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Directors Report of Hindustan Zinc Ltd.

Mar 31, 2023

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

('' in crore)

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.


Mar 31, 2022

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

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%

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

I. OPERATIONAL PERFORMANCE

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.

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

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

('' 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 '' 29,440 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 '' 1,216 crore during the year compared to '' 1,819 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

Zinc’s cost of production (COP), excluding royalty for FY 202122 was '' 83,511 (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 '' 17,441 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 '' 9,629 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 '' 22.79 per share as compared to '' 18.89 per share in FY 2020-21.

Dividend

Interim dividend of 900%, i.e. '' 18.0 per share on equity share of '' 2 each amounting to '' 7,606 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 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, 2022, the Company’s net cash and cash equivalents was '' 17,966 crore as compared to '' 15,130 crore at the end of FY 2020-21 and is invested in high quality debt instruments.

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

(*) Includes 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 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 increased from '' 2,180 crore to '' 3,132 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 '' 34,228 crore to '' 37,455 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 '' 16,315 crore, as compared to '' 17,183 crore at the end of previous fiscal year.

Contribution to the Government Treasury The Company has contributed '' 15,676 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

I n 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 Company’s 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 '' 190.92 crore on CSR programmes more than the 2% of CSR mandate which was '' 186.68 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 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

VIII. MANAGEMENT DISCUSSION AND ANALYSIS

The ‘Our Operational Performance’ section of this Annual Report gives a detailed account of the Company’s 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.

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,

• i ndependent 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:

• It’s charter/ terms of reference

• Number of meetings held and it’s 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 it’s 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


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. t hey 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 Company’s 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.

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 Company’s 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 Company’s 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 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.

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 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.

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


Mar 31, 2021

Dear Members,

We share with you our 55th Annual Report, together with the Audited Financial Statements for the year ended 31st March, 2021.

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. We have taken a pro-active approach to keep our assets and people safe while increasing engagement with our communities during these difficult times.

The year in summary

Mine production progressively improved during the year with ore production for the full-year up 7% y-o-y to deliver a record 15.5 Mt, supported by strong production growth at Zawar mines and Rampura Agucha (RA) Mine, which were up 21% and 9% respectively. Operations were halted on account of nationwide lockdown to combat COVID-19 from 22nd March, 2020 and restarted gradually in April 20. Mined metal production was up 6% y-o-y to 972 kt primarily on account of higher ore production with overall grades remaining at same levels.

During the year, back fill plants were commissioned at Zawarmala and Mochia mines. The development of North Decline (ND1) was completed at Rampura Agucha Mine. COVID-19 restrictions including stringent visa guidelines for Chinese nationals continued during the year which resulted in delay in commissioning of Fumer plant at Chanderiya. Feasibility studies are underway at mining locations for expansion to 1.5 Mtpa 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. 1

reporting. During the year, the Company commissioned an underground Occupational Health Centre at Rampura Agucha Mine which significantly improves the response time in emergency cases.

ENVIRONMENT

During the reporting year, waste recycling continued at 31%, and water recycling rate increased marginally to 40% (FY2020: 39%). Specific energy consumption improved marginally to 19.9 GJ/ton of metal (FY2020: 20.4 GJ/ton).

Hindustan Zinc''s 22 MW solar power project at RA mine was registered under Gold Standard during the year. Dariba Smelting Complex (DSC) successfully commissioned a 4500 MTPA FPT (Freeze Precipitation Technology) plant to recover Sodium sulphate from final multi-stage RO rejects which will cater to 1/3rd of DSC Hydro smelter''s input salt requirements to support our circular economy goal. CPP Team conducted an innovative in-house recycling of the bottom ash to convert it into fly ash (saleable product) improving value realization and lowering environment footprint. Hindustan Zinc''s Udaipur Sewage Treatment Plants expanded to 55 MLD translating into over 90% treatment of city''s sewage.

HZL led an endorsement for ''UNGC (United Nations Global Compact) CEO Water Mandate'' giving our commitment towards water stewardship and initiating our journey to follow the six principles laid out by UNGC. As part of commitment towards biodiversity conservation, the Company is now a member of IUCN ''Leader for Nature India'' initiative. HZL actively participated in the 3rd meeting of ''Business Leaders Group COP26'' and actively engaged for shaping the agenda for COP26 which is to be held at Glasgow (UK) in Nov''21.

Our sustainability activities received several endorsements during the year including selection in ''Sustainability Yearbook 2021'' as Member for 4th consecutive year, 1st position in Asia Pacific region in metal and mining sector in Dow Jones Sustainability Indices and 7th Globally and CII-ITC Corporate Excellence Sustainability Award 2020. Hindustan Zinc was featured among the first Indian companies to be featured in CDP India Annual Report and was rated ''A'' in Climate change CDP 2020.

Production

For the full-year, ore production was up 7% y-o-y to 15.5 Mt on account of strong production growth at Rampura Agucha Mine and Zawar mines, which were up 9% and 21% respectively. Mined metal production for FY2021 was 971,976 tons compared to 917,101 tons in the prior year in line with higher ore production.

For the full year, integrated metal production was up 7% to 930 kt in line with higher MIC availability, while silver production was up by 16% to a record 706 tons in line with higher lead production and slightly better grades at SK. These record numbers were delivered despite losing 3-4 weeks equivalent of production days in the year due to COVID related lockdown and other disruptions resulting from rising infections.

The Company generated 4,085 million units of thermal based power in FY2021 as compared to 3,880 million units in FY2020. Total green power generation was 649 million units as compared to 609 million units in FY2020.

Sales

The refined zinc metal sales in the domestic market during the year was 437kt, while export sales accounted for 287kt as compared to 486kt and 194kt respectively 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 181 kt, while export sales were 35kt leading to higher aggregate sales of 20% from a year ago, in line with the increase in lead metal production during the year. Silver sales were 735 tons in FY2021, all in the domestic market and 25% higher than previous year.

III. FINANCIAL PERFORMANCE Financial Information

Hindustan Zinc Limited is the first investor requested company in India to respond to

CDP''s Forests questionnaire and also received Supplier Engagement Rating ''A'' from CDP.

II. OPERATIONAL PERFORMANCE Production performance

Production (kt)

FY2021

FY2020

% change

Total mined metal

972

917

6%

Refinery metal production

930

870

7%

Refined zinc - integrated

716

688

4%

Refined lead - integrated1

214

182

18%

Production - silver (in tons)2

706

610

16%

1. Excluding captive consumption of 6,424 tons in FY2021 vs. 7,088 tons in FY2020.

2. Excluding captive consumption of 34.6 tons in FY2021 vs. 36.7 tons in FY2020.


Revenue

The Company reported ''Revenue from operations'' including other operating income of '' 22,629 crore, an increase of 22% y-o-y primarily on account of increase in metal sales and higher silver prices.

The ''Other income'' was '' 1,819 crore during the year compared to '' 1,934 crore in the previous year on account of lower treasury income due to lower rate of return on fresh investments/ reinvestments during the year on account of lower interest rates.

Production Cost

Zinc''s cost of production (COP), excluding royalty for FY2021 was '' 70,681 (US$954) per ton, lower by 5% y-o-y (9% in US$). The full year COP decrease reflects higher production volume, lower power costs, lower metcoke and cement costs partly offset by higher admin expense (Covid donation), lower sulphuric acid credits and higher diesel costs.

Operating margin

The above revenue and production cost resulted in profit before depreciation, interest and tax (PBDIT) of '' 13,491 crore in FY2021, up 25% on account of higher revenue and lower cost of production.

Net profit

Net profit was '' 7,980 crore, up 17% on account of higher PBDIT partly offset by higher D&A expense and higher effective tax rate. Tax rate for the year was 24.5% as compared to 18.9% due to reversal of deferred tax liabilities in FY2020 related to prior years pursuant to

Company''s expectation of moving to a lower tax regime under Section 115BBA of the Income Tax Act, 1961.

Earnings Per Share (EPS)

The EPS for the year was '' 18.89 per share as compared to '' 16.11 per share in FY2020.

Dividend

Interim dividend of 1065%, i.e. '' 21.3 per share on equity share of '' 2 each amounting to '' 9,000 crore was declared in October 2020.

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 longterm 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 31st March, 2021, the Company''s net cash and cash equivalents was '' 15,130 crore as compared to '' 21,596 crore at the end of FY2020 and is invested in high quality debt instruments.

Cash Flows

('' in crore)

Particulars

FY2021

FY2020

Opening Cash*

22,207

19,490

Add: EBITDA2

11,739

8,849

Add: Net Interest Income

1,258

1,722

Less: Income Tax

1,755

1,135

Less: Dividend

15,972

0

Less: Capital Account Payments

2,481

3,637

Add: Borrowings

6,525

-1924

(Increase)/Decrease in Working Capital & Others

787

-1,158

Closing Cash*

22,308

22,207

(*) Includes 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 Investments (refer Note 9 of the Audited Financial Statements).

Gross Working Capital

Gross working capital represented by inventory, trade receivables and other current assets decreased from '' 2,558 crore to '' 2,180 crore as at 31st March, 2021 primarily due to decrease of stores & finished goods inventory. The working capital cycle was 36 days in FY2021 as compared to 51 days in FY2020.

Gross Block

The gross block during the year increased from '' 32,106 crore to '' 34,228 crore. This was largely due to the ongoing mining projects and other sustaining capex.

Capital Employed

The total capital employed as at 31st March,

2021 was '' 17,183, crore, as compared to '' 18,714 crore at the end of previous fiscal year mainly due to payment of dividend in current fiscal year.

Contribution to the Government Treasury

The Company has contributed '' 15,008 crore during FY2021, in terms of royalties and taxes to the Government treasury, aggregating to approximately 66% of the total revenue.

IV. RESERVE & RESOURCE (R&R)

On an exclusive basis, total ore reserves at the end of FY2021 totalled 150.3 Mt and mineral resources totalled 297.6 Mt. Total contained metal in Ore Reserves is 9.16 Mt of zinc, 2.55 Mt of lead and 295.5 million ounces of silver.

The Mineral Resource contains 14.9 Mt of zinc, 6.3 Mt of lead and 618.7 million ounces of silver. At current mining rates, the R&R underpins metal production for more than 25 years. This year Company replenished 2.7 times more resource than it consumed during the year i.e. there is a gross resource addition of 61.9Mt with a contained metal of 3.1 Mt, which is highest resource addition in last decade.

V. PROJECTS

We commissioned a 10 MLD STP plant in Udaipur and another 5 MLD STP is in its last leg of commissioning, which will take the total STP capacity set up by us to 60 MLD. This will treat almost the entire sewage of Udaipur city and the recycled water will be used by our plants, significantly reducing our fresh water intake.

During the year, Graphite floatation system was commissioned at Mill 3 of Sindesar Khurd Mines, which will enhance the smelter throughput and boost the recovery.

