AGM 2023

Aug 23, 2023

Dear members, good morning, and a very warm welcome to the 57th annual general meeting of Hindustan Zinc Limited through video conferencing or another audio visual facility. As a reminder, for the smooth conduct of the meeting, the members will be in the mute mode and the audio and video will be open when they speak at the AGM as per the registration. Please note that as per the requirement, the proceedings of the annual general meeting will be recorded and available on the website of Hindustan Zinc Limited. I now hand over the proceedings to Mr. Rajendra Panwar, the Company Secretary of Hindustan Zinc Limited. Good afternoon, ladies and gentlemen. I welcome you all to the 57th annual general meeting of our company being held today through audio visual means. For today's meeting, we have Ms. Priya Agarwal as Chairperson of the company, Mr. Kannan Ramamirtham, Independent Director and Chairperson of Audit & Risk Management Committee, Mr. Akhilesh Joshi, Independent Director and Chairperson of NRC Committee, and Ms. Pallavi Joshi Bakhru as Woman Independent Director of the company. Besides them, we have Mr. Arun Misra, CEO and Whole-time Director of the company, and Mr. Sandeep Modi, Chief Financial Officer. We also have representatives of statutory auditors, secretarial auditors, and Mr. Manoj Maheshwari, a Scrutinizer to oversee the virtual e-voting process. Required quorum for the meeting is present. I request Chairperson to call the meeting to order and deliver her speech. As confirmed, required quorum for the meeting is present, so we can commence the proceedings of the 57th AGM. My dear shareholders, I am humbled and delighted to be here with you. Your company has such a rich legacy. When the economic history of the 21st century in India is written, the turnaround story of Hindustan Zinc will have a chapter of its own, and we are not done yet. We remain hungry, we are capable, and we are fully motivated. Hindustan Zinc is a leader in the industry today. We will also be among the best companies of the world. Hindustan Zinc is a shining beacon in the Vedanta portfolio. Since taking over as Chairperson, I have witnessed the organization achieve many milestones. Not only did Hindustan Zinc remain on course to achieve its goals, but has also stayed ahead of the market curve to deliver an excellent performance during the year. Zinc will play a key role in India's growth story, just as India's growth story will play a key role in the growth of Hindustan Zinc. Use for galvanizing will quite literally strengthen the world-class infrastructure that is built under the leadership of the Government of India, as well as input into several other manufacturing industries. We are looking forward to at least 3%-4% growth in the sector and plan to ramp up our production from 1 million tonnes to 1.5 million tonnes per annum. Our growth efforts include expansion of capacities, maintaining a portfolio of mines with long life, strengthening cost leadership, expansion of product portfolio through customer centricity, and progressing towards a sustainable future. It gives me immense pleasure to share that we reported yet another record-breaking year with Hindustan Zinc, surpassing production of 1 million tonnes of refined metal. Given our continuous efforts of investing in world-class technology for maximum metal recovery, our digitization of our mining and smelting operations, we achieved highest ever mined metal production in the first quarter at 257 kt. These achievements are just the beginning, and I am looking forward for all of us together to break many production records. Hindustan Zinc has been leading by example, not only in production, but also in accomplishing ESG goals. We are the first company in the country to introduce battery-operated EVs in underground mining. Today, our Pantnagar metal plant is powered 100% by renewable energy. With our solar and wind projects accounting for 180 megawatts and 250 megawatts respectively, Hindustan Zinc will reduce its coal dependency by 50% by 2025. It is due to efforts such as these that Hindustan Zinc was among the top three companies globally at the S&P Global Corporate Sustainability Assessment, along with being ranked amongst the top 5% in the S&P Global Sustainability Yearbook 2023. It has garnered A- in water security, along with A in climate change by CDP. I must congratulate the entire team for speed and efficiency with which the organization is moving towards net zero. I am hopeful that Hindustan Zinc will achieve this target by 2030, ahead of Vedanta Group's goal of 2050. As mentioned before, people are at the core of Hindustan Zinc's success. The stellar team at Hindustan Zinc, with their dedication and hard work, has time and again made it possible for us to achieve our ambitious goals. In an endeavor to show inclusivity and promote diversity, we have developed a robust recruitment strategy and are even encouraging