MIRA
INFORM REPORT
|
Report Date : |
20th
January, 2007 |
IDENTIFICATION DETAILS
|
Name : |
HINDUSTAN
ZINC LIMITED |
|
|
|
|
Registered Office : |
Yashad Bhawan, Yashadgarh, |
|
|
|
|
Country : |
|
|
|
|
|
Financials (as on) : |
31.03.2005 |
|
|
|
|
Date of Incorporation : |
10.01.1966 |
|
|
|
|
Com. Reg. No.: |
16-1208 |
|
|
|
|
CIN No.: [Company
Identification No.] |
L27204RJ1966PLC001208 |
|
|
|
|
TAN No.: [Tax
Deduction & Collection Account No.] |
JDHH00694B |
|
|
|
|
Legal Form : |
A public
limited liability company. The
company's shares are listed on the Stock Exchanges. |
|
|
|
|
Line of Business : |
Manufacturing, selling,
exploration, mining & concentration of zinc, lead silver, cadmium,
sulphuric acid, phosphoric acid and cobalt. |
RATING & COMMENTS
|
MIRA’s Rating : |
A |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory
capability for payment of interest and principal sums |
Fairly Large |
|
Maximum Credit Limit : |
USD
135000000 |
|
|
|
|
Status : |
Good |
|
|
|
|
Payment Behaviour : |
Regular
|
|
|
|
|
Litigation : |
Clear |
|
|
|
|
Comments : |
Subject
is a well – established and reputed company having fine track. Directors are
reported as experienced and respectable businessmen. Trade relations are
fair. Business is active. Payments are usually correct and as per
commitments. The
company can be considered good for normal business dealings at usual trade
terms and conditions. |
LOCATIONS
|
Registered Office : |
Yashad Bhawan, Yashadgarh, |
||||||||||||||
|
Tel. No.: |
91 - 294 - 2529182/2529183/2529184/2529185/
181/2529102/103/104 |
||||||||||||||
|
Fax No.: |
91 - 294 - 2526443 / 2523522/2525763 |
||||||||||||||
|
E-Mail : |
|||||||||||||||
|
Website : |
|||||||||||||||
|
|
|
||||||||||||||
|
MINING UNITS |
Located
at : v
Zawar Mines, v
Rajpura Dariba Mine, Rajsamand District, Rajasthan v
Rampura Agucha Mine, Bhilwara District, Rajasthan v
Sargipali Lead Mines, Sundergarh District, Orissa v
Maton Mine, Udaipur District, Rajasthan v
Agnigundala Mine, Guntur District, Andhra Pradesh v
Sargipali Mine, Sundergarh District, Orissa |
||||||||||||||
|
|
|
||||||||||||||
|
SMELTING UNITS |
v
Debari Zinc Smelter, Rajpura, v
Vizag Zinc Smelter, v
Chanderiya Lead Zinc Smelter, Chittorgarh District, Rajasthan v
Tundoo Lead Smelter, Dhanbad, Jharkhand |
||||||||||||||
|
|
|
||||||||||||||
|
|
Exports:
|
||||||||||||||
|
Tel.
No.: |
|
||||||||||||||
|
Regional Office: |
Northern
Regional Office Tel -
91 11-24364988/24367261 Fax 91
11-24365421 Email sanjay.khanna@vedanta.co.in Southern
Regional Office Tel 91
80- 25590918 Fax 91
80- 25590917 Email: sundeep.prasanna@vedanta.co.in Eastern
Regional Office Tel 91
33-2217763/22262627 Fax 91
33-22262627 Email: mohammed.azmatulla@vedanta.co.in Western
Regional Office Tel 91-22-56434500 Fax 91-22-56434640 Email: Anuj.lal@vedanta.co.in |
||||||||||||||
|
|
|
||||||||||||||
|
Branches
: |
Located
at : Ř
301-302, Dohil Chambers, 46, Tel. No. 91-11-2628
0570 / 2646 3711 / 2641 9426 Fax No. 91-11-2648
4614 Ř
Chatterjee International Centre, 20th Floor, 33-A, Tel. No. 91-33-2242
1761 / 2226 2627 / 2249 5413 Fax No. 91-33-2245
7354 Ř
47, Mittal Chambers, Nariman Point, Mumbai – 400 021 Tel. No. 91-22-2202
5903 / 2204 9317 Fax No. 91-22-2283
3341 Ř
B-II, 403, Kamal Apartment, Tel. No. 91-141-2200723 Ř
Block No. 205, II Floor, 5-9-13, Tara Mandal Complex, Saifabad, Tel. No. 91-40-2241712
/ 2233516 / 2230307 Ř
102, 8th Garden Colony, New Surya Apartment, Tel. No. 91-79-2656
1161 Ř
No. 6, Amar Jyoti House, Building Co-operative Society, Near Tel. No. 91-80-330
0292 / 330 5036 |
DIRECTORS
|
Name : |
Mr.