During the year, back fill plants were commissioned at Zawarmala and Mochia

mines. These plants will de-risk operations and provide opportunity to mine left-out high-grade ore in pillars. On similar lines, we have also started execution activities for combined paste-fill and dry tailing plant at Rajpura Dariba which will help in increasing ore production from 1.2 Mtpa to 2 Mtpa. This will also facilitate in additional utilization of tails by ~20% for backfilling and will reduce stope turnaround time.

The development of North Decline (ND1) was completed at Rampura Agucha Mine (RAM). This improves the accessibility of shaft section, alternate emergency evacuation, ease in mine equipment deployment at lower levels of mine, face charging with emulsion explosives, face drilling with long feed jumbo, etc.

We have started operations in RKD circuit (component of overall Fumer project) to treat Raw Zinc Oxide (RZO). COviD-19 restrictions including stringent visa guidelines for Chinese nationals continued during the year which resulted in delay in commissioning of Fumer plant at Chanderiya. We are following up with authorities to find a solution.

VI. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company''s CSR passionately focuses on community upliftment through Education, Sustainable Livelihoods, Women Empowerment, Health & Water, Sports & Culture, Environment and Community Assets Creation.

During the year, the Company spent '' 214 crore on CSR programmes as compared to '' 132 crore in previous year. For further details, refer Annexure 3 and ''Business Review'' section of this Annual Report.

VII. DIRECTORS

During the year under review, following changes took place in the Board of Directors:

Pursuant to expiry of the appointed tenure of Mr. Sunil Duggal as CEO & WTD on 31st July, 2020, Mr. Arun Misra was appointed as CEO & WTD of the company w.e.f 1st August, 2020.

Similarly, Mr. Akhilesh Joshi and

Mr. Anjani Kumar Agrawal were appointed

as independent Directors w.e.f 1st August,

2020 upon the expiry of the appointed tenure of Mr. A R Narayanaswamy and Mr. Arun L Todarwal on 31st July, 2020.

Government of india, Ministry of Mines appointed Ms. Yatinder Prasad on the

Board w.e.f 7th August, 2020, in place of Mrs. Reena Sinha Puri.

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-20J.2020.pdf

VIII. MANAGEMENT DISCUSSION AND ANALYSIS

The ''Our Operational Performance'' section of this Annual Report gives a detailed account of the Company''s operations and the market in which it operates, including its initiatives in 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 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. 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. 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 Company''s internal financial controls were adequate and effective during FY2021.

XI. BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the board was evaluated by the Board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc.

The performance of the committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc.

The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on 5th January, 2017.

In a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and Chairman of the Company was evaluated, taking into account the views of executive directors and nonexecutive directors.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as the contribution of the individual director to the board and committee meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

At the board meeting that followed the meeting of the independent directors and meeting of Nomination and Remuneration Committee, the performance of the Board, its Committees, and individual directors was also discussed. Performance evaluation of independent directors was done by the Board members, excluding the independent director who is being evaluated.

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 31st March, 2021. 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, and purchase of Bonds from holding company 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. Chandrasekaran Associates, 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 Company''s 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 31st March, 2021 is available on the Company''s website on 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 Company''s 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 nonfinancial information to enable the Members to take well informed decisions and have a better understanding of the Company''s longterm 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.

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

Place: Udaipur Mumbai

Date: 27th April, 2021

1

HEALTH, SAFETY AND ENVIRONMENT

Occupational Health & Safety Health & Safety Performance

LTIFR for the year was 0.97 as compared to 1.38 a year ago. In the reporting year, there has been enhanced leadership focus on incident reporting, categorisation & investigation along with greater focus to bring a cultural change in encouraging reporting via felt leadership programmes, safety town halls, enabling tools like safety whistle-blower as well as reward & recognition for near-miss

2

Earnings before Interest, Tax, Depreciation and Amortisation expenses and Income on investments.


Mar 31, 2019

Board''s Report

Dear Members,

The Directors are pleased to inform that Hindustan Zinc delivered strong performance from all our underground mines and many benchmarks in operational performance were set during the year.

I. FINANCIAL PERFORMANCE

We share with you our 53rd Annual Report, together with the Audited Financial Statements for the year ended March 31, 2019.

FINANCIAL INFORMATION

Rs in Crore

Particulars

FY 2019

FY 2018

Revenue from operations (net of Excise Duty)

21,118

22,082

Other Income

1,782

1,716

Profit before depreciation, interest and tax

12,452

14,226

Less: Interest

113

246

Less: Depreciation and amortization expense

1,883

1,483

Profit before tax

10,456

12,497

Less: Net tax expense

2,500

3,221

Net profit

7,956

9,276

Earnings per share, ?

18.83

21.95

REVENUE

The Company reported ''Revenue from operations'' (net of excise duty) including other operating income of Rs 21,118 Crore, a decrease of 4% y-o-y higher lead & silver volumes and rupee depreciation, offset by lower metal prices and zinc volume.

The ''Other income'' was Rs 1,782 Crore during the year compared to Rs. 1,716 Crore in the previous year on account of higher treasury income due to mark-to-market gains resulting from decline in interest rates, partly offset by decline in investment corpus on account of special interim dividend payment.

PRODUCTION COST

Net zinc metal cost per tonne, without royalty, during the year was higher by 11% in INR (3%in USD) at Rs 70,444 ($1008) MT and was impacted by higher mine development, lower metal volume, higher coal & commodity prices, LTS related expense and rupee depreciation (in case of rupee COP), partly offset by higher acid credits. The Company concluded a five-year long-term settlement with its recognised union impacting cost by $33 per tonne.

OPERATING MARGIN

The above revenue and production cost resulted in profit before depreciation, interest and tax (PBDIT) of Rs 12,452 Crore in FY 2019, down 12%. In addition to lower revenue and higher cost of production, operating income was impacted by one-time expense related to LTS arrears.

NET PROFIT

The Company reported record net profit of Rs. 7,956 Crore, 14% lower than previous year on account for lower PBDIT and higher depreciation, partly helped by lower tax rate.

Depreciation & amortisation has trended up due to higher capitalisation and increased underground ore production resulting in higher amortisation.

EARNINGS PER SHARE (EPS)

The EPS for the year was Rs. 18.83 per share as com pared to Rs. 21.95 per share in FY 2018.

DIVIDEND

On October 22, 2018, the Board of Directors declared a Special Interim Dividend of 1000% i.e. Rs. 20 per share on equity share of Rs. 2 each amounting to Rs. 10,188 Crore (including DDT). The Board has not recommended final dividend for the year.

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 dominant position in India''s zinc industry, efficient and integrated operations and a strong financial risk profile.

The Company follows a conservative investment policy and invests in high quality debt instruments. As on March 31, 2019, the Company''s cash and cash equivalents was Rs. 19,490 Crore invested in high quality debt instruments and the portfolio continues to be rated "Tier-1" implying Highest Safety by CRISIL. During the year, the Company borrowed ? 5,000 Crore of short term commercial paper in to meet cash flow mismatch for special interim dividend funding requirement. Of this, Rs 3,000 Crore of commercial paper was paid off during the year. The net cash and cash equivalents at the end of the year was Rs. 16,952 Crore as compared to ? 20,395 Crore at the end of FY 2018.

CASH FLOWS

Rs. in Crore

Particulars

FY 2019

FY 2018

Opening Cash*

20,395

23,972

Add: EBITDA**

10,747

12,373

Add: Net Interest Income

1,552

1,329

Less: Income Tax & Dividend

14,518

13,497

Less: Capital Account Payments

3,400

2,733

Add: (Increase) / Decrease in Working Capital & Others

4,714

(1,049)

Closing Cash*

19,490

20,395

(*) Includes Cash & Equivalents (refer Note 11 of the Audited Financial Statements) and Current Investments (refer Note 9 of the Audited Financial Statements)

(**) Earnings before Interest, Tax, Depreciation and Amortization expenses and Income on investments.

GROSS WORKING CAPITAL

Gross working capital represented by inventory, trade receivables and other current assets increased from Rs. 1,956 Crore to Rs. 2058 Crore as at March 31, 2019 primarily due to increase of stores inventory. The working capital cycle was 36 days in FY 2019 as compared to 32 days in FY 2018.

GROSS BLOCK

The gross block during the year increased from Rs. 23,879 Crore to Rs. 28,096 Crore. This was largely due to the ongoing mining projects and other sustaining capex.

CAPITAL EMPLOYED

The total capital employed as at March 31, 2019 was Rs. 16,652 Crore, as compared to Rs. 15,537 Crore at the end of previous fiscal year mainly due to addition in fixed assets.

CONTRIBUTION TO THE GOVERNMENT TREASURY

The Company has contributed Rs. 11,563 Crore during FY2019, in terms of royalties, taxes and dividends to the Government treasury on cash basis, aggregating to approximately 55% of the total revenue.

II. OPERATIONAL PERFORMANCE PRODUCTION

The FY 2019 mined metal production was entirely from underground mines, which ramped up strongly by 29% to 936 kt on account of 27% increase in ore production and better grades. The closure of open-cast operations caused total mined metal production to decline marginally by 1% from a year ago.

Integrated metal production was 894 kt, down 7% from a year ago. Zinc production at 696 kt was lower by 12% year-over-year due to lower zinc mined metal availability during the year as underground mines ramped up to fill the vacuum from closure of open-cast operations and higher lead ratio in ore. Integrated lead and silver production were at record 198 kt and 679 MT, higher by 18% and 22% respectively from a year ago driven by higher lead mined metal production, retrofitting of pyro metallurgical smelter in Q2 FY 2019 to produce more lead in line with higher lead mined metal availability and better silver grades.

The Company generated 3,746 million units of power in FY 2019 as compared to 3,817 million units in FY 2018. Total green power generation was 449 million units as compared to 414 million units in FY 2018.

SALES

The refined zinc metal sales in the domestic market during the year was 513 kt, while export sales accounted for 181 kt as compared to 515 kt and 278 kt respectively a year ago. The aggregate sales were lower by 12% than previous year, in line with production. Lead metal sales in the domestic market were 154 kt, while export sales were 44 kt leading to higher aggregate sales of 17% from a year ago, in line with increase in lead metal production during the year. Silver sales were 676 MT in FY 2019, all in the domestic market and 21% higher than previous year.

III. RESERVE & RESOURCE (R&R)

During the year, gross additions of 5.4 million MT were made to reserves resource (R&R), prior to depletion of 13.8 million MT. As at March 31, 2019, the combined R&R were estimated to be 403 million MT, containing 34.6 million MT of zinc-lead metal and 965 million ounces of silver. Overall mine life continues to be more than 25 years.

IV. PROJECTS

The announced mining projects are nearing completion in line with the target of reaching 1.2 million MT per annum of mined metal capacity in FY2020.

UPDATE ON ONGOING EXPANSION PROJECTS

Capital mine development increased by 12% to 43 km in FY2019.

