EX-4.3



 Exhibit 4.3 

ESOP Scheme 2012 
 Objective: 

To build a strong organization founded on engaging competent employees who are aligned with company’s objectives. To have in place an appropriate holistic
reward mechanism that will incentivize and motivate these employees, besides other initiatives to attract and retain the best talent and also to provide opportunities for wealth creation and building strong emotional connect. 

Salient Features of the proposal: 
 In order to achieve
the above stated objectives, we propose ESOP scheme that reflects rewarding of performance on pre-defined criteria linked to Business Performance. This scheme proposes to bring in greater ownership in achievement of business targets and imbibes high
performance culture. 
  

	 	a.	Eligibility for coverage: M7 and above employees will be eligible for coverage in ESOP scheme based on the potential, individual performance and criticality of role. 


Employees who have joined as Freshers in M6 grade will be eligible for ESOP scheme on completion of a minimum of 1 year service with the Group
and freshers who have joined in M7 grade will be eligible on completion of minimum service period of 2 years with the Group. 
 Employees due
to retire within 6 months of the date of grant will not be eligible for coverage. 
  

	 	b.	Coverage: Select employees in M7 and above grades across Group will be covered including Executive Directors. 

  

	 	c.	Grant of options: VR Plc Options will be awarded to employees under ESOP scheme 2012 effective 24th September 2012. For vesting condition, the performance
period considered will be FY 2012-13. 

 The tranche shall vest based on the achievement of business performance in the
performance period as defined and applicable to the eligible participants. The vesting schedule will be staggered at 50% vesting at the end of 1st year, 30% at the end 2nd year and balance 20% at the end of the 3rd year subject to continuation of employment at the time of vesting. 

 

	 	d.	Determining number of options: In order to determine the number of options, the grant value will be divided by the average share price of the last thirty days from date of grant. The exercise price will be 10
cents per share of VR Plc. 

  

	 	e.	Ceiling: The aggregate quantum of options that may be granted by the company under this Plan over a period of ten years shall be limited to 10% of the company’s ordinary share capital. 


 

	 	f.	Performance conditions: 

  

	 	•	 	For Businesses - The vesting of options will be dependent on the achievement of business performance measured against BOA and enablers. 


 

			
	 Performance Condition for Businesses
	  	 Parameters

	Operational Deliverables	  	Volume
	  	COP
	  	Free Cash Flow
	  	HSE Scorecard
	Enablers	  	Company Specific

  

	 	•	 	For projects like TSPL, VGCB, Fujairah Gold and WCL - For projects the performance parameters would be the achievement of milestones as mentioned in respective Business Plans. 


 

	 	•	 	For EDs and Corporate Team based in Mumbai, Delhi and London – The performance conditions considered for EDs and Corp Team is weighted average score of businesses, financial aspects and
Sustainability. 

 It may be noted that for EDs, Sustainability will be considered as an separate parameter, in addition to
the already inbuilt sustainability component forming part of weighted average score of businesses. 

  

			
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	 	g.	Population distribution of covered employees and weightage of performance conditions: Employees will be categorized on the basis of performance, potential, market pull, and criticality of current and expected
role for award of options. The categories of population distribution will have differing weightages to operational deliverables and Enablers considering their role and impact on each of these parameters. 


 

							
	Distribution of population for award of options	 	  

Value of Options
	 	Weightage of Operational 
Deliverables & Enablers
	 	(Not exceeding)	 	 A

(Sr Mgmt)
	 	 B

(Others)

	Category I - 25% of 
covered population	 	100% of individual CTC *	 	 70% - Operational deliverables 

30% - Enablers
	 	100% - Operational deliverables
	Category II - 50% of covered population	 	75% of individual CTC *	 	 
	Category III - 25% of covered population	 	50% of individual CTC *	 	 

  

	* a)	‘CTC’ refers to fixed CTC and excludes variable pay, production incentives, vehicle reimbursements and location specific allowances. 


	   b)	For overseas locations, options will be granted based on equivalent work levels. 

  

	 	h.	Business Performance Score - The combined score of operational deliverables and enablers will result in the Business Performance Score. 


