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NSE
250.45
Change Change %
-4.80 -1.88%

Updated:22 May, 2019, 15:56 PM IST

BSE
251.25
Change Change %
-3.85 -1.51%

Updated:22 May, 2019, 16:01 PM IST

Chairmans Letter:

Market Scenario

FY 2013 was a challenging year, given the volatility in global commodities markets. The markets witnessed positivity at the beginning of the year, then weakened midway, before resurfacing to end the year at a higher level. The demand for zinc, our primary metal, was steady during the year, as emerging economies led the growth in metal consumption. While demand was subdued in the Americas and China, it was better than what we had expected. Leading global zinc producers have reported considerably flat mine production growth, a trend that we think will continue in future given the lack of major new projects and closure of existing mines.

Counter strategy

Our strategy to tide over these challenges has been to increase production, control costs, grow our market share in our focus regions and increase our presence in emerging markets.

I am happy to report that in FY 2013, we delivered record mine production, record refined lead and silver production, maintained our market share in India at 82% and entered new markets in Southeast Asia and Africa.

Expansion roadmap

We are motivated by our mandate to create value for our investors by increasing net present value of our mines by increasing production and adding to reserves & resources to maintain a mine–life of 25+ years.

During the year, we announced the next phase of growth that will increase our zinc–lead mined metal production capacity to 1.2 million MT annually. Our mining projects are low–risk, as we are expanding at our existing locations: Rampura Agucha Mine (RAM), Sindesar Khurd Mine (SKM), Zawar Mine and Rajpura Dariba Mine (RDM), where we have excess land, ore bodies are well–known and enhancement of existing environmental clearances is relatively easier.

Additionally, the new mines at Kayad and Bamnia Kalan have the advantages of proximity to our existing infrastructure. Kayad is an extension of RAM, while Bamnia Kalan lies in the Rajpura Dariba belt. The mines will be developed using best–in–class technology and equipment including two shafts that will be sunk at RAM and SKM that will accelerate the pace of ramp–up at these mines.

Our experienced leadership is instrumental behind the success of our growth plan. Since 2002, our operations team has successfully executed growth projects and constantly improved the quality of our assets by enhancing productivity. In addition, we have hired the best of global mining consultants and contractors to support our operations teams and ensure highest level of productivity.

India has tremendous potential for exploration and we are one of the most active mineral explorers.

India is a resource–rich country with significant potential zinc–lead deposits in Rajasthan, where we have our operations. By no means this belt has been fully explored. We are exploring more and more every year at our existing mines and strengthening our reserves & resources. In addition, we are actively exploring greenfield sites across the country.

I am happy to report that we are one of the most active mineral explorers in India with a greenfield exploration plan of over 35,000 sq. km. We have been the pioneers in bringing some of the best–in–class technologies to the country. Our exploration efforts have consistently yielded positive results and we believe there are promising deposits in India, which can be developed into world–class mines in future.

Corporate governance

We are committed to high standards in corporate governance and aim to implement best practices beyond compliance requirements.

Our Board currently comprises eight directors, including a majority of independent directors with varied expertise. To make the Company a woman–friendly organisation, a Women Interactive Network was formed during the year to nurture women leaders of tomorrow by offering equal opportunities for professional development and promoting a safe workplace.

Sustainability

As a socially responsible corporate citizen, we have made sustainable efforts to uplift rural communities in the vicinity of our operations. In FY 2013, we invested ` 43 Crores in our social programs, and plan to increase it in the coming years.

We focus on providing nutrition to children through adoption of staterun Anganwadi (crche) centres; promoting women empowerment through self–help groups; providing vocational training to young people; organising health and medical camps; facilitating agriculture and livestock development; and model village development, among others. These programmes are bringing significant changes in the lives of over 500,000 rural people in Rajasthan.

Safety is of utmost importance for us. During the year, we significantly reduced total recorded injuries. Despite our best efforts towards safety, I regret to report that we had seven fatalities during the year, which is unacceptable. We have initiated several programmes to enhance a comprehensive safety culture within the organisation. We have commenced a Consequence Management System for all injuries and fatalities to establish line accountability and initiate progressive discipline. We have shifted the focus of review system towards hazard identification and near–misses to achieve our target of zero harm.

Our efforts towards sustainability and governance were recognised by leading organisations. During FY 2013, we were awarded BSE Social and Corporate Governance Award and CII–ITC Sustainability Award. I congratulate our team for this recognition.

Since we operate in semi–arid regions of Rajasthan, we have to be innovative in water management. We are a near zero water discharge Company and in FY 2013 we started projects to reduce our intake of fresh water. Adiabatic cooling towers were installed at Dariba Smelting Complex to achieve more than 70% reduction in water for process cooling. Another project, which deserves mention is an Urban Sewage Treatment Plant that we are setting up in collaboration with the city of Udaipur. The plant will treat most of the citys sewage, which currently flows into lakes and serve as a sustainable source of water for our operations. Such initiatives show our commitment to safeguarding the environment.

Way forward

Our overall performance in FY 2013 will set the stage for sustainable growth in future.

I am excited about the resource potential of our country and our next phase of growth will be a firm step in harnessing this potential. With sustainability as the cornerstone of our operations, I am confident about the Companys future.

Warm Regards,

Agnivesh Agarwal

Chairman

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