At Rampura Agucha underground mine, the ventilation system was commissioned earlier in the year liberating the mine from ventilation issues. The commissioning of mid shaft loading system in October 2018 allowed waste hoisting to be done through the shaft ahead of schedule, leading to improvement in ore production. The second paste fill plant was completed ahead of schedule in Q4 and the mine is equipped with paste fill capacity to support 5.0 mtpa production. The full shaft commissioning is expected to complete by September 2020 synchronising with completion of crusher and conveyor system.

During the year, Sindesar Khurd received environment clearance to produce 6.0 million MT of ore and 6.5 million MTof ore beneficiation.The new 1.5 mtpa mill accomplished smooth commissioning and began production in the third quarter of the year, taking the total milling capacity to 6.2 mtpa. The underground crusher and production shaft were commissioned during Q4 and ore hoisting from shaft is expected to start in Ql of the current year. The second paste fill plant is under mechanical completion and also expected to commission in Q1 of the current year.

Zawar mines: The new 2.0 mtpa mill was commissioned in Q4 while the dry tailing plant is under execution and expected to commission in Q2 FY 2020.

Rajpura Dariba mine has received Environment Clearance by the Ministry of Environment, Forest & Climate Change to increase ore production from 0.9 to 1.08 mtpa and regulatory approval for further expansion to 2.0 mtpa is under process. Ore production run-rate is already at 1.2 million MT per annum post major infrastructure enhancement. During the year, orders were place for a new 1.5 mtpa mill and paste fill plant which are expected to complete in FY2020.

OTHER PROJECTS

The Fumer project at Chanderiya is expected to commission in Q1 of the current year.

22 MW solar plant was completed at Rampura Agucha taking the total solar capacity to 38 MW.

25 MLD Sewage Treatment Project was commissioned at Udaipur taking the total capacity to 45 MLD which will help improve water availability at Dariba and treat over half of Udaipur city''s sewage.

Planning is underway for the next phase of expansion to 1.35 million MT perannum.

OUTLOOK

Both mined metal and finished metal production in FY2020 will be significantly higher than last year and expected to be about 1.0 million tonnes each. The Company expects to complete the underground mine expansion plan announced in early 2013 by Q2 of the current financial year, quadrupling its underground mined metal production capacity to 1.2 mtpa.

Zinc cost of production in FY2020 is expected to be under $1000 per MT. The guidance of FY 2020 silver production is in the range of 750 - 800 MT. The project capex for the year will be in the range of US$350 to US$400 million.

VI. HEALTH, SAFETY AND ENVIRONMENT

Safety, health and sustainability initiatives have been discussed in detail in ''Business Review'', which forms a part of this Annual Report.

VII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company''s CSR focuses on Education, Sustainable Livelihoods, Women Empowerment, Health & Water, Sports & Culture, Environment and Community Development including Community Assets Creation.

During the year, the Company spent Rs. 130 Crore on CSR programs as compared to Rs, 92 Crore in previous year. For further details, refer Annexure 5 and ''Business Review'' section of this Annual Report.

VIII. DIRECTORS

During the year under review, Mr. Agnivesh Agarwal resigned as Director and Chairman of the Board on February 22,2019 after 13 years of being on the Board of Directors. We thank Mr. Agarwal for his leadership and guidance towards the growth of the Company. Mrs Kiran Agarwal was appointed as Additional Director and Chairman of the Board on March 02, 2019.

Mr. Sudhir Kumar, Independent Director and nominee of Government of India, completed his tenure on November 29, 2018. We thank Mr. Kumar for his contribution.

IX. MANAGEMENT DISCUSSION AND ANALYSIS

The Business Review section of this Annual Report gives a detailed account of the Company''s operations and the market in which it operates, including its initiatives in areas such as human resources, sustainability and risk management.

X. 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 Act2013 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.

XI. 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 read with requirements set out under Schedule 3 to the Act, have been followed and there are no material departures in the same.

ii. The Directors have selected such accounting policies, 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. The Directors have 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 have prepared the annual accounts on a ''Going Concern'' basis.

v. The Directors have 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

XII. AUDITORS

The Company had appointed M/s. SR Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company to conduct audit of Financial Statements for the year ended March 31, 2019. 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 is for not fulfilling the criteria of adequate number of Independent Directors for which we are in touch with the two major shareholders.

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 Chandrasekaran Associates, Company Secretaries as the Secretarial Auditors for conducting the Secretarial audit of the Company.

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.

XIII. PARTICULARS OF EMPLOYEES

Disclosures pertainingto 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.

XIV. 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 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

Sunil Duggal

A R Narayanaswamy

CEO & Whole-time Director

Director

Camp: London

Place: Mumbai

Date: May 02, 2019

Annexure 1

Particulars of technology absorption and foreign exchange earnings and outgo, as per Section 134(3)(m) of the Companies Act, 2013 and the rules made therein and forming part of the Board''s Report for the year ended March 31, 2019.

A) CONSERVATION OF ENERGY

Trails of DROSRITE™ zinc dross treatment process conducted at zinc melting section of Pantnagar Metal Plant. This process uses the heat generated by the oxidation of unrecoverable zinc metal, in the presence of oxygen, as a source of energy

B) TECHNOLOGY ABSORPTION

A) SPECIFIC AREAS IN WHICH R&D HAS BEEN CARRIED OUT BY THE COMPANY IN FY 2019

Feasibility testing of new technologies like Stage Flotation Reactor (SFR), flash floatation, graphite pre-float and lead re-grinding for suitability in our operations to address ore variability and improve recovery

Modification in floatation circuit configuration for increase in metal recovery in mills

Testing of new floatation reagents for improved metallurgical performance and cost benefits

Plant surveys of grinding and floatation circuit across all mines for optimised plant performance

Benchmarking of beneficiation plant performance and modelling and simulation studies to strengthen metallurgical accounting at Zawar

Process development for tailing re-processing to recover metal from tailings

Conversion of pre-graphite concentrate into saleable graphite product and to recover metal values from pre-graphite concentrate

Pilot scale testing for 18.75 MT antimony slag was successfully completed. About 3 MT of antimony trioxide of purity >96% and 17 MT of enriched lead residue suitable for internal consumption were generated

Pilot scale testing initiated for high grade cobalt cake generation from purification waste cake. The operating parameters have been optimised at lab and bench scale to generate purified cobalt cake of about 20% purity

Process for recovery of vanadium as ammonium meta vandate from spent acid catalyst validated at lab scale. Replacement of sodium peroxide is being explored

Cold bricks are being prepared with 3-5% cement and 80% of different wastes used in various composition. Enhancing of brick strength is in progress.

Process feasibility for magnesium bleeding through zinc dross treatment has done. Bench scale closed loop testing is in progress

B) BENEFITS DERIVED AS RESULT OF ABOVE R&D

Testing of new technologies suggest that its implementation will increase recovery of lead and silver in case of flash floatation and lead re-grinding and improve concentrate grade by using SFR and pre-graphite floatation

Circuit modification in zinc floatation circuit suggests that it will increase zinc recovery by 2%

Regular plant surveys across all mines gives an idea of plant operating status and any opportunity for improvement thereof

Metallurgical accounting will help in bridging gap between theoretical and actual recovery

Tailing re-processing at Rampura Agucha mine will give an extra 3% increase in overall metal recoveries 18.75 MT antimony slag treated and total realization of Rs 25.5 lacs is achieved from pilot plant operation. Expected realization is Rs. 11.5 Crore per annum

Drosrite process suggests the Improvement in 1st pass metal recovery by 0.35%. Also the final dross can be directly treated at leaching plant

The spent vanadium catalyst can be reused and disposal cost can be saved

Successful dross leaching signify zero dross to roaster

High grade cobalt cake serve the purpose of cost generation from waste

C) FUTURE PROJECTS FOR R&D IN FY2019-20

Modification in floatation circuit configuration for increase in metal recoveries

Plant optimisation through cell hydrodynamic and mineralogical characterization

Implementation of tailing recovery project

Process flowsheet validation for cobalt recovery at pilot scale

Exploration of solvent extraction to get high grade cobalt cake

Antimony slag treatment plant setup at Chanderiya ancillary plant

Establishment of vanadium recovery process to bench and pilot scale

Raw mix design and generation of high strength bricks & paver blocks

Zinc dross treatment for magnesium bleeding at pilot scale

Lab & bench scale testing and parameter optimisation of mercury stripper water

Recovery of manganese from manganese sulphate solution

C) FOREIGN EXCHANGE EARNINGS AND OUTGO

During the year, foreign exchange outgo was Rs 1,700 Crore (which includes import of capital goods, stores & spares, coal, consumables, consultancy, travelling etc.), while foreign exchange earned was Rs 4,237 Crore.

FORM A

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY

Particulars

Unit

Year ended March 31, 2019

Year ended March 31, 2018

A) ELECTRICITY, POWER GENERATION & FUEL CONSUMPTION

Purchase Units

Million Kwh

206

191

Total Amount

Rs.Cr

172.90

149.33

Average rate of purchasing

Rs/ /kwh

8.39

7.82

CPP - Units generated from fuel oil

Own Generation Units (From Fuel Oil)

Million Kwh

0.28

0.21

Quantity Consumed

LSHS/FO

MT

0.42

0.42

HSD

KL

493

526

Total Amount

Rs. Cr

2.93

4.03

Average cost of fuel per Kg

Rs./kg

72.45

93.28

Average cost of generation

Rs./kwh

102.95

193.97

Unit generated per unit of fuel (LSHS/FO/HSD)

kwh/kg

0.70

0.48

CPP - Units generated from Coal

Own Generation Units (From Coal)

Million Kwh

3,633

3,693

Quantity Consumed

Coal

MT

17,42,116

17,84,862

LDO

KL

300

352

Total Amount

Rs. Cr

1,456.34

1359.91

Average cost per Kg (Coal)

Rs. /kg

8.36

7.62

Average cost per Kg (LDO)

Rs./kg

56.93

57.96

Average cost of generation

Rs./kwh

4.65

4.21

Unit generated per unit of fuel (Coal)

kwh/kg

2.27

2.26

B) FUEL CONSUMPTION FOR METAL PRODUCTION

(a) L.P.G./Propane

Quantity

Million Kg

3.70

5.61

Total Amount

Rs. Cr

17.27

23.17

Average cost per Kg

Rs.//Kg

46.69

41.27

(b) L.D.O./LSHS/FO

Quantity

KL

29,612

19,000

Total Amount

Rs. Cr

146.06

66.78

Average cost per Ltr

Rs/Ltr

49.32

35.15

(c) Coal for Steam & Others

Quantity

MT

26,250

26,424

Total Amount

Rs. Cr

22.61

20.03

Average cost per MT

Rs./MT

8,612

7,580

(d) Met Coke & Coke breez

Quantity

MT

99,819

1,34,822

Total Amount

Rs. Cr

277.37

353.69

Average cost per MT

Rs./MT

27,787

26,234

CERTIFICATE OF COMPLIANCE WITH THE CODE OF CONDUCT POLICY

As provided under clause 17 (5) (a) of the SEBI (LODR) Regulation 2015, all Board Members and the Senior Management personnel have confirmed compliance with the Business Ethics and Code of Conduct for the year ended on March 31, 2019.

