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Directors Report of Hindustan Zinc Ltd.

Mar 31, 2015

Dear Members

In the golden jubilee year of the Company''s operations, the Directors are pleased to inform that Hindustan Zinc has achieved new performance benchmarks and delivered the highest ever operating profit, net profit and mined metal output.

Presenting the 49th Annual Report, together with the statement of Audited Financial Statements for the year ended March 31, 2015, the Company''s performance is summarized below:

Financial Highlights (Rs. in Crore)

FY 2015 FY 2014

Total Revenues (including other income) 17,609 15,535

Profit before depreciation, interest and tax 10,238 8,799

Less: Interest 24 45

Less: Depreciation and amortization expense 644 785

Profit before tax 9,570 7,970

Net tax expense / (benefit) 1,392 1,065

Profit for the year 8,178 6,905

Earnings per equity share, Rs. 19.35 16.34

Dividend

The Board of Directors has recommended a final dividend of 125%, i.e. Rs. 2.50 per share on equity share of Rs. 2 each, subject to the approval of shareholders. This takes the total dividend for FY 2015 to 220%, i.e., Rs. 4.40 per share, which is the highest ever proposed by the Company. The total outgo on account of dividend, including tax on dividend, will be Rs. 2,207 Crore during FY 2015, as against Rs. 1,730 Crore in FY 2014.

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 Report, describing the initiatives taken by your Company from an Environmental, Social and Governance perspective, also forms a part of this report. Various disclosures as required under section 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; CSR Policy and initiatives taken during the year; Board evaluation; remuneration of the Managerial Personnel; Secretarial Audit report etc.

Directors'' Responsibility Statement

As required under Section 134(5) of the Companies Act, 2013, the Directors hereby confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures, if any.

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and 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. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv. The Directors had prepared the annual accounts on a ''Going Concern'' basis.

v. The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively, and

vi. The Directors had devised proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Auditors

The Company had appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, as Statutory Auditors of the Company to conduct audit of Financial Statements for the year ended March 31, 2015. Their term of appointment expires at the conclusion of the forthcoming Annual General Meeting and being eligible, they have offered themselves for reappointment. The Directors propose their reappointment.

Pursuant to the orders issued by the Central Government under section 148 of The Companies Act, 2013, the Board of Directors of the Company 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.

M/s. V. M. & Associates, Company Secretary in practice was appointed as Secretarial Auditor of the Company

Particulars of Employees

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

Acknowledgments

The Board of Directors places on record its sincere appreciation of the contribution made by the employees and the employees'' unions in the success of the Company. The Directors also sincerely thank the Central Government and the State Governments of Rajasthan, Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Maharashtra, Jharkhand and Uttarakhand; and the bankers, auditors, vendors, customers and the shareholders of the Company for their continued support.

For and on behalf of the Board of Directors

Akhilesh Joshi A R Narayanaswamy

CEO & Whole-time Director Director

Place: Mumbai Date : April 20, 2015


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 47th Annual Report, together with the statement of Audited Financial Statements for the financial year ended March 31, 2013.

FINANCIAL RESULTS AND DIVIDEND

(Rs. Crores) FY 2013 FY 2012

Total Revenues (including 14,731.99 12,948.14 Other Income)

Profit before depreciation, 8,496.26 7,569.16 interest and tax

Less: Interest 29.10 13.95

Less: Depreciation and 647.04 610.67 amortisation expense

Profit before tax 7,820.12 6,944.54

Taxation 920.64 1,418.50

Profit for the Year 6,899.48 5,526.04

Earnings per equity share, Rs. 16.33 13.08

DIVIDEND

The Board of Directors has recommended a final dividend of 75%, i.e., Rs. 1.50 per share on equity share of Rs. 2.00 each subject to the approval of shareholders. This takes the total dividend for FY 2013 to 155%, i.e., Rs. 3.10 per share, which is the highest ever proposed by the Company. The total outgo on account of dividend, including tax on dividend, will be Rs. 1,527 Crores during FY 2013, as against Rs. 1,179 Crores in FY 2012.

PERFORMANCE REVIEW

We reported net revenue from operations of Rs. 12,700 Crores, an increase of 11% compared to FY 2012. The increase was primarily on account of increased silver sales and INR depreciation, partially offset by lower metal prices. The Company achieved profit before depreciation, interest and tax (PBDIT) of Rs. 8,496 Crores in FY 2013, up 12%, benefiting from higher sales and other income, partially offset by higher operating costs.

Mined metal production during the year was 870,200 MT compared to 830,432 MT in the previous year. The higher mined metal production was primarily due to higher output at Rampura Agucha.

Integrated refined zinc production this year was 659,971 MT, compared to 752,265 MT in FY 2012. The decline in zinc metal production was mainly on account of uneven distribution of mined metal production during the year with the second half much stronger than the first half, as per the mine plan. We addressed it by selling 61,097 MT of zinc mined metal in the second half. The total refined zinc production was 676,921 MT in FY 2013, compared to 758,716 MT in FY 2012.