 

	 	i.	Details on Performance Conditions: 

  

	 	(i)	For Businesses: The entities will have varying weightages to the operational deliverables and Enablers based on the entities’ business drivers as follows: 


Operational Deliverables: 
  

																																													
	 Parameters
	  	HZL	 	 	ZI	 	 	KCM	 	 	CMT	 	 	SGL	 	 	Balco	 	 	VAL-J	 	 	VAL-L	 	 	SEL	 	 	S Cu	 	 	Malco	 
	 Volume
	  	 	40	% 1 	 	 	33	% 	 	 	40	%3 	 	 	50	% 	 	 	50	%4 	 	 	40	%5 	 	 	35	% 	 	 	50	% 	 	 	30	% 	 	 	20	%7 	 	 	30	% 
	 COP
	  	 	20	% 2 	 	 	20	% 	 	 	30	% 	 	 	30	% 	 	 	10	% 	 	 	30	%6 	 	 	35	% 	 	 	30	% 	 	 	30	% 	 	 	20	% 	 	 	30	% 
	 Free Cash Flow
	  	 	30	% 	 	 	20	% 	 	 	20	% 	 	 	10	% 	 	 	30	% 	 	 	20	% 	 	 	20	% 	 	 	10	% 	 	 	30	% 	 	 	50	% 	 	 	30	% 
	 HSE
	  	 	10	% 	 	 	27	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 	 	 	10	% 

 Note: 
  

	1 	Volume weightage of 40% comprises 30% for MIC volume and 10% for Integrated Silver volume. 


	2	COP weightage of 20% comprises 15% for Zn COP and 5% for Pb COP 


	3 	Volume refers to integrated production 


	4 	Volume refers to Iron Ore sales 


	5 	Volume weightage of 40% comprises 20% for Al volume and 20% for power sales 


	6 	COP weightage of 30% comprises 15% for Al COP and 15% for commercial power COP 


	7 	Volume refers to production of fresh anode 

 Enablers: 

 

																																													
	 Parameter
	  	HZL	 	 	ZI	 	 	KCM	 	 	CMT	 	 	SGL	 	 	BALCO	 	 	VAL - J	 	 	VAL - L	 	 	SEL	 	 	S Cu	 	 	MALCO	 
	 PR *
	  	 	15	% 	 	 	33	% 	 	 	10	% 	 	 	10	% 	 	 	20	% 	 	 	25	% 	 	 	40	% 	 	 	40	% 	 	 	40	% 	 	 	25	% 	 	 	50	% 
	 HR
	  	 	15	% 	 				 	 	15	% 	 	 	10	% 	 	 	15	% 	 	 	15	% 	 	 	15	% 	 	 	10	% 	 	 	10	% 	 	 	15	% 	 	 	25	% 
	 Asset Optimization
	  	 	15	% 	 	 	—  	  	 	 	20	% 	 	 	10	% 	 	 	—  	  	 	 	20	% 	 	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	25	% 
	 Growth **
	  	 	20	% 	 				 	 	20	% 	 	 	—  	  	 	 	50	% 	 	 	40	% 	 	 	40	% 	 	 	50	% 	 	 	50	% 	 	 	40	% 	 	 	—  	  
	 Mine Development
	  	 	15	% 	 	 	67	% 	 	 	20	% 	 	 	30	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  
	 Exploration
	  	 	10	% 	 				 	 	15	% 	 	 	40	% 	 	 	15	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  
	 Market Cap
	  	 	10	% 	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  	 	 	—  	  

  

			
	*      PR refers to a)	  	Media (local, State and National level), Community Relations and CSR initiatives
	b)	  	Effective relationship at all levels for smooth operation and growth mission like PCB, MOEF, Industry depts., SEBs, Coal Ministry, Power Ministry, Mines Ministry, etc.


	
	


	**	Growth Includes Projects / Approvals / Coal block / Coal Linkage / Bauxite / Karnataka / Zawar / etc. 


  

			
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	 	(ii)	For EDs and Corporate Team based in Mumbai, Delhi and London – The performance conditions considered for EDs and Corp Team is as follows: 


 


 For EDs 
  

							
	 Sl No
	  	 Parameter
	  	Weightage	 
	 1
	  	 Weighted Average Score of Businesses *
	  	 	30	% 
	 2
	  	 Market Capitalization of VR Plc**
	  	 	60	% 
	 3
	  	 Sustainability
	  	 	10	% 
		  		  	  
	  
	 
		  	 Total
	  	 	100	% 
		  		  	  
	  
	 

 

 For Corp Team at Mumbai, Delhi and London 

 