For Hindustan Zinc Limited
Sunil Duggal
CEO & Whole-time Director Camp: London
Date: May 02, 2019

FORM NO. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED MARCH 31, 2019

To,

The Members,

Hindustan Zinc Limited

Yashad Bhavan,

Yashadgarh,

Udaipur, Rajasthan - 313004

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate governance practices by Hindustan Zinc Limited

(hereinafter called "the Company"). Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.

Based on our verification of the Company''s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on March 31, 2019 complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the Financial Year ended on March 31, 2019 according to the provisions of:

(i) The Companies Act, 2013 (the "Act") and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 ("SCRA'') and the rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder to the extent of Regulation 76 of Securities and Exchange Board of India (Depositories and Participants) Regulations, 2018;

(iv) Foreign Exchange Management Act, 1999 and the rules and regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (''SEBI Act''):-

(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018;

(d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014;Not Applicable

(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; Not Applicable

(f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client to the extent of securities issued;

(g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; Not Applicable

(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; Not Applicable

(vi) The Management has identified and confirmed the following laws as being specifically applicable to the Company:

1. The Mines Act, 1952 and Rules made thereunder, and

2. The Mines and Minerals (Development and Regulation) Act, 1957 and the Rules made thereunder.

We have also examined compliance with the applicable clauses/ Regulations of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs.

(ii) SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

During the period under review, the Company has substantially complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above except as mentioned hereinafter.

WE FURTHER REPORT THAT:

The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors except that with regard to the requirement of having at least one haIf of the Board of Directors comprising of Independent Directors in terms of Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company falls short by two Independent Director. The changes, if any, in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board/ Committee Meetings. Agenda and detailed notes on agenda were sent in advance (and at a shorter notice for which necessary approvals obtained, if any) and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the minutes of the meetings of the Board of Directors or Committee of the Board, as the case maybe.

We further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

We further report that during the audit period, no specific events / actions took place having a major bearing on the Company''s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc.

Place: Delhi

For Chandrasekaran Associates

Date: May 02, 2019

Company Secretaries

Shashikant Tiwari

Partner

Membership No. A28994

Certificate of Practice No. 13050

Note: This report is to be read with our letter of even date which is annexed as Annexure-A and forms an integral part of this report.

ANNEXURE-A

TO SECRETARIAL AUDIT REPORT

To,

The Members,

Hindustan Zinc Limited

Yashad Bhavan,

Yashadgarh,

Udaipur, Rajasthan -313004

1. Maintenance of secretarial record is the responsibility of the Management of the Company. Our responsibility is to express an opinion on these secretarial records based on our audit.

2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on the random test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our opinion.

3. We have not verified the correctness and appropriateness of financial records and Books of Accounts of the Company.

4. Whenever required, we have obtained the Management representation about the compliance of laws, rules and regulations and happening of events etc.

5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of Management. Our examination was limited to the verification of procedures on random test basis.

6. The Secretarial Audit report is neither an assurance as to the future viability of the Company nor of the efficacy or effectiveness with which the Management has conducted the affairs of the Company.

Place: Delhi

For Chandrasekaran Associates

Date: May 02, 2019

Company Secretaries

ShashikantTiwari

Partner

Membership No. A28994

Certificate of Practice No. 13050

Annexure 2

Particulars of contract or arrangements with related parties

FORM NO.AOC-2

FORM FOR DISCLOSURE OF PARTICULARS OF CONTRACTS/ARRANGEMENTS ENTERED INTO BY THE COMPANY WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013 INCLUDING CERTAIN ARM''S LENGTH TRANSACTIONS UNDER THIRD PROVISO THERETO

1. Details of contracts or arrangements or transactions not at arm''s length basis: NIL

(a) Names(s) of the related party and nature of relationship

(b) Nature of the contracts/arrangements/transactions

(c) Duration of the contracts/arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, If any

(e) Justification for entering into such contracts or arrangements or transactions

(f) Date(s) of approval by the board

(g) Amount paid as advances, if any:

(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188

2. Details of the material contracts or arrangements or transactions at arm''s length basis: NIL

(a) Names(s) of the related party and nature of relationship

(b) Nature of contracts/arrangements/transactions

(c) Duration of the contracts/arrangements/transactions

(d) Salient terms of the contracts or arrangements or transactions including the value, If any

(e) Date(s) of approval by the board

(f) Amount paid as advances, if any:

For and on behalf of the Board of Directors

Sunil Duggal

A.R. Narayanaswamy

CEO & Whole-time Director

Director

Camp: London

Place: Mumbai

Date: May 02, 2019

Note: In item 2, material is defined as greater than 10% of the turnover

annexure 3

FORM NO. MGT-9

EXTRACT OF ANNUAL RETURN as on March 31,2019

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS:

i) CIN

L27204RJ1966PLC001208

ii) Registration Date

January 10, 1966

iii) Name of the Company

Hindustan Zinc Limited

iv) Category /Sub-Category of the Company

Public Limited Company

v) Address of the Registered office and contact details

Yashad Bhawan, Udaipur - 313004 (Rajasthan)

Email id: - [email protected]

Phone No: - 0294-6604000

vi) Whether listed company Yes/No

Yes

vii) Name, Address and Contact details of Registrar and

Karvy Fintech Private Limited

Transfer Agent, if any

(Formerly known as KCPL Advisory Services P Ltd)

Karvy Selenium Tower B, Plot Nos. 31 & 32 | Financial

District Nanakramguda |Serilingampally Mandal

Hyderabad- 500032 | India

P: 91 40 67161591

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY

Mining and Smelting of Non-Ferrous metals (Zinc, Lead, Silver).

Wind energy All the business activities contributing 10% or more of the total turnover of the Company shall be stated: -

SI. No.

Name and Description of main products / services

NIC Code of the Product/ service

% to total turnover of the company

1

Zinc

27204

69.5%

2

Lead

27209

15.2%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES -

S.No.

Name and Address of the Company

CIN/GLN

Holding/ Subsidiary/ Associate

% of shares held

Applicable Section

1

Vedanta Limited

L13209GA1965PLC00044

HOLDING

64.92%

2(46)

IV. SHARE HOLDING PATTERN (EQUITY SHARE CAPITAL BREAKUP AS PERCENTAGE OF TOTAL EQUITY) (I) CATEGORY-WISE SHARE HOLDING

Category of Shareholders

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change during the year

Demat

Physical

Total

% of Total Shares

Demat

Physical

Total

% of Total Shares

A. Promoters

(1) Indian

a) Individual/HUF

-

-

-

-

-

b) Central Govt

-

-

-

-

-

c) State Govt (s)

-

-

-

-

d) Bodies Corp. - Vedanta Limited

2743154310

0

2743154310

64.92

2743154310

0

2743154310

64.92

0

e) Banks /Fl

-

-

-

-

f) Any Other

-

-

-

-

-

Sub-total (A) (1)

2743154310

0

2743154310

64.92

2743154310

0

2743154310

64.92

0

(2) Foreign

a) NRIs- Individuals

-

-

-

-

b) Other Individuals

-

-

-

-

c) Bodies Corp.

-

-

-

-

d) Banks/ Fl

-

-

-

-

e) Any Other

-

-

-

-

Sub-total (A) (2)

-

-

-

-

-

-

-

-

-

Total shareholding of Promoter (A) = (A)(l) (A) (2)

2743154310

0

2743154310

64.92

2743154310

0

2743154310

64.92

0

B. Public shareholding

1. Institutions

(a) Mutual Funds/ UTI

37304507

265000

37569507

0.89

13031140

265000

13296140

0.31

(-) 0.58

(b) Financial Institutions /Banks

1623381

45000

1668381

0.04

2060017

45000

2105017

0.05

0.01

(c) Central Government/ State Government(s)

1247950590

0

1247950590

29.54

1247950590

0

1247950590

29.54

-

(d) Venture Capital Funds

-

-

-

-

-

(e) Insurance Companies

24668104

0

24668104

0.58

87492060

0

87492060

2.07

1.49

(f) Foreign Institutional Investors

3338834

111000

3449834

0.08

1771758

111000

1882758

0.04

(-) 0.04

(g) Foreign Venture Capital Investors

-

-

-

-

-

(h) Alternate Investment Funds

876800

0

876800

0.02

-

-

(-) 0.02

(i) Any Other (specify)

(i-i) Central Government

1927464

0

1927464

0.05

2015181

0

2015181

0.05

-

(i-ii) Clearing Member

99297

0

99297

0.00

41006

0

41006

-

(i-iii) NBFC

8320

0

8320

0

10203

0

10203

-

(i-iv) HUF

1541374

0

1541374

0.04

1465708

0

1465708

0.03

(-) 0.01

Sub-Total (B)(1)

1319338671

421000

1319759671

31.24

1355837663

421000

1356258663

32.10

0.86

2. Non-Institutions

(a) Bodies Corporate

22925813

135000

23060813

0.55

19729167

127000

19856167

0.47

(-) 0.08

(b) Individuals

i) Individual shareholders holding nominal share capital up to Rs. 2 Lac

40983618

1606269

42589887

1.00

39720417

1472866

41193283

0.97

(-) 0.03

ii) Individual shareholders holding nominal share capital in excess of Rs 2 Lac

1921923

0

1921923

0.05

854870

0

854870

0.02

(-) 0.03

(c) Any Other (specify)

(c-i) Trust

79292

0

79292

0

86476

0

86476

0

0

(c-ii) NRI

1828152

690000

2518152

0.06

1633165

690000

2323165

0.05

(-) 0.01

(c-iii) NRI Company

-

-

-

-

(c-iv) Foreign Individual

100

0

100

0

100

0

100

(c-v) Foreign Corporate Bodies

92233912

0

92233912

2.18

61591026

0

61591026

1.46

(-) 0.72

(c-vi) IEPF

940

0

940

0

940

0

940

Sub-Total (B)(2)

159973750

2431269

162405019

3.84

123616161

2289866

125906027

2.98

(-) 0.86

Total Public Shareholding (B)= (B)(1) (B)(2)

1479312421

2852269

1482164690

35.08

1479453824

2710866

1482164690

35.08

-

C. Shares held by Custodians and against which Depository Receipts have been issued

GRAND TOTAL (A) (B) (C)

4222466731

2852269

4225319000

100.00

4222608134

2710866

4225319000

100

-

(II) SHAREHOLDING OF PROMOTERS

SI. No

Shareholder''s Name

Shareholding at the beginning of the year

Shareholding at the end of the year

% change in shareholding during the year

No. of Shares

% of total Shares of the company

% of Shares Pledge/ encumbered to total shares

No. of Shares

% of total Shares of the company

% of Shares Pledge/ encumbered to total shares

1

Vedanta Limited

2743154310

64.92

0

2743154310

64.92

0

0

Total

2743154310

64.92

0

2743154310

64.92

0

0

(Ill) CHANGE IN PROMOTERS'' SHAREHOLDING (PLEASE SPECIFY, IF THERE IS NO CHANGE)

SI. No

Particulars

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company

1

At the beginning of the year

2743154310

64.92

2743154310

64.92

2

Date wise Increase/Decrease in Promoters Shareholding during the year specifying the reasons for increase /decrease (e.g. allotment/ transfer/bonus/sweat equity etc.)

