Cash Management

A
PROJECT REPORT
ON
“Cash Management”
Submitted in partial fulfilment for the
Award of degree
Master of Business Administration
SUBMITTED TO: SUBMITTED BY:

Ms. Prerna Patwa Rishabh sharma
DECLARATION
This is to certify that all the work contained in this research report
titled as “CASH MANAGEMENT” is genuine work done by me as part of
summer training project, Chanderiya lead zinc smelter Chittorgarh during
May-June 2010. Wherever some material is taken from website or other
published literature, suitable references are given and sources are
acknowledged.
PREFACE
About three decades ago, the scope of financial management was confined to the raising of
funds ,whenever needed & little significance used to be attached to financial decision-
making & problem solving.
Today, financial managers perform the passive role of scorekeepers of financial data,
information & arranging funds, they occupy key positions in top management areas & play
a dynamic role in solving complex management and financial problems. The main
advantage of using Cash Management is to make the optimum level of cash in the
organisation and Investing the additional fund into other activities where it needed. And To
minimize the amount locked up as cash balances in the company. And To meet the cash
disbursement need as per the payment Schedule .
The Cash is uses in the company for the payment of day to day expenses which are occur
in the organisation and to protect the firm against uncertainties characterizing its cash
flows. And Cash is the most important factor in financial management. It is also the most
important current asset for the operation of the business. Every activity in an enterprise
revolves round the cash.
While cash serves these functions, it is an idle resource which has an opportunity cost. The
liquidity provided by cash holding is at the expense of profits sacrificed foregoing alternative
opportunities. Hence, the finance manager should carefully plan and control cash.
Cash is also helpful in maintaining the goodwill of the firm in the market. The company can
gain the profit to purchases the material from the other firm on credit. And availing the cash
discount to paid the payment in cash at the time . and it also help in managing the good
relationship with banks.
ACKNOWLEDGEMENT
I would like to express my gratitude to all those people who helped me in completing my
project at Chanderiya Lead Zinc Smelter Ltd at Chittorgarh. My project title was cash
management.
I am deeply indebted to my project Guide Mr.S.N.LADDHA (SENIOR MANAGER)
FINANCE Chanderiya Lead Zinc Smelter Ltd. for allowing me to undertake the project &
making available all facilities for the successful completion of the study besides guiding
me to pursue the study on proper lines.
I would like to express my gratitude to my academic project guide, Mr. MADANLAL
PHADIYA professor at GOVT. COLLEGE BUNDI (Raj.) for the valuable guidance which
helped me throughout the project.
Rishabh Sharma
EXECUTIVE SUMMARY
VEDANTA is a London listed metals & mining company. The major metals produced
are Aluminum, Copper, Zinc & Lead. Vedanta is India’s only integrated Zinc producer.
The principle operations are in Rajasthan, dominated by Rampura Agucha Mine,
Rajpura Dariba mine, Zawar mines. The Zinc business of Vedanta is managed with in
Hindustan Zinc Limited. HZL is India’s only integrated Zinc company, operating from
Mines to finished metal & supplies around 90% of India’s Zinc requirements.
Hindustan Zinc Smelter, Chanderiya is a refinery located in 10 km north of Chittorgarh,

