Hindustan Zinc Ltd
Chairman Speech
Message from the Chairperson
Dear Stakeholders,
I would like to first thank the Board and the shareholders of the Company for reposing
their trust in me for steering Hindustan Zinc as its new Chairperson. This is indeed an
honour, and I hope, together we will be able to work towards achieving our ambitious
goals, in line with the landmark accomplishments of my predecessor Ms. Kiran Agarwal.
Hindustan Zinc is a shining beacon in the Group's portfolio. Since assuming the role of
Chairperson, I have witnessed the organisation achieve many milestones. Not only did
Hindustan Zinc remain on course to realise its goals, but also stayed ahead of the market
curve to deliver an excellent performance during the year.
Setting New Records of Excellence
It gives me immense pleasure to share that we reported yet another record-breaking
annual performance, with historic highs in terms of revenue, EBITDA, net profit and cash
flow generation during the year. Technology and digitisation have been key in boosting
operational efficiencies, while enabling continual volume enhancement and cost
optimisation through agile decision-making.
Committed to People Safety
I also want to take this opportunity to thank our stellar team for their dedication,
hard work and for their belief in our ambitious goals. I am confident that together we can
scale unfathomable heights.
I would like to reiterate our commitment to people safety by implementing all possible
measures to identify gaps and ensure zero fatalities across all our facilities. I would
like to assure you all that we shall continue to leverage the power of automation and
technology to enhance employee safety across all our operations.
Promoting Diversity to Drive Inclusive Growth
In an endeavour to ensure inclusivity and promote diversity, we have developed a robust
recruitment strategy and we encourage our business partners to have a diverse and
inclusive workforce. I am pleased to share that across the Company, as many as 501 women
employees, including 146 women engineers, are breaking the glass ceiling in mining and
smelting operations. At Hindustan Zinc, women are working and flourishing in all the key
functions, from driving large mining vehicles to operating plants and working in
nightshifts - and we are all proud of them.
At present, women make up 19.5% of our executive workforce, 35% of our Management
Committee and 21% of our Executive Committee. As a frontrunner in promoting gender,
geographical, cultural and racial inclusivity, we have set a target to achieve and
maintain 30% diversity among all our Executive and Management Committees.
Our commitment to develop a conducive and inclusive work environment is also visible
through the induction of transgender employees across roles at Hindustan Zinc.
Powering our Sustainability Goals
At the heart of our futuristic growth strategy is our strong commitment to
sustainability, which continues to be pivotal to our success as a market and industry
leader. In 2020, Hindustan Zinc listed a set of goals for steering its Environmental,
Social and Governance (ESG) journey over the next 5 years. We had also laid out a clear
strategic roadmap to achieve these goals, especially through implementation of innovations
and digitisation.
Aligning ourselves with global trends and the United Nations Sustainable Development
Goals (UN SDGs), we have prioritised climate change, water stewardship, circular economy,
biodiversity conservation, zero harm, social impact, diversity in workforce and
responsible sourcing as key tenets of our sustainability efforts.
In addition to signing a long-term renewable energy (RE) power delivery agreement, we
are also the first in the country to introduce electric vehicles in underground mining. We
have also set a target of converting all 900 diesel-run mining vehicles into
battery-operated ones and have earmarked an investment of over US$ 1 billion for the same.
Furthermore, an ‘A' rating in climate change by CDP is testament to our commitment
towards achieving net-zero emissions by 2050.
Preserving and enriching biodiversity is an integral part of Hindustan Zinc's
commitment to sustainable development. The Company's biodiversity policy and management
standards are designed to conserve and promote biodiversity, while working to protect the
natural ecosystem in its areas of operation.
I am confident that we will accomplish many more milestones and work together
proactively to maintain and augment our position as an industry leader
Expanding our CSR Ambit
Social impact initiatives are a key to sustainability, and are a base for us to create
a strong societal foundation for collective growth and development.
Our initiatives to give back to the community are, thus, a significant investment area
for us, and we continued to expand the ambit of our social programmes during FY 2022-23.
The prestigious ‘Corporate Social Responsibility' award, won by Hindustan Zinc at the
esteemed S&P Global Metal Award ceremony held in London in October 2022, was an
important validation of our CSR focus. Projects such as Sakhi, Khushi-Nandghar, Shiksha
Sambal and Unchi Udaan, to name a few, are aimed to ensure that we continue to positively
impact lives at the grassroot level and empower the women and children in our communities
through education and skilling opportunities, while focussing on creating people-led
institutions. Our Zinc Football Academy is another feather in our cap. With
state-of-the-art facilities, the football academy currently hosts over 60 students who are
not only excelling in the field of sports but also academics. With steadfast belief in the
transformative power of training, mentoring, and their relentless efforts, we envision our
athletes reaching new heights and represent India on the global arena in the years to
come.