Agnivesh Agarwal |
|
Designation : |
Chairman
|
|
|
|
|
Name : |
M
|
|
Designation : |
Chief
Executive Officer and Whole Time Director |
|
|
|
|
Name : |
Mrs.
Ajita Bajpai Pande |
|
Designation : |
Director
|
|
|
|
|
Name : |
Mr.
Sujit Gulati |
|
Designation : |
Director
|
|
|
|
|
Name : |
Mr. C.D.Arha |
|
Designation : |
Chairman |
|
|
|
|
Name : |
Mr. Prashant Mehta |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Harbhajan Singh |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. A.C.Wadhawan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. N.K.Shukla |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Anil Agarwal |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Navin Agarwal |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. Tarun Jain |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. C.V. Krishnan |
|
Designation : |
Director |
|
|
|
|
Name : |
Mr. K.K. Kaura |
|
Designation : |
Director |
KEY EXECUTIVES
|
Name
: |
Mr. Rajendra Pandwal |
|
Designation
: |
Company Secretary |
|
|
|
|
Name : |
Mr. S L Bajaj |
|
Designation : |
Chief Financial Officer |
MAJOR SHAREHOLDERS
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Promoters
Holdings |
|
|
|
Sterlite Opportunities and Ventures Ltd. |
274315431 |
64.92 |
|
Person acting in concert |
0.000 |
0.000 |
|
Sub-Total |
274315431 |
64.92 |
|
|
|
|
|
Non – Promoters Holdings |
|
|
|
Sub-Total |
0.000 |
0.00 |
|
|
|
|
|
Institutional Investors |
|
|
|
Mutual Funds |
6666823 |
1.58 |
|
Banks, Financial Institutions, Insurance Companies (Central/State
Government Institutions/ Non-Government Institutions) |
1782258 |
0.42 |
|
Flls |
4555617 |
1.08 |
|
Sub-Total |
13004698 |
3.08 |
|
|
|
|
|
Others |
|
|
|
GOI -President Of |
124795259 |
29.54 |
|
Private Corporate Bodies |
2192731 |
0.52 |
|
Indian Public |
7537532 |
1.78 |
|
NRI's/Ocb's |
275711 |
0.06 |
|
NRI Company |
16700 |
0.01 |
|
Any Other |
394038 |
0.09 |
|
Sub-Total |
135211771 |
32.00 |
|
|
|
|
|
GRAND TOTAL |
422531900 |
100.00 |
BUSINESS DETAILS
|
Line of Business : |
Manufacturing, selling,
exploration, mining & concentration of zinc, lead silver, cadmium,
sulphuric acid, phosphoric acid and cobalt. |
||||||
|
|
|
||||||
|
Products : |
|
PRODUCTION
STATUS
|
Particulars |
|
Unit
|
Installed Capacity |
Actual Production |
|
MAIN PRODUCT |
|
|
|
|
|
Zinc Metals |
|
MT |
411000 |
317558 |
|
Lead Metals |
|
MT |
103000 |
23636 |
|
BY PRODUCT |
|
|
|
|
|
Silver |
|
Kg. |
86000 |
24098 |
|
Sulphuric Acid |
|
MT |
687196 |
501956 |
|
Cadmium Metals |
|
MT |
763 |
359 |
|
Copper Cathode |
|
MT |
2100 |
-- |
GENERAL INFORMATION
|
Suppliers : |
v Balaji Industries product Limited v
Gaurav Crushing
industries v
Vulcan techno private
Limited v
AKCL Exports Limited |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
No. of Employees : |
12531 |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
Bankers : |
v
State Bank of Bikaner & Jaipur v
State Bank of v
Bank of v
UCO Bank v
Indian Bank v
Indian Overseas Bank v
IDBI Bank Limited v
ICICI Bank Limited v
UTI Bank Limited v
HDFC Bank Limited v
Calyon Bank |
|||||||||||||||||||||||||||||||||||||||
|
|
|
|||||||||||||||||||||||||||||||||||||||
|
Facilities : |
Reserve and Surplus (in millions)
|
|
|
|
|
Banking Relations : |
Good |
|
|
|
|
Auditors : |
Deloitte Haskins and Sells (Statutory Auditors) Chartered Accountants |
|
Address |
12, Mumbai-400018, |
|
|
|
|
Associates/Subsidiaries : |
Nil |