our businesses to have diverse and inclusive workforce. I am pleased to share that across the company, as many as 505 women employees, including 109 women engineers, are breaking the glass ceiling in mining and smelting operations. At Hindustan Zinc, women are working and flourishing in all key functions, from driving large mining vehicles to operating plants and working night shifts, and we are so proud of them. At present, 19.5% of our executive workforce, 35% of our management committee, and 21% of our executive committee comprise of women. Our commitment to developing a conducive and inclusive work environment is also visible through the induction of transgender employees across roles at Hindustan Zinc. Further, I am delighted to inform you that last month at Hindustan Zinc, we launched a robust transgender policy through the Zinclusion event, in which Vedanta will support gender affirmation surgeries through monetary support and a month long leave for our transgender employees. Another strong pillar for Hindustan Zinc's growth has been the give back philosophy. Projects such as Sakhi, Khushi, and Shiksha, to name a few, are aimed at ensuring that we impact lives positively at grassroots level and empower women and children in our communities with education and skilling opportunities. Till date, we have impacted over 25 lakh women and children through education, nutrition, healthcare, and welfare projects, and I hope this number will continue to grow. Our Zinc Football Academy is another feather on our cap. With state-of-the-art facilities, the football academy currently hosts over 60 students who are not only excelling in the field of sports, but also in their academics. We hope in the coming years, our athletes will represent India on a global platform. I am confident that we will accomplish many more milestones together, sustainably and efficiently. Our core strength, experience, and expertise will help us maximize the opportunities of growth available to us while operating new vistas of expansion for capacity expansion, volume growth, better operational and financial performance, and enhanced value creation for all stakeholders will be the key areas of success. With your continued support, dear shareholders, I believe that our growth story will be unstoppable. Thank you. Thank you, madam. Now I request Mr. Arun Misra, CEO and whole-time Director of the company, to deliver his speech. Arvind, thank you once more. A very warm welcome to the 57th annual general meeting of Hindustan Zinc. It is an honor to stand before you today as the CEO of this esteemed organization. I extend my heartfelt gratitude to each one of you for your continued trust, support, and commitment towards the growth of Hindustan Zinc. To get maximum shareholder engagement, we have retained the virtual element this year as well. Safety has always been a priority in the way we conduct our business. We are committed to operating safely and believe all fatalities, occupational diseases, and injuries at work can be prevented. The incidents of last year, resulting in multiple fatalities, happened despite our continuous effort to eliminate fatalities and attain a zero harm work environment. Due to our renewed focus on safety, I am happy to report that your company had fatality-free operations for the last three quarters. This has instilled a new wave of commitment among the employees towards attaining a zero harm environment. Before I give you an overview of the year gone by, I would like to point out that copies of Hindustan Zinc's 2023 Integrated Annual Report, the board report, and the audited annual accounts have already been handed over to you. I now seek your permission to take them as read. Over the past year, we have faced numerous challenges and navigated through them to emerge as a global leader. However, it is during such moments that the true strength of a company and its people shine through. I am proud to say that Hindustan Zinc has not only weathered the storm, but has emerged stronger, more resilient, and more focused on our core values and objectives. The global landscape has witnessed significant shifts with technological advancements, geopolitical changes, and the pursuit of sustainable development. At Hindustan Zinc, we have recognized these shifts and have proactively aligned ourselves to meet the demands of the future. Our objective is to remain at the forefront of adopting best-in-class technologies and set a benchmark by enhancing efficiencies and productivity along the way. We have advanced well on the journey of leveraging digitalization and look forward towards embracing new technologies such as artificial intelligence and machine learning to make all our business procedures more efficient by predictive analysis. We will continue our total focus on environmental, social, and governance parameters that ensures equitable growth to all our stakeholders. As per current trends, I believe