Hindustan Zinc Ltd. — Proxy Solicitation & Information Statement 2023

Feb 21, 2023

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HZL/2023-SECY/

February 21, 2023

BSE Limited P.J. Towers, Dalal Street, Mumbai - 400001

Kind Attn: - General Manager, Dept. of Corporate Services Scrip Code: 500188

National Stock Exchange of (India) Ltd. “Exchange Plaza” Bandra-Kurla Complex, Mumbai – 400051 Kind Attn:- Head - Listing & Corporate Communications

Trading Symbol: HINDZINC-EQ

Sub: - Notice convening the meeting of the equity shareholders of the Company scheduled to be held ‐ on Wednesday, March 29, 2023, through Video Conferencing/ Other Audio Visual Means, pursuant to the Order dated February 6, 2023, passed by the Hon’ble National Company Law Tribunal, Jaipur Bench, in the matter of proposed Scheme of Arrangement between Hindustan Zinc Limited (“Company”) and its shareholders

Dear Sir/ Madam,

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“ SEBI Listing Regulations ”), we wish to inform you that, pursuant to the Order dated February 06, 2023, passed by the Hon’ble National Company Law Tribunal, Jaipur Bench (“ Tribunal ”) (“ Order ”) in the matter of Scheme of Arrangement between the Company and its shareholders under Section 230 and other applicable provisions of the Companies Act, 2013 (“ Act ”) (“ Scheme ”), a meeting of the equity shareholders of the Company is scheduled to be held on Wednesday, March 29, 2023 at 12.00 Noon (IST) through Video Conferencing (“ VC ”)/ Other Audio Visual Means (“ OAVM ”) (“ Meeting ”).

In this regard, please find enclosed herewith the Notice convening the Meeting, copy of the Scheme, Statement under Section 230 read with Section 102 and other applicable provisions of the Act and Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 along with all annexures to Statement (“ Notice ”) is being sent through: (i) electronic mail to those equity shareholders whose email addresses are registered with the Company/ Depositories/ Registrar and Transfer Agent (“ RTA ”) of the Company; and (ii) courier/ post to those equity shareholders at their addresses registered with the Company whose email addresses are not available with the Company/ Depositories/ RTA .

In terms of the directions of the Tribunal given under the Order and Regulation 44 of the SEBI Listing Regulations read with Section 108 of the Act and Rule 20 of the Companies (Management & Administration) Rules, 2014 as amended from time to time, the Company is providing facility to its equity shareholders to exercise their right to vote on resolution proposed in the Notice to be passed at the Meeting by electronic means. The equity shareholders of the Company shall have the facility and option of voting on the resolution proposed in the Notice by casting their votes through: (a) e‐voting system

Hindustan Zinc Limited

Registered Office: Yashad Bhawan, Udaipur (Rajasthan) - 313 004 Tel.: (91-294)6604000-02, Fax: (91-294) 2427739 CIN: L27204RJ1966PLC001208, www.hzlindia.com

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available at the Meeting to be held virtually (“ e‐voting at the Meeting ”); or (b) by remote electronic voting (“ remote e‐voting ”). The cut‐off date for e‐voting and time period for the remote e‐voting of the aforesaid Meeting is as under:

Sr. No	Event	Day, Date & Details	Time
1	Cut‐off date for e‐voting	Wednesday,March 22,2023	-
2	Remote e‐votingstart date and time	Friday,March 24,2023	10:00 A.M.(IST)
3	Remote e‐votingend date and time	Tuesday,March 28,2023	5.00. P.M.(IST)
4	E‐votingWebsite	www.evoting.nsdl.com	-

The aforementioned Notice is also available on the website of the Company at www.hzlindia.com.

The procedure and instructions for joining the Meeting through VC/ OAVM and the manner of casting vote through remote e‐voting or through e‐voting at the Meeting are outlined in the Notes set out in the Notice.

Kindly take the above on record.

Thanking You,

Yours Faithfully,

For Hindustan Zinc Limited

RAJENDRA PANDWAL Digitally signed by RAJENDRA PANDWAL DN: c=IN, o=HINDUSTAN ZINC LIMITED, ou=COMPANY, 2.5.4.20=950c5f887fb27b8b28b21e4880fc2cf6a616a81e554f7c57f71c9298f20a8cc0, postalCode=313004, st=Rajasthan, serialNumber=78d6db6add194143714fc93376f52a6826ec730547bd31dec4a4a334c628fc20, cn=RAJENDRA PANDWAL Date: 2023.02.21 15:59:58 +05'30'

(R Pandwal) Company Secretary

Encl: As above

Copy to: National Securities Depository Ltd.

Trade World, A Wing, 4th & 5th Floors, Kamala Mills Compound, Lower Parel, Mumbai – 13

Central Depository Services (India) Limited

Marathon Futurex, A-Wing, 25th Floor, NM Joshi Marg, Lower Parel, Mumbai – 13

Hindustan Zinc Limited

Registered Office: Yashad Bhawan, Udaipur (Rajasthan) - 313 004 Tel.: (91-294)6604000-02, Fax: (91-294) 2427739 CIN: L27204RJ1966PLC001208, www.hzlindia.com

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HINDUSTAN ZINC LIMITED CIN : L27204RJ1966PLC001208 Registered Office : Yashad Bhavan, Yashadgarh, Udaipur- 313004, Rajasthan, India Phone : +91 294 6604000-02, Fax: +91 294 2427734 Email : dhruvika.jain@vedanta.co.in | Website : www.hzlindia.com

NOTICE CONVENING MEETING OF EQUITY SHAREHOLDERS OF HINDUSTAN ZINC LIMITED PURSUANT TO ORDER DATED FEBRUARY 6, 2023 OF THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL, JAIPUR BENCH

		MEETING	MEETING
Day		Wednesday
Date		March 29, 2023
Time		12:00 Noon (IST)
Mode of meeting		As per the directions of the Hon’ble National Company Law Tribunal, Jaipur Bench, the meeting shall be conducted through Video Conferencing/ Other Audio- Visual Means
Cut-off date for e-voting		Wednesday, March 22, 2023
Remote e-voting start date and time		Friday, March 24, 2023 at 10:00 A.M. (IST)
Remote e-voting end date and time		Tuesday, March 28, 2023 at 5.00. P.M. (IST)
E-voting at the Meeting		As per the instructions provided in the notice
Sr. No.	Contents		Page Nos.
1.	Notice of meeting of equity shareholders of Hindustan Zinc Limited (“Company”) under the provisions of Section 230 of the Companies Act, 2013 (“Act”) read with Rule 6 of the Companies (Compromises, Arrangements and Amalgamations)Rules,2016(“CAA Rules”) (“Notice”)		1
2.	Statement under Section 230 read with Section 102 and other applicable provisions of the Act and CAA Rules(“Statement”)		17
3.	Annexure I Scheme of Arrangement between Hindustan Zinc Limited (“Company”) and its shareholders(“Scheme”)		28
4.	Annexure II Consolidated and Standalone Unaudited Financial Results (limited reviewed) of the Companyfor thequarter andyear ended December 31,2022		37
5.	Annexure III Consolidated and Standalone Audited Financial Results of the Company for thequarter and financialyear ended as on March 31,2022		45
6.	Annexure IV Observation letter dated August 23, 2022 issued by National Stock Exchange of India Limited(“NSE”)on the Scheme		61
7.	Annexure V Observation letter dated August 23, 2022, issued by BSE Limited (“BSE”) on the Scheme		66
8.	Annexure VI Letters of the Company in response to the observation letters issued by BSE and NSE		71

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9.	Annexure VII Complaints report submitted bythe Companyto NSE	89
10.	Annexure VIII Complaints report submitted bythe Companyto BSE	91
11.	Annexure IX Report of the Board of Directors of the Company, pursuant to Section 232(2)(c)of the Act	93
12.	Annexure X Certificate dated February 18, 2022 issued by M/s S. R. Batliboi & Co LLP, Chartered Accountants, Statutory Auditors of the Company confirming that the accounting treatment in the Scheme, is in compliance with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and circulars issued there under and the applicable accounting standards prescribed under Section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other generally accepted accounting principles	95

The Notice of the Meeting, Statement under Section 230 read with Section 102 and other applicable provisions of the Act and Rule 6 of the CAA Rules and Annexure I to Annexure X should be read together.

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FORM NO. CAA. 2 [Pursuant to Section 230 (3) of the Companies Act, 2013 and Rule 6 and 7 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016)]

IN THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL, JAIPUR BENCH

CA(CAA) No. 10/230-232/JPR/2022

IN THE MATTER OF SECTION 230 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND

IN THE MATTER OF THE SCHEME OF ARRANGEMENT BETWEEN HINDUSTAN ZINC LIMITED AND ITS SHAREHOLDERS

Hindustan Zinc Limited, a Company ) incorporated under the Companies Act, 1956 ) having Corporate Identity Number: ) L27204RJ1966PLC001208 and having its ) registered office at Yashad Bhavan, ) Yashadgarh, Udaipur- 313004, Rajasthan, India ) ) …. Company / Applicant Company

NOTICE CONVENING MEETING OF THE EQUITY SHAREHOLDERS OF HINDUSTAN ZINC LIMITED

To,

All the Equity Shareholders of Hindustan Zinc Limited

1. Pursuant to the directions of the Hon’ble National Company Law Tribunal, Jaipur Bench (“ Tribunal ”) vide its order dated February 6, 2023 (“ Tribunal Order ”), the Company is directed to convene and hold a meeting of its equity shareholders for the purpose of their considering, and if thought fit, approving, with or without modification(s), the proposed Scheme of Arrangement between Hindustan Zinc Limited (“ Company ”) and its shareholders (“ Scheme ”), within 60 days from the date of the Tribunal Order. Therefore, notice is hereby given that, a meeting of the equity shareholders of the Company for the purpose of their considering, and if thought fit, approving, with or without modification(s), the proposed Scheme, will be held on Wednesday, March 29, 2023 at 12:00 Noon (IST).

2. Pursuant to the said Tribunal Order and as directed therein, the meeting of the equity shareholders of the Company (“ Meeting ”) will be held through video conferencing (“ VC ”) / other audio visual means (“ OAVM ”), in compliance with the applicable provisions of the Companies Act, 2013 (“ Act ”) and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“ SEBI Listing Regulations ”) to consider, and if thought fit, pass, with or without modification(s), the following resolution for approval of the Scheme by requisite majority as prescribed under Section 230(1) and Section 230(6) of the Act as amended:

“ RESOLVED THAT pursuant to the provisions of Section 230 and other applicable provisions of the Companies Act, 2013, the rules, circulars and notifications made thereunder (including any statutory modification(s) or re-enactment(s) thereof, for the time being in force), Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time and the provisions of the Memorandum and Articles of Association of the Company and subject to the approval of Hon’ble jurisdictional National

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Company Law Tribunal (“ NCLT ”) and subject to such other approvals, permissions and sanctions of regulatory and other authorities, as may be necessary and subject to such conditions and modifications as may be deemed appropriate by the Company, at any time and for any reason whatsoever, or which may otherwise be considered necessary, desirable or as may be prescribed or imposed by the NCLT or by any regulatory or other authorities, while granting such approvals, permissions and sanctions, which may be agreed to by the Board of Directors of the Company (hereinafter referred to as the “ Board ”, which term shall be deemed to mean and include one or more Committee(s) constituted/to be constituted by the Board or any other person authorised by it to exercise its powers including the powers conferred by this Resolution), the arrangement embodied in the Scheme of Arrangement between Hindustan Zinc Limited and its shareholders (“ Scheme ”), be and is hereby approved.

RESOLVED FURTHER THAT the Board be and is hereby authorised to do all such acts, deeds, matters and things, as it may, in its absolute discretion deem requisite, desirable, appropriate or necessary to give effect to this Resolution and effectively implement the arrangement embodied in the Scheme and to make any modifications or amendments to the Scheme at any time and for any reason whatsoever, and to accept such modifications, amendments, limitations and/or conditions, if any, which may be required and/or imposed by the NCLT while sanctioning the arrangement embodied in the Scheme or by any authorities under law, or as may be required for the purpose of resolving any questions or doubts or difficulties that may arise including passing of such accounting entries and /or making such adjustments in the books of accounts as considered necessary in giving effect to the Scheme, as the Board may deem fit and proper.”

1. TAKE FURTHER NOTICE that the equity shareholders shall have the facility and option of voting on the resolution for approval of the Scheme by casting their votes through: (a) e-voting system available at the Meeting to be held virtually (“ e-voting at the Meeting ”); or (b) by remote electronic voting during the period as stated below (“ remote e-voting ”):

REMOTE E-VOTING PERIOD	REMOTE E-VOTING PERIOD
Commencement of voting	Friday,March 24,2023 at 10:00 A.M.(IST)
End of voting	Tuesday,March 28,2023 at 5.00. P.M.(IST)

1. A person, whose name is recorded in the Register of Members or in the Register of Beneficial Owners maintained by the Depositories as on the cut-off date, i.e., Wednesday, March 22, 2023 ( “Cut-off Date” ) only shall be entitled to exercise his/her/its voting rights on the resolution proposed in the Notice and attend the Meeting. A person who is not an equity shareholder as on the Cut-off Date, should treat the Notice for information purpose only.

2. A copy of the Scheme, Statement under Section 230 read with Section 102 and other applicable provisions of the Act and Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (“ CAA Rules ”) along with all annexures to Statement are enclosed herewith. A copy of this Notice and the accompanying documents are also placed on the website of the Company and can be accessed at: www.hzlindia.com; the website of National Securities Depository Limited (“ NSDL ”) viz. www.evoting.nsdl.com, being the agency appointed by the Company to provide e-voting and other facilities for the Meeting and the website of the Stock Exchanges, i.e., BSE Limited and National Stock Exchange of India Limited viz. www.bseindia.com and www.nseindia.com, respectively.

3. The Tribunal has appointed Justice (Retd.) Mr. Dinesh Chandra Somani and failing him Mr. Amol Vyas, to be the Chairperson for the Meeting and Mr. Prashant Agrawal, to be the Scrutinizer for the Meeting.

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1. The Scheme, if approved at the aforesaid Meeting, will be subject to the subsequent sanction of the Tribunal and such other approvals, permissions and sanctions of regulatory or other authorities, as may be necessary.