Rajasthan, India. It is active in the commodities like Copper, Lead, and Silver etc. This
is the biggest and modern Zinc Refinery of India.
Hindustan Zinc Limited (HZL) was incorporated in January 1966 as a public sector
company, after the takeover of the erstwhile Metal Corporation of India Limited, to
develop mining and smelting capacities and to substantially meet the domestic
demand of zinc and lead metals.
Hindustan Zinc was a wholly owned company of the Govt. of India till disinvestments of
shares by the Govt. in the favour of trust, financial institutions and banks, in May'92. The
company is engaged in mining and refining ore to produce non-ferrous metals - zinc, lead
and silver with installed capacities of 169000 TPA, 43000 tpa and 96000 TPA
respectively. Sulphuric acid, cadmium and zinc Sulphate are produced as by-products. It
also has installed capacities for phosphoric acid and super phosphate. The main
products, zinc and lead, are used by the engineering and automobile industries.
Working capital is the capital required for maintenance of day-to-day business operations.
The present day competitive market environment calls for an efficient management of
working capital. The reason for that is attributed to the fact that an ineffective working
capital management may force the firm to stop its business operations, may even lead to
bankruptcy. Hence the goal of working capital management is not just concerned with the
management of current assets & current liabilities but also in maintaining a satisfactory
level of working capital. And the cash management is the part of working capital
management.
The main objectives of the study were to analyze by the for the day to day transaction to
meet the company requirement that how much cash the company need to keep with it .
because if the company keep more fund then required then the company loose the other
investment opportunities or loose the interest with the company can gain to invest the
money in some other place.
CONTENTS
1. Introduction to Industry--------------------------
2. Introduction to Organization--------------------
3. Research Methodology--------------------------
3.1 Title of Study ------------------------------
3.2 Duration of study -------------------------
3.3 Objective of Study------------------------
3.4 Type of Research------------------------
3.5 Data Collection and Sampling--------
3.6 Scope of Study----------------------------
3.7 Limitations----------------------------------
4. Facts and Findings-----------------------------------------
5. Data Analysis and Interpretation----------------
6. SWOT Analysis------------------------------------------------
7. Conclusion-----------------------------------------------------
8. Recommendation and Suggestions--------------------
9. Questionnaire-------------------------------------------------
10. Bibliography-------------------------------------------------
INTRODUCTION
TO
INDUSTRY
INTRODUCTION TO INDUSTRY
Zinc was first introduced commercially in the United States during the 1850s, with small-scale
smelting plants in New Jersey, Pennsylvania, Illinois, Missouri, and Arkansas, near sources of ore
and fuel. The principal early use of zinc was in the production of brass, a zinc-copper alloy.
The first known domestic zinc production was at the Washington, D.C., arsenal in 1835, by Belgian
workers. A furnace was built primarily to produce zinc for making brass to be used in standard
weights and measures.
Early zinc production used oxidized forms of the ore, reduced by externally heating closed clay
vessels containing a mixture of ore and coal. The vaporized zinc was condensed and cast into slabs.
As ore deposits were worked to greater depths during the 1880s, larger quantities of sulphides and
smaller quantities of oxides occurred. This required new technology for rotating the sulfides to form
crude oxides.
As a result of this technology, sulfuric acid became a by-product of the zinc industry. Development
of zinc-lead ore fields in Missouri, Kansas, and Oklahoma in 1895 gave a great impetus to the
building of gas-fired zinc smelters in the region.
The discovery of natural gas in and west of this area fueled developments, and the tri-state region
became known as the Gas Belt. Westward migration created a great need for galvanized, zinc-coated
steel for fencing, corrugated sheet metal, and brass hardware. In 1852, Samuel Wetherill invented a
grate furnace to produce zinc oxide from oxidized ores, a
so called American process that was perfected in the last half of the nineteenth century.
During the first quarter of the twentieth century, as new mining districts were opened up in the
Rocky Mountain area, in Tennessee, and in Virginia, the froth flotation technique for separating
sulfide minerals from associated rock became the major mode of production. Demand for zinc
during World War I led to great expansion of the U.S. zinc mining and smelting industry. It also
spurred introduction of the electrolytic process in 1916, which used electrical energy as a substitute
for coal and gas in freeing zinc from its mineral compounds. In the course of improving the process,
it became possible to produce high-purity zinc. The uses for this zinc were vast, enabling mass
production of intricate, precision shapes. When alloyed with aluminium, zinc products were
instrumental in the burgeoning automobile and appliance industries beginning in the 1930s. New
smelting techniques recovered cadmium as a by-product, which is valuable for its attractive and
durable finish when plated onto other metals.
Introduction
To
Organization
HISTORY
Hindustan Zinc Ltd. was created from the erstwhile Metal Corporation of India (MCI) on 10th
January 1966 as a Public Sector Undertaking. In April 2002, Sterlite acquired a 46% interest in
HZL from the Government of India and the open market, and it became a part of the Sterlite
group. Since then HZL has been growing from strength to strength. In August 2003, Sterlite
acquired a majority state in HZL by acquiring another 19.9% interest from the Government of
India.
Today HZL is India’s leading Zinc producer.
HZL is a vertically integrated Mining & Smelting company, gearing up to:
 Harnessing mining resources to help India maintain self-sufficiency in

Zinc.
 Become a global leader in Zinc.
 Create value for all entities whether it is Customers, Investors or
Employees.
 Constant innovation, meticulous attention to detail, extensive
investments in R&D and technology are the hallmarks of HZL making it a
multi-unit and multi-product company.
VEDANTA is a London listed metals & mining company. The major metals produced are
Aluminum, Copper, Zinc & Lead. Vedanta is India’s only integrated Zinc producer. The
principle operations are in Rajasthan, dominated by Rampura Agucha Mine, Rajpura
Dariba mine, Zawar mines. The Zinc business of Vedanta is managed with in Hindustan
Zinc Limited. HZL is India’s only integrated Zinc company, operating from Mines to
finished metal & supplies around 90% of India’s Zinc requirements. Vedanta is a FTSE
100 metals and mining company. Our principal operations are in India, Zambia and
Australia. The major metals produced are Aluminums, Copper, Zinc and Lead. Our
mission is to create a world-class metals and mining group and generate strong financial
returns.
Sustainable development is an integral part of our business philosophy. Our processes

and performance have evolved on safety, health and environment in tandem with our
sustainable development goals. We stay committed to continue to improve our
performance in line with our HSE & Social Policy.
Hindustan Zinc Smelter, Chanderiya is a refinery located in 10 km north of Chittorgarh,

