Hindustan Zinc Ltd
Chairman Speech
Dear Stakeholders,
At Hindustan Zinc, amidst heartening optimism, there is, a strong sense
of buoyancy that drives us towards new horizons of greater growth and inclusive value
creation. The journey of the past one year, which saw us successfully negotiate a
multitude of challenges, has left us enthused about the future. It has encouraged us to
surge proactively ahead towards realising our vision and delivering on our promises and
goals.
In a tough macro environment,
FY 2021-22 proved to be an exceptional year for Hindustan Zinc. We set
many new operational benchmarks and notched up new milestones. I am pleased to share that
we posted unprecedented numbers across both operational and financial metrics during the
year, touching historically high production volumes, and record annual revenue, EBIDTA and
net profit.
This was no small feat and was made possible by the dedication and hard
work of our people. I would like to take a moment here to thank them all for standing by
us through the turmoil of the times. I credit them for giving us many reasons to celebrate
and for shaping Hindustan Zinc?s journey of excellence. We continue to steer the
trajectory of our targeted initiatives to nurture a culture of high performance and
inclusiveness in our workforce, which finds endorsement in the various awards and
accolades we receive year-on-year and validates our people-centric policies and
programmes.
In FY 2021-22, too, we earned several awards and recognitions that
underscored the quality and strength of our pro-employee initiatives. These included
Hindustan Zinc?s certification as ‘Great Place to Work 2021? for the 4th
consecutive year, ‘Company with Great Managers 2022? by People Business for the
2nd year in a row and ‘Prize for Leadership in HR Excellence? by CII
National HR Excellence Awards. Going forward, it shall be our focussed endeavour to drive
even greater employee-centricity, to generate more opportunities for our people, across
genders, demographics, and communities, to grow and progress.
We shall simultaneously continue to work concertedly towards augmenting
the safety environment at our mines and sites. Given the nature of our operations, we are
cognisant of the inherent risk involved in our business. It is with deep sorrow that I
must inform you that despite best efforts to keep our people safe, three unfortunate
incidents at our sites led to the tragic loss of four precious lives during the year. We
share the grief of the bereaved families and will continue to support them in every
possible way in these difficult times. We have also launched thorough investigations into
all the incidents and will take corrective actions after a comprehensive root cause
analysis. Let me assure you that every single life is dear to us, and we will not
compromise on the safety of our people under any circumstances.
Our continual investments in strengthening our safety framework through
digitalisation and automation are aimed at propelling our Zero Injury vision, and we will
not rest till we have achieved this goal. We have made the 2025 Sustainability Goals an
intrinsic part of our strategic approach and remain committed to surging ahead
aggressively towards the realisation of these objectives.
The formation of our Board level Sustainability and ESG Committee
during FY 2021-22 is aligned with this commitment and facilitates our efforts towards the
accomplishment of our 2025 goals and Environmental, Social and Governance priorities. The
Sustainability and ESG Committee will help accelerate our transition towards 50% renewable
energy in our operations - a voyage on which we have embarked as a responsible corporate
citizen striving to decarbonise our mining operations.
From introduction of electric vehicles in our mines to reporting based
on the Task Force on Climate-related Financial Disclosures (TCFD) framework, we have
initiated a host of focussed measures to help us achieve our ESG targets. We have also
undertaken a 3-year engagement with the International Union for Conservation of Nature
(IUCN) for development of a Biodiversity Management Plan from no net loss approach. Our
participation in the British High Commission Conference of the Parties (COP26), and the
fact that Hindustan Zinc has joined the Taskforce on Nature-related Financial Disclosure
(TNFD) to tackle nature- related risks proactively, further underscores our commitment to
deliver on our Net-Zero goal by 2050.
Our concerted efforts on the ESG front found resonance in the various
accolades and awards earned during the year. These honours make us confident that we are
on the right track of delivering on our ESG vision, which encompasses many futuristic
goals, including achievement of 5x water positivity by 2025.
Most of you may be aware that the sustainability thrust at Hindustan
Zinc goes beyond the organisational framework and encompasses the communities around our
operations. We sustained our CSR focus during FY 2021-22 through coordinated efforts to
ensure continuity of our support programmes for community livelihood, skill development
and education, even while extending urgent and immediate relief to the people impacted by
the COVID-19 pandemic. To facilitate remote learning amidst the pandemic, we designed
subject-wise learning materials and practice papers, and arranged regular classes through
online platforms as well as home visits by teachers to ensure learning outcomes, among
other measures.