Jaipur, February 21, 2023

Sd/Justice (Retd.) Mr. Dinesh Chandra Somani Chairperson appointed by the Tribunal for the Meeting

Registered office: Yashad Bhavan, Yashadgarh, Udaipur- 313004 Rajasthan, India CIN: L27204RJ1966PLC001208 Website: www.hzlindia.com Email: dhruvika.jain@vedanta.co.in Tel: +91 294 6604000-02 Fax: +91 294 2427734

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Notes for the Meeting of the equity shareholders of the Company

1. In view of the ongoing Covid-19 pandemic, in terms of the Tribunal Order and in compliance with the applicable provisions of the Act, SEBI Listing Regulations and General Circular Nos. 14/2020 dated April 8, 2020 read with General Circular Nos. 17/2020 dated April 13, 2020, 22/2020 dated June 15, 2020, 33/2020 dated September 28, 2020, 39/2020 dated December 31, 2020, 10/2021 dated June 23, 2021, 20/2021 dated December 8, 2021, 03/2022 dated May 5, 2022 and 11/ 2022 dated December 28, 2022 (collectively referred to as “ MCA Circulars ”) and Circular No. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020 and SEBI Circular SEBI/HO/CFD/CMD2/CIR/P/2022/62 dated May 13, 2022 issued by the Securities and Exchange Board of India (“ SEBI ”) (“ SEBI Circulars ”), the Company is permitted to conduct the meeting through VC/ OAVM, without physical presence of the equity shareholders, therefore, the said Meeting of equity shareholders of the Company is being held through VC/ OAVM to transact the business set out in the Notice convening the Meeting.

2. Since this Meeting is being held through VC/ OAVM, physical attendance of equity shareholders has been dispensed with. Accordingly, the facility for appointment of proxies by the equity shareholders will not be available for the Meeting and hence the Proxy Form and Attendance Slip are not annexed hereto. However, in pursuance of Section 113 of the Act, authorized representatives of institutional/ corporate shareholders may be appointed for the purpose of voting through remote e-voting, for participation in the Meeting through VC/OAVM facility and e-voting during the Meeting provided that such shareholder sends a scanned copy (PDF/JPG Format) of its board or governing body resolution/authorization etc., authorizing its representative to attend the Meeting through VC/OAVM on its behalf, vote through e-voting during the Meeting and/or to vote through remote e-voting, on its behalf. The scanned image of the abovementioned documents should be in the name format [CTC |Authorized Representation|Section 113] . The said resolution/authorization shall be sent to the scrutinizer by email via his registered email id address to ippagrawal@gmail.com and to the Company at rajendra.pandwal@vedanta.co.in and/or dhruvika.jain@vedanta.co.in , with a copy marked to evoting@nsdl.co.in before the VC/OAVM Meeting or before the remote e- voting, as the case may be. The corporate shareholders can also upload documents in NSDL e-voting system for verification by scrutiniser.

3. The deemed venue for the Meeting shall be the Registered Office of the Company.

4. Equity shareholders attending the Meeting through VC / OAVM shall be reckoned for the purpose of quorum. In terms of the Tribunal Order, the quorum for the Meeting shall be in terms of Section 103 of the Act and the equity shareholders holding 33% in value. In case the quorum as stated above, is not present at the specified time, then the Meeting shall be adjourned by half an hour, and thereafter the persons present and voting, including authorized representatives, shall be deemed to constitute the quorum.

5. In terms of the Tribunal Order, the Notice of the Meeting and the accompanying documents mentioned in the Index are being sent through: (i) electronic mail to those equity shareholders whose email addresses are registered with the Company/ Depositories/ Registrar and Transfer Agent (“ RTA ”) of the Company i.e. Kfin Technologies Limited ( “Kfin” ); and (ii) courier/ post to those equity shareholders at their addresses registered with the Company whose email addresses are not available with the Company/ Depositories/ RTA.

6. NSDL, will provide the facility for voting by the equity shareholders through remote e-voting, for participation in the Meeting through VC/OAVM and e-voting during the Meeting.

7. Voting rights of an equity shareholder/ beneficial owner (in case of electronic shareholding) shall be in proportion to his/ her/ its shareholding in the paid-up equity share capital of the

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Company as on the Cut-off Date (specified in the Notice).

1. The Statement pursuant to Section 230 read with Section 102 and other applicable provisions of the Companies Act, 2013 (“ Act ”) and Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in respect of the business set out in the Notice of the Meeting is annexed hereto.

2. No route map of the venue of the Meeting is annexed hereto, since this Meeting is being held through VC / OAVM.

3. In case of joint holders attending the Meeting, only such joint holder who is higher in the order of names will be entitled to vote at the Meeting.

4. A copy of the Scheme, Statement under Section 230 read with Section 102 and other applicable provisions of the Act and Rule 6 of the CAA Rules along with all annexures to Statement are enclosed herewith. A copy of this Notice and the accompanying documents are also placed on the website of the Company and can be accessed at: www.hzlindia.com; the website of NSDL viz. www.evoting.nsdl.com, being the agency appointed by the Company to provide e-voting and other facilities for the Meeting and the website of the Stock Exchanges, i.e., BSE Limited and National Stock Exchange of India Limited viz. www.bseindia.com and www.nseindia.com, respectively. All the documents referred to in the accompanying Statement, shall be available for inspection through electronic mode during the proceedings of the Meeting. Equity shareholders seeking to inspect copies of the said documents may send an email at rajendra.pandwal@vedanta.co.in and/or dhruvika.jain@vedanta.co.in. Further, all the documents referred to in the accompanying explanatory statement shall also be open for inspection by the equity shareholders at the Registered Office of the Company between 10:30 a.m. to 12:30 p.m., on all working days up to the date of the Meeting.

5. If so desired, equity shareholders may obtain a physical copy of the Notice and the accompanying documents, i.e., Scheme and the Statement under Section 230 read with Section 102 and other applicable provisions of the Act and Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 etc., free of charge. A written request in this regard, along with details of your shareholding in the Company, may be addressed to the Company Secretary at rajendra.pandwal@vedanta.co.in.

6. The Scheme shall be considered approved by the equity shareholders of the Company if the resolution mentioned in the Notice has been approved by majority of persons representing three-fourth in value of the equity shareholders voting at the Meeting through VC/OAVM or by remote e-voting, in terms of the provisions of Section 230 of the Act.

7. In terms of Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655 dated November 3, 2021 read with Circular No. SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated January 25, 2022 issued by the SEBI, the SEBI has mandated the submission of Permanent Account Number ( “PAN” ) by every participant in the securities market. The equity shareholders of the Company holding shares in electronic form who have not submitted their PAN to their Depository Participants are requested to submit their PAN to their Depository Participants and those equity shareholders holding equity shares in physical form who have not submitted their PAN are requested to submit their PAN to the Company’s RTA through Form ISR-1 duly filled with details including Folio Number and attaching a self-attested copy of PAN card to Kfin, RTA of the Company at einward.ris@kfintech.com.

8. The equity shareholders of the Company holding shares in physical mode, who have not registered / updated their email addresses with the Company, are requested to register/

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update the same by sending an application to the RTA of the Company through Form ISR-1 as per the instructions provided in Point no. 14 stated above.

16. Procedure for joining the meeting through VC / OAVM:

• (a) Equity shareholders of the Company will be able to attend the Meeting through VC / OAVM or view the live webcast of the Meeting provided by NSDL by following the instructions provided in the notes to the Notice of the Meeting.

• (b) Facility to join the Meeting shall be opened 30 (thirty) minutes before the scheduled time of the Meeting and shall be kept open throughout the proceedings of the Meeting.

• (c) Members requiring any assistance/ support for participation before or during the Meeting, can contact NSDL on evoting@nsdl.co.in or can call at 022 - 4886 7000 and 022 - 2499 7000 or can contact Ms. Prajakta Pawle, at the designated e-mail id: evoting@nsdl.co.in.

17. Procedure and Instructions relating to e-voting:

(a) Instructions relating to e voting:

• (i) Pursuant to the directions of the Tribunal given under the Tribunal Order, the Company is providing facility to its equity shareholders to exercise their right to vote on resolution proposed to be passed at the Meeting by electronic means.

• (ii) The manner of voting, including voting remotely by: (i) individual shareholders holding equity shares of the Company in demat mode; (ii) shareholders other than individuals holding equity shares of the Company in demat mode; (iii) shareholders holding equity shares of the Company in physical mode; and (iv) equity shareholders who have not registered their e- mail address, is explained in the instructions given hereinbelow.

• (iii) The remote e-voting will not be allowed beyond the end date and time specified in the voting period as stated in the Notice and the remote e-voting module shall be forthwith disabled by NSDL upon expiry of the aforesaid period.

• (iv) The Company has opted to provide the same electronic voting system at the Meeting, as used during remote e-voting, and the said facility shall be operational till the resolution proposed in the Notice is considered and voted upon at the Meeting and may be used for voting only by the equity shareholders holding shares as on the Cut-off Date who are attending the Meeting and who have not already cast their vote(s) through remote e-voting.

• (v) The equity shareholders who have cast their vote(s) by remote e-voting may also attend the Meeting but shall not be entitled to cast their vote(s) again at the Meeting. Once the vote on the resolution is cast by an equity shareholder, whether partially or otherwise, the equity shareholder will not be allowed to change it subsequently or cast the vote again.

• (vi) An equity shareholder can opt for only single mode of voting i.e., either through remote e-voting or e-voting at the Meeting. If an equity shareholder casts vote(s) by both modes, then voting done through remote e-voting shall

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prevail and vote(s) cast at the Meeting shall be treated as “INVALID”.

• (vii) Mr. Prashant Agrawal has been appointed as the Scrutinizer for conducting the e-voting process including remote e-voting in a fair and transparent manner and they have communicated their willingness to be appointed and will be available for same purpose.

• (viii) The remote e-voting facility will be available during the following period:

REMOTE E-VOTING PERIOD

Commencement of voting Friday, March 24, 2023 at 10:00 A.M. (IST) End of voting Tuesday, March 28, 2023 at 5.00. P.M. (IST)

• (ix) Any person holding equity shares of the Company in physical form and nonindividual shareholders, who acquire equity shares of the Company and become equity shareholders of the Company after the Notice is sent through e-mail and holding shares as of the Cut-off Date (as specified in the Notice), may obtain the login ID and password by sending a request at evoting@nsdl.co.in. However, if you are already registered with NSDL for remote e-voting, then you can use your existing user ID and password for casting your vote. If you have forgotten your password, you could reset your password by using “Forgot User Details/Password” or “Physical User Reset Password” option available on www.evoting.nsdl.com or call on 022 - 4886 7000 and 022 - 2499 7000.

• (x) In case of individual shareholders holding equity shares of the Company in demat mode, who acquire equity shares of the Company and become a shareholder of the Company after sending of the Notice and holding shares as of the Cut-off Date (as specified in the Notice), may follow steps mentioned in the Notice of the Meeting under ‘Access to NSDL e-Voting system’;

• (xi) It is strongly recommended not to share your Password with any other person and take utmost care to keep your Password confidential. Login to the e- voting website will be disabled upon five unsuccessful attempts to insert the correct password. In such an event, you will need to go through the ‘Forgot User Details/Password?’ or ‘Physical User Reset Password?’ option available on www.evoting.nsdl.com to reset the password; and

• (xii) To attend to any queries, you may refer the Frequently Asked Questions (FAQs) and e-voting user manual for shareholders available at the download section of www.evoting.nsdl.com or call on: 022 - 4886 7000 and 022 - 2499 7000 or send a request at evoting@nsdl.co.in or contact Ms. Prajakta Pawle, at the designated email id: evoting@nsdl.co.in at National Securities Depository Limited, Trade World, ‘A’ Wing, 4[th] Floor, Kamala Mills Compound, Senapati Bapat Marg, Lower Parel, Mumbai – 400 013, Maharashtra, India who will also address the grievances connected with the voting by electronic means.

(b) Procedure for e-voting

• (i) The details of the process and manner for remote e-voting and e-voting at the Meeting are explained below.

• (ii) The way to vote electronically on NSDL e-voting system consists of “Two

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Steps” which are mentioned below:

Step 1: Access to the NSDL e-voting system

Step 2: Cast your vote electronically on NSDL e-voting system

(iii)

Step 1: Access to NSDL e-Voting system

(A) Login method for e voting and joining virtual meeting for individual shareholders holding equity shares of the Company in demat mode

Individual shareholders holding equity shares of the Company in demat mode are allowed to vote through their demat account maintained with Depositories/ Depository Participants. Equity shareholders are advised to update their mobile number and email id in their demat accounts in order to access e-voting facility.

Login method for individual shareholders holding equity shares of the Company in demat mode is given below:

• Type of Login Method

• shareholders

• Individual 1. Existing IDeAS user can visit the e-Services shareholders website of NSDL viz. holding equity https://eservices.nsdl.com either on a shares of the Personal Computer or on a mobile. On the Company in e-Services home page, click on the demat mode ‘Beneficial Owner’ icon under ‘Login’ with NSDL. which is available under ‘IDeAS’ section, this will prompt you to enter your existing User ID and Password. After successful authentication, you will be able to see e- voting services under Value added services. Click on ‘Access to e-Voting’ under e-Voting services and you will be able to see e-Voting page. Click on the Company’s name or e-Voting service provider i.e. NSDL and you will be redirected to e-Voting website of NSDL for casting your vote during the remote e- voting period or joining virtual Meeting & e-voting at the meeting.

