42nd Annual Report 2007-08

Hindustan Zinc Limited
42ND ANNUAL REPORT 2007-08
Hindustan Zinc, a saga of exemplary growth with an outstanding performance on sustainable development, is the Worlds second largest integrated zinc producer with a mining and metals capacity of 754,000 tonnes per annum.
ENDURING VALUE THROUGH VALUES
OVERVIEw
01 02 04 06 08 HIgHLIgHTS HINDUSTAN ZINC AT A gLANCE OUR gROWTH HISTORy CHAIRMANS STATEMENT ENDURINg VALUE THROUgH VALUES
BUSINESS REVIEw
10 12 14 18 20 KEy PERfORMANCE INDICATORS ZINC DEMAND AND MARKETS LEAD DEMAND AND MARKETS ExPLORATION OPERATIONAL PERfORMANCE 20 MININg 24 SMELTINg PROjECTS HUMAN RESOURCES AND INfORMATION TECHNOLOgy fINANCIAL PERfORMANCE
26 28 30
SUSTAINABILITy
34 SUSTAINAbLE DEVELOPMENT
GOVERNANcE
46 48 49 52 53 54 55 63 67 bOARD Of DIRECTORS CORPORATE INfORMATION DIRECTORS REPORT ANNExURE 1 fORM A CERTIfICATE Of COMPLIANCE WITH THE CODE Of CONDUCT POLICy CORPORATE gOVERNANCE REPORT ADDITIONAL SHAREHOLDER INfORMATION CERTIfICATION by CHIEf ExECUTIVE OffICER AND CHIEf fINANCIAL OffICER Of THE COMPANy AUDITORS CERTIfICATE AUDITORS REPORT ANNExURE TO THE AUDITORS REPORT
68 69 70
FINANcIALS
bALANCE SHEET PROfIT AND LOSS ACCOUNT CASH fLOW STATEMENT SCHEDULE ANNExED TO AND fORMINg PART Of THE ACCOUNTS 103 bALANCE SHEET AbSTRACT AND COMPANyS gENERAL bUSINESS PROfILE 104 fINANCIAL HIgHLIgHTS 72 73 74 75
overview
highlights
Another year of excellent performance for Hindustan Zinc Revenues of Rs 7,878 crores driven by higher volumes in both Zinc and Lead. PBDIT of Rs 6,231 crores driven by excellent cost performance EPS of Rs 104.04 per share Stable operating costs despite industry-wide pressures Continues to deliver projects ahead of schedule and within budget in a challenging industry environment Strong balance sheet with shareholders fund base of Rs 11,848 crores ROCE of 50.7% Total dividend recommended at Rs 5.00 per share Growth projects Rs 3,600 crores of near term growth projects under implementation Actions on ground to cross 1 million tonnes of metal production capacity
HINDUSTAN ZINC LIMITED
ANNUAL REPORT 2007-08
01
hiNDUstAN ZiNC At A glANCe

MINING OPERATIONS
1. rAMPUrA AgUChA MiNe
2. siNDesAr KhUrD MiNe
Ore Produced in FY 2008: 4,068,215 tonnes Type of Mine: Open Cast Reserves: 63.56 million tonnes Resources: 43.77 million tonnes Average Reserves Grade: Zinc 12.97% Lead 1.94% Ore Production Capacity: 5.00 million tonnes per annum
3. rAjPUrA DAribA MiNe
Ore Produced in FY 2008: 295,200 tonnes Type of Mine: Underground Reserves: 1.96 million tonnes Resources: 35.31 million tonnes Average Reserves Grade: Zinc 5.32% Lead 2.08% Ore Production Capacity: 0.30 million tonnes per annum
4. ZAwAr MiNes
SMELTING OPERATIONS
5. ChANDeriyA sMelter CoMPlex
POWER OPERATIONS
5. ChANDeriyA sMelter CoMPlex
Production FY 2008: Capacity:

6. DebAri ZiNC sMelter
293,541 tonnes of Zinc 58,247 tonnes of Lead 525,000 tonnes of Zinc 85,000 tonnes of Lead 78,511 tonnes of Zinc 88,000 tonnes Zinc 54,271 tonnes of Zinc 56,000 tonnes of Zinc
Type: Capacity: Type: Capacity: Type: Capacity:
Coal based captive power plant 234 MW Wind energy farms 88.8 MW Wind energy farms 18.4 MW
8. sAMANA wiND Power ProjeCt

7. viZAg ZiNC sMelter
9. gADAg wiND Power ProjeCt
1. 2. 3. 4. 5. 6. 7. 8. 9.
Rampura Agucha Mine Sindesar Khurd Mine Rajpura Dariba Mine Zawar Mine Chanderiya Smelter Complex Debari Zinc Smelter Vizag Zinc Smelter Samana Wind Power Project Gadag Wind Power Project Smelting operations Power plants
02

overview
VISION
Be a world-class zinc company, creating value, leveraging mineral resources and related core competencies.
MISSION
Be a lowest cost zinc producer on a global scale, maintaining market leadership One million tonne zinc-lead metal capacity by 2010 B e innovative, customer oriented and eco-friendly, maximising stake-holder value
1 6 5 4 3 2
rAjAsthAN gUjArAt
8 7
ANDhrA PrADesh
KArNAtAKA
Note: map not to scale
03
oUr growth history

Driven by the capability of 6,359 employees, Hindustan Zinc Limited is the worlds second largest integrated zinc producer.
1966
Hindustan Zinc Limited was incorporated from erstwhile Metal Corporation of India on 10 January 1966
2004
35,000 tonnes of zinc debottlenecking completed at Chanderiya Smelter Complex
1991
Chanderiya Pyo-metallurgical Lead Zinc Smelter and Rampura Agucha Mine began production
2005
Commissioned 170,000 tonnes per annum of Hydrometallurgical Zinc Smelter (Hydro I) at Chanderiya Smelter Complex Commissioned 2x77 MW Captive Power Plant at Chanderiya Smelter Complex Rampura Agucha Mine expansion from 2.30 million tonnes per annum to 3.75 million tonnes per annum
2002
Acquired by Sterlite Industries (India) Limited on 11 April 2002
2003
32,000 tonnes of zinc debottlenecking completed at Debari Zinc Smelter and Vizag Zinc Smelter Debottlenecking of Rampura Agucha Mine from 1.37 million tonnes per annum to 2.30 million tonnes per annum
2006
Commissioned 50,000 tonnes per annum of Ausmelt Lead Smelter at Chanderiya Smelter Complex Sindesar Khurd Mine began production with an initial capacity of 0.3 million tonnes per annum
UNrivAlleD growth
04
overview
2007
Commissioned 170,000 tonnes per annum of Hydrometallurgical Zinc Smelter (Hydro II) in a benchmark time of 20 months at Chanderiya Smelter Complex Commissioned 38.4 MW of Wind Energy Farms at Gujarat
2008
88,000 tonnes per annum zinc debottlenecking completed at Chanderiya Smelter Complex and Debari Zinc Smelter Rampura Agucha Mine expansion from 3.75 million tonnes per annum to 5.00 million tonnes per annum Commissioned additional 68.8 MW Wind Energy Farms making the Companys total Wind Energy capacity to 107.2 MW as on 31 March 2008
05
CHAIRMANS STATEMENT
2008 was another excellent year for Hindustan Zinc. A significant increase in volumes combined with productivity gains and stable operating costs delivered industry-leading growth and returns for our shareholders.
2008 HIGHLIGHTS
2008 was another excellent year for Hindustan Zinc. A significant increase in volumes combined with productivity gains and stable operating costs delivered industry-leading growth and returns for our shareholders. Our portfolio of existing assets and completed expansion projects continue to yield superior performance and we continue to make investments that drive sustainable long-term growth. We are emerging as an exceptional mining company with world class resources. We continue to offer a unique investment story by delivering our expansion projects ahead of schedule in a challenging environment. During the year metal in concentrate production was 629,019 tonnes, an increase of 10% over prior year production of 572,319 tonnes. Our FY 2008 finished zinc metal production grew to 426,323 tonnes, with lead production at 58,247 tonnes, an increase of 22.4% and 30.7%, respectively over FY 2007. The increase in zinc and lead metal production was primarily due to the output from our new Chanderiya Hydro II zinc smelter and increased output from our existing zinc and lead smelters. I am delighted to report that we achieved net sales of Rs. 7,878 crore in 2008 with accompanying PBDIT of Rs. 6,231 crore. Despite higher metal production and operating efficiencies, net sales were lower compared to the previous year on account of lower LME prices and an appreciation of the Indian
rupee vis--vis the US dollar. Profit After Taxes of Rs. 4,396 crores was marginally lower than Rs. 4,442 crores recorded in FY 2007 due to the aforementioned reasons.
2008 ACHIEVEMENTS
tonnes containing 27.5 million tonnes of zinc-lead metal. During the year, we successfully achieved LME registration of zinc metal from the Chanderiya Hydro I smelter and the lead metal from our Chanderiya Lead Smelter. The LME registration is recognised worldwide as one of the most demanding standards and signifies highest product quality, uniform physical characteristics and consistency of metal production. This underpins the capability and commitment of HZL to meet best quality standards.
GROWTH PROjECTS
We commissioned our new 170,000 tonne Chanderiya Hydro II zinc smelter at Chanderiya during the year, within a record time of 20 months and three months ahead of schedule. This smelter was also ramped up within one quarter of its commissioning. We added 80 MW of Captive Power at Chanderiya in FY 2008. Subsequent to the year end, we also successfully completed our 88,000 tonne zinc debottlenecking project at Chanderiya and Debari. With this, our total zinclead capacity is now 754,000 tonnes making us the second largest integrated zinc producer in the world. A total of 68.8 MW of wind power capacity was commissioned during the year, taking our total installed green wind energy capacity to 107.2 MW. Our exploration philosophy has been to replace every tonne of ore mined with at least one tonne of resource. I am pleased to report that our ongoing exploration activities have yielded significant success with an increase of 28.7 million tonnes to reserves and resources, prior to a depletion of 5.8 million tonnes in FY 2008. Contained zinc-lead metal has increased by 4.0 million tonnes, prior to a depletion of 0.6 million tonnes during the same period. Total reserves and resources at 31 March 2008 were 232.3 million
We also recently announced expansion projects that will increase our total integrated zinc-lead capacity to 1,065,000 tonnes per annum, making us the worlds largest integrated zinclead producer. This expansion is also expected to gradually increase our silver production from the current levels of 2.8 million ounce per annum to 16.1 million ounce per annum.
DIVIDEND
The Company paid an interim dividend of Rs.2.5 per share. To maintain consistency and continuity and keeping in view future fund requirements for expansion, your Board of Directors have recommended a final dividend of Rs.2.5 per share, resulting in a total dividend of Rs.5.0 per share for the year under review.
PEOPLE
Driving our achievements and success is our dedicated and talented workforce
06

overview
of 6,359 people. I would like to thank each one of them for their superior efforts this year. We remain committed to continue to provide a challenging and rewarding work environment for all our employees, and building a high performance organisation where careers are nurtured, capabilities are valued, leaders are developed from within and performance is rewarded.
SuSTAINAbLE DEVELOPMENT
villages situated around our operations have been declared as Model villages as per the social audit conducted by Operations Research Group (ORG). The tripartite partnership between the State Government of Rajasthan, Naandi Foundation and Hindustan Zinc to provide nutritious meals daily to nearly 200,000 children in Chittorgarh, Udaipur and Bhilwara districts of Rajasthan is delivering splendidly. The results are encouraging as this social investment is one of the main factors contributing to widening primary education and we intend to replicate this success story in the Rajsamand district of Rajasthan. I am pleased with our achievements in sustainable development in the year under review. Going forward, we aim to be an industry-leading company in this area and to work closely with all of our stakeholders.
AWARDS AND RECOGNITION
OuTLOOk
We see sustainable development as central to the way that we conduct our business and recognise that our obligations to society include ensuring that we manage our health, safety, environmental and social impacts, risks and opportunities effectively. I am pleased to report that our safety record measured in terms of Lost Time Injury Frequency Rate (LTIFR) reduced 44% from 5.46 in FY 2007 to 3.07 in FY 2008. During the year we undertook the Bal Chetna Anganwadi Project covering over 16,000 children in 400 anganwadi centres spread across four districts of Rajasthan. A Public-PrivatePartnership model has been created for the holistic development of under privileged children in the age group of three to six years, by providing them supplementary nutrition, health care, and joyful learning services. Our Model Village development initiative addresses the sustainable and inclusive growth of the communities where we operate 32
Global demand for metals continues to be strong and we are well placed to serve this growing demand. The industry faces challenges in terms of cost pressures and the ability to bring new capacities to production on time and within budget. We believe that we have an unrivalled track record in this challenging environment in our ability to deliver projects at global benchmark costs and aggressive timelines. We will continue to build upon our 2008 achievements responsibly and I eagerly look forward to reporting on our progress on various initiatives in 2009.
AGNIVESH AGARWAL CHAIRMAN
I am happy that our efforts are acknowledged by external agencies. During the year we won over 20 awards in the areas of operational excellence, governance, and health and safety, notable among them being the Dun & Bradstreet American Express Corporate Award 2007 for being the Best Company in the Non-Ferrous Metals Sector, the Golden Peacock Award for Excellence in Corporate Governance 2007 and the Golden Peacock Award for Corporate Social Responsibility 2007.
07
eNDUriNg vAlUe throUgh

oUr vAlUes
eNtrePreNeUrshiP
We foster an entrepreneurial spirit in our business and value the ability to foresee opportunities early in the cycle and act on them swiftly. Whether it is developing growth projects or it is debottlenecking the existing assets we ensure an entrepreneurial spirit in the heart of our employees.
growth
We continue to deliver industry-leading growth and generate significant value for our shareholders. Our growth is unique and we are confident that we will continue to deliver significant growth for shareholders in the future. We are not the only beneficiary of our growth. We see growth as a means to enhance the wealth and prosperity of the society at large.
exCelleNCe
Achieving excellence in all that we do is our way of life. We consistently deliver projects ahead of schedule at industry-leading costs of construction and within budget. We are one of the lowest cost zinc producers and our ongoing initiatives should help us to further sharpen our cost performance. Equally important to us is achieving excellence in health, safety and environment performance.
trUst
We value and cherish the trust reposed in us by our stakeholders. We recognize that we must responsibly deliver on the promises we make to earn that trust. We constantly strive to meet stakeholder expectations and try to deliver ahead of expectations. We always behave in a manner that is consistent and upholds our value system. Our desire and ability to act in a competent manner would help us to further build upon the trust of our stakeholders.
sUstAiNAbility
We pursue sustainability within the framework of well defined governance structures and policies and with the demonstrated commitment of our management and employees. Our sustainability team comprises of over 280 full time resources including field workers. With the use of appropriate technology and best in class practices, we always endeavour to minimize the damage to the environment, and we do not miss any opportunity to leave a positive mark. Our growth and business policy hinges around the philosophy of inclusive growth with a clear focus on neighbourhood communities.
08

overview
vAlUes
88,000 tonnes zinc capacity debottlenecking in Chanderiya and Debari, and new
roaster commissioned in April 2008
Metal Recovery initiatives through innovative ideas of our people Thousands of improvement projects voluntarily undertaken by our employees
including research on beneficial use of solid wastes
34% CAGR in revenue (five years) 61% CAGR in profits (five years) Rs 4,210 crores gross assets addition in last five years (including CWIP) Rs 3,600 crores expansion projects under implementation
Asian Power Plant of the Year Award (2007) by Asian Power, Singapore 170,000 tpa Chanderiya Hydro II zinc smelter commissioned in a benchmark time
of 20 months
184 kwh/tonne of cathode of specific power reduction in FY 2008 over previous year Exploration led 28.7 million tonnes increase in mineral resource in FY 2008 Several National and International Awards in the areas of Operational Excellence,
Human Resources, Environment, Safety, Quality and Corporate Social Responsibility.
Several Public Private Partnership social development projects implemented Proactive discussion with the policy makers in the areas of mining, safety,
environment and social development
Our ability to attract the talent and its retention
TERI Corporate Social Responsibility Award 2007 44% reduction in LTIFR in FY 2008 over the previous year 107.2 MW Wind Energy commissioned in Gujarat and Karnataka 5% and 4% reduction in power consumption per tonne of metal and ore over
previous year at smelters and mines respectively. previous year at smelters and mines respectively corporate social responsibility initiatives.
12% and 6% reduction in water consumption per tonne of metal and ore over More than 500,000 people positively benefited across 173 villages through our
09
Key PerforMANCe iNDiCAtors
STRATEGIC ObjECTIVE
kEY PERFORMANCE INDICATOR
Shareholder value
Revenue (net sales)
PBDIT
ROCE
EPS
Safety
LTIFR
Environment Corporate Social Responsibility People
10

bUsiNess review
DESCRIPTION
Hindustan Zincs main revenue sources comprise zinc and lead. Revenue (net sales) in FY 2008 was Rs. 7,878 crore against Rs. 8,560 crores in FY 2007 driven by highest ever zinc and lead production.
RESuLTS
NET SALES OF
Rs. 7,878crores
PBDIT
Profits before interest, taxes and depreciation (PBDIT) was Rs. 6,231 crore in FY 2008 against Rs. 6,639 crores in FY 2007. The PBDIT margin (PBDIT-to-total income) was 71%. Stable operating costs. Return on Capital Employed (ROCE or EBIT-to-capital employed) was 50.7% in FY 2008 against 84.98% in FY 2007.
Rs. 6,231crores
ROCE
Earnings per share (EPS) was Rs. 104.04 in 2007-08, versus Rs. 105.12 in the previous year.
Lost time injury frequency rate was reduced from 5.46 in 2006-07 to 3.07 in 2007-08.
50.7% 104.04 44%

EPS LTIFR
reduction over previous year
Continued efforts of the Company have resulted in the reduction of specific energy and water consumption year on year in smelters and mines. For more details please see page 38. HZL identified 59 villages lacking in basic amenities for transforming them into model villages. During the year, transformations of 32 villages into model villages were completed. For more details please see page 41. During the year 3,425 employees were trained clocking 6.24 average training man-days for executives. For more details please see page 28.
11
DeMANDs AND MArKets ZiNC
In terms of use of metallic elements, zinc ranks fourth after iron, aluminium and copper. Its major uses are: Galvanising: Zinc is one of the best forms of protection against corrosion, and is used extensively in building, construction, infrastructure, household appliances, automobiles, steel furniture, and many more. Zinc Oxide: The most widely used zinc compound, zinc oxide is used in the vulcanisation of rubber, as well as in ceramics, paints, animal feed, pharmaceuticals and other applications. A special grade of zinc oxide has long been used in photocopiers. Die Castings: Zinc is an ideal material for die casting and is extensively used in hardware, electrical equipment, automotive and electronic components. Rolled Zinc: Zinc sheets are used extensively in the building industry for roofing, flashing and weathering applications. These are also used in graphic art to make plates and blocks, as well as battery callouts and coinage. Alloys: Zinc is extensively used in making alloys, especially brass, which is an alloy of copper and zinc. Charts A and B show the first use and end use applications of zinc.
GLObAL MARkET: ZINC
economies and rising production of galvanised sheets. There was also strong zinc demand from Brazil and Russia, where the construction sector has been benefiting from higher government spends on infrastructure. Faster growth in demand from emerging markets more than offset a slowdown in the US, Japanese and European zinc demand. Global zinc mine production rose by 6% during 2007 to 11 million tonnes, on the back of increased production in China, Kazakhstan, India and Australia, and the starting of new mines in Peru, Bolivia, and Portugal. The largest increase in zinc metal output came from China, where refined zinc production grew by 17% to 3.7 million tonnes, or one-third of the worlds output. Refined zinc production also increased significantly in Russia, Mexico, Brazil and India. The market for zinc concentrates eased somewhat from the very tight levels seen in the previous three years, enabling the smelters to improve capacity utilisation and obtain higher TC. In 2008, global zinc consumption is expected to rise by 3.7% to 11.9 million tonnes, in response to the continuing strong demand arising out of Asia. Usage in China is expected to rise by another 10.4%, primarily due to major investments in infrastructure projects. Demand is also expected to increase in India, Japan, the Republic of Korea and Russia.
During 2007, global refined zinc consumption rose by 3% to 11.5 million tonnes, driven mainly by the rapid growth of the Chinese and Indian
12

bUsiNess review
In Europe, predicted rise in demand in Belgium, France, Poland, the Russian Federation and Spain will be partially offset by reductions in Germany and Italy, resulting in an overall increase of 0.9%. After falling by 11.8% in 2007, demand in the US is forecast to rise by 4.8% in 2008. The increased demand of 2008 will be met from higher output of established mines and the opening of new sites. However the newer mines are not coming into operations as quickly as originally envisaged, the marginal mines are poorer in metal content and, hence, carry greater cost per tonne of concentrate. As a result the demand supply of zinc might reach equilibrium sooner than forecasted and zinc prices are also expected to stabilise sooner. World output of refined zinc metal is forecast to rise by 8.3% to 12.1 million tonnes in 2008 thus maintaining a very narrow gap between metal demand and supply. The most significant increases are expected in India and China. Chart C gives the trend in average monthly LME zinc prices. It shows that while prices have come down from $4,405 in December 2006 to $2,511 in March 2008, the long-term trend is upward.
INDIAN MARkET: ZINC
Spurred by industrialisation and infrastructure demand, India has the potential to see high growth in zinc consumption. In 2007, Indian zinc demand rose strongly by 9.5% to 0.47 million tonnes, the increase in zinc demand is led by Indias fast growing galvanising sector which accounted for about 70% of the total zinc demand. For 2008-09, the rise in demand of zinc is expected to remain robust driven by realty growth, manufacturing sector and infrastructure.
13
DeMANDs AND MArKets CONTINUED leAD
The battery sector is the single largest consumer of lead, accounting for around three-quarters of demand. It can be sub-divided into the following groups: SLI (Starting-Lighting-Ignition) batteries, which currently account for around half of all lead demand. These are mainly used in cars and light vehicles, but are also found in other applications such as golf carts and boats. SLI battery demand in turn can be split into original equipment (OE) and replacement, with replacement demand outstripping OE demand by about 4:1 in mature markets. Industrial batteries, which currently consume approximately a quarter of all lead produced. This sector can be split roughly 50:50 into stationary and traction batteries. Stationary batteries are principally used in backup power supply systems; traction batteries are used for motive power in equipment such as forklift trucks and motorised wheelchairs. The remainder is used in non-battery applications. This comprises several small uses, which have proportionately declined over time as the battery sectors market share has increased. The second largest current end use of lead for non-battery applications, and accounting for approximately 8% of lead consumption, is in the chemical industry, in the form of lead-based pigments and other compounds. Principal markets are for cathode ray tubes used in television screens and computer monitors, and for PVC stabilisers.
14

bUsiNess review
GLObAL MARkET: LEAD
Global lead consumption rose by 3.1% to 8.2 million tonnes in 2007. It was the sixth consecutive year in which global refined lead consumption was above the 25-year trend growth of 1.8% per annum. In 2007, China showed the highest growth in the lead consumption, on the back of major increase in the countrys battery production. It also instituted a 10% export tax on refined lead in June 2007. Consequently, exports dropped from an average of 26,000 tonnes per month in the first half of 2007 to 13,000 tonnes per month in the second half reducing available metal for the rest of the world. While it is believed that growth in lead metal demand will be strong in 2008, supply will again play a pivotal part in the market. Global lead mine production increased by 2.7% to 3.3 million tonnes in 2007. Due to the recent increase in lead prices, mine production is expected to grow at a higher rate of 9.4% to 3.7 million tonnes in 2008, and then on to 4.03 million tonnes by 2010. Secondary refined lead output also increased to 3.6 million tonnes in 2007, and is expected to grow to about 3.7 million tonnes in 2008, roughly in line with the rise in scrap supplies. Refined lead recorded another year of deficit in 2007. In 2008 it is expected that the refined lead and concentrate markets will, at best, move into a very modest surplus one that could easily be wiped out by the closure or delay of one mine or refinery.
As Chart D shows, international price of lead rose steeply between June 2006 and October 2007 when it reached an all-time high of $3,720 per tonne.
INDIAN MARkET: LEAD
The Indian lead market is expected to grow from 0.28 million tonnes in 2007-08 to 0.31 million tonnes in 2008-09, with most of the growth coming from the automobile battery sector. If the automobile sector can maintain its impressive double-digit growth rates over the next few years, one can continue to expect strong growth in lead demand. It is expected that the demand for lead by the battery sector will grow from 0.25 million tonnes in 2007-08 to 0.275 million tonnes in 2008-09. The inverter industry, too, is expected to grow over the years. Rapid growth in
telecommunication and estimated power shortages over the next few years should boost the need for industrial and inverter batteries, and keep demand growing at over 15% per annum for the next three years.
15
In line with the Groups exploration philosophy to replace every tonne of ore mined with at least one tonne of resource and to ensure resource inventory of 17 20 years mine life, HZL is engaged in continuous exploration in and around its existing and new prospective tenements, with a team of 40 geologists. They employ the latest geophysical, geochemical and GIS technologies and high speed deep drilling equipment. The success of exploration has primarily been in the Sindesar Khurd and Rampura Agucha mines. In FY 2008, the drilling programme successfully increased the strike length, by 300 metres, to 1,600 metres averaging 5.8% zinc, 3.8% lead and 215 grams per tonne of silver at Sindesar Khurd. At Rampura Agucha, 28,000 metres of drilling in 32 holes were carried
out to outline mineralisation below a depth of 550 metres. Of these, 29 holes intersected ore widths with significant grades averaging 15.5% zinc and 2.0% lead. The Company has added 110.7 million tonnes of reserves and resources in the period of April 2003 to March 2008, gross of depletion of 22.1 million tonnes. In FY 2008 alone, Hindustan Zinc added fresh reserves and resources of 28.7 million tonnes, before depletion of 5.8 million tonnes. As on 31 March 2008, the total reserves and resources were 232.3 million tonnes, containing 27.5 million tonnes of contained zinc-lead metal. Exploration success has increased the mine life to over 20 years at expanded capacity of over 1 million tonnes per annum.
sUCCessfUl exPlorAtioN efforts