CAPITAL STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
500,000,000 |
Equity Shares |
Rs. 10/- each |
Rs. 5000.000 millions |
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
422,531,900 |
Equity Shares |
Rs. 10/- each |
Rs. 4225.320 Millions |
FINANCIAL DATA
[all figures are in Rupees Millions]
ABRIDGED
BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
4225.300 |
4225.320 |
4225.320 |
|
|
2] Share Application Money |
0.000 |
0.000 |
0.000 |
|
|
3] Reserves & Surplus |
30072.500 |
16552.110 |
10843.420 |
|
|
4] (Accumulated Losses) |
0.000 |
0.000 |
0.000 |
|
|
NETWORTH |
34297.800 |
20777.430 |
15068.740 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
0.000 |
5709.320 |
6073.880 |
|
|
2] Unsecured Loans |
5580.200 |
3.920 |
4.080 |
|
|
TOTAL BORROWING |
5580.200 |
5713.240 |
6077.960 |
|
|
DEFERRED TAX LIABILITIES |
2413.800 |
1081.130 |
656.380 |
|
|
|
|
|
|
|
|
TOTAL |
42291.800 |
27571.800 |
21803.080 |
|
|
|
|
|
|
|
|
APPLICATION OF FUNDS |
|
|
|
|
|
|
|
|
|
|
|
FIXED ASSETS [Net Block] |
18603.000 |
13878.770 |
6400.380 |
|
|
Capital work-in-progress |
578.000 |
4562.640 |
2518.320 |
|
|
|
|
|
|
|
|
INVESTMENT |
16048.800 |
6878.790 |
6193.250 |
|
|
DEFERREX TAX ASSETS |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
3831.000
|
3343.080
|
3225.820 |
|
|
Sundry Debtors |
6898.500
|
2608.490
|
2727.300 |
|
|
Cash & Bank Balances |
740.300
|
221.070
|
4046.130 |
|
|
Other Current Assets |
1.700
|
2.700
|
121.180 |
|
|
Loans & Advances |
1622.300
|
1193.540
|
829.240 |
|
Total Current Assets |
13093.800
|
7368.880
|
10949.670 |
|
|
Less : CURRENT LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Current Liabilities |
4158.100
|
4274.150
|
3254.410 |
|
|
Provisions |
1873.700
|
843.130
|
1004.130 |
|
Total Current Liabilities |
6031.800
|
5117.280
|
4258.540 |
|
|
Net Current Assets |
7062.000
|
2251.600
|
6691.130 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
42291.800 |
27571.800 |
21803.080 |
|
PROFIT
& LOSS ACCOUNT
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Sales Turnover [including other
income] |
39927.800 |
23372.000 |
19358.820 |
|
|
|
|
|
|
Profit/(Loss)
Before Tax |
22295.700 |
9269.190 |
5847.330 |
|
Provision
for Taxation |
7570.900 |
2715.850 |
9893.210 |
|
Profit/(Loss)
After Tax |
14724.800 |
6553.340 |
4045.880 |
|
|
|
|
|
|
Export
Value |
8623.500 |
3650.110 |
2216.160 |
|
|
|
|
|
|
Import
Value |
1744.900 |
2214.510 |
249.030 |
|
|
|
|
|
|
Total
Expenditure |
17632.100 |
14102.810 |
11402.620 |
QUARTERLY
RESULT
|
PARTICULARS |
31.12.2006 |
30.09.2006 |
30.06.2006 |
|
TYPE
|
3rd Qtr |
2nd Qtr |
1st Qtr |
|
Sales
Turnover |
24800.000 |
24410.000 |
16100.000 |
|
Other
Income |
640.000 |
460.000 |
470.000 |
|
Total Income |
25440.000 |
24870.000 |
16570.000 |
|
Total
Expenditure |
5730.000 |
5850.000 |
3660.000 |
|
Operating
Profit |
19710.000 |
19020.000 |
12910.000 |
|
Interest |
(110.000) |
100.000 |
270.000 |
|
Gross
Profit |
19820.000 |
18920.000 |
12640.000 |
|
Depreciation |
370.000 |
370.000 |
370.000 |
|
Tax |
5950.000 |
5480.000 |
3480.000 |
|
Reported
PAT |
13350.000 |
12980.000 |
8740.000 |
200606 Quarter 1 - Expenditure Includes (Accretion) /Decretion to stock Rs (1850.00) million Mining & Manufacturing Expenses Rs 2960.00 million Mining Royalty Rs 1510.00 million Staff Costs Rs 650.00 million Administrative, Selling & Other Expenses Rs 390.00 million Tax Includes Provision for Current Tax Rs 3480.00 million Deferred Tax Rs 50.00 million.