Rajasthan, India. It is active in the commodities like Copper, Lead, and Silver etc. This is
the biggest and modern Zinc Refinery of India.
Hindustan Zinc Limited (HZL) was incorporated in January 1966 as a public sector
company, after the takeover of the erstwhile Metal Corporation of India Limited, to develop
mining and smelting capacities and to substantially meet the domestic demand of zinc and
lead metals.
MANAGEMENT PROFILE
BOARD OF DIRECTORS
Shri Agnivesh Agarwal, Chairman.
Shri M.S. Mehta, CEO & Whole-time Director
Shri S.k. Mittal, Director
Smt. Ajita Bajpai Pande, Director
Shri G.Srinivas, Director
Shri Nand Kishore Shukla, Director
Shri Anil Agarwal, Director
Shri Navin Agarwal, Director
Shri Tarun Jain, Director
HINDUSTAN ZINC AT A GLANCE:-
Hindustan Zinc Ltd. was created from the erstwhile Metal Corporation of India (MCI) on
10th January 1966 as a Public Sector Undertaking. In April 2002, Sterlite acquired a 46%
interest in HZL from the Government of India and the open market, and it became a part of
the Sterlite group. Since then HZL has been growing from strength to strength. In August
2003, Sterlite acquired a majority state in HZL by acquiring another 19.9% interest from the
Government of India.
HZL produces Zinc, Lead and by-products viz. Sulphuric Acid and Silver. HZL
achieved an all-time high production output of 293,699 tones Zinc and a record
production of 999,007 tones of Zinc concentrate during 2005-06.Today HZL is India’s
leading Zinc producer.
HZL is a vertically integrated Mining & Smelting company, gearing up to:
 Harnessing mining resources to help India maintain self-sufficiency in
Zinc.
 Become a global leader in Zinc.
 Create value for all entities whether it is Customers, Investors or
Employees.
Constant innovation, meticulous attention to detail, extensive investments in R&D and
technology are the hallmarks of HZL making it a multi-unit and multi-product company.
GROWTH HISTORY OF THE COMPANY
Driven by the capability of 6,359 employees, Hindustan Zinc Limited is the world’s
second largest zinc producer.
1966:
- Hindustan zinc limited was incorporated from erstwhile metal Corporation of India on
10 January 1966
1991:
-Chanderiya Pyro-metallurgical lead zinc smelter and Rampura Agucha mine began
production.
2002:
-Acquired by Sterlite industries (India) Limited on 11 April 2002.
2003:
-32,000 tons of zinc debottlenecking completed at Debari zinc smelter and Vizag zinc
smelter
-Debottlenecking of Rampura Agucha Mine from 1.37million tones per annum to
2.30million tones per annum
2004:
-35,000tonnes of zinc debottlenecking completed at Chanderiya Smelter Comp 2005:
-Commissioned 170,000 tons per annum of hydrometallurgical zinc smelter (Hydro)at Chanderiya smelte
-Commissioned 2*77MW captive power plant at chanderiya smelter Complex.
-Rampura Augucha Mine expansion from 2.30million tones per annum to 3.75million
tones per annum.
2006:
-Commissioned 50,000 tons per annum of Ausmelt Lead smelter at chanderiya smelter
complex.
-Sindesar Khurd Mine began production with an initial capacity of 0.3million tones per annum.
2007:
-Commissioned 170,000 tonnes per annum of hydrometallurgical zinc smelter (Hydro)
ina benchmark time of 20month at chanderiya smelter complex.
-Commissioned 38.4MW of wind Energy farms at Gujarat.
2008:
-88,000 tonnes per annum zinc debottlenecking completed at chanderiya
smelter complex and debari zinc smelter .
-Rampura Augcha Mine expension from 3,75million tones per annum to
5.00million tones per annum .
-Commissioned additional 68.8MW Wind energy farms making the
company’s total Wind energy capacity to 107.2MWas on 31March 2008
INDIAN MARKET: ZINC
Spurred by industrialization and infrastructure demand, India has the potential to see high growth
in zinc consumption. In 2007,India zinc demand rose strongly by 9.5%to 0.47 million tonnes,
the increase in zinc demand is led by India fast growing galvanizing sector which accounted
for about 70% of the total zinc demand. For 2009-10, the rise in demand of zinc is expected to
remain robust driven by realty growth, manufacturing sector and infrastructure.
USE OF ZINC:
:
FIRST USE OF ZINC:

GALVANISING Zinc is the one of the best form of the protection
against corrosion, and used extensively in
building construction infrastructure, household
appliances, automobile, steel furniture,
and many more.
ZINC OXIDE The most widely used zinc compound, zinc

oxide is used in valcanisation of rubber,
as well as a ceramics, paints, animal feed,
pharmaceuticals and other application.
A special grade of zinc oxide has long been
used in photocopiers.
DIE CASTINGS Zinc is a ideal material for die castings and is

extensively used in hardware, electrical
equipment, automotive and electronic
components.
PRODUCTION & OPERATION PERFORMANCE
Hindustan zinc is the second largest integrated producer of zinc in the world. Its main
product are zinc and lead, beside sulphuric acid, cadmium & silver.
Hindustan zinc’s operation can be classified into mining and smelting currently. It has
operating facilities at seven location, of which four are mining operation and the remaining
three are smelting, barring the smelting facilities at Vishakhapatnam in Andra-Pradesh , all
other facilities of the company are in the state of Rajasthan. A part from sindesar khurd.
Which is a new mining site , the other six units are accredited with ISO 14001:2004 for
environment, and OSHAS 18000 for health and safety.
.
Hindustan Zinc Ltd. (HZL) is the only integrated Zinc producer in India and owns captive
Zinc mines that supply all of HZL’s Zinc concentrate requirements for its smelters. HZL
operates open cast (Rampura Agucha Mine) as well as underground mines (Rajpura
Dariba and Zawar Mines) with state of the art technology, with Rampura Agucha mines
being one of the most cost-efficient Zinc mines in the world.
Rajpura Dariba Mines

Commissioned 1993
Location 75 km north-east of Udaipur, Rajasthan, India
Capacity 1.3 MTPA ore Including Sindesar Kurd mine’s

capacity of 0.3 MTPA
Details An underground mine with onsite concentrator and

two vertical access shafts. Mining is done through
vertical crater retreat and blast hole stopping. Ore is
crushed underground before hoisting and
stockpiling for secondary and tertiary crushing.
Ore Grade Zinc 6.0%, Lead 1.7%(Grades are as on 31 March
2006)
Zawar mines
Commissioned 1942
Location 40 km east of Udaipur, Rajasthan, India
Capacity 1.2 MTPA ore
Details An underground mining complex consisting of four

underground mines and one concentrator for all mines.
Mining is done with sublevel stopping with matching
infrastructure.
Ore Grade Zinc 4.3%,Lead1.9%