16
Panoramic view of Rampura Agucha Mine
bUsiNess review
17
exPlorAtioN
hiNDUstAN ZiNCs exPlorAtioN resUlts

As on 31 March 2008, the total reserves (proved and probable) and resources (measured and indicated as well as inferred), net of depletion in 2007-08, stood at 232.3 million tonnes, including 27.5 million tonnes of contained zinc-lead metal The Company has added 110.7 million tonnes of reserves and resources during the period April 2003 to March 2008, before depletion of 22.1 million tonnes In 2007-08 alone, Hindustan Zinc added fresh reserves and resources of 28.7 million tonnes, before depletion of 5.8 million tonnes containing 4.0 million tonnes of metal (zinc and lead)
The Companys objective is to become a 1 million tonnes metal producer by 2010. Exploration is a key component of this growth plan. Hindustan Zincs exploration team, comprising 40 welltrained geo-scientists, continues to expand the reserves and resource base in its existing operating areas and prospecting tenements. During 2007-08, exploration activities continued at an accelerated pace, especially at the Companys mines at Sindesar Khurd and Rampura Agucha. Chart E shows the substantial increase in drilling activity by Hindustan Zinc over the last couple of years.
In FY 2008, the Company drilled a total of 65,800 metres an increase of 55.6% over 2006-07. The drilling programme successfully increased the strike length at Sindesas Khurd 300 metres to 1,600 metres, averaging 5.8% zinc, 3.8% lead and 215 grams per tonne of silver. At Rampura Agucha, 28,000 metres of drilling in 32 holes were carried out to outline mineralisation below a depth of 550 metres. Of these, 29 holes intersected ore widths with significant grades averaging 15.5% zinc and 2% lead. Chart F gives the reserves and resources position of the Company
18

bUsiNess review
at the end of 2006-07 and 2007-08, net of depletion. The Companys combined reserve and resources position has increased by 22.9 million tonnes from 209.4 million tonnes as on 31 March 2007 to 232.3 million tonnes as on 31 March 2008. The combined reserves and resources at Rampura Agucha alone have been augmented to 107.3 million tonnes as on 31 March 2008 thus achieving a landmark crossing of 100 million tonnes.
Focused exploration at Sindesar Khurd has resulted in the resource base going up to 37 million tonnes making it the second largest ore body in Hindustan Zincs portfolio after Rampura Agucha. Exploration has established a good potential for outlining of resources in deeper extension of Rajpura Dariba mine. Test drilling has commenced in prospective areas in Zawar. There have been technological improvements and modernisation in database management, computing
facilities and ground geophysical surveys. Application of hyper-spectral remote sensing data for regional exploration is under implementation. 2008-09 will see the use of newer technology, such as remote sensing interpretation, airborne geophysical surveys and advanced geochemicalmineralogical investigations, this indeed will help us to further enhance our resources in near mine as well as in regional exploration.
ZINC AND LEAD MINE RESOuRCE AND RESERVE SuMMARY

Resource Measured and indicated million MT Zinc grade % Lead grade % Zinc grade % Lead grade % | Reserves Proved and probable reserves million MT Zinc grade % Lead grade %
Mine
Inferred million MT
Rampura Agucha Rajpura Dariba Zawar Kayar Sindesar Khurd Bamnia Kalan TOTAL
22.8 6.6 22.9 2.3 21.0 1.7 77.3
15.7 8.3 5.0 12.6 6.4 5.3 9.1
2.2 2.5 1.8 1.9 4.0 1.8 2.6
21.0 11.0 19.0 6.7 14.2 3.4 75.3
14.9 5.8 3.9 10.0 5.0 4.7 8.0
1.9 1.3 3.0 1.7 3.8 3.7 2.5
63.6 7.1 7.2 2.0 79.9
13.0 6.2 3.9 5.3 11.4
1.9 1.5 2.1 2.1 1.9
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oPerAtioNAl PerforMANCe
Hindustan Zinc is the second largest integrated producer of zinc in the world. Its main products are zinc and lead, besides sulphuric acid, cadmium and silver
TAbLE 1: MINING OPERATIONS, PRODuCTION: 2006-07 AND 2007-08

Ore mined (tonnes) Location Type of mine 2007-08 | 2006-07 Zinc concentrate (DMT) 2007-08 | 2006-07 Lead concentrate (DMT) 2007-08 2006-07
Rampura Agucha Rajpura Dariba Sindesar Khurd Zawar TOTAL

Note: DMT is Dry Metric Tonnes
Open Cast 4,068,215 3,748,840 914,917 Underground 518,049 512,634 42,213 Underground 295,200 66,441 24,022 Underground 901,635 812,000 54,676 5,783,099 5,139,915 1,035,828
851,089 43,859 5,785 46,654 947,386
74,874 11,284 12,422 27,175 125,755
69,905 10,042 2,168 25,219 107,334
Hindustan Zincs operations can be classified into mining and smelting. Currently, it has operating facilities at seven locations, of which four are mining operations, and the remaining three are smelting. Barring the smelting facility at Vishakhapatnam in Andhra Pradesh, all other facilities of the Company are in the state of
Rajasthan. Apart from Sindesar Khurd, which is a new mining site, the other six units are accredited with ISO 9001:2000 for quality, ISO 14001: 2004 for environment, and OSHAS 18000 for health and safety.
MINING
The Companys mining operations are located in Rampura Agucha, Rajpura Dariba, Sindesar Khurd and Zawar, all in Rajasthan. Rampura Agucha, an open cast zinc-lead mine, is located in Bhilwara district 225 km north of Udaipur, Rajasthan. It is worlds third largest open cast mine for zinc and lead, with a capacity of 5.0 million tonnes per annum after a recent expansion. It is also one of the lowest cost zinc mines in the world, and has a 5S certification and a four star rating from the British Safety Council. The other three mines, viz. Sindesar Khurd, Rajpura Dariba, and Zawar, are underground mines with an annual capacity of 0.3 million tonnes, 0.6 million tonnes and 1.2 million tonnes of ore respectively. Table 1 gives the overall production summary of the Companys mining operations during 2006-07 and 2007-08.
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During the year, the total quantity of ore mined by the Company increased by 12.5% from 5.1 million tonnes in 2006-07 to 5.8 million tonnes in 2007-08. Production of zinc concentrate increased by over 88,442 DMT from 947,386 DMT to 1,035,828 DMT during the same period. Hindustan Zinc is one of the most efficient zinc and lead producers in the world. Productivity of the mining operations has increased consistently in the last few years.
Mining productivity increased by 9.8% from 143 tonnes per person in 2006-07 to 154 tonnes per person in 2007-08. Between 2003-04 and 2007-08, mining productivity increased at a compounded annual growth rate (CAGR) of 12.5%. This rise in productivity has been complemented with substantial improvements in recovery rates in the last few years. Recovery of zinc in the mining operations has consistently increased from 88.7% in 2002-03 to 91.2% in 2007-08. Recovery of lead has improved from 64.4% to 68.8% over the same period
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The Chanderiya Hydro II zinc smelter achieved the distinction of fastest commissioning in the history of the zinc industry globally within 20 months of project ground breaking. The additional focus of this project was to achieve a DREAM RAMP UP which successfully achieved the smoothest ramp-up to rated capacity and quality within 10 days of the smelter start-up. HZL charted out Phase II of its expansion to increase capacity to 670,000tpa of metal by 2008. The key learnings from the earlier Phase I expansion were collated after several sessions of intense brainstorming and made available to the project team. A Commissioning Champion was nominated nearly one year in advance of the actual start up of the commissioning. The operating team was thoroughly trained and their knowledge enhanced through a structured On-The-Job
training. To make the whole process robust, the people were taken through a series of tests to enhance their understanding of the smelter operations. Mock situations were simulated with operators made to react to adverse situations and checked for adherence to standard operating procedures. In addition, over 50 operators and maintenance engineers were also trained overseas. A stringent process of cold commissioning with handover and takeover protocols was implemented between the projects and commissioning teams. Most important of all was the single unified voice across the entire team to make the Fastest Commissioning and Dream Ramp-Up happen the driving force behind the teams determination and enthusiasm.
the fAstest globAl

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View from Chanderiya II cell house control room
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sMelter CoMMissioNiNg
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SMELTING
Hindustan Zincs smelting facilities are located at Chanderiya and Debari in Rajasthan and Visakhapatnam in Andhra Pradesh. Chanderiya Smelter Complex with a capacity of 525,000 tonnes of zinc in the worlds largest single location zinc smelting complex. At the beginning of 2007-08, Hindustan Zinc had a smelting capacity of 496,000 tonnes. In FY 2008, it successfully added a second hydrometallurgical zinc smelter (Hydro II) at its Chanderiya plant in a record time of 20 months, with a capacity of 170,000 tonnes per annum. As a result, on 31 March 2008, the Companys metal production capacity had gone up to 666,000 tonnes per annum. Subsequent to the commissioning of 88,000 tonnes per annum zinc debottlenecking in April 2008, Hindustan Zincs metal capacity (Zinc and Lead) stands at 754,000 tonnes per annum. During 2007-08, Hindustan Zinc received the coveted London Metal
TAbLE 3: PRODuCTION OF METALS (TONNES)
Saleable metal 2007-08 | 2006-07
Exchange (LME) registration for zinc metal produced from its Hydro I smelter at Chanderiya under the brand of Hindustan Zinc SHG 99.995 and its lead Ingots under the brand of VEDANTA 99.99. Table 2 and Chart G give the details of capacities and production of the smelting operations.
TAbLE 2: CAPACITY OF METALS (TONNES)
Total capacity as on 31/3/08 31/3/07
Chanderiya Debari Vishakhapatnam TOTAL
530,000 80,000 56,000 666,000
360,000 80,000 56,000 496,000
Production of saleable metal has increased substantially in the last few years. During the year, saleable metal production grew by 23.3% from 392,868 tonnes in 2006-07 to 484,569 tonnes in 2007-08. This was driven by both zinc and lead, which increased at 22.4% and 30.7% respectively. Table 3 has the details.
Saleable zinc 2007-08
| 2006-07
Saleable lead 2007-08 2006-07
Chanderiya Debari
Vishakhapatnam TOTAL
54,271 484,570
351,788 78,511
50,107 392,868
268,408 74,353
54,271 426,323
293,541 78,511
50,107 348,316
223,855 74,353
58,247
58,247
44,552
44,552
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While increase in saleable metal output was driven by the increase in Hydro II facility at Chanderiya coming onstream in third quarter of FY 2008, production of the existing capacities at Chanderiya and other locations also contributed to this growth. During the year, production at Debari and Vishakhapatnam increased by 5.6% and 8.3% respectively. As in the case of mining, productivity of smelting operations has also increased significantly in the last few years. During 2007-08, productivity in smelting increased by 9% from 90 tonnes per person in 2006-07 to 98 tonnes per person in 2007-08. Apart from these improvements, the Company has also been successful in bringing down its consumption of energy and water. Moreover, with its emphasis on safety and better monitoring across its manufacturing locations, Hindustan Zinc has made its operations much safer with significant reductions in accidents.
uNIT COSTS
realisation of by-products which were offset by higher energy prices and general inflationary pressures. Royalties, which are LME-linked, were Rs 7,966 per tonne of zinc in FY 2008 compared with Rs 11,587 per tonne of zinc in FY 2007.
COAL
commence production by 2010-11, once operational, this project will reduce the cost of procuring coal.
MARkETING
Coal is one of the most important inputs that Hindustan Zinc procures from the market. During 2007-08, the Company consumed 630,265 tonnes of coal. Government of India allocated a coal block to a group of six consumers of coal; Hindustan Zinc is one among them, having a share of 31.5 million tonnes. A joint venture named Madanpur South Coal Company Limited has been formed to implement the project. Progress of this venture is on track, and it is expected to commence production by 201011. This project will reduce the cost of coal and enhance our long-term energy securities. Recognising the importance of securing its supply of coal, the Company had entered into a joint venture in 2006 called Madanpur South Coal Company Limited, which has coal reserves of 175 million tonnes. With a 21.8% interest, Hindustan Zinc has a share of 31.5 million tonnes in the coal block. Progress of this venture has been on track, and it is expected to
Hindustan Zinc has a dedicated team which services customers in India using an extensive network of sales depots across the country. These operations are managed through four offices in Mumbai, Kolkata, Delhi and Hyderabad. The domestic and exports marketing headquarters is in Mumbai. Apart from its presence in India, the Company is also a significant player in the export market. During 2007-08, Hindustan Zinc exported to around 26 countries in Europe, US, South East Asia, Middle East, China, Japan and in the SAARC region and 32.3% of the Companys revenues came from exports. During 2007-08, the Company strategically widened its customer base for sulphuric acid, by commencing exports. As a part of its logistics improvement initiative, the Company became the first company in Indian history to transport the sulphuric acid by rail rake. In terms of volume, sales of sulphuric acid increased by almost 7% from 610,263 tonnes in 2006-07 to 651,592 tonnes in 2007-08. The Company is actively using technology such as online auctions to improve efficiencies in marketing.
The Company succeeded in maintaining the stable cost of production of finished metal at the back of greater efficiencies in the operations. Unit costs of production in 2007-08 excluding royalties were stable at Rs. 27,625 per tonne of zinc compared with FY 2007, due to higher operational efficiencies, increase in volumes and better
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ProjeCts
Hindustan Zinc has a strong track record of efficient execution of projects, and in crashing timelines and budgets in the process.
growth Next stAge

The Company has recently announced a list of new projects in mining smelting and captive power plants, which will be made operational by 2010. These are: Mining: Expansion from 5.0 million tonnes per annum to 6.0 million tonnes per annum at Rampura Agucha; expansion from 0.3 million tonnes per annum to 1.5 million tonnes per annum at Sindesar Khurd; and a new mine with an initial capacity of 0.3 million tonnes per annum at Kayar in Rajasthan. Smelting: Set up a 210,000 tonnes per annum zinc hydrometallurgical plant and a 100,000 tonnes per annum lead plant at Rajpura Dariba. Captive Power: To meet the energy requirements for these operations, the Company will also add 2x80 MW captive power plants at Rajpura Dariba. Completion of these projects will take our annual mining capacity to more than 1 million tonnes (1,065,000 tonnes) per annum making Hindustan Zinc the worlds largest zinc producer by 2010, with fully integrated mining and captive power generation capabilities. In addition to the above, we also expect to progressively increase our silver production from the current levels of 2.8 million ounce per annum to a level of approximately over 16.1 million ounce per annum.
PROjECTS
Its success in project execution has to do with a set of interrelated factors. First, the core project team is both small and integrated, with each member having end-to-end ownership and accountability. Each project is divided into several packages and each package in its entirety is the responsibility of one person. Second, project planning and execution is based on robust monthly and rolling schedules. This allows greater visibility of each part of the project in the context of the overall execution. Third, the Company always uses reputable and established vendors and contractors for greater reliability and control over the execution. Most are repeat vendors. Thus, there is a built-in assurance of quality and timely delivery. In addition, it employs an appropriate mix of incentives to assist in the seamless execution of projects from one stage to another.
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The Company successfully completed the following projects: 170,000 tonnes per annum of second hydrometallurgical zinc smelter at Chanderiya (Hydro II) was commissioned with a capacity of 170,000 tonnes per annum in a record time of 20 months. This project achieved ramp-up to full capacity within the first quarter of its operations and is registering recovery rates of over 96%. The Company added an 80 MW thermal power plant for captive use at Chanderiya. During the year, it also commissioned 68.8 MW of wind power capacity in Gujarat and Karnataka, taking Hindustan Zincs wind energy capacity to 107.2 MW as on 31 March 2008. In the first quarter of FY 2009, the capacity of Rampur Agucha mine was increased from 3.75 million tonnes per annum to 5.0 million tonnes per annum. With this, the total ore production capacity of the Company has increased to 7.10 million tonnes per annum.
The Company also concluded the debottlenecking of 88,000 tonnes per annum of zinc smelting capacity 80,000 tonnes at Chanderiya and 8,000 tonnes at Debari in the first quarter of 2008-09. This has increased refined metal capacity to 754,000 tonnes per annum.
Other ongoing projects of Hindustan Zinc are an 80 MW captive power plant in Zawar, and 17 MW wind power capacity expansion at Gadag, in Karnataka both of which are on schedule.
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6.24 average executive training mandays. 78 employees were given exposure to the best in class practises across mines and smelters globally. Company runs a systematic ACT-UP (Accelerated Competence and Upgradation Programme), process to identify the talent and nurture them to take up the leadership position in future. During the year, under this programme 43 high performing individuals were identified as Stars of the Business who will be groomed to take up leadership positions. Besides the Production Incentive Scheme several reward schemes like CEO Reward, Achievement Awards are in place with an objective to give recognition and boost employee morale and motivation. Improvement Initiatives like Six Sigma, Quality Circles and High Impact Projects have increased the engagement and involvement of employees at the shop floor. The Company has also ensured higher employee engagement with the improvement in the quality of life at the workplace as well as at the townships. All our townships have facilities like schools, recreational clubs, gymnasium, medical facilities, shopping centres, playgrounds, landscape gardens, etc. Our Chanderiya School topped in the district.
HuMAN RESOuRCES
Hindustan Zinc is committed to building a high performing workforce where capabilities are valued, careers are built, leaders are developed from within and performance is cherished. Over the years, Hindustan Zincs robust HR policies and practises have built a dedicated and highly competent workforce which has enabled the Company in continuously improving its operational performance and in successfully executing the expansion projects. To meet our additional manpower required for expansions, during the year we recruited 190 professionals
including engineers, chartered accountants, MBAs and science graduates from the best institutes, of which 16% are women. Company has a systematic programme for induction and training for freshers. They are trained in prestigious institutes like IIT, BITS-Pilani, premier management institutes, Hoffincons Maintenance Institute Chennai, etc. to equip them with required skills. To enable our employees to enhance their competencies and upgrade their skills, the Company organises extensive training programmes covering all facets of professional discipline. During the year 3,425 employees were trained clocking
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During the year, HR has moved a step ahead and introduced several online HR systems making performance management a more transparent and objective process. Also, with the introduction of an online HR Manual, the Company policies, Code of Conduct and SOPs are more accessible. The Company believes in its ongoing two way communication with all the employees including the workers, Unions at various levels and it enjoys cordial relations with the Unions.
INFORMATION TECHNOLOGY (IT)
Since the implementation of SAP R/3, Hindustan Zinc has enhanced the system for better and stringent controls, as well as more effective reporting. Many critical areas such as transportation and logistics, exports, imports and key value drivers have been taken up for implementation. The Company has also recently upgraded SAP R/3 to SAP ECC 6.0 to improve the functionality of the system. Hindustan Zinc also uses IT in process control, mine planning and geological exploration. Some of the tools used are Data Mine, Geosoft, Mapinfo, Encom Discover, ArcGIS and Plant Information and Management System. The Company has a separate Human Resources Management System (HRMS) to assist the HR function. It also has a fully functional e-sales portal for its customers where they can place new orders and track past ones. Similarly, it has an e-procurement portal, where it conducts reverse auctions and through which vendors get information related to their deliveries and payments. Apart from these, the Company also has a Document and Policy Management System, Legal Case Management System, Project Information and Retrieval System, Note for Approval Workflow System, and a system for tracking customers complaints. Hindustan Zinc has invested to build in redundancy into the system so that a system failure at any point of the
chain does not affect the overall infrastructure. It has also built a disaster recovery site at a different seismic zone to ensure continuity of business in the case of any disaster at the primary site. Going forward, Hindustan Zinc plans to implement a Business Intelligence solution to convert raw data into integrated, meaningful and actionable intelligence that helps in streamlining processes further to reduce costs. This solution will enhance the analytical capabilities of the users and result in real time reporting for better decision making.
Operational efficiencies and plant and mining technology have been continuously upgraded over the years and to effectively monitor managerial effectiveness, the Company has adequately invested in setting up stateof-the-art IT facilities across its multiple locations. All manufacturing facilities, offices and depot locations of the Company are connected using hybrid technology namely, MPLS, leased line VPN, and VSATs with adequate failover links. Hindustan Zinc has an advanced ERP solution based on SAP R/3, which enables it in real time processing of transactions in the areas of finance and control, materials, production, maintenance, sales and distribution and quality management. During the year, the coverage of the ERP system was extended to the new Hydro II zinc smelter plant in Chanderiya.
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Table 4 presents the summary of Hindustan Zincs financial performance during the year 2007-08 and compares it with the previous year.
TAbLE 4: HINDuSTAN ZINCS AbRIDGED PROFIT AND LOSS STATEMENT (RS. CRORE)
2007-08 2006-07
Net Sales from operation Total income PBDIT PBIT PBT Income Tax PAT
7,878 8,729 6,231 6,009 5,985 1,589 4,396
8,560 8,791 6,638 6,482 6,454 2,012 4,442
FY 2008, an increase of 65.7% compared with FY 2007, by improving sales to major domestic customers thereby generating better contribution vis--vis exports. Consequently, exports were limited to 88,000 tonnes of zinc metal in FY 2008, down 39.3% compared with FY 2007. In addition to refined zinc metal, we also sold 232,000 dry metric tonnes of zinc concentrate and 65,000 dry metric tonnes of lead concentrate, in FY 2008. Despite 22.4% increase in saleable zinc and 30.7% increase in saleable lead production volumes and stable operating costs, PBDIT in FY 2008 was lower at Rs 6,231 crores compared with FY 2007 primarily due to the significant fall (about 17%) in LME zinc prices and the appreciation of the Indian rupee against the US dollar by more than 11%. However, the Company was able to contain these negative impacts through its volume growth, improvements in operational efficiencies and higher by-product credits and net profit was down only marginally from Rs.4,442 crore in FY 2007 to Rs.4,396 crore in FY 2008. The other income increased to Rs 851 crores in FY 2008 compared to the previous year of Rs.231 crore in FY 2007, mainly on account of higher level of investible surplus cash which increased from Rs 4,403 crores to Rs 6,632 crores in FY 2008, arising from strong operational cash flows. Further
the investments also generated higher rate of return. Other income also includes the write back for excess provision of royalty made earlier years as per court decision in favour of Company. Despite facing higher energy prices, Hindustan Zinc succeeded in maintaining the stable cost of production of finished metal at the back of greater efficiencies in the production processes. Unit costs of production in FY 2008 excluding royalties were stable at Rs. 27,625 per tonne of zinc compared with FY 2007, due to higher operational efficiencies, increase in volumes and better realisation of byproducts which were offset by higher energy prices and general inflationary pressures. Royalties, which are LMElinked, were Rs 7,966 per tonne of zinc in FY 2008 compared with Rs 11,587 per tonne of zinc in FY 2007. During the year, the effective tax rate was 25.8% compared to the previous years rate of 30.5% in FY 2007. We have taken a number of steps to improve our efficiencies in tax management. There are several tax incentives available to companies operating in India; we have made effective use of these tax benefits in our operations. In summary, the adverse impact of lower zinc LME prices and appreciation of rupee have been effectively countered by increasing the volumes,
The Company achieved record zinc and lead metal production in FY 2008 of 426,323 tonnes and 58,247 tonnes respectively, an increase of 22.4% and 30.7% compared with the previous year. The increase in production was primarily on account of the production from the newly commissioned Hydro II smelter and the improved performance from the existing smelters. Total mined metal production during FY 2008 was 629,019 tonnes, an increase of 10% compared with the corresponding previous year. We sold 338,000 tonnes of zinc metal in the domestic markets during
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maintaining stable operating costs, improving yield on investments, generating strong cash flows and effective tax management. The result of these actions is net profit has remained stable with Rs 4,396 crores corresponding to the previous year. We have taken a number of steps to minimise working capital used in the business and have primarily focused on gross working capital i.e. receivables and inventory. Effects of all theses measures have yielded substantial decrease in the operating cycle of receivables and inventory periods; these results can be seen in the Table 6.
TAbLE 6: ACTIVITY RATIOS
2007-08 2006-07
takes care of our long term requirement in the form of investments and capital expenditures and still having a large investible surplus. Thus Hindustan Zinc continues to be a Zero Debt Company. In summary we continue to have a strong balance sheet with shareholders fund equity of Rs 11,848 crores. Our continued focus on operational efficiencies and higher volumes enable us to operate at healthy margins and we generate strong cash flows thereby putting us in a robust liquidity position which can be leveraged effectively when a need arises.
RISkS AND uNCERTAINTIES
an owner at a senior level, and the impact to the Company if a risk materializes and its likelihood of crystallization is regularly updated.
RISk MANAGEMENT PRACTICE
Hindustan Zincs risk management process, approved at the highest level by its Board of Directors, is set up across the enterprise. It is designed to identify potential events that may affect the entity, manage such risks within clearly laid down parameters, and to provide reasonable assurance regarding the achievement of entities objectives. The Companys risk management framework includes: Hindustan Zincs risk management policy The risk organisation structure Roles and responsibilities for managing risks Guidelines on the risk assessment process Possible response to identified risks Templates for documenting and reporting risks Risk assessment is carried out in all key operations and projects of the Company. At the unit level, risks are the responsibility of the SBU heads/ operating managers or supervisors. Once a risk is identified, it is necessary to design and document control measures to mitigate/minimise the risk. These controls are checked
Receivables period Inventory period Operating cycle
20.6 75.7 96.2
23.7 84.6 108.4
We generated strong cash flows from operating activities of about Rs 4,000 crores, operating profit before working capital changes were lower by about Rs 1,000 crores, which have been largely offset by improved working capital management and efficient tax management resulting in lower cash generated from operating only of about Rs 400 crores. Our continued strong financial performance more than adequately
Our business is subject to a variety of risks and uncertainties which are no different from any other company in general and our competitors in particular. Such risks are the result of not only the business environment in which we operate but also of other factors over which we have little or no control. We have well documented and practiced risk management policies that act as an effective tool in mitigating various risks to which our business is exposed in the course of its dayto-day operations as well as in the strategic actions. Risks are identified through a formal risk management programme with active involvement of business managers and senior management personnel. Each significant risk has
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CONTINUED
internally and are reviewed by the Management Assurance System (MAS) a team that is not connected with the day-to-day management of the Company. Risk registers are kept and updated; and residual risks are measured on a regular basis. The Board of Directors are regularly apprised by the management of high level risks and what mitigating steps are being taken.
COMMODITY
As a general policy, we aim to sell our products at prevailing market prices. Hedging activity in commodities is undertaken on a strategic basis to a limited degree and is subject to strict limits laid down by our Board and is subject to strictly defined internal controls and monitoring mechanisms.
FOREIGN CuRRENCY
environmental damage at or to its mines, smelters, refineries or related facilities and also to communities that live near the mines and plants. Such incidents not only result in expensive litigation, damage claims and penalties but also cause loss of reputation. To mitigate such risks, Hindustan Zinc proactively uses state-of-the-art technologies to make its operations safe and environment friendly. Today, it is one of the most energy efficient companies in the world, and a leader in meeting safety and environmental norms in the industry. We accord very high priority to safety, health and environment matters.
OTHER RISkS
The revenues of Hindustan Zinc are directly linked with the global market for its products, viz. zinc and lead. Adverse fluctuation in prices of these commodities could have a significant impact on financial performance. However, the Company has been successful in containing the impact of lower LME prices for zinc by an increase in its volumes and more cost efficient operations which we continue to deliver in order to minimise the impact of adverse market fluctuation. The Company aims to achieve average LME prices for a month or a year; average realised prices may not necessarily reflect the LME price movements because of a variety of reasons including uneven sales during the year. Any fluctuation in the prices of metal that we produce and sell will have an immediate and direct impact upon the profitability of our business.
Hindustan Zincs exposure to the currency markets comes from its US dollar determined pricing of zinc and lead. Appreciation of the Indian rupee vis--vis the US dollar can affect revenues. To mitigate this risk foreign currency exposures are managed through the Companys hedging policy. This policy is reviewed periodically to ensure that the risk from fluctuating currency exchange rates is appropriately managed.
SAFETY, HEALTH AND ENVIRONMENT RISkS
Our operations, by its nature are subject to extensive health, safety and environmental legislation like anywhere else in the world. Significant changes in these regulations can have an adverse impact on the operations and financial performance of the Company. We are engaged in mining activities which are inherently hazardous and any accident or explosion may cause personal injury or death, property damage or
Apart from these, some other risks facing the Company include risks associated with completing new projects within timelines and budgets, especially given the current inflationary outlook and continued rise in global energy prices. Hindustan Zinc has a strong track record in completing its project ahead of schedules and within budget which in turn mitigates this risk to a greater extent. The Company regularly reviews these risks and takes appropriate steps to mitigate.
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INTERNAL CONTROL SYSTEMS
Hindustan Zinc has a strong and adequate internal audit and control systems commensurate with the size of its business to ensure that all transactions are authorised, recorded and reported correctly. Regular internal audit visits to the operations are undertaken to ensure the Companys high standards of internal control are maintained. These consist of comprehensive internal and statutory audits which are conducted by top international audit firms. Independence of the audit and compliance function is ensured by the direct reporting of the internal audits to the Audit Committee of the Board. Details on the composition and functions of the Audit Committee can be found in the chapter on Corporate Governance of the Annual Report.
CAuTIONARY STATEMENT
uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forwardlooking statements. We do not undertake to update our forwardlooking statements.
This report on Management Discussion and Analysis contains forward-looking statements that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as expects, anticipates, intends, plans, believes, seeks, should or will. Forwardlooking statements by their nature address matters that are, to different degrees,
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sUstAiNAble DeveloPMeNt
SuSTAINAbLE DEVELOPMENT COMMITTED TO IMPROVING PERFORMANCE
As a responsible corporate citizen Hindustan Zinc has a clear focus on sustainable development, it is a key element of our business and corporate philosophy. Our ability to maximize related opportunities and minimizing the risks is unique in itself and in turn creating value for our shareholders. Our approach towards managing environment is one of the best in class in our sector. We follow best practises in the management of environmental impact and related opportunities. Employing environment friendly technologies, optimizing the usage of energy and resources through recycling and reuse procedures, emissions are kept to an absolute
minimum, driving a number of initiatives to create value from waste and continuously striving to surpass the best industry standards. We continuously strive to uplift the economic wellbeing of our neighbourhood communities through various initiatives like sustainable livelihood, health care, and education. Invariably all specific initiatives follow identification of need in consultation with the beneficiaries. Hindustan Zinc works in the social development of the neighbourhood community through involving like minded partners like State Governments, NGOs, etc., to form a partnership in which the area of expertise is shared for effective implementation of the projects.
We see ourselves as a facilitator in addressing the problems of our local community, and strive to find a solution through consultative process with the local stakeholders. Our work towards sustainable development has been recognized through various local, national and international bodies.
HEALTH, SAFETY AND ENVIRONMENT (HSE)
Health and safety of Hindustan Zincs employees is of paramount importance to the Company. Preventing workplace accidents and controlling the incidence of occupational diseases is a top priority, and several technological and administrative controls have been put in place to achieve health, and environment objectives. These include: Safety reviews and audits by internal and external experts. Routine safety inspection. Employing environment friendly technologies. Incentives linked with safety performance. Compliance with all the legislations applicable. Safety score-card. Ensure all our employees including contract labours implement health and safety policies and procedures. Implementing learnings from near miss incidents/accidents/first aids. Safety stewardship: driving safety initiatives down the line.
HEALTH
In addition to various healthcare camps across 173 operational villages in the neighbourhood of its mines and plants (see the next section on Corporate
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Social Responsibility), Hindustan Zinc has six hospitals/dispensaries at its operating locations with all requisite facilities, and with qualified doctors and nurses being available round the clock. The Company also has tie-ups with reputed hospitals in the country to provide best health and medical facilities to the employees and their dependents.
SAFETY
The index used is the lost time injury frequency rate (LTIFR). It is the number of injuries involving loss of work time per million working hours. In April 2007, Hindustan Zinc set a target of reducing LTIFR by 20% at its operations. The actual performance: LTIFR reduced by 44% from 5.46 in 2006-07 to 3.07 in 2007-08. Despite the Companys continued focus on safety, there were, unfortunately, five fatalities all related to contract workers. This is a cause of concern. Hindustan Zinc continues to strengthen its focus on safety by imparting training programmes to all contracted personnel and better monitoring of safety related processes to minimise the risk of such incidents. To sensitise the workforce on health and safety issues, the Company conducts both introductory and specialised training. Safety training is compulsory for all new employees and refresher training is periodically carried out in the different facilities. In 2007-08, HSE training was given to 17,378 employees including contract workmen.
Hindustan Zinc will continue to learn and evolve its safety and occupational health systems according to its changing needs and best practises in the Industry. Considering the environment in which the Company is operating increased emphasis will now be placed on behavioural aspects of industrial safety.
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foCUsiNg oN sAfety
36
View from Chanderiya II leaching control room
sUstAiNAbility
Hindustan Zinc gives paramount importance to its employee safety, with a focus to reduce its LTIFR (Lost Time Injury Frequency Rate) year after year. Riding on the success story of HSE steward system and near miss reporting implemented last year, the safety culture is strengthened further with the introduction of exclusive contractor safety officers for large contractors and HZL appointed exclusive safety officer for pool of smaller contractors. We have also given thrust to vehicle/driving safety and initiated guidelines in this respect. These initiatives have promoted safe behaviour among contract workmen and reduced risks at our operations. All the efforts of implementation on safety performance have resulted in continuous reduction of the Companys LTIFR from 5.46 in FY 2007 to 3.07 in FY 2008, a reduction of 44% year- on-year.
In addition to this, to assess the safety performance, safety score cards and physical condition tour audit systems have been introduced this year. Safety score card is a point based system which assesses key performance indicators like LTIFR, TIFR, safety training, review mechanism, near misses recorded, etc to judge the safety performance of the unit on a monthly basis. Physical condition tour is a field audit giving thrust to assess the conditions in areas of general condition of workplace material handling, equipment health, hazard control, emergency systems and PPE compliance. In order to improve our safety performance continuously we have initiated external safety audits which have been carried out to assess the functionality, adequacy and adherence of safety management systems across all our operations to further improve.
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CONTINUED
ENVIRONMENT
Hindustan Zincs approach towards environmental sustainability is to optimise resource use, minimise the carbon footprint and conserve bio-diversity in and around its operating locations. The Company has a qualified team of environment professionals consisting of certified ISO auditors, environment engineers, scientists and ecologists. The team is governed by Hindustan Zincs HSE policy, and its functions are reviewed at various fora such as daily operations meetings, monthly review meetings at the plant and Company levels, and quarterly HSE Committee meetings at the group corporate level. All employees from top management to shop floor workmen are expected to champion the cause of environmental protection. 2007-08 has seen significant improvement in energy and water utilisation, reduction in emissions and adoption of environment friendly technologies across all the operations.
ENERGY CONSERVATION
DisAster MANAgeMeNt PrePAreDNess