Looking Forward to Bigger Milestones
As Chairperson, Hindustan Zinc, I am confident that we will accomplish many more
milestones and work together proactively to maintain and augment our position as an
industry leader. With a strong leadership, robust operational mechanisms and best-in-class
digitisation efforts, we are at the inflection point of unprecedented growth. As a
responsible organisation and a recognised industry leader over the years, I am confident
we will achieve our targets sustainably and efficiently.
Our core strengths, experience and expertise will help us to maximise the growth
opportunities available to us, while opening new vistas of expansion for the Company.
Capacity expansion, volume growth, improved safety, better operational and financial
performance and enhanced value creation for all stakeholders will be the key areas of
focus in our growth story.
I am confident that with the continued support of our customers, partners,
shareholders, investors, communities and employees, we will find many more reasons to
celebrate and I look forward to a fruitful fiscal.
Sincerely,
Priya Agarwal Hebbar
  Â
Hindustan Zinc Ltd
Directors Reports
Dear Members,
We share with you our 57th Annual Report, together with the Audited
Financial Statements for the year ended March 31, 2023.
The Directors are pleased to inform that Hindustan Zinc delivered exemplary operational
performance showcasing resilience while ensuring safe operations and continued to improve
on its performance of various ESG metrics. The Company has taken a proactive approach to
keep its assets and people safe, while increasing engagement with the communities.
THE YEAR IN SUMMARY
The Company continued to deliver stellar results during the year, touching new
operational milestones. Mine production continued to improve during the year with ore
production for the full-year up 2% y-o-y to deliver a record 16.7 Mt, supported by strong
production growth at Rajpura Dariba, Sindesar Khurd and Rampura Agucha mines, which were
up 11%, 7% and 6% respectively. Mined metal production was up 4% y-o-y to record 1,062 kt
driven by higher ore production, improved mined metal grades and operational efficiencies.
The Company also recorded ever highest mine development, registering 4% growth y-o-y,
crossing the 110 km mark in line with increasing production requirements and securing
future resource base.
The Company crossed the 1 million tonne refined metal production mark for the first
time producing ever highest 1,032 kt of refined metal supported by strong MIC production
and better plant availability.
The Company diligently focussed on community upliftment in the areas of education,
sustainable livelihoods, women empowerment, health, sports & culture, water &
environment and community assets creation.
The Company is ranked #3 globally and #1 overall in Asia- Pacific at S&P Global
Corporate Sustainability Assessment Score in metal and mining sector. The Company has also
been selected as a leadership band ‘A' listed company for ‘Climate Change' and
band ‘A-' listed company for ‘Water Security‘ in CDP 2022.
I. HEALTH, SAFETY AND ENVIRONMENT
Occupational Health & Safety
In line with our commitment to ensure zero harm to employees, the leadership has
undertaken the prime responsibility of providing a safe workplace for all employees
entering our premises. While committed to operate a business with ‘zero harm', it is
with deep grief we report the loss of lives of six business partner colleagues and one
Hindustan Zinc employee in work- related incidents at our managed operations. These
incidents happened despite our constant efforts to eliminate fatalities and attain a
‘zero harm' work environment. A thorough investigation was conducted to identify the
causes of these incidents and share the lessons learned across Hindustan Zinc, to prevent
similar incidents in the future.
LTIFR for the year was 0.70 as compared to 0.81 in FY 2021-22.
During the year, to avoid fatalities and catastrophic incidents in Hindustan Zinc,
‘Vihan': a critical risk management (CRM) initiative was launched to improve
managerial control over rare but potentially catastrophic events by focussing on the
critical controls. We have reinforced the focus upon four critical risks i.e., fall of
ground (FOG), fall of person/object from height (WAH), vehicle pedestrian interaction
(VPI) and entanglement. Through these initiatives, we want to ensure that all identified
critical controls are being monitored on a daily basis and systems are in place.
Safety pause was also conducted across all our operational units covering all shift
employees under the theme ‘stop work if it's not safe'. During this connect all
recent safety incidents that happened across group companies were discussed and key
learnings were shared.
A Community of Practice (CoP) on "Structure Stability" was established during
the year to institute a review mechanism of all prevailing civil and mechanical
structures; further a specific categorisation was established to mark the structures based
on which their repair/replacement will be planned.
Second half of the year has been a period of innovation for mining operations to avoid
manual intervention and related risk with inclusion of:
Digitalised drilling of production stopes during blasting operations eliminating
manpower requirement, machine drills in auto mode with interlock features and digital
radio frequency identification (RFID) based cap lamps along with proximity sensors to
avoid man-machine interaction underground.
