forestry has now received reports from the various
subcommittees and is expected to shortly give its recommendations on this matter
to the Supreme Court. We are hopeful of a positive resolution of this matter in
the near future.

Our greenfield 500,000 tpa aluminium smelter in Jharsuguda, Orissa, is being
constructed in two phases. Phase I is due for commissioning in mid 2009 and
Phase II in late 2010, at a total cost of $2.1bn. Each phase will involve the
construction of a 250,000 tpa smelter and captive power plant (five units in the
first phase and four in the second). Preconstruction activities are progressing
well and two-thirds of the orders have been awarded.

Copper - India and Australia

                                          (in US$ millions, except as stated)
                                    H 1 2007   H 1 2006   Change %   FY 2006

Revenue                              1,190.2      596.5       99.5%  1,537.9
EBITDA                                 211.7       81.5      159.8%    219.0
EBITDA margin                           17.8%      13.7%        NA      14.2%
Operating profit                       175.2       62.3      181.2%    175.6
Production volumes ('000 mt)              
- Mined metal content                     15         18      (16.7%)      34
- Cathode                                137        124       10.5%      273 
- Rod                                     87         80        8.8%      167
Average LME cash settlement prices
(USc/lb)                               338.6      162.3      108.6%    185.9
Unit costs(USc/lb)                       5.2        6.5      (20.0%)     6.1
Realised TC/RCs (USc/lb)                37.1       15.7      136.3%     23.1

Copper cathode production in the second quarter of 80,000 tonnes was the highest
ever produced. Together with the first quarter cathode production of 57,000
tonnes due to a planned maintenance shutdown in April 2006, the copper smelter
at Tuticorin has performed well and has produced 137,000 tonnes of cathode in
H1 2007. De-bottlenecking of the smelter to expand its capacity to 400,000 tpa,
is now mechanically complete with trial runs beings conducted. We expect this to
be fully operational by December 2006, as scheduled. Mined metal production at
our Australian mine was 15,000 tonnes in HI 2007, lower than the corresponding
half of the previous year, due to the planned closure of Thalanga Copper Mines
in the second quarter of the previous year.

Despite an increase in energy prices, copper unit costs were further reduced to
5.2 USc/lb in H1 2007 compared with 6.5 USc/lb in H1 2006, primarily on account
of improved productivity and improved by-product management together with the
higher realisation for free metal.

TC/RCs in H1 2007 improved significantly to 37.1 USc/lb from 15.7 USc/lb in
H1 2006 on the back of strong market conditions.

Revenues at the Copper business in India/Australia have nearly doubled to
$1,190.2 million, with an EBITDA of $211.7 million. The increase in revenues was
primarily due to a significant increase in LME prices. The increase in
profitability was mainly due to better TC/RC realisation, an increase in LME
prices for the Australian mining business and a reduction in unit costs. This
was despite the reduction in import tariffs from 10.0% to 7.5% affecting
realisation in domestic markets. The EBITDA margin for the Copper business in
India/Australia has improved to 17.8% in H1 2007 compared with 13.7% in H1 2006.


Copper - Zambia

                                          (in US$ millions, except as stated)
                                    H 1 2007   H 1 2006   Change %   FY 2006

Revenue                                488.2      304.9       60.1%    703.4
EBITDA                                 244.4       90.3      170.7%    206.3
EBITDA margin                           50.1%      29.6%        NA      29.3%
Operating profit                       216.8       63.3      242.5%    163.0
Production volumes ('000 mt)              
- Mined metal content                     43         54      (20.4%)      99
- Cathode                                 70         81      (13.6%)     164
Average LME cash settlement prices
(USc/lb)                               338.6      162.3      108.6%    185.9
Unit costs(USc/lb)                     143.9      113.2       27.1%    127.9

Mined metal output at KCM continued to show an improving trend with production
in the second quarter at 25,000 tonnes compared with 18,000 tonnes in the first
quarter. Mined metal production at 43,000 tonnes in H1 2007 was lower than
H1 2006, due to low head-grade ore and lower recoveries due to changes in
mineralogy.

Copper cathode production in H1 2007 was at 70,000 tonnes, lower than H1 2006,
primarily due to a planned shutdown of the Nkana smelter for process
improvements. Production also fell due to a small fire at the tailings leach
plant that caused one of the circuits to be taken out of line to restabilise
operations. The circuit is now back to normal. There was also a leak in a
pipeline at the tailings leach plant, as a result of which the plant was shut
down. The pipeline was promptly repaired and related remedial work was carried
out. We are awaiting authorisation from the authorities to resume production at
the earliest opportunity. We continue our efforts to improve the operational
efficiencies in a planned and phased manner and expect to achieve a production
run rate of 200,000 tpa by December 2006.

Unit costs of production were at 143.9 c/lb in H1 2007, an increase from 113.2 
c/lb in H1 2006. The increase in costs is due to an increase in wage costs,
higher input prices and lower output.

Revenues at the Copper business in Zambia increased by 60.1% to $488.2 million
due to significant increase in commodity prices. The EBITDA of $244.4 million,
increased by 170.7% from the previous corresponding period, primarily due to an
increase in the LME prices, despite the reduction in volumes and increase in
unit costs of production. The EBITDA margin of the Copper business in Zambia was
improved at 50.1%, as compared to 29.6% in the corresponding period for the
previous year.

Under the Phase II programme, there are two major expansion projects in Zambia
underway totalling $680 million in capex. The first is the Konkola Deeps mine at
a cost of $400 million, which is currently being expanded by sinking a new
shaft, widening an existing shaft, installing a concentrator, major equipment
changes and the establishment of a pumping station. The Konkola mine expansion
is scheduled to be completed in late 2009. The second major expansion project is
the construction of a new 250,000 smelter at Nchanga, expected to be completed
in mid 2008. The concentrate feed for this smelter will come from the Konkola
mine.

Zinc

                                           (in US$ millions, except as stated)
                                    H 1 2007    H 1 2006    Change    FY 2006

Revenue                                881.5       271.9     224.2%     875.5
EBITDA                                 703.5       124.0     467.3%     532.9
EBITDA margin                           79.8%       45.6%       NA       60.9%
Operating profit                       681.4       102.0     568.0%     489.5
Production volumes ('000 mt)             
- Mined metal content                    256         220      16.4%       472
- Refined metal                          161         123      30.9%       284
Average LME cash settlement prices
($/mt)                                 3,333       1,286     159.2%     1,614
Unit costs($/mt)                         838         707      18.5%       691

Mined metal production was 256,000 tonnes in H1 2007, an increase of 16.4% as
compared with H1 2006 and in line with our expectations, primarily due to an
increase in output from the Rampura Agucha mines. Refined zinc production was
161,000 tonnes in H1 2007, an increase of 30.9% as compared with H1 2006,
primarily due to production from the new hydro smelter. The new hydro smelter
produced 61,000 tonnes in H1 2007. With the stabilisation of the new hydro
smelter, we expect it to reach its rated capacity by the end of December 2006.
During the first half of the year, we sold zinc concentrate of 146,000 dry
metric tonnes and lead concentrate of 30,000 dry metric tonnes.

Unit costs of production excluding royalties were marginally lower at $600 per
tonne in H1 2007 as compared with $608 per tonne in H1 2006, primarily due to an
increase in volumes, various productivity improvement initiatives and savings in
procurement costs. Royalties, which are LME-linked, amounted to $238 per tonne
in H1 2007 compared with $99 per tonne in H1 2006, leading to total unit costs
of production of $838 per tonne in H1 2007 as against $707 per tonne in H1 2006.

Revenues for the Zinc business more than trebled to $881.5 million, primarily
due to an increase in metal volumes as a result of higher metal and mined
production and significant increase in commodity prices. The EBITDA in H1 2007
was $703.5 million, an increase of 467.3% over $124.0 million in H1 2006,
primarily due to an increase in revenues and operational efficiencies. The
EBITDA margin in H1 2007 was 79.8%, compared with 45.6% in H1 2006.

HZL continues to expand its exploration programme, focusing on the area
immediately around its current mining operations in Rajasthan. As a result, its
reserves have been re-assessed at 31 March 2006 at 53.4 million tonnes at an
average grade of 12.8%.