(Grades are as on 31 March2006)
Certifications ISO 9001:2000, ISO 14001:1996, OHSAS 19001:1999
The company mining operations are located in Rampura agucha, Rajpura, dariba, Sindesar
khurd and zawar mines all in Rajasthan. Rampura agucha, an open cast zinc-lead mine, is
located in Bhilwara district 225 K.M. north of Udaipur, Rajasthan. it is word’s third largest
open cast mine for zinc and lead ,with a capacity of 5.0 Million tones per annum after a
recent expansion. It is also one of the lowest cost zinc mines in the world .and has a 55
certification and the for star rating form the British safety council. The other three mines
Rampura agucha, Rajpura, dariba,Sindesar khurd and zawar mines with an annual
capacity of 0.3 Million tones ,0.6 Million tones and 1.2 million tones of respectively:
SMELTING:
Hindustan zinc’s smelting facilities are located at Chanderiya and Debari in Rajasthan and
Visakhapatnam in Andhra Pradesh. Chanderiya smelter complex with a capacity of
525,000 tons of zinc is the world’s largest single location zinc smelting complex.
During 2007-08, Hindustan zinc received the coveted London metal Exchange (LME)
registration for zinc metal produced from its hydro I smelter at chanderiya under the brand
of Hindustan zinc SHG 99.99 chart G give the details of capacities and production of the
smelting operation.
While increased in saleable metal output was driven by the increased in Hydro-II facility at
chanderiya coming on stream in third quarter of FY2008 production of the existing
capacities at chanderiya and other location also contributed to this growth .during the year
production at debari and vishkhapatnam increased by 5.6% and 8.3% respectively.
Hindustan Zinc Ltd. (HZL) operates smelters using the ISP™ pyrometallurgical (Chanderiya
Lead Zinc Smelter), RLE hydrometallurgical (Debari, Vizag and
Chanderiya Smelters and Ausmelt™ (Chanderiya Lead Smelter) process routes.
Chanderiya Lead Zinc Smelters(CLZS)
Commissioned 1991
Capacity 105,000 TPA of refined Zinc, 35,000 tpa of refined Lead –
pyrometallurgical lead – zinc smelter.
170,000 TPA of refined Zinc - Hydrometallurgical zinc smelter.
50,000 TPA of refined Lead – Ausmelt™ lead smelter.
Details A pyrometallurgical smelter using ISP™ technology. Main by-
products are Sulphuric Acid and Silver
A hydrometallurgical smelter using the state-of-the-art RLE
technology commissioned in the year 2005-06. Main by-product is
Sulphuric Acid. An Ausmelt™ lead smelter commissioned in
February 2006
Certifications ISO 9001:2000, ISO 14001:1996, OHSAS 19001:1999 (For Pyro

Plant)
Captive Power Coal based 154 MW captive power plant commissioned in 2005.
Generation
DEBARI ZINC SMELTER
Commissioned 1969
Capacity 90,000 TPA of refined Zinc
Details A hydrometallurgical smelter using RLE technology. Main by-

products are Sulphuric Acid and Cadmium. Plant is equipped
with 29 MW of captive power generation capacity.
VIZAG ZINC SMELTER

Commissioned 1977
Location 17 km from Vishakhapatnam, Andhra Pradesh, India
Capacity 56,000 TPA of refined Zinc
Details A hydrometallurgical smelter using RLE technology. Main by-

products are Sulphuric Acid and Cadmium. The plant obtains
part of its power requirement at low-cost due to shareholding in
a gas utility company in Andhra Pradesh.

VISION AND MISSION OF COMPANY
Vision: Be a world-class zinc company, creating value, leveraging mineral resources and related
competencies.
Mission:-
• Be a lowest cost zinc producer on a global scale, maintaining market leadership .

• One million tons zinc-lead metal capacity by 2010
• Be innovative, customer oriented and eco-friendly, maximizing stake-holder value.
Highlight:-
• One of the world’s largest integrated zinc and lead producer.

• Refined zinc production capacity 669,000 tons per annum .
• Refined lead production capacity 85,000 tons per annum.
PROJECTS: GROWTH-NEXT STAGE:
The company has recently announced a list of new project in mining smelting and captive
power plants, which will be made operation by 2010. These are:
-Mining: Expansion from 5.0 million tones per annum to 6.0 million tones per annum at
Rampura Agucha; expansion from 0.3 million tones per annum to 1.5 million tones per
annum at sindesar khurd; and a new mine with an initial capacity of 0.3 million tones per
annum at Kayar in Rajasthan.
-Smelting: set up a 210,000 tons per annum zinc hydrometallurgical plant and a 100,000
tons per annum lead plant at Rajpura Dariba.
-Captive power: to meet the energy requirements for these operation, the company will also
add 2*80 MV captive power plants at Rajpura Dariba.
Completion of .These project will take our annual mining capacity to more than 1 million
tones (1,065,000 tons) per annum –making Hindustan zinc the world’s largest zinc
producer by 2010, with fully integrated mining and captive power generation capabilities.
In addition to the above, we also expect to progressively increase our silver production from
the current levels of 2.8 million ounce per annum to a level of approximately over 16.1
million ounce per annum.
TYPES OF ZINC PRODUCES BY HZL

Special Grade Zinc
First Use End-Use

Automotive equipment, household appliances, fittings,
Die Casting and Gravity Casting
toys, tools, etc.
High Grade Zinc

Special high grade zinc 99.995%
Ingot weight 25 kg each (+/- 2 kg)
Bundle weight 1000 kg each (+/- 50 each)
Bundle configuration 4 ingot/ layer X 10 layer
Bundle dimension 960 (+/- 10)mm length
470 (+/- 10) mm width
475 (+/- 10) mm height
First Use End-Use

Building/construction, energy/power, steel furniture,
Corrosion Protection (galvanizing,
agriculture automotive/transport.
zinc thermal spraying, electro
plating, zinc rich paintings)
Building/construction,fittings automotive and electrical
Brass (copper-zinc alloys)
equipments.
aluminum alloys, magnesium alloys
Building/ construction.
Rolled Zinc
Automotive/transport, computers medical equipment,
Batteries
construction products.
Food industry, animal feed, fertilizers, pharmaceutical
Zinc Compounds
industry, cosmetics industry.
Prime Western Grade Zinc