Training and capability building was also a core theme during the year, few such key
programmes were:
First underground practical cum digitised training gallery developed at Rampura Agucha
Mines (RAM) to provide all facility of surface training to underground operations team,
wi-fi network available at training place so that underground manpower can connect from
underground to any kind of seminars/trainings, safety leadership development programme
initiated for mines frontline supervisor through ex-DGMS officials and Dupont, launch of a
unique virtual reality-based simulator training for jumbo operator at RAM.
Response during any emergency is a paramount parameter to ensure safety of the people.
As a proactive measure, we have conducted emergency response and crisis plan (ERCP) gap
assessment study across all the sites. Further, the 51st All India Mines Rescue
Competition was hosted under the aegis of DGMS at Rajpura Dariba Complex, a 10-day
capacity building training programme on ‘disaster management' was conducted at Zawar
Mines (ZM), the training included medical first responder, collapsed structure search
& rescue, fire management, chemical emergencies, etc. RAM has reaffirmed safety &
rescue by establishing underground fire tender with remote operated foam unit and thermal
imaging camera for blind zones.
Demonstrating the highest standards of health and safety management during the year,
Dariba Smelting Complex received the prestigious ‘Sword of Honour' from British
Safety Council for showing excellence in the management of health and safety risks at
work. Kayad Mines received 5-Star Rating Award in safety and welfare by Rajasthan
Government and Jaswant Singh Gill Memorial Industrial Safety Excellence Award 2022 for
underground metal mining in India.
Environment
Hindustan Zinc commits to ‘long-term target to reach net-zero emissions by 2050'
in line with Science Based Targets initiative (SBTi) aiming to have a clear and defined
path to reduce emissions in line with the Paris Agreement goals. To achieve this target,
we are working towards improving our energy efficiency, switching to low carbon energy
sourcing, introducing battery operated electrical vehicles and increasing the role of
renewables in our energy mixes.
We have entered into a power delivery agreement for sourcing up to 450 MW of renewable
power by 2025 which will not only strengthen our commitment towards a clean future but
will also help reduce emissions to the tune of 2.7 mn tCO2e. Pantnagar Metal
Plant is sourcing 100% green power for its operations thus making it a one-of-a-kind
initiative, leading towards reducing emissions by 30,000 tCO2e.
Technology and digitalisation are key to strengthening our ESG footprint and creating a
net-zero future. It is our ambition to convert all our mining equipment to battery-
operated electric vehicles (EVs). To make our mining operations environment-friendly, we
plan to invest US$ 1 billion over the next few years towards mitigating climate change
impacts.
EVs are a globally recognised means to reduce dependence on petroleum products and thus
reduce CO2 emissions. Therefore, Hindustan Zinc signed a Memorandum of
Understanding (MoU) with Epiroc Rock Drills AB, Normet Group Oy and Sandvik AB to
introduce battery electric vehicles (BEV) in its underground mining operations making
Hindustan Zinc the first Company in India to do so.
Hindustan Zinc has led by example by inducting an LNG powered truck for upstream and
downstream transportation which shall reduce greenhouse gas (GHG) emissions. We are also
using 5% biomass for power generation at our captive thermal power plants thereby reducing
carbon footprint.
In line with Hindustan Zinc's policy of a green value chain, our business partners have
also started operating EVs and several electric forklifts have been introduced in our
multiple business units.
At Hindustan Zinc, we recognise the reality of climate change. Therefore, our risk
management processes embed climate change in the understanding, identification, assessment
and mitigation of risk. We have published our second task force on climate-related
financial disclosures (TCFD) report during the year which sets the adoption of the TCFD
framework for climate change risk and opportunity disclosure.
Endeavouring towards being a sustainable organisation we have refreshed our materiality
matrix and established the ESG governance at tier 3 level as well as at SBU level to
implement ESG projects on ground.
Hindustan Zinc joined the taskforce on nature-related financial disclosures (TNFD)
piloting with ICMM to access the challenges in implementing the LEAP process of TNFD.
Miyawaki afforestation was completed at Dariba Smelting Complex (DSC) and Chanderiya
Lead-Zinc Smelter (CLZS). 12,000 indigenous plants and 6,500 native seeds were planted in
an area of 1 hectare at each of the locations to create a self-sustaining forest in the
span of 3 years.