Work on the new 170,000 tpa Chanderiya hydro smelter is moving forward as
planned, with basic and process engineering activities now completed and all
major and critical orders placed. The project is progressing well, and the
smelter is on schedule for completion in early-2008.


Financial Review

Background

The Financial Statements have been prepared in accordance with International
Financial Reporting Standards ('IFRS') as adopted for use in the European Union.
The reporting currency of Vedanta Resources plc is the US dollar.

Key Financial Performance Indicators
                                              (in $ million, except as stated)
                      30 September 2006    30 September 2005    31 March 2006

EBITDA                          1,290.5                336.5          1,101.5
Underlying EPS (USc
per share)                        161.5                 37.6            130.2
Free Cash Flows                   606.0                (38.6)           634.8
ROCE* (excluding
project capital
work-in-progress)                  86.0%                27.8%            37.9%
Net Debt / (Cash)                (216.0)              (455.7)            11.9
*Annualised basis

Key Financial Highlights

•    Underlying earnings of $463.2 million and operating profit of $1,174.1
     million in H1 2007, an increase of 329.3% and 354.7%, respectively
•    Net Debt reduced significantly from under $12 million at 31 March 2006
     to net cash of $216 million at 30 September 2006
•    Record Free Cash Flow of $606.0 million due to higher operational
     earnings sustained by the efficient management of working capital
•    Underlying EPS of 161.5 US cents (non annualized) up from 37.6 US cents
     (non annualized) in September 2005
•    ROCE (adjusted for project capital work in progress) significantly
     improves to 86.0% in H1 2007 from 37.9% in FY 2006

Summary of Financial Performance

Successful completion of our Phase I projects in copper, aluminum and zinc has
resulted in strong growth in volumes in H1 2007 compared with H1 2006. Such
increases in volumes in all the metals on the back of strong metal prices
resulted in an increase in profit before tax of 1,189.2 million (before special
items) in H1 2007 from $257.1 million (before special items) in the comparative
period, representing a growth of 362.5%. Similarly, Underlying Earnings per
Share grew to 161.5 US cents, up from 37.6 US cents, an increase of 329.5%. Cost
pressures continued in all operations, a consistent trend across the mining
sector. However, Vedanta has been able to minimise the impact of the cost
increases by effective use of its capital and maximising its productivity.

Net Cash at 30 September 2006 was $216.0 million, up from $11.9 million of Net
Debt at 31 March 2006, as a result of record Free Cash Flow of $606.0 million
and expansion capital expenditure of $285.8  million. Free Cash Flow for period
ended 30 September 2006 increased by over $644.6 million in the comparative
period primarily due to good operating results and effective management of
working capital balances, partially offset by income taxes.

Vedanta's Phase I capital investments of $2.2 billion are largely complete and
at levels of 15% to 20% below budged amounts for completed projects. Ramping up
of Chanderiya (zinc) is almost complete and the Korba (aluminium) project is now
back on track. The alumina refinery project at Orissa is also progressing well
with bauxite feed scheduled to commence in January 2007.

Phase II of the expansion programme with $3.1 billion of projects announced last
year, is now well under way and a significant proportion of funding for this
programme will be from operational cash flows. We have committed an amount of
$1,652.4 million, which is 50% of the total capital outlay. Of this, $201.5
million has already been spent and $1450.9 million remains committed but as yet
unspent, as of 30 September 2006.

We also plan to enter into commercial generation of energy and have announced a
2,400 MW project in Jharsuguda, Orissa at a total cost of approximately
$1.9 billion in this important venture. Power is an exciting opportunity for the
Group, given the demand-supply gap in India. The Government of India's
initiatives to make available coal-blocks to private enterprises has made this
an attractive proposition. A new company, Sterlite Energy Limited, a 100%
subsidiary of Sterlite, will be the vehicle for driving the Group's expansion
into the power business.

A detailed discussion on the financial performance of the Group is set out
below.

Income Statement

                                                (in $ million, except as stated)
                                               H1 2007      H1 2006      Change

Revenue                                         3004.5       1384.6      117.0%
EBITDA                                          1290.5        336.5      283.5%
EBITDA margin                                     43.0%        24.3%        NA
Operating special items                          (22.6)           -         NA
Depreciation and amortisation                    (93.8)       (78.3)      19.8%
Operating profit                               1,174.1        258.2      354.7%
Share of loss of associate                        (1.2)        (0.3)     300.0%
Profit before interest and tax                 1,172.9        257.9      354.8%
Net interest (charge) / income                    (6.3)        (0.8)     687.5%
Profit before tax                              1,166.6        257.1      353.8%
Income tax expense                              (320.5)       (71.6)     347.6%
Tax rate                                          27.5%        27.8%        NA
Minority interest                               (398.5)       (77.6)     413.5%
Minority interest rate                            47.1%        41.8%        NA
Attributable to equity shareholders in parent    447.6        107.9      314.8%
Basic earnings per share (US cents)              156.1         37.6      315.2%
Underlying earnings per share (US cents)         161.5         37.6      329.5%

Revenue

Vedanta's revenue in H1 2007 grew by 117.0% to $3,004.5 million (2005: $1,384.6
million) on account of higher metal prices and additional metal produced by Zinc
and Aluminium Businesses. In addition to overall sales volume growth, the
proportion of sales made up of value-added products in the Aluminium and Copper
Businesses, which commanded a higher premium, increased.


Segmental revenues are set out in the table below.

                                             (in US$ millions, except as stated)
Revenue by segment     30 September 2006        30 September 2005        Change

Aluminium                          396.2                    155.8        154.3%
Copper
- India/Australia                 1190.2                    596.5         99.5%
- Zambia                           488.2                    304.9         60.1%
Zinc                               881.5                    271.9        224.2%
Others                              48.4                     55.5        (12.8%)
                                  3004.5                   1384.6        117.0%

EBITDA and Operating Profit

Increases in volumes from new projects in Zinc and Aluminium and sustained
higher metal prices have led to EBITDA growth of 283.5% to $1,290.5 million in
H1 2007 (H1 2006: $336.5 million). While costs have been contained in our Indian
Copper and Aluminium Businesses, unit costs in the Zinc business have increased
mainly due to increase in royalty which is linked to LME prices. Unit costs at
our Zambian copper operations increased due to increase in wage costs, higher
input prices and low production levels. Tariff reductions in India, from 10% to
7.5% with effect from March 2006 and applicable to all metals other than lead,
also adversely affected the profits for H1 2007.

The EBITDA margin increased to 43.0% from 24.3% as a result of better prices,
improved TC/RCs, a product mix skewed towards the higher margin Zinc business
and the management of costs in the Indian Businesses.

                                             (in US$ millions, except as stated)
EBITDA by segment      30 September 2006        30 September 2005        Change

Aluminium                          136.4                     37.6        262.8%
Copper
- India/Australia                  211.7                     81.5        159.8%
- Zambia                           244.4                     90.3        170.7%
Zinc                               703.5                    124.0        467.3%
Others                              (5.5)                     3.1           NA
                                  1290.5                    336.5        283.5%

The increase in EBITDA of $954 million was primarily on account of an increase
in average metal prices achieved and volume gains to amounting to
$1,085.3 million, primarily offset by cost increases including higher royalties.

Sales of zinc concentrate having zinc metal content of approximately 77,000
tonnes and lead concentrate having lead metal content of approximately 14,000
tonnes generated EBITDA of $205.2 million in H1 2007.

Group operating profit before special items increased to $1,196.7 million up
from $258.2 million in the corresponding period of the previous year,
representing an increase of 363.5%. Depreciation charges increased to $93.8
million from $78.3 million mainly due to commissioning of the new Korba
aluminium smelter.

Vedanta has entered into strategic hedging of some quantities of copper and
zinc. The outstanding hedged quantities as of 30 September 2006 were copper -
81,625 tonnes and zinc - 78,525 tonnes, for the remainder of FY 2007 and for
FY 2008.

Special items

During H1 2007, we reviewed our financial exposure to IFL, an associate company,
taking into consideration the financial condition of IFL. Sterlite had issued
corporate guarantees on behalf of IFL and during the six month period, we
estimated the fair value of these guarantees. We have recognised a provision of
$17.1 million on the basis of our estimate of the probable future liability.