							
	 Sl No
	  	 Parameter
	  	Weightage	 
	 1
	  	 Weighted Average Score of Businesses *
	  	 	50	% 
	 2
	  	 Market Capitalization of VR Plc**
	  	 	20	% 
	 3
	  	 Sesa Sterlite Merger
	  	 	20	% 
	 4
	  	 Sesa Sterlite Valuation
	  	 	10	% 
		  		  	  
	  
	 
		  	 Total
	  	 	100	% 
		  		  	  
	  
	 

 
 

  

	*	Weightages for Business Scores of entities will be as follows: 

  

																	
	 Company
	  	 HZL
	  	SGL	  	KCM	  	Av of Balco, VAL & SEL	  	 ZI
	  	S Cu	  	Malco	  	CMT
	 Score
	  	Simple average of above entities’ Business Score	  	Simple average of above entities’ Business Score
	 Weightage
	  	80%	  	20%

  

	**	The Comparator Group comprises of 14 companies as in Alcoa, Anglo American, Antofagasta, BHP Billiton, ENRC, First Quantum, FMG – Fortescue, Glencore, Khazamkhys, Rio Tinto, Teck, Tullow, Vale and Xstrata. The
score against market capitalization parameter for (ii) above shall be determines using the table below relying upon the relative ranking in the comparator Group. The relative ranking will be calculated on the basis of last 30 days average share
price at the beginning and at end of performance period (1st April to 31st March). 

  

			
	 Relative Ranking
	  	 Score

	1	  	100
	2	  	100
	3	  	100
	4	  	90
	5	  	85
	6	  	80
	7	  	75
	8	  	70
	9	  	60
	10	  	50
	11	  	40
	12	  	30
	13	  	Nil
	14	  	Nil
	15	  	Nil

 While at the top 3 ranking, with the score of 100, the vesting would be at 100%, whereas at the median (8th
Rank) the score will be 70 which will result in corresponding vesting of 30%. 
  

	 	j.	Vesting proportion: The vesting proportion will be dependent on achievement of pre-determined performance conditions as follows: 


 

			
	 Business Performance Score
	  	Vesting %
	 Above 100%
	  	100% plus 2% for every additional 1% score above 100
(upto a max vesting of 120%)*
	 95% - 100%
	  	100%
	 Below 95%
	  	100% minus 2% for every 1% fall in score below 95
	 Below 90%
	  	90% minus 3% for every 1% fall in score below 90
	 At 70%
	  	30%
	 Below 70%
	  	Nil

  

	*	For EDs vesting will be upto a maximum of 100% 


  

			
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	 	k.	Financial Implication: The average number of options per employee is 1,818 and the total financial impact is Rs 424 cr approx. Table below details out the cost implication of the proposed tranche as well as
previous tranches: 

  

																					
	 Details
	  	LTIP 2006	 	 	LTIP 2007	 	 	LTIP 2009	 	 	LTIP 2011	 	 	Proposed for ESOP 2012	 
	 No of employees covered
	  	 	1330	  	 	 	2148	  	 	 	2246	  	 	 	2684	  	 	 	2820	  
	 Total no. of eligible employees
	  	 	2699	  	 	 	5986	  	 	 	7576	  	 	 	8896	  	 	 	7234	  
	 %age of eligible population covered
	  	 	49	% 	 	 	36	% 	 	 	30	% 	 	 	30	% 	 	 	39	% 
	 No of options allocated
	  	 	2,531,350	  	 	 	1,692,349	  	 	 	2,478,000	  	 	 	2,862,100	  	 	 	5,127,240	  
	 Share Price (in GBP)
	  	 	9.9	  	 	 	20	  	 	 	15	  	 	 	19	  	 	 	9.5	  
	 Exchange rate
	  	 	82.06	  	 	 	77.18	  	 	 	80	  	 	 	72	  	 	 	87	  
	 Average no of options per employee
	  	 	1,903	  	 	 	788	  	 	 	1,103	  	 	 	1,066	  	 	 	1,818	  
	 Average share value per employee
	  	 	Rs 15.45 lacs	  	 	 	Rs 12.16 lacs	  	 	 	Rs 13.24 lacs	  	 	 	Rs 14.58 lacs	  	 	 	Rs 15.02 lacs	  
		  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total Financial Impact
	  	 	Rs 205.64 cr	  	 	 	Rs 261.20 cr	  	 	 	Rs 297.36 cr	  	 	 	Rs 391.53 cr	  	 	 	Rs 423.78 cr	  
	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	  	$	45.69 m	  	 	$	 58.04 m	  	 	$	 66.08 m	  	 	$	 86.90 m	  	 	$	 77.05 m	  
	  	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 