A 3 year engagement with International Union for Conservation of Nature (IUCN) has also
been initiated. Under this, we have prepared an Integrated Biodiversity Assessment Tool
(IBAT) report for all Rajasthan based locations identifying species present in the core
area, reframed our biodiversity policy, conducted ecosystem service review across the
Rajasthan based locations, completed the biodiversity risk assessment and site visit by
IUCN team members done for two seasons. These studies will help Hindustan Zinc prepare a
strategy to achieve ‘no net loss' towards biodiversity. Green cover study has been
done by the State Remote Sensing Application Centre (SRSAC), Jodhpur for all Rajasthan
based locations of Hindustan Zinc.
One of the most notable achievements has been the successful commissioning of a 3,200
KLD zero liquid discharge (RO-ZLD) plant at the Dariba smelter. Apart from that, ZM and
RAM ZLD projects of 4,000 KLD capacity each have also been initiated to improve recycling
and strengthen the zero discharge. Like ZM, dry tailing plant at Rajpura Dariba mine is
also under final stage of commissioning and will result in significant amount of water
recovery from the tailings.
Site inspection and updated Global Industry Standard on Tailing Management (GISTM)
Conformance Assessment completed by ATC Williams for all tailing storage facility (TSF).
Published the 1st Environmental Product Declaration (EPD), a type 3 ecolabel of
our zinc product thus reinforcing our commitment to sustainability, transparency, and
minimising environmental footprint.
Public hearing was conducted successfully at CLZS for proposed enhancement of zinc
production capacity from 504 to 630 kt and installation of induction furnace, slab casting
line, raw zinc oxide (RZO) unit, change in product mix in pyro unit on total metal basis
& installation of lead refinery and minor metal complex etc.
Our sustainability related activities received several endorsements during the year:
• Hindustan Zinc ranked #3 globally and #1 overall in Asia-Pacific at S&P
Global Corporate Sustainability Assessment Score in metal and mining sector. Scores
improved from 77 last year to 80 this year
• Hindustan Zinc won the "Industry Leadership Award - Base, Precious and
Specialty Metals" and "Corporate Social Responsibility" at the prestigious
S&P Global Platts Global Metal Awards
• I ncluded in Sustainability Yearbook 2023 amongst the top 5% most sustainable
organisations globally
• GreenCo rating 2022: Dariba Smelting Complex (Gold rating), Chanderiya Lead-Zinc
Smelter (Gold rating), Debari Zinc Smelter (Silver rating), Zawar Mines (Silver rating),
RAM (Silver rating)
• Hindustan Zinc received the Indian Patent for inhouse innovation for process to
treat Antimonybearing by-product of zinc-lead smelters and convert it into a value-added
product, Potassium Antimony Tartarate (PAT). Previously, we received the patent for the
same category from the US and Europe patent offices in the years 2021 & 2019
respectively
• Climate Action Programme (CAP) 2.0? - Oriented Award in the Energy, Mining and
Heavy Manufacturing Sector
• Sustainalytics ESG scoring improved from 46.6 to 29.6, management scores
improved from Average to Strong
• Hindustan Zinc awarded with CII EXIM Business Excellence Award 2022
• Hind Zinc school awarded with prestigious Platinum Certification from the Indian
Green Building Council
• Hindustan Zinc selected as leadership bands A/A- listed company by CDP
"Climate Change A" and "Water Security A-" in CDP 2022 and has been
recognised as leaders in supply chain
• CII - ITC Sustainability award to CLZS as Outstanding accomplishment in
corporate excellence and Debari Zinc Smelter (DZS) as Excellence in environment management
• Hindustan Zinc's 4 mines received 5 Star Rated Mines' award by the Ministry of
Mines, Government of India
II. OPERATIONAL PERFORMANCE
Production performance
| Production |
FY 2022-23 |
FY 2021-22 |
% Change |
| Total mined metal (kt) |
1,062 |
1,017 |
4% |
| Refined saleable metal production (kt) |
1,032 |
967 |
7% |
| Refined zinc - integrated (kt) |
821 |
776 |
6% |
| Refined lead - integrated (kt) |
211 |
191 |
10% |
| Saleable silver production (in tonnes) |
714 |
647 |
10% |
Production
For the full-year, ore production was up 2% y-o-y to 16.74 Mt on account of strong
production growth at Rajpura Dariba, Sindesar Khurd & Rampura Agucha mines, which were
up 11%, 7% and 6% respectively. FY 2022-23 saw the best-ever mined metal production of
1,062 kt compared to 1,017 kt in the prior year in line with higher ore production across
mines supported by better mined metal grades and operational efficiencies.
For the full year, we saw our ever-highest metal production, up 7% to 1,032 kt in line
with consistent mined metal flow from mines and better plant availability, while silver
production was 10% higher at 714 MT in line with higher lead metal production.