We performed extremely well in total refined lead and silver production, which are the highest ever at 124,816 MT and 408 MT - up 26% and 69% - respectively. Of this, integrated refined lead production was 106,753 MT and integrated silver production was 322 MT, up 20% and 36%, respectively. Production of refined lead and silver was boosted significantly by higher contribution from Sindesar Khurd mine and full year of production at Dariba lead smelter and the new refineries in the state of Uttarakhand.

Our generation from captive power plants in FY 2013 declined by 2% to 3,363 million units, compared to that in FY 2012. Our wind power generation was up 52% at 511 million units, compared to that in FY 2012, boosted by addition of new wind mills.

SUCCESS IN EXPLORATION

Mineral exploration is a key component of our growth strategy. We are actively pursuing brownfield and greenfield exploration. We have added 24.6 million MT to our reserves & resources this year, prior to a depletion of 8.6 million MT during the period. In the same vein, our contained gross zinc-lead metal has increased by 1.0 million MT, prior to a depletion of 0.9 million MT during the period. Total reserves & resources, on March 31, 2013, were 348.3 million MT containing 35.1 million MT of zinc-lead metal and 909.6 million ounces of silver.

Our exploration activities have maintained our mine life of over 25 years

ZAWAR MINES

Operations at three of the four mines comprising the Zawar mine complex had been suspended since early 2010, pending forest clearance. In January 2013, we obtained an ''in-principle'' approval for forest diversion from Ministry of Environment and Forest (MoEF) and production is now being ramped up to its full capacity.

VIZAG ZINC SMELTER

The operations at Vizag Zinc Smelter have been suspended since February 2012. Considering the environment limitations, large urbanisation around the smelting complex and the viability of continuing operations, we are evaluating all options related to the smelter.

SALES

The zinc refined metal sales in the domestic market during the year were 447,877 MT, while export sales accounted for 227,081 MT. Besides, we exported zinc mined metal of 61,097 MT in FY 2013. Lead metal sales in the domestic market during the year were 114,471 MT, with the export sales accounting for 2,974 MT. Silver sales were 374 MT in FY 2013, all in the domestic market.

FINANCIAL PERFORMANCE

The Company reported record profits of Rs. 6,899 Crores for the year, up 25% from the previous year. This was primarily on account of higher sales and other income, partially offset by higher operating costs.

The Company''s financial performance has been discussed in detail in ''Management Discussion and Analysis'', which forms a part of this Annual Report.

PROJECTS

During the year, we announced our plan for next phase of growth to position the Company to deliver superior performance in future. Based on long-term evaluation of assets and in consultation with mining experts, this growth plan will involve sinking of underground shafts and developing underground mines. These growth projects will result in an increase in mined metal production capacity from 1.0 million MT per annum to 1.2 million MT per annum. The growth plan includes:

- Development of 3.75 million MT per annum underground mine at Rampura Agucha

- Expansion of Kayad mine, an extension of Rampura Agucha block to 1.0 million MT per annum,

- Expansion of Sindesar Khurd mine from 2.0 million MT per annum to 3.75 million MT per annum

- Expansion of Rajpura Dariba mine from 0.9 million MT per annum to 1.2 million MT per annum

- Expand Zawar Mine from 1.2 million MT per annum to 5.0 million MT per annum

- Development of 0.5 million MT per annum underground mine at Bamnia Kalan, an extension of Sindesar Khurd block

The mines will be developed using best-in-class technology and equipment and in consultation with leading global mine experts, ensuring the highest level of productivity at the lowest cost. The projects will be completed in six years. The benefits of expansion projects will start flowing in from the third year, even as projects will continue till FY 2019. Annual capital expenditures for these projects will average US$ 250 million a year over the next six years.

CONTRIBUTION TO THE EXCHEQUER

Your Company has contributed Rs. 3,916 Crores, in terms of royalties, taxes and duties to the exchequer, an increase of 23% from last year.

DIRECTORS

During the year under review, following changes took place in the Board of Directors of your Company. Mr. Durga Shanker Mishra and Mr. Naresh Kumar were appointed as Directors and Mr. R. K. Malhotra and Mr. Naresh Kumar ceased to be directors. Mr. Navin Agarwal and Ms. Anjali Anand Srivastava retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting. None of the retiring Directors hold any shares in the Company. Your Directors recommend their reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, which gives a detailed account of your Company''s operations and the market in which it operates, including its initiatives to expand its business and in areas, such as human resources and risk management, forms a part of this Annual Report.

CORPORATE GOVERNANCE & BUSINESS RESPONSIBILITY REPORT

Your Company is a part of Vedanta Group and conforms to norms of Corporate Governance adopted by them. 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 Statutory Auditors, also forms part of this report. Further Business Responsibility Report, describing the initiatives taken by your Company from an Environmental, Social and Governance perspective also forms a part of this report.

DIRECTORS'' RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i. In the preparation of Annual Financial Statements, applicable accounting standards have been followed, along with proper explanation relating to material departures, if any.

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and 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 on March 31, 2013, and the Company''s profit for the year ending on that date.

iii. The Directors have taken proper and sufficient care for the maintenance of adequate accounting records, in accordance with the provisions of the Act, for safeguarding the Company''s assets and for detecting and preventing frauds and other irregularities

iv. The Directors have prepared the Annual Financial Statements on a ''Going Concern'' basis.