First Use End-Use
Corrosion Protection (galvanizing,

Building/construction, energy/power, steel
zinc thermal spraying, electro
furniture, agriculture automotive/transport.
plating, zinc rich paintings)
Tyres, all rubber goods.
Zinc Oxide
CHANDERIYA LEAD ZINC SMELTER

An Introduction
Chanderiya Lead Zinc Smelter was established in the year 1989. It started
raising Lead Zinc from its Agucha Mines in Udaipur.
There are many places in our country, where we get different types of metallic
substance as raw materials for industries. In these substances the metals are
formed in compound form.
Plenty of minerals are, obtained in Rajasthan. The Jawar Mines in Udaipur are famous as a
source of zinc all over world. Bhilwara the Beawar, Ajmer, Dungarpur, Banswara & Tonk
are the famous places as a source of mica. There are basically 2 types of assets.
A) Mines :-
i) Zawar Mines
ii) Rampura Agucha Mines
iii) Dariba Mines
B) Smelter :-
i) Deriba Smelter
ii) Chanderiya Smelter
iii) Vizag Smelter
1) Raw Material Handling Plant (R.M.H.)
In the Hydro plant the raw material used is Zinc- sulphide (ZNS) which is
send to the Roaster Furnace through the chain conveyers.
2) Roaster plant -
2.1 Concentrate Storage
The zinc concentrate is delivered by trucks and is discharged into two underground bins.
Several belt conveyors transport the concentrate from the underground bins to the
concentrate storage hall. A Pay loader feeds the materials into two hoppers. By means of
discharging and transport belt conveyors including an over-belt magnetic separator, a vibro
screen and a hammer mill, the materials are transported to the concentrate feed bin.
Dross material from the cathode melting and casting process will be added to the feed
material before the vibro screen. For moistening of the concentrate several spraying nozzles
are foreseen in the concentrate storage hall, as well as on the conveying belt before the
concentrate feed bin.
2.2 Material Feeding System and Fluid Bed Furnace
The roaster with a grate size of 123 square meters is designed to treat concentrates of
varying compositions. The produced calcine has the following characteristics.
Sulphide sulphur in calcine approx. 0,3% of sulphide sulphur.
Sulphate sulphur in calcine approx. 1,8% of sulphate sulphur
Blended feed from the concentrate feed bin is discharged onto a discharge belt conveyor,
which in turn discharges onto a rotary table feeder. The roaster is fed then by two slinger
belts. The average particle size distribution of a standard concentrate feed mix is given
below:
The loading level gate at the concentrate bin outlet, which changes the material loading level
on the belt, coarsely controls the quantity of the feed flowing onto the discharge belt
conveyor.
The fine control occurs by means of the belt speed, which can be accelerated or slowed
down by a remote-controlled PIV gear drive. The coarse adjustment is made only once,
during start-up, with fine adjustments being made as necessary during operation. The rotary
table feeder supplies concentrates to the slinger belts, which directly feed into the roaster.
The slinger belts provide a very soft, equal, and fine distribution of the concentrates in the
bed area. It is particularly important to distribute the fine material over the surface of the fluid
bed to prevent local material deposits and the development of gas zones of varying S02
concentration.
For the initial charge of concentrates, the start-up burners and lances using fuel oil heat the
roaster to ignition temperature. The grate itself is made of steel, lined with castable materials.
The combustion air serves both as a carrier medium for the fluid bed and as a source of
oxygen for the predominant reaction, which converts zinc sulphide to zinc oxide and sulphur
dioxide.
ZnS + 1.5 O2 -> ZnO + SO2 ∆ H = -446 kJ/mol
The reaction in the roaster is strongly exothermic, and the gases leave the roaster with a
temperature of approximately 930°C - 975°C and with an S02 concentration of approximately
10,2% by volume, dry basis.
A portion of the surplus reaction heat is absorbed by cooling coils installed in the fluid bed in
the form of evaporator heating surfaces connected to the forced circulation system of the
waste heat boiler, thus cooling the fluid bed by indirect heat transfer. The flexibility needed
for the operation of treating concentrates with varying calorific values is provided by the
combined direct/indirect cooling of the turbulent layer.
A portion of the feed charged into the roaster agglomerates in the bottom of the fluid bed and
would result in a continuously increasing pressure loss in the roaster if an appropriate
quantity of material were not withdrawn.
Bed material is withdrawn via:
 The continuous roaster overflow.
 The purge device for coarse agglomerates.
The roaster overflow functions by gravity and its barrier rim can be raised or lowered by the
insertion of weir plates. The purge-discharging device is operated manually and withdraws
the material from the grate level and thus prevents the accumulation of the coarser-sized
particles. The operation frequency depends on the formation of coarse agglomerates,
however as an indication and for 1st start-up the discharge should be operated once per