200609 Quarter 2 - Expenditure Includes
(Accretion) /Decretion to stock Rs 910.00 million Mining & Manufacturing
Expenses Rs 1970.00 million Mining Royalty Rs 1500.00 million Staff Costs Rs
660.00 million Administrative, Selling & Other Expenses Rs 810.00 million
Tax Includes Provision for Current Tax Rs 5480.00 million Deferred Tax Rs 90.00
million.
KEY
RATIOS
|
PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
|
Debt
Equity Ratio |
0.21 |
0.33 |
0.23 |
|
Long
Term Debt Equity Ratio |
0.21 |
0.02 |
0.02 |
|
Current
Ratio |
1.38 |
0.83 |
1.22 |
|
TURNOVER
RATIOS |
|
|
|
|
Fixed Assets |
1.61 |
1.22 |
1.30 |
|
Inventory
|
12.06 |
7.43 |
6.61 |
|
Debtors |
9.10 |
9.15 |
12.41 |
|
Interest
Cover Ratio |
48.04 |
515.95 |
1059.64 |
|
Operating
Profit Margin (%) |
55.83 |
41.59 |
41.68 |
|
Profit
Before Interest and Tax Margin (%) |
52.63 |
38.05 |
38.23 |
|
Cash
Profit Margin (%) |
37.23 |
30.39 |
28.64 |
|
Adjusted
Net Profit Margin (%) |
34.04 |
26.85 |
25.18 |
|
Return
on Capital Employed (%) |
68.62 |
38.99 |
51.70 |
|
Return
on Net Worth (%) |
53.47 |
36.56 |
39.12 |
STOCK PRICES
|
Face
Value |
Rs.10.00 |
|
High |
Rs.798.80 |
|
Low |
Rs.764.15 |
LOCAL AGENCY FURTHER INFORMATION
History
Incorporated
in the mid-sixties, Hindustan Zinc (HZL) was a wholly-owned company of the Govt.
of India till disinvestment of shares by the Govt., in favour of trust,
financial institutions and banks, in May'92. The company is engaged in mining
and refining ore to produce non-ferrous metals -- zinc and lead. Silver,
Sulphuric acid, Cadmium and Copper Cathode are produced as by-products.
The main products, zinc and lead, are used by the engineering and
automobile industries. The company has stock points all over
The company signed MoUs with three foreign companies -- BHP Minerals and
Nuigini Mining (NML) for exploration and exploitation of base and precious
metals in
The Govt. has decided to incorporate put and call options in the
shareholders agreement for HZL thereby paving the way for further diluting its
stake in the public sector unit. This move is part of the Govt.'s efforts to
further reduce its stake to 26% from the current 76%. This put option would
enable the Govt. to offer the strategic partner right to further increase its
stake in the PSU to 49%. The Govt. has decided to sell upto 26% stake in the
company in the first tranche of disinvestment. It has mandated global advisor
Banque Nationale de Paris - Paribas to act as global advisor for the sell off.