AUDITORS

Your Company had appointed M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company to conduct audit of Financial Statements for the year ended March 31, 2013. Their term of appointment expires at the conclusion of the forthcoming Annual General Meeting and being eligible, they have offered themselves for reappointment. Your Directors propose their reappointment.

Pursuant to the orders issued by the Central Government under section 233B of The Companies Act, 1956, the Board of Directors of your Company 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.

PARTICULARS OF TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217 (1) (e) of the Companies Act, 1956, and rules made therein, the particulars of technology absorption and foreign exchange earnings and outgo are given in Annexure I, which is attached and forms a part of this report.

PARTICULARS OF EMPLOYEES

As required by the provisions of Sub-Section (2A) of Section 217 of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, particulars of the employees are set out in the Annexure to the Directors'' Report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956, the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder, interested in obtaining such particulars may write to the Company Secretary at the Company''s registered office for a copy of the same.

ACKNOWLEDGEMENTS

The Board of Directors places on record its sincere appreciation of the contribution made by the employees and the employees'' unions in the success of the Company. The Directors also sincerely thank the Central Government and the State Governments of Rajasthan, Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Maharashtra, Jharkhand and Uttarakhand; and the bankers, auditors, vendors, customers and the shareholders of the Company for their continued support.

For and on behalf of the Board of Directors

Akhilesh Joshi A. R. Narayanaswamy

CEO & Whole-time Director Director

Place: Mumbai

Date: April 25, 2013


Mar 31, 2012

The Directors have pleasure in presenting the 46th Annual Report together with the Audited Financial Statements for the financial year ended March 31, 2012.

FINANCILA RESULTS AND DIVIDEND (Rs Crores) FY2012 FY2011

Total Revenue (including Other 12,948.14 10,905.19 Income)

Profit before depreciation, 7,569.16 6,452.57 interest and tax

Less: Interest 13.95 18.28

Less: Depreciation 610.67 474.74

Profit before tax 6,944.54 5,959.55

Less: Taxation (1,418.50) (1,059.06)

Net Profit for the year 5,526.04 4,900.49

Earnings per equity share 13.08 11.60

DIVIDEND

The Board of Directors has recommended a final dividend of 45%, i.e., Rs 0.90 per share on equity share of Rs 2.00 each. This takes the total dividend for FY2012 to 120%, i.e., Rs 2.40 per share, which is the highest ever dividend proposed by the Company. The total outgo on account of dividend including tax on dividend will be Rs 1,179 Crores during FY2012 as compared to Rs 491 Crores in FY2011.

PERFORMANCE REVIEW

We reported revenues and PBDIT of Rs 11,405 Crores and Rs 7,569 Crores; up 14% and 17% compared to FY2011. Strong volume growth, operational efficiencies and improved price realisation for Silver drove this growth.

This year overall mined metal production was 830,432 tonnes compared to 840,053 tonnes in the previous year. The marginal decline was due to a temporary decline in ore grade at Rampura Agucha mine, partially offset by higher metal recoveries across all mines and increased production at Sindesar Khurd mine, which ramped-up to 80% utilisation in Q4 FY2012.

Refined Zinc production this year was 758,716 tonnes- up 6% compared to FY2011. This was primarily on account of higher utilisation of new generation smelters in Rajasthan, partially offset by ramp-down of Vizag smelter during the fourth quarter. We performed extremely well in refined Lead and Silver production, which is the highest ever at 98,724 tonnes and 242 tonnes - up 56% and 35% respectively. Production of refined Lead and Silver was boosted significantly by the ramp up of Sindesar Khurd mine and commissioning & ramp-up of Dariba Lead smelter and the new Silver refinery.

To add to our performance metrics, our captive power plants too increased generation by 21% to 3,401.7 Million units, compared to FY2011. Our wind power generation capacity went up from 171MW to 274MW and its power generation was up 67% at 335.7 Million units, compared to FY2011.

SUCCESS IN EXPLORATION

Driving our growth, be it in the past, present or future, is the expansion of reserves and resources. For this, we are continuously pursuing brownfield and greenfield exploration. We have added 27.10 Million tonnes to our reserves and resources this year, prior to a depletion of 8.04 Million tonnes during the period. In the same vein, our contained net Zinc-Lead metal has increased by 1.2 Million tonnes, prior to a depletion of 0.83 Million tonnes during the period. Contained net Silver has increased to 912 Million ounces from 885 Million ounces last year. Total reserves and resources at March 31, 2012 were 332.30 Million tonnes containing 35 Million tonnes of Zinc-Lead metal and 912 Million ounces of Silver.

RENEWAL OF ZAWARLEASE

The renewal of the mining lease for Zawar group of mines was applied on November 25, 2008. As a part of the mining lease was falling on the forest land, approval from the Forest department for diversion of the land was required. In view of the honourable Supreme Court's order dated February 19, 2010, regarding mining in Aravali Hills of Rajasthan, forest clearance was kept pending. Company had represented the matter at various forums and also filed a writ in the Supreme Court. The Forest Advisory Committee (FAC) has already submitted its recommendation to the Supreme Court. All other approvals, as are required for renewal of the mining lease, are in place. Now the matter is pending in the Supreme Court, awaiting final hearing.