The Company voluntarily decided to coordinate with the National Disaster Management Authority (NDMA) and the Disaster Management Institute (DMI), Bhopal, to conduct an on-site and off-site emergency mock exercise on 24 September 2007 at its Chanderiya Lead Zinc Smelter. The drill was aimed at testing the preparedness of plant management and the district administration to tackle emergency situations under three scenarios: 1. Leakage of propane and consequential fire and explosion. 2. Leakage of chlorine. 3. Leakage of sulphur dioxide (SO2) gas. The drill was the first of its kind in Rajasthan and was conducted in the full view of media, external observers, the district administration and the Chief Inspector of Factories, Government of Rajasthan. The three scenarios were enacted sequentially and the disaster control machinery of Hindustan Zinc was put to test in order to control them. A leakage from the propane tank was announced to the control room at 9.55 am. Immediately the sprinkler cooling system was triggered; rescue teams and ambulance arrived within five minutes; and the situation was under control in less than 10 minutes. The mock drill also included ferrying injured ones to the nearest hospital. This was followed by the announcement of leakage in the chlorine house. The neutralisation system was immediately activated and the control room directed medical and fire units to reach the incident point. A water curtain was formed and sprinklers were deployed to dissolve the chlorine gas. In the third scenario of SO2 leakage, evacuation plans for affected villages were enacted. Off-site emergency was declared by the District Collector and all road and railway traffic to and from Chittorgarh was stopped. The exercise got recognised as one of the best off-site exercise by the National Disaster Management Authority.
Hindustan Zincs total energy use during 2007-08 was 10.53 terra-joules (TJ). This included 1.87 terra-watthours (TWh) of electricity (equivalent to 6.7 TJ), most of which was produced in captive power plants. About 3.8 TJ of energy was produced and used at-source for the smelting operations.
38

sUstAiNAbility
Under Six-Sigma initiatives, dedicated teams have taken up a number of projects to reduce energy consumption. Their projects have resulted in a sustained decrease in specific energy consumption over the last three years. Charts I and J show the general trend in reduced energy use both in smelters and mines.
WATER CONSERVATION
Similarly, there has been a significant reduction in the usage of water in the Companys operations. As shown in Charts K and L, water consumption has come down significantly for both smelting and mining operations.
WIND ENERGY
Most of the power generated in India is produced by thermal power plants that are fuelled by the large coal reserves in the country. We run our captive power plants to meet the requirements of our mining and smelting operations. Our power plants operate at the optimal capacity compared to the standard power utility plants leading to more efficient power generation. In the previous financial year we reported the commissioning of 38.4 MW wind energy in Gujarat, and this year we added another 68.8 MW wind energy capacity making a total installed capacity of 107.2 MW as on 31 March 2008. Further to this we shall add another 17 MW of wind energy which is progressing as per schedule.
39
CONTINUED
Corporate Social Responsibility (CSR) is an integral part of Hindustan Zincs business philosophy. Its centrality has led the Company to undertake several projects aimed at achieving sustainable socio-economic development of the villages in the vicinity of its plants and mines. Our approach towards sustainability is to generate and establish socioeconomic wealth and creating opportunities of entrepreneurship, employment, and self-sustained businesses for the local community in which we operate. More importantly we see ourselves as a major facilitator in their socio-economic development. Through our various initiatives and a team of 150 qualified CSR professionals, specialists and fieldworkers, we are positively impacting the lives of 54,209 families across 173 operational villages in the neighbourhood of its mines and plants.
HEALTH AND HYGIENE
The health of our local communities where we are based is an important aspect of all of our activities, some of the projects undertaken during the year on health and hygiene of the local communities are: Over 56,000 villagers have benefited through general rural medical camps and specialised medical camps such as Child Health Camps, Pulse Polio Camps, Eye Care Camps and Family Planning Camps. Three super-specialised camps were organised in Chittorgarh and Udaipur districts, which focused on orthopaedics, skin, eye care, paediatrics and gynaecology.
Approximately 6,300 people were benefited through these medical camps. All 173 Operational Villages in the neighbourhood of mines and smelters of the Company were targeted for the National Pulse Polio drive, resulting in 75% coverage. This was done in collaboration with District Health Department and Primary Health Centres (PHCs). More than 200 family planning operations were conducted. In addition, vasectomy camps were conducted in collaboration with District Administration of Bhilwara, which benefited 700 people. An ambulance has been provided to Help Age India for conducting rural medical camps in the remote villages. Reproductive Tract Infection and Sexually Transmitted Infection cases have gone down from 18% to 6%. Supplying potable water in 27 villages around Debari, Visakhapatnam, Rajpura Dariba and Rampura Agucha. Approximately 500,000 litres of water per day is being supplied to nearby localities of Chittorgarh from the Chanderiya unit.
EDuCATION
We have developed a systematic structure to address and manage our responsibilities within the local communities where we operate. Special attention is also given to the area of education through various initiatives like:
30 child welfare centres are being run in joint collaboration with the Sterlite Foundation for 1,200 children aged between 2 and 5 years. All these children have been immunised. LEAD (Literacy for Empowerment and Development), a programme on literacy, was launched in five villages of Chittorgarh, targeting the age group of 18 and above. Within a year, these villages will be declared 100% literate. During the year we undertook the Bal Chetna Anganwadi Project covering 16,000 children in the age group 36 years in 400 anganwadi centres spread across four districts of Rajasthan. Computer education programmes have been initiated in 200 schools and 50 Literacy Centres at Udaipur, Rajsamand, Bhilwara and Chittorgarh Districts in collaboration with the District Education Department. A total of 1,000 computers have been installed. The project benefits some 48,000 students from Class 6 to 12. Under the Mid-Day Meal Scheme, the centralised kitchens in Chittorgarh, Udaipur and Bhilwara districts are now reaching out to more than 200,000 children. 161 students were awarded scholarships under the Academic Excellence and Talent Promotion programme in Udaipur and Chittorgarh district. Evening coaching classes are operational for 900 students from Class 10 and 12. Representing local talent at the international forums. Ms. Mala
40

sUstAiNAbility
Sukhwal was sponsored by Hindustan Zinc to participate in the Commonwealth Lifting Championship held at New Zealand and she returned to India with Four Gold medals and one silver medal.
SuSTAINAbLE LIVELIHOOD
Our approach to our local communities and their development is holistic and robust and takes into account the remoteness of our locations. We intend to be a benchmark in addressing the real needs of our local communities through the application of sustainable initiatives for their long term inclusive growth. Few of the inspiring initiatives were: 850 village youth were trained in various livelihood skills like retail, tailoring, fitter, electrical equipment, bandhej, block printing, home appliances and pumps set repairs. Entrepreneurial training was imparted to 220 young people from the operational villages of around Debari. 157 Self Help Groups (SHGs), 1,791 members have a cumulative fund base surpassing Rs.720,000. Of these, 37 SHGs have been linked to micro enterprise. 5,900 farmers were imparted training in soil, seed, water management and vermiculture for better yield. 150 vermi compost units were established by some of these farmers. Certified seeds were distributed to 450 farmers in 41 villages. Veterinary camps were organised over for over 60,000 cattle. Drip irrigation and sprinklers were installed in 12 villages, benefiting
120 farmers. Micro irrigation practices were promoted among 50 farmers, which resulted in a 45% reduction of water use over 200 acres of land. More than 2,600 acres of land were brought under irrigation and multicrop cultivation.
MODEL VILLAGE DEVELOPMENT
The module is intensive and long term. We apply the single principle of partnership between all our stakeholders including the communities in which we operate, NGOs local and state government. Hindustan Zinc identified 59 villages lacking in basic amenities for transforming them into Model Villages. This project will be accomplished over a period of three to four years in three phases, through active participation of all the stakeholders. During 2007-08, 32 villages were successfully declared as Model Villages. The social audit of these villages has already been conducted by Operations Research Group, New Delhi.
Our approach to community development is holistic, robust, integrated, intensive, long term and sustainable, given the remoteness of our locations. Our stakeholder engagement process, coupled with base line study and need assessment helps us develop and shape our programmes for a three to five year period for select villages.
41
ProviDiNg sUstAiNAble solUtioNs

42
Womans self help group
sUstAiNAbility
The Godwa village in Rajasthan lacked basic amenities like electricity, primary school, road etc since independence. The first challenge was to mobilise people to come together to address the challenge. The work then expanded to form village institutions to take the process forward. The most important was ensuring access to services rather than being a service provider and we were motivated to be self sustainable from the beginning remarked the SHG group leader. Definitely, road and electricity are basic amenities. HZLs contribution and the village collectiveness was the key
to our transformation. It has taken us three to four years to evolve as an empowered village unit. The electricity connectivity for 94 of our households was ensured through involvement of each household including voluntary contribution for the same. The time is set for significant enhancement in the quality of our life. remarked Ganesh Dangi, village leader Godwa. The finiteness of the efforts was validated by Operational Research Group, New Delhi who evaluated this village as part of our social audit to the entire 32 Model Village Development Programme.
43
CONTINUED
THE GODWA
The Godwa village near Debari in Rajasthan lacked basic amenities like electricity, primary school, road etc since independence. The first challenge was to mobilise people to come together to address the challenge. The work then expanded to form village institutions to take the process forward. Four self help groups with 52 members and a cumulative fund of Rs. 60,000/-, vocational training for rural youths by SANKALP, development of 10 organic farming demonstration sites, fruit plantation in six acres through 24 farmers collective, resource mobilisation from district administration for construction of 3 km road connecting to local market hub, facilitating primary school, child welfare centre for 40 preschool children, facilitating the establishment of primary school ensured sustainability. The most important was ensuring access to services rather than being a service provider and we were motivated to be self sustainable from the beginning remarked the SHG group leader. Definitely, road and electricity are basic amenities. HZLs contribution and the village collectiveness was the key to our transformation. It has taken us three to four years to evolve as an empowered village unit. The electricity connectivity for 94 of our households
was ensured through involvement of each household including a voluntary contribution for the same. The time is set for significant enhancement in the quality of our life. remarked Ganesh Dangi, village leader Godwa. The finiteness of the efforts was validated by Operational Research Group, New Delhi who evaluated this village as part of our social audit to the entire 32 Model Village Development Programme. The impact of SHG and organic farming initiatives were appreciated. Apart from this, the village autonomy and empowered institutions were the value addition to the desired results. The significant improvement in nutrition level of preschool children through child welfare centre was also established. Such results are welcoming and would facilitate the process of graduation remarked the CSR team of the Debari Zinc Smelter.
AWARDS AND RECOGNITION
CORPORATE
Golden Peacock Award for Excellence in Corporate Governance, 2007. Dun & Bradstreet American Express Corporate Award 2007 for being the Top Indian Company in the Non-Ferrous Metals Sector.
ENVIRONMENT/INDuSTRIAL ACTIVITY/ OPERATIONAL EFFICIENCIES
The Company has received several awards in 2007-08, both at an overall corporate level as well as for its individual operating units. However our efforts towards being a responsible corporate through various sustainable development initiatives were recognised at the local, national and international levels. Some of these are given below.
Water Efficient Unit Award to Chanderiya Smelter Complex by Confederation of Indian IndustryGBC, Hyderabad. TERI Corporate Environmental Award 2007. Asian Power Plant of the Year Award 2007 & Best Emission Reduction Project in Asia by Asian Power, Singapore. Greentech Environmental Excellence Golden Award to Chanderiya Smelter Complex and Rampura Agucha Mine. Greentech Environmental Excellence Silver Award to Debari Zinc Smelter and Vizag Zinc Smelter. Excellence in All Round Performance in Industrial Activity to Vizag Zinc Smelter by Federation of Andhra Pradesh Chambers of Commerce & Industry. Institute of Cost & Works Accountants of India Award for Excellence in Cost Management for 2006-07.
44

sUstAiNAbility
SAFETY
Golden Peacock Award for Occupational Health and Safety for 2007, for the Chanderiya Smelter Complex. International Safety Award 2006 from British Safety Council, UK, for the Debari Zinc Smelter. Safety Gold Award 2007 from Royal Society for Prevention of Accidents (UK), for the Debari Zinc Smelter. Meritorious Achievement in NSCI Awards 2006 by National Safety Council of India, for the Debari Zinc Smelter. Safety Innovation Award by Institution of Engineers, Delhi, for the Chanderiya Smelter Complex and the Debari Zinc Smelter. Golden Peacock award for Corporate Social Responsibility, 2007. TERI Corporate Social Responsibility Award 2007. Readers Digest Pegasus Corporate Social Responsibility Award 2007. State Population Stabilisation Award 2007, Chanderiya Smelter Complex. State Level Bhamashah Award 2007: Chanderiya Smelter Complex and the Debari Zinc Smelter.
CSR
45
boArD of DireCtors
1 2 3 4 5
1. MR. AGNIVESH AGARWAL is the Chairman of Hindustan Zinc Limited and was appointed to the Board with effect from 15 November 2005. Mr. Agarwal has an extensive experience in managing large projects, He is also the director of MALCO, Sterlite Iron and Steel Company Ltd, Sterlite Infrastructure Pvt. Ltd, Agarwal Galvanizing Pvt. Ltd, and Sterlite Infrastructure Holdings Pvt. Ltd. Mr. Agarwal has completed his graduation in commerce from Sydhenam College, Mumbai. 2. MR. MAHENDRA SINGH MEHTA is Chief Executive Officer & Whole Time Director and was appointed to the Board with effect from 15 November 2005. Mr. Mehta joined Sterlite Industries India Limited in 2000, prior to taking up the position as CEO of HZL, he was the Commercial Director (Base Metals) responsible for the marketing of copper, aluminum, zinc and lead, procurement of copper concentrate, export and tolling of zinc concentrate and coal procurement. Before joining the Group, Mr. Mehta was with Lloyds Steel Industries Ltd, where he handled wide ranging portfolios; marketing, procurement, working capital finance and projects. Mr. Mehta has a Mechanical Engineering degree from MBM
Engineering College, Jodhpur and is an MBA from the Indian Institute of Management, Ahmedabad. 3. MS. AjITA bAjPAI PANDE is Director and was appointed on the Board with effect from 24 October 2005. Ms Pande is an IAS (Indian Administrative Service) Officer and is presently holding the post of Joint Secretary, Ministry of Mines, New Delhi. She is also the Director of Hindustan Copper Ltd and BALCO. 4. MR. SANjIV kuMAR MITTAL is Director and was appointed on the Board with effect from 28 March 2007. Mr Mittal is an IAS (Indian Administrative Service) officer and is presently holding the post of Joint secretary and Financial Advisor, Government of India, Ministry of Mines, New Delhi. He is also director of BALCO, Hindustan Copper Ltd, Singrari Collieries Company Ltd and Coal Mine Planning & Design Institute. 5. MR. NAND kISHORE SHukLA is Director and was appointed on the Board with effect from 11 April 2002. Mr Shukla is an IRS (Indian Revenue Service) Officer and is presently holding the post of Director General of Income Tax (Legal and Research), New Delhi.
6. MR. AbHAY kuMAR SINGH is Director and was appointed to the Board with effect from 28 November 2007. Mr. Singh is an IFS (Indian Forest Service) Officer and presently holds the post of Director in the Ministry of Mines, New Delhi. He is also the director of Bharat Gold Mines and BALCO. 7. MR. ANIL AGARWAL is the Chairman of Vedanta and was appointed to the Board with effect from 11 April 2002. Mr Agarwal, who founded the Group in 1976, is also Chairman of Sterlite and is a Director of BALCO, and Vedanta Aluminium Ltd. Since 1976 the Group has grown under his leadership, vision and strategy. Mr Agarwal has over 30 years experience as an industrialist. 8. MR. NAVIN AGARWAL is Director and was appointed to the Board with effect from 11 April 2002. Mr Agarwal is also Executive Vice-Chairman and Director of Sterlite, Chairman of KCM and MALCO and a Director of each of BALCO and MALCO. He joined Sterlite at its inception and the Board of Vedanta in November 2004. Mr Agarwal is the Chairman of the Executive Committee of Vedanta. In this capacity, he is responsible for overall delivery of the Groups strategy,
46

goverNANCe
10
including the overall development of the new green and brown field projects, in organic growth opportunities including joint ventures and alliances, the strategic treasury and fund raising initiatives and global investor relations, as well as augmenting and managing the top talent of the Group. Mr Agarwal has also been instrumental in globalising Vedantas business. He actively led Vedantas successful listing on the London Stock Exchange in 2003 and Sterlites US listing on the New York Stock Exchange in 2007. Mr Agarwal has over 20 years experience in strategic management. He received a degree in Commerce from Sydenham College, Mumbai, India and has participated in the Owner/ President Management Programme at Harvard University, USA. 9. MR. kuLDIP k. kAuRA is Director and was appointed on the Board with effect from 11 April 2002. Mr Kaura is also Managing Director of Sterlite and Deputy Chairman of KCM. Mr Kaura, who joined Sterlite in 2002, was Managing Director of HZL and became the Chief Operating Officer of Vedanta Resources plc at its inception. He is also a director of Vedanta Aluminium and CMT and has held various positions in
operations and business management for 18 years at ABB India. Mr Kaura was a member of the board of directors of ABB India from 1996 and was the Managing Director and Country Manager of ABB from 1998 to 2001. Mr. Kaura has a Bachelors degree in Mechanical Engineering (Honours) from the Birla Institute of Technology & Sciences in Pilani and Executive education at London Business School and IFL, Sweden 10. MR. TARuN jAIN is Director and was appointed to the Board with effect from 11 April 2002. He is also a director of SIIL, BALCO, Vedanta Aluminium, SOVL, Twin Star, MALCO, Westglobe Limited and Sterlite Shipping Ventures Private Limited. He has over 24 years of experience in corporate finance, accounts, audit, taxation and secretarial practice. He is responsible for our strategic financial matters including finance and accounting, legal and regulatory compliance and risk management. Mr. Jain is a member of the Institute of Cost and Works Accountants of India and a Fellow Member of the Institute of Chartered Accountants of India and the Institute of Company Secretaries of India.
47
corporate information
Board of directors
Shri Agnivesh Agarwal : Chairman Smt Ajita Bajpai Pande : Director Shri S. K. Mittal Shri N. K. Shukla Shri A. K. Singh Shri Anil Agarwal Shri Navin Agarwal Shri K. K. Kaura Shri Tarun Jain Shri M. S. Mehta : Director : Director : Director : Director : Director : Director : Director : CEO & Whole-time Director
registered office
Yashad Bhawan Udaipur 313 004