shift.
The roaster has a cylindrical bed section, a conical intermediate section, a cylindrical
enlarged top section, and a grate area of 123 square meters.
The enlarged cylindrical section enables a complete roasting of even the finest calcine
particles without the occurrence of a secondary combustion phenomenon. For process
optimisation 10 secondary air nozzles are installed to be able to distribute additional
roasting air above the bed. A slight draught is maintained at the roaster gas outlet to ensure
the safety of the roaster operation.
Before the first start-up, as well as for start-ups after extended shut-downs, the fluid bed
furnace and the waste heat boiler have to be preheated. For this purpose, the roaster is
equipped with a preheating unit for start-up purposes, which consists of 4 oil burners and
12 oil lances with accessories.
The necessary combustion air is taken from the main roaster air fan and the start-up and
cooling air fan.
2.3 Calcine Discharging System
The calcine is discharged at four points during normal operation:
 Roaster
 Waste heat boiler
 Cyclones
 Hot electrostatic precipitator
The cyclone and precipitator dust is received relatively cold (300-350°C) and sufficiently fine
in size, whereas the calcine of the roaster and waste heat boiler requires primary cooling as
well as grinding to the size required for leaching. This results in the following arrangement of
the calcine handling.
Roaster calcine and boiler dust are combined in a common chute and passed to a drum
cooler. A water-cooled rotary valve provides the gas seal of the boiler chain conveyor. The
cooling air blower cools the boiler chain conveyor. The material temperature at the drum
cooler outlet is below 150°C. The pre-cooled calcine is transferred into a ball mill via an
inclined chain conveyor. This ball mill is designed to achieve the desired grain size, which is
90% below 0.075 mm and 70% below 0.050 mm for the total calcine.
The finest dust precipitated in the hot gas ESP is combined with the mill discharge and
transferred to the calcine silos via the pneumatic transport system.
A bag filter is provided to capture fugitive dust from the calcine handling ventilation system.
The combined calcine from the ball mill, cyclones and hot-esp are transported via a chain
conveyor to the calcine intermediate bin. Screw type compressors provide the air for the
pneumatic transport pumps, which transport the calcine to the calcine silo.
The calcine silo bin is equipped with a separate storage dedusting air fan.
The hot dust laden gas stream leaving the roaster is drawn into the waste heat boiler under
suction from the SO2 blower.
In the boiler, the dust-laden gases are cooled down from the roasting temperature to about
350°C before entering the dust precipitation system.
The waste heat boiler is a forced-circulation-type boiler for the production of superheated
steam. The convection heating surfaces of superheaters and evaporators are combined in
bundles in a suspended arrangement.
The waste heat boiler is equipped with a membrane tubed settling (drop-out) chamber ahead
of the front convection bundles. In the settling chamber, part of the dust carried along with
the gas is separated.
Since the waste heat boiler handles roasting gases having very high dust content, a
mechanical rapping device has to be provided. Pneumatic cylinders drive these rappers.
Cooled gases leaving the waste heat boiler flow into the hot electrostatic precipitator (ESP)
for final dust removal.
The SO2 bearing gases goes to acid plant through Gas cleaning section. In Acid Plant SO2
is converted into SO3 in presence of of catalyst. SO3 is absorbed by H2SO4
SO2 + O2 =SO3
SO3 + H2O = H2SO4
3) LEACHING & PURIFICATION -
The purpose of leaching is to extract maximum zinc from the calcine into zinc sulphate form
and to purify the solution from all other impurities like copper, cadmium, cobalt, arsenic
nickel, iron, germanium etc. to the maximum extent before sending the solution to zinc
electrolysis plant for extraction of zinc. The copper is recovered as copper cement and
cadmium as cadmium sponge. The iron present in calcine is also leached during hot leach
operation and is precipitated out as sodium jarosite by addition of sodium sulphate. All
other impurities go along with the jarosite cake.
The leaching section is subdivided into various sections:
1) Calcine storage and feeding
2) Neutral leaching – To convert zinc oxide into ZnSO4 solution at ~5 pH
in presence of excess calcine so as to get minimum impurities in neutral
overflow solution.
3) The zinc oxide remaining un-dissolved during neutral leaching is leached at higher
temperature (70-80°C) and acidity (40-50 gpl) known as Hot Acid Leaching I (HAL I).
Zinc Ferrite (ZnO Fe2O3) formed during roasting is not leachable even during HAL I. To
dissolve zinc contained in zinc ferrite, more aggressive leaching (90-95°C, 116 gpl acidity)
is adopted wherein both zinc and iron go into solution. This stage is termed as Hot Acid
Leaching II (HAL II). This step helps to achieve very high overall zinc recovery (97%).
4) Jarosite precipitation – It is required to remove the iron from ZnSO4 solution,

