HZL Q4 and FY 2012 Results

20 April 2012

Vedanta Resources plcHZL Announces Results for the Fourth Quarter and Year Ended 31 March 2012

19 April 2012

Hindustan Zinc Limited

Results for the Fourth Quarter and Year Ended 31 March 2012

"Growth projects deliver record Sales and Profit; Highest ever dividend"

FY2012 Highlights

Operational Performance -

§ Record refined Zinc production - up 6%

§ Record refined Lead production - up 56%

§ Record refined Silver production - up 35%

Financial Performance -

§ Record Revenues of Rs. 11,405 Crore - up 14%

§ Record net profit of Rs. 5,526 Crore - up 13%

Reserves and Resources -

·; Maintained net addition to R&R base via brownfield exploration

·; Total R&R of 332.3 million tonnes, containing 35 million tonnes of Zinc-Lead metal

Dividend -

§ Final dividend of 45%, taking the total dividend for the year to 120%, the highest ever

Contribution to exchequer -

§ Contribution of over Rs. 3,000 Crore in terms of taxes, duties and royalties to the exchequer

Mr. Agnivesh Agarwal (Chairman, Hindustan Zinc) -"We delivered record metal production and profits, and declared record dividends to shareholders. We are now focusing on our next phase of growth driven by exploration. We remain committed to enhancing shareholders' return and continue to improve and expand our existing assets while continuously evaluating opportunities for further organic and inorganic growth."

Mumbai: Hindustan Zinc Limited ("HZL" or the "Company") today announced its results for the fourth quarter ("Q4 FY2012") and full year ended 31 March 2012 ("FY2012").

Financial Summary

(1) Including captive consumption of 2,156 tonnes and 6,625 tonnes in Q4 and full year, compared to 1,340 tonnes and 5,898 tonnes in corresponding prior periods, respectively.

(2) Including captive consumption of 11,345 Kgs and 34,917 Kgs in Q4 and full year, compared to 7,016 Kgs and 30,997 Kgs in corresponding prior periods, respectively.

(3) Silver occurs in Lead & Zinc ore and is recovered in the smelting and silver-refining processes

Operational Performance

Mined metal production was 830,000 tonnes in FY2012 and 223,000 tonnes in Q4 FY2012, compared to 840,000 tonnes and 231,000 tonnes in the corresponding prior period. The marginal decline was due to a temporary decline in ore grade at RA mine, partially offset by higher metal recoveries across all mines and increased production at SK mine. SK mine ramped-up to 80% utilization in Q4 FY2012.

Refined Zinc production was 6% higher at a record 759,000 tonnes for the full year and marginally lower at 190,000 tonnes in Q4 FY2012, primarily on account of higher utilization of new generation smelters in Rajasthan and ramp-down of Vizag smelter during the quarter.

Lead production was at a record 99,000 tonnes in FY2012 and 37,000 tonnes in Q4 FY2012, up 56% and 110%respectively. Silver production was at a record 242 tonnes in FY2012 and 88 tonnes in Q4 FY2012, up 35% and 77% respectively. The increase in Lead & Silver production was primarily on account of the ramp-up of the SK mine, Dariba Lead smelter and the new Silver refinery.

Financial Performance

Revenues for FY2012 were highest ever at Rs. 11,405 Crore, an increase of 14% compared to last year's performance. The Company achieved record net profits of Rs. 5,526 Crore in FY2012, up 13% compared to the corresponding prior period. The increase was primarily on account of higher sales volume and enhanced operational efficiencies.

Revenues for Q4 FY2012 were down 3% to Rs. 3,135 Crore while net profit for the quarter was down by 20% to Rs. 1,413 Crore, compared to the corresponding prior periods. This was primarily due to lower Zinc and Lead LME prices.

The Zinc COP, excluding royalty, for the year was higher by 9% at Rs. 40,003 per MT [$834], compared to the previous year. The cost during the quarter was Rs. 41,693 per MT ($828), 17% higher compared to Q4 FY2011.The increase in costs was largely on account of significant increase in input commodity prices (including coal) and INR depreciation, partially offset by improved operating efficiencies.