The Company generated 2,996 million units of thermal based power in FY 2022-23. Total
green power generation was 713 million units as compared to 720 million units in FY
2021-22.
Sales
During the year, domestic refined zinc metal sales was 484 kt as against 506 kt last
year, while export sales for the year stood at 337 kt as compared to 271 kt a year ago.
The aggregate sales were higher by 6% than previous year, in line with production. Lead
metal sales in the domestic market were 186 kt, while export sales were 25 kt leading to
increase in aggregate sales by 10% from a year ago, in line with the increase in lead
metal production. Silver sales were 714 MT in FY 2022-23, all in the domestic market and
10% higher than previous year.
III. FINANCIAL PERFORMANCE
Financial Information
| Particulars |
FY 2022-23 |
FY 2021-22 |
| Revenue from operations (incl. other operating income) |
34,098 |
29,440 |
| Other income |
1,379 |
1,216 |
| Profit before depreciation, interest, tax, and exceptional item |
18,885 |
17,441 |
| Less: Interest |
333 |
290 |
| Less: Depreciation and amortisation expense |
3,264 |
2,917 |
| Less: Exceptional Item |
- |
134 |
| Profit before tax |
15,288 |
14,100 |
| Less: Net tax expense |
4,777 |
4,471 |
| Net profit |
10,511 |
9,629 |
| Earnings per share ('/share) |
24.88 |
22.79 |
Annual Performance
Details of the Company's annual financial performance as published on the Company's
website and presented during the analyst meet, after declaration of annual results, can be
accessed using the following link: https:// www.hzlindia.com/wp-content/uploads/Investor_
presentation 21042023.pdf
Revenue
The Company reported ‘Revenue from operations' including other operating income of
' 34,098 crore, an increase of 16% y-o-y primarily on account of increase in zinc prices,
higher metal and silver sales due to increase in production, strategic hedging and
favourable exchange rate, partly offset by lower lead and silver prices.
The ‘Other income' was ' 1,379 crore during the year compared to ' 1,216 crore in
the previous year with support of higher rate of return in current year as against the
previous year.
Production Cost
Zinc's cost of production (COP) excluding royalty for FY 2022-23 was ' 1,00,893 (US$
1,257) per tonne, higher by 21% y-o-y. The full year COP was higher, largely on account of
higher coal prices & input commodity inflation, partly offset by higher volumes,
better sulphuric acid realisation & improved operational efficiencies.
Operating Margin
The above revenue and production cost resulted in profit before depreciation, interest
and tax (PBDIT) of ' 18,885 crore in FY 2022-23, up 8% on account of higher volumes, rise
in LME prices, strategic hedging, partially offset by higher coal and input commodity
prices.
Net Profit
Net profit was ' 10,511 crore, up 9% y-o-y where in the impact of higher PBDIT was
partly offset by higher depreciation and amortisation. Effective tax rate for the year at
31.2% as compared to 31.7%.
Earnings Per Share (EPS)
The EPS for the year was ' 24.88 per share as compared to ' 22.79 per share in FY
2021-22.
Dividend
Interim dividend of 3,775%, i.e., ' 75.5 per share on equity share of ' 2 each
amounting to ' 31,901 crore was declared in the FY 2022-23.
The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 ("SEBI Listing Regulations") is available on the Company's website on
https://www.hzlindia.com/wp- content/uploads/Dividend-Policy-2016.pdf
Credit Rating and Liquidity
CRISIL has reaffirmed the Company's long-term rating of AAA/Stable and short-term
rating of A1+. The ratings continue to reflect the Company's low- cost operations, strong
market position, efficient and integrated operations, high reserve & resource and a
strong balance sheet.
The Company follows a conservative investment policy and invests in high quality debt
instruments. As on March 31, 2023, the Company's gross investments and cash & cash
equivalents were ' 10,061 crore.
Cash Flows
| (' in crore) |
|
|
| Particulars |
FY 2022-23 |
FY 2021-22 |
| Opening Cash* |
20,789 |
22,308 |
| Add: EBITDA** |
17,590 |
16,289 |
| Add: Net Interest Income |
1,151 |
604 |
| Less: Income Tax |
3,140 |
2,391 |
| Less: Dividend |
31,901 |
7,606 |
| Less: Capital Account Payments |
3,561 |
2,998 |
| Add: Borrowings |
8,978 |
(4,315) |
| Add: (Increase)/Decrease in Working Capital & Others |
155 |
(1,102) |
| Closing Cash* |
10,061 |
20,789 |
(*) Includes Cash & Cash Equivalents (refer note 11 of the Audited Financial
Statements), other bank balances excluding earmarked unpaid dividend accounts balance
(refer note 12 of the Audited Financial Statements) and Current & Non-Current Treasury
Investments (refer note 9 of the Audited Financial Statements)
(**) Earnings before Interest, Tax, Depreciation and Amortisation expenses and Income
on investments
Gross Working Capital
Gross working capital represented by inventory, trade receivables and other current
assets decreased from ' 3,132 crore to ' 2,578 crore as at March 31, 2023 primarily due to
decrease in trade receivables and coal stock. The working capital cycle was 28 days in FY
2022-23 as compared to 40 days in FY 2021-22.