that Indian market demand for zinc is set to go up by 4% from 3.8% the previous fiscal, with a steady rise in the usage of galvanized steel by various sectors, especially railways, which has been consuming about 18%. The overall infrastructure growth and research and development in the defense sector will only increase the need for metals in manufacturing specialized high-grade components. With the rising demand for galvanized steel, the demand for zinc will certainly rise consequently. Today, India is on the cusp of major metal revolution, and Hindustan Zinc will certainly be a part of it. I shall now share some brief reflections on the year that was, and then move on to the key highlights of the company's performance during the financial year 2022, 2023. The company, with your support, continues its upward journey. In operational areas, as we begin discussing the key operational highlights during the FY23, I would like to put forth our ideology of transforming for good on the three key pillars: planet, workplace, and communities by looking beyond the macroeconomic lens of business profitability alone. FY23 has been a period of milestones for Hindustan Zinc as it surpassed the 1 million ton production mark to touch historic high of 1,032 kilotons in metal production. It does not end here. Our company ended the year with highest ever silver production of 714 metric tons. In the journey of continuously upgrading the reserves and resources which fuel the mines, Hindustan Zinc reported total ore reserve of 460.1 million tons. These milestones have infused Zinc Parivar with a renewed spark and unwavering commitment towards delivering several more highs to all our stakeholders. The operational milestone, along with financial performances, made in FY23 a year of highs for the company. While India proceeds towards unprecedented growth, Hindustan Zinc contributed by delivering value to the stakeholders through strong results yet again. The revenues stood at INR 34,089 crore, marking a 16% year-on-year growth with ever highest EBITDA of INR 17,590 crore, up by 8% year-on-year, and ever highest profit after tax of INR 10,511 crore, registering a 9% year-on-year growth. In the last fiscal, your company registered the highest ever dividend payout at almost INR 32,000 crore, one of the top amongst the public listed companies, thus contributing towards nation's development. Other than that, your company contributed more than INR 24,000 crore to the exchequer of the country. These milestones have been achieved by adhering to stringent cost and cash conversion discipline, powered by sustainability at the core of everything we do at Hindustan Zinc. On expansion projects, moving ahead to our ongoing expansion projects, all mechanical installations of line 1 completed for Hindustan Zinc Alloys Private Limited, and the overall commissioning of the plant is expected on track. On the fumer front, the absence of Chinese experts, your company is working on commissioning of the plant with internal experts and online OEM support with the in-house team traveling to China for the training purpose. I can update further that we have just started commissioning the fumer plant, and it is expected to ramp up to full production in another 1 month's time. In the first quarter of FY 2023, your company also announced the setting up of new roaster plant with a capacity of 160,000 tons per annum at India's first and oldest zinc smelter at Debari. For this technology partner, OEC and OMC have been onboarded. Along with the roaster, the board also approved the formation of the wholly owned subsidiary company for setting up 0.5 million ton fertilizer plant at Chanderiya. Major process packages orders have been finalized, and partners have been already locked in to complete the fertilizer plant project, which will mainly produce phosphatic fertilizers, diammonium phosphate, and NPK nutrients. On the front of ESG, in an era where ESG has become the prime focus for any organization, the innovation of Hindustan Zinc is based on delivering the mine to metal value in the most sustainable, carbon efficient, and waste-free manner as possible. One of our key achievements this year has been our relentless pursuit of sustainability, and with this regard, I am pleased to share that Hindustan Zinc's efforts on the world sustainability front has borne fruit, as has been narrated by our Chairperson before me. In the journey, the focus is to reduce dependence on thermal coal in the near term through right investments in the renewable projects. We have already tied up of more than 400 megawatt of renewable power agreements with another renewable power producing company. The Pantnagar metal plant is one such example where the plant is operating entirely on renewable power. Hindustan Zinc started the fiscal year with an aim to decarbonize Indian mining, and this has led us to deploy India's first ever battery electric vehicle in underground