SALES

The Zinc metal sales in the domestic market during the year were 438,171 tonnes, while export sales accounted for 320,328 tonnes. Lead metal sales in the domestic market during the year were 74,713 tonnes, with the export sales accounting for 16,988 tonnes.

FINANCIAL PERFORMANCE

The Company reported net profits of Rs 5,526 Crores during the year, up 13% compared to the previous year. This was primarily on account of higher sales volumes, improved price realisations for Silver, rupee depreciation, higher investment income and enhanced operational efficiencies.

The Company's financial performance has been discussed in detail in 'Management Discussion and Analysis' which forms a part of this Annual Report.

PROJECTS

Our well thought-out rollouts have imparted a new growth momentum to our enterprise:

- Ramped-up Sindesar Khurd mine to 2.0 mtpa capacity

- Commissioned the 100 ktpa Lead smelter at Dariba, increasing Lead production capacity to 185 ktpa

- Commissioned the new Silver refinery, increasing Silver refining capacity to over 500 tpa

- Commenced underground mine development work at Rampura Agucha mine and greenfield Kayar mine

- Commissioned 102MW expansion in wind power, increasing total wind power generation capacity to around 274MW

CONTRIBUTION TO THE EXCHEQUER

Your Company has contributed Rs 3,187 Crores in terms of taxes and duties to the exchequer.

DIRECTORS

During the year under review, following changes took place in the Board of Directors of your Company. Mr. Rajib Sekhar Sahoo and Ms Shaukat Ara Tirmizi were appointed as Independent Directors by the Government of India on the Board of the Company w.e.f. October 25, 2011. Mr. Akhilesh Joshi, on completion of his tenure as Chief Operating Officer and Whole- time Director on January 31, 2011 was appointed as Chief Executive Officer and Whole-time Director of the Company w.e.f.

February 1, 2012. Mr. Agnivesh Agarwal and Mr. R K Malhotra retire by rotation and being eligible offer themselves for reappointment at the ensuing Annual General Meeting. None of the retiring Directors hold any shares in the Company. Your Directors recommend their reappointment.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report, which gives a detailed account of operations of your Company and the market in which it operates, including initiatives taken by the Company to expand its business and in areas such as human resources, and risk management, forms a part of this Annual Report.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a certificate from the Auditors of the Company regarding the compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

DIRECTOR'S REPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that

i. In the preparation of Annual Financial Statements, applicable accounting standards have been followed along with proper explanation relating to material departures, if any

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and 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 on March 31, 2012 and of the profit of the Company for that year

iii. The Directors 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 detecting and preventing fraud and other irregularities

iv. The Directors have prepared the Annual Financial Statements, on a 'Going Concern' basis

AUDITORS

Your Company had appointed M/s. Deloitte Haskins & Sells, Chartered Accountants, as Statutory Auditors of the Company for the conduct of audit of Financial Statements for the year ended March 31, 2012. Their term of appointment expires at the conclusion of the forthcoming Annual General Meeting, and being eligible, they offer themselves for reappointment. Your Directors propose their reappointment.

AUDITORS' QUALIFICATION ON FINANCIAL STATEMENTS

Notes to the Financial Statements, as referred to in the Auditors Report are self-explanatory and a practice consistently followed, and therefore do not call for any further comments and explanations.

PARTICULARS OF TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required under Section 217 (1) (e) of the Companies Act, 1956 and rules made therein, the particulars of technology absorption and foreign exchange earnings and outgo are given in Annexure I, which is attached and forms a part of this report.

PARTICULARS OF EMPLOYEES

As required by the provisions of Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, particulars of the employees are set out in the Annexure to the Directors Report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956 the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder, interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company for a copy of the same.

ACKNOWLEDGEMENTS

The Board of Directors places on record its sincere appreciation of the contribution made by the employees and employees' unions in the success of the Company. The Directors also sincerely thank the Central Government and the State Governments of Rajasthan, Andhra Pradesh, Gujarat, Karnataka, Tamil Nadu, Maharashtra, Jharkhand and Uttarakhand; bankers, auditors, vendors, customers and the shareholders of the Company for their continued support.



For and on behalf of the Board of Directors

Akhilesh Joshi A R Narayanaswamy

CEO & Whole-time Director Director

Place: Mumbai

Date: April 19, 2012


Mar 31, 2011

The Directors have pleasure in presenting the 45th Annual Report together with the statement of Audited Accounts for the fnancial year ended 31 March 2011.

Financial Results and Dividend

(Rs. Crores) FY 2011 FY 2010

Total Revenue 10,891.35 8,734.65

Profit before depreciation, interest and tax 6,453.69 5,392.28

Less: Interest 19.40 43.92

Less: Depreciation 474.74 334.25

Profit before tax 5,959.55 5,014.11

Taxation 1,059.06 972.70

Net Profit for the year 4,900.49 4,04141

Add: Balance brought forward from the previous year 9,895.06 6,649.28

Amount available for appropriation 14,795.55 10,690.69

Appropriation

General Reserve 500.00 500.00 (a) Proposed dividend on equity shares 491.08 295.63 (including corporate tax thereon)

Balance carried forward to next year 13,804.47 9,895.06

Share Capital and Dividend

During the year under review, the authorised share capital of the Company was increased from Rs. 500 Crores to Rs. 1,000 Crores. The existing equity share of Rs. 10/- each was sub-divided into 5 equity shares of Rs. 2/- each, and bonus shares in the ratio of 1:1 (post split) were issued to all the shareholders of the Company. After issue of the Bonus shares, the paid up capital of the Company has increased from Rs. 422.53 Crores to Rs. 845.06 Crores.

