ANNUAL REPORT 2015 - 16 We all have ZINC in our lives... Hindustan Zinc Limited Yashad Bhawan Udaipur-313004, Rajasthan Tel: +91 294 6604000-02 www.hzlindia.com Contents Corporate Overview Zinc in our lives 2 Business Review Highlights - FY 2016 9 Vision Industry Outlook 21 To be the world's largest and most admired Zinc, Lead and Silver Company Chairman's Message 16 Operations 27 Board of Directors 18 Mission Human Resources 35 Enhance stakeholder value through exploration, innovation, operational excellence Executive Committee 20 and sustainability Sustainability 37 Be the lowest cost producer Corporate Social Responsibility 45 Maintain market leadership and enhance customer delight Risk Management Framework 48 Values Statutory Reports Entrepreneurship Integrity Our people are our most important assets. We place utmost importance to Directors' Report 53 We actively encourage their development engaging ethically and transparently and support them in pursuing their goals. with all our stakeholders, taking Corporate Governance Report 78 accountability of our actions to Financial Statements Excellence maintain the highest standards of Business Responsibility Report 94 Our primary focus is delivering value of the professionalism and complying with Independent Auditors' Report 103 highest standard to our stakeholders. We international policies and are constantly motivated on improving our procedures. Balance Sheet costs and improving our quality of 110 production in each of our businesses Respect through a culture of best practice We lay consistent emphasis on Statement of Profit & Loss 111 benchmarking. Human Rights, respect the principle of free, prior, informed consent, Cash Flow Statement 112 Trust while our engagements with We actively foster a culture of mutual trust in stakeholders give local communities Notes 114 our interactions with our stakeholders and the opportunity to voice their encourage an open dialogue which ensures opinions and concerns. mutual respect. Care Innovation As we continue to grow, we are We embrace a conducive environment for committed to the triple bottom line encouraging innovation that leads to a zero of People, Planet and Prosperity to harm environment and exemplifying optimal create a sustainable future in a zero Forward-looking statements utilization of natural resources, improved harm environment for our In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and efficiencies and recoveries of by-products. communities. other statements - written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management's plans and assumptions. We have tried wherever possible to identify such statements by using words such as 'anticipate', 'estimate', 'expects', 'projects', 'intends', 'plans', 'believes', and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Disclaimer : The information related to the historical importance of zinc provided in this report has been obtained from various sources within the public domain. While the sources have been selected carefully, Hindustan Zinc does not take any responsibility of its completeness or accuracy. 1 Contents Corporate Overview Zinc in our lives 2 Business Review Highlights - FY 2016 9 Vision Industry Outlook 21 To be the world's largest and most admired Zinc, Lead and Silver Company Chairman's Message 16 Operations 27 Board of Directors 18 Mission Human Resources 35 Enhance stakeholder value through exploration, innovation, operational excellence Executive Committee 20 and sustainability Sustainability 37 Be the lowest cost producer Corporate Social Responsibility 45 Maintain market leadership and enhance customer delight Risk Management Framework 48 Values Statutory Reports Entrepreneurship Integrity Our people are our most important assets. We place utmost importance to Directors' Report 53 We actively encourage their development engaging ethically and transparently and support them in pursuing their goals. with all our stakeholders, taking Corporate Governance Report 78 accountability of our actions to Financial Statements Excellence maintain the highest standards of Business Responsibility Report 94 Our primary focus is delivering value of the professionalism and complying with Independent Auditors' Report 103 highest standard to our stakeholders. We international policies and are constantly motivated on improving our procedures. Balance Sheet costs and improving our quality of 110 production in each of our businesses Respect through a culture of best practice We lay consistent emphasis on Statement of Profit & Loss 111 benchmarking. Human Rights, respect the principle of free, prior, informed consent, Cash Flow Statement 112 Trust while our engagements with We actively foster a culture of mutual trust in stakeholders give local communities Notes 114 our interactions with our stakeholders and the opportunity to voice their encourage an open dialogue which ensures opinions and concerns. mutual respect. Care Innovation As we continue to grow, we are We embrace a conducive environment for committed to the triple bottom line encouraging innovation that leads to a zero of People, Planet and Prosperity to harm environment and exemplifying optimal create a sustainable future in a zero Forward-looking statements utilization of natural resources, improved harm environment for our In this Annual Report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take investment decisions. This report and efficiencies and recoveries of by-products. communities. other statements - written and oral – that we periodically make contain forward-looking statements that set out anticipated results based on the management's plans and assumptions. We have tried wherever possible to identify such statements by using words such as 'anticipate', 'estimate', 'expects', 'projects', 'intends', 'plans', 'believes', and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in assumptions. The achievements of results are subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated, or projected. Readers should keep this in mind. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Disclaimer : The information related to the historical importance of zinc provided in this report has been obtained from various sources within the public domain. While the sources have been selected carefully, Hindustan Zinc does not take any responsibility of its completeness or accuracy. 1 ZINC in our history ZINC in India an age-old relationship reference in vedic era The importance of zinc has been known to India since ancient times. Standard textbooks of Ayurveda, written by ‘rishis’ of Vedic era recommend ‘Jasada bhasma’ a zinc based preparation, as the treatment of choice for diabetes. Modern medicine also recognizes the curative properties of zinc. Long before being identified as an element, Zinc was used for making brass and for medicinal purposes. Metallic zinc and zinc oxide were produced in India sometime between the 11th and 14th centuries and in China in the 17th century. Andreas Marggraf, a German chemist is credited with the discovery of pure metallic zinc who isolated the element in 1746. 2 3 ZINC in our history ZINC in India an age-old relationship reference in vedic era The importance of zinc has been known to India since ancient times. Standard textbooks of Ayurveda, written by ‘rishis’ of Vedic era recommend ‘Jasada bhasma’ a zinc based preparation, as the treatment of choice for diabetes. Modern medicine also recognizes the curative properties of zinc. Long before being identified as an element, Zinc was used for making brass and for medicinal purposes. Metallic zinc and zinc oxide were produced in India sometime between the 11th and 14th centuries and in China in the 17th century. Andreas Marggraf, a German chemist is credited with the discovery of pure metallic zinc who isolated the element in 1746. 2 3 We all have ZINC in our lives... HISTORY says it all… 8th known metal to mankind 4th most consumed metal There is recorded evidence showing that even before zinc was officially recognized as an individual element, people knew of brass, which is made by mixing copper and zinc. Some records show the presence of brass in West Asia prior to 1,000 BC. According to the International Zinc Association, evidence of the use of copper