 AT / 24.09.2012 

Enclosed: 
 Annexure A – Business Plan numbers for
Operational Deliverables (excluding HSE) 
 Annexure B – Vesting percentage for various Business Performance score scenarios 

Annexure C – Vesting percentage for various Performance score scenarios for Corp Team and EDs 

  

			
		  	Page 4 of 5









 Annexure A: Business Plan figures for OD parameters for each Business 

Target figures for 2012-13 as per Business Plan 
  

																																																									
	 Parameters
	 	SGL	 	 	HZL *	 	 	VAL-J	 	 	VAL-L	 	 	SEL	 	 	Balco **	 	 	S Cu	 	 	Malco	 	 	KCM	 	 	ZI	 	 	BMM	 	 	LM	 	 	SZ	 	 	CMT	 
	 Volume (in MT)
	 	 	21	1 	 	 
 	Refer
below table	  
  	 	 	665,529	  	 	 	1,200,000	  	 	 	14702	2 	 	 
 	Refer
below table	  
  	 	 	350,830	  	 	 	869	  	 	 	203,230	  	 	 	419,519	  	 	 	82,994	  	 	 	186,275	  	 	 	150,250	  	 	 	27,070	  
	 COP (in $/MT)
	 	 	22	  	 				 	 	1,900	  	 	 	310	  	 	 	1.83	3 	 				 	 	0.32	4 	 	 	3.55	3 	 	 	169	  	 	 	1,262	  	 	 	1,406	  	 	 	1,233	  	 	 	1,213	  	 	 	207	  
	 Free Cash Flow (in $ Mn)
	 	 	725	  	 	 	1,385	  	 	 	–33	  	 	 	–22	  	 	 	380	  	 	 	285	  	 	 	249	  	 	 	37	  	 	 	604	  	 	 	265	  	 	 	57	  	 	 	82	  	 	 	125	  	 	 	52	  


 

 Note: 

	1	Sesa Goa volume is in mt 


	2	SEL Volume is in MU 


	3 	SEL & MALCOCOP is in Rs./kwh 


	4	Copper COP is in c/lb





					
	 ‡ HZL
	  	 	 
	 Zinc MIC (in MT)
	  	 	815,049	  
	 Lead MIC (in MT)
	  	 	115,691	  
	 Integrated Silver (in kg)
	  	 	354,702	  
	 Zinc COP (in $/MT)
	  	 	800	  
	 Lead COP (in $/MT)
	  	 	745	  

 


					
	 ‡‡ BALCO
	  	 	 
	 Aluminium (in MT)
	  	 	359241	  
	 Power Sales (in MU)
	  	 	6,116	  
	 Aluminium COP (in $/MT)
	  	 	1,795	  
	 Power COP (n Rs/Kwh)
	  	 	2.15	  

 
 

  
 Annexure B: Vesting percentage for
various Business Performance score scenarios 
 To have a better understanding on the calculation of vesting proportions for different business
performance score, below table demonstrates the actual vesting proportion for sample business scores. 
  

							
	 Business Performance Score
	  	 Particulars
	  	Calculation	  	Vesting Proportion
	 105%
	  	5% more than 100%	  	100% + (5% * 2)	  	110%
	 100%
	  	—	  	—	  	100%
	 95%
	  	—	  	—	  	100%
	 90%
	  	5% less than 95%	  	100% - (5% * 2)	  	90%
	 85%
	  	5% less than 90%	  	90% - (5% * 3)	  	75%
	 80%
	  	10% less than 90%	  	90% - (10% * 3)	  	60%
	 75%
	  	15% less than 90%	  	90% - (15% * 3)	  	45%
	 70%
	  	20% less than 90%	  	90% - (20 * 3)	  	30%

 Annexure C: Vesting percentage for various Performance score scenarios for Corp Team and EDs 

Hypothetical projection of vesting for Group (ii) namely Corporate Team and EDs under different performance conditions as follows: 

 