Bankers
State Bank of Bikaner & Jaipur IDBI Bank Limited ICICI Bank Limited Axis Bank Calyon Bank Development Bank of Singapore
statutory auditors
chief financial officer
Shri S. L. Bajaj
M/s. Deloitte Haskins & Sells (Auditors) Chartered Accountants 12, Dr. Annie Besant Road Opp. Shiv Sagar Estate, Worli Mumbai 400 018
company secretary
Shri Rajendra Pandwal
48

governance
directors report
Dear Members, The directors have pleasure in presenting the 42nd Annual Report together with the statement of audited accounts for the financial year ended 31 March 2008.
financial results and diVidend
(Rs. crore) 2007-08 2006-07
Total revenue Profit before depreciation, interest, tax and amortisation Less: Interest Gross Profit Less: Depreciation and amortisation Taxation Net profit for the year Add: balance brought forward from the previous year Amount available for appropriation Appropriation: General Reserve a) Interim Dividend on equity shares (including corporate tax thereon) b) Proposed final dividend on equity shares (including corporate tax thereon) Balance carried forward to next year
diVidend
8729.40 6231.55 24.17 6207.38 222.04 1589.27 4396.07 970.50 5366.57 500 123.58 123.58 4619.41
8791.49 6638.69 28.44 6610.25 156.59 2011.85 4441.81 122.72 4564.53 3350 120.45 123.58 970.50
The Company paid an interim dividend of 25 per cent for the year 2007-08. Subsequently, the Board of your Company has recommended a final dividend of 25 per cent taking the total dividend to 50 per cent, i.e. Rs.5 per equity share of face value Rs.10 each. The total outgo on account of dividend including tax on dividend will be Rs.247 crore during 2007-08 as compared to Rs. 244 crore during the previous year. The record date for the payment of final dividend will be 13 August 2008.
performance reVieW
During the year the global market for zinc remained subdued. The appreciation of the rupee also created further pressures on realisations. However, the Company maintained its streak of volume growth at the back of higher output from mines and smelters and new capacity coming on stream. The Company produced a total refined zinc metal production in FY 2008 of 426,323 tonnes, up by 22.4% compared with 348,316 tonnes in FY 2007. The production of lead during FY 2008 was 58,247 tonnes compared with FY 2007 production of 44,552 tonnes, an increase of 30.7%. The increase was primarily due to production from the Ausmelt plant which is now stabilised.
exploration
Ongoing exploration activities have yielded significant success with an increase of 28.7 million tonnes to its reserves and resources, prior to a depletion of 5.8 million tonnes in FY 2008. Contained zinc-lead metal has increased by 4.0 million tonnes, prior to a depletion of 0.6 million tonnes during the same period. Total reserves and resources at 31 March 2008 were 232.3 million tonnes containing 27.5 million tonnes of zinc-lead metal. The reserves and resources position has been independently reviewed and certified as per JORC standard.
sales
Sales of zinc and zinc concentrate (metal in concentrate) increased by 13% from 482,172 tonnes in 2006-07 to 544,660 tonnes in 2007-08 and sales of lead and lead concentrate (metal in concentrate) increased by 30% from 73,267 tonnes in 2006-07 to 95,278 tonnes in 2007-08.
financial performance
Despite of a 22.4% increase in saleable zinc and 30.7% increase in saleable lead production volumes and stable operating costs, PBDIT in 2007-08 was lower at Rs 6,231 crores compared with 2006-07 primarily due to the significant reduction in LME zinc prices by about 17% and the appreciation of the Indian rupee against the US dollar by more than 11%. As a result of poor realisations of zinc, net sales fell by 8 per cent from Rs. 8,560 crore in 2006-07 to Rs. 7,878 crore in 2007-08. However, the Company was able to contain the impact of poor market for zinc and high energy prices by a combination of increased production volumes, improvements in operational efficiencies and high by-product credit realisations. Net profit came down only marginally from Rs. 4,442 crore in 2006-07 to Rs. 4,396 crore 2007-08. Your Company continues to remain a debt free Company. 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.
49
directors report CONTINUED
projects
During the year, your Company successfully completed several projects ahead of schedule and within budget. These include commissioning of 170,000 tonnes per annum Hydro II zinc smelter and 80 megawatts (MW) captive thermal power plant at Chanderiya; wind power project of 50.4 MW in Gujarat and 18.4 MW in Karnataka. In the first quarter of FY 2009, your Company concluded the expansion of Rampura Agucha Mine from 3.75 mtpa to 5.00 mtpa, 88,000 tpa of zinc debottlenecking at Chanderiya and Debari along with the commissioning of new roaster at Debari two months ahead of schedule, increasing our total metal production capacity to 754,000 tpa. In line with achieving our stated production capacity goal of 1 million tonnes per annum and supported by our strong reserves and resources position as discussed earlier, we recently announced expansion projects at HZL that will take our total integrated zinc-lead capacity to 1,065,000 tonnes per annum with fully integrated mining and captive power generation capacities, thereby making it the worlds largest integrated zinc-lead producer by 2010. Two brownfield smelter projects, which will increase the production capacities of zinc and lead by 210,000 tpa and 100,000 tpa respectively, along with 2x80 MW captive power plant will be undertaken at Rajpura Dariba in Rajasthan, India. We also expect to increase our silver production from the current levels of nearly 2.8 million ounces per year to a level of approximately over 16.1 million ounces per year. To support the increased smelting capacities, your Company will expand its ore production capacity at the Rampura Agucha mine from 5 mtpa to 6 mtpa. Ore production at the Sindesar Khurd mine will be increased from 0.3 mtpa to 1.5 mtpa. The company also plans to start mining activity at the Kayar mine which will have a production capacity of 0.3 mtpa.
contriBution to the excheQuer
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 further its business and in areas such as human resources, information technology 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
Your Company has contributed Rs.2,972 crore in terms of taxes and duties to the exchequer.
directors
Mr. A.C. Wadhawan ceased to be a director with effect from 19 December 2007. The Board of Directors records its appreciation of the valuable guidance and contribution made by him as Chairman of the Audit Committee and as a member of the Board. Mr. A.K. Singh, Director, Ministry of Mines has been nominated as a director on the Board of the Company with effect from 28 November 2007 by the Government of India. Mrs. Ajita Bajpai Pande, Mr. Agnivesh Agarwal and Mr. Tarun Jain retire by rotation and, being eligible, offer themselves for reappointment at the ensuing Annual General Meeting. None of the retiring directors hold any share in the Company. Your directors recommend their reappointment.
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. Welter Trading 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. Sterlite Industries (India) Limited, India 17. Sterlite Paper Limited, India 18. Sterlite Opportunities and Ventures Limited, India 19. The Madras Aluminium Company Limited, India 20. Bharat Aluminium Company Limited, India 21. THL KCM Limited, Mauritius 22. KCM THL Limited, Mauritius 23. Vedanta Resources Investments Limited, United Kingdom 24. THL Aluminium Limited, Mauritius 25. Monte Cello BV, Netherlands 26. Sterlite Energy Limited, India 27. Copper Mines of Tasmania Pty Ltd, Australia 28. Fujairah Gold FZE, UAE 29. Thalanga Copper Mines Pty Ltd., Australia 30. Monte Cello NV, Netherlands Antilles 31. Anil Agarwal Discretionary Trust, Bahamas 32. Onclave PTC Limited, Bahamas 33. Mr. Anil Agarwal
50

governance
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 2008 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; and iv. the directors have prepared the Annual Accounts, on a Going Concern basis.
auditors
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 employee unions in the success of the Company. The directors also sincerely thank the Central Government and The State Governments of Rajasthan, Andhra Pradesh, Jharkhand, Gujarat Uttaranchal and Karnataka, also bankers, auditors, vendors, customers and the shareholders of the Company for their continued support. For and on behalf of the Board of Directors
k.k. kaura director m.s. mehta ceo and Whole time director
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 2008. 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
Date: 12 May 2008 Place: Mumbai
Notes to the accounts, as referred to in the Auditors Report are self-explanatory and a practise 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.
51
PARTICULARS Of TECHNOLOgy AbSORPTION AND fOREIgN ExCHANgE EARNINgS AND OUTgO AS PER SECTION 217 (1) (E) Of THE COMPANIES ACT, 1956 AND THE RULES MADE THEREIN AND fORMINg PART Of THE DIRECTORS REPORT fOR THE yEAR ENDED 31 MARCH 2008
a) conserVation of energy

annexure 1
Use of polyelectrolyte in place of alum to treat water. Installation of new electronic controller in Hot Gas Percipitator (HGP) to improve the HGP efficiency. Use of high pressure steam and waste heat to generate power. Use of furnace oil in place of LDO for boiler operation. Use of planetary gear box for leaching reactors to save power. Use of hydrofoil agitators for leaching reactors. Use of variable frequency drive where load fluctuations are significant. Use of self-propelled turbine ventilators in cell house. Modification of the boiler design was done at CPP to recover more heat in the economiser zone. Modification of control system of turbines was done at CPP for maximisation of steam pressures in turn power generation. Installation of Supersonic Soot Blowers in Economiser for better cleanliness and heat utilisation. Installation of online temperature controllers in closed loop with cooling tower fans.
1. Improvements in metal recovery. 2. Reduction in milling cost by saving in energy consumption. 3. Recovery of byproducts like Cadmium, Lead and Silver. 4. Optimization of plant operations. 5. Improved price realization from by-products. 6. Reduced water consumption. 1. Improvements of metal recovery in mines and smelters. 2. Production and usage of bulk concentrates from RD mines. 3. Reduce energy consumption. 4. Recovery of metal from residues. 5. Mineralogical studies for improved milling operation. 6. Beneficial use of residual wastes. 7. Recovery of Zinc from Tailings.
c) foreign exchange earnings and outgo c) future plan on r&d
B) Benefits deriVed as result of aBoVe r&d
1. Studies on reduction of misplacement of Lead and Zinc in concentrates. 2. Mineralogical studies for feed, concentrates and tailings to enhance recovery. 3. Modelling and simulation studies of RDM grinding circuit. 4. Recovery of Cadmium from HGP dust. 5. Implementation of flow-sheets for Lead Silver cake production in leaching plants. 6. Water consumption reduction by utilising waste water with treatment in gas cleaning towers.
B) technology aBsorption a) specific areas in Which r & d carried out By the company
During the year, foreign exchange outgo was Rs. 436 crore (which includes import of capital goods, stores and spares, know how, supervision charges and trading material) while the foreign exchange earned was Rs. 2,257 crore. The details have been given under item nos 20 to 22 of Schedule 18 annexed to the accounts.
52

governance
form a
fORM fOR DISCLOSURE Of PARTICULARS wITH RESPECT TO CONSERvATION Of ENERgy
Particulars
Unit
year ended 31/3/2008
Year ended 31/3/2007
a) electricity, poWer generation and fuel consumption Purchase units Total amount Average rate of purchasing CPP Units generated from fuel oil Own generation units (from fuel oil) Quantity consumed LSHS/FO HSD Total amount Average cost of fuel per kg Average cost of generation Unit generated per unit of fuel (LSHS/FO/HSD) CPP units generated from coal Own generation units (from coal) Quantity consumed Coal LDO Total amount Average cost per kg (coal) Average cost per kg (LDO) Average cost of generation Unit generated per unit of fuel (coal) B) fuel consumption for metal production a) LPG/propane Quantity Total amount Average cost per Kg b) LDO/LSHS/FO Quantity Total amount Average cost per litre c) Met Coke and Coke breeze Quantity Total amount Average cost per MT
Million kWh Rs. Cr Rs/kWh Million kWh MT KL Rs. Cr Rs./kg Rs/kWh kwh/kg Million kWh MT KL Rs. Cr Rs./kg Rs./kg Rs/kWh kWh/kg
503 191.76 3.82 155 34747 473 73.96 21.05 4.77 4.42 1290.38 630265 902 277.32 4.36 29.93 2.28 2.20
355 133.32 3.75 154 33851 642 59.15 17.21 4.14 4.49 1138.29 534214 494 192.77 3.58 27.48 1.82 2.28
Million kg Rs. Cr Rs./kg KL Rs. Cr Rs./Ltr MT Rs. million Rs./MT
7.67 26.68 34.77 17897 42.38 23.68 123500 1198.67 9705.90
7.71 23.82 30.88 19222 41.35 21.51 107213 1022.34 9535.61
53
certificate of compliance With the code of conduct policy

As provided under clause 49 of the listing agreement with the Bombay Stock Exchange Limited and the National Stock Exchange Limited, the Board members and the senior management personnel have confirmed compliance with the code of conduct and ethics for the year ended on March 31 2008. For Hindustan Zinc Limited
m.s. mehta ceo and Whole time director
secretarial compliance report
to the memBers of hindustan Zinc limited
We have examined all relevant records of the Company relating to its compliance with the provisions of Companies Act, 1956 and rules, regulations framed thereunder. It is the responsibility of the Company to prepare and maintain the relevant necessary records under the aforesaid Acts, Rules, Regulations framed thereunder. Our responsibility is to carry out an examination, on the basis of our professional judgement, so as to provide a reasonable assurance of the correctness and completeness of the records for the purpose of report. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of report and have been provided with such records, documents etc. as required by us. We report that for the financial year ended on 31 March 2008, the Company has complied with the provisions of Companies Act, 1956 and Rules, Regulations framed thereunder, as given hereunder: 1. Maintained all the statutory registers required under the Companies Act, 1956 (the Act) and the Rules made thereunder. 2. Filed all the forms and returns and furnished all the necessary particulars to the Registrar of Companies, Rajasthan, as required by the Act. 3. Issued all notices required to be given for convening of Board/Committee Meetings and General Meeting, within the time limit prescribed by law.
4. Conducted the Board/Committee Meetings and Annual General Meeting as per the requirement of the Act. 5. Complied with all the requirements relating to the minutes of the proceedings of the meeting of the Directors/Committee and the Shareholders. 6. The Company closed its Register of Members from 14 September 2007 to 20 September 2007 (both days inclusive) during the financial year. 7. The Board of Directors of the Company is duly constituted. The appointment of directors has been made in accordance with the provisions of the Act. 8. The Company had constituted the Audit Committee as required under section 292A of the Act. 9. Paid dividend to the shareholders within the time limit prescribed and has also transferred the unpaid dividends to the Central Government within the time limit from time to time. 10. Made due disclosure required under the Act. For V.M. & Associates Company Secretaries
manoj maheshWari partner
Fcs: 3355 C P No.: 1971 Date: 24 April 2008 Place: Jaipur
54

governance
corporate goVernance report
Hindustan Zinc remains resolute in its commitment to conduct business in accordance with the highest ethical standards and sound corporate governance practices. The Company strongly believes that good corporate governance practises go a long way to achieve the objective of enhancing shareholder value and the interest of stakeholders. The Company has set up a three tier governance structure, which helps it in strategic decision making, operations and project implementation: (i) Strategic Supervision: Overall strategic supervision and control is exercised by the Board of Directors in laying down strategic goals, major expansion projects and capital expenditure and business plans approvals to ensure that the Company is progressing to fulfil shareholder aspirations. (ii) Operation Management and Control: Business Management Group comprising of functional heads and unit/plant heads steered by CEO and CFO, handles the management and coordination with regular reviews and meetings with the objective to seek continuous improvement in the Companys working and to harness the potential. (iii) Plant/Unit Executive Management: comprising of several strategic business units (SBUs) for an overall execution and empowered through decentralised decision making. In India, corporate governance standards for listed companies are regulated by the Securities and Exchange Board of India (SEBI) through Clause 49 of the listing agreement of the Stock Exchanges. Hindustan Zinc has adopted practices mandated in Clause 49 and has established procedures and systems to be fully compliant with it. The Companys efforts in corporate governance practises have also been widely recognised. During 2007-08, the Company received the Golden Peacock award for excellence in corporate governance This chapter, along with the chapters on Management Discussion and Analysis, and Additional Shareholders Information, reports HZLs compliance with Clause 49.
Board of directors composition of the Board
As on 31 March 2008 Hindustan Zincs Board comprised 10 directors, four of whom are nominee directors from the Government of India. According to the Shareholders Agreement with the Government of India, which can nominate five directors whereas the strategic partner and promoters, Sterlite Opportunities and Ventures Limited can nominate six directors to the Board of the Company. The Chairman, and the Chief Executive Officer & Whole Time Director, are nominees of Sterlite Opportunities and Ventures Limited. Apart from Mr. M.S. Mehta, who is the CEO and the only executive Director, all other directors are non-executive. The Board has five independent Directors. The composition of the Board is in conformity with Clause 49, which stipulates that at least 50 per cent of the Board should consist of non-executive directors and in case the Chairman is a non-executive director, at least one-third of the Board should be independent. HZL is also compliant with a recent circular by SEBI on 8 April 2008, which stipulates that at least 50 per cent of the Board should be independent if the Chairman is either a promoter or related to the promoters or senior management as defined under the Clause 49 of the listing agreement. No director is a member of more than 10 committees or acts as Chairman of more than five committees across all companies in which they are directors. Note that directorships in foreign companies do not count towards this limit. The non-executive directors are appointed or re-appointed with the approval of the shareholders. All non-executive directors are liable to retire by rotation unless otherwise approved by the shareholders. One third of the directors who are liable to retire by rotation retire every year and are eligible for re-appointment. According to the terms of the Companys Articles of Association, the strength of the Board shall not be less than three and more than 12.
numBer of Board meetings
The Board of Directors met five times during the year on 26 April 2007, 24 July 2007, 22 October 2007, 23 January 2008 and 13 March 2008. The maximum gap between any two meetings was less than four months. The agenda for each meeting is prepared well in advance along with explanatory notes wherever required and distributed to all directors.
55
corporate goVernance report CONTINUED
directors attendance record and directorships held
As mandated by Clause 49, none of the directors are members of more than 10 Board level committees nor are they Chairman of more than five committees in which they are members. The composition of Board of the Directors as on 31 March 2008 is given in Table 1. Table 1: Composition of the board of Directors
No. of outside No. of directorships other of public Committee companies Memberships5 No. of Chairmanships of Committees5
Name of Director
Category
No. of meetings held
No. of meetings attended
Whether attended last AGM
Mr Agnivesh Agarwal, Chairman Mr M. S. Mehta, CEO6 Mrs Ajita Bajpai Pande4 Mr Sanjiv Kumar Mittal4 Mr A.K. Singh1,4 Mr N. K. Shukla4 Mr Anil Agarwal Mr Navin Agarwal Mr Tarun Jain Mr K. K. Kaura Mr A. C. Wadhawan2,4
Non-Executive Executive Independent Independent Independent Independent Non-Executive Non-Executive Independent Non-Executive Independent
5 5 5 5 2 5 5 5 5 5 3
2 5 4 5 2 5 0 4 4 5 3
No Yes No No No Yes No No Yes Yes Yes
2 1 2 3 2 113 103 73 63 5
2 4 1 1
1 4
Notes: 1 Appointed on 28 November 2007. 2 Ceased to be a Director with effect from 19 December 2007. 3 Includes foreign companies: five foreign companies for Mr. Anil Agarwal; two for Mr. Navin Agarwal; two for Mr. Tarun Jain and four for Mr. K.K. Kaura. 4 Nominees of Government of India. 5 Only Audit Committee and Shareholder Grievance Committee. 6 The only Executive Director.
information supplied to the Board
The Board has complete access to all information of the Company. The following information is regularly provided to the Board as a part of the agenda papers well in advance of the Board meetings or is tabled in the course of the Board meeting. Annual operating plans and budgets and any update thereof Major capital budgets and any updates thereof. Quarterly results for the Company. Minutes of the meetings of the Audit Committee and other committees of the Board. Information on recruitment and remuneration of senior officers just below the level of Board, including the appointment or removal of Chief Financial Officer and Company Secretary. Materially important show cause, demand, prosecution notices and penalty notices. Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems. Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company. Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company. Details of any joint venture or collaboration agreement. Transactions that involve substantial payment towards goodwill, brand equity or intellectual property. Significant labour problems and their proposed solutions. Any significant development in human resources/industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme, etc. Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business. Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material. Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as nonpayment of dividend, delay in share transfer, etc. The Board periodically reviews compliance reports of all laws applicable to the Company.
56

governance
remuneration paid to directors
None of the non-executive directors draw any remuneration other than the sitting fee, which is approved by the Board. As approved by the Board, the remuneration of Mr. M.S. Mehta, CEO and whole time director is reimbursed by the Company to Sterlite Industries (India) Limited. Table 2: Sitting fees Paid to Directors for 2007-08 (Rs.)
Name of director Category Sitting fees1 Commission Total
Mr. Agnivesh Agarwal, Chairman Mr. M.S. Mehta, CEO Mrs. Ajita Bajpai Pande Mr. Sanjiv Kumar Mittal Mr. A.K. Singh Mr. N.K. Shukla Mr. Anil Agarwal Mr. Navin Agarwal Mr. Tarun Jain Mr. K.K. Kaura Mr. A.C. Wadhawan2
1 2
Non-Executive Executive Independent Independent Independent Independent Non-Executive Non-Executive Independent Non-Executive Independent
40,000 _ _ _ _ _ _ 80,000 140,000 160,000 90,000
_ _ _ _ _ _ _ _ _ _ _
40,000 _ _ _ _ _ 80,000 140,000 160,000 90,000
Includes sitting fees for Board Meetings at (Rs.20,000 per meeting) and committee meetings (Rs.10,000 per meeting). Ceased to be a director from 19 December 2007.
There are no pecuniary relationships or transactions of the non-executive directors vis--vis the Company except as mentioned above. The Company has not granted any stock option to any of its directors. During 2007-08, the Company did not advance any loans to any of its directors.
code of conduct
Hindustan Zincs Board has laid down a code of conduct for all Board members and senior management of the Company. The code of conduct is available on the website of the Company: www.hzlindia.com. All Board members and senior management personnel have affirmed compliance with the Code of Conduct. A declaration signed by the Chief Executive Officer (CEO) to this effect is enclosed at the end of this report.
risk management
The Company has developed a very comprehensive risk management policy and the same is reviewed by the Audit Committee, which in turn, informs the Board about the risk assessment and minimisation procedures adopted by the management. Suggestions or guidance given by the Audit Committee members are immediately implemented. The Company has unit wise risk register, which provides for root cause of the risk, and its mitigation procedure. The Unit head periodically reviews the identified risks, and updates the control measures. At the corporate level major risks are reviewed by the CEO and CFO and directions are issued accordingly.
committees of the Board
The Company has two Board level committees Audit Committee and Shareholders/Investors Grievance Committee. All decisions pertaining to the constitution of committees, appointment of members and fixing of terms of service for committee members is taken by the Board of Directors. Details on the role and composition of these committees, including the number of meetings held during the financial year and the related attendance, are provided below: a) Audit Committee As on 31 March 2008, the Audit Committee comprises of four directors, the majority of which are independent. They are Mr. N.K. Shukla, Mr. Sanjiv Kumar Mittal, Mr. K.K. Kaura and Mr. Tarun Jain. Mr. N.K. Shukla is the Chairman of the Audit Committee.
57
The time gap between any two meetings was less than four months. The Committee met four times in the year under review on 26 April 2007, 24 July 2007, 22 October 2007 and 23 January 2008. The details of the Audit Committee are given in Table 3. Table 3: Attendance record of Audit Committee
No. of meetings held No. of meetings attended Sitting fees (Rs.)
Name of the Member
Position
Status
Mr. N.K. Shukla Mr. Sanjiv Kumar Mittal Mr. K. K. Kaura Mr. Tarun Jain Mr. A.C. Wadhawan1
1 Ceased to be a director on 19 December 2007.
Chairman Member Member Member Chairman
Independent Independent Non-Executive Independent Independent
4 4 4 4 3
4 4 4 4 3
40,000/40,000/30,000/-
The Chief Executive Officer and whole time director, Chief Financial Officer, the head of internal audit and the representative of the statutory auditors (M/s. Deloitte Haskins & Sells), internal auditors (M/s. Ernst & Young) are invitees to the Audit Committee meetings. The Company Secretary, Mr. R. Pandwal is the Secretary to the Committee. All the members of the Audit Committee possess financial and management expertise and accounting knowledge. The quorum for the meeting of the committee is three members. The Chairman of the Audit Committee attended the Annual General Meeting (AGM) held on 21 September 2007 to answer shareholder queries. The functions of the Audit Committee of the Company include the following: Oversight of the Companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees. Approval of payment to statutory auditors for any other services rendered by the statutory auditors. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to: Matters required to be included in the Directors Responsibility Statement to be included in the Boards report in terms of clause (2AA) of section 217 of the Companies Act, 1956. Changes, if any, in accounting policies and practises and reasons for the same. Major accounting entries involving estimates based on the exercise of judgement by management. Significant adjustments made in the financial statements arising out of audit findings. Compliance with listing and other legal requirements relating to financial statements. Disclosure of any related party transactions. Qualifications in the draft audit report. Reviewing, with the management, the quarterly financial statements before submission to the Board for approval. Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems. Reviewing the adequacy of internal audit plan. Discussion with internal auditors on any significant findings and follow up there of. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as postaudit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, shareholders (in case of nonpayment of declared dividends) and creditors. Reviewing the functioning of the whistleblower mechanism. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.
58

governance
The Audit Committee is empowered, pursuant to its terms of reference, to: Investigate any activity within its terms of reference and to seek any information it requires from any employee. Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, when considered necessary. The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews: Management discussion and analysis of financial condition and results of operations. Statement of significant related party transactions (as defined by the Audit Committee), submitted by management. Management letters/letters of internal control weaknesses issued by the statutory auditors. Internal audit reports relating to internal control weaknesses. The appointment, removal and terms of remuneration of the internal auditor. In addition, the Audit Committee of the Company also reviews the financial statements. The Audit Committee is also apprised on information with regard to related party transactions by being presented: A statement in summary form of transactions with related parties in the ordinary course of business. Details of material individual transactions with related parties which are not in the normal course of business. Details of material individual transactions with related parties or others, which are not on an arms length basis along with managements justification for the same. b) Shareholders/Investor grievance Committee The Shareholders/Investors Grievance Committee consists of three members. The Committee met twice in the year under review on 22 October 2007 and 23 January 2008. The primary function of the Committee is to address investor complaints pertaining to transfers/transmission of shares, non-receipt of the dividend and any other related matters. The minutes of each of the Committee Meetings are reviewed by the Board. The attendance details are mentioned in Table 4 below. Table 4: Attendance Record of Shareholders/Investors grievance Committee
No. of meetings held No. of meetings attended Sitting fees (Rs.)
Name of the member
Position
Status
Mrs. Ajita Bajpai Pande Mr. K.K. Kaura Mr. Tarun Jain
Chairman Member Member
Independent Non-Executive Independent
2 2 2
1 2 2
20,000/20,000/-
The matters, if any, requiring the Boards attention are informed to the Board by the Committee Chairman. Details of queries and grievances received and attended by the Company during the year 2007-08 is given in Table 5. Table 5: Nature of Complaints Received and Attended to During 2007-08 1. Number of complaints received from the investors comprising of Non-receipt of Dividend Warrants, non-receipt of securities sent for transfer and transmission, complaints received from SEBI etc. 2. Number of complaints resolved. 3. Number of complaints not resolved to the satisfaction of the investors as at 31 March 2008. 4. Complaints Pending as at 31 March 2008. 5. Number of Share Transfers pending for approval as at 31st March 2008. The Board of Directors has delegated the power of approving physical transfer and transmission of shares to the Company Secretary. 9 9 NIL NIL NIL
59
management management discussion and analysis
The Annual Report has a detailed chapter on Management Discussion and Analysis.
disclosures
Details of materially significant related party transaction i.e. transactions of the Company of material nature, with its promoters, the directors or the management, their subsidiaries or relatives etc. are present under in Note in Schedule No.18 to Annual Accounts of the Annual Report.
related party transactions
There have been no materially significant related party transactions with the Companys promoters, directors, management or their relatives which have a potential conflict with the interests of the Company. Members may refer to disclosures of transactions with related parties, i.e. promoters, directors, relatives, subsidiary or management made in the Balance Sheet in Schedule No. 18 Notes to Accounts at Note No. 12 (b) in compliance of Clause 32 of the Listing Agreement and Accounting Standard 18. Disclosure of Accounting Treatment in Preparation of financial Statements Hindustan Zinc has followed the guidelines of accounting standards laid down by the Institute of Chartered Accountants of India (ICAI) in preparation of its financial statements. Details of Non-Compliance by the Company Hindustan Zinc has complied with all the requirements of regulatory authorities. No penalties/strictures were imposed on the Company by stock exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years. Code for Prevention of Insider Trading Practises In compliance with the SEBI regulation on prevention of insider trading, the Company has instituted a comprehensive code of conduct for its management and staff. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of the Company, and cautioning them of the consequences of violations. CEO/CfO Certification The CEO and CFO certification of the financial statements for the year is enclosed at the end of the Report.
directors
As per the law, two-thirds of the directors should retire by rotation. One-third of these directors are required to retire every year and, if eligible, offer themselves for re-appointment. Mr. Tarun Jain, Mr. Agnivesh Agarwal and Mrs. Ajita Bajpai Pande would retire this year and, being eligible, have offered themselves for re-appointment. A brief profile of all three of them follows.
1. mr. tarun jain
Mr. Tarun Jain is a fellow member of the Institute of Chartered Accountants of India, the Institute of Company Secretaries of India and Institute of Cost and Works Accounts of India. He joined Sterlite Group in the year 1984 and has over 24 years of experience in Corporate Finance, Accounts, Audit, Taxation and Secretarial Practice. He is also on the Board of the following companies:
Name of the company/body corporate/firms Nature of Interest Committee/Chairman/Membership
1. Sterlite Opportunities and Ventures Limited Director 2. The Bharat Aluminium Company Limited Director 3. The Madras Aluminium Company Limited Director 4. 5. 6. 7. 8. Westglobe Limited Twinstar Holdings Limited Sterlite Shipping Ventures Private Limited Vedanta Aluminium Limited Sterlite Industries (India) Limited Director Director Director Director Whole-time Director
Member Audit Committee Member Audit Committee Member Investor Grievance Committee Member Remuneration Committee Member Audit Committee
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governance
2. mr. agniVesh agarWal
After completing school from Mayo College, Ajmer and graduating in commerce from Sydhenam College, Mumbai, Mr. Agnivesh Agarwal has been associated with business operations and has experience in managing large projects. He has a good knowledge of restructuring and strategy. He also has good commercial knowledge with hands-on experience. He is also on the Board of the following companies:
Name of the company/body corporate/firms Nature of interest Committee/Chairman/Membership
1. 2. 3. 4. 5.
The Madras Aluminium Company Limited Sterlite Iron and Steel Company Limited Agarwal Galvanising Pvt. Ltd. Sterlite Infrastructure Pvt. Ltd. Sterlite Infrastructure Holdings Pvt. Ltd.
Director Director Director Director Director
3. mrs. ajita Bajpai pande
Mrs. Ajita Bajpai Pande is an IAS Officer presently holding the position of Joint Secretary, Ministry of Mines, Government of India, New Delhi. She is also on the Board of following Companies:
Name of the company/body corporate/firms Nature of interest Committee/Chairman/Membership
1. Hindustan Copper Limited 2. Bharat Aluminium Company Limited
Director Director
Means of Communication with Shareholders The Company published its quarterly, half yearly and yearly results in the form as prescribed under Clause 41 of the Listing Agreement within the prescribed time. The results were sent to stock exchanges where shares are listed and the same were published in The Economic Times/Business Standard and Rajasthan Patrika/Dainik Bhaskar. The financial results and official news releases etc. are also displayed on the website of the Company www.hzlindia.com. Annual Report containing inter-alia Audited Annual Accounts, Directors Report, Auditors Report and other important and statutory information are circulated to all members and to others entitled. The Management Discussion and Analysis Report along with CEO and CFO certificate forms part of the Annual Report. Table 6: Details of the Announcement of the financial Results for 2007-08
Description Date
Unaudited Financial Results for the quarter ended on 30 June 2007 Audited Financial Results for the quarter/half year ended on 30 September 2007 Unaudited Financial Results for the quarter/nine months ended on 31 December 2007 Audited Financial Results for the quarter/year ended on 31 March 2008
24 July 2007 22 October 2007 23 January 2008 24th April 2008
Further, the Company has also been complying with SEBI regulations for filing of its financial results under the EDIFAR system. These are available on the SEBI website: www.sebiedifar.nic.in. In addition to this, if there is any other announcement affecting the public it is duly informed to stock exchanges and published in the newspapers for the benefit of shareholders and the public at large.
general Body meetings
Table 7 gives the details of the last three General Meetings. Table 7: Annual/Extraordinary general Meetings
Date AGM Location Time
16 September 2005 16 September 2006 21 September 2007
39th AGM 40th AGM 41st AGM
Yashad Bhawan, Udaipur, Rajasthan Yashad Bhawan, Udaipur, Rajasthan Yashad Bhawan, Udaipur, Rajasthan
4.00pm 4.00pm 4.00pm
There were no special resolutions passed in the previous three AGMs.

