Metals and mining giant Vedanta Ltd's chairman Navin Agarwal on Friday said at the company's annual general meeting (AGM) that the company strongly complies with all environmental norms after the Tamil Nadu government's order to permanently shut down its Sterlite copper plant in Tuticorin District.
Recently, Sterlite announced its plans to expand the Tuticorin plant, villagers around it started fresh protests that continued for over 100 days, culminating in the May 22 police firing on protestors that claimed 13 lives and left scores injured.
The National Green Tribunal (NGT) said on Monday that an independent judicial committee will decide in about six weeks whether to allow Sterlite to reopen its copper smelter, which was shut by the Tamil Nadu on environmental grounds.
Agarwal, at the company's annual general meeting, reiterated that the company 'strongly complies with all environmental norms and is amongst the best, globally.'
With Kerala facing its deadliest floods in nearly a century, Agarwal said that some of the company's employees are in Kerala volunteering to help the victims in setting up camps.
Here's the full text of his speech at the annual general meeting:
Good Morning Ladies and gentlemen. On behalf of the Board of Directors, I am delighted to welcome you all to the 53
rd Annual General Meeting of your Company. Thank you for taking the time to join us today.
Before I provide you with an update on company’s performance, I would like to mention that our thoughts are with the people of Kerala - caught amidst the worst floods in a century, in the state. Our colleagues are on ground helping people by volunteering at flood relief camps set up for flood victims. Many of our employees have contributed to the monetary support, further being supplemented by the company.
We are also greatly grieved by the tragic loss of lives in Tuticorin and have extended all possible support to the impacted families. Your company has been instrumental in the socio-economic transformation of the region. Our copper smelter strongly complies with all environmental norms and is, amongst the best, globally.
Let me now talk about your company’s performance.
It is always a pleasure to share good news, this reporting year marked an excellent performance by your company, setting new benchmarks. Good results are important for all our stakeholders. We are delighted to live up to the faith of our investors.
The success of companies such as yours, is vital for India, at a time when a fragmenting world is adopting an ‘‘every nation for itself’’ mentality. For instance, the message from the US, “America First”, is loud and clear. Even Brexit threatens to overturn 40 years of the way, trade is done in Europe. And yet, the world is determined to grow. Global growth is projected at around 4% for both this year and next. This is being driven mainly by emerging and developing markets, which are expected to grow at about 5% annually, over the next couple of years.
In contrast, India is set to grow by over 7.5% annually over next two years, as per IMF’s World Economic Outlook and will also boast of a USD 6 trillion economy, over the next decade.
A nation’s growth is fuelled by its natural resources sector. In India, the sector contributes around 2% to GDP as against 8- 10% in countries with similar geology like Australia, Brazil and south Africa.
The government has introduced progressive policies in the recent past, that encourage domestic exploration and production of natural resources. Further support will enhance the contribution of the sector to the GDP. This will accelerate socio economic development, help create thousands of Small and Medium Enterprises in the value chain and generate millions of jobs.
Vedanta, the only diversified natural resources company in the Indian subcontinent, is uniquely positioned to benefit from this rising curve. Your company will play a key role in meeting the needs of one of the most exciting emerging markets, which accounts for almost 25% of the world’s population.
I am therefore encouraged by the transformational steps the Indian Government is taking to make the investment climate more attractive. This includes the GST roll out, Oil & Gas licensing policy, opening of commercial coal mining to private sector and the new Insolvency & Bankruptcy Code. The country has also climbed in the ‘Ease of Doing Business’ rankings, moving from 130 last year to 100, now.
The need of the hour is to bring further changes in policies for natural resources sector, particularly the implementation of the much awaited New Mineral Policy and ensure a level playing ground on imports & duties. Encouragement to explore and produce natural resources in India will lead to greater self-reliance, save billions of dollars in imports, generate immense employment opportunities, paving way for socio-economic development.
India currently spends USD 125 billion on oil imports which accounts for 80 percent of its oil needs. As India’s largest private sector oil producer, your company contributes 27% to the domestic production and aspires to take it up to 50%. Towards this, your company will be investing USD 3-4 billion over the next 2-3 years, in various growth projects.