 Scenario 1 
  

																					
	 Parameters
	 	Score	 	 	For EDs	 	 	For Others in
Corp Team	 
	 	 	Weightage	 	 	Final
Score	 	 	Weightage	 	 	Final
Score	 
	 Weighted Avg Business Score
	 	 	90	  	 	 	30	% 	 	 	27.00	  	 	 	50	% 	 	 	45	  
	 Market Cap Score (Rank 3)
	 	 	100	  	 	 	60	% 	 	 	60.00	  	 	 	20	% 	 	 	20	  
	 Sesa Sterlite Merger
	 	 	90	  	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	18	  
	 Sesa Sterlite Valuation
	 	 	90	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	9	  
	 Sustainability
	 	 	80	  	 	 	10	% 	 	 	8.00	  	 	 	—  	  	 	 	—  	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total
	 	 	—  	  	 	 	—  	  	 	 	95.00	  	 	 	—  	  	 	 	92.00	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Vesting percentage
	 	 	—  	  	 	 	—  	  	 	 	100	% 	 	 	—  	  	 	 	94	% 

 

 Scenario 2 
  

																					
	 Parameters
	 	Score	 	 	For EDs	 	 	For Others in
Corp Team	 
	 	 	Weightage	 	 	Final
Score	 	 	Weightage	 	 	Final
Score	 
	 Weighted Avg Business Score
	 	 	90	  	 	 	30	% 	 	 	27.00	  	 	 	50	% 	 	 	45	  
	 Market Cap Score (Rank 4)
	 	 	90	  	 	 	60	% 	 	 	54.00	  	 	 	20	% 	 	 	18	  
	 Sesa Sterlite Merger
	 	 	80	  	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	16	  
	 Sesa Sterlite Valuation
	 	 	80	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	8	  
	 Sustainability
	 	 	50	  	 	 	10	% 	 	 	5.00	  	 	 	—  	  	 	 	—  	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total
	 	 	—  	  	 	 	—  	  	 	 	86.00	  	 	 	—  	  	 	 	87.00	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Vesting percentage
	 	 	—  	  	 	 	—  	  	 	 	78	% 	 	 	—  	  	 	 	81	% 

 
 


 


 Scenario 3 
  

																					
	 Parameters
	 	Score	 	 	For EDs	 	 	For Others in
Corp Team	 
	 	 	Weightage	 	 	Final
Score	 	 	Weightage	 	 	Final
Score	 
	 Weighted Avg Business Score
	 	 	85	  	 	 	30	% 	 	 	25.50	  	 	 	50	% 	 	 	42.5	  
	 Market Cap Score (Rank 5)
	 	 	85	  	 	 	60	% 	 	 	51.00	  	 	 	20	% 	 	 	17	  
	 Sesa Sterlite Merger
	 	 	70	  	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	14	  
	 Sesa Sterlite Valuation
	 	 	70	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	7	  
	 Sustainability
	 	 	25	  	 	 	10	% 	 	 	2.50	  	 				 			
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total
	 	 	—  	  	 	 	—  	  	 	 	79.00	  	 	 	—  	  	 	 	80.50	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Vesting percentage
	 	 	—  	  	 	 	—  	  	 	 	57	% 	 	 	—  	  	 	 	62	% 

 

 Scenario 4 
  

																					
	 Parameters
	 	Score	 	 	For EDs	 	 	For Others in
Corp Team	 
	 	 	Weightage	 	 	Final
Score	 	 	Weightage	 	 	Final
Score	 
	 Weighted Avg Business Score
	 	 	70	  	 	 	30	% 	 	 	21.00	  	 	 	50	% 	 	 	35	  
	 Market Cap Score (Rank 9)
	 	 	60	  	 	 	60	% 	 	 	36.00	  	 	 	20	% 	 	 	12	  
	 Sesa Sterlite Merger
	 	 	75	  	 	 	—  	  	 	 	—  	  	 	 	20	% 	 	 	15	  
	 Sesa Sterlite Valuation
	 	 	75	  	 	 	—  	  	 	 	—  	  	 	 	10	% 	 	 	7.5	  
	 Sustainability
	 	 	75	  	 	 	10	% 	 	 	7.50	  	 	 	—  	  	 	 	—  	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Total
	 	 	—  	  	 	 	—  	  	 	 	64.50	  	 	 	—  	  	 	 	69.50	  
		 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 	 	  
	  
	 
	 Vesting percentage
	 	 	—  	  	 	 	—  	  	 	 	Nil	  	 	 	—  	  	 	 	Nil	  

 
 


  

			
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