postal Ballot
None of the resolutions were required to be passed by postal ballot during the year.
61
compliance mandatory reQuirements
The Company is fully compliant with the applicable mandatory requirements of the revised Clause 49. The Company has complied fully with the requirements of the regulatory authorities on capital markets. There have been no instances of non-compliance by the Company on any matters related to the capital markets, nor has any penalty or stricture been imposed on the Company by the stock exchanges, SEBI or any other statutory authority.
adoption of non-mandatory reQuirements
d) Audit Qualifications Management response on audit qualification, if any, is covered in the Directors Report. e) Mechanism for Evaluation of Non-Executive Directors The Company does not have a mechanism to review performance of non-executive directors. f) whistleblower Policy The Company has formalised a whistleblower policy and its working is regularly reviewed by the Audit Committee. The directors and senior management are obligated to ensure that the whistleblower is not subjected to any discriminatory practises. The Company has established a mechanism for employees to report. The designated email id for reporting is whistle.blower@vedanta.co.in. The access to this email-id is provided to the Head, Management Assurance. g) Secretarial Audit Even though there is no mandatory requirement for Corporate Secretarial Audit, the Company carries out a Quarterly Secretarial Audit with regard to share transfers and other compliances and presents it to the Board. h) Secretarial Standards The Institute of Company Secretaries of India had brought out Secretarial Standard called SS 1 to SS 6. The Company is compliant with these standards even as it is recommendatory in nature.
a) Tenure of Independent Directors No specific tenure has been specified for the Independent Directors. b) Remuneration Committee Other than the sitting fee, which is approved by the Board, none of the directors draw any remuneration from the Company. Hence, no Remuneration Committee has been formed. c) Half-yearly Declaration A half-yearly declaration of financial performance including summary of the significant events in last six months is currently not being sent to each household of shareholders. However, the Company publishes its results in national and state level newspapers having wide circulation. The results are also posted on the website of the Company: www.hzlindia.com.
62

governance
additional shareholder information
annual general meeting
Date: 21 August 2008 Time: 3.30pm Venue: Yashad Bhawan, Udaipur

financial calendar
Financial year: 1 April to 31 March For the year ended 31 March 2008, results were announced on: First quarter 24 July 2007: 22 October 2007: Half year 23 January 2008: Third quarter Fourth quarter and annual. 24 April 2008: For the year ending 31 March 2009, results will be announced by: First Quarter End July 2008: End October 2008: Half Year End January 2009: Third Quarter Fourth Quarter and Annual. End April 2009:
Book closure
The dates of book closure are from 14 August 2008 to 20 August 2008, inclusive of both days.
diVidend
An interim dividend of Rs. 2.50 per equity share was paid on 13 September 2007. A final dividend of Rs. 2.50 per equity share will be paid on or after 27 August 2008 within the statutory time limit, subject to approval by the shareholders at the Annual General Meeting.
listing
At present, the equity shares of the Company are listed on the Bombay Stock Exchange Limited, Mumbai (BSE), and National Stock Exchange Limited (NSE). The annual listing fees for the financial year 2007-08 to NSE and BSE has been paid. Table 1: Hindustan Zincs Stock Exchange Codes
Name of the Stock Exchange Stock Code
National Stock Exchange Limited, Mumbai Bombay Stock Exchange Limited, Mumbai
stock market data
HINDZINC 500188
Table 2: High, Lows and volumes of Companys Shares for 2007-08 at bSE and NSE
BSE High Low | Volume NSE High Low Volume
April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008
751.00 765.00 754.40 828.00 748.00 819.95 969.00 931.00 860.00 842.95 684.85 649.00
545.25 645.00 641.25 686.00 659.75 686.15 777.00 679.20 760.00 510.00 525.10 507.00
4,283,242 3,120,058 2,369,923 2,340,330 1,391,618 1,759,192 2,270,191 1,647,493 1,466,535 1,163,940 743,411 656,301
717.40 767.25 753.45 828.80 815 820 968 929.30 859.95 841 685 655
545 4132180 627.20 2941230 640 3360531 676 2815243 633.90 1897765 685.05 2294311 780.35 2884061 677.10 2110839 758 1989308 500 1779842 524.50 1364288 491.10 1458631
63
additional shareholder information CONTINUED

Chart A: Hindustan Zincs Share Performance versus bSE Sensex
Note: Share price of Hindustan Zinc and BSE Sensex have been indexed to 100 on 2 April 2007
Chart b: Hindustan Zincs Share Performance versus NSE NIfTy
Note: Share price of Hindustan Zinc and NSE NIFTY have been indexed to 100 on 2 April 2007
distriBution of shareholding
Tables 3 and 4 list the distribution of the shareholding of the equity shares of the Company by size and by ownership class as on 31 March 2008. Table 3: Shareholding Pattern by Size on 31 March 2008
No. of equity shares No. of shareholders % of shareholders No. of shares held % of shareholding
Up to 500 5011,000 1,0012,000 2,0013,000 3,0014,000 4,0015,000 5,00110,000 10,00120,000 20,00130,000 30,00140,000 40,00150,000 50,00160,000 100,001 and above total
44,216 1,307 693 202 82 57 102 37 15 10 3 17 35 46,776
94.527 2.794 1.482 0.432 0.175 0.122 0.218 0.079 0.032 0.022 0.006 0.036 0.075 100
31,56,651 10,61,692 10,53,861 510758 2,92,517 2,63,644 7,19,230 5,03,149 3,77,311 3,45,573 1,49,652 13,25,936 41,27,71,926 422,531,900
0.747 0.251 0.249 0.121 0.069 0.062 0.170 0.119 0.089 0.082 0.035 0.314 97.690 100
64

governance
Table 4: Shareholding Pattern by Ownership as on 31 March 2008

Category No. of Percentage of shares held shareholding
A. Promoters holding 1 Promoters Sterlite Opportunities and Ventures Limited Sub-total B. Non-Promoters Holding Institutional Investors a. Mutual Funds and UTI b. Banks, Financial Institutions, Insurance Companies (Central/State Govt. Institutions/ Non-government Institutions) c. FIIs Sub-total Others a. Private Corporate Bodies b. Indian Public c NRIs/OCBs d. NRI company e. Bank Foreign f. Foreign National individual g. GOI President of India Sub-total Grand total
dematerlisation of shares
27,43,15,431 27,43,15,431
64.9218 64.9218
28,20,188 21,60,729 1,00,48,642 1,50,29,559 18,27,705 63,60,307 1,88,339 14,400 1,000 100 12,47,95,059 13,31,86,910
0.6674 0.5114 2.3782 3.5570 0.4325 1.5053 0.0446 0.0034 0.0002 0.0000 29.5351 31.5211
42,25,31,900 100.0000
The shares of the Company are compulsorily traded in dematerialised form only. The Companys shares are available for trading in the depository system of both NSDL and CDSL. As on 31 March 2008, 297,366,198 equity shares forming 70.38 per cent of the share capital of the Company stand dematerialised. The International Securities Identification Number (ISIN) allotted to the Company under the depository system is INE 267A01017. The Companys share is among the most actively traded share on the Indian stock exchanges and is consistently ranked among the top frequently traded shares, both in terms of volume and value. Accordingly it has been included in the futures and options (F&O) category. The market lot for the same is 250 shares.
outstanding gdrs/adrs/Warrents/options
As on 31 March 2008 there were no outstanding GDRs/ADRs etc.

details of puBlic funding oBtained in the last three years
No public funding has been obtained in the last three years.
65
additional shareholder information CONTINUED

registrar and transfer agent
Dematerialisation and electronic connectivity services have been entrusted to: M/s. Sharepro Services Satam Estate, 3rd Floor Above Bank of Baroda Cardinal Gracious Road, Chakala Andheri (E), Mumbai 400 099 Phone: 022-28125168 Fax: 022-28375646
share transfer system
plant locations
Mining units
Rampura Agucha Mine Sindesar Khurd Mine Rajpura Dariba Mine Zawar Mines
Smelting units
Bhilwara District (Rajasthan) Rajsamand District (Rajasthan) Rajsamand District (Rajasthan) Udaipur District (Rajasthan)
Shares lodged in physical form for transfer, are usually transferred within seven days if the documents are clear in all respects. Shares under objection are in general returned within a weeks time. For transfer of shares in physical form, the Board of Directors have authorised the Company Secretary to process and approve the transfer of share and registration. Request received for dematerialisation of shares are processed and the confirmation is given by the Registrar and Transfer Agents to the depositories generally within 15 days. Bulk dematerialisation requests are processed and confirmed within 30 days of receipt to NSDL and CDSL.
companys registered office address
Chanderiya Lead Zinc Smelter Debari Zinc Smelter Vizag Zinc Smelter Lead Smelter Tundoo
Wind power farms
Chittorgarh District (Rajasthan) Udaipur District (Rajasthan) Visakhapatnam (Andhra Pradesh) Dhanbad ( Jharkhand)
Samana Gadag
Jamnagar District, Gujarat Gadag District, Karnataka
address for correspondence
Mr. R. Pandwal Company Secretary Hindustan Zinc Limited Yashad Bhawan Udaipur 313004 Rajasthan
Hindustan Zinc Limited Yashad Bhawan Udaipur 313004 Rajasthan
66

governance
certification By chief executiVe officer and chief financial officer of the company
We, M.S. Mehta, CEO and Whole Time Director, and S.L. Bajaj, Chief Financial Officer of Hindustan Zinc Limited, to the best of our knowledge and belief, certify that: 1. We have reviewed the balance sheet and profit and loss account, and all its schedules etc., and confirm that: a) based on our knowledge and information, these statements do not contain any untrue statement of a material fact or omit to state a material fact or contain statements that might be misleading. b) based on our knowledge and information, the financial statements, present in all material respects, a true and fair view of, the Companys affairs and are in compliance with the existing accounting standards and/or applicable laws and regulations. 2. To the best of our knowledge and belief, no transactions entered into by the Company during the period are fraudulent, illegal or violative of the Companys code of conduct. 3. We are responsible for establishing and maintaining internal controls for financial reporting and we have evaluated the effectiveness of the internal control systems of the Company, and we have: a) designed such controls and procedures to ensure that material information relating to the Company is made known to us; b) designed such internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles; c) evaluated the effectiveness of the Companys disclosure, controls and procedures; and
s.l. Bajaj chief financial officer m.s. mehta ceo and Whole time director
4. We confirm that: a) there are no deficiencies in the design or operation of internal controls, which could materially adversely affect the Companys ability to record, process, summarize and report financial data; b) there are no significant changes in internal controls during the period; c) all significant changes in accounting policies during the year have been disclosed in the notes to the financial statements; and d) there are no instances of significant fraud of which we are aware, that involves management or other employees who have a significant role in the Companys internal control system. 5. We affirm that we have not denied any personnel access to the Audit Committee of the Company (in respect of matters involving alleged misconduct) and we have provided protection to whistleblowers from unfair termination and other unfair or prejudicial employment practices.
Date: 24 April 2008 Place: Mumbai
67
auditors certificate
1. We have examined the compliance of conditions of Corporate Governance by Hindustan Zinc Limited, for the year ended on 31 March 2008, as stipulated in Clause 49 of the Listing Agreement of the said Company with stock exchanges. 2. The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of the certificate of Corporate Governance as stipulated in the said Clause. It is neither an audit nor an expression of opinion on the financial statements of the Company. 3. In our opinion and to the best of our information and according to the explanations given to us, the representations made by the directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement. 4. We state that such compliance is neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company. For Deloitte Haskins & Sells Chartered Accountants
shyamak r. tata partner
M. No. 38320
68

governance
auditors report
1. We have audited the attached Balance Sheet of Hindustan Zinc Limited (the Company) as at 31 March 2008, the Profit and Loss Account and Cash Flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We conducted our audit in accordance with generally accepted auditing standards in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Reference is invited to Note 15 on Schedule 18 , relating to long-term investment in equity shares of a power company being classified as an intangible asset (Schedule 4) and amortised. This treatment is in preference to requirements of Accounting Standard 13 Accounting for Investments, Accounting Standard 30 Financial Instruments: Recognition and Measurement and Schedule XIV of the Companies Act, 1956. This has resulted in profit for the year being lower by Rs. 4.67 crore (2007: Rs. 4.67 crore), investments being lower by Rs. 98.41 crores (2007: Rs. 98.41 crore) and reserves and surplus being lower by Rs. 33.04 crores (2007: Rs. 28.37 crore).
5. Further to our comments in the Annexure referred to in paragraph 3 above, we report that: a. we have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit; b. in our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books; c. the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account; d. in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 except for paragraph 4 above. Additionally, the Company has chosen to early adopt Accounting Standard 30, Financial Instruments: Recognition and Measurement arising from the Announcement of the Institute of Chartered Accountants of India on 29 March 2008 as stated in Note 16 on Schedule 18; and e. in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2008; ii. in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and iii. in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 6. On the basis of written representations received from the directors, as on 31 March 2008, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2008 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956. For Deloitte Haskins & Sells Chartered Accountants
M. No. 38320
69
annexure to the auditors report
(referred to in paragraph 3 of auditors report of eVen date)
In our opinion and according to the information and explanation given to us, the nature of the Companys business/activities during the year are such that clauses, (iii), (v), (x), (xii), (xiii), (xiv), (xv), (xvi), (xviii), (xix) and (xx) of the Companies (Auditors Report) Order 2003, are not applicable to the Company and we state that: 1. In respect of its fixed assets: i. The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. ii. The Company has a phase of physical verification of its fixed assets in a three year period which, in our opinion, is reasonable, having regard to the size of the Company and the nature of its assets. In accordance with such a programme, the management has physically verified the fixed assets and no material discrepancies were noticed on such verification. iii. In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.
5. In our opinion, the Company has an adequate internal audit system commensurate with the size of the Company and the nature of its business. 6. We have broadly reviewed the books of account and records maintained by the Company relating to the manufacture of zinc, lead and sulphuric acid, pursuant to the order made by the central government for the maintained of cost records under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. 7. According to the information and explanations given to us, and the records of the Company examined by us: i. The Company has been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other material statutory dues; and ii. Disputed sales tax, excise duty, royalty and income tax dues aggregating to Rs. 26.80 crore, Rs. 43.27 crore, Rs. 163.06 crore and Rs. 214.82 crore respectively, have not been deposited since the matters are pending with the relevant forum as per Annexure A attached. 8. The Company has not defaulted in repayment of dues to financial institutions and banks. 9. On an overall examination of the Balance Sheet of the Company, funds raised on a short-term basis have, prima facie, not been used during the year for longterm investment. 10. To the best of our knowledge and belief and according to the information and explanation given to us, no significant fraud on or by the Company was noticed or reported during the year. For Deloitte Haskins & Sells Chartered Accountants
2. In respect of its inventories: i. Inventory has been physically verified by the management during the year. ii. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. iii. In our opinion, the Company has maintained proper records of its inventories. The discrepancies noticed on verification between the physical stock and the book records were not material having regard to the size of the operation of the Company. 3. There is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of books and records of the Company we have neither come across nor have been informed of any continuing failure to correct major weakness in the aforesaid internal control procedure. 4. The Company has complied with the provision of Section 58A or any other relevant provision of the Companies Act, 1956 and the rules framed thereunder and the directives issued by the Reserve Bank of India, where applicable, with regard to the deposits accepted from the public. The provision of Section 58AA of the Companies Act, 1956, are not applicable to the Company.
M. No. 38320
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governance
annexure a
Statement of unpaid disputed statutory dues annexed to Auditors Report

Nature of dues Amount (Rs. in crore) Forum pending at
Companys appeals: a) Sales tax claim
b) Central excise duty
Disputes in respect of sales tax rate difference/classification and stock transfer treated as sales for the financial year 1980-81 to 2004-05. In respect of modvat/cenvat credit on inputs, capital goods, alleged duty demand on captive use of intermediate goods, reversal of the amount on dispute of by-product, duty on valuation and storage/handling losses for financial year 1988-89 to 2003-04.
26.80
Deputy Commissioner, Joint Commissioner, CTO, Tribunal and High Court CESTAT, Commissioner (Appeals) and High Court/Supreme Court
43.27
70.07 Departments appeals: a) Royalty b) Income tax Assessment year 1989-90 to 1992-93; 1994-95 to 2003-04 1990-91 to 1996-97 Appeal filed by the Mining Engineer, Department of Mines & Geology, Government of Rajasthan against the Company 163.06 Supreme Court
Relief granted by CIT(A) for difference in computation, allowances of certain expenses and enhancement of rebate, etc. Relief granted by tribunal for difference in computation, allowances of certain expenses and enhancement of rebate, etc.
171.80 43.02 377.88
Tribunal High Court/Supreme Court
71
balaNCE ShEEt
AS AT 31 MARCH 2008
Schedule
Rs. in crore 2008 2007
SOURCES OF FUNDS ShaREhOlDERS FUNDS Capital Reserves and surplus lOaN FUNDS Unsecured loans DEFERRED tax liability (NEt) tOtal aPPliCatiON OF FUNDS FixED aSSEtS Gross block Less: Depreciation
1 2 3
422.53 422.53 11,425.66 11,848.19 7,204.53 7,627.06 0.39 459.68 12,308.26 0.39 300.63
7,928.08
5,181.80 (1,484.64)
3,499.79 (1,264.19)
Net block Capital work in progress (includes advances) iNvEStmENtS CURRENt aSSEtS, lOaNS aND aDvaNCES Inventories Sundry debtors Cash and bank balances Other current assets Loans and advances
3,697.16 2,235.60 465.46 4,162.62 634.99 2,870.59 6,332.45 518.10 443.66 1,362.78 3.00 384.09 2,711.63 774.86 123.58 898.44 4,403.30 499.28 556.62 119.70 0.69 304.66
5 6 7 8 10 9

11
1,480.95 1,813.19 641.81 184.95 826.76 654.19 7,928.08
lESS: CURRENt liabilitiES aND PROviSiONS Current liabilities Provisions NEt CURRENt aSSEtS tOtal Notes
12,308.26
18
Schedules 1 to 18 form an integral part of these accounts. In terms of our report of even date. For Deloitte Haskins & Sells Chartered Accountants:
Shyamak R tata PaRtNER taRUN JaiN DiRECtOR k.k. kaURa DiRECtOR
For and on behalf of the Board of Directors.

m.S. mEhta CEO & WhOlE timE DiRECtOR
Membership No: 38320 Date: 24 April 2008 Place: Mumbai
S.l. baJaJ ChiEF FiNaNCial OFFiCER
R. PaNDWal COmPaNy SECREtaRy
72

FINANCIALS
PROFit aND lOSS aCCOUNt

FOR YEAR ENDED 31 MARCH 2008
Schedule
iNCOmE Sales Less: Excise Other income tOtal
8,736.91 9,220.45 (859.14) 7,877.77 (660.23) 8,560.22

12
851.63 8,729.40
231.27 8,791.49

13 15 16 17
ExPENDitURE Mining and manufacturing (Accretion)/Decretion of stock Employees remuneration and benefits Administrative and selling Finance Depreciation tOtal PROFit bEFORE tax Provision for tax Current Prior year Deferred Fringe benefit
14
1,804.26 59.11 308.19 327.82 24.17 220.51 2,744.06 5,985.34 1,545.07 (79.69) 122.01 1.88 4,396.07 970.50 5,366.57
1,684.35 (56.91) 259.81 266.06 28.44 156.08 2,337.83 6,453.66 1,975.56 (24.68) 59.50 1.47 4,441.81 122.72 4,564.53
PROFit aFtER tax Balance being surplus brought forward PROFit availablE FOR aPPROPRiatiON aPPROPRiatiON Dividend Final Interim Corporate dividend tax General reserve Balance being surplus carried forward Basic and diluted earnings per share (in Rs.) Notes

18
105.63 105.63 35.90 500.00 4,619.41 5,366.57 104.04
105.63 105.63 32.77 3,350.00 970.50 4,564.53 105.12
Schedules 1 to 18 form an integral part of these accounts. In terms of our report of even date. For Deloitte Haskins & Sells Chartered Accountants:

73
CaSh FlOW StatEmENt

FOR THE YEAR ENDED 31 MARCH 2008
a) CaSh FlOW FROm OPERatiNG aCtivitiES: NEt PROFit bEFORE tax aDJUStmENtS FOR: Depreciation and amortisation Movement in general reserve Interest and finance charges Interest and dividend earned Mark to market on commodity hedging Provision for expenses written back Provision for dimunition in value of investment written back Loss on sale of fixed asset (net) Profit on current Investment (net) OPERatiNG PROFit bEFORE WORkiNG CaPital ChaNGES ChaNGES iN WORkiNG CaPital Inventories Sundry debtors Loans and Advances Current liabilities CaSh GENERatED FROm OPERatiONS Income taxes paid during the year b) CaSh FlOW FROm iNvEStiNG aCtivitiES: Purchase of fixed assets Interest and dividend received Purchase of investments Sale of investment Sale of fixed assets NEt CaSh USED iN iNvEStiNG aCtivitiES
5,985.34 222.32 24.17 (228.51) (21.83) (148.12) (1.25) (391.34)
6,453.66 156.85 (0.50) 28.44 (70.21) (8.26) (0.31) 0.91 (108.75)
5,440.78 (18.82) 112.96 (79.92) 281.78
6,451.83 (116.18) 133.23 (142.43) 236.28
5,736.78 (1,528.78) (1,515.06) 226.19 (24,150.89) 22,744.19 1.96
6,562.73 (1,958.15) 4,208.00 4,604.58
NEt CaSh GENERatED FROm OPERatiNG aCtivitiES
(1,114.43) 69.70 (23,608.96) 20,919.60 4.17 (3,729.92) (557.63) (30.91) (240.45) (828.99) 45.67 119.70 74.03 45.67
(2,693.61) (24.08) (247.23) (271.31) 1243.08 1362.78 119.70
C) CaSh FlOW FROm FiNaNCiNG aCtivitiES: Net proceeds from borrowings Interest and finance charges paid Dividend and tax thereon paid NEt CaSh USED iN FiNaNCiNG aCtivitiES NEt iNCREaSE iN CaSh aND CaSh EqUivalENtS Cash and cash equivalents at the end of the year Cash and cash equivalents at the beginning of the year
1243.08
Note: Previous years figures have been recasted/regrouped, wherever necessary. In terms of our report of even date. For Deloitte Haskins & Sells Chartered Accountants:

74

FINANCIALS
SChEDUlE aNNExED tO aND FORmiNG PaRt OF thE aCCOUNtS

1. CaPital
aUthORiSED 500,000,000 (2007: 500,000,000 ) equity shares of Rs. 10/- each.
500.00 500.00 422.53 422.53
500.00 500.00 422.53 422.53
iSSUED, SUbSCRibED aND PaiD UP 422,531,900 (2007: 422,531,900) equity shares of Rs. 10/- each fully paid up
Of the above: a) 21,370,000 (2007: 21,370,000 ) equity shares of Rs. 10/- each allotted for consideration other than cash b) 274,315,431 (2007: 274,315,431 ) equity shares of Rs. 10/- each are held by Sterlite Opportunities and Ventures Limited (SOVL) holding company. SOVL is a subsidiary of Sterlite Industries (India) Limited (SIIL) and the ultimate holding company is Vedanta Resources Plc, United Kingdom (VRP). SIIL and VRP do not hold any shares in the company.
2. RESERvES aND SURPlUS

CaPital RESERvE Balance provisions after adjustment as per Metal Corporation (Nationalisation and Miscellaneous Provision) Act, 1976. Balance as per last balance sheet GENERal RESERvE As per last balance sheet Less: Incremental liability for retirement benefit (net of tax) revised standard adopted Add: Adjustments (net of tax) arising due to early adoption of Accounting Standard 30 issued by ICAI (Refer to Note 16, Schedule 18) Add: Transferred from profit and loss account Hedging reserves arising on early adoption of Accounting Standard 30 issued by ICAI Profit and loss account surplus
3 . UNSECURED lOaNS

0.61 2,883.92
0.61
6,233.42 72.29 500.00
0.50
3,350.00 6,233.42 970.50 7,204.53
6,805.71 (0.07) 4,619.41 11,425.66
From other than bank
0.39 0.39
0.39 0.39
75
SChEDUlE aNNExED tO aND FORmiNG PaRt OF thE aCCOUNtS CONTINUED