Additionally in H1 2007, the Power Transmission Line division of Sterlite was
sold to Sterlite Optical Technologies Limited, a company under the control of
Volcan for a consideration of $32.3 million based on valuation by an independent
valuer. This was identified as a non-core business at the time of our IPO in
December 2003, and the sale of the division has now been concluded, thereby
enabling us to focus on mining and metals. The transaction resulted in a loss of
$2.3 million which has been recognized as a special item in the income
statement. The sale of this non-core business does not materially impact our
revenues or profits.

During the six month period, HZL and MALCO announced a voluntary separation
scheme for its employees and 179 employees accepted the package under the
scheme. A total cost of $2.5 million was incurred.

Net Finance Costs

Net finance costs in H1 2007 were $6.3 million compared to net finance costs of
$0.8 million in H1 2006. General interest rate rises and the convertible bond
issue of $725 million in the second half of FY 2006 have resulted in higher
finance costs compared with the prior period. In addition, borrowing costs
attributable to expansion projects which were commissioned in the period have
been charged to the income statement, whereas previously they were capitalised.

Taxation

The effective tax rate in H1 2007 has been brought down to 27.5% from the
FY 2006 rate of 30.0%. The lower projected effective tax rate, as compared to
the full year rate, reflects the likely impact of tax planning measures
undertaken by us in some of our major operating subsidiaries. Of the overall tax
charge, current tax has remained relatively constant at around 20%.The tax rate
is however sensitive to the availability of various incentives which differ from
subsidiary to subsidiary, due to differing tax rates in India and Zambia and
also to change in the profit mix among subsidiaries.

Attributable Profit

Attributable profit for H1 2007 was $447.6 million against $107.9 million in the
corresponding period in the previous year, an increase of 314.8%. This has been
the result of strong performances across all Group Businesses. The increase in
underlying earnings over the previous period was $355.3 million, an increase of
329.3% over the previous period. Underlying earnings exclude the effects of
special items and their tax and minority impact and is an important tool for
measuring the recurring performance of the Group.


Earnings per Share

EPS for the period increased to 156.1 US cents per share in H1 2007, a growth of
315.2%. EPS on underlying profit rose by 329.5%. The higher EPS reflects the
good performance of all the Businesses in returning higher value to the
shareholders.

Dilutive elements include adjustments for the convertible bond of 27.9 million
shares and 3.5 million shares to be issued under the LTIP. On this basis, the
fully diluted EPS was 144.7 US cents, an increase of 287.9% compared with the
fully diluted EPS of 37.3 US cents in the corresponding previous period.

Balance Sheet

Shareholders' equity as at 30 September 2006 stood at $1,809.3 million, up from
$1,417.1 million as at 31 March 2006. Minority interests increased to $1,301.5
million from $921.7 million as at 31 March 2006. Net Debt of $11.9 million as at
31 March 2006 moved to net cash of $216.0 million as at 30 September 2006. Cash
and cash equivalents including liquid investments as at 30 September 2006 were
$2,219.8 million.

As a result of capital expenditure during the six months period, capital
employed increased by $544.1 million to $2,894.8 million. The net book value of
the Group's property, plant and equipment increased from $2,763.0 million at the
end of previous year to $3,054.7 million as at 30 September 2006. Thus,
approximately half the increase in capital employed was attributable to fixed
assets and the remainder to increases in working capital. Working capital
increased in absolute terms for the reasons mentioned earlier.

ROCE on an adjusted capital employed basis (capital employed reduced by project
capital work-in-progress) rose to 86.0% (annualised basis) from the previous
year of 37.9% due principally to higher operational results aided by higher
metal prices and higher volumes. ROCE is affected by the timing of expansion
projects being delivered during the year due to the time lag in capturing the
full benefit of additional capacities.

Cash Flow and Debt

                                           (in US$ millions, except as stated)
                                      30 September 2006     30 September 2005

EBITDA                                          1,290.5                 336.5
Special items                                     (22.6)                    -
Working capital movements                        (340.2)               (270.1)
Changes in long term creditors and
non-cash items                                    (28.1)                (20.9)
Sustaining capital expenditure                    (94.5)                (40.2)
Sale of tangible fixed assets                       1.7                     -
Net interest paid                                 (25.2)                 (6.0)
Tax paid                                         (175.6)                (37.9)
Free Cash Flow                                    606.0                 (38.6)
Expansion Capital Expenditure                    (285.8)               (315.1)
Acquisitions                                      (36.6)                    -
Dividends paid                                    (55.1)                (42.1)
Foreign exchange                                   (5.0)                 (1.4)
Other movements                                     4.4                  15.8
Movement in net(debt)/cash                        227.9                (381.4)

The Group delivered strong Free Cash Flow of $606.0 million, an increase of
$644.6 million over the comparative period, reflecting improved operating cash
and working capital management. Working capital expressed as percentage of
turnover has reduced to 7.3% down from 9.4% in the comparative period.

Free cash flow expressed as percentage of EBITDA increased to 47% as compared to
negative free cash flows in the comparative period. Working capital in absolute
terms increased due to higher inventories at the new Korba smelter and at the
expanded Copper business at Tuticorin. In addition, higher metal prices and
strong second quarter sales have led to higher levels of trade receivables. The
cash tax rate has been consistent with last year's levels.

The Group has invested $94.5 million in Sustaining Capital Expenditure in
H1 2007 to improve operational efficiencies.

Gross debt as at 30 September 2006 was $2,003.8 million which was lower than the
gross debt of $2,103.6 million as at 31 March 2006.

Cash and cash equivalents, together with liquid investments were $2,219.8
million as at 30 September 2006 compared with $2,091.7 million as at
31 March 2006. Strong cash flows, resulting from good operational profits and
better working capital management, have resulted in generation of free cash of
$606.0 million which has been used partly to fund the Group's expansion
projects, partly to retire debt, and to acquire a majority stake in Sterlite
Gold. Vedanta continues to remain focused on maintaining a strong balance sheet.

External debt held by subsidiaries, not including Vedanta Finance (Jersey)
Limited was $808.3 million on 30 September 2006 compared with $908.2 million on
31 March 2006. Cash flows generated from operations have been utilised to repay
part of the subsidiaries' debt, particularly in Sterlite and BALCO.

Acquisitions

During H1 2007, we completed the acquisition of a majority stake in Sterlite
Gold Limited, a company listed in Canada with its main operations in Armenia.
Sterlite Gold is engaged in gold mining and processing.

We first acquired 55% of the equity shareholding in Sterlite Gold Limited at a
cost of $33.7 million and then acquired an additional 25% stake through an open
offer to existing shareholders at a cost of $15.8 million. Acquisition costs of
$2.9 million were incurred in the transaction. As at 30 September 2006, we held
80.9% of the outstanding equity of Sterlite Gold Limited.

We have accounted for this acquisition in accordance with IFRS 3 'Business
Combinations'. The fair value of the assets and liabilities of the acquired
business has resulted in creating assets in the form of mining properties and
leases of $71 million. We believe that this acquisition gives us a highly
prospective gold mining asset in Armenia. We intend to carry out major
exploration activity in Armenia to tap the full potential of this asset.


Projects
Total capital expenditure in H1 2007 on Phase II expansion projects was
$152.6 million. Additionally, we spent $143.6 million on Phase I expansion
projects announced at the time of our IPO. Amounts committed but not yet spent
on Phase II expansion projects at 30 September 2006 were $1,450.9 million.