-No Change-

-No Change-

-No Change-

-No Change-

3

Attheend of the year

2743154310

64.92

2743154310

64.92

(IV) SHAREHOLDING PATTERN OF TOP TEN SHAREHOLDERS (OTHER THAN DIRECTORS, PROMOTERS AND HOLDERS OF GDRs AND ADRs):

SI. No

For Each of the Top 10 Shareholder''s

Shareholding at the beginning of the year

No. of shares

% of total shares of the company

At the beginning of the year (01.04.2018)

1

PRESIDENT OF INDIA

1247950590

29.54

2

LIFE INSURANCE CORPORATION OF INDIA

16870025

0.40

3

JANUS OVERSEAS FUND

8149485

0.19

4

INDIA OPPORTUNITIES III PTE. LIMITED

8024214

0.19

5

GENERAL INSURANCE CORPORATION OF INDIA

5800000

0.14

6

GOLDMAN SACHS INDIA LIMITED

5717222

0.14

7

GOLDMAN SACHS FUNDS-GOLDMAN SACHS GROWTH & EMERGING MARKETS BROAD EQUITY PORTFOLIO

4759052

0.11

8

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

4463950

0.11

9

VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS

4338093

0.10

10

INDIA CAPITAL FUND LIMITED

4050000

0.10

Net Increase/Decrease in shareholding during the year specifying the reasons for increase /decrease (e.g. allotment/ transfer/bonus/sweat equity etc.)

1

LIFE INSURANCE CORPORATION OF INDIA

60793999

1.44

2

JANUS OVERSEAS FUND

(-)8149485

(-) 0.19

3

INDIA OPPORTUNITIES III PTE. LIMITED

(-)8024214

(-) 0.19

4

GENERAL INSURANCE CORPORATION OF INDIA

200000

-

5

GOLDMAN SACHS INDIA LIMITED

(-)3149521

(-) 0.07

6

GOLDMAN SACHS FUNDS-GOLDMAN SACHS GROWTH & EMERGING MARKETS BROAD EQUITY PORTFOLIO

(-)4759052

(-) 0.11

7

HDFC STANDARD LIFE INSURANCE COMPANY LIMITED

(-)4463950

(-) 0.11

8

VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS

7020

-

9

INDIA CAPITAL FUND LIMITED

4000

-

10

PTC CABLES PRIVATE LTD

11267300

0.27

11

JANUS HENDERSON OVERSEAS FUND

8149485

0.19

12

UTI- EQUITY FUND

1590000

0.04

13

VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND

596822

0.01

14

JANUS HENDERSON OVERSEAS PORTFOLIO

3692019

0.09

Change in holding is due to purchase/ sale of shares

At the end of the year (or on the date of separation, if separated during the year) (31.03.2019)

1

PRESIDENT OF INDIA

1247950590

29.54

2

LIFE INSURANCE CORPORATION OF INDIA

77664024

1.84

3

PTC CABLES PRIVATE LTD

11267300

0.27

4

JANUS HENDERSON OVERSEAS FUND

8149485

0.19

5

GENERAL INSURANCE CORPORATION OF INDIA

6000000

0.14

6

VANGUARD EMERGING MARKETS STOCK INDEX FUND, A SERIES OF VANGUARD INTERNATIONAL EQUITY INDEX FUNDS

4345113

0.10

7

INDIA CAPITAL FUND LIMITED

4054000

0.10

8

UTI- EQUITY FUND

3963341

0.09

9

VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND

3744691

0.09

10

JANUS HENDERSON OVERSEAS PORTFOLIO

3692019

0.09

(V) SHAREHOLDING OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

SI. No

Particulars

Shareholding at the beginning of the year

Cumulative Shareholding during the year

For Each of the Directors and KMP

No. of shares

% of total shares of the company

No. of shares

% of total shares of the company

1

Mr. Arun L.Todarwal, Director

At the beginning of the year (01.04.2018)-

1500

0.00

-

Purchase during the year

500

0.00

2000

-

At the end of the year

-

2000

0.00

2

Mr. Rajendra Pandwal, Company Secretary

At the beginning of the year (01.04 .2018)-

25000

-

-

Purchase/Sale during the year

-

-

At the end of the year

-

25000

-

V. INDEBTEDNESS

INDEBTEDNESS OF THE COMPANY INCLUDING INTEREST OUTSTANDING/ACCRUED BUT NOT DUE FOR PAYMENT

Rs. in Crore

Particulars

Secured Loans excluding deposits

Unsecured Loans

Deposits

Total Indebtedness

Indebtedness at the beginning of the financial year

0

0

0

0

(01.04.2018)

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i ii iii)

0

0

0

0

Change in Indebtedness during the financial year

Addition

0

12000

0

12000

Reduction

0

10000

0

10000

Net Change

0

2000

0

2000

Indebtedness at the end of the financial year

0

2000

0

2000

(31.03.2019)

i) Principal Amount

ii) Interest due but not paid

iii) Interest accrued but not due

Total (i ii iii)

0

2000

0

2000

Note: 1. Interest is paid upfront on CP

2. Principal amount of CP is shown and not the CP issue proceeds, hence not matching with Balance Sheet numbers

3. On frequent basis overdraft is taken. As on 31.03.2019 amount of overdraft outstanding (unsecured) is Rs. 569.40 Crore

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. REMUNERATION TO MANAGING DIRECTOR, WHOLE-TIME DIRECTORS AND/OR MANAGER:

SI. No

Particulars of Remuneration

Name of MD/ WTD/ Manager

Total Amount (Rs.)

Mr. Sunil Duggal

1

Gross salary (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961

5,77,79,267

5,77,79,267

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) Income-tax Act, 1961

2

Stock Option

-

3

Sweat Equity

-

4

Commission

-

as % of profit

Others, specify

5

Others, please specify (ESOP of ultimate Holding Co.)

2,41,88,682

2,41,88,682

Total (A)

8,19,67,949

8,19,67,949

Ceiling as per the Act

10% of Profit after tax i.e. Rs. 796 Crore

B. REMUNERATION TO OTHER DIRECTORS:

SI. No

Particulars of Remuneration

Name of Director

Total Amount (Rs.)

1

Independent Directors

Mr. A. R. Narayanaswamy

Mr. Arun L Todarwal

Mr. Sudhir Kumar

Fee for attending Board / Committee meetings

5,50,000

4,25,000

2,00,000

11,75,000

Commission

15,00,000

15,00,000

9,98,630

39,98,630

Others, please specify

-

-

Total (1)

20,50,000

19,25,000

11,98,630

51,73,630

2

Other Non-Executive Directors

Mr. Navin Agarwal

Mr. Agnivesh Agarwal

Mrs. Kiran Agarwal

Fee for attending Board / Committee meetings

2,00,000

50,000

2,50,000

Commission

15,00,000

22,46,575

2,05,480

39,52,055

Others, please specify

-

-

Total (2)

17,00,000

22,96,575

2,05,480

42,02,055

Total (B)=(1 2)

37,50,000

42,21,575

14,04,110

93,75,685

Overall Ceiling as per the Act

1% of Profit after tax i.e. Rs. 79.6 crore

C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD/MANAGER/WTD

SI. No

Particulars of Remuneration

KEY MANAGERIAL PERSONNEL

Company Secretary Mr. R Pandwal

Chief Financial Officer Mr. Amitabh Gupta (Upto 21.01.2019)

Acting Chief Financial Officer Mr. Swayam Saurabh (w.e.f 21.01.2019)

Total

1

Gross salary

(a) Salary as per provisions contained in section 17(1) of the Income-taxAct, 1961

85,11,150

2,82,20,401

30,92,947

3,98,24,498

(b) Value of perquisites u/s 17(2) of the Income-tax Act, 1961

(c) Profits in lieu of salary under section 17(3) of the Income-tax Act, 1961

-

-

2

Stock Option

-

-

3

Sweat Equity

-

-

4

Commission

as % of profit

-

-

Others, specify. . .

-

-

5

Others, please specify (ESOP of ultimate Holding Co)

26,41,644

1,38,08,592

1,64,50,236

Total

1,11,52,794

4,20,28,993

30,92,947

5,62,74,734

VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:

Type

Section of the Companies Act

Brief Description

Details of Penalty / Punishment/ Compounding fees imposed

Authority [RD / NCLT/ Court]

Appeal made, if any (give details)

A. COMPANY

Penalty

Punishment

Compounding

B. DIRECTORS

-

Penalty

NIL

Punishment

Compounding

C. OTHER OFFICERS IN DEFAULT

Penalty

Punishment

Compounding

annexure 4

I) DISCLOSURE ON REMUNERATION OF MANAGERIAL PERSONNEL

(i) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:

Name of Director

Mr. Sunil Duggal

Mean

1:51

Median

1:83

ii) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Name

Annual Increment (%)

Mr. Sunil Duggal

55

Mr. Amitabh Gupta

11

Mr. Swayam Saurabh

NA

Mr. R Pandwal

(-)6

(iii) The percentage increase in the median remuneration of employees in the financial year: Mean 11.1%, Median 8.2% (iv) The number of permanent employees on the rolls of Company: 4,199 (including 24 expats and retainers)

(v) The explanation on the relationship between average increase in remuneration and Company performance: The Company achieved record volumes and profitability in FY 2017-18.

(vi) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company: Remuneration of the KMPs as % of the PAT for 2018-19 is 0.17%.

(vii) Variation in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies and in case of unlisted companies the variations in the net worth of the Company as at the close of the current financial year and previous financial year:

Date

Market Price in (Rs.)

EPS (Rs)

P/E ratio

Market Capitalization, Rs. Crore

% Change

March 31, 2018

300.95

21.95

13.71

1,27,161

March 31, 2019

276.40

18.83

14.68

1,16,788

(-) 8.16

Percentage increase over the last public offer price is not relevant as there has never been any public offer by the Company.