During the end of March 2005 the stake of Government of India in the company
stood as 29.54%
In March 2002, Sterlite Industries (
During 2004-05 the company has commissioned 170000 TPA Hydro Met Zinc
Smelter along with a captive power plant of 154 MW, with matching expansion of
3.75 million TPA of mining and milling at Rampura Agucha Mines. While the
expansion of Rampura Agucha Mine and beneficiation plant and the CPP of 154 MW
have been completed in March 2005 the new Zinc Smelter has been commissioned
and trial runs are in progress. The new lead project of 50000 TPA capacity
using Ausmelt technology is in progress and is expected to be commissioned
during 2005-06.The company have invested Rs.139.43 million in Mansi Wakal
Stage-I Project for construction of dam and project is nearing the completing
stage.
The company has increased its installed capacity of Sulphuric acid by
306000 MT and with this expansion the total installed capacity of Sulphuric
acid by 629000 MT during 2004-05.
Financial
Review
During the year under review, the total revenues of Company increased by 71%
from Rs. 23372.000 millions to Rs. 39927.800 millions. The EBITDA for the same
period increased from Rs.10177.300 millions to Rs. 24176.500 millions representing
an increase of 138%. The net profit increased by 125% from Rs. 6553.300
millions to Rs.1 4724.800 millions.
The increase in revenues is attributed to 12% increase in Zinc metal sales to 322,744
MT from 288,866 and 84% increase in Lead metal sales to 26,928 MT from 14,622
MT. The Company has also selectively increased concentrate sales (MIC) by 65%
to 101,706 MT from 61,819 MT, to benefit from the strong commodity prices. The
improvement in profitability of the Company is mainly attributed to higher
volumes and prices, which have resulted in better realizations due to higher
price of Zinc and Lead.
The operating costs showed a declining trend except for increase in cost of
fuel and increase in royalty due to higher LME.
Globally, Zinc and Lead prices firmed up during the year under review. The
average Zinc LME price for the year 2005-06 was USS 1,614.32 PMT as against US$
1,109.86 PMT during the year 2004-05. The average Lead LME price was US$
1,040.94 PMT. against USS 920.55 PMT during the last fiscal year.
Operations Overview
The year under review has been a landmark year for your Company. This year your
Company completed and operationalised major expansions, which included 170,000
tpa of Zinc Smelting, 50,000 TPA of Lead Smelting and a Captive Power Plant of
154 MW and associated expansion in the Rampura Agucha Mines. Now your Company
is world's 4th largest company in mining Zinc and Lead and 6th largest in
smelting capacity.
During the year under review Company consolidated its leadership position in
domestic Zinc with record sales of 309,128 MT of Zinc metal with a market share
of 68%. In Lead Company's domestic sales were 25,680 MT representing a market
share of 11%. Company also exported Zinc concentrate (MIC) 99,659 MT, 13,616 MT
of Zinc metal and 1,248 MT of Lead metal, thus earning a foreign exchange of
Rs. 8623.500 millions (previous year Rs. 3650.100 millions).
For the year under report the production of Zinc concentrate increased by 34%
from 661,068 DMT to 889,007 DMT and Lead Concentrate increased by 14% from
83,976 DMT to 95,738 DMT. The production of Zinc metal increased from 265,924
MT to 317,558 MT. Even as the expanded Lead capacity got operationalised towards
the end of the financial, year, the production of Lead metal increased by 50%
from 15,727 MT to 23,636 MT.
New
Initiatives
During the year under review the company launched Six Sigma initiatives at
Chanderiya Lead Zinc Smelter, Rampura Agucha Mines and Debari Zinc Smelter. The
projects related to productivity improvement, reduction in consumption levels,
recovery efficiency improvement etc. Several of these projects initiated have
been completed successfully. Considering the promising results, action has also
been initiated for implementing six sigma initiatives at other units of the
Company during the year.
PROJECT OVERVIEW
Expansion Projects
Looking to the rising demand of
Zinc in India and in the international market, during the current year the
Board has approved an expansion plan which included 170,000 TPA Zinc smelter
and 77 MW Captive Power Plant, at Chanderiya with corresponding expansion of
mining and ore dressing plant at Rampura Agucha Mines. The estimated cost of
the project is Rs. 11000 millions to be financed from internal accruals.
Preliminary work on this expansion has commenced.
Mansi Wakal Project
The Company is partnering with the Government of Rajasthan on an important
project that aims to augment the drinking water supply to the people of the
city of
Government of Rajasthan and the Company has jointly funded this project in a
70:30 ratio. A total of Rs. 568.700 millions has been spent on this project
upto March 2006. Of this, about Rs. 170.600 millions has been shared by
Company. During the year under review Company has incurred an expenditure of
about Rs. 31.200 millions for this project.