• 1. If you are not registered for IDeAS e- Services, option to register is available at https://eservices.nsdl.com. Select “Register Online for IDeAS Portal” or click at https://eservices.nsdl.com/SecureWeb/I deasDirectReg.jsp.
• 1. Visit the e-Voting website of NSDL. Open web browser by typing the following URL: www.evoting.nsdl.com either on a

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Type of shareholders	LoginMethod
	Personal Computer or on a mobile. Once the home page of e-Voting system is launched, click on the icon ‘Login’ which is available under ‘Shareholder/Member’ section. A new screen will open. You will have to enter your User ID (i.e. your sixteen digit demat account number held with NSDL), Password/ OTP and a Verification Code as shown on the screen. After successful authentication, you will be redirected to NSDL Depository site wherein you can see e-voting page. Click on the Company’s name or e-voting service provider i.e. NSDL and you will be redirected to e-voting website of NSDL for casting your vote during the remote e- voting period or joining virtual Meting & e-voting during the Meeting. 4. Shareholders/Members can also download NSDL Mobile App “NSDL Speede” facility by scanning the QR code mentioned below for seamless voting experience.
Individual Shareholders holding equity shares in demat mode with Central Depository Services Limited ("CDSL")	1. Users who have opted for CDSL Easi / Easiest facility, can login through their existing user id and password. Option will be made available to reach e-Voting page without any further authentication. The users to login Easi /Easiest are requested to visit CDSL website www.cdslindia.com and click on login icon & New System Myeasi Tab and then user your existing my easi username & password. 2. After successful login the Easi / Easiest user will be able to see the e-Voting option for

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Type of shareholders	LoginMethod
	eligible companies where the evoting is in progress as per the information provided by company. On clicking the evoting option, the user will be able to see e-Voting page of the e-Voting service provider for casting your vote during the remote e- Voting period or joining virtual meeting & voting during the meeting. Additionally, there is also links provided to access the system of all e-Voting Service Providers, so that the user can visit the e-Voting service providers’ website directly. 3. If the user is not registered for Easi/Easiest, option to register is available at CDSL websitewww.cdslindia.comand click on login & New System Myeasi Tab and then click on registration option. 4. Alternatively, the user can directly access e-Voting page by providing Demat Account Number and PAN No. from a e-Voting link available onwww.cdslindia.com home page. The system will authenticate the user by sending OTP on registered Mobile & Email as recorded in the Demat Account. After successful authentication, user will be able to see the e-Voting option where the evoting is in progress and also able to directly access the system of all e-Voting Service Providers.
Individual shareholders (holding securities in demat mode) login through their depository participants	You can also login using the login credentials of your demat account through your Depository Participant registered with NSDL / CDSL for e-voting facility. Upon logging in, you will be able to see e-voting option. Click on e- voting option, you will be redirected to NSDL / CDSL Depository site after successful authentication, wherein you can see e-voting feature. Click on the Company’s name or e- voting service provider i.e. NSDL and you will be redirected to e-voting website of NSDL for casting your vote during the remote e-voting period or joining virtual Meeting & e-voting during the Meeting.

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• (iv) Important note: Equity shareholders of the Company who are unable to retrieve User ID/ Password are advised to use Forgot User ID and Forgot Password option available at abovementioned website.

• (v) Helpdesk for individual shareholders holding securities in demat mode for any technical issues related to login through Depository i.e. NSDL and CDSL.

**Login type **	Helpdesk details
Individual shareholders holding securities in demat mode with NSDL	Equity shareholders facing any technical issue in login can contact NSDL helpdesk by sending a request at to Ms. Prajakta Pawle at evoting@nsdl.co.inor call on : 022 - 4886 7000 and 022 - 2499 7000 [from 8:00 a.m. (IST) to 8:00 p.m. (IST)]
Individual shareholders holding securities in demat mode with CDSL	Equity shareholders facing any technical issue in login can contact CDSL helpdesk by sending a request athelpdesk.evoting@cdslindia.comor contact at +91-22-23058738 or +91-22- 23058542-43 [from 10:00 a.m. (IST) to 6:30 p.m. (IST)]

(B) Login method for e voting and joining virtual meeting for equity shareholders other than individual shareholders holding equity shares of the Company in demat mode and physical mode

How to Log-in to NSDL e-voting website?

• (i) Visit the e-voting website of NSDL. Open web browser by typing the following URL: https://www.evoting.nsdl.com/ either on a Personal Computer or on a mobile.

• (ii) Once the home page of e-voting system is launched, click on the icon ‘Login’ which is available under ‘Shareholder/Member’ section.

• (iii) A new screen will open. You will have to enter your User ID, your Password/ OTP and a Verification Code as shown on the screen.

• Alternatively, if you are registered for NSDL eservices i.e. IDeAS, you can log-in at https://eservices.nsdl.com/ with your existing IDeAS login. Once you log-in to NSDL eservices after using your log-in credentials, click on e-voting and you can proceed to Step 2 i.e. Cast your vote electronically.

• (iv) Your User ID details are given below:

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Manner of holding equity shares i.e. Demat (NSDL or CDSL) or Physical	Your User ID is:
a) For equity shareholders who hold shares in demat account with NSDL.	8 Character DP ID followed by 8 Digit Client ID For example if your DP ID is IN300 and Client ID is 12 then your user ID is IN30012**.
b) For equity shareholders who hold shares in demat account with CDSL.	16 Digit Beneficiary ID For example if your Beneficiary ID is 12** then your user ID is 12**
c) For equity shareholders holding shares in Physical Form.	EVEN Number followed by Folio Number registered with the company For example if folio number is 001 and EVEN is 101456 then user ID is 101456001

• (v) Password details for equity shareholders other than individual shareholders are given below:

• (a) If you are already registered for e-voting, then you can use your existing password to login and cast your vote.

• (b) If you are using NSDL e-voting system for the first time, you will need to retrieve the ‘Initial Password’ which was communicated to you. Once you retrieve your ‘Initial Password’, you need to enter the ‘Initial Password’ and the system will force you to change your password.

• (c) How to retrieve your ‘Initial Password’?

  • (i) If your email id is registered in your demat account or with the Company, your ‘Initial Password’ is communicated to you on your email id. Trace the email sent to you from NSDL from your mailbox. Open the email and open the attachment i.e. a .pdf file. The Password to open the .pdf file is your 8 digit Client ID for NSDL account, last 8 digits of

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Client ID for CDSL account or folio number for shares held in physical form. The .pdf file contains your ‘User ID’ and your ‘Initial Password’.

  - (ii) If your email id is not registered, please follow steps mentioned below in **process for those Shareholders whose email IDs are not registered** .

• (vi) If you are unable to retrieve or have not received the ‘Initial Password’ or have forgotten your Password:

• (a) Click on ‘Forgot User Details/Password?’ (If you are holding equity shares of the Company in your demat account with NSDL or CDSL) option available on www.evoting.nsdl.com.

• (b) ‘Physical User Reset Password?’ (If you are holding shares in physical mode) option available on www.evoting.nsdl.com.

• (c) If you are still unable to get the password by aforesaid two options, you can send a request at evoting@nsdl.co.in mentioning your demat account number/ folio number, your PAN, your name and your registered address etc.

• (d) Equity shareholders can also use the OTP (One Time Password) based login option available at www.evoting.nsdl.com for casting their vote on the e-voting system of NSDL.

• (vii) After entering your password, tick on Agree to ‘Terms and Conditions’ by selecting on the check box.

• (viii) Now, you will have to click on ‘Login’ button.

• (ix) After you click on the ‘Login’ button, Home page of e-voting will open.

(C) Step 2: Cast your vote electronically at the Meeting/ join virtual - meeting on NSDL e voting system

• (i) After successful login at Step 1, you will be able to see ‘EVEN’ of all the companies in which you are holding shares and whose voting cycle and the meeting is in active status.

• (ii) Select ‘EVEN’ of the Company for which you wish to cast your vote during the remote e-voting period and casting your vote during the Meeting. For joining virtual Meeting, you need to click on ‘VC / OAVM’ link placed under ‘Join Meeting’.

• (iii) Now you are ready for e-voting as the voting page opens.

• (iv) Cast your vote by selecting appropriate options i.e. assent or

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dissent, verify/ modify the number of shares for which you wish to cast your vote and click on ‘Submit’ and also ‘Confirm’ when prompted.

• (v) Upon confirmation, the message ‘Vote cast successfully’ will be displayed.

• (vi) You can also take the printout of the votes cast by you by clicking on the print option on the confirmation page.

• (vii) Once you confirm your vote on the resolution, you will not be allowed to modify your vote.

(D) Process for those equity shareholders of the Company whose email ids are not registered with the Depositories for procuring user ID - and password and registration of email ids for e voting for the resolutions set out in this Notice.

• (i) In case equity shares of the Company are held in physical mode, please provide Folio No., Name of Shareholder, scanned copy of the share certificate (front and back), PAN (self-attested scanned copy of PAN card), AADHAR (selfattested scanned copy of Aadhar Card) by e-mail to dhruvika.jain@vedanta.co.in.

• (ii) In case equity shares are held in demat mode, please provide DPID-CLID (16-digit DPID + CLID or 16 digit beneficiary ID), Name, Client master or copy of Consolidated Account statement, PAN (self-attested scanned copy of PAN card), AADHAR (self-attested scanned copy of Aadhar Card) to dhruvika.jain@vedanta.co.in. If you are an individual shareholder holding equity shares of the Company in demat mode, you are requested to refer to the login method explained at Step 1 (A) i.e. Login method for e-voting and joining virtual Meeting, for individual shareholders holding equity shares of the Company in demat mode.

• (iii) Alternatively, shareholders may send a request to evoting@nsdl.co.in for procuring User ID and Password for e- voting by providing above mentioned documents.

• (iv) Equity shareholders of the Company are required to update their mobile number and email id correctly in their demat account in order to access e-voting facility.

(E) Instructions for attending the Meeting and cast votes through e voting on the day of the Meeting:

• (i) Equity shareholders of the Company will be provided with a facility to attend the Meeting through VC/ OAVM through the NSDL e-voting system. Equity shareholders of the Company may access by following the steps mentioned above for Access to NSDL e-voting system. After successful login, you

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can see link of ‘VC / OAVM link’ placed under ‘Join meeting’ menu against the Company’s name. You are requested to click on VC / OAVM link placed under ‘Join Meeting’ menu. The link for VC / OAVM will be available in Shareholder/Member login where the EVEN of the Company will be displayed. Please note that the shareholders who do not have the User ID and Password for e-voting at the Meeting or have forgotten the User ID and Password may retrieve the same by following the remote e-voting instructions mentioned in the Notice to avoid last minute rush.

• (ii) The procedure for e-voting on the day of the Meeting is same as the instructions mentioned above for remote e-voting.

• (iii) Only those equity shareholders, who will be present in the Meeting through VC/OAVM facility and have not cast their vote on the resolution through remote e-voting and are otherwise not barred from doing so, shall be eligible to vote through e-voting system in the Meeting.

• (iv) Details of persons who may be contacted for any grievances connected with the facility for e-voting on the day of the Meeting is the same as that mentioned for remote e-voting.

• (v) Equity shareholders are encouraged to join the Meeting through Laptops for better experience.

• (vi) Further, shareholders will be required to allow Camera and use Internet with a good speed to avoid any disturbance during the Meeting.

• (vii) Please note that participants connecting from Mobile Devices or Tablets or through Laptop connecting via Mobile Hotspot may experience Audio/Video loss due to Fluctuation in their respective network. It is therefore recommended to use Stable Wi-Fi or LAN Connection to mitigate any kind of aforesaid glitches.

• (viii) Equity shareholders of the Company who would like to express their views/ have questions may send their questions in advance to rajendra.pandwal@vedanta.co.in and dhruvika.jain@vedanta.co.in by mentioning their name, demat account number/folio number, email id, mobile number. The same will be replied by the Company suitably.

(F) Procedure for speaker registration or to raise questions / queries

• (i) The equity shareholders of the Company who have any questions on the resolution proposed in the Notice are requested to send their queries in advance, latest by March 24, 2023 (05:00 P.M. IST) through e-mail at rajendra.pandwal@vedanta.co.in and dhruvika.jain@vedanta.co.in by mentioning their name, DP

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ID and Client ID/ Folio No., email id, mobile number.

• (ii) Equity shareholders of the Company who would like to express their views or ask questions during the Meeting may register themselves as speaker by sending their request from their registered e-mail address mentioning their name, DP ID and Client ID/Folio No., No. of shares, PAN, mobile number at rajendra.pandwal@vedanta.co.in and dhruvika.jain@vedanta.co.in on or before March 24, 2023 (05:00 P.M. IST). Those equity shareholders of the Company who have registered themselves as a speaker will only be allowed to express their views, ask questions during the Meeting. The Company reserves the right to restrict the number of speakers as well as the speaking time depending upon the availability of time at the Meeting. The equity shareholders of the Company may view the criteria for identification/ selection of speakers which is available on the website of the Company at www.hzlindia.com.

• (iii) All documents referred to in the Notice will also be available electronically for inspection without any fee by the equity shareholders from the date of circulation of this Notice up to the date of Meeting. Equity shareholders of the Company seeking to inspect such documents can send an e-mail to dhruvika.jain@vedanta.co.in.

(c) Results of the Meeting

• (i) The Scrutinizer will, after the conclusion of e-voting at the Meeting, scrutinize the votes cast at the Meeting and votes cast through remote e-voting, make a consolidated Scrutinizer’s Report and submit the same to the Chairperson of the Meeting. The result of voting for the Meeting will be declared within 2 (two) working days of the conclusion of the Meeting and the same, along with the consolidated Scrutinizer’s Report, will be placed on the website of the Company: www.hzlindia.com and on the website of NSDL at www.evoting.nsdl.com. The result will simultaneously be communicated to the Stock Exchanges. The result will also be displayed at the registered office of the Company.

• (ii) Subject to receipt of requisite majority of votes in favour of the Scheme i.e., majority in number representing three-fourth in value (as per Section 230 of the Act), the Resolution proposed in the Notice shall be deemed to have been passed on the date of the Meeting (specified in the Notice).

Equity Shareholders are requested to carefully read all the Notes set out herein and in particular, instructions for joining the Meeting, manner of casting vote through remote e-Voting or e-Voting at the Meeting.

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IN THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL, JAIPUR BENCH

CA (CAA) No. 10/230-232/JPR/2022

IN THE MATTER OF SECTION 230

AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 AND

IN THE MATTER OF THE SCHEME OF ARRANGEMENT BETWEEN HINDUSTAN ZINC LIMITED AND ITS SHAREHOLDERS

Hindustan Zinc Limited, a Company ) incorporated under the Companies Act, 1956 ) having Corporate Identity Number: ) L27204RJ1966PLC001208 and having its ) registered office at Yashad Bhavan, ) Yashadgarh, Udaipur- 313004, Rajasthan, India ) ) …. Company / Applicant Company

STATEMENT UNDER SECTION 230 READ WITH SECTION 102 AND OTHER APPLICABLE PROVISIONS OF THE COMPANIES ACT, 2013 (“ACT”) AND RULE 6 OF THE COMPANIES (COMPROMISES, ARRANGEMENTS AND AMALGAMATIONS) RULES, 2016 (“CAA RULES”) TO THE NOTICE OF THE MEETING OF EQUITY SHAREHOLDERS OF HINDUSTAN ZINC LIMITED CONVENED PURSUANT TO ORDER OF THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL, JAIPUR BENCH (“TRIBUNAL”) DATED FEBRUARY 6, 2023 (“TRIBUNAL ORDER”)

I. Meeting for the Scheme

This is a Statement accompanying the Notice convening the meeting of equity shareholders of Hindustan Zinc Limited (“ Company ”) for the purpose of their considering and if thought fit, approving, with or without modification(s), the proposed Scheme of Arrangement between Hindustan Zinc Limited and its shareholders (“ Scheme ”). The Scheme provides for capital reorganization of the Company (as defined hereinafter), inter alia , providing for transfer of amounts standing to the credit of the General Reserves ( as defined in the Scheme ) to the Retained Earnings ( as defined in the Scheme ) of the Company, pursuant to the provisions of Section 230 and other applicable provisions of the Act ( as defined in the Scheme ). The Scheme also provides for various other matters consequential thereto or otherwise. A copy of the Scheme is attached hereto as Annexure I .

