“Stringent cost and cash conversion discipline powered a historic performance for Hindustan Zinc during FY 2021-22. Our efforts to deliver sustainable growth were further aided by our operational excellence and targeted investments, which contributed to the generation of industry-leading returns for our shareholders. We remain committed to protecting our margins, while generating robust free cash flow and investing towards the realisation of our ESG goals. We believe that our sustained focus on cost leadership and profitability, while building a sustainable business, will ensure long-lasting value for all our stakeholders.”
Our commitment to value creation and delivery for all stakeholders is the driving force underlying the excellent KPIs we have reported, year-on-year.
** Includes cash and cash equivalents, other bank balances excluding dividend account balance, borrowings and current investments as applicable
*** Excludes captive consumption
Description Earnings before interest, tax, depreciation, and amortisation (EBITDA) is a factor of volume, prices, and cost of production. This measure is calculated by adjusting operating profit for special items and adding depreciation and amortisation and dividing it by revenue from operations.
Management Statement EBITDA margin increased from 52% in FY 2020-21 to 55% in FY 2021-22 primarily due to increase in revenue from operations on account of higher LME prices offset by higher power fuel cost and mining development cost.
Description This is a measure of the profitability of a company. It is calculated as a ratio of net profit (before exceptional items) to total income.
Management Statement Net profit margin is lower on account of higher ETR due to expiry of certain tax holidays apart from higher cost of production due to higher coal prices and input commodity inflation, partially offset by higher volumes and higher metal prices.
Description This is calculated on the basis of operating profit net of tax expenses, as a ratio of net funds for business operations. The objective is to earn a post-tax return consistently above the weighted average cost of capital.
Management Statement Increase in Return on Net funds for Business Operations is mainly on account of higher operating profit net of taxes.
Description The debtors’ turnover ratio is an accounting measure used to quantify a company’s effectiveness in collecting its receivables. This is calculated as a ratio of revenue from operation to average trade receivables.
Management Statement Reduction in debtor turnover is on account of higher average trade receivables (due to higher sales) in FY 2021-22 as compared with the previous financial year.
Description The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed. This is calculated as a ratio of cost of goods sold to average inventory.
Management Statement Inventory turnover ratio was marginally higher on account of higher cost of goods sold.
Description The current ratio is a liquidity ratio that measures a company’s ability to pay short-term obligations or those due within one year. This is calculated as a ratio of current assets to current liabilities.
Management Statement Current ratio is higher mainly on account of repayment of short-term borrowings during the year.
Description The interest coverage ratio is a representation of the ability of the Company to service its debt. It is computed as a ratio of EBITDA divided by finance costs.
Management Statement The interest coverage is higher on account of higher EBITDA and lower finance cost due to decrease in short-term and long-term borrowings.
Description Return on Net Worth is a measure of the profitability of the Company. This is calculated as a ratio of net profit (before exceptional items) to net worth (share capital + reserves).
Management Statement Return on Net Worth is higher mainly on account of higher Net profits after tax during the year.
Description The Debt-to-Equity ratio reflects the Company’s ability to meet its short-term and long-term obligations in proportion to the net worth of the Company.
Management Statement The Debt-to-Equity ratio is lower mainly on account of higher repayment of short-term and long-term borrowing during the year. Net debt is nil.
Our Environmental, Safety and Governance (ESG) focus has enabled us to deliver sustained performance and growth across key ESG metrics. We are continually working towards reducing our carbon footprint and lowering the impact of our business on the environment. These efforts are aimed to improve operational efficiencies, ensure optimal utilisation of natural resources, and increase the use of renewable energy in our plants and processes. The safety and health of our workforce, and our workplace, is central to our ESG strategy.
* on gross basis
*During the reporting period, aligned with the principles of completeness and accuracy in reporting, we have revised our accounting methodology while estimating water and energy intensity. The revised water and energy intensity accounting methodology includes the following amendments respectively:
1. Inclusion of water consumption in our Captive Power Plants (CPPs) and
2. Estimation of direct energy from fossil fuel (coal) consumed in our CPPs in lieu of, estimation of direct energy from electricity generated.
Economic value added (EVA) is a measure of a company’s financial performance based on income generated post charging for the cost of capital provided by lenders and shareholders. It represents the value added for shareholders by generating operating profits in excess of the cost of capital employed in the business.
NOPAT: Net operating profit after tax (NOPAT) is a financial measure that shows how well a company performed through its core operations, net of taxes. Calculated as profits after depreciation and taxes, but before interests.
Cost of Capital: Cost of Capital is the return expected by investors to compensate them for the variability in returns caused by fluctuating earnings and share prices.
Capital Employed: Capital employed in the business is exclusive of net cash and cash equivalents.