I am happy to share that Hindustan Zinc has received the ‘BRICS
Solution for SDG Awards 2021 ?, for intensively promoting sustainable livelihood for
30,000 farmers, and for establishing five farmer-led producer companies.
The Company has also won the CSR Leadership Award 2021, presented by
World CSR Day for transforming the lives of nearby communities. It was further honoured
with ‘Leaders for Social Change? award by the Social Story Foundation for its
Sakhi Women Empowerment initiatives - another endorsement of our deep-rooted commitment to
community enrichment and empowerment in line with our ESG ethos. We focussed extensively
during the year on creating strong institutional structures on the ground. Some of these
included federating seven new micro finance legal entities and the aforementioned
constitution of five farmer-led producer companies. We also facilitated the formation of
over 3,000 Anganwadi Management Committees to strengthen community ownership, with focus
on children, pregnant women and new mothers.
While sustainability continues to be integral to our strategic
approach, we are concurrently expanding into new markets of opportunity to steer our
growth plans. At the same time, we continue to focus on augmenting our production to meet
the emerging market demand. We shall continue to step up our output, efficiency, and
productivity across business segments to raise the bar of performance, growth, and value
delivery to all our stakeholders. In doing so, we shall follow a transparent and ethical
approach, which is an integral component of our business strategy. With the ISO 37301:2021
certification received for the Company?s compliance management during the year, we
have reinforced our commitment to strong corporate governance principles.
We are well positioned and fully geared to execute our plans and attain
our short and long term goals. Over the past few years, we have humbly accepted the
thought leadership role entrusted to us by the industry. The responsibility is an
endorsement of our capability and capacity to bring about meaningful transformation in the
difficult and complex business of mining, to make it more relevant to the contemporary
needs of the international zinc market. The election of our CEO,
Mr. Arun Misra, as the new acting Chairman of the International Zinc
Association (IZA) gives us another opportunity to represent the industry constructively on
the global platform. His appointment is a matter of great pride as he is the first Indian
and Asian to hold this prestigious position. Hindustan Zinc is well positioned to deliver
on the important responsibility that has come with this honour.
Before I conclude, I would like to congratulate all our partners,
shareholders, investors, and others on the remarkable accomplishments which will pave the
way for Hindustan Zinc to steer its future with greater confidence and strength. We expect
to see FY 2022-23 provide us many more reasons to celebrate in terms of both, operational
excellence, and financial performance, as we strategically shift our focus towards pushing
up the production of metal at our smelters.
I am confident that we will continue to deliver on our goals, across
every aspect of our business, with your continued cooperation, the sustained support of
our people, and a focussed digitalisation drive across all our mines.
  Â
Hindustan Zinc Ltd
Directors Reports
Dear Members,
We share with you our 56th Annual Report, together with the Audited
Financial Statements for the year ended 31st March, 2022.
The Directors are pleased to inform that Hindustan Zinc delivered
exemplary operational performance while ensuring safe operations and continued to improve
on its performance of various ESG metrics. The company has taken a pro-active approach to
keep its assets and people safe, while increasing engagement with the communities during
challenging times.
THE YEAR IN SUMMARY
We delivered stellar results during the year touching new operational
milestones. The company delivered historic-high ore production for the full year at 16.3
million MT driven by concerted efforts towards bolstering mine production across most of
the mines. The company also crossed 1 million tonne mined metal production mark for the
first time producing 1,017 kt of mined metal.
Mine development, registering 10% y-o-y growth, crossed 100 km mark for
the 1st time in line with increasing production requirements and securing future resource
base.
Rampura Agucha has successfully commissioned 2nd underground crusher
along with conveyor system enabling full utilization of 3.75 Mt main shaft hoisting
capacity.
The Company diligently focussed on community upliftment in the areas of
Education, Sustainable Livelihoods, Women Empowerment, Health & Water, Sports &
Culture, Environment and Community Assets Creation.
The Company is ranked 1st in Asia-Pacific and globally 5th in Dow Jones
Sustainability Index in 2021 amongst Mining & Metal companies. (1st in environment
Dimension among the metal and mining sector globally). The Company has also won the 1st
Bronze Medal and has been featured in the prestigious Sustainability Yearbook for the
fifth year in a row by S&P Global.