Gross Block
The gross block during the year increased from ' 37,453 crore to ' 40,426 crore. This
was largely due to the ongoing mining projects and other sustaining capex.
Capital Employed*
The total capital employed as at March 31, 2023 was ' 14,712 crore, as compared to '
16,315 crore at the end of previous fiscal year.
*Refer page 51 for description
Contribution to the Government Treasury The Company has contributed ' 24,892 crore
during FY 2022-23, in terms of royalties, dividend and taxes to the Government treasury,
aggregating to approximately 73% of the total operating revenue.
IV. RESERVE & RESOURCE (R&R)
On an exclusive basis, total Ore Reserves at the end of FY 2022-23 stood at 173.49
million tonnes (net of depletion of 16.74 million tonnes during FY 2022-23) and exclusive
Mineral Resources totalled 286.56 million tonnes. Total contained metal in Ore Reserves is
estimated at 9.64 million tonnes of zinc, 2.7 million tonnes of lead and 310.2 million
ounces of silver. The Mineral Resource contains approximately 12.8 million tonnes of zinc,
5.66 million tonnes of lead and 545.7 million ounces of silver. At current mining rates,
the R&R underpins metal production for more than 25 years.
V. PROJECTS
I n Hindustan Zinc journey of 1.25 Mtpa MIC expansion, only remaining project of RD
beneficiation plant revamping is under execution at RD mines which is scheduled to be
commissioned in FY 2023-24. Fumer plant commissioning is delayed due to VISA issues of OEM
from China. The plan is to complete commissioning of plant through OEM support in FY
2023-24. For further phase of expansion of mines and smelters, studies are under progress
and results are expected in FY 2023-24.
The capacity of smelters is being enhanced by putting up a new roaster in Debari with
latest technologies. The order placement is targeted by Q1 FY 2023-24.
With increasing focus on enhancing the value-added product portfolio, a new project of
Alloys commissioned through a subsidiary - Hindustan Zinc Alloys Private Limited (HZAPL)
in FY 2022-23, which is scheduled for completion in FY 2023-24. Hindustan Zinc is also
setting up a new fertiliser plant at Chanderiya for which partner has been locked in.
Project is scheduled for completion in 24 months. Through HZAPL and Hindustan Zinc
Fertilisers Private Limited (HZFPL), the Company will move from a commodity-based to a
product-based Company.
VI. SUBSIDIARIES/JOINT VENTURES
As on March 31, 2023, your Company had 4 wholly owned subsidiaries and 1 joint venture
as per the Companies Act, 2013 (the Act) which have been classified as subsidiaries/JVs
under Indian Accounting Standards (Ind AS). Same are as follows: -
1. Hindustan Zinc Alloys Private Limited
2. Vedanta Zinc Football & Sports Foundation
3. Hindustan Zinc Fertilisers Private Limited
4. Zinc India Foundation
5. Madanpur South Coal Company Limited
During the year under review, no changes occurred in your Company's holding structure.
VII. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Company's CSR initiatives passionately focusses on community upliftment by
strengthening the local economy and improving the quality of life by working in the areas
of education, sustainable livelihoods, women empowerment, health, water & sanitation,
sports & culture, environment & safety and community assets creation.
During the year, the Company spent ' 276.34 crore on CSR programmes, more than the 2%
of CSR mandate which was ' 214.38 crore. For further details, refer Annexure 3 and
‘Operational Review' section of this Annual Report.
VIII. DIRECTORS AND KEY MANAGERIAL PERSONNEL
Mr. Kannan Ramamirtham (DIN: 00227980) was appointed as Non-executive Independent
Director on the Board of the Company for a period of 1 year effective from September
01,2022 to August 31,2023. The same was approved by the shareholders through postal ballot
outcome dated October 31, 2022.
Mrs. Kiran Agarwal has ceased to be the Chairperson and Director of the Company w.e.f.
January 18, 2023 (from the close of business hours) and Ms. Priya Agarwal has been
appointed on the Board as Additional Director and Chairperson of the Company w.e.f.