(viii) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last

financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average increase in the remuneration of all employees excluding KMPs: 10% Average increase in the remuneration of KMPs: 31%

Justification: KMP salary increases are decided based on the Company performance, inflation, prevailing industry trends and benchmarks

(ix) Comparison of remuneration of each of the Key Managerial Personnel against the performance of the Company; Each KMP is granted salary based on his qualification, experience, nature of job, industry benchmark, earlier salary and many other factors, comparison of one against the other is not feasible.

(x) The key parameters for any variable component of remuneration availed by the Directors: Only Whole-time Directors are given variable component, which is benchmarked against Company performance.

Note: The term remuneration includes value of the ESOP''s issued by the Holding company.

(xi) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: Nil

(xii) Affirmation that the remuneration is as per the remuneration policy of the Company: Yes

Note: For Director, only CEO & Whole-time Director, has been considered. All remuneration figures are for Executives only.

CEO compensation also considers financial returns (return on assets, equity, invested capital), total shareholder return and volume growth of integrated metal

annexure 5

ANNUAL REPORT ON THE CSR ACTIVITIES PURSUANT TO THE COMPANIES (CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES 2014.

A brief outline of the Company''s CSR policy, including overview of projects or programmes proposed to be undertaken and a reference to the web-link to the CSR policy and projects or programmes

Company''s vision on CSR is to enhance the quality of life and the economic well being of communities around our operations. For detailed policy, please refer our website www.hzlindia.com. For projects please refer to section on CSR under Sustainability (Business Overview section)

The composition of the CSR committee

Mr. A R Narayanaswamy - Chairman

Ms. Reena Sinha Puri

Mr. Sunil Duggal

Average net profit of the Company for last three financial years

Rs. 10,196.36 Crore (PBT, as prescribed)

Prescribed CSR Expenditure (two percent of the amount as in item 3 above)

Rs. 203.93 Crore

Details of CSR spent during the financial year

a) Total amount to be spent for the financial year

Rs. 203.93 Crore

b) Amount Spent

Rs. 130.20 Crore

c) Amount unspent, if any

Rs. 73.73 Crore

d) Manner in which the amount spent during the financial year is detailed below

Refer next page

In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the company shall provide the reason for not spending the amount in its Board report

We spent Rs. 130.20 Crore as CSR this year. This is a 41% increase over last year''s expenditure and we are continuing to scale up many of our programmes. Several new projects were also launched this year, which are now ramping up.

In addition to the above, the Company has provided Rs. 637.83 Crore as contribution to District Mineral Foundation which is also meant to be spent towards the well-being of persons and areas affected by mining operations.

A responsibility statement of the CSR Committee that the implementation and monitoring of the CSR policy is in compliance of CSR objectives and Policy of the Company

Yes. The CSR Committee of the Company hereby confirm that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and Policy of the Company.

Sunil Duggal

A. R. Narayanaswamy

CEO & Whole-time Director

Director and Chairman of CSR Committee

Camp: London

Place: Mumbai

Date: May 02, 2019

s.

No

CSR Project or Activity Identified

Sector in which the Project is covered

Project or Programme 1. Local area or otherwise 2. Specify the district

Amount Outlay (Rs. in Lac) (budget)

Amount spent (Rs. in Lac)

Cumulative spend till reporting period (Rs. in Lac)

Amount spent, director Implementing Agency

Name of implementing agency

Area

Name of District

Direct

Overheads

Total

1

Vedanta Bal Chetna Anganwadi & Child care Project (KHUSHI Project)

Education

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara & Ajmer

2,030

1,805

1,805

5,188

Implementing Agency

Seva mandir, Jatan Sansthan, CARE India, Gramin Evam Samajik Vikas Sanstha, Institute of Financial Management S Research

2

Brownfield & Greenfield Nandghar

Education

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara & Ajmer

2,950

1,694

1,694

2,237

Direct& Implementing Agency

Jatan Sansthan, Seva Mandir, Gramin Evam Samajik Vikas Sanstha, Care India

3

Shiksha Sambal Project

Education

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

400

420

420

1,027

Implementing Agency

Vidya Bhawan Society, Avanti Learning Centers Pvt Ltd, Educational Initiatives Pvt Ltd

4

Rural education Program & Company run School

Education

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

2,423

1,098

1,098

6,681

Direct& Implementing Agency

HZL, SUMEDHA, Dean Boy''s Fund, Udaipur; Muskaan Dream Creative Foundation, Resonance Eduventures Ltd, Vedanta Ringus PG Girls College, Round Table India Trust

5

Jeevan Tarang, Zinc ke Sang

Education

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

220

123

123

218

Implementing Agency

Noida Deaf Society, National Handicapped Finance and Development Corporation, Viklang Kalyan Samiti, Badhir Bal Kalyan Vikas Samiti, Badhit Bal Vikas Samiti, V-Shesh Learning Services Pvt Ltd

6

Health, Water & Sanitation including company run hospitals

Health, Water & Sanitation

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

1,930

1,122

1,122

6,200

Direct & Implementing Agency

HZL, Smile Foundation, Jimmedari Foundation, Dainik Bhaskar

7

Hospital Upgrada-tion

Health, Water & Sanitation

Local area

Udaipur

-

-

636

Direct

HZL

8

Vocational training for youth (HZL Mining Acad-emy)

Sustainable Livelihood

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

1,840

990

990

2,217

Implementing Agency

Skill Council for Mining Sector & Indian Institute Skill Development, Team Lease Skills University, Ambuja Cement Foundation

9

Agriculture Project (SAMADHAN Project)

Sustainable Livelihood

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

1,130

642

642

1,392

Implementing Agency

BAIF Institute of Sustainable Livelihood Development

10

Animal Husbandry project

Sustainable Livelihood

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara

10

284

Direct & Implementing Agency

BAIF, Government Animal Husbandry Dept.

11

Women Empowerment (SAKHI Project)

Women Empowerment

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara

943

540

540

1,295

Implementing Agency

Saheli Samiti & Manjari Foundation, Center for Study of Values (COS-V)

12

Rural Infrastructure

Infrastructure Projects

Local & Otherwise

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

1,432

944

944

7,360

Direct & lmplementing Agency

HZL, Ashadham Ashram Society, Waterlife India Pvt Ltd

13

Football Academy

Sports & Culture

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

1,500

1,546

1,546

2,416

Implementing partner

The Football Link, Sanjeev Gupte Architects, Young Monk Communications Pvt. Ltd

14

Ajmer Dargah-Swachh Bharat Abhiyaan

Sports & Culture

Local area

Ajmer

1,000

176

176

272

Implementing partner

Abhimanyu Dalai Architects, Sri Sri Rural Development Programme; N.B. Mercantile Co. Pvt. Ltd.

15

Sports & Culture

Sports & Culture

Local & Otherwise

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

532

267

267

1,914

Direct& Implementing agency

HZL, Maharana Kumbha Sangeet Parishad, Seher, Pandit Chaturlal Memorial Trust

16

Social Forestry/ Environment

Environment

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

493

258

258

767

Direct

HZL, Frontier Markets Consulting Pvt Ltd

17

Social Audit, Evaluation, CSR Communications, etc

Programme evaluation

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara, Ajmer and Uttrakhand

90

95

95

182

Direct

HZL, Taru Leading Edge, Subhash Mittal & Associates

18

STP- Maintenance and depreciation

Health,Water& Sanitation

Local area

Udaipur

900

840

-

840

3,577

Direct

HZL

19

Program Management

Programme & Administration

Local area

Udaipur, Rajsamand, Chittorgarh, Bhilwara and Ajmer

577

458

458

1,946

Direct

HZL, Adecco India Pvt Ltd, Shrushti Seva Samiti

20

Miscellneous initiatives

Local area

Udaipur

-

-

1,276

Direct

HZL

Total CSR

20,400

12,562

458

13,020

47,086


Mar 31, 2018

Dear Members,

The Directors are pleased to inform that Hindustan Zinc delivered strong performance from all our underground mines and many benchmarks in operational and financial performance were set during the year.

I. FINANCIAL PERFORMANCE

We share with you our 52nd Annual Report, together with the Audited Financial Statements for the year ended March 31, 2018.

FINANCIAL INFORMATION

Rs, in Crore

Particulars

FY 2018

FY 2017

Revenue from operations (net of Excise Duty)

22,084

17,273

Other Income

1,751

2,474

Profit before depreciation, interest and tax

14,263

12,213

Less: Interest

283

202

Less: Depreciation and amortization expense

1,483

1,811

Profit before tax

12,497

10,200

Less: Net tax expense

3,221

1,884

Net profit

9,276

8,316

Earnings per share, ''

21.95

19.68

REVENUE

The Company reported Rs,Revenue from operations'' (net of excise duty) of Rs, 22,084 Crore, an increase of 28% y-o-y driven primarily by higher metal volumes and prices partly offset by impact of rupee appreciation.

The ‘Other income'' was Rs, 1,751 Crore during the year compared to Rs, 2,474 Crore in the previous year on account of lower rate of return resulting from a broader decline in interest rates as well as lower investment corpus on account of special dividend payment.

PRODUCTION COST

Net zinc metal cost, without royalty, during the year was higher by 14% in INR (18% in USD) at Rs, 63,583 ($976) primarily due to 38% increase in imported coal prices and metcoke prices and about 15% increase in diesel prices as well as lower ore grades, partly offset by higher metal production.

OPERATING MARGIN

The above revenue and production cost resulted in profit before depreciation, interest and tax (PBDIT) of Rs, 14,263 Crore in FY 2018, up 17%.

NET PROFIT

The Company reported record net profit of Rs, 9,276 Crore, 12% higher than previous year on account for higher PBDIT and lower depreciation, partly offset by higher tax. With effect from April 1, 2017, the Company has changed its depreciation method and revised certain estimates relating to depreciation resulting in a lower charge for the full year by Rs, 321 Crore.

Net profit was also impacted by a one-time exceptional gain of Rs, 291 Crore related to the Supreme Court''s favorable judgment on District Mineral Foundation (DMF) levies leading to write back of excess DMF liability for the period January 12, 2015 to September 16, 2015. This was reduced by a one-time exceptional loss of Rs, 51 Crore related to gratuity provision for earlier years as per the ceiling enhancement announced towards end of the year.

EARNINGS PER SHARE (EPS)

The EPS for the year was Rs, 21.95 per share as compared to Rs, 19.68 per share in FY 2017.

DIvIDEND

On March 16, 2018, the Board of Directors declared second interim dividend of 300% i.e. Rs, 6 per share on equity share of Rs, 2. Together with the interim dividend of Rs, 2 (100%) paid in October 2017, the aggregate interim dividend paid during FY 2018 was Rs, 8 per share (400%) amounting to Rs, 4,068 Crore including DDT. In view of the second interim dividend, no final dividend is recommended.