4. FixED aSSEtS
Rs. in crore As at 31/3/07 Additions Gross block (at cost) Deductions/ Adjustment As at 31/3/08 Adjustment for grant Net gross block as at 31/3/08
Land (including development expenditure) Freehold Leasehold Buildings and roads1 Mine development expenditure Railway sidings, locomotives and wagons Plant and machinery Other equipment Intangible assets Investment in shares Computer software Furniture and fittings Vehicles Assets retired from active use Total Previous year (total)
1
13.46 0.23 0.35 11.10 214.20 86.82 59.88 8.20 0.25 3,033.20 1,575.14 62.40 12.58 98.41 1.70 11.38 6.98 6.03 3,516.19 0.88 1.37 1.79 1,690.16 537.23
13.69 11.45 301.02 59.88 8.45 2.58 4,605.76 1.21 73.77 0.18 0.38 3.80 27.40 98.41 2.58 12.57 8.39 2.23 3,516.19
13.69 11.45 0.25 300.77 59.88 8.45 14.11 4,591.65 2.04 71.73 98.41 2.58 12.57 8.39 2.23
8.15 5,198.20
16.40 5,181.80 16.40 3,499.79
3,006.36
Buildings includes Rs. 1.03 (2007: Rs. 1.03) crore where bifurcation of the cost between land and building is not ascertained.
Rs. in crore Upto 31/3/07
Depreciation/amortisation Provided during the year Deductions/ Adjustment
| Upto 31/3/08
Net Block As at 31/3/08 As at 31/3/07
Land (including development expenditure) Freehold Leasehold Buildings and roads Mine development expenditure Railway sidings, locomotives and wagons Plant and machinery Other equipment Intangible asset Investment in shares Computer software Furniture and fittings Vehicles Assets retired from active use
44.43 58.35 5.82 1,079.40 29.66 28.37 1.49 6.13 4.83 5.71
6.27 1.53 0.37 209.12 4.61 4.67 0.21 0.60 0.49 0.02 227.89 156.85
13.69 13.46 11.45 0.35 50.70 250.07 169.52 59.88 1.53 6.19 2.26 2.38 2.37 1,286.15 3,305.50 1,939.69 0.81 33.46 38.27 30.70 0.37 0.28 3.61 33.04 1.70 6.36 5.04 2.12 65.37 0.88 6.21 3.35 0.11 70.04 0.21 5.25 2.15 0.32
1,264.19
7.44 1,484.64 22.32 1,264.19
3,697.16 2,235.60 2,235.60 292.66 373.68 172.80 261.31
Previous year (total) 1129.66 Capital work in progress Advance towards capital goods and services considered good Total

4,162.62 2,870.59
Rs. in crore
2008
2007
Profit and loss account Expenditure on mine development Capitalised in fixed asset Research and development expenditure
220.51 1.53 5.59 0.26 227.89 0.26 0.12 7.12
156.08 0.51 0.26 156.85 0.10 0.03 6.74
100% depreciation has been charged on following assets: Plant and machinery and vehicles Furniture and fixtures Cumulative
76

FINANCIALS
5. iNvEStmENtS NON-tRaDE aND UNqUOtED UNlESS StatED OthERWiSE lONG-tERm iNvEStmENtS at COSt
In fully paid-up equity shares (trade investment)

Rs. in crore 2007-08 Face value total number of shares (in Rs.) 2006-07 | value as at Total number Value as at 31/3/08 of shares 31/3/07
Madanpur South Coal Company Limited
10
130,001
1.39
10,000
0.01
CURRENt iNvEStmENt- at FaiR valUE thROUGh PROFit OR lOSS (2007 at lOWER OF COSt aND maRkEt valUE)
In mutual funds

Rs. in crore 2007-08 Face value total number of units (in Rs.) 2006-07 | value as at Total number Value as at 31/3/08 of units 31/3/07
ABN AMRO Fixed Term Plan Series 5 ABN AMRO Fixed Term Plan Series 8 Yearly Plan A ABN AMRO Fixed Term Plan Series 8 Yearly Plan E ABN AMRO Fixed Term Plan Series 8 Yearly Plan D ABN AMRO Flexible Short Term Plan Series B Birla Fixed Term Plan Series AC Birla Fixed Term Plan Series AE Birla Fixed Term Plan Series AJ Birla Fixed Term Plan Series X Birla Fixed Term Plan Series AD Birla Fixed Term Plan Series AA Birla Fixed Term Plan Series R (400 days) (March 2007) Birla Fixed Term Plan Series S Birla Fixed Term Plan Series AB Birla Sun Life Interval Income Fund Quarterly Plan Series I Birla Fixed Maturity Plan Series O (500 days) (December 06) Birla Fixed Term Plan Series U Birla Sun life Liquid plus IP Birla Fixed Term Plan Series AN Birla Sun Life Interval Income Fund Quarterly Plan Series III Birla Fixed Term Plan Series T DBS Chola Fixed Maturity Plan Series 6 DSP ML Fixed Term Plan Series 3H DSP ML FMP 18 Months Series 1 DSP ML Liquid Plus Fund IP DSP ML FMP 3 Months Series 6 DSP ML FMP 13 Months Series 1 DSP ML Fixed Term Plan Series 3E DWS Fixed Term Fund Series 32 DWS Fixed Term Fund Series 20 DWS Fixed Term Fund Series 41 DWS Fixed Term Fund Series 35 DWS FMP Series 21 390 days DWS Fixed Term Fund Series 24 Fidelity Liquid Plus Super Inst HDFC FMP 367 D June 2007 HDFC FMP 367 D September 2007 HDFC FMP 367 D August 2007 HDFC Fixed Maturity Plan 18 M October 2006 HDFC Fixed Maturity Plan 15 M March 2007 HDFC Cash Management Fund Savings Plus HDFC Fixed Maturity Plan 14 M March 2007 HSBC Fixed Term Series 32 HSBC Fixed Term Series 27 HSBC Fixed Term Series 44 HSBC Fixed Term Series 21
10 10000000 10 10000000 10 25000000 10 32439600 10 36642373 10 5000000 10 10000000 10 10000000 10 15000000 10 18000000 10 20000000 10 20000000 10 23000000 10 25000000 10 35202231 10 40000000 10 42000000 10 89451357 10 100000000 10 101576114 10 200000000 10 30000000 10 100000 10 15000000 10 153837 10 20000000 10 45000000 10 750000 10 7000000 10 15000000 10 15000000 10 21664400 10 35000000 10 100000000 10 10007859 10 5000000 10 5000000 10 15000000 10 25000000 10 45000000 10 65712733 10 107000000 10 10000000 10 15000000 10 15000000 10 20000000
11.13 10000000 10.75 26.13 34.28 36.93 5.20 10.31 10.19 16.09 18.57 21.10 22.21 20000000 25.58 23000000 26.32 35.29 44.52 40000000 46.66 42000000 89.51 100.67 101.77 222.06 200000000 32.81 30000000 10.37 15.61 15.39 20.08 45.17 83.00 750000 7.63 16.86 15000000 15.45 22.74 38.83 35000000 111.08 100000000 10.01 5.36 5.22 15.79 28.07 25000000 50.06 45000000 65.92 119.09 107000000 10.68 16.65 15000000 15.07 22.25 20000000
10.00 20.00 23.00 40.00 42.00 200.00 30.00 75.00 15.00 35.00 100.00 25.00 45.00 107.00 15.00 20.00
77

5. iNvEStmENtS NON-tRaDE aND UNqUOtED UNlESS StatED OthERWiSE CONTINUED CURRENt iNvEStmENt at FaiR valUE thROUGh PROFit OR lOSS (2007 at lOWER OF COSt aND maRkEt valUE) CONTINUED
In mutual funds continued

HSBC Fixed Term Series 36 HSBC Fixed Term Series 25 ICICI Prudential Fixed Maturity Plan Series 38 One year Plan D ICICI Prudential Fixed Maturity Plan Series 41 ICICI Prudential FMP Series 42 16 Months Plan ICICI Prudential Interval Fund Annual Interval Plan III ICICI Prudential FMP Series 35 One Year Plan Instl. Div. ICICI Prudential Interval Fund II Quarterly Interval Plan E ICICI Prudential FMP Series 37 14 Months Plan ICICI Prudential FMP-Series 34 15 Months Plan (February 2007) ICICI Prudential Interval Fund Annual Interval Plan II ICICI Prudential Interval Fund II Quarterly Interval Plan C ICICI Prudential Flexible Income Plan ICICI Prudential FMP Series 35 13 Months Plan B ING Fixed Maturity Fund Series 32 ING Fixed Maturity Fund Series 31 ING Vysya Liquid Plus Fund Institutional Fund JM Fixed Maturity Fund Series IV Yearly Plan Growth Plan JM Fixed Maturity Fund Series IV 13 Months Plan F4 Growth Plan JM Fixed Maturity Fund Series VII JM Arbitrage Advantage Fund Growth Plan JM Money Manager Fund Super Plus Kotak FMP 12 M Series 1 Kotak FMP 14 M Series 4 Kotak FMP 12 M Series 2 Kotak FMP 12 M Series 4 Kotak FMP 14 M Series 3 Kotak FMP 13 M Series 3 Kotak FMP 13 M Series 2 Kotak FMP 14 M Series 2 Kotak Quarterly Interval Plan Series 5 Kotak FMP 13 M Series 1 Kotak Flexi Debt Fund Lotus India FMP 13 Months Series II Lotus India FMP 14 Months Series I Lotus India FMP 375 Days Series III Lotus India FMP 15 Months Series II Lotus India FMP 375 Days Series V Lotus India FMP 3 Months Series XXII Lotus India FMP 375 Days Series IV Principal Fixed Maturity Fund Plan 460 days Series IV Principal Pnb Fixed Maturity Plan 385 days Series V Principal Deposit Fund-Plan 540 Days Series I (January 2007) Principal Pnb Fixed Maturity Plan 385 days Series VI Principal Pnb Fixed Maturity Plan 385 days Series IV Principal Income Fund Principal Fixed Maturity Fund Plan 460 days Series III (March 2007) Principal Floating Rate Fund FMP-IP Reliance Fixed Horizon Fund VII Series 1 Reliance Fixed Horizon Fund IV Series 6 Reliance Fixed Horizon Fund II Annual Plan Series IV (470 Days, January 2007) Reliance Fixed Horizon Fund IV Series 1 Reliance Fixed Horizon Fund IV Series 2 Reliance Fixed Horizon Fund II Annual Plan V (February 2007) Reliance Fixed Horizon Fund VII Series 3
10 40000000 10 50000000 10 10000000 10 10000000 10 15000000 10 20000000 10 25000000 10 25000000 10 35000000 10 50000000 10 50000000 10 101683345 10 98268007 10 150000000 10 40000000 10 50000000 10 51398162 10 10000000 10 15000000 10 27004691 10 39701103 10 117112012 10 10000000 10 20000000 10 25000000 10 25000000 10 25000000 10 30000000 10 50000000 10 50000000 10 53762033 10 75000000 10 99579352 10 5000000 10 10000000 10 10000000 10 10001712 10 15549525 10 20263482 10 25000000 10 8000000 10 10000000 10 15000000 10 15000000 10 30000000 10 38087110 10 40000000 10 213445695 10 15000000 10 20000000 10 25000000 10 30000000 10 30000000 10 35000000 10 50000000
41.78 55.53 50000000 10.32 10.26 15.16 20.72 27.50 25.12 38.74 35000000 56.17 50000000 52.11 101.79 103.90 166.68 150000000 42.14 52.45 51.42 11.16 10000000 16.77 15000000 28.38 46.00 117.16 10.73 20.14 26.13 25.84 25.23 30.10 55.49 55.40 53.84 83.21 75000000 99.89 5.54 5000000 11.12 10000000 10.56 10.23 16.07 20.28 26.16 8.05 10.49 16.67 15000000 15.42 33.19 30000000 43.43 38087110 44.54 40000000 213.68 15.23 20.64 27.80 25000000 31.77 31.61 38.93 35000000 50.40
50.00 35.00 50.00 150.00 10.00 15.00 75.00 5.00 10.00 15.00 30.00 39.66 40.00 25.00 35.00
78

FINANCIALS

Reliance Liquid Plus Fund Institutional Plan Reliance Fixed Horizon Fund III Annual Plan Series I Reliance Fixed Horizon Fund III Annual Plan Series IV Reliance Fixed Horizon Fund II Annual Plan Series VI Reliance Fixed Horizon Fund III Annual Plan Series VI1 Reliance Fixed Horizon Fund III Annual Plan Series III SBI Debt Fund Series 90 Days 20 Standard Chartered Fixed Maturity Plan Yearly Series 7 Standard Chartered Fixed Maturity Plan Yearly Series 17 Plan B Standard Chartered Fixed Maturity Plan Yearly Series 19 Plan B Standard Chartered Fixed Maturity Plan Yearly Series 5 Standard Chartered Fixed Maturity Plan Yearly Series 3 Tata Fixed Horizon Fund Series 13 Scheme C Tata Fixed Horizon Fund Series 13 Scheme B Tata Fixed Horizon Fund Series 7 Scheme D 16 Months (December 2006) Tata Fixed Horizon Fund Series 13 Scheme A IG Tata Fixed Horizon Fund Series 14 Scheme A Tata Fixed Horizon Fund Series 7 Scheme A 13 Months (March 2007) Tata Fixed Horizon Fund Series 6 Scheme C 13 Months (March 2007) Tata Fixed Horizon Fund Series 7 Scheme B (March 07) Tata Floating Rate Fund LT Tata Dynamic Option Bond Fund Option B Templeton Fixed Horizon Fund Series I (January 207) (15 Months) Templeton Fixed Horizon Fund Series II Plan B Templeton Fixed Tenure Fund Series VII (370 days plan) Templeton Fixed Horizon Fund Series I (13 months plan) UTI Fixed Term Income Fund Series II Plan 16 Institutional Growth Plan UTI Fixed Income Interval Fund Annual Interval Plan Series 3 UTI Fixed Maturity Plan HFMP (March 2008) UTI Liquid Plus Fund Institutional Plan UTI Fixed Maturity Plan Yearly Series YFMP/March 2007 Growth Plan ABN AMRO Fixed Term Plan Series 1 ABN AMRO Fixed Term Plan Series 2 ABN AMRO Fixed Term Plan Series 3 Birla Fixed Term Plan Series E Birla Fixed Term Plan Series F Birla Fixed Term Plan Series H DSP ML Fixed Term Plan Series 3A DWS Fixed Income fund Series 15 DWS Fixed Maturity Plan Series 10 DWS Fixed Maturity Plan Series 14 DWS Fixed Term Fund Series 4 DWS Fixed Term Fund Series 5 DWS Fixed Term Fund Series 6 DWS Fixed Term Fund Series 9 HDFC Fixed Maturity Plan July 2006 HDFC Fixed Maturity Plan September 2006 HDFC FMP HDFC FMP June 2006 (1) HSBC Fixed Term Series 13 HSBC Fixed Term Series 15 (September 2006) HSBC Fixed Term Series 4 HSBC Fixed Term Series 9 ICICI Prudential Fixed Maturity Plan Series 25 ICICI Prudential Fixed Maturity Plan Series 28
10 934217 10 100000000 10 100000000 10 150000000 10 200000000 10 200000000 10 101900349 10 25000000 10 30000000 10 35000000 10 35000000 10 40000000 10 10000000 10 15000000 10 15000000 10 20000000 10 20000000 10 20000000 10 25000000 10 40000000 10 148637545 10 191475735 10 20000000 10 20000000 10 50000000 10 105000000 10 20000000 10 50000000 10 74559731 10 797220 10 129380575 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10
93.53 111.25 100000000 111.11 100000000 166.57 150000000 217.94 223.13 200000000 102.70 27.41 30.21 35.13 38.83 35000000 44.44 40000000 10.54 15.85 16.67 15000000 21.53 21.10 22.22 20000000 27.82 25000000 44.39 40000000 150.60 195.11 22.18 20000000 21.45 55.47 50000000 116.64 105000000 21.28 20000000 52.34 74.80 79.74 138.00 129380575 40000000 10000000 30000000 20000000 31000000 82000000 400000 20000000 25000000 50000000 5000000 55161500 24000000 37000000 25000000 30000000 30000000 40000000 30000000 50000000 10000000 50000000 23343542 60000000
100.00 100.00 150.00 200.00 35.00 40.00 15.00 20.00 25.00 40.00 20.00 50.00 105.00 20.00 129.38 40.00 10.00 30.00 20.00 31.00 82.00 40.00 20.00 25.00 50.00 5.00 55.16 24.00 37.00 25.00 30.00 30.00 40.00 30.00 50.00 10.00 50.00 25.00 60.00
79


ICICI Prudential Fixed Maturity Plan Series 28 ICICI Prudential Fixed Maturity Plan Series 12 Inst ICICI Prudential Hybrid FMP 13 ICICI Prudential Hybrid FMP 13 ING Vysya FMP Series VII ING Vysya FMP Series XV JM Equity And Derivative Fund Bonus JM Equity And Derivative Fund Growth JM Fixed Maturity Plan Series II JM High Liquidity Fund Bonus Option Kotak FMP Series XIV Kotak FMP Series 13 Kotak FMP Series 25 Kotak FMP Series XXI Kotak FMP Series 1 Kotak FMP Series 2 Kotak FMP Series 2 Kotak FMP Series 26 LIC MF Fixed Maturity Plan Series IV Principal Pnb Fixed Maturity Plan Series I Principal Pnb Fixed Maturity Plan Series I Principal Pnb Fixed Maturity Plan Series II Principal Pnb Fixed Maturity Plan Series II Reliance Fixed Horizon Fund I Series I Reliance Fixed Horizon Fund I Series II Standard Chartered Grindlays Fixed Maturity Plan Annual 20th Plan Standard Chartered Grindlays Fixed Maturity 20th Plan Standard Chartered Grindlays Fixed Maturity Plan 22 Tata Fixed Horizon Fund Series 2 Plan B Tata Fixed Horizon Fund Series 2 Plan C Tata Fixed Horizon Fund Series 3 Scheme C Tata Fixed Horizon Fund Series 3 Scheme D Tata Fixed Horizon Fund Series 3 Scheme F Tata Fixed Horizon Fund Series 6 Scheme A Tata Fixed Horizon Fund Series 3 Scheme G UTI Fixed Term Income Fund Series I UTI Fixed Term Income Fund- Series I Plan 18 UTI Fixed Maturity Plan August 2006 UTI Fixed Maturity Plan June 2006 Aggregate of unquoted investments at book value
1 Refer note number 6 of schedule 18 (B)
10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10
6,331.06 6,332.45
12000000 19980020 25000000 50000000 17000000 25000000 7415958 52565414 40000000 39721505 10000000 40000000 40000000 25000000 30000000 50000000 50000000 15000000 10000000 34000000 15000000 20000000 22000000 50000000 70000000 10000000 10000000 20000000 5000000 25000000 35000000 10000000 30000000 40000000 40000000 15000000 19000000 50000000 40000000
12.00 20.00 25.00 50.00 17.00 25.00 7.41 55.95 40.00 40.73 10.00 40.00 40.00 25.00 30.00 50.00 50.00 15.00 10.00 34.00 15.00 20.00 22.00 50.00 70.00 10.00 10.00 20.00 5.00 25.00 35.00 10.00 30.00 40.00 40.00 15.00 19.00 50.00 40.00 4,403.29 4,403.30
80

FINANCIALS
5. iNvEStmENtS NON tRaDE aND UNqUOtED UNlESS StatED OthERWiSE CONTINUED FOllOWiNG iNvEStmENtS PURChaSED aND SOlD DURiNG thE yEaR
2007-08 Purchased units | Sold units 2006-07 Purchased units Sold units
a) EqUity ShaRES OF COmPaNy Madanpur South Coal Company Limited joint venture
120001
10000
b) UNitS iN mUtUal FUND ABN AMRO Fixed Term Plan Series 8 Yearly Plan A ABN AMRO Interval Fund Quarterly Plan H ABN AMRO Fixed Term Plan Series 8 Yearly Plan E ABN AMRO Fixed Term Plan Series 7 Quarterly Plan D ABN AMRO Interval Fund Quarterly Plan Series G ABN AMRO Fixed Term Plan Series 8 Yearly Plan D ABN AMRO Flexible Short Term Plan Series E ABN AMRO Interval Fund Monthly Plan A ABN AMRO Flexible Short Term Plan Series B ABN AMRO Cash Fund Institutional Plus ABN AMRO Money Plus IP Fund ABN AMRO Fixed Term Plan Series 1 15 Months ABN AMRO Fixed Term Plan Series 3 Yearly Plan (August 2006) ABN AMRO Fixed Term Plan Series 2 13 months Birla Fixed Term Plan Series AC Birla Fixed Maturity Plan Quarterly Series 20 Birla Fixed Term Plan Series AJ Birla Fixed Term Plan Quarterly Series 23 Birla Fixed Term Plan Series AE Birla Fixed Term Plan Series X (370 days) Birla Fixed Term Plan Series AD Birla Fixed Term Plan Series AA Birla Fixed Term Plan Series AB Birla Sunlife Liquid Plus Institutional Plan Birla Fixed Maturity Plan Quarterly Series 2 Birla Fixed Term Plan Quarterly Series 13 Birla Sunlife Income Fund BSL Interval Income Fund INSTL Quarterly Series 2 Dividend Payout Birla Sun Life Interval Income Fund Quarterly Plan Series I Birla Income Plus Birla Fixed Term Plan Series AN Birla Sun life Interval Income Fund Quarterly Plan Series III Birla Sun life Short Term Fund Birla Sun life Liquid plus IP Birla Cash Plus Institutional Premium Birla Fixed Term Plan Series E (15 months) Birla Fixed Term Plan Series F (14 months) Birla Fixed Term Plan Series H (13 months) DBS Chola Fixed Maturity Plan Series 7 (Quarterly Plan III) DBS Chola Interval Fund DBS Chola Liquid fund Institutional DBS Chola Freedom Income -STF -IP DSP Merrill Lynch Fixed Term Plan- Series 3 H DSP ML Strategic Bond Fund DSP Merrill Lynch Liquidity Fund Institutional Daily Dividend DSP ML Liquidity Fund Institutional Plus DSP Merrill Lynch Cash Plus Institutional Daily Dividend DSP ML Liquid Plus Fund IP DSP ML Short Term Fund DSP ML FMP 18 month Series 1 DSP ML FTP 3 month Series 2 DSP ML FMP 3 months Series 6 DSP ML FMP 13 months Series 1 DSP ML Fixed Term Plan Series 3a 12.5 months
10000000 20346715 20346715 25000000 25520962 25520962 26370941 26370941 32439600 36178561 36178561 36642373 36642373 36642373 60009146 60009146 224143289 224143289 105834795 105834795 40000000 30000000 30000000 10000000 5000000 10000000 10000000 10000000 10000000 10000000 10000000 15000000 18000000 20000000 25000000 29329345 29329345 29934444 29934444 30000000 30000000 33717996 33717996 35000000 35000000 35202231 47744174 47744174 100000000 101576114 217881022 217881022 614839122 525387765 788384776 788384776 906772284 906772284 20000000 31000000 82000000 10000000 10000000 30399922 30399922 159312085 159312085 161733710 161733710 43185833 43185833 100000 100134 100134 153797 153797 640163 640163 4574158 4831654 1423090 1423090 2135289 1981453 984692 984692 4078098 4078098 19841973 19841973 15000000 15273553 15273553 20000000 45000000 400000
81

5. iNvEStmENtS NON-tRaDE aND UNqUOtED UNlESS StatED OthERWiSE CONTINUED FOllOWiNG iNvEStmENtS PURChaSED aND SOlD DURiNG thE yEaR CONTINUED
DWS Fixed Term Plan Series 32 DWS Fixed Term Fund Series 41 DWS Fixed Term Fund Series 35 DWS Fixed Term Fund Series 30 DWS Short Maturity Fund DWS Money Plus Institutional Plan DWS Insta Cash Plus Fund Institutional Plan DWS Credit Opportunities Cash Fund DWS Fixed Term Fund Series 4 DWS Fixed Income fund Series 15 (September 2006) DWS Fixed Term Fund Series 6-14 months DWS Fixed Maturity Plan Series 10 DWS Fixed Term Fund Series 9-13 months DWS Fixed Maturity Plan Series 14 DWS Fixed Term Fund Series 5- 375 days Fidelity Short Term Income-Retail Plan Div Fidelity Short Term Income Inst Div Fidelity Cash Fund Fidelity Liquid Plus Super Inst HDFC Cash Management Fund HDFC FMP 367 D September 2007 HDFC FMP 367D June 2007 HDFC HIF STP HDFC FMP 367 D HDFC Income Fund HDFC FMP 90D December 2007 HDFC Cash Management Fund Call Plan HDFC Quarterly Interval Fund Plan B HDFC Quarterly Interval Fund Plan A HDFC Liquid Fund Premium Plus Plan HDFC Short Term Plan HDFC Cash Management Fund Savings Plan HDFC Cash management Fund Savings Plus HDFC Fixed Maturity Plan 13 months July 2006 HDFC Fixed Maturity Plan 13 months September 2006 HDFC FMP 13 months HDFC FMP 13 months June 2006 (1) HSBC Income Fund Invtt Plan IP HSBC Fixed Term Series 32 HSBC Fixed Term Series 44 HSBC FTS 31 HSBC FTS 34 6 months HSBC FTS 29 6 months HSBC Interval Fund 1 HSBC Fixed Term Series 36 HSBC Liquid Plus Fund Institutional Plus Option HSBC Cash Fund Institutional Plus Option HSBC FTS IV 370 Days HSBC FTS 13 370 Days HSBC Fixed Term Series 15 370 days (September 2006) HSBC FTS IX 370 days ICICI Prudential Fixed Maturity Plan Series 38 One Year Plan D ICICI Prudential Fixed Maturity Plan Series 41 ICICI Prudential FMP Series 42 16 months ICICI Prudential Interval Fund Annual Interval Plan III ICICI Prudential Interval Fund Quarterly Plan I ICICI Prudential FMP35 One Year Plan Instl. Div.
7000000 15000000 21664400 30000000 30000000 64277575 64277575 397904256 397904256 497417423 497417423 519328586 519328586 5000000 20000000 24000000 25000000 37000000 50000000 55161500 4048208 4048208 7944865 7944865 56308639 56308639 60553861 50546001 4701502 4701502 5000000 5000000 0 5006079 5006079 15000000 23835960 23835960 30000000 30000000 31429849 31429849 50000000 50000000 60807845 60807845 63139921 63139921 67170239 67170239 171034562 171034562 351817523 286104790 25000000 30000000 30000000 40000000 4032552 4032552 10000000 15000000 20000000 20000000 21634958 21634958 32309279 32309279 32915255 32915255 40000000 195720373 195720373 270758986 270758986 10000000 30000000 50000000 50000000 10000000 10000000 15000000 20000000 20333200 20333200 25000000
59112358 85319718 584791965 584791965 685071676 685071676 20000000 25000000 50000000 347861394 347861394 103692132 103692132 25000000 30000000 40000000 94000614 94000614 50000000 50000000
82