Capital terms not defined herein and used in the Notice and this Statement shall have the same meaning as ascribed to them in the Scheme.

II.

Purpose, Objective, Rationale and Benefits of the Scheme

1. From the date of notification of provisions of the Act, the mandatory requirement to transfer funds from the profits/ retained earnings of a company to its general reserves was done away with. Further, creation of general reserves in accordance with the erstwhile provisions of the Companies Act, 1956 was also done away with. Currently, there is no provision under the Act which enables or restricts the transfer of funds lying in the general reserves of a company to its retained earnings.

2. Further, the funds lying in general reserves of the Company have been accumulated over past few years, after transfer of profits earned by the Company. Accordingly, in absence of any specific provisions/ guidance under the Act, in the past the various High Courts and the

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National Company Law Tribunal have permitted companies to undertake such a transfer through a scheme of arrangement pursuant to provisions of Section 230 of the Act.

1. The circumstances which justify and/or have necessitated the said Scheme and the benefits of the same are, inter alia , as follows:

1. “Over the years, the Company has built up significant reserves through transfer of profits to the reserves in accordance with provisions of the erstwhile Companies Act, 1956 and erstwhile rules notified thereunder, namely, the Companies (Transfer of Profits to Reserves) Rules, 1975.

2. Steady growth in sales volume, balanced capital expenditure for continuing operations has helped the Company achieve a strong track record of generating cash flows. With healthy business practices in place, the Company expects that it will continue its growth trajectory and its business operations will keep generating incremental cash flow over the coming years.

3. The Company is of the view that the funds represented by the General Reserves are in excess of the Company's anticipated operational and business needs in the foreseeable future, thus, these excess funds can be utilized to create further shareholders' value, in such manner and to such extent, as the Board of the Company in its sole discretion, may decide, from time to time and in accordance with the provisions of the Act and other Applicable Law.

4. The Scheme is in the interest of all stakeholders of the Company.”

1. In view of the aforesaid and in the interest of following good corporate governance practices, the Company has proposed the Scheme.

III. Background of the Company

1.

• Particulars of the Company

• (a) Hindustan Zinc Limited (“ Company ”) having Corporate Identity Number (CIN) L27204RJ1966PLC001208 was incorporated on January 10, 1966 as a public limited company, under the provisions of the Companies Act, 1956, as ‘Hindustan Zinc Limited’ and the Registrar of Companies, Jaipur issued a Certificate of Incorporation dated January 10, 1966. The registered office of the Company is situated at Yashad Bhavan, Yashadgarh, Udaipur- 313004, Rajasthan, India. Its Permanent Account Number with the Income Tax Department is AAACH7354K. The email address of the Company is: dhruvika.jain@vedanta.co.in and Company’s website is www.hzlindia.com. During the last five years, there has been no change in the name and registered office of the Company. The equity shares of the Company are listed on BSE Limited (“ BSE ”) and National Stock Exchange of India Limited (“ NSE ”).

• (b) Main objects of the Company, as per its Memorandum of Association, have been reproduced below for the perusal of the equity shareholders:

• “ III A. The main objects for which the Company is established are:

1. To acquire, take over, manage and develop the undertaking formerly belonging to the Metal Corporation of India Limited which shall be deemed to include all assets, rights, lease holds, including mining leases, if any, powers, authorities and privileges and all property, movable and immovable, including lands, buildings, works, mines, workshops, projects, smelters, refineries, stores, instruments, machinery, locomotives, automobilies, and other vehicles, mined

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or extracted zinc or lead ores, concentrate and metals, in process or in stock or in transit, cash balances, cash on hand, reserve fund investments and book debts and all other rights and interests arising out of such property as were immediately before the 22nd day of October, 1965 in the ownership, possession, power or control of the Metal Corporation of India Limited in relation to the undertaking, whether within or outside India, and all books of account, registers, maps, plans, sections, drawings, records of survey and all other documents of whatever nature relating thereto and shall also be deemed to include all borrowings, liabilities and obligations of whatever kind then subsisting of the Metal Corporation of India Limted in relation to the undertaking which has been transferred to and vested in the Central Government by virtue of the Metal Corporation of India (Acquisition of Undertaking) Act, 1966, (No.36 of 1966), and shall also be deemed to include all other properties, assets, liabilities and obligations acquired or incurred for purposes of the undertaking since the transfer thereof to and vesting thereof in the Central Government by virtue of the said Act.

2. To carry on in India and elsewhere trades or business of metallurgists and miners including beneficiation of minerals, mineral dressing, concentration, smelting, refining and the extraction, manufacture and fabrication, purchase and sale of and generally dealing in all metals and their products and alloys and in particular to manufacture and/or produce and/or otherwise engage generally in the manufacture or production of or dealing in ores and concentrates of zinc and lead, zinc and lead metals and their products and by-products of all kinds including fertilizers and the sale, dealing or other disposition of such products and by-products.

3. To search, prospect, get, win, workraise, beneficiate, make merchantable, sell, dispose of and deal in all minerals and substances and the manufacture and sale of produce obtained thereby.

4. To buy, sell, smelt, refine, manufacture, fabricate and deal in minerals and metals and alloys of all kinds.

5. To act as consulting engineers and metallurgists in all fields of engineering and metallurgy and to carry on the business of mechanical, metallurgical, mining, chemical, electrical and civil engineering including in particular the work of selling, erecting, installing, operating, maintaining and repairing all types of plant machinery and equipment.

6. To undertake, carry on or cause to be carried on and assist, contribute in any form, research in all fields of metallurgy and engineering in India or elsewhere and to construct, execute, carry out, equip, improve, work, purchase or otherwise acquire, hire, lease, develop, administer, manage, control in India or elsewhere laboratories, technical training, educational institutes, school or colleges.

7. To do the business as power producer either individually as a holding company or in collaboration, consortium, partnership, joint venture, majority or minority or equal equity participation with another person or a special purpose vehicle or entity, corporate or otherwise and in that capacity to develop, assemble, modify, restructure, generate, accumulate, transmit, distribute, purchase, sell and supply in India and/or abroad efficient thermal, hydroelectric and wind power generated electric energy including steam from conventional /non conventional renewable & non renewable energy sources or any other form of energy for captive use/ consumption or to other enterprises on commercial basis and to undertake or to carry on the business of managing, owning, controlling, erecting, commissioning, operating, running, leasing or transferring power

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• plants, wind energy plants, mechanical, electrical, thermal hydel, civil engineering works and similar projects, selling steam, disposal of by-products.

8. To lay down, establish, operate and maintain such power/energy generating stations and sub stations including main transmission line, structures, machineries, equipments cables as may be required to be established by the competent authority or authorities.

9. To carry on business of consultancy services in power generation, establishment of power plants and related areas and execution of turnkey jobs for other organizations, bodies whether private or government owned and to deal in all apparatus and thing required for or capable of being used in connection with the generation, distribution, supply, accumulation of electric and to supply light to cities, towns, streets, docks, markets, theaters, buildings and places, with public and private, suppliers and dealers in electrical and other related appliances.

10. To generate, acquire by purchase in bulk, develop and accumulate electrical power at the place or places contemplated by the said License and to transmit, distribute and supply such power throughout the area of supply named therein, and generally to generate acquire by purchase in bulk develop and accumulate power at any other place or places and to transmit, distribute and supply such power.

11. To carry on the business of an electric Power, Light and Supply Company in all its branches, and in particular to construct lay down, establish, fix and carry out all necessary power stations, cables, wires, lines accumulators, lamps and works, and to generate acquire by purchase in bulk, accumulate distribute and supply electricity, and to light cities, towns, streets, docks, markets, theatres, buildings and places, both public and private.

12. To carry on the business of electrician, mechanical engineers, suppliers of electricity for the purposes of light heat, motive power or otherwise, and manufacturers of and dealers in apparatus and things required for or capable of being used in connection with the generation, distribution, supply, accumulation and employment of electricity, galvanism, magnetism or otherwise.

13. To carry on in India or elsewhere the business of establishing, commissioning, setting up, operating and maintaining electric power generating stations based on conventional/non-conventional resources, tie-lines, sub-stations and transmission lines on build, own and transfer (BOT), and/or build, own, lease and transfer (BOLT and/or build, own, operate and transfer (BOOT) basis and to carry on in lndia or elsewhere the business of acquiring, operating, managing and maintaining existing power generation stations, tie-lines, sub-stations and transmission lines, either owned by the private sector or public sector or the Government or Governments or other public authorities and for any or all of the aforesaid purposes, to do all the necessary or ancillary activities as may be considered necessary or beneficial or desirable.

1. To acquire concessions or licenses granted by, and enter into contracts with the Government of India or the Government of any Province in India or the Government of any Slate in India or any municipal or local authority, company or person in India, or elsewhere, for the construction and maintenance of an electric installation for the production, transmission or use of electric power for lighting, heating, pumping, signaling, telephonic, or traction or motive purposes, including the application thereof to tramcars, omnibuses, carriages, ships, conveyances and objects, or any other purpose .”

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During the last five years, there has been no change in the objects clause of the Company.

• (c) The Company is engaged in exploring, extracting and processing of minerals. The Company’s operations include five zinc-lead mines, for zinc smelters, one lead smelter, one zinc-lead smelter, eight sulphuric acid plants, one silver refinery plant, six captive thermal power plants and four captive solar plants in the State of Rajasthan. In addition, the Company also has rockphosphate mine in Matoon, near Udaipur in Rajasthan and zinc, lead, silver processing and refining facilities in the State of Uttarakhand. The Company also has wind power plants in the States of Rajasthan, Gujarat, Karnataka, Tamil Nadu and Maharashtra and solar power plants in the State of Rajasthan.

(d) The authorised, issued, subscribed and paid-up share capital of the Company as on January 31, 2023 is as follows:

Particulars	Amount in INR
Authorised share capital
500,00,00,000 equityshares of INR 2 each	1000,00,00,000
Total	1000,00,00,000
Issued, subscribed andpaid-up share capital
422,53,19,000 equityshares of INR 2 each fully paid	845,06,38,000
Total	845,06,38,000

The latest annual financial statements of the Company have been audited for the financial year ended March 31, 2022. Consolidated and Standalone Unaudited Financial Results (limited reviewed) of the Company for the quarter and year ended December 31, 2022 is attached hereto as Annexure II .

(e) The Consolidated and Standalone Audited Financial Results of the Company for the quarter and financial year ended as on March 31, 2022 is attached hereto as Annexure III . A copy of the full annual report of the Company for the financial year ended as on March 31, 2022 can be accessed at: www.hzlindia.com and the website of the Stock Exchanges, i.e., BSE Limited and National Stock Exchange of India Limited viz. www.bseindia.com and www.nseindia.com, respectively.

(f) The details of Directors and Promoter of the Company (as on the date of the Notice) along with their addresses are mentioned herein below:

Sr. No.	Name	Category	Address
		Directors
1.	Mrs. Priya Agarwal	Chairman & Non- Executive Director	Flat No. 2501/2502 Raheja Legend, Plot No. 254A, Dr Anne Besant Road, Worli, Mumbai – 400025
2.	Ms. Nirupama Kotru	Non- Executive Director	Government of India Ministry of Mines, Shastri Bhawan, New Delhi - 110001
3.	Dr. Veena Kumari Dermal	Non- Executive Director	Government of India Ministry of Mines, Shastri Bhawan, New Delhi -

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Sr. No.	Name	Category	Category	Address
				110001
4.	Ms. Farida M. Naik	Non- Executive Director		Government of India Ministry of Mines, Shastri Bhawan, New Delhi - 110001
5.	Mr. Anjani K. Agrawal	Independent Director		2201, Tower 2A, Sumer Trinity Towers, New Prabha Devi Road, Prabha Devi, Mumbai – 400 025
6.	Mr. Akhilesh Joshi	Independent Director		54, Polo Ground Udaipur – 313 004
7.	Mr. Ramamirtham Kannan	Independent Director		Karachi Citizens, CHS 205-B, New Link Road, D.N. Nagar Andheri (West), Mumbai 400053
8.	Mr. Navin Agarwal	Non- Executive Director		Soham, 8/738, Behramji Gamadia Road, Mumbai - 400 026
9.	Mr. Arun Misra	CEO & Whole-time Director		Hindustan Zinc Limited Yashad Bhawan, Udaipur - 313 004.
Sr. No.	Name			Address
	Promoter and Promoter Group
1.	Vedanta Limited		1stFloor, C wing, Unit 103, Corporate Avenue Atul Projects, Chakala, Andheri (East) Mumbai - 400 093,Maharashtra,India

IV. SALIENT FEATURES OF THE SCHEME

1. The salient features of the Scheme, inter alia , are as stated below. The capitalized terms used herein shall have the same meaning as ascribed to them in Clause 1 of Part I of the Scheme:

2. (a) The Scheme provides for capital reorganization of the Company, inter alia, providing for transfer of amounts standing to the credit of the General Reserves to the Retained Earnings of the Company under Section 230 and other applicable provisions of the Act.

3. (b) No consideration is proposed to be issued pursuant to the Scheme.

4. (c) The Appointed Date of the Scheme shall mean the Effective Date.

5. (d) The Scheme shall become effective and operative from the Effective Date.

6. (e) The equity shares of the Company shall continue to be listed on the Stock Exchanges.

Note: The above are the salient features of the Scheme. The equity shareholders are requested to read the entire text of the Scheme annexed hereto to get fully acquainted with

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the provisions thereof.

