Vesting under Vedanta ESOS 2026 is 100% performance-linked with no time-based or guaranteed vesting element
Continued employment is necessary for eligibility but does not guarantee vesting
Performance targets and threshold levels are derived from the company's annual operating plan approved by the Board
The scheme is multi-year with targets set at the beginning of each financial year
Performance weightage distribution: EBITDA (35%), FCF (50%), Carbon Footprint Reduction (15%) for business units; Weighted Average based on Target EBITDA for Corporate
Minimum vesting period of three years within maximum vesting period of five years
Grant quantum capped at 100% of employee's annual fixed pay
Vesting requires achievement against pre-defined performance parameters with minimum threshold gating (below threshold = zero vesting)
Threshold performance level yields 50% vesting, overachievement capped at 100%
Nomination and Remuneration Committee (NRC) approves final vesting percentage
Vedanta has operated similar performance share plan structure for 10 years
Item No. 2: ESOP Extension to Group Companies
Extension of VEDPOWER ESOP 2026 to employees of Holding Company and Subsidiary/Associate Companies
Restricted to entities with direct strategic, operational or business linkage to VEDPOWER
Cost of benefits will be cross-charged to relevant entity receiving employee services
No creation of dual employment relationships or conflicting fiduciary obligations
Holding company provides strategic, technical, commercial and functional leadership support
Item No. 3 and 4: Secondary Acquisition Mechanism
Secondary acquisition mechanism facilitates efficient implementation of VEDPOWER ESOS 2026 through Trust
Avoids issuance of additional shares by the Company
No incremental equity dilution beyond shareholder-approved limits
Trust acquires existing shares from secondary market
Vedanta has used ESOS Trust since inception of ESOS 2016 scheme
Item No. 9: Related Party Transactions Clarification
Transactions with VAML (Vedanta Aluminium Metal Limited)
Aggregate value of proposed transactions: ₹921 crore
Breakdown from VEDPOWER's perspective:
Recovery of expenses: ₹505 crore
Reimbursement of expenses: ₹330 crore
Purchase of goods and services: ₹50 crore
Sale of goods and services: ₹35 crore
Sale of assets: ₹0.55 crore
Purchase of assets: ₹0.55 crore
Reciprocal presentation explained: sale by VAML = purchase by VEDPOWER, recovery by VAML = reimbursement by VEDPOWER
Purchase of power from VAML driven by operational requirements of Jharsuguda IPP (600 MW)
Power required during shutdowns, maintenance periods, or non-generation periods to maintain essential plant services
Transactions with VEDL (Vedanta Limited)
Aggregate proposed related party transactions: ₹48.6 billion
Includes ₹8.42 billion of expense recoveries and reimbursements
Arises from transfer of Sakti Thermal Power Plant from VEDL to VEDPOWER
Continuation of contractual, administrative and operational arrangements during transition
Changes to FSAs, PPAs and associated records with authorities and counterparties in progress
Expenses attributable to transferred power business may be incurred by VEDL and recovered from VEDPOWER
Background Context
Jharsuguda IPP (600 MW) and Aluminium business (including 3015 MW CPP) previously part of Vedanta Limited (VEDL)
Under demerger: Jharsuguda IPP transferred to Vedanta Power Limited, remaining assets to Vedanta Aluminium Metal Limited (VAML)
Process of updating Fuel Supply Agreements (FSA), Power Purchase Agreements (PPA), registrations and associated records currently underway
Transitional arrangements continue under pre-demerger framework until changes completed
Commitment to Enhanced Disclosure
Company commits to provide enhanced disclosure of performance targets and actual achievement levels in future annual reports
Acknowledges IiAS's expectation of enhanced disclosure