                                                     (in US$ millions, except as stated)
Expansion projects announced        Original   Committed at      Spent to      Committed
in earlier years                   estimated   30 September  30 September        but not
                                        cost           2006          2006      yet spent

Lanjigarh alumina refinery             800.0          569.2         549.1           20.1
Korba aluminium smelter                550.0          486.1         474.6           11.5
Korba power plant (aluminium)          350.0          295.3         295.3              -
Tuticorin copper smelter                87.0           87.0          87.0              -
Chanderiya zinc lead smelter           335.0          267.6         267.6              -
Rampura Agucha zinc lead mine           90.0           45.2          45.2              -
Total                                2,212.0        1,750.4       1,718.8           31.6

                                                      (in US$ millions, except as stated)
Expansion projects announced        Original   Committed at      Spent to      Committed
during the year                    estimated   30 September  30 September        but not
                                        cost           2006          2006      yet spent

Jharsuguda aluminium smelter         2,100.0        1,070.1          93.2          976.9
Konkola Deep copper mine               400.0          211.0          32.0          179.0
Nchanga copper smelter                 280.0          165.0          34.0          131.0
Chanderiya zinc smelter                300.0          206.3          42.3          164.0
Total                                3,080.0        1,652.4         201.5        1,450.9



Consolidated Income Statement
-----------------------  -----    -------------    -------------   ------------
                         Note       Six months       Six months     Year ended
                                         ended            ended
                                  30 September     30 September       31 March 
                                          2006             2005           2006
-----------------------  -----    -------------    -------------   ------------
                                     $ million        $ million      $ million
-----------------------  -----    -------------    -------------   ------------
Revenue                                3,004.5          1,384.6        3,701.8
Cost of sales                         (1,723.6)        (1,055.2)      (2,591.4)
-----------------------  -----    -------------    -------------   ------------
Gross profit                           1,280.9            329.4        1,110.4

Other operating income                    57.6             16.2           41.5
Distribution costs                       (52.5)           (30.2)         (81.1)
Administrative expenses                  (89.3)           (57.2)        (127.0)
Administrative
expenses -
special items               4            (22.6)               -              -
-----------------------  -----    -------------    -------------   ------------
Operating profit            3          1,174.1            258.2          943.8
Investment revenues                       60.8             22.3           51.6
Finance costs                            (67.1)           (23.1)         (59.3)
Share of loss
of associate                              (1.2)            (0.3)          (1.4)
-----------------------  -----    -------------    -------------   ------------
Profit before taxation                 1,166.6            257.1          934.7
Income tax expense          5           (320.5)           (71.6)        (280.4)
-----------------------  -----    -------------    -------------   ------------
Profit for the
period/year                              846.1            185.5          654.3
=======================  =====    =============    =============   ============
Attributable to:
Equity holders
of the parent                            447.6            107.9          373.5
Minority interests                       398.5             77.6          280.8
-----------------------  -----    -------------    -------------   ------------
                                         846.1            185.5          654.3
=======================  =====    =============    =============   ============
Earnings per share
Basic (US Cents) (not
annualised)                6a            156.1             37.6          130.2
Diluted (US Cents) 
(not annualised)           6a            144.7             37.3          128.2


Consolidated Balance Sheet
-------------------------  -----   -------------   -------------     ---------
                           Note           As at           As at         As at
                                   30 September    30 September      31 March
                                           2006            2005          2006
-------------------------  -----   -------------   -------------     ---------
                                      $ million       $ million     $ million
-------------------------  -----   -------------   -------------     ---------
ASSETS
Non-current assets
Goodwill                                   11.7            12.1          12.1
Property, plant and
equipment                               3,054.7         2,550.9       2,763.0
Interest in associate                         -             2.9           1.8
Financial asset
investments                                34.4            27.3          27.1
Other non-current assets                   24.7            21.0          27.3
Other financial assets
(derivatives)                              68.3            37.5          63.2
Deferred tax assets                        28.8            87.7          71.9
-------------------------  -----   -------------   -------------     ---------
                                        3,222.6         2,739.4       2,966.4
-------------------------  -----   -------------   -------------     ---------
Current assets
Inventories                               941.2           646.8         535.0
Trade and other
receivables                               740.5           441.1         593.0
Other current financial
assets (derivatives)                       72.1               -          49.0
Liquid investments                        205.7           292.9         244.4
Cash and cash equivalents    10         2,014.1         1,166.3       1,847.3
-------------------------  -----   -------------   -------------     ---------
                                        3,973.6         2,547.1       3,268.7
-------------------------  -----   -------------   -------------     ---------
TOTAL ASSETS                            7,196.2         5,286.5       6,235.1
-------------------------  -----   -------------   -------------     ---------
LIABILITIES
Current liabilities
Short term borrowings                    (179.3)         (516.5)       (239.8)
Convertible loan notes                        -            (5.9)            -
Trade and other payables               (1,160.5)         (817.0)       (942.5)
Other current financial
liabilities (derivatives)                 (66.1)          (46.6)       (114.7)
Provisions                                (29.7)          (12.8)        (12.2)
Current tax liabilities                   (93.9)          (19.6)        (34.7)
-------------------------  -----   -------------   -------------     ---------
                                       (1,529.5)       (1,418.4)     (1,343.9)
-------------------------  -----   -------------   -------------     ---------
Net current assets                      2,444.1         1,128.7       1,924.8
-------------------------  -----   -------------   -------------     ---------
Non-current liabilities
Medium and long term
borrowings                             (1,205.1)       (1,349.8)     (1,236.0)
Convertible loan notes                   (601.5)              -        (600.4)
Trade and other payables                  (11.6)          (12.1)        (15.6)
Other financial
liabilities (derivatives)                 (92.1)          (76.9)        (93.4)
Deferred tax liabilities                 (335.6)         (245.8)       (286.9)
Retirement benefits                       (39.3)          (40.8)        (38.2)
Provisions                               (211.3)         (226.0)       (222.5)
Non equity minority
interests                                 (59.4)          (59.4)        (59.4)
-------------------------  -----   -------------   -------------     ---------
                                       (2,555.9)       (2,010.8)     (2,552.4)
-------------------------  -----   -------------   -------------     ---------
Total liabilities                      (4,085.4)       (3,429.2)     (3,896.3)
-------------------------  -----   -------------   -------------     ---------
Net Assets                              3,110.8         1,857.3       2,338.8
=========================  =====   =============   =============     =========
EQUITY
Share capital                              28.7            28.7          28.7
Share premium account                      18.8            18.6          18.6
Share based payment
reserves                                    7.1             3.1           4.1
Convertible bond reserve                  123.1               -         123.3
Hedging reserve                           (23.7)          (19.9)        (29.1)
Other reserves                            501.9           164.3         213.1
Retained earnings                       1,153.4           957.6       1,058.4
-------------------------  -----   -------------   -------------     ---------
Equity attributable to
equity holders of the
parent                                  1,809.3         1,152.4       1,417.1
Minority interests                      1,301.5           704.9         921.7
-------------------------  -----   -------------   -------------     ---------
Total Equity                            3,110.8         1,857.3       2,338.8
=========================  =====   =============   =============     =========

Consolidated cash flow statement
--------------------------  ----    -------------   -------------   -----------
                            Note      Six months      Six months    Year ended
                                           ended           ended
                                    30 September    30 September      31 March
                                            2006            2005          2006
--------------------------  ----    -------------   -------------   -----------
                                       $ million       $ million     $ million
--------------------------  ----    -------------   -------------   -----------
Operating activities
Profit before taxation                   1,166.6           257.1         934.7
Adjustments for:
Depreciation                                93.8            78.3         157.7
Investment revenues                        (60.8)          (22.3)        (51.6)
Finance costs                               67.1            23.1          59.3
Other non-cash items                       (24.1)           (6.0)          8.5
Share of loss in associate                   1.2             0.3           1.4
--------------------------  ----    -------------   -------------   -----------
Operating cash flows 
before movements in
working capital                          1,243.8           330.7       1,110.0
Increase in inventories                   (447.7)         (304.1)       (190.1)
Increase in receivables                   (159.3)          (96.2)       (236.8)
Increase in payables                       262.8           106.9         231.6
--------------------------  ----    -------------   -------------   -----------       
Cash generated from
operations                                 899.6            37.3         914.7
Dividend received                            5.5               -           7.0
Interest income received                    72.2            20.5          58.5
Interest paid                             (103.0)          (26.6)       (112.1)
Income taxes paid                         (175.6)          (37.9)       (186.5)
Dividends paid                             (41.0)          (33.1)        (49.4)
--------------------------  ----    -------------   -------------   -----------
Net cash from operating
activities                                 657.7           (39.8)        632.2
--------------------------  ----    -------------   -------------   -----------