FINANCIALS
ICICI Prudential Interval Fund II Quarterly Interval Plan E ICICI Prudential Interval Fund: Monthly Interval Plan II ICICI Prudential Income Fund IP ICICI Prudential Interval Fund Annual Interval Plan II ICICI Prudential Interval Fund II: Quarterly Interval Plan C ICICI Prudential Short-term Institutional Plan ICICI Prudential Floating Rate Plan Plan D ICICI Prudential Flexible Income Plan ICICI Prudential Instl Liquid Plan Super Instl ICICI Prudential Fixed Maturity Plan Series 28-16 months ICICI Prudential Fixed Maturity Plan Series 12 Inst ICICI Prudential Fixed Maturity Plan Series 25-17 months ICICI Prudential Fixed Maturity Plan Series 28-370 days ICICI Prudential Hybrid FMP 13(13 month) (August 2006) ING Vysya FMP Series XXV ING Vysya FMP Series 34 ING Vysya FMP Series XXX ING Vysya FMP Series 36 ING Vysya FMP Series 29 ING Fixed Maturity Fund Series 32 ING Fixed Maturity Fund Series XXXI ING Vysya Income Fund Short-term ING Vysya Liquid Fund Super Institutional ING Vysya Liquid Plus Fund Institutional Fund ING Vysya FMP Series VII ING Vysya FMP Series XV JM Short Term Fund Institutional Plan JM Fixed Maturity Fund Series V Quarterly Plan 5 JM Arbitrage Advantage Fund Dividend Plan JM Liquid Plus Fund Premium JM Fixed Maturity Fund Series VI Q2 JM Fixed Maturity Fund Series V JM Fixed Maturity Fund Series VI Quarterly Plan 3 JM Fixed Maturity Fund Series VII JM Fixed Maturity Fund Series VI Q4 JM Arbitrage Advantage Fund Growth Plan JM Interval Fund Quarterly Plan I JM Fixed Maturity Fund Series VI Q5 JM High Liquidity Super Institutional JM Money Manager Fund Super Plus JM Equity And Derivative Fund Bonus JM High Liquidity Fund Bonus Option JM Fixed Maturity Plan Series II 375 days JM Equity And Derivative Fund Growth JP Morgan India Liquid Fund JP Morgan India Liquid Plus Fund Kotak FMP 12 M Series 1 Kotak Quarterly Interval Plan Series 2 Rollover Kotak FMP 14 M Series 4 Kotak FMP 3 M Series 25 Kotak Quarterly Interval Plan Series 1 Kotak FMP 12 M Series 2 Kotak FMP 12 M Series 4 Kotak FMP 14 M Series 3 Kotak FMP 3 M Series 17 Kotak FMP 3 M Series 18 Kotak FMP 13 M Series 3 Kotak Quarterly Interval Plan Series 5
25000000 42676408 42676408 46349385 46349385 50000000 101683345 144440197 144440197 107467801 139717796 144538628 144538628 879253303 879253303 837771474 739503467 19130994 19130994 1081380090 1081380090 1472572810 1472572810 12000000 19980020 23343542 60000000 75000000 75000000 0 15000000 15000000 15040529 15040529 20000000 20000000 23432170 23432170 30000000 30000000 40000000 50000000 72235381 72235381 80039598 80039598 348508564 348508564 501885166 501885166 406230531 354832370 17000000 17000000 25000000 25000000 6258152 6258152 43608111 43608111 10000000 10000000 15311384 15311384 15847721 15847721 16400246 16400246 25520448 25520448 25582372 25582372 27004691 35622083 35622083 39701103 41340093 41340093 47238819 47238819 398538671 398538671 78665608 78665608 521922476 404810464 152710114 152710114 7415958 100115434 92699476 39721505 248782059 209060554 40000000 52565414 0 46454586 149878356 149878356 151074268 151074268 10000000 15523160 15523160 20000000 20000000 20000000 20445974 20445974 25000000 25000000 25000000 25000000 25000000 25000000 25000000 30000000 53762033
83

Kotak Bond Short-term Plan Kotak FMP 3 M Series 22 Kotak Quarterly Interval Plan Series 3 Kotak FMP 3 M Series 26 Kotak Liquid (Institutional Premium) Kotak Flexi Debt Fund Kotak FMP Series XIV 15 months Kotak FMP Series 26 Kotak FMP Series XXI 15 months Kotak FMP 15 M Series 1 Kotak FMP Series 13 13 months Kotak FMP Series 25 -13 months LIC MF Fixed Maturity Plan Series IV 15 months Lotus India Active Income Fund IP Lotus India Fixed Maturity Plan 1 month Series 1 Lotus India FMP 375 days Series III Lotus India FMP 15 months Series II Lotus India Fixed Maturity Plan 3 month Series VII Lotus India FMP 3 months Series XI Lotus India FMP 3 months Series XVI Lotus India Quarterly Interval Fund Plan E Lotus India FMP 3 months Series VIII Lotus India FMP 3 months Series XVIII Lotus India FMP 3 months Series XIV Lotus India FMP 375 days Series V Lotus India Quarterly Interval Fund Plan F Lotus India Quarterly Interval Fund Plan D Lotus India FMP 3 months Series XXII Lotus India FMP 375 days Series IV Lotus India FMP 3 months Series XX Lotus India Short Term Plan Institutional Plan Lotus India Liquid Plus Institutional Plan Lotus India Liquid Fund Lotus India FMP 13 months Series II Lotus India FMP 14 months Series I Principal FMP Plan 460 days Series IV Principal Pnb Fixed Maturity Plan 385 days Series V Principal Pnb Fixed Maturity Plan 385 days Series VI Principal Floating Rate Fund SMP Instl Principal Income Fund IP Principal Income Fund Short Term Plan Institutional Plan Principal 91 Days FMP Series XII Principal Cash Management Fund Liquid Option Instl. Prem. Plan Principal Floating Rate Fund FMP IP Principal Pnb Fixed Maturity Plan 385 days Series I Principal Pnb Fixed Maturity Plan 460 days Series II (August 2006) Principal Pnb Fixed Maturity Plan 385 days Series II Principal Pnb Fixed Maturity Plan 460 days Series I Reliance Income Fund Reliance Liquid Plus Fund Institutional Plan Reliance Fixed Horizon Fund VII Series 1 Reliance Fixed Horizon Fund IV Series 6 Reliance Fixed Horizon Fund IV Series 1 Reliance Fixed Horizon Fund IV Series 2 Reliance Interval Fund Reliance Interval Fund (Monthly Interval Fund Series 1) Reliance Fixed Horizon Fund VII Series 3 Reliance Fixed Horizon Fund VI Quarterly FMP Series 1
66851547 66851547 71181685 71181685 76019035 76019035 109858256 109858256 404589476 404589476 879064929 779485576 10000000 15000000 25000000 30000000 40000000 40000000 10000000 5361280 5361280 8046600 8046600 10000000 10001712 10207386 10207386 15000000 15000000 15254208 15254208 15275536 15275536 15291198 15291198 15509504 15509504 15546260 15546260 15549525 15800813 15800813 19101832 19101832 20263482 25000000 35519412 35519412 40634643 40634643 145078440 145078440 148562340 148562340 8000000 10000000 15000000 16001951 16001951 52877879 52877879 71237515 71237515 75000000 75000000 667036231 667036231 827005624 613559929 15000000 20000000 22000000 34000000 7464940 7464940 9093792 8159575 15000000 20000000 30000000 30000000 31681581 31681581 35185561 35185561 50000000 60000000 60000000
76118292 111078613 15000000 30000000 38440017 68272346 5000000 10000000
76118292 111078613 38440017 68272346
619154620 619154620 71544063 71544063 20000000 22000000
84

FINANCIALS
Reliance Short Term Fund Reliance Fixed Horizon Fund III Annual Plan Series VI Reliance Liquidity Fund Reliance Fixed Horizon Fund I Annual Plan Series I Reliance Fixed Horizon Fund I Annual Plan II (September 2006) SBI SDFS 90 Days 16 (October 2007) SBI SDFS 90 Days 18 SBI Debt Fund Series 90 days 20 Standard Chartered Liquidity Manager Fund Plus Standard Chartered Grindlays Super Saver Income Fund MTP Plan A Standard Chartered Fixed Maturity Plan Quarterly Series 14 Standard Chartered Fixed Maturity Plan Quarterly Series 9 Standard Chartered Fixed Maturity Plan YS 7 Standard Chartered Fixed Maturity Plan Quarterly Series 11 Standard Chartered Fixed Maturity Plan Yearly Series 17 Plan B Standard Chartered Fixed Maturity Plan Yearly Series 19 Plan B Standard Chartered Fixed Maturity Plan Quarterly Series 19 Standard Chartered Grindlays SSIF-Short Term Plan C-Super IP Standard Chartered Grindlays Floating Rate Fund I P-LTP Plan B Standard Chartered Fixed Maturity 2nd Plan 13 months Standard Chartered Grindlays Fixed Maturity 20 Th Plan 14 months Standard Chartered Grindlays Fixed Maturity Plan 22 15 months TATA Treasury Manager Fund SHIP TATA Liquidity Management Fund TATA Liquid Super High Investment Fund TATA Fixed Horizon Fund Series 13 Scheme C TATA Fixed Horizon Fund Series 13 Scheme B TATA Fixed Income Portfolio Fund A3 TATA Floating Rate Fund Short Term Institutional Plan TATA Fixed Horizon Fund Series 13 Scheme A IG TATA Fixed Horizon Fund Series 14 Scheme A TATA Fixed Horizon Fund Series 11 Scheme D TATA Fixed Horizon Fund Series 11 Scheme E TATA Short Term Bond Fund TATA Fixed Horizon Fund Series 10 Scheme D TATA Dynamic Bond Fund TATA Floating Rate Fund LT TATA Dynamic Bond Fund Option B TATA Floater Fund TATA Fixed Horizon Fund Series 2 Plan B TATA Fixed Horizon Fund Series 3 Scheme D 13 months TATA Fixed Horizon Fund Series 2 Plan C TATA Fixed Horizon Fund Series 3 Scheme F 14 months TATA Fixed Horizon Fund Series 3 Scheme C 13 months TATA Fixed Horizon Fund Series 3 Scheme G 18 months TATA Fixed Horizon Fund Series 6 Scheme A 13 months (July 2006) Templeton India Short Term Institutional Plan IP Templeton India TMA Liquid Super Institution Plan. Templeton India IBA Plan A Templeton Quarterly Interval Plan Plan B Templeton Fixed Horizon Fund Series II Plan B Templeton Quarterly Interval Plan Plan C Templeton Quarterly Interval Plan Plan A Templeton Floating Rate Income Fund LT IP Templeton Floating Rate Income Fund LT Super IP Templeton Floating Rate Income Fund LT Super IP Daily Div UTI Liquid Cash Plan Institutional
145130379 145130379 200000000 688381949 688381949 50000000 70000000 30490530 30490530 91630694 91630694 101900349 2258923 2258923 15195816 15195816 20000000 20000000 20000000 20000000 25000000 25000000 25000000 30000000 35000000 41303752 41303752 93996872 93996872 289162212 289162212 10000000 10000000 20000000 681962 681962 1031739 1031739 4106721 4106721 10000000 15000000 15082719 15082719 15262937 15262937 20000000 20000000 20340386 20340386 20343718 20343718 21779184 21779184 40804261 40804261 44043168 44043168 148637545 191475735 506138022 506138022 5000000 10000000 25000000 30000000 35000000 40000000 40000000 3119749 3119749 5703707 5703707 11611828 11611828 15000000 15000000 20000000 20349258 20349258 25000000 25000000 31701556 31701556 63923906 63923906 783571475 783571475 2472746 2472746
69219386 69219386 50000000 70000000 5904402 5904402 2043690 2043690 1696613 1696613 519610333 519610333 2015255 2082011 5185771 40000000 1888980 1888980
253530459 253530459
85

UTI Liquid Plus Fund Institutional Plan UTI Quarterly FMP Series QFMP/September 2007/II UTI Quarterly Interval Plan I Fixed Income Fund UTI Bond Fund Growth UTI Quarterly FMP Series QFMP August 2007/II UTI Fixed Income Interval Fund Annual Interval Plan Series 3 UTI Fixed Maturity Plan HFMP (03/08) UTI Fixed Term Income Fund Series I (18 months plan) UTI Fixed Term Income Fund Series I Plan 18 (18 months plan) UTI Fixed Maturity Plan June 06 UTI Fixed Maturity Plan August 06 ABN AMRO Fixed Term Plan Series 5 14 months ABN AMRO Fixed Term Plan Series 3 Quarterly Plan A (August 2006) ABN AMRO Fixed Term Plan Series 3 Quarterly Plan D (September 2006) ABN AMRO Fixed Term Plan Series 3 Quarterly Plan E (October 2006) ABN AMRO Fixed Term Plan Series 3 Quarterly Plan G (November 2006) ABN AMRO Flexi Debt ABN AMRO FRF LT IP Fund Birla Bond Plus Institutional Birla Fixed Term Plan Series S (400 days) Birla Fixed Term Plan Series T Birla Fixed Term Plan Series U Birla Fixed Term Plan Series A Birla Fixed Term Plan Series R (400 days) (March 2007) Birla FMP 18 months Birla FMP Annual November 2005 Birla FMP Quarterly (Series 2) (December 2006) Birla FMP (Series O) (500 days) (December 2006) DBS Chola Fixed Maturity Plan Series 5 (Quarterly Plan II) DBS Chola Fixed Maturity Plan Series 1 (371 days). DBS Chola Fixed Maturity Plan Series 6 (371 days). DBS Chola Liquid fund Super Institutional DBS Chola Short Term FRF DSP Merrill Lynch Fixed Term Plan Series 3 DSPML FTP Series 3E DWS Fixed Income fund Series 16 (August 06) DWS Fixed Income fund Series 18 (November 06) DWS Fixed Maturity Plan Series 21 390 days DWS Fixed Term Fund 389 days DWS Fixed Term Fund Series 24 DWS Fixed Term Fund Series 25 DWS Fixed Term Fund Series 2 389 days DWS Fixed Term Fund Series 3 DWS Fixed Term Fund Series 13 (Quarterly September 2006) DWS Fixed Term Fund Series 20 HDFC Fixed Maturity 15 M March 2007 HDFC Fixed Maturity Plan 14 M March 2007 HDFC Fixed Maturity Plan 18 Months October 2006 HDFC Fixed Maturity Plan 3 Months November 2006 HSBC Fixed Term Series 21 HSBC Fixed Term Series 25 HSBC Fixed Term Series 27 ICICI Prudential Equity & Derivatives Fund Income Optimiser Plan ICICI Prudential Fixed Maturity Plan Series 12 Inst ICICI Prudential Fixed Maturity Plan Series 32 (3 Months) (September 2006) ICICI Prudential FMP Series 35 13 months Plan B ICICI Prudential FMP Series 37 14 month Plan ICICI Prudential FMP Series 32 1 month Plan A (November 2006)
4193449 20000000 20371878 42666079 43730222 50000000 74559731
3396229 6712475 6712475 20000000 20371878 42666079 43730222 15000000 19000000 40000000 40000000 50000000 50000000 10000000 35000000 35000000 50000000 50000000 50000000 50000000 35000000 35000000 13421429 13421429 52665303 52665303 136358859 136358859 23000000 200000000 42000000 50000000 20000000 25000000 18687921 69535589 69535589 40000000 20000000 20000000 10000000 30000000 39576531 39576531 438078431 438078431 20000000 750000 20000000 20000000 15000000 15000000 35000000 5000000 100000000 25000000 20000000 15000000 15000000 15000000 15000000 45000000 107000000 25000000 25000000 25000000 20000000 50000000 15000000 50000000 50000000 19980020 25000000 30000000 30000000 150000000 35000000 25000000 25000000
86

FINANCIALS
ICICI Prudential FMP Series 34 15 months Plan (February 2007) ICICI Prudential Long Term Plan ICICI Prudential Sweep Cash Option ING Vysya FMP Series XIV (August 2006 6 months) JM Financial Fixed Maturity Fund Series IV (Yearly FMP) JM Financial Fixed Maturity Fund Series IV (Yearly FMP) 375 days JM Fixed Maturity Plan YSA 2 JM Fixed Maturity Fund Series III Monthly Plan JM Fixed Maturity Fund Series III Monthly Plan 3 JM Fixed Maturity Fund Series III Quarterly JM Fixed Maturity Fund Series III Quarterly Plan (FMF-Q2) JM Fixed Maturity Fund Series III Quarterly Plan 4 (November 2006) JM Fixed Maturity Plan Ysb 2 JM Fixed Maturity Pl Yso1 Growth JM Floater Fund Short Term Plan JM High Liquidity Super Institutional Premium Plan Kotak Cash Plus Kotak Floater ST Kotak FMP 13 M Series 1 Kotak FMP 13 M Series 2 Kotak FMP 14 M Series 2 Kotak FMP 3 M Series 3 (September 2006) Kotak FMP 3 M Series 4 (September 2006) Kotak FMP 3 M Series 5 (October 2006) Kotak FMP Series XVII 3 Months Kotak Liquid Institutional Premium Kotak Long Term Floater LIC MF Fixed Maturity Plan Series 1 LIC MF Liquid Fund Magnum Debt Fund 13 months (March 2005) Magnum Debt Fund 15 months Principal Deposit Fund Plan 540 days Series I (January 2007) Principal Fixed Maturity Fund Plan 460 days Series III (March 2007) Principal Fixed Maturity Plan (December 2005, 3 months) Principal Fixed Maturity Plan (October 05) Principal Income Fund Principal Income Fund Institutional Plan Principal Income Fund STP Institutional Principal Liquid Option Institutional Premium Plan Principal Pnb Fixed Maturity Plan 385 days Series IV Reliance Fixed Horizon Fund Plan B Series IV (Quarterly August 2006) Reliance Fixed Horizon Fund I Monthly Plan Series II (November 2006) Reliance Fixed Horizon Fund I Monthly Plan Series IV (January 2007) Reliance Fixed Horizon Fund I Quarterly Plan Series I (September 2006) Reliance Fixed Horizon Fund I Monthly Plan Series I (October 2006) Reliance Fixed Horizon Fund II Annual Plan V (February 2007) Reliance Fixed Horizon Fund II Monthly Plan Series I (February 2007) Reliance Fixed Horizon Fund II Annual Plan Series VI Reliance Fixed Horizon Fund III Annual Plan Series I Reliance Fixed Horizon Fund III Annual Plan Series III Reliance Fixed Horizon Fund III Annual Plan Series IV Reliance Fixed Horizon Fund II Annual Plan Series IV (470 days, January 2007) Reliance Fixed Maturity Fund Series II (Quarterly Plan III) Reliance Fixed Maturity Fund Annual Plan Series I Reliance Fixed Maturity Fund Series II Annual Plan III Reliance Fixed Term Series II Annual Plan I Reliance Floating Rate Fund Reliance liquid fund-cash Plan
50000000 0 10637845 202252830 202252830 20000000 20000000 15000000 0 10000000 0 0 15000000 85000000 85000000 15000000 15000000 25000000 25000000 60000000 60000000 25000000 25000000 7000000 20000000 234401786 234401786 378962007 378962007 33815159 68551855 74029044 74029044 75000000 50000000 50000000 20000000 20000000 50000000 50000000 35000000 35000000 10000000 706841387 706845846 168841408 168841408 15000000 411953711 411953711 15000000 25000000 15000000 40000000 25000000 25000000 15000000 95217775 57130665 2685092 117933755 117933755 1100285485 1100285485 30000000 25000000 25000000 120595000 120595000 80000000 80000000 70000000 70000000 100000000 100000000 35000000 100000000 100000000 150000000 100000000 200000000 100000000 25000000 5000000 20000000 15000000 18246124 814018160 814018160 419591439 419591439
87

Reliance Fixed Horizon Fund Plan A Series V (monthly August 2006) Reliance Fixed Horizon Fund Plan B Series V SBI Mutual Fund Magnum Institutional Standard Chartered GSSIF ST Plan C Standard Chartered GSSIF MT Standard Chartered Fixed Maturity Plan Yearly Series 3 Standard Chartered Fixed Maturity Plan Yearly Series 5 TATA Fixed Horizon Fund Series 8 Scheme B (monthly February 2007) TATA Fixed Horizon Fund Series 8 Scheme C (monthly February 2007) TATA Fixed Horizon Fund Series 5 Scheme E (1 month September 2006) TATA Fixed Horizon Fund Series 2 Plan A TATA Fixed Horizon Fund Series 6 Scheme C (13 months March 2007) TATA Fixed Horizon Fund Series 7 Scheme D (16 months December 2006) TATA Fixed Horizon Fund Series 7 Scheme A (13 months March 2007) TATA Fixed Horizon Fund Series 7 Scheme B (March 2007) TATA Fixed Horizon Fund Series 8 Plan A Templeton Fixed Horizon Fund Series I (13 months Plan) Templeton Fixed Horizon Fund Series I (January 2007)(15 months) Templeton Fixed Tenure Fund Series VII (370 days Plan) Templeton India TMA Short Term Plan Super Inst Plan UTI Fixed Maturity Plan Dec 06 (3 Months December 2006) UTI Fixed Maturity Plan Sept 06 (3 Months September 2006) UTI Fixed Maturity Plan YFMP (0705) UTI Fixed Maturity Plan (10/05) UTI Fixed Maturity Plan Quarterly Plan (October 2006) UTI Fixed Maturity Plan Quarterly Plan (November 06) UTI Fixed Term Income Fund Series II, Plan 16 02/07 (16 Months) UTI Fixed Term Income Fund YFMP (March 2007) UTI Money Market Fund UTI Bond Fund 6. iNvENtORiES

100000000 100000000 50000000 50000000 24967168 24967168 21856047 21856047 75947432 75947432 40000000 35000000 50247443 50247443 50253937 50253937 60000000 60000000 5000000 25000000 15000000 20000000 40000000 35000000 35000000 105000000 20000000 50000000 491725 491725 29000000 29000000 30000000 30000000 15000000 20000000 35000000 35000000 34000000 34000000 20000000 129380575 98888771 98888771 997870
Stores and spares Goods in transit Ore Concentrates Stock in process Finished goods
160.44 53.66 8.87 192.22 76.22 26.69
518.10
102.79 33.38 11.47 296.05 47.70 7.89 499.28
7. SUNDRy DEbtORS CONSiDERED GOOD

Debts outstanding for less than six months Secured Unsecured
428.77 14.89
443.66
556.56 0.06 556.62
88

FINANCIALS
8. CaSh aND baNk balaNCES

Cash/cheques in hand Bank balances a) Schedule banks: Current account Short-term deposits
9. OthER CURRENt aSSEtS

0.30
0.32 47.43 71.95 119.70
81.28 1,281.20
1,362.78
Interest accrued on deposits
3.00
0.69
10. lOaNS aND aDvaNCES UNSECURED CONSiDERED GOOD UNlESS StatED OthERWiSE
lOaNS (SECURED) StaFF (Secured by hypothecation of property/vehicle) aDvaNCES RECOvERablE iN CaSh OR iN kiND OR FOR valUE tO bE RECEivED DEPOSitS With GOvERNmENt DEPaRtmENtS taxatiON (NEt)
22.05 319.97 41.92 0.15
384.09
23.90 239.47 41.29 304.66 1,480.95
2,711.63
11. CURRENt liabilitiES aND PROviSiONS

CURRENt liabilitiES Sundry creditors Advance from customers Security and other deposits Investor education and protection fund matured fixed deposits unpaid dividend (not due for payment) Other liabilities PROviSiONS Dividend Corporate dividend tax Taxation (net)
105.63 17.95
354.67 39.07 204.00 0.08 0.70 176.34 774.86 123.58 898.44
105.63 17.95 61.37
206.53 25.52 139.88 0.08 0.77 269.03 641.81
184.95 826.76
89

12. OthER iNCOmE

1
Interest on gross deposits staff loans others
3.91 1.18 61.80
66.89 161.62 170.61 220.74 1.38 1.25 148.12 81.02 851.63
0.43 1.31 49.40 51.14 19.07 108.75 0.31 0.72 8.26 43.02 231.27
Dividend from current/non-trade investments Profit on sale of current investments (net) Adjustment to mark to market on investing financial instruments Dimunition in value of current investment written back Rent Profit/(Loss) on sale of fixed assets (net) Provision for expenses written back Miscellaneous income
1
Tax deducted at source Rs. 5.84 crore (2007: Rs. 3.14 crore)
13. miNiNG aND maNUFaCtURiNG ExPENSES

Materials consumed Stores, spares and components Power and fuel Royalty Repairs: buildings machinery others Freight on concentrate Tolling charges Other factory expenses Excise Amortisation
15.21 186.60 13.40
6.09 420.93 545.38 511.05 215.21 47.69 74.08 (17.70) 1.53 1,804.26
13.16 175.40 11.81
328.73 402.60 643.81
200.37 39.63 0.88 55.02 12.80 0.51
1,684.35
14. (aCCREtiON)/DECREtiON OF StOCk

ClOSiNG StOCk Ore Concentrates Stock in process Finished goods tOtal OPENiNG StOCk Ore Concentrates Stock in process Finished goods tOtal
8.87 192.22 76.22 26.69 304.00 11.47 296.05 47.70 7.89 363.11 59.11
11.47 296.05 47.70 7.89 363.11 6.87 240.93 43.84 14.56 306.20 (56.91)
(aCCREtiON)/DECREtiON OF StOCkS
90

FINANCIALS
15. EmPlOyEES REmUNERatiON aND bENEFitS

Salary, wages and bonus Voluntary retirement expenses Contribution to provident/other funds Staff welfare expenses Less: Capitalised
269.14 20.27 29.82 319.23 11.04 308.19
209.83 9.71 17.78 27.48 264.80 4.99 259.81
16. aDmiNiStRativE aND SElliNG

Rent Rates and taxes Insurance Watch and ward Technical consultancy Research and development expenses: Salary, wages and bonus Materials and services Others Depreciation Less: grants received
1.30 0.58 0.60 0.26 2.74 0.55 0.29 0.08 0.97 0.03
1.12 8.08 12.29 5.21 44.84 2.19 0.05 0.23 1.37 0.01 2.62 178.72 13.10 18.06 55.48 343.37 15.55 327.82
1.83 0.88 0.46 0.25 3.42 0.90 0.22 0.06 0.07 0.03
1.01 1.55 5.62 4.55 34.92
Directors fees Directors travelling expenses Auditors remuneration and expenses Audit fees Tax audit fees Other services Out of pocket expenses Cost audit and expenses Donation Selling and distribution freight and forwarding other selling expenses Exchange difference (net) Loss/(profit) on sale of fixed assets (net) Other expenses Less: Capitalised
17. FiNaNCE

2.52 0.04 0.23
0.38 0.02 4.72 152.12 11.75 7.04 0.91 40.84 268.22 2.16 266.06
Interest bank (net) Exchange difference on loan Others
3.59 1.12 19.46 24.17
21.37 3.98 3.09 28.44
91

18. NOtES a) SiGNiFiCaNt aCCOUNtiNG POliCiES
Basis of accounting The financial statements are prepared under the historical cost convention and in accordance with applicable accounting standards and provisions of the Companies Act, 1956. Use of estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognised in the periods in which the results are known/materialise. Fixed assets Fixed assets (including research and development assets) are recognised at cost of acquisition including expenditure up to the date of commissioning, net of cenvat. Grant received towards fixed assets is reduced from the cost of the related assets. Mine development expenditure includes leases, costs incurred for acquiring/developing properties/rights up to the stage of commercial production. Impairment of fixed assets The carrying amounts of tangible fixed assets are reviewed for impairment, if events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If there are indicators of impairment, an assessment is made to determine whether the assets carrying value exceeds its recoverable amount. Whenever the carrying value of an asset exceeds its recoverable amount, impairment is charged to the profit and loss account. Recoverable amounts are estimated for individual assets where feasible, otherwise to the relevant cash generating unit. Depreciation and amortisation Depreciation on fixed assets is provided using the straight-line method at rates prescribed under Schedule XIV of the Companies Act, 1956 subject to the following deviations: Additions and disposals are reckoned on the first day and the last day of the quarter respectively; Individual items of plant and machinery and vehicles costing upto Rs. 25,000/- are wholly depreciated; and Tools, implements and instruments are written off on issue. Intangible assets are amortised over its expected useful life. Mine development expenditure is amortised in proportion to the annual ore raised to the remaining mineable ore reserves. In the year of abandonment of mine, the residual mine development expenditure is written off. Financial asset investments Quoted financial asset investments are classified as held for trading and are initially recorded at cost then remeasured at subsequent reporting dates to fair value. Unrealised gains and losses on financial asset investment are routed through the income statement. Unquoted financial assets that do not have a market price and whose fair value cannot be reliably measured are measured at cost. Inventories Ore, concentrate, stock in process and finished products are valued at lower of cost and net realisable value. Stores and spares are valued at lower of cost and net realisable value. By products, aluminum scrap, chemical lead scrap, anode scrap and coke fines are valued at net realisable value. Other scraps/residuals are not valued. Stock pile of moore cake, neutral sand, lime sludge, beta cake, lead sulphate, lead hydroxide and copper cadmium cake are valued at Re.1 per MT.
92