Metal prices and exchange rate -

During the year, we contributed over Rs 3,000 Crore in taxes, duties and royalties to the exchequer.

Final Dividend

HZL's Board of Directors has recommended a final dividend of 45%, i.e., Rs. 0.90 per share on equity share of Rs 2.00 each. This takes the total dividend for FY2012 to 120%, i.e., Rs 2.40 per share, which is the highest ever dividend proposed by the company. The book closure period is from 30 June 2012 to 6 July 2012.

Expansion projects

During the year, we commissioned the Dariba Lead smelter and a new Silver refinery, both of which are ramping up as per schedule. Sindesar Khurd mine achieved 1.8mtpa run-rate towards the end of Q4 FY2012. The progress of underground mine development work at Rampura Agucha mine and greenfield Kayar mine is as per schedule.

With the commissioning of the last 15MW of our wind power generation capacity in Q4 FY2012, we have now reached a total of 274MW, making us one of the largest wind power producers in the country.

Reserves and Resources (R&R)

We continue to meet success in our exploration activities and during the year, we added 27.1 million tonnes to our R&R, prior to depletion of 8.04 million tonnes. With a total R&R of 332.3 million tonnes containing 35 million tonnes of Zinc-Lead and 912 million ounces of Silver as on 31 March 2012, we continue to maintain our prominent position with over 25 years of mine life.

In line with the Company's growth oriented vision, we continue to invest our resources in identifying new world-class resources. A total of 94,250m of drilling was completed at various exploration sites in FY2012. During the year, we performed systematic greenfield exploration over 4,500 sq km and applied for new Reconnaissance Permits for around 18,700 sq km. Presently we have 20 PLs and 4 MLs applications awaiting approval, including 7 PLs and 3 MLs applied during the year.

Outlook

In line with our mine plan, mined metal production in FY2013 is expected to be slightly higher than FY2012. Production in H1 FY2013 is expected to be marginally lower than H1 FY2012, but will be more than made up in H2 FY2013. SK mine is expected to deliver volumes near its capacity of 2.0mtpa in FY2013. Total integrated Silver production is projected to be around 350 tonnes in FY2013.

We expect to deliver stable COP in FY2013 on a full year basis, however there could be some quarterly fluctuations based on mine plan.

Liquidity and investment

Company follows conservative Investment Policy and invests in high quality Debt instruments in Mutual Fund and Fixed Deposit with Bank. As on 31 March 2012, the Company had cash and cash equivalents of Rs. 17,948 Crore. This includes Rs. 11,313 Crore invested in debt mutual funds, Rs. 1,380 Crore in bonds and Rs. 5,225 Crore in fixed deposits with Banks.

For further information, please contact:

About Hindustan Zinc

HZL is one of the world's largest integrated producers of Zinc-Lead. It has a metal production capacity of 1.06 million tonnes per annum with its key Lead-Zinc mines in Rampura Agucha and Sindesar Khurd; and modern smelting complexes in Chanderiya and Dariba. HZL is focused on growth and long-term term sustainability on the back of its high-quality assets, long mine life of over 25 years and low cost base. The Company is a subsidiary of the NYSE listed, Sterlite Industries (India) Limited (NYSE: SLT) and London listed FTSE 100 diversified metals and mining major, Vedanta Resources plc.

Disclaimer

This press release contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behavior of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

For further information, please contact:

About Vedanta Resources plc

Vedanta Resources plc ("Vedanta") is a London listed FTSE-100 diversified global resources major. The group produces Aluminium, Copper, Zinc, Lead, Silver, Iron ore, Power, and Oil and Gas. Vedanta has world-class assets in India, Zambia, South Africa, Namibia, Ireland Liberia, Australia and Sri Lanka and a strong organic growth pipeline of projects. With an empowered talent pool globally, Vedanta places strong emphasis on partnering with all its stakeholders based on the core values of entrepreneurship, excellence, trust, inclusiveness and growth. For more information, please visit:

www.vedantaresources.com.

Disclaimer

This press release contains "forward-looking statements" - that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should" or "will." Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, uncertainties arise from the behaviour of financial and metals markets including the London Metal Exchange, fluctuations in interest and or exchange rates and metal prices; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different that those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.