With the completion of water carrying tunnel and building of the pumping
reservoir by the State Government, the overall project is expected to be
commissioned by December 2006.
Awards
And Prizes
The company received the following awards/prizes during the year:
Vizag Zinc Smelter won May Day Award 2005 for Best Management for its
outstanding contribution in maintenance of Industrial Relations, Social Welfare
and Productivity.
Vizag Zinc Smelter also won the Award for Occupational Health and Safety
(OHSAS-18001) at National Safety
Day Celebration held on 4th March 2005 at
Rampura Agucha Mine has been awarded certificate of 'Overall Excellence' at the
Mines Environment and Minerals Conservation Week, under the aegis of Indian Bureau
of Mines,
Rampura Agucha Mine got the 1st prize in the following categories: Open Cast
Working, Explosive management (storage, transport and use), Welfare Amenities,
Protective equipment VTC. Mine Lighting, Mine Plans and record keeping and
Overall 1st prize for overall performance at the 18th Mines Safety Week.
Rajpura Dariba Mine bagged the first prize in afforestation/plantation, waste
dump management and other prizes at 5th Mine and Minerals Conservation Week
2004 at J.K. Cement, Nimbahera.
Rajpura Dariba Mine won 'Best Team Award on Recovery' at All
Future Outlook
In 2005,
the consumption of Zinc was about 10.72 million MT, which is expected to grow
by 9% to 11.7 million MT. In both these years the expected shortfall is about
432 KT and 452 KT respectively. The shortfall in Zinc market is expected to
continue till 2008. In the long run the global Zinc market is expected to grow
by about 5% primarily on back of growth in emerging markets such as
For Lead, automotive and industrial batteries, which are the principal uses,
account for about 50% of demand. In 2005 the global consumption of Lead was
7.66 million
The Directors believe that with its global scale capacities, linkages to all
key inputs, a relentless focus on efficiencies and an access to growing global
Zinc and Lead market your Company is uniquely poised for leadership in the
global Zinc metal landscape.
Awards
and recognitions
During the year, many of operations received awards and commendations for their
contribution to HSEC management, which continuously encourages us to set higher
targets for their businesses in this area. Some of the significant achievements
are as under:
Greentech Silver Award for 2004 in Mining Sector for Excellence in
Environmental Management to Zawar Mines.
British Safety Council's National award to Chanderiya Lead Zinc Smelter for its
safety performance during 2003 which was conferred in May 2004.
Greentech Silver award and National Safety Council award to CLZS for its safety
performance during the prior year, CLZS has also been chosen for a Greentech
Silver award for its safety performance during the year ended 31st March 2005,
which was conferred in May 2005.
Rajpura Dariba Mines has received the Best Team as well as Best Member Awards
in All India Mine Rescue Competition in Metal sector in February 2005 at
Talchir, Orissa.
Each of HZL mines has received a number of awards during the Mine Environment
and Mineral Conservation Week (MEMCW) for 2004-05 in which all mines of the
region compete under the auspices of the Indian Bureau of Mines. The Rampura
Agucha Mine received the award for overall excellence in Mine
Environment.
Vizag Zinc Smelter received 'May Day Award-2005 for Best Management' for its
outstanding contribution in maintenance of Industrial Relations, Social Welfare
& Productivity from the Government of Andhra Pradesh. Earlier to this, the
Unit also received the award for Occupational Health & Safety (OHSAS-18001)
on the occasion of National Safety Day Celebrations held on 4th March, 2005 at
Rampura Agucha Mine was also placed first overall in the mechanised opencast
mine category during Mines Safety week, in the Ajmer region under the aegis of
Directorate General of Mines Safety (Northern Zone), Ministry of Labour,
Government of India. Many other prizes in individual competitions were obtained.
Overview
This year has been a landmark
year for the Company in terms of completion of expansions, higher production
and sales volume, and reduction in the cost of production. This year the
Company completed and operationalised major expansions, which included
additional 170,000 tpa of Zinc Smelting and 50,000 tpa of Lead Smelting and a
new Captive Power Plant of 154 MW and associated expansion in the Rampura
Agucha Mines. Now the Company is world's 4th largest Company in mining Zinc and
Lead and 6th largest in smelting capacity.