V. Approvals and intimation in relation to the Scheme

1. The Committee of Independent Directors and the Audit & Risk Management Committee of the Company approved and recommended the Scheme to the Board of Directors of the Company on January 06, 2022 and January 21, 2022 respectively. Basis recommendation of the Committee of Independent Directors and the Audit & Risk Management Committee of the Company, the Board of Directors of the Company on January 21, 2022, unanimously approved the Scheme, as detailed below:

Name of Director	Voted in favour / against / did not
	participate or vote
Mrs. Kiran Agarwal	Favour
Mr. Navin Agarwal	Favour
Mr. Akhilesh Joshi	Favour
Mr. Anjani K. Agrawal	Favour
Ms. Nirupama Kotru	Favour
Ms. Farida M. Naik	Favour
Dr. Veena Kumari D	Favour
Mr. Arun Misra	Favour

1. In terms of Regulation 37 of the SEBI Listing Regulations read with SEBI Master Circular SEBI/HO/CFD/DIL1/CIR/P/2021/0000000665 dated November 23, 2021 (“ SEBI Master Circular ”), NSE and BSE, by their respective letters, both dated August 23, 2022, have issued their respective observation letters on the Scheme to the Company. The NSE and BSE vide their respective letters dated August 23, 2022 have conveyed their ‘no objection’ and ‘no adverse observations’ to the Scheme respectively. Copies of the said observation letters issued by NSE and BSE to the Company are attached hereto as Annexure IV and Annexure V respectively. However, the SEBI has raised certain concerns on the Scheme which are stated in the aforesaid observation letters issued by BSE and NSE. The letters of the Company in response to the observation letters issued by BSE and NSE are attached hereto as Annexure VI .

2. Further, in terms of the said SEBI Master Circular, the Company has not received any complaint relating to the Scheme and “NIL” complaint reports were filed by the Company with NSE and BSE, copies of which are attached hereto as Annexure VII and Annexure VIII respectively.

3. There are no ongoing adjudication & recovery proceedings, prosecution initiated and enforcement action taken, against the Company, which if results in an adverse outcome may materially and adversely affect the Scheme, the Company’s operations or its financial position, as the case may be.

4. In addition to the approval of the Tribunal, the Company will obtain such necessary approvals / sanctions / no objection(s) from the regulatory or other governmental authorities in respect of the Scheme in accordance with law, as may be required.

VI. Interest of Directors, Key Managerial Personnel (KMPs), their relatives and Debenture Trustee

None of the Directors, KMPs (as defined under the Act and rules framed thereunder) of the Company and their respective relatives (as defined under the Act and rules framed thereunder) has any interest in the Scheme except to the extent of their shareholding in the Company, if any. Save as aforesaid, none of the said Directors or the KMPs or their respective

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relatives has any material interest in the Scheme. The Debenture Trustee of the Company has no interest in the Scheme.

VII. Effect of the Scheme on stakeholders

The effect of the Scheme on various stakeholders is summarised below:

1. Equity shareholders, KMPs, promoter and non-promoter shareholders

The effect of the Scheme on the equity shareholders, KMPs, promoter and nonpromoter shareholders of the Company is given in the report adopted by the Board of Directors of the Company on January 21, 2022 pursuant to the provisions of Section 232(2)(c) of the Act which is attached as Annexure IX to this Statement.

2. Directors

• (i) The Scheme will have no effect on the office of the existing Directors of the Company. Further, no change in the Board of Directors of the Company is envisaged on account of the Scheme. It is clarified that, the composition of the Board of Directors of the Company may change by appointments, retirements or resignations in accordance with the provisions of the Act, SEBI Listing Regulations and Memorandum and Articles of Association of the Company.

• (ii) The effect of the Scheme on the Directors of the Company in their capacity as equity shareholders of the Company is same as in case of other equity shareholders of the Company, as mentioned in the aforesaid report attached as Annexure VIII hereto.

3. Employees

• (i) The employees of the Company shall, in no way, be affected by the Scheme, as there is no transfer of employees under the Scheme.

• (ii) On the Scheme becoming effective, all the employees of the Company shall continue with their employment, without any break or interruption in their services, on the same terms and conditions on which they are engaged as on the Effective Date.

4. Creditors (other than Debenture holders and Bond holders)

• (i) The creditors of the Company shall, in no way, be affected by the Scheme, as there is no reduction in the amount payable to any of the creditors and no compromise or arrangement is contemplated with the creditors.

• (ii) Further, there is no outflow of cash from the Company. Thus, the Scheme would not, in any way, adversely affect the operations of the Company or the ability of the Company to honour its commitments or to pay its debts in the ordinary course of business.

5. Debenture holders, Bond holders and Debenture Trustees

• (i) The Company has not issued any debentures. Hence, no debenture trustees have been appointed by the Company.

6. Depositors and Deposit Trustees

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• (i) The Company has not accepted any deposits within the meaning of the Act and Rules framed thereunder. Hence, no Deposit Trustees have been appointed.

• (ii) Thus, the Scheme will have no adverse effect on the aforesaid stakeholders.

VIII. Amounts due to secured creditors and unsecured creditors

• (i) The Company does not have any secured creditors.

• (ii) The amount due to unsecured creditors of the Company, as on December 31, 2022 is INR 34,99,16,25,393.

• (iii) The present Scheme is an arrangement between the Company, and its shareholders, under the provisions of Section 230 of the Act. The Scheme provides for capital reorganisation of the Company. No consideration is proposed to be issued pursuant to the Scheme. Thus, the secured creditors and unsecured creditors of the Company shall, in no way, be affected by the Scheme, as there is no reduction in the amount payable to any of the creditors and no compromise or arrangement is contemplated with the creditors. Further, there is no outflow of cash from the Company. Thus, the Scheme would not, in any way, adversely affect the operations of the Company or the ability of the Company to honour its commitments or to pay its debts in the ordinary course of business.

IX. Share Capital / Debt Restructuring

There is no share capital/debt restructuring envisaged in the Scheme. No shares are proposed to be issued by the Company, pursuant to the Scheme. Therefore, there will be no change in the share capital structure and the post-scheme shareholding pattern of the Company. The pre- scheme share capital details of the Company is mentioned above in Paragraph III d above. The pre-scheme shareholding pattern of the Company is given below.

X. Pre-Scheme shareholding pattern of the Company

(Based on shareholding data as on December 31, 2022)

Sr. No.	Category of shareholder	No. of fully paid-up equity shares held	% of (A+B+C)
(A)	Promoter & Promoter Group	274,31,54,310	64.92%
(B)	Public	148,21,64,690	35.08%
(C)	Non-Promoter Non-Public	-	-
(C1)	Shares underlyingDRs	-	-
(C2)	Shares held byEmployee Trust	-	-
Grand Total(A+B+C)		422,53,19,000	100.00%

Further, no shares/ consideration is proposed to be issued by the Company pursuant to the Scheme. Therefore, there will be no change in the shareholding pattern of the Company pursuant to the Scheme.

XI. Auditors’ Certificate on conformity of accounting treatment in the Scheme with Accounting Standards

Certificate dated February 18, 2022, issued by M/s S. R. Batliboi & Co LLP, Chartered Accountants, Statutory Auditors of the Company confirming that the accounting treatment in the Scheme, is in compliance with SEBI (Listing Obligations and Disclosure Requirements)

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Regulations, 2015 and circulars issued there under and the applicable accounting standards prescribed under Section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other generally accepted accounting principles is attached hereto as Annexure X .

XII. Other information

• (i) A copy of the Scheme has been filed by the Company with the Registrar of Companies, Jaipur.

• (ii) No investigation proceedings have been instituted and/or are pending against the Company under Sections 210 to 227 of the Act.

XIII. Non applicability of valuation report and fairness opinion

• (i) The Scheme provides for the capital reorganization of the Company, inter alia providing for transfer of amounts standing to the credit of the General Reserves to the Retained Earnings of the Company.

• (ii) Further, no shares/ consideration is proposed to be issued by the Company pursuant to the Scheme. Therefore, there will be no change in the shareholding pattern of the Company pursuant to the Scheme.

• (iii) Thus, in view of the above, valuation report and fairness opinion are not applicable.

XIV. Inspection of Documents

Electronic copy of following documents will be available for inspection in the Investors Relations section of the website of the Company at www.hzlindia.com under tab “Scheme of Arrangement”.

• (a) Memorandum and Articles of Association of the Company;

• (b) Consolidated and Standalone unaudited financial results (limited reviewed) for the quarter ended December 31, 2022 of the Company;

• (c) Annual report of the Company for the financial year ended as on March 31, 2022;

• (d) Copy of the Scheme;

• (e) Certificate of the Statutory Auditor of the Company confirming that the accounting treatment prescribed under the Scheme is in compliance with Section 133 of the Act and applicable accounting standards;

• (f) Report of the Audit & Risk Management Committee and Committee of Independent Directors of the Company recommending the Scheme; and

• (g) Copy of the Order of the Hon’ble National Company Law Tribunal, Jaipur Bench.

Based on the above and considering the rationale and benefits, in the opinion of the Board, the Scheme will be of advantage to, beneficial and in the interest of the Company, its equity shareholders and other stakeholders and the terms thereof are fair and reasonable. The Board of Directors of the Company recommend the Scheme for approval of the equity shareholders.

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The Directors and KMPs, as applicable, of the Company, and their relatives do not have any concern or interest, financially or otherwise, in the Scheme except as equity shareholders in general.

Jaipur, February 21, 2023

Sd/-

Justice (Retd.) Mr. Dinesh Chandra Somani

Chairperson appointed by the Tribunal for the Meeting

Registered office:

Yashad Bhavan, Yashadgarh, Udaipur- 313004, Rajasthan, India CIN: L27204RJ1966PLC001208 Website: www.hzlindia.com Email: dhruvika.jain@vedanta.co.in Tel: +91 294 6604000-02 Fax: +91 294 2427734

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ANNEXURE-I

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ANNEXURE-III

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ANNEXURE-IV

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Ref: NSE/LIST/29974_II

August 23, 2022

The Company Secretary Hindustan Zinc Limited Yashad Bhawan, Udaipur-313004.

Kind Attn.: Mr. Rajendra Pandwal

Dear Sir,

Sub: Observation Letter of draft scheme of arrangement between Hindustan Zinc Limited and its shareholder.

We are in receipt of the draft Scheme of Arrangement filed by Hindustan Zinc Ltd as required under SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017; SEBI vide its letter dated August comment(s) on the draft scheme of Arrangement wherein Company shall ensure that the comments shall be part of the explanatory statement sent to shareholders and before NCLT for the purpose of seeking their approval as Annexure.

Annexure I

I. Facts of the Case in Brief:

1. Draft Scheme of Arrangement filed by Hindustan Zinc Limited provides for transfer of an amount of Rs.103,83,15,26,729 standing to the credit of the General Reserve to Retained Earnings of the Company.

2. Hindustan Zinc Limited is listed on BSE Limited and National Stock Exchange of India Limited.

3. As per the draft scheme document, the rationale provided by the Company for the scheme is as follows:

4. i Over the years, the Company has built up significant reserves through transfer of profits to the reserves in accordance with provisions of the erstwhile Companies Act, 1956 and erstwhile Rules notified thereunder, namely, the Companies (Transfer of Profits to Reserves) Rules, 1975.

5. ii Steady growth in sales volume, balanced capital expenditure for continuing This Document is Digitally Signed operations has helped the Company to achieve a strong track record of generating cash flows. With healthy business practices in place, the Company expects that it will Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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Continuation Sheet

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continue its growth trajectory and its business operations will keep generating incremental cash flow over the coming years.

• iii The company is of the view that the funds represented by the general reserves are in excess of the Company's anticipated operational and business needs in the foreseeable future, thus, these excess funds can be utilized to create further shareholder's value, in such manner and to such extent, as the Board of the Company in its sole discretion, may decide, from time to time and in accordance with the provisions of the Act and other applicable law.

• iv The scheme is in interest of all stakeholders of the Company.

II. Comments of SEBI on the Draft Scheme of Arrangement:

1. In terms of section 205(2A) of the erstwhile Companies Act, 1956, it was mandatory for Companies to transfer a certain percentage of profits, not exceeding ten percent, to the reserves, which would be beneficial to both, Company and shareholders, because such reserves would be available to the Company for ploughing them back for expansion of the activities of the Companies and would also be available for declaration of dividends in a lean year.

2. The erstwhile Companies (Declaration of Dividend out of Reserves) Rules, 1975 provided that in the event of inadequacy or absence of profits in any year, dividend may be declared by a company for that year out of accumulated profits earned by it in previous years and transferred by it to reserves, subject to conditions that-

• i Rate of dividend declared shall not exceed dividend declared for previous five years or 10% of paid up capital, whichever is less.

• ii Total amount to be transferred from general reserve shall not exceed 10% of paid-up capital and free reserves and amount be first utilized to set off the losses before declaring dividend.

• iii Balance of reserves after such transfer shall not fall below 15% of the paid up capital.

3. However, section 123 of the Companies Act, 2013, which corresponds to section 205(2A) of the erstwhile Companies Act, 1956, made effective from September 12, 2013, provides that a Company may, before declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company. Thus, in terms of the above first proviso, to section 123(1) of the Companies Act, 2013, such transfer of profits to reserves has not been made compulsory.

4. Incidentally, the second proviso to section 123 of Companies Act, 2013 still provides that where, owing to inadequacy or absence of profits in any financial year, any Company This Document is Digitally Signed

proposes to declare dividend out of the accumulated profits earned by it in previous years and transferred by the Company to the reserves, such declaration of dividend shall not be made Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST

except in accordance with such rules as may be prescribed in this behalf. Location: NSE

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Continuation Sheet

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5. In this regard, the Companies (Declaration and Payment of Dividend) Rules, 2014, states as under-

"In the event of inadequacy or absence of profits in any year, a Company may declare dividend out of free reserves subject to the fulfilment of the following conditions, namely:-

• i The rate of dividend declared shall not exceed the average rate at which dividend was declared by it in the three years immediately preceding that year. Provided that this subrule shall not apply to a Company which has declared any dividend in each of the three preceding financial years.

• ii The total amount to be drawn from such accumulated profits shall not exceed one-tenth of the sum of its paid up share capital and free reserves as appearing in the latest audited financial statement.

• iii The amount so drawn shall first be utilised to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared.

• iv The balance of reserves after such withdrawal shall not fall below fifteen percent of its paid up share capital as appearing in the latest audited financial statement.

6. As a result of this scheme, the funds which were meant for restrictive use, as part of general reserve, would now be available for any purpose, including distribution as dividend, after transfer to P&L Account, which does not have any apparent restrictions on its use.

7. By transferring funds from general reserves to P&L Account, the Companies are practically re-transferring funds which had been transferred to the general reserve as per the compulsory provisions existing then under the erstwhile Companies Act, 1956. However, no such explicit provision is provided in the extant law and it is silent on enabling/restraining such retransfer. Nevertheless, the purposes for which general reserve could be utilized does not envisage transfer of the general reserve (compulsory) to P&L Account for an unfettered and unrestricted use.