Your company is the second largest integrated zinc-lead producer in the world. We are the only primary silver producer in India and are among the top 10 silver-producers, globally. We are also the largest producer of Aluminium in the country. This year, we had a record production in our Zinc-Lead-Silver and Aluminium businesses. We would be further investing USD 3-4 billion in these businesses in the next 2-3 years.
India’s consumption of these metals is currently 1/3rd of the global average. Urbanisation and infrastructure development will continue to generate demand for natural resources, including commodities where your company is a leading producer. Such is the scale of the nation’s needs, we believe that in times to come, everything that we produce in India – will sell in India.
With this immense growth potential, I’m pleased to report that your company will invest around USD 8 billion, on growth projects across our businesses, over the next 3 years.
Our businesses are being powered by a strong focus on innovation and technology. To harness the benefits of these we are establishing a global centre for technical excellence. Digitalisation in particular, is a key focus area and we are looking to exploit its potential to boost exploration, enhance recoveries, increase productivity, improve safety and reduce costs.
At our Gamsberg mine in South Africa and the Sindesarkurd in Rajasthan, we are deploying cutting edge technologies, leading to increased output and efficiencies.
Moving to financial performance, during FY 18, your company increased revenue by 22% to Rs 92,900 crore. Year-on-year, EBITDA also increased by 19%, to Rs 25,500 crore, and we saw profit after taxes up by 10% to Rs 8,200 crore. The EBITDA margin was a robust 36%.
Free cash flow stood at Rs 7,900 crore and we reduced our gross debt by Rs 8,500 crore. During the year, your company also paid the highest-ever dividend of Rs.21.20 per share, amounting to Rs 7,881 crore. With a contribution of over Rs 33,000 crore to Indian exchequer, we are proud to be amongst the top two corporate contributors in India Inc.
During the year we acquired Electrosteel Steels Limited, integrating it with our existing iron ore business.
This year, your company produced more, earned more and delivered more, and I acknowledge the efforts of our most precious resource – our extended family of 65,000 people for this outstanding performance.
But of course, a good year also needs to deliver on more than just the top line financials and metrics. Acting sustainably, safely and contributing to the well-being of our communities, has been a key pillar of our strategy. I am therefore proud that your company can report meaningful and measurable progress on these fronts.
During the year our operations yielded impressive results. As part our efforts to reduce carbon footprints, we conserved 2.6 gigajoules of energy and reduced our greenhouse gas emissions by 14%, far exceeding our targets. These and many other actions, including water conservation and greening our energy mix, earned us a credible 15
th rank in the Dow Jones Sustainability Index for mining and metals sector. These achievements only strengthen our appetite to achieve more in how we source, use and re-use precious resources.
As a responsible global resources company, we are committed to Zero Harm, Zero Waste and Zero Discharge.
During the year we continued our active social programmes in remote areas of our operations. These include education, healthcare and nutrition, skills training and livelihood, promoting sport all of which lead to greater social involvement and benefits.
During the year your company invested Rs 244 crore in social programmes, directly touching the lives of well over three million people in more than 1400 villages.
Nandghar, our modern Anganwadi – and the company’s flagship program, is one of the largest community projects in the country. We are setting up 4000 Nandghars focused on meeting the nutritional, educational and social needs of pre-school children, as well as developing skills for women.
We have also set up the BALCO Medical Centre, a 350-bed super-specialty cancer hospital in Raipur, Chhattisgarh, the only one in the region. We are now partnering the state government of Odisha to establish a 500-bed hospital and medical college in Kalahandi District, Odisha.
Your company is managed by a fine set of leaders with global and diverse experience in the sector. The management has set progressive policies and objectives, follows global practices all with a vision to take the company ahead to the next level.
We are committed to providing our people with a safe and healthy work environment and helping them grow personally and professionally. We are also very proud that we have one of the best gender diversity ratios among our peers and indeed the highest number of women in senior management roles.
I once again welcome Mr UK Sinha to our Board. As former SEBI Chairman, he is credited with delivering many major capital market reforms.
These are exciting times at Vedanta and we look to 2019 and beyond with keen anticipation and optimism.
And just before I close, I would like to thank you, our shareholders, our board of directors, our customers, business and JV partners, central and state governments, local communities, our advisors, banks & financial institutions – and each one of our extended family of 65,000 people who make Vedanta the company, we are.Ladies and gentleman, thank you for your presence and kind attention, today.