Operations
This year the Company achieved impressive growth in all its products. This was
driven primarily by increased capacity, higher domestic demand and productivity
gains across various units.
In the Zinc segment, which is the primary business area of the Company the
total metal output increased by 19% from 265,924 MT to 317,558 MT. This
included tolled metal of 34,890 MT (53,479 MT in the previous year). As the
smelting capacity of the Company is increasing it is able to produce more metal
through its own smelters. Thus, the in-house metal production has increased
from 212,445 MT by 33 % to 282,668 MT Over the last 4 years, the in-house Zinc
metal production has increased by more than 61% from 176,395 MT in 2001-02 to
282,668 MT in 2005-06. As a philosophy driven by internal commitment and
business needs, the Company has a relentless focus on reducing the cost of
production ('COP'). During the year under review the COP decreased marginally
from USD 695 per tonne of production to USD 691 per tonne of production.
Despite significant increase in the input prices of all the key raw materials
including an increase in the royalty of USD 17.60 per MT of concentrate
production, the Company has been able to control costs due to improved
efficiency and capacity expansion. The new hydro metallurgical Zinc smelter
commissioned at Chanderiya is a world scale and state-of-art technology plant
capable of producing Zinc at much lower cost as compared to the old plants.
Constant focus on operational efficiency has led to significant improvement in
recovery of metal in mining operations. On going continuous improvement
activities such as debottlenecking and meaningful sustainable capital
expenditure have improved the smelter productivity.
During the year under review, the total metal output in the Lead segment
increased from 15,727 MT to 23,636 MT. The production for Sulphuric Acid, which
is a by-product from the operations, increased by 35% from 371,170 MT to
501,956 MT.
Concentrate production at all the mines showed a impressive growth of 32% from
745,044 DMT to 984,745 DMT which was predominately at the back of Rampura
Agucha Mine expansion.
In terms of sales, the Company continues to maintain its leadership position in
Zinc and Lead markets in
In 2005-06 the Company sold 25,680 MT of lead in the domestic market,
which represents an increase of 96% over previous year sales of 13,125 MT.
Overall sales revenue for Lead metal sales increased by 97% from Rs. 893.300
millions to Rs.1763.300 millions.
The Company sold 481,802 MT of Sulphuric acid in the current year, which is
about 270/a higher than 379,669 MT sold in the previous year. Sulphuric Acid
sales revenue registered an increase from Rs. 666.400 millions to Rs. 914.200
millions.
From its other by-products such as Silver, Cadmium, etc the Company earned Rs.
776.100 millions in the current year (previous year Rs. 266.200 millions).
Market
Outlook Zinc
In the global markets, galvanizing accounts for about 46% of total Zinc usage.
Thus, Zinc industry is very closely linked with the steel industry. Galvanizing
finds extensive application in the construction and automotive industries.
Batteries and alloys are other important applications of Zinc. In absolute as
well as percentage terms galvanizing is expected to be the fastest growing
segment, accounting for about 55% of Zinc usage in 2017. The global refined
Zinc production in 2005 was about 10.28 million MT against a consumption of
10.72 million MT In 2006 these are respectively expected to increase by 3.7%
and 4.2% to 10.66 million MT and 11.17 million MT. In the long-term the global
Zinc market is expected to grow at about 5%. ASEAN countries will continue to
be the growth engine for Zinc market. New applications and increased use of
galvanizing will also drive the growth of this segment. A deficit in market,
strong growth and decreasing stocks of the metal may point to robust metal
prices.
In
Sustained and healthy growth of Indian Zinc market will ensure adequate
domestic demand for HZL's expanded Zinc capacity. The Company is poised to
maintain its market leadership and work closely with its customers and other
agencies to continuously develop new applications of Zinc.
Market Outlook Lead
Automotive and industrial batteries are the key application for Lead and
account for about 500/a of global Lead demand, other applications include
pigments, compound, alloys, rolled/extruded products and cable sheathing. In
2005, the global production of refined Lead was 7.57 million MT and it is
expected to grow by 3% to 7.83 million MT in 2006. The consumption of Lead is
expected to grow from 7.66 million MT in 2005 to about 7.79 million MT in
2006.
In
Exports
The foreign exchange earning
from exports was Rs. 8623.500 millions against Rs. 3650.100 millions in the
previous year.