The Board of Directors has recommended dividend of 50%, i.e., Rs. 1 per equity share of Rs. 2/- each on the increased capital after issue of Bonus shares for the year 2010-11. The total outgo on account of dividend including tax on dividend will be Rs. 491 Crores during FY 2011 as compared to Rs. 296 Crores in FY 2010.

Performance Review

FY 2011 has been remarkable in terms of volume growth and capacity additions. We have successfully commissioned our 1.50 mtpa concentrator at Sindesar Khurd. It is ramping up well and is expected to achieve its rated capacity in FY 2012. The 100 ktpa Lead smelter at Dariba is expected to commission by Q1 FY 2012, post which our Zinc-Lead metal production capacity will increase to 1,064 ktpa.

Driven by significant volume ramp-ups during the year, the Company recorded its highest ever Zinc-Lead mined metal production of 840,053 tonnes, up by 9% compared to the previous year.

Refined Zinc metal production was highest ever at 712,471 tonnes in FY 2011, up by 23% compared to the previous year.

Refned Lead metal production was 12% lower at 63,192 tonnes in FY 2011, compared to the previous year.

Refned Silver production for the year was higher at 179,079 kg, compared to the previous year.

Exploration

Ongoing exploration activities have yielded significant success with an increase of 22.1 million tonnes to the reserves and resources, prior to a depletion of 7.5 million tonnes in FY 2011. Contained Zinc-Lead metal has increased by 1.4 million tonnes, prior to a depletion of 0.84 million tonnes during the same period. Contained Silver has increased to 885 million ounces from 832.8 million ounces last year. Total reserves and resources as at 31 March 2011 were 313.2 million tonnes containing 34.7 million tonnes of Zinc-Lead metal and 885 million ounces of Silver. The reserves and resources position has been independently reviewed and certified as per the JORC standard.

Renewal of Mining Lease

The renewal of the mining lease for Zawar group of mines was applied on 25 November 2008. As a part of the mining lease was falling on the forest land, approval from the Forest department for diversion of the land was required. In view of the honorable Supreme Courts order dated 19 February 2010, regarding mining in Aravali Hills of Rajasthan, forest clearance was kept pending. Company had represented the matter at various forums and also fled a writ in the Supreme Court. The Forest Advisory Committee (FAC) has already submitted its recommendation to the Supreme Court. All other approvals, as are required for renewal of the mining lease, are in place. Now the matter is pending in the Supreme Court, awaiting final hearing.

Sales

Zinc metal sales in the domestic market during the year were 411,617 tonnes, while export sales accounted for 300,986 tonnes. Lead metal sales in the domestic market during the year were 57,204 tonnes, with the export sales accounting for 25 tonnes. Sales during the year were augmented by sale of 65,957 Dry Metric Tonnes (DMT) of surplus Zinc concentrate and 38,457 DMT of surplus Lead concentrate.

Financial Performance

The Company reported Net profits of Rs. 4,901 Crores during the year, up by 21% compared to the previous year. This was primarily on account of higher volumes, increased LME prices and improved operational efficiencies.

The Companys financial performance has been discussed in detail in the chapter on Management Discussion and Analysis which forms a part of this Annual Report.

Projects

The current fiscal has witnessed successful commissioning of the 1.50 mtpa concentrator at Sindesar Khurd. We have also added 160 MW (80X2) captive power generation capacity at Dariba, during the year.

The pace of volume ramp up at Sindesar Khurd has been accelerated with the commissioning of the 1.50 mtpa concentrator. The concentrator had already achieved a production level of around 85% of the capacity, as we exited the year. Our Silver production capacity is expected to leap to 500 tonnes by the end of FY 2012, on the back of volume ramp up at Sindesar Khurd & Rampura Agucha and various recovery improvement measures.

After the commissioning of the 100 ktpa Lead Smelter, the Company will cross the one million tonne landmark in metal production capacity.

We have also announced an addition of 150 MW in our existing 123.2 MW wind power capacity. Of this 47.7 MW has been commissioned in March 2011. The balance is expected to get commissioned towards the end of Q2 of FY 2012.

Our existing portfolio of assets continues to deliver superior performance; and we continue to pursue further organic/ inorganic growth opportunities.

Contribution to the Exchequer

Your Company has contributed Rs. 2,602 Crores in terms of taxes and duties to the exchequer.

Directors

During the year under review, following changes took place in the Board of Directors of your Company. Mr. R. K. Malhotra and Ms. Anjali Anand Srivastava were nominated as Directors on the Board in place of Ms. Ajita Bajpai Pande and Mr. S. K. Mittal. Further Mr. M. S. Mehta ceased to be director on the board of the Company w.e.f. 30 June 2010.