8. The freedom to transfer profits to reserves on a voluntary basis, as outlined in para 3 above, would be prospective in nature, after notification of the 2013 Act. In effect, the Company is attempting to apply the provision for voluntary transfer to reserves, on a retrospective basis by transferring back the entire general reserve to P&L account.

9. Further, though the extent provisions of the Companies Act, 2013 do not make it mandatory for transfer to general reserves, Companies (Declaration and Payment of Dividend) Rules, 2014 exist which in effect are having similar provisions as that of Companies (Declaration of Dividend out of Reserves) Rules, 1975. Thus, the right of payment of dividend out of reserves is not an unfettered right and is subject to conditionalities. The only provision done away with is the compulsory transfer from profits to reserves which gives freedom to the Companies in This Document is Digitally Signed this respect.

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Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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Continuation Sheet

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10. Consequently, the limited freedom given to Companies through the Companies Act, 2013, is with respect to whether or not profits may be transferred to reserves, and not an untrammelled right to utilize the already existing compulsorily transferred reserves in total disregard to the restrictions on usage as contained in the Companies (Declaration and Payment of Dividend) Rules, 2014.

11. In a nutshell, the prospective nature of the Section 123 of the Companies Act, 2013 as well as the retention of restrictions on payment of dividend out of accumulated reserves as enshrined in the Companies (Declaration and Payment of Dividend) Rules, 2014, suggests that the lawmakers had neither intended unrestricted use of accumulated profits to pay dividend, nor transfer of reserves to P&L account to possibly pay dividend in this circumlocutory manner. Thus, the conduct of the Company may be at variance with the spirit of the law.

12. Once the Scheme is permitted, Hindustan Zinc Limited, is free to use the money liberally disregarding the conservative policies as are contained in Companies (Declaration and Payment of Dividend) Rules, 2014.

13. Also, in the instant case, it has not been specified how shareholder value is intended to be created. Such vagueness of purpose and conduct of the management with respect to the possible usage outlined in the paras above, may not be in the interest of shareholders.

14. In view of the above, the proposed Scheme may not be justified, both from the legal and the corporate governance point of view.

15. It may also be mentioned that in respect of some Schemes providing for similar transactions, in past, the Ministry of Corporate Affairs, had contended before Hon'ble National Company Law Tribunal that Scheme is not in the public interest as it is framed to circumvent the provisions of Section 123 of Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2014.

16. Incidentally, it may also be mentioned that Hon'ble Supreme Court in the case of National Confederation of Officers Association of Central Public Sector Enterprises and Ors. Vs. Union of India & Ors. vide order dated November 18, 2021 had inter-alia observed that-

disinvestment of Hindustan Zinc Limited by the Union Government in 2002. The CBI is

The Company is hereby advised to make Stock Exchange as a party in the matter and suitably Law Tribunal during the proceedings regarding this scheme.

Please note that the submission of documents/information in accordance with the Circulars, to SEBI This Document is Digitally Signed should not in any way be deemed or construed that the same has been cleared or approved by SEBI.

Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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Continuation Sheet

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SEBI does not take any responsibility either for the financial soundness of any Scheme or for the correctness of the statements made or opinions expressed in the documents submitted.

Further, where applicable in the explanatory statement of the notice to be sent by the company to the shareholders, while seeking approval of the scheme, it shall disclose information about unlisted companies involved in the format prescribed for abridged prospectus as specified in the Circular.

Based on the draft scheme and other documents submitted by the Company, including undertaking le the Company to file the draft scheme with NCLT.

However, the Exchange reserves its rights to raise objections at any stage if the information submitted to the Exchange is found to be incomplete/ incorrect/ misleading/ false or for any contravention of Rules, Bye-laws and Regulations of the Exchange, Listing Regulations, Guidelines/ Regulations issued by statutory authorities. August 23, 2022, within which the scheme shall be submitted to NCLT.

Kindly note, this Exchange letter should not be construed as approval under any other Act /Regulation/rule/bye laws (except as referred above) for which the Company may be required to obtain approval from other department(s) of the Exchange. The Company is requested to separately take up matter with the concerned departments for approval, if any

The Company shall ensure filing of compliance status report stating the compliance with each point of Observation Letter on draft scheme of arrangement on the following path: NEAPS > Issue > Scheme of arrangement > Reg 37(1) of SEBI LODR, 2015> Seeking Observation letter to Compliance Status.

Yours faithfully,

For National Stock Exchange of India Limited

Dipti Chinchkhede

Manager

P.S. Checklist for all the Further Issues is available on website of the exchange at the following URL: https://www.nseindia.com/companies-listing/raising-capital-further-issues-main-sme-checklist

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This Document is Digitally Signed

Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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ANNEXURE-V

DCS/IPO/TL/ESOP-IP/2456/2022-23

“E-Letter” August 23, 2022

The Company Secretary, HINDUSTAN ZINC LTD. Yashad Bhawan, Udaipur, Rajasthan, 313004

Dear Sir,

Sub: Observation Letter regarding the Scheme of Arrangement between Hindustan Zinc Ltd and its Shareholders

We are in receipt of the draft Scheme of Arrangement filed by Hindustan Zinc Ltd as required under SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017; SEBI vide its letter dated August 22, 2022, has inter alia given concerns on the draft scheme which are placed as Annexure I and it’s comment(s) on the draft scheme of Arrangement wherein Company shall ensure that the comments shall be part of the explanatory statement sent to shareholders and before NCLT for the purpose of seeking their approval as Annexure II:

Annexure I

I.FACTS OF THE CASE IN BRIEF:

• 1) Draft Scheme of Arrangement filed by Hindustan Zinc Limited provides for transfer of an amount of Rs.103,83,15,26,729 standing to the credit of the General Reserve to Retained Earnings of the Company.

• 2) Hindustan Zinc Limited is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

• 3) As per the draft scheme document, the rationale provided by the company for the scheme is as follows:

• i. Over the years, the Company has built up significant reserves through transfer of profits to the reserves in accordance with provisions of the erstwhile Companies Act, 1956 and erstwhile Rules notified thereunder, namely, the Companies (Transfer of Profits to Reserves) Rules, 1975.

• ii. Steady growth in sales volume, balanced capital expenditure for continuing operations has helped the Company achieve a strong track record of generating cash flows. With healthy business practices in place, the Company expects that it will continue its growth trajectory and its business operations will keep generating incremental cash flow over the coming years.

• iii. The company is of the view that the funds represented by the general reserves are in excess of the Company's anticipated operational and business needs in the foreseeable future, thus, these excess funds can be utilized to create further shareholder's value, in such manner and to such extent, as the Board of the Company in its sole discretion, may decide, from time to time and in accordance with the provisions of the Act and other applicable law.

• iv. The scheme is in interest of all stakeholders of the Company

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II.COMMENTS OF SEBI ON THE DRAFT SCHEME OF ARRANGEMENT:

• 1) In terms of section 205(2A) of the erstwhile Companies Act, 1956, it was mandatory for companies to transfer a certain percentage of profits, not exceeding ten percent, to the reserves, which would be beneficial to both, company and shareholders, because such reserves would be available to the company for ploughing them back for expansion of the activities of the companies and would also be available for declaration of dividends in a lean year.

• 2) The erstwhile Companies (Declaration of Dividend out of Reserves) Rules, 1975 provided that in event of inadequacy or absence of profits in any year, dividend may be declared by a company for that year out of accumulated profits earned by it in previous years and transferred by it to reserves, subject to conditions that-

• i. Rate of dividend declared shall not exceed dividend declared for previous five years or 10% of paid up capital, whichever is less.

• ii. Total amount to be transferred from general reserve shall not exceed 10% of paidup capital and free reserves and amount be first utilized to set off the losses before declaring dividend.

• iii. Balance of reserves after such transfer shall not fall below 15% of the paid up capital.

• 3) However, section 123 of the Companies Act, 2013, which corresponds to section 205(2A) of the erstwhile Companies Act, 1956, made effective from September 12, 2013, provides that a company may, before declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the company. Thus, in terms of the above first proviso, to section 123(1) of the Companies Act, 2013, such transfer of profits to reserves has not been made compulsory.

• 4) Incidentally, the second proviso to section 123 of Companies Act, 2013 still provides that where, owing to inadequacy or absence of profits in any financial year, any company proposes to declare dividend out of the accumulated profits earned by it in previous years and transferred by the company to the reserves, such declaration of dividend shall not be made except in accordance with such rules as may be prescribed in this behalf.

• 5) In this regard, the Companies (Declaration and Payment of Dividend) Rules, 2014, states as under –

In the event of inadequacy of absence of profits in any year, a company may declare dividend out of free reserves subject to the fulfilment of the following conditions, namely:-

• i. The rate of dividend declared shall not exceed the average of rate at which dividend was declared by it in the three years immediately preceding that year. Provided that this sub-rule shall not apply to a company which has declared any dividend in each of the three preceding financial years.

• ii. The total amount to be drawn from such accumulated profits shall not exceed onetenth of the sum of its paid up share capital and free reserves as appearing in the latest audited financial statement.

68

• iii. The amount so drawn shall first be utilised to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared.

• iv. The balance of reserves after such withdrawal shall not below fifteen percent of its paid up share capital as appearing in the latest audited financial statement.

• 6) As a result of this scheme, the funds which were meant for restrictive use, as part of general reserve, would now be available for any purpose, including distribution as dividend, after transfer to P&L Account, which does not have any apparent restrictions on its use.

• 7) By transferring funds from general reserves to P&L Account, the companies are practically re-transferring funds which had been transferred to the general reserve as per the compulsory provisions existing then under the erstwhile Companies Act, 1956. However, no such explicit provision is provided in the extant law and it is silent on enabling/restraining such retransfer. Nevertheless, the purposes for which general reserve could be utilized does not envisage transfer of the general reserve (compulsory) to P&L Account for an unfettered and unrestricted use.

• 8) The freedom to transfer profits to reserves on a voluntary basis, as outlined in para 3 above, would be prospective in nature, after notification of the 2013 Act. In effect, the company is attempting to apply the provision for voluntary transfer to reserves, on a retrospective basis by transferring back the entire general reserve to P&L account.

• 9) Further, though the extent provisions of the Companies Act, 2013 do not make it mandatory for transfer to general reserves, Companies (Declaration and Payment of Dividend) Rules, 2014 exist which in effect are having similar provisions as that of Companies (Declaration of Dividend out of Reserves) Rules 1975. Thus, the right of payment of dividend out of reserves is not an unfettered right and is subject to conditionalities. The only provision done away with is the compulsory transfer from profits to reserves which gives freedom to the companies in this respect.

• 10) Consequently, the limited freedom given to companies through the Companies Act, 2013, is with respect to whether or not profits may be transferred to reserves, and not an untrammelled right to utilize the already existing compulsorily transferred reserves in total disregard to the restrictions on usage as contained in the Companies (Declaration and Payment of Dividend) Rules, 2014.

• 11) In a nutshell, the prospective nature of the Section 123 of the Companies Act, 2013 as well as the retention of restrictions on payment of dividend out of accumulated reserves as enshrined in the Companies (Declaration and Payment of Dividend) Rules, 2014, suggests that the lawmakers had neither intended unrestricted use of accumulated profits to pay dividend, nor transfer of reserves to P&L account to possibly pay dividend in this circumlocutory manner. Thus, the conduct of the company may be at variance with the spirit of the law.

• 12) Once the scheme is permitted, Hindustan Zinc Limited, is free to use the money liberally disregarding the conservative policies as are contained in Companies (Declaration and Payment of Dividend) Rules, 2014.

69

• 13) Also, in the instant case, it has not been specified how shareholder value is intended to be created. Such vagueness of purpose, and conduct of the management with respect to the possible usage outlined in the paras above, may not be in the interest of shareholders.

• 14) In view of the above, the proposed scheme may not be justified, both from the legal and the corporate governance point of view.

• 15) It may also be mentioned that in respect of some Schemes providing for similar transactions, in past, the Ministry of Corporate Affairs, had contended before Hon'ble National Company Law Tribunal that Scheme is not in the public interest as it is framed to circumvent the provisions of Section 123 of Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2014.

• 16) Incidentally, it may also be mentioned that Hon'ble Supreme Court in the case of National Confederation of Officers Association of Central Public Sector Enterprises and Ors. Vs. Union of India & Ors. vide order dated November 18, 2021 had inter-alia observed that –

"There is sufficient material for registration of a regular case in relation to the 26 percent disinvestment of Hindustan Zinc Limited by the Union Government in 2002. The CBI is directed to register a regular case and proceed in accordance with law."

III.

“Company is advised to make Stock Exchanges a party in the matter and they should suitably articulate the said concerns before the NCLT during the proceedings regarding this scheme.”

Accordingly, based on aforesaid comment offered by SEBI, the company is hereby advised:

• i. To provide additional information, if any, (as stated above) along with various documents to the Exchange for further dissemination on Exchange website.

• ii. To ensure that additional information, if any, (as stated aforesaid) along with various documents are disseminated on their (company) website.

• iii. To duly comply with various provisions of the circulars.

In light of the above, we hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon’ble NCLT.

Further, where applicable in the explanatory statement of the notice to be sent by the company to the shareholders, while seeking approval of the scheme, it shall disclose information about unlisted company involved in the format prescribed for abridged prospectus as specified in the circular dated March 10, 2017.

Kindly note that as required under Regulation 37(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the validity of this Observation Letter shall be six months from the date of this Letter, within which the scheme shall be submitted to the NCLT.

The Exchange reserves its right to withdraw its ‘No adverse observation’ at any stage if the information submitted to the Exchange is found to be incomplete / incorrect / misleading / false or for any contravention of Rules, Byelaws and Regulations of the Exchange, Listing Agreement, Guidelines/Regulations issued by statutory authorities. Please note that the aforesaid observations does not preclude the Company from complying with any other requirements.

70

Further, it may be noted that with reference to Section 230 (5) of the Companies Act, 2013 (Act), read with Rule 8 of Companies (Compromises, Arrangements and Amalgamations) Rules 2016 (Company Rules) and Section 66 of the Act read with Rule 3 of the Company Rules wherein pursuant to an Order passed by the Hon’ble National Company Law Tribunal, a Notice of the proposed scheme of compromise or arrangement filed under sections 230-232 or Section 66 of the Companies Act 2013 as the case may be is required to be served upon the Exchange seeking representations or objections if any.

In this regard, with a view to have a better transparency in processing the aforesaid notices served upon the Exchange, the Exchange has already introduced an online system of serving such Notice along with the relevant documents of the proposed schemes through the BSE Listing Centre.