January 19, 2023. The same was approved by the shareholders through postal ballot outcome
dated April 10, 2023.
Mr. Sandeep Modi, Interim Chief Financial Officer (CFO) has been elevated as Chief
Financial Officer w.e.f. April 21, 2023 by the Board.
The Company's policy on appointment of Directors and their remuneration is available on
the Company's website https://www.hzlindia.com/wp-content/uploads/
HZL-Nomination-Remuneration-Policy-20.1.2020.pdf
IX. MANAGEMENT DISCUSSION AND ANALYSIS
The ‘Operational Overview' section of this Annual Report gives a detailed account
of the Company's operations and the market in which it operates. The ‘Financial
Performance' section of this Board Report and the ‘Key Performance Indicators'
section of this Annual Report provide a discussion on the financial performance and key
financial ratios of the Company. The initiatives in the areas of human resources,
sustainability and risk management are covered in the respective sections of this Annual
Report.
X. CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
As a listed company, necessary measures are taken to comply with the listing agreements
of the Stock Exchanges. A report on Corporate Governance forms part of this report.
Further, Business Responsibility and Sustainability Report describing the initiatives
taken by the Company from an environmental, social and governance perspective, also forms
a part of this report. In order to maintain transparency and efficient governance, various
disclosures as required under sections 134 and 135 of the Companies Act, 2013 are annexed
to this report or covered in the Corporate Governance Report, such as Related Party
Transactions; information and details on conservation of energy, technology absorption,
foreign exchange earnings and outgo; extract of annual return; constitution of various
Board level committees; annexure on CSR, etc.
XI. DIRECTORS' RESPONSIBILITY STATEMENT
As required under section 134(5) of the Companies Act, 2013, the Board of Directors, to
the best of their knowledge and ability confirm that:
i. In the preparation of the annual accounts, the applicable accounting standards have
been followed and there are no material departures;
ii. they have selected such accounting policies and applied them consistently and made
judgements & estimates that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company at the end of the financial year and of the
profits of the Company for that period;
iii. t hey have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Act, for safeguarding the
assets of the Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts have been prepared on a ‘Going Concern' basis;
v. they have laid down internal financial controls to be followed by the Company and
that such internal financial controls are adequate and were operating effectively;
vi. they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems are adequate and operating effectively
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, the work performed by the internal, statutory
and secretarial auditors and external consultants, including the audit of internal
financial controls over financial reporting by the statutory auditors and the reviews
performed by management and the relevant Board committees, including the Audit & Risk
Management Committee, the Board is of the opinion that the Company's internal financial
controls were adequate and effective during FY 2022-23.
XII. BOARD EVALUATION
The Nomination and Remuneration Committee has devised a criterion for evaluation of the
performance of the Directors including the Independent Directors. The said criteria
provide certain parameters like attendance, acquaintance with business, communication
inter se between Board members, effective participation, domain knowledge, compliance with
code of conduct, vision and strategy, benchmarks established by global peers etc., which
is in compliance with applicable laws, regulations and guidelines.
Board evaluation is done on an annual basis by a third party.
During the year, Company engaged Deloitte Haskins & Sells LLP (DHS) for carrying
out the performance evaluation of all the Board members, Board as a whole and various
committees.
The criteria used by them basis which the individual Director performance evaluation
has been done included:
• preparation and participation in Board meetings
• personality and conduct
• quality of value added
• understanding of the Company's mission, vision, philosophy and strategy
• understanding of the industry and the business in which the Company operates
• independence of judgement
• independent thinking ability to bring a divergent view, etc.
CEO & Whole-time Director evaluation was more focussed towards Company performance
and leadership, team building and management succession, edge in execution of strategy
formulated by the Board.
The evaluation of the various Board committees was more focussed towards:
• it's charter/terms of reference
• number of meetings held and its appropriateness
• timely availability of information
• committee composition
• committee decisions are adequately conveyed and implemented
• meetings are conducted in a manner that ensures open communication, meaningful
participation and timely resolution of issues
• independency of committee to contribute effectively
Assessment of each Director on the Board is done by the other Directors including that
of various committees. The consolidated outcome from all the Directors is prepared by the
Chairman of Nomination and Remuneration Committee and presented to the Board of Directors.
All the Directors had been rated excellent and overall finding shows that the Board and
its various committees are working very well. All Board members come with very strong
backgrounds and add lot of value & insights to the Company by making the meetings
participative and engaging.
XIII. INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The details in respect of internal financial control and their adequacy are included in
the Management Discussion and Analysis, which is a part of this report.