Mr. A. R. Narayanswamy and Mr. Navin Agarwal retire by rotation and being eligible; ofer themselves for reappointment at the ensuing Annual General meeting. None of the retiring directors hold any shares in the Company. Your Directors recommend their reappointment.

Management Discussion and Analysis

The Management Discussion and Analysis Report, which gives a detailed account of operations of your Company and the market in which it operates, including initiative taken by the Company to expand its business and in areas such as human resources, and risk management, forms a part of this Annual Report.

Corporate Governance

Report on Corporate Governance along with a certifcate from the auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

Group

The Agarwal Group being a group defned under the Monopolies and Restrictive Trade Practices Act, 1969, controls the Company.

A list of its group entities is given below:

Sr. No. Name of the Group Companies

1. Volcan Investments Limited

2. Vedanta Resources Plc.

3. Vedanta Resources Holding Limited

4. Vedanta Resources Jersey Limited

5. Vedanta Resources Jersey II Limited

6. Vedanta Resources (Jersey) Limited

7. Vedanta Resources Investments Limited

8. Vedanta Jersey Investments Limited

9. Bharat Aluminum Company Limited

10. Copper Mines of Tasmania Pty Limited

11. Fujariah Gold

12. The Madras Aluminium Company Limited

13. Monte Cello BV

14. Monte Cello Corporation NV

15. Konkola Copper Mines PLC

16. Sterlite Energy Limited

17. Sesa Goa Limited

18. Sesa Industries Limited

19. V S Dempo Private Limited

20. Dempo Mining Corporation Private Limited

21. Sterlite Industries (India) Limited

22. Sterlite Opportunities and Venture Limited

23. Sterlite Infra Limited

24. Thalanga Copper Mines Pty Limited

25. Twin Star Holding Limited

26. Vedanta Aluminium Limited

27. Richter Holding Limited

28. Westglobe Limited

29. Finsider International Company Limited

30. Vedanta Resources Finance Limited

31. Vedanta Resources Cyprus Limited

32. Welter Trading Limited

33. Lakomasko BV

34. THL Zinc Ventures Limited - Former THL KCM Limited

35. Twinstar Energy Holdings Limited - Former THL Aluminium

36. THL Zinc Limited - Former KCM Holdings Limited

37. Sterlite (USA) Inc.

38. Talwandi Sabo Power Limited

39. Allied Port Services Pvt. Ltd.

40. Konkola Resources Plc

41. Vizag General Cargo Berth Pvt. Limited

42. Twin Star Mauritius Holding Limited

43. Vedanta Namibia Holdings Limited

44. Skorpoin Zinc (Pty) Limited

45. Namzinc (Pty) Limited

46. Skorpion Mining Company (Pty) Limited

47. Amica Guesthouse (Pty) Ltd.

48. Rosh Pinah healthcare (Pty) Ltd.

49. Black Mountain Mining (Pty) Ltd.

50. THL Zinc Holding BV - Former Labaume BV

51. Lisheen Mine Partnership

52. THL Zinc Holding Cooperative U.A.

53. Pecvest 17 Pvt. Ltd.

54. Vedanta Lisheen Finance Limited

55. Vedanta Base Metals (Ireland) Limited

56. Vedanta Lisheen Mining Limited

57. Killoran Lisheen Mining Limited

58. Killoran Lisheen Finace Limited

59. Lisheen Milling Limited

60. Killoran Concentrates Limited

61. Killoran Lisheen Limited

62. Killoran Lisheen Holdings Limited

63. Azela Limited

64. Paradip Port Services Pvt. Limited

65. MALCO Power Company Limited

66. Malco Industries Limited

Directors Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confrm that:

i. In the preparation of Annual Accounts, applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and 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 on 31 March 2011 and of the profit of the Company for that year.

iii. The Directors 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 detecting and preventing fraud and other irregularities.

iv The Directors have prepared the Annual Accounts on a Going Concern basis.

Auditors

Your Company had appointed M/s. Deloitte Haskins & Sells, Chartered Accountants, as statutory auditors of the Company for the conduct of audit of accounts for the year ended 31 March 2011. Their term of appointment expires at the conclusion of the forthcoming Annual General Meeting (AGM), and being eligible, they offer themselves for reappointment. Your Directors propose their reappointment.

Auditors Qualification on Accounts

Notes to the accounts, as referred to in the Auditors Report are self-explanatory and a practice consistently followed, and therefore do not call for any further comments and explanations.

Particulars of Technology Absorption and Foreign Exchange Earnings and Outgo

As required under Section 217 (1) (e) of the Companies Act, 1956 and rules made therein, the particulars of technology absorption and foreign exchange earnings and outgo are given in Annexure I, which is attached and forms a part of this report.

Particulars of Employees

As required by the provisions of Sub-section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, particulars of the employees are set out in the Annexure to the Directors Report. However, as per provisions of Section 219 (1)(b)(iv) of the Companies Act, 1956 the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder, interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company for a copy of the same.