CREDIT RATING AND LIQUIDITY

CRISIL has reaffirmed the Company''s long-term rating of AAA/Stable and short-term rating of A1 . The Company''s strong financial risk profile is driven by its sustained strong liquidity and conservative capital structure as well as its integrated operations, highly competitive cost position and high-grade reserves.

gross working capital

The Company follows a conservative investment policy and invests in high quality debt instruments. As on March 31, 2018, the Company''s cash and cash equivalents was Rs, 20,395 Crore invested in high quality debt instruments and the portfolio is rated “Tier -1” implying Highest Safety by CRISIL. During the year, the Company paid off Rs, 8,000 Crore of short term commercial paper raised in March 2017 to meet the special interim dividend funding requirement.

cash flows

Rs, in Crore

Particulars

FY 2018

FY 2017

Opening Cash*

23,972

35,272

Add: EBITDA**

12,376

9,734

Add: Net Interest Income

1,291

2,166

Less: Income Tax & Dividend

13,497

21,310

Less: Capital Account Payments

2,733

2,008

(Increase) / Decrease in Working Capital & Others

-1,014

118

Closing Cash*

20,395

23,972

(*) Includes Cash and Equivalents (refer Note 11 of the Audited Financial Statements) and Current Investments (refer Note 9 of the Audited Financial Statements)

(**) Earnings before Interest, Tax, Depreciation and Amortization expenses and Income on investments.

Gross working capital represented by inventory, trade receivables and other current assets decreased from Rs, 2,486 Crore to Rs, 1,956 Crore as at March 31, 2018 primarily due to reduction of ore, mined metal and stores inventory. The working capital cycle was 32 days in FY 2018 as compared to 52 days in FY 2017.

GROSS BLOcK

The gross block during the year increased from Rs, 20,975 Crore to Rs, 23,879 Crore. This was largely due to the ongoing mining projects and other sustaining capex.

capital employed

The total capital employed as at March 31, 2018 was Rs, 15,537 Crore, as compared to Rs, 14,740 Crore at the end of previous fiscal year. The increase is mainly due to addition in fixed assets as reduced by reduction in gross working capital and repayment of temporary borrowings.

contribution to the government TREASURY

The Company has contributed Rs, 9,301 Crore during FY 2018, in terms of royalties, taxes and dividends to the Government treasury on cash basis, aggregating to approximately 42% of the total revenue.

II. OPERATIONAL PERFORMANCE

production

Mined metal production for FY 2018 was 947 kt, 4% higher from a year ago and the highest ever. This was driven by higher ore production from underground mines, partly offset by lower open-cast production and lower ore grades. Performance from underground mines remained robust, attaining best ever ore and mined metal production during the year.

In FY 2018, the Company delivered record integrated refined zinc-lead metal production at 960kt, up 18% from a year ago, driven by higher smelter efficiency and uniform availability of mined metal throughout the year. Integrated zinc production was 791kt as compared to 672kt a year ago, an increase of 18%, while integrated saleable lead production was 168kt as compared to 139kt from a year ago, an increase of 21%.

During the year, integrated saleable silver production was a record 558 MT as compared to 453 MT a year ago, an increase of 23%, in line with higher lead production.

The Company generated record 4,155 million units of power in FY 2018 as compared to 3,345 million units in FY 2017. Total wind power generation was 414 million units as compared to 448 million units in FY 2017.

SALES

The refined zinc metal sales in the domestic market during the year was 515 kt, while export sales accounted for 278kt. The aggregate sales were higher by 13.9% than previous year. Lead metal sales in the domestic market were 139 kt, while export sales were 30 kt leading to higher aggregate sales of 22.1% from a year ago. The increase was in line with higher metal production during the year. Silver sales were 556 MT in FY 2018, all in the domestic market and 23.9% higher than previous year.

III. RESERVE AND RESOURCE (R&R)

During the year, the Company added 19.5 million MT to its R&R, prior to a depletion of 12.6 million MT during the period. Total R&R on March 31, 2018 were 411.3 million MT containing 35.7 million MT of zinc-lead metal and approximately 28,500 MT of silver.

IV. PROJECTS

The announced mining projects are progressing in line with the target of reaching 1.2 million MT per annum of mined metal capacity in FY 2020.

UPDATE ON ONGOING ExPANSION PROJECTS

The announced mining projects are progressing in line with the expectation of reaching 1.2 million tonnes per annum of mined metal capacity in FY 2020. Capital mine development was 38.5 km during the year, an increase of 65% y-o-y.

Rampura Agucha underground reached an ore production run-rate of 3.0 mtpa towards the end of the year. The main shaft hoisting and south ventilation shaft systems were commissioned during the year, while off-shaft development is on track. Production from the main shaft is expected to start as planned from Q3 FY 2019.

Sindesar Khurd mine achieved its target capacity of 5 million tonnes towards the end of the year and is gearing up for higher production. The main shaft was equipped during the year and winder installation work has begun. Production from the shaft is expected to start as scheduled in Q3 FY 2019. Civil and structure erection for the new mill is ongoing and expected to be commissioned in Q2 FY 2019.

Towards the end of the year, orders were placed for paste fill plants for both the Rampura Agucha and Sindesar Khurd mines.

Zawar mines achieved record ore production of 2.2 million tonnes during the year and production capacity has been ramped up to 3.0 mtpa. The existing mill capacity was debottlenecked to 2.7 mtpa. Civil construction work for the new mill is progressing well, with commissioning expected by Q4 FY 2019.

Ministry of Environment, Forest and Climate Change (MoEF) has given environmental clearance for the expansion of ore production at the Kayad mine from 1.0 to 1.2 mtpa. The Kayad project is now operating at its rated capacity of 1.2 mtpa.

The Fumer project at Chanderiya is progressing as scheduled and expected to commission in mid FY 2019.

next phase of expansion announced

Based on a long-term evaluation of assets and in consultation with global experts, the Company is evaluating plans to increase its mined metal capacity from 1.2 to 1.5 million MT per annum. The Board has approved the Phase I of this expansion which will increase mined metal from 1.20 to 1.35 million MT per annum through brownfield expansion of existing at an estimated capital expenditure of Rs, 4,500 Crore.

Phase I includes incremental ore production capacity of 0.5 million MT per annum each at Rampura Agucha, Sindesar Khurd and Rajpura Dariba mines bringing the total capacity to 5.0, 6.5 and 2.0 million MT per annum respectively. The capacity of Zawar mines will be increased by 1.2 to 5.7 million MT per annum. These projects will take total ore production capacity to 20.4 million MT per annum and mined metal capacity from 1.20 to 1.35 million MT per annum. Phase I will be completed in three years and will be done concurrently with the ongoing expansion which is now in its final stages.

V. OUTLOOK

Mined metal and refined zinc-lead production in FY 2019 is expected to be slightly higher than that of last year, filling the gap caused by completion of open-cast production. Silver production is expected to be in the range of 650 to 700 MT.

COP before royalty is projected to be in the range of USD 950 to 975 per MT in FY 2019. Tax rate is expected to trend up while quarterly depreciation expense is expected to be in the range of Rs, 350 to Rs, 400 Crore.

The project capex on mining and smelter expansions is expected to be approximately USD 400 million in FY 2019.

VI. HEALTH, SAFETY And ENVIRONMENT

The Company''s efforts towards building a safety culture and achieving its goal of zero harm has led to reduction in Lost Time Injury Frequency Rate by 10% for the year and by 69% over the last 5 years to the lowest ever at 0.27.

Despite our best efforts, there were regrettably two fatalities during the year at Chanderiya Fumer and Rampura Agucha underground mine project sites. Both the accidents were investigated and corrective actions have been taken to make workplace safe. Safety and sustainability initiatives have been discussed in detail in ‘Business Review'', which forms a part of this Annual Report.

VII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company''s CSR focuses on Education; Sustainable Livelihoods; Women''s Empowerment; Health, Water and Sanitation; Sports and Culture; Environment; and Community Development including Community Assets Creation.

During the year, the Company spent '' 92.18 Crore on CSR programs as compared to '' 49.40 Crore in previous year. For further details, refer Annexure 5 and ‘Business Review'' section of this Annual Report.

VIII. DIRECTORS

During the year under review, there has been no change in the Directors of the Company.

IX. MANAGEMENT DISCUSSION AND ANALYSIS

The Business Review section of this Annual Report gives a detailed account of the Company''s operations and the market in which it operates, including its initiatives in areas such as human resources, sustainability and risk management.

X. 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; Annual Report on CSR.

XI. 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 read with requirements set out under Schedule 3 to the Act, have been followed and there are no material departures in the same.

i i. The Directors have selected such accounting policies, applied them consistently and made judgments 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 have 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 have prepared the annual accounts on a ‘Going Concern'' basis.

v. The Directors have 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

XII. AUDITORS

The Company had appointed M/s. SR Batliboi & Co.

LLP, Chartered Accountants, as Statutory Auditors of the Company to conduct audit of Financial Statements for the year ended March 31, 2018. 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 given by Statutory Auditors and Secretarial Auditors (M/s. V. M. and Associates) is for not fulfilling the criteria of adequate number of Independent Directors which is expected to be complied soon.

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 V M & Associates, Company Secretaries as the Secretarial Auditors for conducting the Secretarial audit of the Company.

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.

XIII. 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.

XIV. 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

Sunil Duggal A. R. Narayanaswamy

CEO and Whole-time Director Director

Place: Mumbai

Date: April 30, 2018


Mar 31, 2017

Dear Members,

The Directors are pleased to inform that Hindustan Zinc achieved new operational performance benchmarks, highest ever profits and declared the highest ever dividend during the year.

I. FINANCIAL PERFORMANCE

We share with you our 51st Annual Report, together with the statement of Audited Financial Statements for the year ended March 31, 2017. The Company’s performance, grouped in accordance with the new accounting standards Ind-AS, is summarized below:

Financial Information (Rs. in Crore)

FY 2017

FY 2016

Total Gross Revenues (excluding Other Income)

18,798

15,463

Profit before depreciation, interest and tax

12,213

9,385

Less: Interest

202

17

Less: Depreciation and amortization expense

1,811

745

Profit before tax

10,200

8,623

Net tax expense/(benefit)

-1,884

-448

Profit for the year

8,316

8,175

Earnings per equity share, ‘

19.68

19.35

Total Revenue Including Other Income

The Company reported total gross revenue excluding other income of Rs.18,798 Crore, an increase of 21.6% compared to FY 2016. The increase was primarily on account of strong zinc, lead & silver prices and higher production, partly offset by lower zinc volumes, due to lower mined metal availability in first half.

The ‘Other income’ was Rs.2,474 Crore during the year, down 9.3% as compared to the previous year, on account of smaller investment corpus subsequent to Golden Jubilee dividend payout during the year, partly offset by higher rate of return.

Production Cost

Net zinc metal cost, without royalty, during the year, was higher by 5.8% in INR and 3.2% in USD terms, at Rs.55,679 ($ 830), compared with the previous year. The increase was on account of lower integrated production, higher coal & input commodity prices, lower average grades due to change in mining mix and lower by-product credit.