XIV. RELATED PARTY TRANSACTIONS
In line with the requirements of the Companies Act and the SEBI Listing Regulations,
the Company has formulated a Policy on Related Party Transactions and the same can be
accessed using the following link: https://www.hzlindia.com/wp-content/uploads/HZL_
RPT-Policy Revised 21.04.2023.pdf
During the year under review, all transactions entered into with related parties were
approved by the Audit Committee/Board of Directors of the Company as per the applicable
case. Certain transactions, which were repetitive in nature, were approved through omnibus
route. However, there were no material transactions of the Company with any of its related
parties as per the Act. The disclosure of Related Party Transactions as required under
Section 134(3)(h) of the Act in Form AOC- 2 is annexed as Annexure 2.
XV. DEPOSITS
The Company has not accepted any deposits from public and as such no amount on account
of principal or interest on deposits from public was outstanding as on the date of the
Balance Sheet.
XVI. AUDITORS
The Company had appointed M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, as
Statutory Auditors of the Company to conduct audit of Financial Statements for the year
ended March 31, 2023. The notes to Financial Statements referred to in the Auditors'
Report are selfexplanatory and do not call for any further comments. The Auditors' Report
does not contain any qualification or reservation.
Certificate on the compliances with the conditions of Corporate Governance (CG) as per
provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, as amended, has been issued by Vinod Kothari & Company, Practising Company
Secretaries and Secretarial Auditors of the Company. The only adverse remark in CG
certificate is for not fulfilling the criteria of adequate number of Independent Directors
including at least one-woman Independent Director and for which the Company is in touch
with two major shareholders, which is self-explanatory.
As per provisions of section 136 of the Companies Act, 2013, the Annual Report
including the audited accounts for the year will be sent to all the shareholders whose
e-mail addresses are registered.
Reporting of Frauds by Auditors
During the year, none of the auditors of the Company have reported any fraud as
specified under the second proviso of Section 143(12) of the Act.
XVII. VIGIL MECHANISM
The Company has a Whistle Blower Policy and has established the necessary vigil
mechanism for Directors and employees in confirmation with section 177(9) of the Act and
regulation 22 of SEBI Listing Regulations, to report concerns about unethical behaviour.
This policy is available on the Company's website on https://
www.hzlindia.com/wp-content/uploads/HZL-WHISTLE- BLOWER-POLICY-19.10.2015.pdf
XVIII. ANNUAL RETURN
Pursuant to section 92(3) read with section 134(3)(a) of the Act, the Annual Return as
on March 31, 2023 is available on the Company's website https://www.
hzlindia.com/investors/reports-press-releases/
XIX. PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required under section
197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014 are attached to this report. In terms of the provisions
of section 197(12) of the Companies Act, 2013 read with rules 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing
the names and other particulars of employees drawing remuneration in excess of the limits
set out in the said rules forms part of the report. However, having regard to the
provisions of the first proviso to section 136(1) of the Companies Act, 2013, the Annual
Report excluding the aforesaid information is being sent to the members of the Company.
The said information is available for inspection at registered office of the Company
during working hours. Any member interested in obtaining such information may write to the
Company Secretary at the registered office and the same will be furnished on request.
Further the details are also available on the Company's website: www.hzlindia.com.
I n line with the internal guidelines of the Company, no payment is made towards
commission to the Executive Director of the Company, who is in full time employment with
the Company.
XX. INTEGRATED REPORT
The Company being one of the top companies in the country in terms of market
capitalisation, has voluntarily provided Integrated Report, which encompasses both
financial and non-financial information to enable the members to take well informed
decisions and have a better understanding of the Company's long-term perspective. The
report also touches upon aspects such as organisation's strategy, governance framework,
performance and prospects of value creation based on the six forms of capital viz.
financial capital, manufactured capital, intellectual capital, human capital, social and
relationship capital and natural capital.
The key initiatives taken by the Company with respect to stakeholder engagement, ESG,
health and safety of employees has been provided separately under various sections of this
Integrated Annual Report.
XXI. ACKNOWLEDGEMENTS
We sincerely thank our customers, vendors, investors, business partners, worker unions,
auditors and bankers for their continued support during the year. We place on record our
appreciation of the contribution made by employees at all levels. Our continued success
was made possible by their hard work, solidarity, commitment and support. We thank the
Government of India, the state governments of Rajasthan, Andhra Pradesh, Gujarat,
Karnataka, Tamil Nadu, Maharashtra and Uttarakhand for their continued support.
| For and on behalf of the Board of Directors |
|
| Arun Misra |
Anjani K Agrawal |
| CEO & Whole-time Director |
Director |
| DIN: 01835605 |
DIN :08579812 |
| Udaipur |
Mumbai |
| Date: April 21, 2023 |
|
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