which has leached during hot acid leaching II-stage. This is done at high temp (100 °C)
and by adding sodium sulphate to precipitate iron as sodium jarosite. The other impurities
are also precipitated along with jarosite during this stage.
5) Pre-Neutralisation – This stage is to eliminate the residual iron in clear solution

from jarosite before entering the neutral leaching. Calcine is added and pH ~4.5 is
maintained to precipitate iron as ferric hydroxide.
2.1 Neutral Leaching

The neutral leaching is the most important section of the leaching plant, because most of
the zinc is dissolved here.
Calcine from the calcine storage day bins will be fed via star feeder, weighing belt conveyor
and screw conveyor into the first and third NL leaching tank.
The homogenized solution made up of spent electrolyte, pre-neutralized solution, re-
circulation streams from the purification section and MnO2 as well as MnO2 slurry from the
tank house is pumped to the first neutral leach tank via a flow control valve.
The main amount of calcine added to the leaching section is fed to the first tank of the NL
section.
To eliminate all the iron in solution and to precipitate harmful impurities it is required to
neutralise the solution to a pH of 5.2. This final pH-adjustment is done in the third NL tank
by adding calcine.
The final acidity in the last tank of the NL leaching cascade should be maintained very
exactly at a pH of 5.2 to 5.4). At this pH value the calcine added has been minimized, thus
obtaining a very small amount of unreacted calcine in the neutral leach residues.
The suspension from the last NL tank containing the un-leached calcine, iron precipitates
and zinc ferrites flows via a launder to a thickener for solid-liquid separation. To accelerate
the solid-liquid separation diluted flocculants are added to the solution.
The solids, which settle on the thickener’s conical bottom, are pushed towards the center
by means of the thickener rake, from where they are pumped to the hot acid leaching
section to recover the zinc from excess of calcine added to the NL section and from the un-
dissolved zinc ferrites (ZnO x Fe2O3).
The clear NL thickener overflow is collected in a pump tank, from where it is pumped to the
purification section. The basic reaction during neutral leaching is as follows;
ZnO + H2SO4 = ZnSO4 + H2O
MeO + H2SO4 = MeSO4 + H2O
Me = metals other than zinc present in concentrate.
2.2 Hot Acid Leach I and II
The neutral leach residue and the leaching residues from the pre-neutralization step, are
leached in two counter current hot acid I, II leaching steps.
The main purpose of this two-step counter current leaching step is to break up the incoming
zinc ferrite to obtain an overall zinc recovery 97% and a lead-silver residue. Lead-silver
residue shall be fed to the existing Imperial Smelting Furnace (ISF).
Each hot acid leaching step consists of leaching tanks arranged in a cascade and a
thickener.
Both of the leaching steps, hot acid leach II and I, are run at elevated temperatures and
higher acidity.
The acidity control is done by increasing or decreasing the addition of spent electrolyte into
the hot acid leach II. Temperature is maintained by means of steam.
During this aggressive leaching almost all of the zinc ferrites will go into solution. The
resulting lead and silver residue obtained after the hot acid leach II is separated from the
acid leaching solution in a thickener. The hot acid leach II thickener overflow is pumped to
the acid leach I, whereas the acid leach I thickener overflow will be sent to the jarosite
precipitation section.
The Pb-Ag residue from the hot acid II leach thickener underflow is pumped to filter presses
for filtering. The Pb-Ag filter press cake is collected in a concrete box from where it is sent
to the existing plant for further treatment. The filtrate is returned to the thickener.
During the hot acid leaching steps not only zinc but also iron from the zinc ferrites is
dissolved. This iron must be removed before sending this solution to the neutral leaching
step. The iron removal is achieved by neutralizing the solution with calcine to precipitate the
dissolved irons as jarosite. To minimize the addition of calcine to the jarosite precipitation
step and to pre-purify the jarosite thickener overflow prior to joining the neutral leaching
step a pre-neutralization step will be provided.
Main reaction steps are as follows;
3ZnOFe2O3 + 12H2SO4 === 3ZnSO4 + 3Fe2(SO4)3 + 12H2O
2.3 Jarosite Precipitation

During the jarosite precipitation step the iron is precipitated selectively out of the solution as
a basic iron sulphate jarosite. The total reaction is the following:
3 Fe2((SO4)3 + 10 H2O + Na2SO4 = (Na)2 (Fe6(SO4)4(OH)12) + 6 H2SO4
This reaction gives the end product of several intermediate reaction steps with
partly hydrolysed iron sulphate. As an equivalent amount of sulphuric acid is
liberated during the precipitation, calcine will be added continuously to
maintain a fairly constant acidity of the solution. To optimize jarosite formation,
Na-ions must be present.
Jarosite formation allows for the co-precipitation of a number of impurities
brought into solution during the two hot acid leaching steps. Sodium sulphate
(Na2SO4 x 10 H2O) will be added into the first tank of the jarosite tank cascade
from a bin.
The discharge from the last reaction tank flows to the jarosite thickener for
solid liquid separation. To accelerate the solid-liquid separation diluted
flocculent are added to the solution prior to entering the thickener.
The underflow from the jarosite thickener containing the jarosite formed during
the iron precipitation and the residues from the calcine used for the
neutralization is washed on vacuum belt filters to minimize soluble zinc losses,
while adding a minimum amount of water.
2.4 Jarosite Disposal

Jarosite residue is converted to an inert material “Jarofix” by blending and
curing with cement and lime at certain proportion. The converted jarofix is
transported by trucks to the waste disposal yard.
There is also a provision maintained for repulping the jarosite redidue and
pumping to an impervious storage pond located at about 2 kms from the
place.
2.5 Purification
The purification of neutral leach solution is necessary to remove certain
elements like copper, cadmium, cobalt, and nickel as major impurities and
also small amounts of arsenic and antimony, in so far as these impurities have
not been completely removed during the ferric hydroxide purification in the
neutral leaching plant. The purification is carried out by the addition of zinc
dust. The purification of the neutral solution will be carried out in three main
steps:
The first step or cold purification for the removal of copper and cadmium as
impurities.
The second step or hot purification for the removal of cobalt and nickel as
Impurities
Third stage shall be polishing stage.
The impure neutral solution coming from the neutral leach thickener is stored
in a storage tank before being pumped to the purification tanks of the first
purification step.
2.5.1 Cold Purification

In cold purification step the neutral solution produced in the leaching plant is
sent to strip the solution from copper-cadmium by means of zinc dust. The
temperature for cementation is 60 to 650C, hence no heating or cooling of the
solution during the cold purification is required.
2.5.2 Hot Purification

In the hot purification section, cobalt and nickel are precipitated out of the
solution. The process requires a temperature of >750C and the addition of
Potassium Antimony Trioxide (PAT) and copper sulphate in order to improve
the zinc dust reactivity and accelerate the precipitation reaction.
The main reaction in purification section is as follows;
MeSO4 + Zn = ZnSO4 + Me
Me is metals as Cd, Cu, Ni, Co etc.
2.5.3 Polishing Stage

As the name suggests, in this stage the impurities not removed earlier gets
removed by the addition of Zinc dust. The extra Antimony if any is also
removed in this stage. The cake from polishing stage is recycled to first stage
of purification as it is mainly of zinc dust.
The final pure electrolyte after this polishing step is pumped to Electrolysis
plant for extraction of zinc metal by electrolytic process.
Purification & Cadmium Plant
Zn Powder & PAT
Impure Zn SO 4 Zn Powder
Solution Zn Powder
(from NL)
Cold Purification Hot Purification Polishing
Steam
HE
Filtration
Filtration
Cell Pure Solution
Cake Co Cake Filtration
Acid to Electrowining
Cake Cake
Steam Re-leaching
Filtration
Cu Cake
Filtrate
Zn powder
NaOH Cd Precipitation
Filtration Cd
Sponge
Filtrate to
Jarosite
2.6 Cadmium Plant