Acknowledgements

The Board of Directors places on record its sincere appreciation of the contribution made by the employees, employees unions in the success of the Company. The Directors also sincerely thank the Central Government and the State Governments of Rajasthan, Andhra Pradesh, Gujarat, Karnataka, Jharkhand and Uttaranchal; bankers, auditors, vendors, customers and the shareholders of the Company for their continued support. For and on behalf of the Board of Directors

Akhilesh Joshi A. R. Narayanswamy CEO & Whole-time Director Director

Place : Mumbai Date : April 21, 2011




Mar 31, 2010

The Directors have pleasure in presenting the 44th Annual Report together with the statement of Audited Accounts for the financial year ended 31 March 2010.

Financial Results and Dividend

(RsCrore) FY2010 FY2009

Total Revenue 8,739.17 6,611.50

Profit before depreciation, interest,

tax and amortization 5,392.28 3,66539

Less: Interest 43.92 21.88

Gross Profit 5,348.36 3,64351

Less: Depreciation and amortization 334.25 285.27

Taxation 972.70 630.63

Net Profit for the year 4,041.41 2,727.61

Add:Balance brought forward

from the previous year 6,649.28 4,619.41

Amount available for appropriation 10,690.69 7,347.02

Appropriation:

General Reserve 500 500

(a) Proposedfinal dividend on equity

shares 295.63 19774

(including corporate tax thereon)

Balance carried forward to next year 9,895.06 6,649.28

Dividend

The Board of your Company has recommended dividend of 60% i.e. Rs 6 per equity share of face value of Rs 10 each. The total outgo on account of dividend including tax on dividend will be Rs 296 Crore during FY 2010 as compared to Rs 198 Crore in FY 2009. The record date for the payment of final dividend will be 23 July 2010.

Performance Review

During FY 2010, the Company recorded its highest ever mined and refined metal production of 768,620 tonnes and 650,038 tonnes respectively of Zinc & Lead, up 4.5% and 5.3% respectively, compared to FY 2009. The Company also recorded its ever highest Silver production at 176,381 kilograms, an increase of 33.9%, compared to the previous year. The year also witnessed successful commissioning of the 210 ktpa zinc smelter at Dariba and 1 mtpa concentrator at Rampura Agucha, around a quarter ahead of schedule.

Exploration

Ongoing exploration activities have yielded significant success with an increase of 33.7 million tonnes to the reserves and resources, prior to a depletion of 7.1 million tonnes in FY 2010. Contained zinc-lead metal has increased by 3.4 million tonnes, prior to a depletion of 0.8 million tonnes during the same period. Total reserves and resources at 31 March 2010 were 298.6 million tonnes containing 34.1 million tonnes of zinc-lead metal. The reserves and resources position has been independently reviewed and certified as per the JORC standard.

Renewal of Mining lease

The renewal of the mining lease for Zawar group of mines was applied on 25 November 2008. As part of the mining lease was falling on the forest land, approval from the Forest department for diversion of the land is pending. Company has represented the matter in the Supreme Court. On receipt of the Forest Advisory Committee (FAC) approval, mining lease will be renewed.

Sales

Company sold 386,000 tonnes of zinc metal in the domestic market, while export accounted for 192,000 tonnes. Sale of Lead metal in the domestic market was 51,000 tonnes, while the export sale accounted for 13,500 tonnes. Company also sold 223,500 Dry Metric Tonnes (DMT) of surplus zinc concentrate and 30,900 DMT of surplus lead concentrate in FY 2010.

Financial Performance

Profit during the year was Rs 4,041.41 Crore, higher by 48% compared to the previous year. This was primarily on account of higher volumes, increased LME prices and improved operational efficiencies.

The Companys financial performance has been discussed in detail in the chapter on Management Discussion and Analysis which forms a part of this Annual Report.

Long Term Wage Settlement

The long term wage settlement expired on 30 June 2007. The new wage settlement was signed with Hindustan Zinc Workers Federation on 13 November 2009 for a period of five years effective 1 July 2007. The salient features of the same are:

- 100% neutralization of Dearness Allowance (DA)

- 26% increase on Cost To Company (CTC).

Projects

During the year, the Company successfully commissioned its 210 ktpa Hydro Zinc smelter at Dariba and 1 mtpa concentrator at Rampura Agucha, around three months ahead of schedule. Consequently, the total zinc-lead metal production capacity has increased to 964 ktpa. The work at the 100 ktpa lead smelter and the 160 MW CPP at Dariba, is progressing well for scheduled completion in Q2 FY2011. The Sindesar Khurd mine project is also on schedule for progressive expansion to 1.50 mtpa. Post completion of the 100 ktpa lead smelter, the Company will become the largest integrated Zinc-Lead producer in the world, having metal production capacity of 1,064 ktpa. We will also progressively increase our Silver production from the current levels of 180 tonnes per annum to a level of approximately 500 tonnes per annum.

Contribution to the Exchequer

Your Company has contributed Rs 1,889 Crore in terms of taxes and duties to the exchequer.

Directors

Mr Bhupal Nanda, Director Ministry of Mines was nominated as Director on the Board in place of Mr G Srinivas, w.e.f. 19 October 2009 by the Government of India.

Mr Agnivesh Agarwal and Ms Ajita Bajpai Pande retire by rotation and being eligible; offer themselves for reappointment at the ensuing Annual General Meeting. None of the retiring directors hold any shares in the Company. Your Directors recommend their reappointment.