Cash flows from investing
activities
Acquisition of subsidiary      8           (36.6)              -             -
Cash acquired with
subsidiary                     8             0.8               -             -
Disposal on non core
business                       9             1.1               -             -
Purchases of property,
plant and equipment                       (410.4)         (270.7)       (656.2)
Proceeds on disposal of
property, plant and
equipment                                    1.8               -           0.7
Dividends paid to 
minority interests of
subsidiaries                               (14.1)           (9.0)         (8.9)
Disposal /(purchase) of
liquid investments                          39.3           (32.3)         12.8
Investment in associate                        -               -           0.1
Deconsolidation of cash                     
held by SEWT                                   -               -         (19.5)
--------------------------  ----    -------------   -------------   -----------
Net cash used in investing
activities                                (418.1)         (312.0)       (671.0)
--------------------------  ----    -------------   -------------   -----------

Cash flows from financing
activities
Proceeds from issue of
convertible loan notes                         -               -         719.7
(Decrease)/increase in 
short term borrowings                      (11.8)          258.9          28.4
Redemption of preference
shares in subsidiary                       (42.1)              -             -
Increase/(decrease) in
long-term borrowings                         7.8            80.8         (20.9)
--------------------------  ----    -------------   -------------   -----------
Net cash from financing
activities                                 (46.1)          339.7         727.2
--------------------------  ----    -------------   -------------   -----------
Net (decrease)/increase 
in cash and cash
equivalents                                193.5           (12.1)        688.4
--------------------------  ----    -------------   -------------   -----------
Effect of foreign exchange 
rate changes                               (26.7)           (7.2)        (26.7)
Cash and cash equivalents 
at beginning of
period/year                              1,847.3         1,185.6       1,185.6
--------------------------  ----    -------------   -------------   -----------
Cash and cash equivalents 
at end of period/year         10         2,014.1         1,166.3       1,847.3
==========================  ====    =============   =============   ===========


Consolidated statement of changes in equity

                                           ---------------------------------------------
                                           Attributable to equity holders of the Company
                                           ---------------------------------------------
$ million                   Share    Share     Share  Hedging    Other  Retained    Total   Minority    Total
                          capital  premium     based  reserve reserve*  earnings           interests   equity
                                             payment
                                            reserves
------------------------  -------  -------  --------  ------- --------  --------  -------  ---------  -------
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)     0.9      (9.8)   (12.1)      (2.1)   (14.2)
As at 1 April 2005           28.7     18.6       2.5     (3.2)    44.8   1,007.0  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    (19.9)   164.3     957.6  1,152.4      704.9  1,857.3
========================  =======  =======  ========  ======= ========  ========  =======  =========  =======


                                                    ---------------------------------------------
                                                    Attributable to equity holders of the Company
                                                    ---------------------------------------------
$ million                   Share   Share    Share Convertible Hedging    Other  Retained     Total  Minority     Total
                          capital premium    based        bond reserve reserves  earnings           interests    equity
                                           payment     reserve                *
                                          reserves     
------------------------  ------- ------- --------   --------- ------- --------  --------   ------- ---------   -------
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)     0.9      (9.8)    (12.1)     (2.1)    (14.2)
As at 1 April 2005           28.7    18.6      2.5           -    (3.2)    44.8   1,007.0   1,098.4     634.1   1,732.5
Profit for the year             -       -        -           -       -        -     373.5     373.5     280.8     654.3
Issue of convertible
bond                            -       -        -       123.3       -        -         -     123.3         -     123.3
Deconsolidation of SEWT         -       -        -           -       -        -     (88.2)    (88.2)     29.5     (58.7)
Movement on decrease in
minority interests              -       -        -           -       -        -      (0.4)     (0.4)     24.6      24.2
Exchange differences on
translation of foreign
operations                      -       -        -           -     0.2    (16.1)        -     (15.9)    (14.1)    (30.0)
Transfers                       -       -        -           -       -    184.7    (184.7)        -         -         -
IPO related credit              -       -        -           -       -        -       0.6       0.6         -       0.6
Movement in fair value 
of cash flow hedges and
financial investments           -       -        -           -   (26.1)    (0.3)        -     (26.4)    (24.3)    (50.7)
Dividends paid                  -       -        -           -       -        -     (49.4)    (49.4)     (8.9)    (58.3)
Recognition of share 
based payment                   -       -      1.6           -       -        -         -       1.6         -       1.6
------------------------  ------- ------- --------   --------- ------- --------  --------   ------- ---------   -------
As at 31 March 2006          28.7    18.6      4.1       123.3   (29.1)   213.1   1,058.4   1,417.1     921.7   2,338.8
========================  ======= ======= ========   ========= ======= ========  ========   ======= =========   =======


Consolidated statement of changes in equity (continued)

                                               ---------------------------------------------
                                               Attributable to equity holders of the Company
                                               ---------------------------------------------
$ million                  Share   Share    Share Convertible Hedging    Other  Retained     Total  Minority     Total
                         capital premium    based        bond reserve reserves  earnings           interests    equity
                                          payment     reserve                *   
                                         reserves     
-----------------------  ------- ------- --------    -------- ------- --------  --------   -------  --------   -------
As at 1 April 2006          28.7    18.6      4.1       123.3   (29.1)   213.1   1,058.4   1,417.1     921.7   2,338.8
Profit for the period          -       -        -           -       -        -     447.6     447.6     398.5     846.1
Acquisition of a 
subsidiary                     -       -        -           -       -        -         -         -      12.4      12.4
Conversion of 
convertible bond               -     0.2        -        (0.2)      -        -         -         -         -         -
Exchange differences 
on translation of
foreign operations             -       -        -           -    (0.6)   (23.9)        -     (24.5)    (22.4)    (46.9)
Transfers                      -                                         311.6    (311.6)        -         -         -
Movement in fair value 
of cash flow hedges and
financial investments          -       -        -           -     6.0      1.1         -       7.1       5.4      12.5
Dividends paid                 -                                                   (41.0)    (41.0)    (14.1)    (55.1)
Recognition of share 
based payment                  -       -      3.0           -       -        -         -       3.0         -       3.0
-----------------------  ------- ------- --------    -------- ------- --------  --------   -------  --------   -------
As at 30 September 2006     28.7    18.8      7.1       123.1   (23.7)   501.9   1,153.4   1,809.3   1,301.5   3,110.8
=======================  ======= ======= ========    ======== ======= ========  ========   =======  ========   =======


* Other reserves comprise currency translation reserve, merger reserve,
investment revaluation reserve and the general reserves established in the
statutory accounts of the Group's Indian subsidiaries. Under Indian law, a
general reserve is created through a year-on-year transfer from the income
statement. The purpose of these transfers is to ensure that distributions in a
year are less than the total distributable results for that year. This general
reserve becomes fully distributable in future periods.


Notes to the financial information

1. Basis of preparation

The financial information in this interim financial report is prepared under
International Financial Reporting Standards ('IFRS'). The interim condensed
consolidated financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985.

The financial information for the full preceeding financial year has been
derived from the statutory accounts for the financial year ended 31 March 2006
as filed with the Registrar of Companies. The auditors' report on the statutory
accounts for the year ended 31 March 2006 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 financial information prepared under IFRS in respect of the six months ended
30 September 2006 and 30 September 2005 is unaudited but has been reviewed by
the auditors and their report is set out on page 33.

2. Accounting policies

This interim financial report, including all comparatives, has been prepared
using the same accounting policies and methods of computation as followed in the
annual financial statments for the year ended 31 March 2006 as published by the
Company. 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. In addition, this interim report for the six month period
ended 30 September 2006 has been prepared under International Accounting
Standard ('IAS') 34 Interim financial reporting.

IFRS 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 2007.

Foreign exchange rates

The following exchange rates to US dollar ($) have been applied:

-----------------          ---------       ---------        --------      ---------       ---------      --------
                       Average rate    Average rate    Average rate           As at          As at         As at
                      to six months   to six months   to year ended    30 September   30 September      31 March
                              ended           ended        31 March    
                       30 September    30 September                 
                               2006            2005            2006           2006            2005          2006
-----------------          ---------       ---------        --------      ---------       ---------      --------
Indian Rupees                 45.96           43.65           44.28          45.96           43.99         44.61

Australian dollar              1.33            1.31            1.32           1.34            1.31          1.40
-----------------          ---------       ---------        --------      ---------       ---------      --------

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 2006 and
30 September 2005 and for the year ended 31 March 2006. Items after operating
profit are not allocated by segment.