Operating margin

The above revenue and production cost resulted in profit before depreciation, interest and tax (PBDIT) of Rs.12,213 Crore in FY 2017, up 30.7%.

Net Profit

The Company reported record net profit of Rs.8,316 Crore for the year, marginally higher than previous year. The impact of higher PBDIT was partly offset by higher tax, higher depreciation and lower other income during the year.

Earnings Per Share (EPS)

The EPS for the year was Rs.19.68 per share as compared to Rs.19.35 per share in financial year 2015-16.

Dividend

On March 22, 2017, the Board of Directors declared a Special Interim dividend of 1375% i.e. Rs.27.50 per share on every share of Rs.2 each. This dividend entails an outflow of Rs.13,985 Crore, including dividend distribution tax (DDT). The Special dividend was in addition to the first interim dividend paid (Rs.1.90 per share or 95%) in October 2016 of Rs.966 Crore, including DDT. The total dividend outflow including DDT for FY 2017 was Rs.14,951 Crore (Rs.29.40 per share of Rs.2 or 1470%), against FY 2016 dividend of Rs.14,137 Crore (Rs.27.80 per share or 1390%). In view of the Special dividend paid in March 2017, no final dividend was recommended.

Credit Rating and Liquidity

CRISIL has reaffirmed the Company’s longterm rating of AAA/Stable and short-term rating of A1 . The Company’s strong financial risk profile is driven by its sustained strong liquidity and conservative capital structure as well as its integrated operations, highly competitive cost position and high-grade reserves.

The Company follows a conservative investment policy and invests in high quality debt instruments. As on March 31, 2017, net cash and cash equivalents were Rs.16,065 Crore, which excludes Rs.7,908 Crore of short term commercial paper raised to meet the special interim dividend fund requirement to avoid tax inefficiencies. The gross investments were Rs.23,972 Crore in high quality debt instruments including Rs.19,336 Crore in mutual funds and Rs.4,446 Crore in bonds.

Cash Flows (Rs. in Crore)

Particulars

FY 2017

FY 2016

Opening Cash*

35,272

30,898

Add: EBITDA1

9,734

6,667

Add: Net Interest Income

2,166

2,699

Less: Income Tax & Dividend

-21,310

-5,025

Less: Capital Account Payments

-2,008

-1,550

(Increase) / Decrease in Working Capital & Others

118

1,583

Closing Cash Balance

23,972

35,272

(*) Includes Cash & Equivalents (refer Note 11 of the Audited Financial Statements) and Current Investments (refer Note 9 of the Audited Financial Statements)

(**) Earnings before Interest, Tax, Depreciation and Amortization expenses and Income on investments

Gross Working Capital

Gross working capital represented by inventory, sundry debtors and loans & advances increased from Rs.1,639 Crore to Rs.2,486 Crore as at March 31, 2017 primarily due to accretion of ore and mined-metal inventory. The working capital cycle was 52 days in FY 2017 as compared to 40 days in FY 2016, calculated based on new Ind AS guidelines.

Gross Block

The gross block during the year increased from Rs.18,952 Crore to Rs.20,975 Crore. This was largely due to the on-going mining projects and other sustaining capex.

Capital Employed

The total capital employed as at March 31, 2017 was Rs.14,740 Crore, as compared to Rs.2,114 Crore at the end of previous fiscal year. The increase is mainly due to higher dividend liability last year and lower surplus cash this year

Contribution to the Exchequer

Your Company has contributed Rs.11,095 Crore during FY 2017, in terms of royalties, taxes and duties to the exchequer on cash basis.

II. OPERATIONAL PERFORMANCE

Production

Mined metal production was 9,06,984 MT up 2% from a year ago and the highest ever. The underground mines ramped up significantly during the year to achieve a substantial 44% y-o-y increase in ore production and 32% y-o-y increase in mined metal production.

Integrated refined zinc and saleable lead production this year were a record 6,70,078 MT and 1,39,009 MT, down 12% and 1% respectively. The total refined zinc was 6,71,988 MT, down 11% from a year ago, while total saleable lead production was 1,39,009 MT, which is lower by 4% compared to FY 2016. The decrease was on account of low availability of mined metal in first half due to the cyclical pattern of the Rampura Agucha open cast mine and as per plan.

During the year, production of integrated saleable silver increased by 7% to an all-time high of 453 MT on account of higher volume and grades from Sindesar Khurd mine.

Our total power generation in FY 2017 was 3,345 million units, down 3.5% from last year. Our wind power generation was up 8% at 448 million units.

Sales

The refined zinc metal sales in the domestic market during the year was 4,72,824 MT (inclusive of imported Zinc metal of 24,072 MT), while export sales accounted for 2,23,176 MT. The aggregate sales were lower by 8.5% than previous year. Lead metal sales in the domestic market were 1,17,313 MT, while export sales were 20,940 MT lower by 4.9% compared to previous year. This reduction was due to lower cyclical mine production in first half of the year resulting in lower metal volumes.

Silver sales were 449 MT in FY 2017, all in the domestic market and 5.4% higher than previous year.

III. RESERVE & RESOURCE (R&R)

Our exploration activity has consistently added to our reserve and resource base over the last several years. We have added 26.40 million MT to our R&R this year, prior to a depletion of 11.90 million MT during the period. Total R&R on March 31, 2017 were 404.40 million MT containing 36.09 million MT of zinc-lead metal and approximately 32 kT of silver.

IV. PROJECTS

The Company remains on track for achieving 1.2 mtpa mined metal capacity by FY 2020.

The transition to underground mining is progressing well as share of underground mined metal production increased from 40% in FY 2016 to 52% in FY 2017. Our ore production from underground mines increased by 44% compared to last year. Further, total mine development reached 66,545 meters during the year which is higher by 15% from a year ago.

During the year, Rampura Agucha underground mine produced 1.4 million MT of ore as compared with 0.2 million MT a year ago. The south ventilation shaft sinking was completed towards the end of the year, while the main shaft sinking reached its ultimate depth of 955 metres. Further, cold commissioning of both production & service winders was completed during the quarter as shaft equipping work continues to progress satisfactorily.

Sindesar Khurd mine achieved record ore production of 3.7 million MT of ore in this year against 2.97 million MT in the previous year. The winder foundation work for the shaft was completed while head gear erection is nearing completion. The new mill of 1.5 mtpa capacity was completed in record 14 months and is running smoothly. We plan to reach our targeted capacity of 4.5 million MT this year, ahead of schedule.

Zawar mine achieved record ore production of 1.8 million MT during the year. Environmental clearance of 4 mtpa ore production & beneficiation, along with other statutory permissions were received towards the end of the year. Zawar mill expansion and associated power up-gradation project are at advanced stages with completion planned in Q2 of FY 2018.

The recent fumer project, which has been undertaken to further improve profitability and metal recoveries from the Company’s hydro metallurgical plant, is progressing with scheduled completion by mid FY 2019.

The Company successfully commissioned 16 MW of captive solar farms in March 2017.

This project will help the Company partly meet its renewable power obligation and has been set up on waste lands.

V. OUTLOOK

Projects: The Company’s transition to underground mining is progressing well and we expect the share of mined metal to increase from 52% in FY 2017 to 80% in FY 2018. Both, Rampura Agucha and Sindesar Khurd shafts are on track for completion in FY 2019. The capex on the on-going mine expansion projects, fumer and smelter debottlenecking will be around $350-360 million in FY 2018.

Operations: In FY 2018, mined metal production is expected to be higher than FY 2017. Refined zinc-lead metal production will be around 950 kt, which will be evenly spread through the year. Silver production will be over 500 MT.

Financial: Dollar COP (excluding royalty) is expected to be marginally higher based on current levels of coal & input commodity prices. Treasury income is expected to be lower due to reduction in investment corpus and current softening in rates while tax rate for FY 2018 is expected to be slightly higher than MAT.

VI. HEALTH, SAFETY AND ENVIRONMENT (HSE)

The Company’s efforts towards reinforcing a positive safety culture have resulted in reduction of total Lost Time Injuries from 23 last year to 15 this year, while the Lost Time Injury Frequency Rate reduced to 0.30 from 0.50 a year ago. However, the Company is deeply anguished to report an unfortunate accident at the project site post mill commissioning, where a rare crane collapse caused four fatalities of contractor employees. The accident was fully investigated and corrective action was taken at all our sites.

HSE initiatives have been discussed in detail from page 45 to 51 in ‘Business Review’, which forms a part of this Annual Report.

VII. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Company’s CSR policy focuses on Education, Sustainable Livelihoods, Women’s Empowerment, Health, Water & Sanitation, Sports & Culture, Environment, and Community Development. Detailed policy is available on our website http://hzlindia.com/social_policy.aspx

During the year, we spent Rs.49.40 Crore on our CSR programs and also contributed Rs.50 Crore to Vedanta Foundation for setting-up Nandghars under our Bal Aanganwadi program. In addition, the Company has also provided Rs.543 Crore as contribution to District Mineral Foundation which will be utilized for the interest and benefit of the persons and areas affected by mining related operations, which is also quasi CSR. Details of the same are provided in Annexure 5.

For details on existing CSR projects, please refer to page 52 to 57 of ‘Business Review’, which forms a part of this Annual Report.

VIII. DIRECTORS

During the year under review, following changes took place in the Board of Directors of your Company. Ms. Reena Sinha Puri, Ms. Farida M Naik and Mr. Nikunja Bihari Dhal were appointed as Directors on the Board, while Mr. Akhilesh Joshi, Ms. Sujata Prasad, Mr. Sudhaker Shukla and Mr. Nikunja Bihari Dhal ceased to be directors during the year.

IX. MANAGEMENT DISCUSSION AND ANALYSIS

The Business Review section of this Annual Report gives a detailed account of your Company’s operations and the market in which it operates, including its initiatives in areas such as human resources, sustainability and risk management.

X. 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; Annual Report on CSR.

XI. 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 read with requirements set out under Schedule 3 to the act, have been followed and there are no material departures in the same.

ii. The Directors have selected such accounting policies, 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. The Directors have 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 have prepared the annual accounts on a ‘Going Concern’ basis.

v. The Directors have 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 have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively

XII. AUDITORS

The Company had appointed M/s. SR Batliboi & Co. LLP, Chartered Accountants, as Statutory Auditors of the Company to conduct audit of Financial Statements for the year ended March 31, 2017. 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 is for not fulfilling the criteria of adequate number of Independent Directors which is expected to be complied soon and not having a Woman Director for part of the year.

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 V M & Associates, Company Secretaries as the Secretarial Auditors for conducting the Secretarial audit of the Company.

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.

XIII. 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.

XIV. 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

Sunil Duggal A R Narayanaswamy

CEO & Whole-time Director Director

Place: Mumbai

Date: April 20, 2017


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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