I. HEALTH, SAFETY AND ENVIRONMENT
Occupational Health & Safety Health & Safety Performance
LTIFR for the year was 0.81 as compared to 0.97 a year ago. It is with
deep sadness that we report the regret of four colleagues (Business partners) in
work-related incidents at our operations. These incidents happened despite continuous
efforts to eliminate fatalities and attain zero-harm work environment. Thorough
investigations were conducted to identify the causes of these incidents and to share
lessons learnt across HZL operations, with the aim of preventing repeat or similar
incidents.
There has been enhanced leadership focus on incident reporting,
incident categorisation & incident investigation along with greater focus on
horizontal deployment of learnings across HZL and critical risk management.
During the year, the Company commissioned first made-in-India emergency
escape route (staircase type) in at Rajpura Dariba Underground Mine as well as underground
rescue station at Rampura Agucha Mine, both of which will significantly improve the
response time in case of an emergency. Qualitative and Quantitative Exposure Assessment is
completed for all units and exposure mitigation plan is developed. 22 Digitized safety
modules were launched for easy understanding of safety standard requirements.
Demonstrating the highest standards of health and safety management
during the year, Chanderiya CPP and Debari both received the prestigious ‘Sword of
Honour? from British Safety Council for showing excellence in the management of
health and safety risks at work. Kayad Mine was also awarded the National Safety Award
from the Government of India for the longest accident-free operations in the metal and
mining sector as well as for the lowest injury frequency rate.
ENVIRONMENT
During FY 2021-22, waste recycling increased marginally to 31% (FY
2020-21: 30%), and water recycling rate increased to 44% in (FY 2020-21: 39%). Specific
energy consumption for FY2021-22 was 48 GJ/MT of metal (FY 2020-21: 51 GJ/MT).
Hindustan Zinc commits to ‘Long-term target to reach net-zero
emissions by 2050? in alignment with Science Based Targets initiative (SBTi) aiming
to have clearly defined path to reduce emissions in line with the Paris Agreement goals.
Company has made notable technological advancements in energy conservation. Zinc Smelter
Debari has revamped the cell house and eliminated current losses through electrolytic
cells by successfully replacing 600+ concrete cells with poly-concrete cells. As a result,
the power rating has improved. Additionally, the turbine revamping project is certified as
a carbon reduction project by VERRA (the world?s most widely used voluntary GHG
program) resulting in avoidance of GHG emissions of 270,000 tCO2e per year. For
decarbonizing the future of Indian mining, Hindustan Zinc has partnered with leading
global manufacturers for introducing Battery Electrical Vehicles (BEVs) in its underground
mines. All units of HZL are certified as ISO 50001 (Energy Management system).
Hindustan Zinc has published its first TCFD (Task Force on
Climate-related financial disclosure) report during the year, adapting the TCFD framework
for climate change risk and opportunity disclosure. HZL actively participated in
‘Business Leaders Group COP26? and contributed in shaping the agenda for COP26
which was held at Glasgow (UK) in Nov?21. Endeavouring towards sustainable
organization, HZL enhanced the governance by establishing Board Level ESG &
Sustainability Committee to overview the ESG progress of the organization.
Hindustan Zinc joined the Taskforce on Nature-Related Financial
Disclosures (TNFD) forum to tackle nature- related risks. Miyawaki Method of Afforestation
pilot project completed at Debari Zinc Smelter (DZS) and horizontal deployment will be
done across HZL. 3-year Engagement with International Union for Conservation of Nature
(IUCN) will help in development of Biodiversity Management Plan focusing No Net-Loss
approach to achieve Sustainability Goals 2025.
One of the most notable achievements has been the successful
commissioning of a 3,000 KLD Zero Liquid discharge plant at the Zinc Smelter Debari. The
company has also commissioned 5 MLD Sewage Treatment Plant (STP) in Udaipur, bringing the
total Udaipur STP capacity built by Hindustan Zinc to 60 MLD. In the area of water
stewardship, Rampura Agucha Mine has also completed the execution of groundwater recharge
intervention across 4 blocks of Bhilwara district having ground water recharge potential
of 8.7 million cubic meter (MCM)/ annum.