Six months ended 30 September 2006
-----------------   --------   --------  ------  -------     ---------        ----------
                   Aluminium    Copper    Zinc    Other   Elimination             Total 
                                                                             Operations
Revenue
Sales to external
customers              396.2   1,678.4   881.5    48.4             -            3,004.5
Inter-segment
sales                   27.1         -       -       -         (27.1)                 -
-----------------   --------   --------  ------  -------     ---------        ----------
Segment revenue        423.3    1678.4   881.5    48.4         (27.1)           3,004.5
-----------------   --------   --------  ------  -------     ---------        ----------
Result Operating
profit                 109.2     392.0   679.3    (6.4)                         1,174.1
-----------------   --------   --------  ------  -------     ---------        ----------


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

Year ended 31 March 2006
-----------------   --------   --------  ------  -------     ---------        ----------
                   Aluminium    Copper    Zinc     Other   Elimination             Total 
                                                                              Operations
Revenue
Sales to external
customers              453.0   2,241.3   875.5    132.0             -            3,701.8
Inter-segment
sales                   40.1         -       -        -         (40.1)                 -
-----------------   --------   --------  ------  -------     ---------        ----------
Segment revenue        493.1   2,241.3   875.5    132.0         (40.1)           3,701.8
-----------------   --------   --------  ------  -------     ---------        ----------
Result Operating
profit                 102.8     338.6   489.5     12.9             -              943.8
-----------------   --------   --------  ------  -------     ---------        ----------

(b) EBITDA(1) by Segment

                           Six months            Six months         Year ended
                                ended                 ended
                         30 September          30 September           31 March                  
                                 2006                  2005               2006
                            $ million             $ million          $ million
 -------------------      ------------          ------------        -----------
Aluminium                       136.4                  37.6              135.3
Copper                          456.1                 171.8              425.3
-------------------       ------------          ------------        -----------
- India/Australia               211.7                  81.5              219.0
- Zambia                        244.4                  90.3              206.3
-------------------       ------------          ------------        -----------
Zinc                            703.5                 124.0              532.9
Others                           (5.5)                  3.1                8.0
-------------------       ------------          ------------        -----------
Group EBITDA                  1,290.5                 336.5            1,101.5
Depreciation                    (93.8)                (78.3)            (157.7)
Operating 
special items                   (22.6)                    -                  -
-------------------       ------------          ------------        -----------
Group operating
profit                        1,174.1                 258.2              943.8
===================       ============          ============        ===========

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

4. Special items

Administrative expenses
                            Six months            Six months         Year ended
                                 ended                 ended
                          30 September          30 September           31 March                   
                                  2006                  2005               2006
                             $ million             $ million          $ million
------------------------   ------------          ------------        -----------
Restructuring and
redundancies                      (2.5)                    -                  -
Impairment of investment 
in associate                      (0.4)                    -                  -
Provision for guarantees
given on behalf of
associate                        (17.1)                    -                  -
Loss on sale of property,
plant and equipment               (0.3)                    -                  -
Loss on disposal of non 
core business (note 9)            (2.3)
------------------------   ------------          ------------        -----------
                                 (22.6)                    -                  -
========================   ============          ============        ===========

5. Income tax expense

------------------------   ------------          ------------        -----------
                            Six months            Six months         Year ended
                                 ended                 ended
                          30 September          30 September           31 March                   
                                  2006                  2005               2006
------------------------   ------------          ------------        -----------
                             $ million             $ million          $ million
------------------------   ------------          ------------        -----------
Current tax:
UK Corporation tax                   -                   0.4                  -
Foreign tax:
- India                          227.7                  40.3              177.8
- Zambia                           1.2                   0.4                1.1
- Others                          14.4                   1.6                7.1
------------------------   ------------          ------------        -----------
                                 243.3                  42.7              186.0
------------------------   ------------          ------------        -----------
Deferred tax:
Current year                      77.2                  28.9               94.4
------------------------   ------------          ------------        -----------
                                  77.2                  28.9               94.4
------------------------   ------------          ------------        -----------
Total income tax expense         320.5                  71.6              280.4
------------------------   ------------          ------------        -----------
Effective tax rate                27.5%                 27.8%              30.0%
========================   ============          ============        ===========

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         Six months       Year ended
                                     ended              ended
                              30 September       30 September         31 March                   
                                      2006               2005             2006
----------------------------     ----------         ----------       ----------
                                 $ million          $ million        $ million
----------------------------     ----------         ----------       ----------
Net profit attributable to
equity holders of the parent         447.6              107.9            373.5
--------------------------        ----------         ----------         --------


6. Earnings per share (continued)

----------------------------    ----------          ----------       ----------
                               Six months          Six months       Year ended
                                    ended               ended
                             30 September        30 September         31 March                   
                                     2006                2005             2006
----------------------------    ----------          ----------       ----------
                                  million             million          million
----------------------------    ----------          ----------       ----------
Weighted average number of 
Ordinary Shares for basic 
earnings per share                  286.8               286.8            286.8
Effect of dilution:
Convertible loan notes               27.9                   -              3.1
Share options                         3.5                 1.4              3.6
----------------------------    ----------          ----------       ----------
Adjusted weighted average 
number of Ordinary Shares 
for diluted earnings per
share                               318.2               288.2            293.5
============================    ==========          ==========        =========

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

--------------------------------      ----------      ----------     ---------
Basic earnings per share on the       Six months      Six months    Year ended
profit for the period/year                 ended           ended
                                    30 September    30 September      31 March                   
                                            2006            2005          2006
--------------------------------      ----------      ----------     ---------
Profit for the period 
attributable to equity holders 
of the parent($ million)                   447.6           107.9         373.5
Weighted average number of
Ordinary Shares of the Company 
in issue (million)                         286.8           286.8         286.8
--------------------------------      ----------      ----------     ---------
Earnings per share on profit
for the period/year (US
cents per share)                           156.1            37.6         130.2
================================      ==========      ==========     =========

----------------------------------    ----------      ----------     ---------
Diluted earnings per share on the     Six months      Six months    Year ended
profit for the period/year                 ended           ended
                                    30 September    30 September      31 March                   
                                            2006            2005          2006
----------------------------------    ----------      ----------     ---------
Profit for the period/year
attributable to equity holders 
of the parent ($ million)                  447.6           107.9         373.5
Adjustment in respect of
convertible bonds of Vedanta 
($ million)                                 12.8               -           2.7
Adjustment in respect of
convertible bonds of
Sterlite ($ million)                           -            (0.4)            -
----------------------------------    ----------      ----------     ---------
Profit for the period/year
after dilutive adjustment                  460.4           107.5         376.2
----------------------------------    ----------      ----------     ---------
Adjusted weighted average  number 
of Ordinary Shares of the Company 
in issue (million)                         318.2           288.2         293.5
----------------------------------    ----------      ----------     ---------
Diluted earnings per share on
profit for the period/year
(US cents per share)                       144.7            37.3         128.2
==================================    ==========      ==========     =========

Profit for the period would be diluted if holders of the convertible bonds in
Vedanta exercised their right to convert their bond holdings into Vedanta
equity. The impact on profit for the period of this conversion would be the
interest payable on the convertible bond.

The outstanding awards under the Long Term Incentive Plan ('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 this
financial information.