Management Discussion and Analysis

The Management Discussion and Analysis Report, which gives a detailed account of operations of your Company and the market in which it operates, including initiative taken by the Company to expand its business and in areas such as human resources, and risk management, forms a part of this Annual Report.

Corporate Governance

A Report on Corporate Governance along with a certificate from the auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Clause 49 of the Listing Agreement is annexed to this report.

Group

The Agarwal Group being a group defined under the Monopolies and Restrictive Trade Practices Act, 1969, controls the Company.

A list of its group entities is given below:

Sr. No Name of Group Companies

1. Volcan Investments Limited, Bahamas

2. Vedanta Resources Plc, United Kingdom

3. Vedanta Finance jersey Limited, Jersey

4. Vedanta Resources Holdings Limited, United Kingdom

5. Twinstar Holdings Limited, Mauritius

6. WelterTrading Limited, Cyprus

7. Vedanta Resources Finance Limited, United Kingdom

8. Vedanta Resources Cyprus Limited, Cyprus

9. Richter Holding Limited, Cyprus

10. Westglobe Limited, Mauritius

11. Finsider International Company Limited, United Kingdom

12. Sesa Goa Limited, India

13. Sesa Industries Limited, India

14. Konkola Copper Mines Plc, Zambia

15. Vedanta Aluminium Limited, India

16. The Madras Aluminium Company Limited 17 Sterlite Infra Limited, India

18. Sterlite Opportunities and Ventures Limited, India

19. Talwandi Saboo Power Limited, India

20. Hindustan Zinc Limited, India

21. Bharat Aluminium Company Limited, India

22. THLKCM Limited, Mauritius

23. KCM Holdings Limited, Mauritius

24. Vedanta Resources Investments Limited, United Kingdom

25. THL Aluminium Limited, Mauritius

26. Monte Cello BV, Netherlands 27 Sterlite Energy Limited, India

28. Copper Mines of Tasmania Pty Ltd, Australia

29. Sterlite (USA) Inc., USA

30. Fujairah Gold FZE, UAE

31. Thalanga Copper Mines Pty Ltd., Australia

32. Monte Cello NV, Netherlands Antilles

33. Anil Agarwal Discretionary Trust, Bahamas

34. Onclave PTC Limited, Bahamas

35. Lakomasko BV, Netherlands

36. Vedanta Jersey Investments Limited, Jersey

37. Vedanta Resources Jersey Limited, Jersey

38. Vedanta Resources Jersey 2 Limited, Jersey

39. V S Dempo & Co. Private Limited, India

40. Dempo Mining Corporation Private Limited, India

41. Goa Maritime Private Limited, India

42. Vizag General Cargo Berth Private Limited, India

43. Allied Port Services Private Limited, India

44. MALCO Industries Limited, India

45. MALCO Power Company Limited, India 46. Mr Anil Agarwal

Directors Responsibility Statement

As required under Section 217 (2AA) of the Companies Act, 1956, the Directors hereby confirm that:

i. In the preparation of Annual Accounts, applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

ii. The Directors have selected such accounting policies and applied them consistently and made judgements and 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 on 31 March 2010 and of the profit of the Company for that year.

iii. The Directors 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 detecting and preventing fraud and other irregularities.

iv. The Directors have prepared the Annual Accounts, on a Going Concern basis.

Auditors

Your Company had appointed M/s. Deloitte Haskins & Sells, Chartered Accountants, as statutory auditors of the Company for the conduct of audit of accounts for the year ended 31 March 2010. Theirterm of appointment expires at the conclusion of the forthcoming Annual General Meeting (AGM), and being eligible, they offer themselves for reappointment. Your Directors propose their reappointment.

Auditors Qualification on Accounts

Notes to the accounts, as referred to in the Auditors Report are self-explanatory and a practice consistently followed, and therefore do not call for any further comments and explanations.

Particulars of Technology Absorption and Foreign Exchange Earnings and Outgo

As required under Section 217 (1) (e) of the Companies Act, 1956 and rules made therein, the particulars of technology absorption and foreign exchange earnings and outgo are given in Annexure I, which is attached and forms a part of this report.

Particulars of Employees

As required by the provisions of Sub-Section (2A) of Section 217 of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975 as amended, particulars of the employees are set out in the Annexure to the Directors Report. However, as per provisions of Section 219 (l)(b)(iv) of the Companies Act, 1956 the report and the accounts are being sent to all the shareholders excluding the aforesaid information. Any shareholder, interested in obtaining such particulars may write to the Company Secretary at the registered office of the Company for a copy of the same.

Acknowledgements

The Board of Directors places on record its sincere appreciation of the contribution made by the employees, employee unions in the success of the Company. The Directors also sincerely thank the Central Government and The State Governments of Rajasthan, Andhra Pradesh, Gujarat, Karnataka jharkhand and Uttaranchal; bankers, auditors, vendors, customers and the shareholders of the Company for their continued support.

For and on behalf of the Board of Directors

M.S. Mehta Akhilesh joshi

Whole-time Director CO & Whole-time Director

Place: Mumbai

Date: May 4,2010

 
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