mining. Along with this, the company has also deployed 21 electric vehicles at its smelting locations, thus further reducing the dependency on fossil fuels. Furthermore, first LNG vehicle was flagged off for material movement, which marked the beginning of a green era of transportation. With the ratio of 2.41 times water positive since past 4 years, your company is on track to become 5 times water positive by 2025, as per the Sustainable Development Goals of 2025. Hindustan Zinc also laid the foundation stone for zero liquid discharge plant at Rampura Agucha mine. In addition, EV policy rolled out at the group level for all employees under Evolving for Good initiative, propelling Zinc Parivar further on the journey of decarbonization of light motor vehicles by 2030. On people practices, the success would not have been possible without the unwavering support of Zinc Parivar. I would like to express my deepest gratitude for your continued trust and collaboration. The support has been instrumental in our growth journey, and we remain committed to creating long-term value for all our stakeholders. Your company also takes pride in being an equal opportunity employer, inclusive and progressive company, aiming to develop a workforce that is diverse, driven, and diligent, with a laser focus towards delivering results. It is significant to note that 505 women employees are leading the wave of change in the mining and smelting operations, as has been narrated by our Chairperson before me. Hindustan Zinc firmly believes that the presence of women in mining and engineering is important to India's robust journey of growth and development. Your company has achieved a diversity ratio of more than 90% in the executive workforce. Company has taken multipronged approach that includes focused efforts to encourage and empower young engineers to create new processes and implement new technologies. Hindustan Zinc received several accolades on HR excellence which includes Certify Test, Great Place to Work, Company with Great Managers, and PeopleFirst HR Excellence Award by recognized human resource bodies and associations. On the community front, your company has always believed that business has a purpose beyond profits. The belief is that we need to create shared value-generating economic growth in a way that also produces value for the society. Having said that, Hindustan Zinc has transformed the lives of 1.73 million in 237 villages through various initiatives like Nand Ghar, Khushi, Anganwadi program, Shiksha Sambal project, Unchi Udaan, Jeevan Tarang, Sakhi, Samadhan, Zinc Kaushal program, and Zinc Football Academy. One of the largest CSR verticals with the highest spend on education vertical begins with Khushi Nand Ghar program for children below six years of age, in which preschooling learning imparted to over 100,000 children through videos. This is followed by technology-aided learning from class 1 to 8, and the Shiksha Sambal initiative supporting young talent from grade 6 to 12. Then comes the Unchi Udaan program, which selects the top performing students among the Shiksha Sambal schools and provide them with four years of in-house coaching for engineering through IIT-JEE, under which your company has been able to help over 223 students in seven batches. In conclusion, as we look ahead, we are cognizant of the challenges that lie before us. The global business landscape is evolving at an unprecedented pace. The falling zinc-lead prices does pose a great challenge to us. We plan to meet this challenge by aggressive cost-cutting measures and better realization through more valued products. We will continue to be agile, innovative, and ensure best-in-class management in place to handle the challenges and transform them into opportunities for growth and success. In a first of its kind of initiatives, this year, we take immense pride in presenting what we believe is India's first eco-friendly digital integrated report. This innovative approach not only demonstrates our commitment to transparent communication, but also showcase our determination to lead by example in our commitment to minimizing our environmental impact. This year's e-report is a technological and sustainability pioneer, which uses energy-efficient server. We have meticulously selected energy-efficient technologies and hosting solutions aimed at reducing power consumption and environmental impact, thereby aligning with our overall mission of decarbonizing Indian mining. Dark mode versus bright mode, text version versus video, graphs versus tables. You can make a choice without compromising on the richness of the experience. The process of accessing this document is not just engaging than ever before, but also paving a way for sustainable future. Thank you once again for your presence here today. Your trust and support are invaluable to us. Let us continue this journey together and build brighter and sustainable future. Thank you