Board has approved a long-term captive renewable power development plan
up to a capacity of 200 MW. The project will be built under the Group captive norms and on
Build Own Operate basis. The power delivery is expected to start from 2025. Hindustan
Zinc?s sustainability initiatives received several accolades & endorsements
during the year
• The Company is ranked 1st in Asia-Pacific and globally 5th in
Dow Jones Sustainability Index in 2021 amongst Mining & Metal companies. (1st in
environment Dimension among the metal and mining sector globally)
• Company won the 1st Bronze Medal and has been featured in the
prestigious Sustainability Yearbook for the fifth year in a row by S&P Global.
• The company received the award for ‘Outstanding
Accomplishment in Corporate Excellence and Dariba smelter received the award for
excellence in Environment management? in 16th CII-ITC Sustainability Awards.
• HZL received IEI Industry Excellence Award 2021, instituted by
The Institution of Engineers (India)
• HZL?s RAM and Kayad mines received 5 Star Rated Mines?
award by the Ministry of Mines, Govt. of India.
• Hindustan Zinc wins at ESG India Leadership Awards - Leadership
in Environment and Green House Gas Emissions Reduction Categories organized by ESGRisk.ai , India?s first ESG rating company.
• HZL has been awarded the Most Sustainable Company in the Mining
Industry by World finance at their Sustainability Awards 2021
II. OPERATIONAL PERFORMANCE
Production performance
| Production (kt) |
FY 2021-22 |
FY 2020-21 |
% change |
| Total mined metal |
1,017 |
972 |
5% |
| Refined saleable metal production |
967 |
930 |
4% |
| Refined zinc - integrated |
776 |
715 |
8% |
| Refined lead - integrated |
191 |
214 |
-11% |
| Saleable Silver Production (in tonnes) |
647 |
706 |
-8% |
Production
For the full-year, ore production was up 6% y-o-y to 16.3 million
tonnes on account of strong production growth at Zawar and Sindesar Khurd mines, which
were up 12% and 8% respectively. Mined metal production for FY 2021-22 was 1,017 kt
compared to 972 kt in previous year
For the full year, integrated metal production was up 4% to 967 kt due
to higher plant & concentrate availability. Lead production was lower on account of
operating the Pyro plant at CLZS at Zinc-Lead mode rather than Lead mode. Silver
production was down by 8% to 647 MT in line with lower lead metal production.
The Company generated 3,891 million units of thermal based power in FY
2021-22. Total green power generation was 720 million units as compared to 649 million
units in FY 2020-21.
Sales
During the year, domestic refined zinc metal sales was 506 kt as
against 437 kt last year. While export sales for the year stood at 271 kt as compared to
287 kt a year ago. The aggregate sales were higher by 7% than previous year, in line with
production. Lead metal sales in the domestic market were 167 kt, while export sales were
25 kt leading to lower aggregate sales of 11% from a year ago, in line with the decrease
in lead metal production. Silver sales were 647 MT in FY 2021-22, all in the domestic
market and 12% lower than previous year.
III. FINANCIAL PERFORMANCE
We share with you our 56th Annual Report, together with the Audited
Financial Statements for the year ended March 31, 2022.
Financial Information
(Rs in crore)
| Particulars |
FY 2021-22 |
FY 2020-21 |
| Revenue from operations (Incl. other operating income) |
29,440 |
22,629 |
| Other Income |
1,216 |
1,819 |
| Profit before depreciation, interest, tax, and exceptional
item |
17,441 |
13,491 |
| Less: Interest |
290 |
386 |
| Less: Depreciation and amortisation expense |
2,917 |
2,531 |
| Less: Exceptional Item |
134 |
- |
| Profit before tax |
14,100 |
10,574 |
| Less: Net tax expense |
4,471 |
2,594 |
| Net profit |
9,629 |
7,980 |
| Earnings per share, ( /share) |
22.79 |
18.89 |
Revenue
The Company reported Revenue from operations including other operating
income of Rs 9,440 crore, an increase of 30% y-o-y primarily on account of increase in LME
prices supported by higher metal sales due to increase in production
The Other income was Rs,216 crore during the year compared to Rs,819
crore in the previous year in line with lowering rate of return in current year to 4.7% as
against 7.8% in the previous year.
