CEO’S MESSAGE

Dear Stakeholders,

Since inception, our purpose has been to create value and improve lives through sustainable and responsible mining. Our various achievements this year have reasserted our path to progress through our mission of becoming a global leader and creating value by conducting our business in a socially responsible and ethical manner. We know and recognise that the essence of sustainability is in
'C-A-R-I-N-G'. This year, our theme-CARING A(g) to Z(n)-is reflective of our thoughtfulness across our value chain.

While that has been the driving agenda of growth at HZL, I say with regret that this year we have fallen short of our commitment to provide zero harm working places. We are deeply anguished by these incidents and our prayers and thoughts are with affected families. We are determined to eliminate such accidents and have intensified our work towards our goal of zero harm.

Cautious at work

Globally, the concept of safe mining has now become larger than volumes and profits. At HZL, care for and safety of our people is paramount. Continuously strengthening our safety initiatives, this year we have taken a number of measures to monitor and mitigate risks at work. A special Fatality & Serious Incident Prevention Plan (FSIPP) Subcommittee has been introduced to focus on high-risk activities and monitor control-measures. For assessing maturity level of employees and safety system implementation, Safety Maturity assessment was carried out across sites by DuPont.

While we have improved our Lost Time Injury Frequency Rate (LTIFR) from 0.85 in FY 2014 to 0.27 in FY 2018, LTIFR during the current year was 0.63. We are committed to our efforts in our quest towards zero harm and zero fatality.

Augmenting growth

We could not have been the mining giant we are today, if concern and thoughtfulness about the way we grow had not been a part of our DNA. HZL governs about ~80% of the growing zinc market in India and produces ~100% of the country's integrated silver. While we continue to be the largest and lowest cost zinc producers in the world, our expansion is progressing in line with the expectation of reaching 1.2 MTPA capacity by 2020.

We declared a Special Interim Dividend of 1000% i.e. ` 20 per share on equity share of ` 2 each, amounting to ` 10,188 Crore (including Dividend Distribution Tax (DDT)). Another significant change this year was completely moving from open-cast to underground mines – a conscious choice that will ensure safety and be less harmful for the environment.

Responsible supply chain

Our resilient and responsible supply chain is a reaffirmation of our universal message of caring within and beyond the boundary of the organisation. At HZL, we encourage our suppliers to not just comply by the relevant national and international standards, but ensure ongoing improvement in their own standards through regular exchange of knowledge and training. Our supply chain management strategy incorporates processes which help integrate tenets of sustainability across our value chain. As one of our future endeavours, we plan to audit our suppliers’ sustainability practices.

We also introduced a one-of-its-kind Integrated Transport Management System that helps in real-time tracking of raw material, semi-finished and finished goods without any human intervention.

Inclusive progress

Our people are at the heart of our operations. We have consistently been certified as a ‘Great Place to work’ for the past two years. Our drive towards employee engagement has led to an innovative programme called Reengineering to Achieve Cost Excellence (RACE). Under this programme, our employees generated over 300 ideas encompassing fundamental rethinking and radical redesign of existing resources and ways of working, to drive sustainable improvement in productivity, safety, waste elimination, increase in waste to wealth creation, and ultimately, reduction in cost.

To take our learning journey to the next level and leverage best-in-class content, we have partnered with ‘Edumine’, world’s best online learning platform in the mining sector. The modules span an array of relevant topics from Exploration & Geology, Geotechnics, Health, Safety, Environment, Maintenance to Mineral Processing and Mine Management.

Nurturing the environment

While mining provides most materials we rely on, environmental implications and remediation measures by the industry, have been a subject of global debates. At HZL, our deep-rooted culture of caring ensures nurturing of our immediate and extended environment.

In continuation of investment in green energy, this year we have commissioned a 22 MW solar power plant at Rampura Agucha Mine for captive use of generated green energy, taking the total captive solar power capacity to 38.9 MW.

In light of the tailings facility failures in recent years, we have conducted stability tests across our three tailing dams with the help of global experts. Further, I would like to mention our efforts towards doubling the paste fill capacities at Sindesar Khurd and Rampura Agucha mines, which will significantly reduce quantum of tailings flowing into dams as well as dry stack tailing plant at Zawar for better stability and water conservation.

Through technology interventions, bulk of waste from our smelter and Captive Power Plant (CPP) is now being utilised by cement industry and in highway construction. The impact of these efforts in reducing our environment and land footprint is enormous.

Growing together

Caring for communities is not just handing out doles; at HZL, we believe in enabling, educating and facilitating to foster self-sufficient and empowered communities. With ~40% of our CSR spend on education it remains the thrust area through which we endeavour to bring in the desired change.

Vedanta’s flagship programme Nand Ghar, the new-age childhood care centres, is being integrated with our Khushi and Sakhi projects to create and provide unique models of women and childhood care.

HZL has been associated with sports and has been promoting sportsmen for almost four decades when we made our football stadium at Zawar in Rajasthan in 1976. During the reporting period, we set up India’s first, below-12, international-level ‘Hindustan Zinc Football Academy’ in Zawar. With ‘F-Cube’ Training and Assessment Technology, the world’s first intelligent and interactive device for football and fitness training, the fully residential Academy provides a 360-degree holistic football training opportunity for both boys and girls.

Accolades are not our objective, but when we receive recognition for our work, it reinforces our journey along the chosen path to progress! It is with great pride that I mention to our stakeholders that among the global mining & metal companies evaluated this year, we ranked 1st in environment and 5th overall, in the Dow Jones Sustainability Index.

We entered 2019 with an expectation to grow not only in terms of our financial returns, but truly see the benefits of that growth percolate to our stakeholders and reflect in the care for our people and our environment.

In closing, I express my gratitude to all those who have been a part of and supported our journey of sustainable growth. Please do read the elaborate journey in this Sustainability Report and share your feedback, that always prompts us to do better.

Warm regards

Sunil Duggal