6. Earnings per share (continued)

(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          Six months       Year ended
                                    ended               ended
                             30 September        30 September         31 March                   
                                     2006                2005             2006
---------------------------    ----------          ----------        ---------
                                $ million           $ million        $ million
---------------------------    ----------          ----------        ---------
Profit for the period/year
attributable to equity 
holders of the parent               447.6               107.9            373.5
Administrative expenses -
special items                        22.6                   -                -
Tax effect of special items          (1.7)                  -                -
Minority interest effect of
special items                        (5.3)                  -                -
---------------------------    ----------          ----------        ---------
Underlying profit for the
period/year                         463.2               107.9            373.5
===========================    ==========          ==========         ========

----------------------------------    ----------      ----------     ---------
Basic earnings per share on           Six months      Six months    Year ended
Underlying Profit for the period/          ended           ended
year                                30 September    30 September      31 March                   
                                            2006            2005          2006
----------------------------------    ----------      ----------     ---------
Underlying profit for the
period/year ($ million)                    463.2           107.9         373.5
Weighted average number of 
Ordinary Shares of the Company in
issue (million)                            286.8           286.8         286.8
----------------------------------    ----------      ----------     ---------
Earnings per share on Underlying
Profit for the period/year
(US cents per share)                       161.5            37.6         130.2
==================================    ==========      ==========      ========

---------------------------------     ----------      ----------     ---------
Diluted earnings per share on         Six months      Six months    Year ended
Underlying Profit for the period/          ended           ended
year                                30 September    30 September      31 March                   
                                            2006            2005          2006
---------------------------------     ----------      ----------     ---------
Underlying profit for the
period/year ($ million)                    463.2           107.9         373.5
Adjustment in respect of 
convertible bonds of Vedanta 
($ million)                                 12.8                           2.7
Adjustment in respect of
convertible bonds of
Sterlite ($ million)                           -            (0.4)            -
---------------------------------     ----------      ----------     ---------
Underlying profit for the
period/year after dilutive
adjustment ($ million)                     476.0           107.5         376.2
---------------------------------     ----------      ----------     ---------
Adjusted weighted average number
of Ordinary Shares of the Company 
in issue (million)                         318.2           288.2         293.5
---------------------------------     ----------      ----------     ---------
Diluted earnings per share on
Underlying Profit/year for the 
period (US cents per share)                149.6            37.3         128.2
=================================     ==========      ==========      ========

7. Dividends

                                      Six months      Six months    Year ended
                                           ended           ended
                                    30 September    30 September      31 March                   
                                            2006            2005          2006
                                       $ million       $ million     $ million
----------------------------------    ----------      ----------     ---------
Amounts paid as distributions to
equity holders:
Final dividend paid for 2005-06 : 
14.3 US cents per share (2004-05
: 11.55 US cents per share)                 41.0            33.1          33.1
Interim dividend paid for 2005-06 :
5.7 US cents per share                         -               -          16.3
----------------------------------    ----------      ----------     ---------


8. Business combination

The Group acquired the following companies during the period ended
30 September 2006:

Names of company             Principal        Date of  Proportion       Cost of
acquired                      activity    acquisition   of shares   acquisition 
                                                         acquired   ($ million)

Welter Trading Limited      Investment    22 May 2006      100.0%             -
                               holding 
                               company

Twinstar International
Limited                     Investment  23 August 2006     100.0%         33.7*
                               holding 
                               company

* $2.9 million of acquisition expenses were additionally incurred in the
acquisition of Twinstar International Limited and its subsidiaries.

Vedanta acquired 100% of Welter Trading Limited, a company incorporated in
Cyprus, on 22 May 2006. On 23 August 2006, Welter Trading Limited acquired 100%
of Twinstar International Limited ('TSI'), a company incorporated in Mauritius
and 100.0% owned by Volcan Investments Limited ('Volcan'). Volcan holds 54% of
the equity of Vedanta.

TSI held 55.09% of Sterlite Gold Limited ('Sterlite Gold'), a company
incorporated in Canada and listed on the Toronto Stock Exchange. By virtue of
Welter Trading Limited acquiring 100% of TSI, Sterlite Gold became a subsidiary
of Vedanta with an effective date of 23 August 2006, being the date at which
control passed to Vedanta. As a result, the financial information of TSI and
Sterlite Gold has been consolidated from 23 August 2006.

From the date of acquisition, Sterlite Gold held 100.0% interests in the
following companies:

•    First Dynasty Mines (USA) LLC
•    First Dynasty Mines Armenia Limited
•    AGRC Services Limited
•    First Dynasty Mines Holding Company Limited
•    Myanmar First Dynasty Mines Limited
•    Ararat Gold Recovery Company LLC ('AGRC')

AGRC is a company involved in gold mining activities and is incorporated in
Armenia. All other companies listed above are non-operating.

On 30 September 2006, the Group acquired a further 25.8% interest in the equity
of Sterlite Gold for $16.7 million (inclusive of $0.9 million of acquisition
expenses). The Group's total holding in Sterlite Gold following this transaction
and at 30 September 2006 was 80.89%.

There was no material change in the consolidated net assets of TSI between 31
August and the acquisition of the further 25.8% interest in Sterlite Gold on
30 September 2006.


8. Business combination (continued)

The consolidated net assets of TSI acquired are detailed in the table below.

$ million                       Book value         Fair value             Fair 
                                                  adjustments            value
-----------------------------     ---------         ----------         --------
Assets
Non-current assets
Property, plant and equipment         11.4               71.7             83.1
Financial asset investments            4.7                  -              4.7
-----------------------------     ---------         ----------         --------
                                      16.1               71.7             87.8
-----------------------------     ---------         ----------         --------
Current assets
Inventories                            2.7                  -              2.7
Trade and other receivables            2.7                  -              2.7
Cash and cash equivalents              0.8                  -              0.8
-----------------------------     ---------         ----------         --------
                                       6.2                                 6.2
-----------------------------     ---------         ----------         --------
Liabilities
Current liabilities
Trade and other payables              (2.9)                 -             (2.9)
-----------------------------     ---------         ----------         --------
                                      (2.9)                 -             (2.9)
-----------------------------     ---------         ----------         --------
Non current liabilities
Borrowings from Vedanta
Resources Plc                        (10.2)                 -            (10.2)
Deferred tax liabilities                 -              (14.3)           (14.3)
Provisions                            (1.8)                 -             (1.8)
-----------------------------     ---------         ----------         --------
                                     (12.0)             (14.3)           (26.3)
-----------------------------     ---------         ----------         --------
Net assets                             7.4               57.4             64.8
-----------------------------     ---------         ----------         --------
Less : minority interests
recognised on first 
acquisition                                                              (29.1)
Add: Reduction in minority
interests on second
acquisition                                                               16.7
-----------------------------     ---------         ----------         --------
                                                                          52.4
-----------------------------     ---------         ----------         --------
Satisfied by :
Cash consideration on first
acquisition                                                               33.7
Cash consideration on
second acquisition (payable
at 30 September 2006)                                                     15.8
Acquisition expenses                                                       2.9
-----------------------------     ---------         ----------         --------
                                                                          52.4
-----------------------------     ---------         ----------         --------

Since the date of acquisition, Sterlite Gold has contributed $0.6 million to the
revenue and $(0.5) million to the net profit of the Group for the period ended
30 September 2006. If TSI Group had been acquired at the beginning of the
period, the revenues of the Group would have been $3,009.0 million and the net
profit of the Group would have been $845.9 million.