FINANCIALS
18. NOtES CONTINUED
Revenue and expenses Revenue on sale of products (net of volume rebates) is recognised on delivery of product and/or on passage of title to the buyer. Sales include export benefit. All other revenue and expenses are recognised on accrual basis. Revenue relating to interest on staff loans for conveyance, insurance/railway claims is recognised when recoverability is certain. Expenditure on projects is: capitalised when projects are crystallised; and written off in other cases. Technical know how, not directly identifiable to any plans, layout of buildings/plant and machinery, etc are written off. Expenditure relating to fixed assets not owned by Company is charged to revenue. Prior period/prepaid expenses exceeding Rs. 0.05 crore is appropriately disclosed. All revenue expenses on research and development are written off. Foreign currency transactions Transactions in foreign currency are recorded at exchange rates prevailing on the date of the transaction. Year end balance of foreign currency transactions is translated at the year end rates. Exchange difference arising on restatement or settlement is charged to profit and loss account. Derivative financial instrument In order to hedge its exposure to foreign exchange, interest rate and commodity price risks, the Company enters into forward, option and other derivative financial instruments. The Company does not hold derivative financial instruments for speculative purposes. Derivative financial instruments are initially recorded at their fair value on the date of the derivative transaction and are remeasured at their fair value at subsequent balance sheet dates. Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement. Changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recorded in equity. Amounts deferred to equity are recycled in the income statement in the periods when the hedged item is recognised in the income statement. Derivative financial instruments that do not qualify for hedge accounting are marked to market at the balance sheet date and gains or losses are recognised in the income statement immediately. Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised, or no longer qualifies for hedge accounting. Any cumulative gain or loss on the hedging instrument recognised in equity is kept in equity until the forecast transaction occurs. If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised in equity is transferred to net profit or loss for the year. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value with unrealised gains or losses reported in the income statement. Borrowing costs Borrowing costs that are attributable to the acquisition/construction of qualifying assets are capitalised as part of cost of such asset till such time as the asset is ready for its intended use. All other borrowing costs are recognised as an expense in the period in which they are incurred.
93

18. NOtES CONTINUED
Retirement Benefits Contribution to defined contribution schemes such as provident fund etc are charged to the profit and loss account as incurred. Contributions are made to a trust administered by the Company. Any deficiency in the interest declared by the board of trustees is to be made good by the Company to bring it to the statutory limit. Gratuity and leave encashment liabilities are accounted for on the basis of year end actuarial valuation. Termination benefit are recognised as expense as and when incurred. Voluntary retirement expenses Voluntary retirement expenses are charged to the profit and loss account. Taxation Provision for current tax is made after taking into account rebate and relief available under the Income tax Act, 1961. Deferred tax resulting from timing difference between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised only to the extent that there is a reasonable certainty that the future taxable profit will be available against which the deferred tax asset can be realised. Provision for fringe benefit tax is made in accordance with the provisions of the Income tax Act, 1961. Dividend Interim dividend payments including tax thereon has been appropriated from profits for the year and provision is made for proposed final dividend and tax thereon subject to consent of the shareholders at the Annual General Meeting. Contingent liabilities Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.
b) NOtES

1. Contingent liability:
Claims against the company not acknowledged as debts Suppliers and contractors Employees, ex-employees and others Land tax Guarantees issued by the banks Sales tax demands Excise duty demands Bills discounted Claim for compensation (CLZS land)

46.19 27.95 11.28 16.02 0.27 23.55 18.57 31.83 57.50 47.39 46.30 327.14 207.44 Not ascer- Not ascer-
tainable tainable
2. Estimated amount of contracts remaining to be executed on capital account not provided for Rs. 985.39 crore (2007: Rs. 1,215.49 crore) 3. The title deeds are still to be executed in respect of 10.63 acres of freehold land at Vishakapatnam. 4. Additions to fixed assets and year end capital work in progress include foreign exchange loss Rs. 5.76 crore (2007: Rs. nil)
94

FINANCIALS
18. NOtES CONTINUED
5. Joint Venture: a The Company has access up to 31.5 million tonnes of coal as a partner in the joint venture Madanpur South Coal Company Limited where it holds 21.8% of ownership interest. b Interest in joint venture:
Name Percentage of Percentage of ownership ownership Country of interests as at Interests as at incorporation 31/3/08 31/3/07
Madanpur South Coal Company Limited
India
21.8 %
21.8 %
The companys interest in these joint ventures is reported as long-term investment (Schedule 5) and stated at cost. However, the Companys share of each of the assets, liabilities, income and expenses, etc, (each without elimination of the effect of transactions between the Company and the joint venture) related to its interests in these joint ventures are:
as at As at 31/3/08 31/3/07 (Rs. in crore) (Rs. in crore)
i. aSSEtS 1. Fixed assets 2. Current assets, loans and advances a) Cash and bank balances ii. liabilitiES 1. Share capital 2. Unsecured loan

0.96 0.59 1.39 0.28
0.76 0.48 0.01 1.33
For the For the year ended year ended 31/3/08 31/3/07 (Rs. in crore) (Rs. in crore)
III. Income IV. Expenses
0.02
0.10
6. The non-fund based facility of Rs. 200 crore (2007: Rs. 100 crore) from bank is secured by pledge of specific investments and a subservient charge on the entire current assets, present and future. 7. Matured fixed deposits of Rs. 0.08 crore (2007: Rs. 0.08 crore) due for transfer to investor education and protection fund have not been transferred in view of pending legal litigation between the beneficiaries. 8. Retirement benefits: Gratuity long-term fund defined benefit plan: The Company has constituted a trust recognised by income tax authorities for gratuity to employees, contributions to the trust are funded with Life Insurance Corporation of India. In accordance with revised AS-15 Employee Benefits, the Company has provided the liability on actuarial basis. As per the actuarial certificate (on which auditors have relied), the details of the employees; benefits plan-gratuity are:
Actuarial assumptions 31.03.08 31.03.07
Salary growth Discount rate Expected rate of return on plan assets
5% 7.50% 9.10%
5% 7.50% 8.40%
Amount recognised in the income statement
Rs. in crore
Rs. in crore
Current service cost Interest cost Expected return on plan assets Net actuarial loss/(gain) recognised in the period tOtal
4.30 5.64 (6.30) 3.99 7.63
3.56 5.02 (5.21) 3.22 6.59
95

18. NOtES CONTINUED
Movement in the present value of defined benefit obligation
Rs. in crore
Rs. in crore
Obligation at the beginning of the year Interest cost Current service cost Benefits paid Actuarial loss/(gain) on obligation Obligation at the end of the year
Movement in the present value of plan assets
75.29 5.64 4.31 (1.81) 4.28 87.71

Rs. in crore
66.94 5.02 3.56 (3.56) 3.34 75.29

Rs. in crore
Fair value at the beginning of the year Expected return on plan assets Contributions Benefits paid Actuarial loss/(gain) on plan FUNDED StatUS
Expected returns on plan assets

Fair value of assets

Expected return %
69.26 6.30 5.96 (1.81) 0.29 80.00

Fair value of assets
62.02 5.21 5.48 (3.56) 0.12 69.26

Expected return %
Class of assets Life Insurance Corporation

Amounts recognised in the balance sheet
80.00

9.10%

69.26
Rs. in crore
8.40%
Rs. in crore
Present value of obligation at the end of the year Fair value of plan assets at the end of the year Funded status Excess of actual over estimated
87.71 80.00 (7.71) 0.29 (7.71)
75.29 69.26 (6.03) 0.12 (6.03)
NEt aSSEt/(liability) RECOGNiSED iN thE balaNCE ShEEt
a) Leave encashment short-term benefit plan The Company has provided for the liability on the basis of acturial valuation. 9. Excise duty:
a) Excise duty shown as a reduction from turnover Total b) Excise duty charged to profit and loss account i) difference between closing and opening stock ii) shortages, etc tOtal
859.14 859.14 (20.54) 2.84 (17.70)
660.23 660.23 11.07 1.73 12.80
10. Earnings per share (EPS):

Particulars 2008 2007
Net profit after taxation for the year (Rs. in crore) Weighted average number of ordinary shares for Basic EPS Nominal value of ordinary shares (in Rs.) Basic/diluted earnings per ordinary shares (in Rs.)
4396.07 422,531,900 10/- 104.04
4,441.81 422,531,900 10/105.12
96

FINANCIALS
18. NOtES CONTINUED
11. Segment reporting Segment information for the year ended 31 March 2008
Particulars Zinc & Lead 31.03.08 (Rs. In Crore) Others 31.03.08 Unallocated 31.03.08 Total 31.03.08
Revenue External Sales Inter Segment Sales Total Revenue RESULTS Segment result Unallocated Corporate Income net of unallocated Expenses Interest Expense Interest Income Dividend Income Net Profit before tax Other information Segment Assets Segment Liabilities Capital Expenditure Depreciation Noncash expenses other than Depreciation

7,845.53 7,845.53 5,171.74
32.24 32.24 (9.33)
7,877.77 7,877.77 5,162.41 618.60 24.17 66.89 161.62 5,985.35
4,946.76 543.06 7,716.88 13,206.70 707.22 67.25 584.04 1,358.51 1,235.89 284.75 1,520.64 180.31 41.27 0.46 222.04

(ii) Information about Secondary Business Segments

Total
India Outside India
Revenue by geographical market on FOB basis Inter-Segment tOtal
5,620.29 2,257.48 7,877.77 5620.29 2257.48 7877.77
Carrying amount of segment assets Additions to Fixed Assets
13113.06 1520.64
93.64 13206.70 1520.64
(iii) Note: a) Business Segment: The Company is engaged in the business of mining and smelting of zinc and lead operations. The Company has also entered into the wind energy business; however, its operations for the year are within the threshold limits stipulated under AS-17 Segment Reporting and hence it does not require disclosure as a separate reportable segment. In the previous year, the company operated in a single segment of mining and smelting of zinc and lead operations. b) Geographical segment The geographical segments considered for disclosure are as follows: Revenue within India includes sales to customers located within India and earnings in India. Revenue outside India includes sales to customers located outside India and earnings outside India.
97

18. NOtES CONTINUED
12. Related party disclosures: a) Names of related parties and description of relation: i) Holding companies ii) Fellow subsidiaries iii) Associate companies iv) Joint Venture v) Key personnel
1 No transactions during the year
Immediate: Ultimate in India: Ultimate in UK:
Sterlite Opportunities and Ventures Limited Sterlite Industries (India) Limited Vedanta Resources Plc UK Bharat Aluminium Company Limited Sterlite Paper Limited1 Monte Cello BV1 Copper Mines of Tasmania Pty Limited1 Thalanga Copper Mines Pty Limited1 Konkola Copper Mines Plc Sterlite Energy Limited1 Sterlite Gold Limited1 Sesa Goa Limited (acquired on 23 April 2007) Sesa Industries Limited1 (acquired on 23 April 2007) The Madras Aluminium Company Limited Vedanta Aluminium Limited India Foils Limited1 Madanpur South Coal Company Limited Mr MS Mehta
b) Transactions with related parties:

Nature of transactions Rs. in crore) ( Holding company 2008 | 2007 Fellow subsidiaries 2008 | 2007 Associate companies 2008 | 2007 Key personnel 2008 | 2007 Joint venture 2008 | 2007 Total amount 2008 2007
Purchase of goods 0.062 0.052 Sale of goods2 126.31 57.75 Dividend1 137.16 137.16 Personnel services2 29.13 22.93 Apportionment of common group expenses2 26.65 19.01 Remuneration MS Mehta Investment in joint venture Madanpur South Coal Company Limited Debtors balance: Sterlite Industries (India) Limited 1.73 Konkola Copper Mines Plc Vedanta Aluminium Limited Sesa Goa Limited Madanpur South Coal Company Limited Vedanta Resources Plc UK 0.65 Creditors balance: Bharat Aluminium Company Limited
9.94 3 5.003 1.13 0.22 0.71 0.09 0.44
1.86
1.70
0.33 0.28
10.00 5.05 126.31 57.75 137.16 137.16 29.13 22.93 26.65 19.01 1.86 1.70 1.34 1.33 0.33 1.73 1.13 0.22 0.28 0.65 0.71 1.34 0.09 1.33 0.44
Note: 1 Represents transaction with Sterlite Opportunities and Ventures Limited 2 Represents transaction with Sterlite Industries (India) Limited 3 Represents transaction with Bharat Aluminium Company Limited
98

FINANCIALS
18. NOtES CONTINUED
13. Financial and derivative instruments disclosure a) The Following are the outstanding forward exchange contracts entered into by the Company as on 31 March 2008.
Currency as on 31/3/2008 amount buy/Sell Cross Currency Currency As on 31/3/2007 Amount Buy/Sell Cross Currency
US Dollar 115000000 Euro 843351 US Dollar 2138926 AUD 34255 CAD 589209 EURO 8413405 GBP 285030
Sell Buy Buy Buy Buy Buy Buy
Indian Rupees Indian Rupees Indian Rupees Indian Rupees Indian Rupees US Dollar US Dollar
AUD CAD EURO GBP JPY USD
473655 528237 9140846 100000 122245485 26583158
Buy Buy Buy Buy Buy Buy
Indian Rupees Indian Rupees Indian Rupees Indian Rupees Indian Rupees Indian Rupees
b) For hedging commodity related risks: zinc forwards/futures sale for 6,625 MT (2007: 49,275 MT) lead forwards/futures sale for 5,200 MT (2007: nil) c) All derivative and financial instruments acquired by the Company are for hedging purposes. d) Unhedged foreign currency exposure
Debtors Creditors
93.64 2.36
173.47
14. Deferred taxes: Break up of deferred tax assets/liabilities:

Particulars Rs. in crore 2008 2007
i) Deferred tax asset: Voluntary retirement expenditure ii) Deferred tax liability: Related to fixed assets Expenditure on mine development Others Net deferred tax asset/(liability)
3.24
5.36
437.57 305.47 0.52 25.35 (459.68) (300.63)
15. Intangible assets represents Rs. 98.41 crore (2007: Rs. 98.41 crore) being long term investment in equity shares of Andhra Pradesh Gas Power Corporation Limited, Hyderabad, which entitles the company to draw power in Andhra Pradesh for its Vishakapatnam unit. This has been amortised as a fixed asset. Amortisation for the year is Rs. 4.67 crore (2007: Rs. 4.67 crore), cumulative Rs. 33.04 crore (2007: Rs. 28.37 crore). 16. Arising from the Announcement of the Institute of Chartered Accountants of India (ICAI) on 29 March 2008, the Company has chosen to early adopt Accounting Standard 30, Financial Instruments: Recognition and Measurement. Coterminous with this, in the spirit of complete adoption, the Company has also implemented the consequential limited revisions in view of AS/30 to certain Accounting Standards as have been announced by the ICAI. As a result the Company has changed the designation and measurement of all its significant financial assets and liabilities existing as at 1 April 2007 and: 1. The resulting gain (as adjusted for the related tax expense) has been adjusted against opening balance of general reserves other than covered by 2 below. 2. The portion of the gain on the hedging instrument that is determined to be an effective cash flow hedge has been recognised directly in the Hedging Reserve Account. The adoption of this Standard has resulted in the profits for the year (after taxation) being higher by Rs. 221.25 crore (after considering a credit of Rs. 220.74 crore on account of current investments which were hitherto being carried at lower of cost and fair value) and the aggregate reserves being higher by Rs. 221.18 crore.
99

18. NOtES CONTINUED
Product
17. Details of capacity and production1

Unit Installed capacity 2008 | 2007 Actual production 2008 2007
maiN PRODUCt Zinc metals Lead metals Power from wind energy by PRODUCt Silver Sulphuric acid Cadmium metals Copper cathode
1 2 3
MT MT Lakh
581,000 93,000 9,391
411,000 93,000 3,364 132,000 704,196 763 2,100
426,3232 348,5672 63,5663 50,1873 956 14 80,405 753,966 537 51,296 591,440 415
kg 132,000 MT 1,280,996 MT 833 MT 2,100
As certified by management Includes nil MT (2007: 251 MT) of tolled zinc produced through outside smelters by conversion of own produced concentrate and net of internal consumption and transit shortages Production includes high silver lead 5,319 MT (2007: 5,634 MT)
PaRtiCUlaRS REGaRDiNG OPENiNG StOCk, SalES aND ClOSiNG StOCk OF GOODS PRODUCED
Unit Quantity 2008 Quantity in MT except silver, which is kg, Value Rs. in crore | 2007 2008 2007
OPENiNG StOCk Zinc metals Lead metals Silver Sulphuric acid Cadmium metals
MT MT kg MT MT MT MT kg MT MT Lakh DMT MT MT kg MT MT
138 530 2,001 5,432 2 425,532 58,298 81,982 651,592 531 956 297,214 912 902 424 39,695 8
1,346 844 24,609 7
1.48 1.85 3.69 0.82 0.05 7.89
7.34 3.17 3.95 0.10 14.56
SalES1 Zinc metals Lead metals Silver Sulphuric acid Cadmium metals WPP Zinc and Lead concentrate Others ClOSiNG StOCk Zinc metals Lead metals Silver Sulphuric acid Cadmium metals Others
1
349,615 6,074.85 6,549.03 44,916 832.67 385.92 49,295 158.31 92.00 610,263 215.53 80.21 420 18.76 7.87 14 32.24 9.41 313,299 1,277.25 1,934.56 127.30 161.45 8,736.91 9,220.45 138 530 2,001 5,432 2 4.75 3.84 0.99 16.70 0.32 0.09 26.69 1.48 1.85 3.69 0.82 0.05 7.89
Excludes transit shortage of zinc 17 MT (2007: 160) fully recovered, internal consumption of high silver lead 4,894 MT (2007: 5,575) and transit loss 2 MT (2007: 10 MT) fully recovered and sulphuric acid used during trial run of Roaster 68,111 MT (2007: 354 MT)
100 HINDUSTAN ZINC LIMITED

FINANCIALS
18. NOtES CONTINUED

18. Particulars of consumption of concentrates, stores, etc

2008 quantity in mt | value Rs. in crore 2007 Quantity in MT Value Rs. in crore
a) COmPaNyS OWN PRODUCtS i) Zinc concentrate ii) Lead concentrate
860,640 108,113 502
778.39 111.35 889.74 6.09 895.83

| 2007
683,190 85,644
625.11 81.28 706.39 706.39
b) bOUGht OUt ORE/CONCENtRatE i) Remelted lead tOtal (a+b)

Value (Rs. in crore) 2008
Percentage 2008 2007
i) ORE/CONCENtRatE Indigenous
895.83 895.83 420.93 130.27 377.64 0.58 11.73 941.15
706.39 706.39 328.73 90.10 228.25 0.88 31.79 679.75
100.00 100.00
100.00 100.00
ii) StORES aND SPaRES, COmPONENtS EtC, CONSUmED1 Direct consumable Repairs and maintenance Power generation Research and development Others
1
Break up of stores and spares consumed (included under respective expenses) between indigenous and imported stores is not ascertainable.
19. Payment to Directors including Chairman-Managing Director

a) Salary and allowances b) Contribution to PF, pension, gratuity etc c) Medical reimbursement and leave travel concession d) Long-term Incentive Plan e) Directors fees 20. CIF Value of imports

1.06 0.09 0.02 0.69 0.05 1.91
0.86 0.08 0.02 0.74 0.04 1.74
Components, stores and spare parts Trading Material Capital goods
187.76 189.66 377.42
145.48 111.65 257.13
101

18. NOtES CONTINUED

21. Expenditure in foreign currency

ITechnical know-how and basic engineering Travelling expenses Interest 22. Earning in foreign exchange

57.23 0.43 1.16
23.22 0.41 24.20
Export of goods on FOB basis
2257.48 4,213.58
23. Sundry creditors includes due to Micro, Small and Medium Enterprises Rs. 0.60 crore (previous year Rs. nil). The aforesaid information is on the basis of information available with the Company from parties. There is no interest paid/ payable as at 31 March 2008 24. Vedanta Resources Plc, United Kingdom, the ultimate holding company is listed on the London Stock Exchange and for compliance with United Kingdom regulation, its consolidated financial statements includes the restated financial statements of Hindustan Zinc Limited as per International Financial Reporting Standards (IFRS). Additionally, Sterlite Industries (India) Limited, the holding company, is listed in the New York Stock Exchange and for compliance with the United States regulations, its consolidated financial statements includes the restated financial statements of Hindustan Zinc Limited as per the United States Generally Accepted Practices. 25. Previous years figures have been regrouped and rearranged, wherever necessary. For and on behalf of the Board of Directors:
taRUN JaiN DiRECtOR kk kaURa DiRECtOR R PaNDWal COmPaNy SECREtaRy mS mEhta CEO & WhOlE timE DiRECtOR
Sl baJaJ ChiEF FiNaNCial OFFiCER

FINANCIALS
balaNCE ShEEt abStRaCt aND COmPaNyS GENERal bUSiNESS PROFilE

(AS PER SCHEDULE VI, PART (IV) OF THE COMPANIES ACT, 1956)
i. REGiStRatiON DEtailS
Registration Number Balance sheet date 3 1 0 3
1 2 0 8 2 0 0 8
State code
1 7
ii. CaPital RaiSED DURiNG thE yEaR (amOUNt iN RS. thOUSaNDS)
Bonus issue Public issue
N I L N I L
Rights issue Private placement
N I L N I L
iii. POSitiON OF mObiliSatiON aND DEPlOymENt OF FUNDS (amOUNt iN RS. thOUSaNDS)
Total liabilities
SOURCES OF FUNDS:
1 2 3 0 8 2 6 3 8
Total assets
aPPliCatiON OF FUNDS:
1 2 3 0 8 2 6 3 8
Paid-up capital Reserves and surplus Secured loans Unsecured loans Deferred Tax
0 0 4 2 2 5 3 1 9 1 1 4 2 5 6 6 0 1 N I L 0 0 0 0 0 3 9 2 3 0 0 4 5 9 6 7 9 5
Net fixed assets Investments Net current assets Miscellaneous expenditure Accumulated losses
0 4 1 6 2 6 1 6 9 0 6 3 3 2 4 5 2 5 0 1 8 1 3 1 9 4 4 N I L N I L
iv. PERFORmaNCE OF COmPaNy (amOUNt iN RS. thOUSaNDS)
Turnover Profit/loss before tax Earning per share (Rs.) (As in monetary terms)
PRODUCt DESCRiPtiON
0 8 7 2 9 4 0 3 5 5 9 8 5 3 4 2 3 1 0 4 . 0 4
Total expenditure Profit/loss after tax Dividend rate (%)
0 2 7 4 4 0 6 1 2 0 4 3 9 6 0 7 2 1 5 0
v. GENERiC NamES OF PRiNCiPal PRODUCtS/SERviCES OF COmPaNy
itEm CODE NUmbER (itC CODE)
Zinc not alloyed containing by weight less than 99.9% zinc Refined lead
7 9 0 1 1 2 0 0 7 8 0 1 1 0 0 0
For and on behalf of the Board of Directors:

taRUN JaiN DiRECtOR kk kaURa DiRECtOR R PaNDWal COmPaNy SECREtaRy mS mEhta CEO & WhOlE timE DiRECtOR
Sl baJaJ ChiEF FiNaNCial OFFiCER
103
FiNaNCial hiGhliGhtS
Particulars 2003-04 2004-05
Rs. in crore 2005-06 2006-07 2007-08
Turnover Profit before depreciation, interest, tax (PBDIT) Tax Profit after tax (PAT) Gross Block Net Block Share Capital Reserves & Surplus Net Worth Total Debt Capital Employed Return on capital employed (%) Earning per Share (Rs.) Dividend per Share (Rs.) Book Value per Share (Rs)
1,841 660 180 405 1,852 892 423 1,084 1,507 608 2,060 28.42 9.58 1.40 35.66
2,202 1,018 272 655 2,855 1,844 423 1,655 2,078 571 2,625 35.38 15.51 1.75 49.17
3,877 2,418 757 1,472 3,048 1,918 423 3,007 3,430 558 3,988 57.10 34.85 2.50 81.17
8,560 7,878 6,639 6,231 2,012 1,589 4,442 4,396 4,135 5,647 2,871 4,163 423 423 7,205 11,426 7,627 11,849 0 0 7,627 11,849 84.98 50.72 105.12 104.04 5.00 5.00 180.51 280.41

Yashad Bhawan Udaipur 313 004 Rajasthan www.hzlindia.com T: +91 294-2420813-15

42nd Annual Report 2007-08

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Hindustan Zinc Limited

42ND ANNUAL REPORT 2007-08

ENDURING VALUE THROUGH VALUES

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

hiNDUstAN ZiNC At A glANCe

1. rAMPUrA AgUChA MiNe

2. siNDesAr KhUrD MiNe

Production FY 2008: Capacity:

Type: Capacity: Type: Capacity: Type: Capacity:

8. sAMANA wiND Power ProjeCt

Production FY 2008: Capacity:

9. gADAg wiND Power ProjeCt

Production FY 2008: Capacity:

HINDUSTAN ZINC LIMITED

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

oUr growth history

Acquired by Sterlite Industries (India) Limited on 11 April 2002

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

HINDUSTAN ZINC LIMITED

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

eNDUriNg vAlUe throUgh

HINDUSTAN ZINC LIMITED

roaster commissioned in April 2008

including research on beneficial use of solid wastes

Human Resources, Environment, Safety, Quality and Corporate Social Responsibility.

environment and social development

Our ability to attract the talent and its retention

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

Key PerforMANCe iNDiCAtors

kEY PERFORMANCE INDICATOR

Revenue (net sales)

Environment Corporate Social Responsibility People

HINDUSTAN ZINC LIMITED

50.7% 104.04 44%

reduction over previous year

ANNUAL REPORT 2007-08

DeMANDs AND MArKets ZiNC

HINDUSTAN ZINC LIMITED

INDIAN MARkET: ZINC

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

DeMANDs AND MArKets CONTINUED leAD

HINDUSTAN ZINC LIMITED

GLObAL MARkET: LEAD

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

sUCCessfUl exPlorAtioN efforts

Panoramic view of Rampura Agucha Mine

HINDUSTAN ZINC LIMITED

ANNUAL REPORT 2007-08

hiNDUstAN ZiNCs exPlorAtioN resUlts

HINDUSTAN ZINC LIMITED

ZINC AND LEAD MINE RESOuRCE AND RESERVE SuMMARY

22.8 6.6 22.9 2.3 21.0 1.7 77.3

15.7 8.3 5.0 12.6 6.4 5.3 9.1

2.2 2.5 1.8 1.9 4.0 1.8 2.6

21.0 11.0 19.0 6.7 14.2 3.4 75.3

14.9 5.8 3.9 10.0 5.0 4.7 8.0