Production Cost
Zincs cost of production (COP), excluding royalty for FY 2021- 22 was
Rs 3,511 (US$ 1,122) per tonne, higher by 18% y-o-y. The full year COP was higher impacted
largely on account of higher coal prices & input commodity inflation, partly offset by
higher volume, better Sulphuric Acid realizations & improved recoveries.
Operating margin
The above revenue and production cost resulted in profit before
depreciation, interest and tax (PBDIT) of Rs7,441 crore in FY 2021-2, up 29% on account of
higher volumes, rise in LME prices partially offset by higher coal and input commodity
prices.
Net profit
Net profit was Rs ,629 crore, up 21% where in the impact of higher
PBDIT was partly offset by lower investment income due to declining interest rate
environment. Effective Tax rate
Cash Flows
for the year increased to 31.7% as compared to 24.5%, mainly due to end
of certain tax benefits.
Earnings Per Share (EPS)
The EPS for the year was Rs 2.79 per share as compared to Rs8.89 per
share in FY 2020-21.
Dividend
Interim dividend of 900%, i.e. Rs8.0 per share on equity share of Rs
each amounting to Rs ,606 crore was declared in December 2021.
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 Companys
website on
https://www.hzlindia.com/wp-content/uploads/ Dividend-Policy-2016.pdf
Credit Rating and Liquidity
CRISIL has reaffirmed the Companys long-term rating of AAA/Stable and
short-term rating of A1+. The ratings continue to reflect the Companys 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, 2022, the Companys net cash and cash
equivalents was Rs7,966 crore as compared to Rs 5,130 crore at the end of FY 2020-21 and
is invested in high quality debt instruments.
(Rs in crore)
| Particulars |
FY 2021-22 |
FY 2020-21 |
| Opening Cash* |
22,308 |
22,207 |
| Add: EBITDA** |
16,289 |
11,739 |
| Add: Net Interest Income |
604 |
1,258 |
| Less: Income Tax |
2,391 |
1,755 |
| Less: Dividend |
7,606 |
15,972 |
| Less: Capital Account Payments |
2,998 |
2,481 |
| Add: Borrowings |
(4,315) |
6,525 |
| Add: (Increase)/Decrease in Working Capital & Others |
(1,102) |
787 |
| Closing Cash* |
20,789 |
22,308 |
Gross Working Capital
Gross working capital represented by inventory, trade receivables and
other current assets increased from Rs ,180 crore to Rs,132 crore as at March 31, 2022
primarily due to increase in raw material inventory, trade receivables and coal stock for
ensuring coal security and to combat any potential price increase. The working capital
cycle was 40 days in FY 2021 -22 as compared to 36 days in FY 2020-21.
Gross Block
The gross block during the year increased from Rs 4,228 crore to Rs
7,455 crore. This was largely due to the ongoing mining projects and other sustaining
capex.
Capital Employed
The total capital employed as at March 31, 2022 was Rs 6,315 crore, as
compared to Rs 7,183 crore at the end of previous fiscal year.
Contribution to the Government Treasury The Company has contributed Rs
5,676 crore during FY 2021-22, in terms of royalties and taxes to the Government treasury,
aggregating to approximately 53% of the total operating revenue.
IV. RESERVE & RESOURCE (R&R)
On an exclusive basis, total ore reserves at the end of FY 2021-22
stood at 161.21 million tonnes (net of depletion of FY 2021-22 production of 16.34 million
tonnes) and exclusive mineral resources totalled 286.73 million tonnes. Total contained
metal in Ore Reserves is estimated at 9.57 million tonnes of zinc, 2.45 million tonnes of
lead and 298.4 million ounces of silver. The Mineral Resource contains approximately 13.18
million tonnes of zinc, 5.86 million tonnes of lead and 576.3 million ounces of silver. At
current mining rates, the R&R underpins metal production for more than 25 years.
V. PROJECTS
In HZL journey of 1.25 mtpa MIC expansion, some of key projects are
under execution at RD Mines complex. We have successfully completed RD Mines Shaft &
Conveyor upgradation for enhancement of ore hoisting capacity in Q3 FY 2021-22. In line
with our ESG journey, we have completed installation of Dry Filtration & Paste fill
plant to enable effective tailings managements by switching from Wet to Dry tailing
management system. Commissioning of plant will start by Q1 of FY 2022-23. For enhancing
metal recovery, we have placed order for RD Beneficiation plant revamping, enabling better
Pb, Zn & Ag recoveries and improving plant reliability by replacing obsolete Grinding,
Floatation & Filtration circuits. Civil construction is already ongoing and plant is
scheduled to be commissioned in Q3 FY 2022-23.