BUSINESS
The
company is engaged in manufacturing and selling, exploration, mining &
concentration of zinc, lead silver, cadmium, sulphuric acid, phosphoric acid
and cobalt.
The
company is engaged in mining and refining of ore to produce non-ferrous metals
such as zinc, lead and silver with installed capacities of 152000 tpa, 65000
tpa and 122800 tpa, respectively.
Sulphuric acid, Cadmium and Zinc Sulphate are produced as
by-products. It also has installed
capacities for phosphoric acid and superphosphate.
The main
products, zinc and lead, are used by the engineering and automobile
industries.
The company
has singed MOUs with three foreign companies - BHP Minerals and Nuigini Mining
(NML) for exploration and exploitation of base and precious metals in
Subject's
operations are broad based and its activities range from exploration, mining
and ore processing to smelting and refining of lead, zinc, cadmium, cobalt,
copper and other precious metals. It
also produces sulphuric acid and rock phosphate.
Starting
with a 150000 tpa lead zinc mine, a 3600 tpa lead smelter and an 1800 tpa zinc
smelter under construction. It operates
five lead-zinc mines with a total lead-zinc ore production capacity of 3.49
million tpa and four smelters with combined installed capacity of 152000 tpa
zinc and 65000 tpa lead besides a rock phosphate mine.
The company is in
trade terms with:
v
Sarvodaya Engineering Works
v
Oswal Engineering & Chemical Company
v
Vasudha Udhyog
v
Bansal Industrial Gases
v
Om Shree Durga Hardcoke Manufacturing Company
v
Vishwakarma Foundry & Engineering
v
Siddhant Chemicals (Private) Limited
The company’s fixed assets of
important value include land (freehold and leasehold), buildings & road,
railway sidings, locomotive & wagons, plant & machinery (plant &
machinery, power supply & distribution, shafts, adits & inclines, air
& water lines, industrial waste & effluent treatment, water mains,
dams, canal & wells and other equipments), furniture & fittings and
vehicles.
press
clippings
As on 3rd December, 2003
Business Summary
Incorporated
in the mid-sixties, Hindustan Zinc (HZL) was a
wholly-owned company of the Govt. of India till disinvestment of shares by the
Govt., in favour of trust, financial institutions and banks, in May'92. The
company is engaged in mining and refining ore to produce non-ferrous metals -- zinc, lead and silver with installed capacities of
169000 tpa, 43000 tpa and 86000 tpa respectively. Sulphuric acid, cadmium and zinc sulphate are produced as by-products. It also
has installed capacities for phosphoric acid and superphosphate.The main
products, zinc and lead, are used by the
engineering and automobile industries. The company has stock points all over
The company
signed MoUs with three foreign companies -- BHP Minerals and Nuigini Mining
(NML) for exploration and exploitation of base and precious metals in India;
and BRGM/VMC for Pac Lang gold prospect in Vietnam.The Govt. has decided to
incorporate put and call options in the shareholders agreement for HZL thereby
paving the way for further diluting its stake in the public sector unit. This
move is part of the Govt.'s efforts to further reduce its stake to 26% from the
current 76%. This put option would enable the Govt. to offer the strategic
partner right to further increase its stake in the PSU to 49%. The Govt. has
decided to sell upto 26% stake in the company in the first tranche of
disinvestment. It has mandated global advisor Banque Nationale de Paris -
Paribas to act as global advisor for the sell off.In March 2002, Sterlite
Industries (
CMT REPORT [Corruption, Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts,
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.44.21 |
|
|
1 |
Rs.87.30 |
|
Euro |
1 |
Rs.57.34 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
6 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
5 |
|
--LIQUIDITY |
1~10 |
7 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
65 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit
history (10%) Market
trend (10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial
base with the strongest capability for timely payment of interest and principal
sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No
caution needed for credit transaction. It has above average (strong)
capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are
regarded healthy. General unfavourable factors will not cause fatal effect.
Satisfactory capability for payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal.
Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors
carry similar weight in credit consideration. Capability to overcome
financial difficulties seems comparatively below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of
interest and principal sums in default or expected to be in default upon
maturity |
Limited with full security |
|
<10 |
C |
Absolute credit risk exists. Caution
needed to be exercised |
Credit not recommended |