Corporate Governance rightly continues to remain a prevailing area of shareholder focus. At Vedanta, good governance is an integral part of how we do business and we have a well-established corporate governance framework to facilitate effective and prudent management and embed the highest corporate governance standards throughout the organisation while supporting the strategic delivery of our objectives. The Board provides clear strategic direction to and oversight of management who act within the limits of the authority delegated to them by the Board.
I am pleased to report that the Group has made significant progress during the year ended 31 March 2013 and has proactively addressed the challenges we have encountered as outlined below:
The successful acquisition of a controlling stake in Cairn India has proved to be an excellent platform for growth in a high margin business and contributed to another year of robust EBITDA margins. This acquisition has brought a world-class asset with further growth and exploration potential into the Group. Cairn India was the fastest growing exploration and production company last year, winning the Platts Top 250 Energy Company Awards 2012 and is proving to be an ideal fit with our resources portfolio and geographic footprint.
We have commenced work on the next stage of expansion for our Indian zinc business, following successful exploration over the years. A US$1.5 billion project will over six years expand the capacity at our existing mines and open a new, small mine at Bamnia Kalan in the Rajpura Dariba belt to 1.2 million tonnes. West Africa is emerging as a major iron ore hub and the Group's acquisition in Liberia last year has put us in a prime position to be a key player in this area as the country becomes one of the world's leading exporters of iron ore.
Following the Indian government's approval of exploration in development areas, we began work to extend our oil and gas reserves, drilling our first exploration well in the Rajasthan field, in addition to two exploration wells drilled in Sri Lanka.
In 2012 we initiated a major project to simplify our Group structure and unlock value for shareholders. The merger of Sesa Goa Ltd and Sterlite Industries (India) Ltd to form Sesa Sterlite Ltd aims to create a more efficient ca pital structure across the Group with better alignment of debt and cash flows, as well as delivering significant operational synergies. The necessary approval from the High Court of Bombay and Goa has been received and we now await the approval of the High Court of Madras.
Despite industry-wide inflationary pressure returning, we have either reduced or maintained unit costs in the majority of our operations. Whilst we are not immune from these pressures, we have a good track record of driving down costs, implementing operational improvements and successfully maintaining our assets with one of the lowest sustaining capex costs.
The state-wide temporary mining restrictions in Karnataka and Goa have had a significant impact on mining companies such as Sesa Goa. We are pleased that the Indian Supreme Court has recently lifted the temporary ban on mining of iron ore in Karnataka and we are working towards resuming our mining operations in the region. Mining in Goa remains suspended but we have lodged an appeal against this ban with the Supreme Court and await a date for the final hearing. We continue to actively engage with all necessary stakeholders for a resolution of the matter.
The effectiveness of the Board is instrumental in delivering the long-term success of the Group. Together with the other members of the Nominations Committee, as Chairman of the Board and the Nominations Committee, I regularly review the composition of the Board to ensure that there is an appropriate balance of skills, experience, independence and knowledge of the Group. Last year Geoffrey Green was appointed to the Board as an independent Non-Executive Director. Mr Green has extensive experience in relation to strategic issues and corporate governance practices that will provide unique insights to the Board in the pursuit of its strategic priorities.
As several of the Company's Non-Executive Directors have served on the Board for a number of years, Board succession planning has been at the forefront of the Nominations Committee's considerations and we will take the necessary steps to ensure smooth and orderly Board succession. Mr Naresh Chandra will retire from the Board following the conclusion of the Company's 2013 Annual General Meeting, having served nearly nine years on the Board. Spencer Stuart, one of the world's leading Board recruitment consultants, was engaged to conduct the search for suitable candidates to join as Non-Executive Directors on the Board.
Today, the Nominations Committee recommended and the Board approved the appointment of Mr Deepak Parekh as a Non-Executive Director on the Company's Board with effect from 1 June 2013. He will stand for election by shareholders at the Company's 2013 Annual General Meeting.
Following the publication of Lord Davies' Report on diversity, we set ourselves an aspirational target to achieve a minimum of 25% female representation on the Board by 2015. As we do not have any women on the Board at present, this remains a key priority of the Board for the year ahead. Historically, the gender balance in leadership roles has been a challenge for the natural resources sector and Vedanta is no different. However, we are determined to make serious efforts to move in a positive direction. On the positive side, despite significant geographical and cultural challenges in addressing diversity throughout the Group, we have been successful in improving the overall gender balance. While women currently comprise 8% of the overall Group employee population, they make up 12% of the professional population within the Group. I personally supported a workshop to identify the barriers to women's progression and to encourage the empowerment of women professionals within the organisation. In addition, we aim to recruit 20–25% women through our graduate recruitment schemes across the organisation and review the career progression of women into professional and senior management roles that could provide a ready pipeline of potential talent for future Board appointments.
We undertake an annual review of the effectiveness of the Board. This includes a rigorous evaluation of the performance of the Board, its Committees and each of the Directors in order to recognise strengths and identify improvements that can be made to maintain a strong and resilient Board, with the right balance of skills and experience. For the year under review, the annual evaluations were conducted by means of a questionnaire, discussions at Board and Committee meetings and meetings between myself and each of the Directors individually. It is our intention that the 2014 Board and Committee annual performance evaluations will be facilitated by an external expert.
The key priorities identified by the Board in the 2013 annual evaluation exercise for focus during the year include Board composition, the reduction of debt, cost and security of financing, ensuring raw material security, completion of the Group restructuring, acquisition of minority shareholdings in BALCO and HZL, dealing with the regulatory environment and proactive engagement with shareholders and other stakeholders.
Following the annual evaluation exercise, I am satisfied with the overall effectiveness of the Board and Committees and the contribution made by each Director. Furthermore, I am pleased to say that actions identified for consideration in previous reviews were addressed during the year.
15 May 2013