At Zawar, in order to enhance the ventilation capacities and working
conditions of West Mochia and North Baroi mines, installation of underground ventilation
fans has started. For increasing the capacity of Tailing storage Facility, design and
stabilisation studies have been conducted and the dry stacking is under progress.
Treatment of Raw Zinc Oxide (RZO) in RKD circuit (component of overall
Fumer project) continued during the entire year. For the Fumer commissioning, visa process
is in advanced stages for the technical experts. The Fumer commissioning is targeted for
completion by early FY 2022-23.
VI. CORPORATE SOCIAL RESPONSIBILITY (CSR)
The Companys CSR initiatives passionately focuses 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 Rs90.92 crore on CSR programmes more
than the 2% of CSR mandate which was Rs86.68 crore. For further details, refer Annexure
III and Business Review section of this Annual Report
VII. DIRECTORS
Government of India, Ministry of Mines appointed Ms. Nirupama Kotru in
place of Ms. Yatinder Prasad w.e.f. July 26, 2021. Ms. Veena Kumari Dermal also appointed
as director w.e.f. July 29, 2021.
The companys policy on appointment of Directors and their remuneration
is available on the Companys website
https://www.hzlindia.com/wp-content/uploads/ HZL-Nomination-Remuneration-Policy-20.1.2020.pdf
VIII. MANAGEMENT DISCUSSION AND ANALYSIS
The Our Operational Performance section of this Annual Report gives a
detailed account of the Companys operations and the market in which it operates, including
its initiatives in the areas of human resources, sustainability and risk management.
IX. CORPORATE GOVERNANCE AND BUSINESS RESPONSIBILITY REPORT
As a listed company, necessary measures are taken to comply with the
listing agreements of the Stock exchanges. A report on Corporate Governance, along with a
certificate of compliance from the statutory auditors, 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; Annual Report on CSR, etc.
X. 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. t hey 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. they 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 committee,
the Board is of the opinion that the Companys internal financial controls were adequate
and effective during FY 2021-22.
XI. BOARD EVALUATION
The Nomination and Remuneration Committee has devised a criteria for
evaluation of the performance of the Directors including the Independent Directors. The
said criteria provides 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.
During the year, Company engaged Deloitte Haskins & Sells LLP 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 Companys 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 focused 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 focused
towards:
• Its 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 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 well. All Board members come with very
strong background and add lot of value to the meetings by making them participative and
engaging.
XII. 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.
XIII. 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, 2022. The Notes to Financial Statement referred to in the
Auditors Report are self-explanatory and do not call for any further comments. The
Auditors Report does not contain any qualification or reservation. The only adverse remark
in CG certificate is for not fulfilling the criteria of adequate number of Independent
Directors including woman independent director and for which we are in touch with the two
major shareholders, which is self-explanatory.
Pursuant to the orders issued by the Central Government under Section
148 of The Companies Act, 2013, the Board has appointed M/s. K G Goyal & Co. Cost
Accountants for conducting the audit of the cost accounting records maintained by the
Company for all its products and M/s. Vinod Kothari & Company, Company Secretaries as
the Secretarial Auditors for conducting the Secretarial audit of the Company. Their report
does not contain any qualification or reservation. The only adverse remark is for not
fulfilling the criteria of adequate number of Independent Directors including woman
independent director, for which we are in touch with the two major shareholders and other
procedural delays due to COVID-19, which are 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.
XIV. 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 Listing Regulations, to report concerns about unethical
behaviour. This Policy is available on the Companys website on
https://www. hzlindia.com/wp-content/uploads/HZL-WHISTLE-
BLOWER-POLICY-19.10.2015.pdf
XV. ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the
Annual Return as on March 31, 2022 is available on the Companys website https://www. hzlindia.com/investors/reports-press-releases/
XVI. 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 Companys website: www.hzlindia.com .
In 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.
XVII. INTEGRATED REPORT
The Company being one of the top companies in the country in terms of
market capitalization, 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 Companys long-term perspective. The
Report also touches upon aspects such as organisations 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.
XVIII. 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 |
| Place: Udaipur |
Place: Mumbai |
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