Any service of notice under Section 230 (5) or Section 66 of the Companies Act 2013 seeking Exchange’s representations or objections if any, would be accepted and processed through the Listing Centre only and no physical filings would be accepted. You may please refer to circular dated February 26, 2019 issued to the company.

Yours faithfully, Sd/Sd/- Prasad Bhide Tanmayi Lele Senior Manager Assistant Manager

ANNEXURE-VI

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75 Exhibit-A

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Ref: NSE/LIST/29974_II

August 23, 2022

The Company Secretary Hindustan Zinc Limited Yashad Bhawan, Udaipur-313004.

Kind Attn.: Mr. Rajendra Pandwal

Dear Sir,

Sub: Observation Letter of draft scheme of arrangement between Hindustan Zinc Limited and its shareholder.

We are in receipt of the draft Scheme of Arrangement filed by Hindustan Zinc Ltd as required under SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017; SEBI vide its letter dated August comment(s) on the draft scheme of Arrangement wherein Company shall ensure that the comments shall be part of the explanatory statement sent to shareholders and before NCLT for the purpose of seeking their approval as Annexure.

Annexure I

I. Facts of the Case in Brief:

1. Draft Scheme of Arrangement filed by Hindustan Zinc Limited provides for transfer of an amount of Rs.103,83,15,26,729 standing to the credit of the General Reserve to Retained Earnings of the Company.

2. Hindustan Zinc Limited is listed on BSE Limited and National Stock Exchange of India Limited.

3. As per the draft scheme document, the rationale provided by the Company for the scheme is as follows:

4. i Over the years, the Company has built up significant reserves through transfer of profits to the reserves in accordance with provisions of the erstwhile Companies Act, 1956 and erstwhile Rules notified thereunder, namely, the Companies (Transfer of Profits to Reserves) Rules, 1975.

5. ii Steady growth in sales volume, balanced capital expenditure for continuing This Document is Digitally Signed operations has helped the Company to achieve a strong track record of generating cash flows. With healthy business practices in place, the Company expects that it will Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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Continuation Sheet

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continue its growth trajectory and its business operations will keep generating incremental cash flow over the coming years.

• iii The company is of the view that the funds represented by the general reserves are in excess of the Company's anticipated operational and business needs in the foreseeable future, thus, these excess funds can be utilized to create further shareholder's value, in such manner and to such extent, as the Board of the Company in its sole discretion, may decide, from time to time and in accordance with the provisions of the Act and other applicable law.

• iv The scheme is in interest of all stakeholders of the Company.

II. Comments of SEBI on the Draft Scheme of Arrangement:

1. In terms of section 205(2A) of the erstwhile Companies Act, 1956, it was mandatory for Companies to transfer a certain percentage of profits, not exceeding ten percent, to the reserves, which would be beneficial to both, Company and shareholders, because such reserves would be available to the Company for ploughing them back for expansion of the activities of the Companies and would also be available for declaration of dividends in a lean year.

2. The erstwhile Companies (Declaration of Dividend out of Reserves) Rules, 1975 provided that in the event of inadequacy or absence of profits in any year, dividend may be declared by a company for that year out of accumulated profits earned by it in previous years and transferred by it to reserves, subject to conditions that-

• i Rate of dividend declared shall not exceed dividend declared for previous five years or 10% of paid up capital, whichever is less.

• ii Total amount to be transferred from general reserve shall not exceed 10% of paid-up capital and free reserves and amount be first utilized to set off the losses before declaring dividend.

• iii Balance of reserves after such transfer shall not fall below 15% of the paid up capital.

3. However, section 123 of the Companies Act, 2013, which corresponds to section 205(2A) of the erstwhile Companies Act, 1956, made effective from September 12, 2013, provides that a Company may, before declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company. Thus, in terms of the above first proviso, to section 123(1) of the Companies Act, 2013, such transfer of profits to reserves has not been made compulsory.

4. Incidentally, the second proviso to section 123 of Companies Act, 2013 still provides that where, owing to inadequacy or absence of profits in any financial year, any Company This Document is Digitally Signed

proposes to declare dividend out of the accumulated profits earned by it in previous years and transferred by the Company to the reserves, such declaration of dividend shall not be made Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST

except in accordance with such rules as may be prescribed in this behalf. Location: NSE

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Continuation Sheet

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5. In this regard, the Companies (Declaration and Payment of Dividend) Rules, 2014, states as under-

"In the event of inadequacy or absence of profits in any year, a Company may declare dividend out of free reserves subject to the fulfilment of the following conditions, namely:-

• i The rate of dividend declared shall not exceed the average rate at which dividend was declared by it in the three years immediately preceding that year. Provided that this subrule shall not apply to a Company which has declared any dividend in each of the three preceding financial years.

• ii The total amount to be drawn from such accumulated profits shall not exceed one-tenth of the sum of its paid up share capital and free reserves as appearing in the latest audited financial statement.

• iii The amount so drawn shall first be utilised to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared.

• iv The balance of reserves after such withdrawal shall not fall below fifteen percent of its paid up share capital as appearing in the latest audited financial statement.

6. As a result of this scheme, the funds which were meant for restrictive use, as part of general reserve, would now be available for any purpose, including distribution as dividend, after transfer to P&L Account, which does not have any apparent restrictions on its use.

7. By transferring funds from general reserves to P&L Account, the Companies are practically re-transferring funds which had been transferred to the general reserve as per the compulsory provisions existing then under the erstwhile Companies Act, 1956. However, no such explicit provision is provided in the extant law and it is silent on enabling/restraining such retransfer. Nevertheless, the purposes for which general reserve could be utilized does not envisage transfer of the general reserve (compulsory) to P&L Account for an unfettered and unrestricted use.

8. The freedom to transfer profits to reserves on a voluntary basis, as outlined in para 3 above, would be prospective in nature, after notification of the 2013 Act. In effect, the Company is attempting to apply the provision for voluntary transfer to reserves, on a retrospective basis by transferring back the entire general reserve to P&L account.

9. Further, though the extent provisions of the Companies Act, 2013 do not make it mandatory for transfer to general reserves, Companies (Declaration and Payment of Dividend) Rules, 2014 exist which in effect are having similar provisions as that of Companies (Declaration of Dividend out of Reserves) Rules, 1975. Thus, the right of payment of dividend out of reserves is not an unfettered right and is subject to conditionalities. The only provision done away with is the compulsory transfer from profits to reserves which gives freedom to the Companies in This Document is Digitally Signed this respect.

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Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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Continuation Sheet

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10. Consequently, the limited freedom given to Companies through the Companies Act, 2013, is with respect to whether or not profits may be transferred to reserves, and not an untrammelled right to utilize the already existing compulsorily transferred reserves in total disregard to the restrictions on usage as contained in the Companies (Declaration and Payment of Dividend) Rules, 2014.

11. In a nutshell, the prospective nature of the Section 123 of the Companies Act, 2013 as well as the retention of restrictions on payment of dividend out of accumulated reserves as enshrined in the Companies (Declaration and Payment of Dividend) Rules, 2014, suggests that the lawmakers had neither intended unrestricted use of accumulated profits to pay dividend, nor transfer of reserves to P&L account to possibly pay dividend in this circumlocutory manner. Thus, the conduct of the Company may be at variance with the spirit of the law.

12. Once the Scheme is permitted, Hindustan Zinc Limited, is free to use the money liberally disregarding the conservative policies as are contained in Companies (Declaration and Payment of Dividend) Rules, 2014.

13. Also, in the instant case, it has not been specified how shareholder value is intended to be created. Such vagueness of purpose and conduct of the management with respect to the possible usage outlined in the paras above, may not be in the interest of shareholders.

14. In view of the above, the proposed Scheme may not be justified, both from the legal and the corporate governance point of view.

15. It may also be mentioned that in respect of some Schemes providing for similar transactions, in past, the Ministry of Corporate Affairs, had contended before Hon'ble National Company Law Tribunal that Scheme is not in the public interest as it is framed to circumvent the provisions of Section 123 of Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2014.

16. Incidentally, it may also be mentioned that Hon'ble Supreme Court in the case of National Confederation of Officers Association of Central Public Sector Enterprises and Ors. Vs. Union of India & Ors. vide order dated November 18, 2021 had inter-alia observed that-

disinvestment of Hindustan Zinc Limited by the Union Government in 2002. The CBI is

The Company is hereby advised to make Stock Exchange as a party in the matter and suitably Law Tribunal during the proceedings regarding this scheme.

Please note that the submission of documents/information in accordance with the Circulars, to SEBI This Document is Digitally Signed should not in any way be deemed or construed that the same has been cleared or approved by SEBI.

Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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Continuation Sheet

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SEBI does not take any responsibility either for the financial soundness of any Scheme or for the correctness of the statements made or opinions expressed in the documents submitted.

Further, where applicable in the explanatory statement of the notice to be sent by the company to the shareholders, while seeking approval of the scheme, it shall disclose information about unlisted companies involved in the format prescribed for abridged prospectus as specified in the Circular.

Based on the draft scheme and other documents submitted by the Company, including undertaking le the Company to file the draft scheme with NCLT.

However, the Exchange reserves its rights to raise objections at any stage if the information submitted to the Exchange is found to be incomplete/ incorrect/ misleading/ false or for any contravention of Rules, Bye-laws and Regulations of the Exchange, Listing Regulations, Guidelines/ Regulations issued by statutory authorities. August 23, 2022, within which the scheme shall be submitted to NCLT.

Kindly note, this Exchange letter should not be construed as approval under any other Act /Regulation/rule/bye laws (except as referred above) for which the Company may be required to obtain approval from other department(s) of the Exchange. The Company is requested to separately take up matter with the concerned departments for approval, if any

The Company shall ensure filing of compliance status report stating the compliance with each point of Observation Letter on draft scheme of arrangement on the following path: NEAPS > Issue > Scheme of arrangement > Reg 37(1) of SEBI LODR, 2015> Seeking Observation letter to Compliance Status.

Yours faithfully,

For National Stock Exchange of India Limited

Dipti Chinchkhede

Manager

P.S. Checklist for all the Further Issues is available on website of the exchange at the following URL: https://www.nseindia.com/companies-listing/raising-capital-further-issues-main-sme-checklist

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This Document is Digitally Signed

Signer: DIPTI VIPIL CHINCHKHEDE Date: Tue, Aug 23, 2022 19:28:59 IST Location: NSE

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84 Exhibit-A

DCS/IPO/TL/ESOP-IP/2456/2022-23

“E-Letter”

August 23, 2022

The Company Secretary, HINDUSTAN ZINC LTD. Yashad Bhawan, Udaipur, Rajasthan, 313004

Dear Sir,

Sub: Observation Letter regarding the Scheme of Arrangement between Hindustan Zinc Ltd and its Shareholders

We are in receipt of the draft Scheme of Arrangement filed by Hindustan Zinc Ltd as required under SEBI Circular No. CFD/DIL3/CIR/2017/21 dated March 10, 2017; SEBI vide its letter dated August 22, 2022, has inter alia given concerns on the draft scheme which are placed as Annexure I and it’s comment(s) on the draft scheme of Arrangement wherein Company shall ensure that the comments shall be part of the explanatory statement sent to shareholders and before NCLT for the purpose of seeking their approval as Annexure II:

Annexure I

I.FACTS OF THE CASE IN BRIEF:

• 1) Draft Scheme of Arrangement filed by Hindustan Zinc Limited provides for transfer of an amount of Rs.103,83,15,26,729 standing to the credit of the General Reserve to Retained Earnings of the Company.

• 2) Hindustan Zinc Limited is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

• 3) As per the draft scheme document, the rationale provided by the company for the scheme is as follows:

• i. Over the years, the Company has built up significant reserves through transfer of profits to the reserves in accordance with provisions of the erstwhile Companies Act, 1956 and erstwhile Rules notified thereunder, namely, the Companies (Transfer of Profits to Reserves) Rules, 1975.

• ii. Steady growth in sales volume, balanced capital expenditure for continuing operations has helped the Company achieve a strong track record of generating cash flows. With healthy business practices in place, the Company expects that it will continue its growth trajectory and its business operations will keep generating incremental cash flow over the coming years.

• iii. The company is of the view that the funds represented by the general reserves are in excess of the Company's anticipated operational and business needs in the foreseeable future, thus, these excess funds can be utilized to create further shareholder's value, in such manner and to such extent, as the Board of the Company in its sole discretion, may decide, from time to time and in accordance with the provisions of the Act and other applicable law.

• iv. The scheme is in interest of all stakeholders of the Company

85

II.COMMENTS OF SEBI ON THE DRAFT SCHEME OF ARRANGEMENT:

• 1) In terms of section 205(2A) of the erstwhile Companies Act, 1956, it was mandatory for companies to transfer a certain percentage of profits, not exceeding ten percent, to the reserves, which would be beneficial to both, company and shareholders, because such reserves would be available to the company for ploughing them back for expansion of the activities of the companies and would also be available for declaration of dividends in a lean year.

• 2) The erstwhile Companies (Declaration of Dividend out of Reserves) Rules, 1975 provided that in event of inadequacy or absence of profits in any year, dividend may be declared by a company for that year out of accumulated profits earned by it in previous years and transferred by it to reserves, subject to conditions that-

• i. Rate of dividend declared shall not exceed dividend declared for previous five years or 10% of paid up capital, whichever is less.

• ii. Total amount to be transferred from general reserve shall not exceed 10% of paidup capital and free reserves and amount be first utilized to set off the losses before declaring dividend.

• iii. Balance of reserves after such transfer shall not fall below 15% of the paid up capital.

• 3) However, section 123 of the Companies Act, 2013, which corresponds to section 205(2A) of the erstwhile Companies Act, 1956, made effective from September 12, 2013, provides that a company may, before declaration of any dividend in any financial year, transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the company. Thus, in terms of the above first proviso, to section 123(1) of the Companies Act, 2013, such transfer of profits to reserves has not been made compulsory.

• 4) Incidentally, the second proviso to section 123 of Companies Act, 2013 still provides that where, owing to inadequacy or absence of profits in any financial year, any company proposes to declare dividend out of the accumulated profits earned by it in previous years and transferred by the company to the reserves, such declaration of dividend shall not be made except in accordance with such rules as may be prescribed in this behalf.

• 5) In this regard, the Companies (Declaration and Payment of Dividend) Rules, 2014, states as under –

In the event of inadequacy of absence of profits in any year, a company may declare dividend out of free reserves subject to the fulfilment of the following conditions, namely:-

• i. The rate of dividend declared shall not exceed the average of rate at which dividend was declared by it in the three years immediately preceding that year. Provided that this sub-rule shall not apply to a company which has declared any dividend in each of the three preceding financial years.