9. Disposal of non core business

The Board of Sterlite passed a resolution on 21 August 2006 to divest its non
core aluminum conductor business, a reporting unit classified in the Group's
'Other' segment. The Group sold the business to SOTL, a company owned and
controlled by Volcan Investments Limited and a related party, for $32.3 million.
The loss on this sale was $ 2.3 million. The carrying values of the assets and
liabilities disposed of were as follows:

------------------------------------------                            ---------
                                                                     $ million
------------------------------------------                            ---------
Property, plant and equipment                                             18.6
Current assets                                                            83.4
------------------------------------------                            ---------
Total assets                                                             102.0
Debt                                                                      23.1
Current liabilities                                                       44.3
------------------------------------------                            ---------
Total liabilities                                                         67.4
------------------------------------------                            ---------
Net assets disposed                                                       34.6
Less: consideration received                                             (32.3)
------------------------------------------                            ---------
Loss on disposal (note 4)                                                  2.3
------------------------------------------                            ---------


10. Movement in net debt (1)

-----------------       -------        ------         -------        ------         -------       -------       -------
                              Debt due within one year       Debt due after one year
                              ------------------------       -----------------------
$ million                  Cash          Debt    Debt related          Debt    Debt related        Liquid     Total net
                       and cash      carrying   derivatives(2)     carrying   derivatives(2)  investments   (debt)/cash
                    equivalents         value                         value   
------------------      -------        ------         -------        ------         -------       -------       -------

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                 688.4         (28.4)              -        (704.1)              -         (12.8)        (56.9)
Other non-cash
changes                    (1.0)         (2.0)           17.9         135.2           (12.7)            -         137.4
Exchange difference       (26.7)          3.6               -          20.2               -          (4.8)         (7.7)
------------------      -------        ------         -------        ------         -------       -------       -------
Opening balance at 
1 April 2006            1,847.3        (239.8)            2.8      (1,836.4)          (30.2)        244.4         (11.9)
Cash flow                 193.5          53.9               -          (7.8)              -         (39.3)        200.3
Disposal of non core
business                      -          23.1               -             -               -             -          23.1
Other non-cash
changes                       -         (20.9)            2.9          20.4             6.6           0.5           9.5
Foreign exchange
differences               (26.7)          4.4               -          17.2               -           0.1          (5.0)
------------------      -------        ------         -------        ------         -------       -------       -------
As at 30 September 
2006                    2,014.1        (179.3)            5.7      (1,806.6)          (23.6)        205.7         216.0
==================      =======        ======        ========        ======        ========       =======       =======



-----------------       -------        ------         -------        ------         -------       -------       -------
                              Debt due within one year       Debt due after one year
                              ------------------------       -----------------------
$ million                  Cash        Debt    Debt related          Debt    Debt related        Liquid     Total net
                       and cash    carrying   derivatives(2)     carrying   derivatives(2)  investments          debt
                    equivalents       value                         value   
------------------      -------      ------         -------        ------         -------       -------       -------
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)
Exchange difference        (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)
==================      =======      ======        ========        ======        ========       =======       =======

(1) Net debt being total debt after fair value adjustments under IAS 32 and 39
as reduced by cash and cash equivalents and current asset investments.

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


11. Other disclosures

Capital commitments
Contractual commitments to acquire fixed assets were $1,813.0 million at
30 September 2006 (30 September 2005: $ 434.2 million; 31 March 2006: $1,233.4
million).

Contingent liabilities
There were no material changes in contingent liabilities during the period
except in case of certain guarantees issued on behalf of IFL against which a
provision of $17.1 million has been made (note 4).

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 Sterlite
Optical Technologies Limited ('SOTL'), which is related by virtue of having the
same controlling party as the Group, namely Volcan. As India Foils Limited
('IFL') is an associate of the Group, it is also regarded as a related party.

The Group acquired TSI and Sterlite Gold on 22 August 2006. As a result, with an
effective date of 23 August 2006, TSI and Sterlite Gold became subsidiaries of
the Group and ceased to be related parties.

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

SOTL
                               Six months          Six months       Year ended
                                    ended               ended
                             30 September        30 September         31 March                   
                                     2006                2005             2006
-------------------------      ----------          ----------       ----------
                                $ million           $ million        $ million
-------------------------      ----------          ----------       ----------

Sale of goods to SOTL                20.5                 2.6              3.0
Sale of aluminium conductor
division                             32.3                   -                -
-------------------------      ----------          ----------       ----------
Amounts receivable at
period/year end                      31.1                 1.9              5.6
-------------------------      ----------          ----------       ----------

Volcan
-------------------------      ----------          ----------       ----------

                                Six months         Six months       Year ended
                                     ended              ended
                              30 September       30 September         31 March                   
                                      2006               2005             2006
-------------------------       ----------         ----------       ----------
                                 $ million          $ million        $ million
-------------------------       ----------         ----------       ----------
Reimbursement of bank
charges                               (0.1)               0.2             (0.5)
-------------------------       ----------         ----------       ----------
Amounts receivable/(payable)
at period/year end                    (0.1)                 -              0.1
-------------------------       ----------         ----------       ----------

IFL
-------------------------     ----------          ----------        ----------
                              Six months          Six months        Year ended
                                   ended               ended
                            30 September        30 September          31 March                   
                                    2006                2005              2006
-------------------------     ----------          ----------        ----------
                               $ million           $ million         $ million
-------------------------     ----------          ----------        ----------
Sales to IFL                        20.7                16.2              34.1
Net interest received                  -                 0.3               0.5
-------------------------     ----------          ----------        ----------
Trade receivables                    6.9                 2.9               0.6
Loan balance receivable                -                 6.2               6.2
-------------------------     ----------          ----------        ----------
Amounts receivable at
period/year end                      6.9                 9.1               6.8
-------------------------     ----------          ----------        ----------


11. Other disclosures (continued)
Related party transactions (continued)

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 period ended
30 September 2006 amounted to $ nil million (30 September 2005: $ nil;
31 March 2006: $0.6 million). The loan was classified as an investment in
associate and has been fully impaired. During the period ended
30 September 2006, Sterlite advanced no further loans to IFL.

The Group has given corporate guarantees to certain banks and financial
institutions in relation to IFL, an associate of the Group, against which a
provision of $ 17.1 million has been recognised (30 September 2005 : $ nil,
31 March 2006 : $ nil).

Transactions with Volcan
In relation to the shares of Sterlite held by Twin Star, MALCO issued guarantees
to the Income Tax Department of India, at the request of Volcan. The amount
receivable/ (payable) for the period ended was $ 0.1 million (30 September 2005:
$ nil; 31 March 2006: $(0.1) million).

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 1 April 2005 to 31 March 2006, 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 $20,895 and
$16,700, respectively. There was no material charge during the six months ended
30 September 2006 (30 September 2005: $ nil).

Political and Public Awareness Trust
During the period, the Group did not contribute to the Political and Public
Awareness Trust (30 September 2005: $ nil, 31 March 2006: $0.1 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 the Group to the Sterlite Foundation
(30 September 2005: $0.3 million, 31 March 2006: $0.6 million). 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.

Vedanta Foundation
During the period, $ nil (30 September 2005: $ nil; 31 March 2006: $ 0.1
million) was paid by Sterlite to the Vedanta Foundation. The Vedanta Foundation
is a registered not-for-profit entity engaged in social and charitable
activities and is a related party as it is controlled by members of the Agarwal
family.


11. Other disclosures (continued)
Related party transactions (continued)

Twin Star International (TSI)
During the period, the Group advanced a loan of $ 10.3 million
(30 September 2005: $ nil; 31 March 2006: $ 5.0 million) to TSI. The loan
carries an interest rate of LIBOR plus 100 basis points and the interest accrued
was $ 0.2 million (30 September 2005: $ nil; 31 March 2006: $ 32,688)

Sterlite Energy Limited
During the period, the Group advanced $ nil million (30 September 2005: $ nil;
31 March 2006: $ 0.4 million) to Sterlite Energy Limited. Sterlite Energy is a
related party as it is controlled by the members of the Agarwal family.
Twinstar Overseas Limited

As part of the acquisition of TSI and its subsidiaries, the Group acquired a
balance of $0.2 million payable to Twinstar Overseas Limited. Twinstar Overseas
Limited is a related party as it is controlled by the members of the Agarwal
family.

Twinstar International Investments Limited

As part of the acquisition of TSI and its subsidiaries, the Group acquired a
balance of $0.1 million payable to Twinstar Investments Limited. Twinstar
Investments Limited is a related party as it is controlled by the members of the
Agarwal family


Independent review report to Vedanta Resources plc

Introduction

We have been instructed by the company to review the financial information for
the six months ended 30 September 2006 which comprise 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 11. 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 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.

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 2006.

(Signature)
Deloitte & Touche LLP
Chartered Accountants
London
15 November 2006

Glossary and definitions

Adjusted profit
Profit before write back of negative goodwill to income statement

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, a copper mine 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

Economic Holdings or Economic Interest
The economic holdings/interest are derived by combining the Group's direct and
indirect shareholdings in the operating companies. The Group's Economic Holdings
/Interest is the basis on which the Attributable Profit and net assets are
determined in the consolidated accounts


Glossary and definitions (continued)

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

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

Glossary and definitions (continued)

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, not controlled by the Group.

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


Glossary and definitions (continued)

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




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