• ii. The total amount to be drawn from such accumulated profits shall not exceed onetenth of the sum of its paid up share capital and free reserves as appearing in the latest audited financial statement.

86

• iii. The amount so drawn shall first be utilised to set off the losses incurred in the financial year in which dividend is declared before any dividend in respect of equity shares is declared.

• iv. The balance of reserves after such withdrawal shall not below fifteen percent of its paid up share capital as appearing in the latest audited financial statement.

• 6) As a result of this scheme, the funds which were meant for restrictive use, as part of general reserve, would now be available for any purpose, including distribution as dividend, after transfer to P&L Account, which does not have any apparent restrictions on its use.

• 7) By transferring funds from general reserves to P&L Account, the companies are practically re-transferring funds which had been transferred to the general reserve as per the compulsory provisions existing then under the erstwhile Companies Act, 1956. However, no such explicit provision is provided in the extant law and it is silent on enabling/restraining such retransfer. Nevertheless, the purposes for which general reserve could be utilized does not envisage transfer of the general reserve (compulsory) to P&L Account for an unfettered and unrestricted use.

• 8) The freedom to transfer profits to reserves on a voluntary basis, as outlined in para 3 above, would be prospective in nature, after notification of the 2013 Act. In effect, the company is attempting to apply the provision for voluntary transfer to reserves, on a retrospective basis by transferring back the entire general reserve to P&L account.

• 9) Further, though the extent provisions of the Companies Act, 2013 do not make it mandatory for transfer to general reserves, Companies (Declaration and Payment of Dividend) Rules, 2014 exist which in effect are having similar provisions as that of Companies (Declaration of Dividend out of Reserves) Rules 1975. Thus, the right of payment of dividend out of reserves is not an unfettered right and is subject to conditionalities. The only provision done away with is the compulsory transfer from profits to reserves which gives freedom to the companies in this respect.

• 10) Consequently, the limited freedom given to companies through the Companies Act, 2013, is with respect to whether or not profits may be transferred to reserves, and not an untrammelled right to utilize the already existing compulsorily transferred reserves in total disregard to the restrictions on usage as contained in the Companies (Declaration and Payment of Dividend) Rules, 2014.

• 11) In a nutshell, the prospective nature of the Section 123 of the Companies Act, 2013 as well as the retention of restrictions on payment of dividend out of accumulated reserves as enshrined in the Companies (Declaration and Payment of Dividend) Rules, 2014, suggests that the lawmakers had neither intended unrestricted use of accumulated profits to pay dividend, nor transfer of reserves to P&L account to possibly pay dividend in this circumlocutory manner. Thus, the conduct of the company may be at variance with the spirit of the law.

• 12) Once the scheme is permitted, Hindustan Zinc Limited, is free to use the money liberally disregarding the conservative policies as are contained in Companies (Declaration and Payment of Dividend) Rules, 2014.

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• 13) Also, in the instant case, it has not been specified how shareholder value is intended to be created. Such vagueness of purpose, and conduct of the management with respect to the possible usage outlined in the paras above, may not be in the interest of shareholders.

• 14) In view of the above, the proposed scheme may not be justified, both from the legal and the corporate governance point of view.

• 15) It may also be mentioned that in respect of some Schemes providing for similar transactions, in past, the Ministry of Corporate Affairs, had contended before Hon'ble National Company Law Tribunal that Scheme is not in the public interest as it is framed to circumvent the provisions of Section 123 of Companies Act, 2013 and the Companies (Declaration and Payment of Dividend) Rules, 2014.

• 16) Incidentally, it may also be mentioned that Hon'ble Supreme Court in the case of National Confederation of Officers Association of Central Public Sector Enterprises and Ors. Vs. Union of India & Ors. vide order dated November 18, 2021 had inter-alia observed that –

"There is sufficient material for registration of a regular case in relation to the 26 percent disinvestment of Hindustan Zinc Limited by the Union Government in 2002. The CBI is directed to register a regular case and proceed in accordance with law."

III.

“Company is advised to make Stock Exchanges a party in the matter and they should suitably articulate the said concerns before the NCLT during the proceedings regarding this scheme.”

Accordingly, based on aforesaid comment offered by SEBI, the company is hereby advised:

• i. To provide additional information, if any, (as stated above) along with various documents to the Exchange for further dissemination on Exchange website.

• ii. To ensure that additional information, if any, (as stated aforesaid) along with various documents are disseminated on their (company) website.

• iii. To duly comply with various provisions of the circulars.

In light of the above, we hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon’ble NCLT.

Further, where applicable in the explanatory statement of the notice to be sent by the company to the shareholders, while seeking approval of the scheme, it shall disclose information about unlisted company involved in the format prescribed for abridged prospectus as specified in the circular dated March 10, 2017.

Kindly note that as required under Regulation 37(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the validity of this Observation Letter shall be six months from the date of this Letter, within which the scheme shall be submitted to the NCLT.

The Exchange reserves its right to withdraw its ‘No adverse observation’ at any stage if the information submitted to the Exchange is found to be incomplete / incorrect / misleading / false or for any contravention of Rules, Byelaws and Regulations of the Exchange, Listing Agreement, Guidelines/Regulations issued by statutory authorities. Please note that the aforesaid observations does not preclude the Company from complying with any other requirements.

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Further, it may be noted that with reference to Section 230 (5) of the Companies Act, 2013 (Act), read with Rule 8 of Companies (Compromises, Arrangements and Amalgamations) Rules 2016 (Company Rules) and Section 66 of the Act read with Rule 3 of the Company Rules wherein pursuant to an Order passed by the Hon’ble National Company Law Tribunal, a Notice of the proposed scheme of compromise or arrangement filed under sections 230-232 or Section 66 of the Companies Act 2013 as the case may be is required to be served upon the Exchange seeking representations or objections if any.

In this regard, with a view to have a better transparency in processing the aforesaid notices served upon the Exchange, the Exchange has already introduced an online system of serving such Notice along with the relevant documents of the proposed schemes through the BSE Listing Centre.

Any service of notice under Section 230 (5) or Section 66 of the Companies Act 2013 seeking Exchange’s representations or objections if any, would be accepted and processed through the Listing Centre only and no physical filings would be accepted. You may please refer to circular dated February 26, 2019 issued to the company.

Yours faithfully, Sd/Sd/- Prasad Bhide Tanmayi Lele Senior Manager Assistant Manager

ANNEXURE-VII

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ANNEXURE-VIII

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ANNEXURE-X

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2[nd] & 3rd Floor, Golf View Corporate Tower - B Sector 42 Road Gurugram - 122 002, Haryana, India Tel: +91 124 681 6000

Revised Independent Auditor's Report on accounting treatment contained in draft Scheme of arrangement amongst Hindustan Zinc Limited and its Shareholders

To, The Board of Directors, Hindustan Zinc Limited, Yashad Bhawan, Udaipur, Rajasthan – 313004

We, the statutory auditors of Hindustan Zinc Limited, (hereinafter referred to as “the Company”), have examined the proposed accounting treatment specified in paragraph 5 of the Certified Draft Scheme of Arrangement (hereinafter referred to as “Scheme”) between the Company and its shareholders in terms of provisions of Sections 230 to 232 of the Companies act, 2013 read with rules made thereunder and other applicable provisions of the Companies Act, 2013 (the ‘Act’) to confirm whether it is in compliance with the applicable accounting standards notified under section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as may be amended from time to time and Other Generally Accepted Accounting Principles (‘Applicable Accounting Standards’). This certificate is being issued in supersession of our earlier certificate dated January 21, 2022, which hereby stands withdrawn for reasons stated in Annexure 1 which is an integral part of this certificate.

This revised certificate is to be read together with our comments in Annexure 1.

The responsibility for the preparation of the Certified Draft Scheme and its compliance with the relevant laws and regulations, including the Applicable Accounting Standards as aforesaid, is that of the Board of Directors of the Companies involved. Our responsibility is to examine and report whether the Certified Draft Scheme complies with the applicable Accounting Standards and Other Generally Accepted Accounting Principles. Nothing contained in this Revised Certificate, nor anything said or done in the course of, or in connection with the services that are subject to this Revised Certificate, will extend any duty of care that we may have in our capacity of the statutory auditors of any financial statements of the Company. We carried out our examination in accordance with the Guidance Note on Audit Reports and Certificates for Special Purposes, issued by the Institute of Chartered Accountants of India.

Based on our examinations and according to the information and explanations given to us, we report that there is no specific accounting treatment specified for transfer from general reserves to free reserves in accounting standards prescribed under Section 133 of the Act. Accordingly, in our opinion the proposed accounting treatment contained in the paragraph 5 of the Scheme is in compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and circulars issued thereunder and all applicable accounting standards prescribed under section 133 of the Act read together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other generally accepted accounting principles

This Revised Certificate is issued at the request of the Company pursuant to the requirements of circulars issued under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for onward submission to the NSE, BSE, SEBI and NCLT. This revised certificate is to be read together with Annexure

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which forms an integral part of this certificate. This Revised Certificate should not be used for any other purpose without our prior written consent.

For S.R. Batliboi &Co. LLP Chartered Accountants ICAI Firm Registration Number: 301003E/E300005

Digitally signed by AJAY BANSAL AJAY DN: cn=AJAY BANSAL, c=IN, o=Personal, email=ajay.bansal@srb.in BANSAL Date: 2022.02.18 10:22:33 +05'30'

Per Ajay Bansal Membership Number: 502243 UDIN: 22502243ADAAPS9896 Place : Gurgaon Date : February 18, 2022

S.R. Batliboi & Co. LLP, a Limited Liability Partnership with LLP Identity No. AAB-4294 Regd. Office : 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata-700 016

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Annexure I which forms part of the Revised certificate

1. This Revised Certificate is issued in accordance with the terms of the Master Engagement Agreement (the “MEA”) dated October 21, 2021 and the service scope letter (the “SSL”) dated October 21, 2021 between S. R. Batliboi & Co. LLP ("we" or "us" or "SRBC") and Hindustan Zinc Limited (hereinafter the “Company”).

2. We are informed that the Company had filed the aforementioned Scheme with the National Stock Exchange of India Limited (‘NSE’) and BSE Limited (‘BSE’) together with our report dated January 21, 2022. We are issuing this revised certificate in response to the queries raised by NSE in supersession of our earlier certificate dated January 21, 2022, which hereby stands withdrawn. Consequentially, our opinion has been reworded in this revised certificate. We have received an undertaking from the management that this revised certificate and the fact of supersession of the Original Certificate be brought to the attention of all recipients of such previous (superseded) certificate and such Original Certificate shall be replaced with this revised certificate, wherever such Original Certificate has been used/distributed.

3. The attached Scheme is prepared by the Company, which is required to be submitted by the Company to the BSE, NSE, National Company Law Tribunal (‘NCLT’) and Securities and Exchange Board of India (“ SEBI ”) or any other authority as required under the Act and initialled by us for identification purposes only.

Managements’ Responsibility

1. The preparation of the Scheme is the responsibility of the Management of the Company including the preparation and maintenance of all accounting and other relevant supporting records and documents. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Scheme and applying an appropriate basis of preparation; and making estimates that are reasonable in the circumstances.

2. The management of the Company is also responsible for ensuring that the Company complies with the requirements of the Act, and for providing all relevant information to the NCLT and any other regulatory authority in connection with the Scheme.

Auditor’s Responsibility

1. Pursuant to the requirements of Section 230 of the Companies Act, 2013 and Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, our responsibility is to express reasonable assurance in the form of an opinion based on our examination and according to information and explanations given to us as to whether the proposed accounting treatment prescribed in the Scheme complies with the applicable accounting standards and other Generally Accepted Accounting Principles.

2. A reasonable assurance engagement includes performing procedures to obtain sufficient appropriate evidence on the reporting criteria. The procedures selected depend on the auditor's judgment, including the assessment of the risks associated with the Reporting Criteria. Accordingly, we have performed the following procedures in relation to the Revised Certificate:

S.R. Batliboi & Co. LLP, a Limited Liability Partnership with LLP Identity No. AAB-4294 Regd. Office : 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata-700 016

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• i. Read the proposed accounting treatment specified in paragraph 5 of the Scheme.

• ii. Examined the accounting treatment as described in paragraph 5 of the Scheme with the SEBI (Listing Obligations and Disclosure Requirements) and applicable accounting standards and other Generally Accepted Accounting Principles. While assessing the proposed accounting treatment we have also considered the guidance issued by ICAI to the extent relevant.

• iii. Performed necessary inquiries with the management and obtained necessary representations from the management.

• Our examination did not extend to any aspects of a legal or propriety nature covered in the paragraph 5 of the Scheme. Further, our scope of work did not involve us performing any audit tests in the context of our examination. We have not performed an audit, the objective of which would be to express an opinion in the specified elements, accounts or items thereof, for the purpose of this revised certificate. Accordingly, we do not express such opinion. Further, our examination did not extend to any aspects of legal or propriety nature of the Petition and other compliances thereof.

• We performed procedures in accordance with the Guidance Note on Reports or Certificates for Special Purposes (Revised 2016) issued by the Institute of Chartered Accountants of India. The Guidance Note requires that we comply with the ethical requirements of the Code of Ethics issued by the Institute of Chartered Accountants of India.

• We have complied with the relevant applicable requirements of the Standard on Quality Control (SQC) 1, Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements.

Restriction on Use

1. This revised certificate has been prepared at the request of the Company for submission to NCLT and SEBI or any other authority as required under the Act. It should not be used by any other person or for any other purpose. Accordingly, we do not accept or assume any liability or any duty of care or for any other purpose or to any other party to whom it is shown or into whose hands it may come. We have no responsibility to update this revised certificate for events and circumstances occurring after the date of this revised certificate.

For S.R. Batliboi &Co. LLP

Chartered Accountants ICAI Firm Registration Number: 301003E/E300005

Digitally signed by AJAY BANSAL AJAY DN: cn=AJAY BANSAL, c=IN, o=Personal, email=ajay.bansal@srb.in BANSAL Date: 2022.02.18 10:23:06 +05'30'

Per Ajay Bansal Membership Number: 502243 UDIN: 22502243ADAAPS9896 Place: Gurgaon Date: February 18, 2022

S.R. Batliboi & Co. LLP, a Limited Liability Partnership with LLP Identity No. AAB-4294 Regd. Office : 22, Camac Street, Block ‘B’, 3rd Floor, Kolkata-700 016