The filter cake from the cold and hot purification contains all the Cadmium,
Cobalt, Nickel as well as Copper together with the excess of zinc dust. This
filter cake is treated in the cadmium plant to recover Copper cement, Cobalt
residue and Cadmium as cadmium sponge with a purity of 95%. The cadmium
plant operates in batch process and involves the following main steps:
Filter cake leaching with spent electrolyte to leach excessive zinc
Removal of copper cement after zinc and cadmium is dissolved
Selective cadmium precipitation with zinc dust
Disposal of products/wastes
The copper cement shall be sold as by-product.Melting and Casting –
3.1 Tank House
The tank house contains 124 numbers RCC cell tanks with suitable acid proof
lining.
The cells are arranged in two bays,62 cells in each bay. Each cell is fitted with
114 Aluminium cathodes and 115 Lead-Silver alloy anodes. Pure zinc
sulphate electrolyte is continuously circulated through the cells. DC power
from rectifier is also continuously fed to the cells. zinc sulphate electrolyte
dissociates resulting in formation of zinc metal coating on the cathode plate
and dilute sulphuric acid. As the electrolyte depletes in zinc content , it is
partly purged from the system and enriched with fresh electrolyte. The
electrolyte during its circulation through the cells get heated. This is cooled in
atmospheric cooling tower made of FRP. The zinc metal deposited on cathode
plate is stripped out at every 48 hours in an automatic stripping machine.
The cells are electrically connected by copper bus bras in closed circuit, the
DC power supplied by two rectifiers each of 96 KA , 490 V DC output.
3.2 Melting & Casting Plant
Zinc sheet stripped from cathodes is melted into electrical induction furnaces
each having 22 TPH melting capacity. Zinc sheet is charged into the feed
chute of the furnace. As the zinc melts, the metals is removed by the pumps to
the casting machines.
The melting furnace is provided with doors for periodical removal of dross
from the top molten surface , ventilation system comprising hoods , ducts,
fans and bag filter.
Two casting machines are provided, one dedicated to each melting furnace,
matching their melting rate capacity. One casting machine is for casting 25 Kg
ingots and the other for casting 1Ton jumbo ingots.
FLOW CHART OF MELTING AND CASTING:-
Production in Hindustan zinc
Saleble metal Production(MT)

Product Parameter
2005-06 2006-07 2007-08
Zinc Installed 1,05,000 1,05,000 1,05,000
Metal Capacity
Production 82798 88187 86080

(Pyro
volume
Plant)
Zinc Installed 1,70,000 1,70,000 1,70,000
Metal Capacity
Production 65415 133197 159582

(Hydro 1
Plant) volume
Zinc Installed 1,70,000

Metal Capacity
Production 33536
(Hydro
volume
2Lead
Plant) Installed 51,667 85,000 85,000
Metal ( Capacity
Pyro & 23867 44416 58343
Ausmelt Production
plant) volume
Hydrometallurgical Zinc Smelter
Hydro I Commissioned in 2005

Roast Leach Electrowinning
Technology with Lead Silver
Residue Recovery
210,000 tonnes per annum of Zinc
Hydro II Commissioned in 2007

Roast Leach Electrowinning
Technology with Conversion
Process
210,000 tonnes per annum of Zinc
Lead Smelter Commissioned in 2006

TSL Technology from Ausmelt-
Australia
Cansolv Technology for Sulphur
Recovery
50,000 tonnes per annum of Lead
Coal Based Captive Power Commissioned in 2005
Plant Built by BHEL
2 x 77 MW
Commissioned in 2007
Built by BHEL
80 MW
Certification ISO 9001:2000, ISO 14001:2004, OHSAS
18001:1999
Specification of lead product:-
Lead as per IS Typical Analysis

Element 27:1992 HZL Lead
99.993%
Lead, Min 99.99% 99.99%
5ppm
Copper, Max 30 ppm 5 ppm
5ppm
Antimony, Max 20 ppm 10 ppm
25ppm
Bismuth, Max 50 ppm 50 ppm
5ppm
Iron, Max 30 ppm 5 ppm
20ppm
Silver, Max 20 ppm 20 ppm
5ppm
Zinc, Max 20 ppm 5 ppm
5ppm
Arsenic, Max 20 ppm 10 ppm
Specification of product SHG zinc:
SHGasper Typical Typical

Element IS 209:1992 HZL SHG AnalysisPyro AnalysisHydro
Zinc Min. 99.99% 99.9950% 99.9958% 99.9956%

Lead,
Max 30 ppm 30 ppm 27ppm 27ppm
Cadmium,
Max 30 ppm 20 ppm 2 ppm 1ppm
Iron, Max 30 ppm 20 ppm 7 ppm 9ppm
Copper,
Max 20 ppm 10 ppm 6 ppm 7ppm
3 R :-
• REDUCE
• RECYCLE
• REUSE
5 ‘S’:-
• SERE – To keep useful things only

• SATON – to arrange properly
• SESO – to keep neat and clean
• SEKETSU – to be trained
• SETSUKE – to be self discipline
SUSTAINABILITY DEVELOPMENT:
COMMITTED TO IMPROVING PERFORMANCE

As a responsible corporate citizen Hindustan Zinc has a clear focus on
sustainable
development, it is a key element of our business and corporate philosophy.
Our ability to maximize related opportunities and minimizing the risks is unique
in itself and in turn creating value for our shareholders. Our approach towards
managing environment is one of the best in class in our sector. We follow best
practices in the management of environmental impact and related
opportunities. Employing environment friendly technologies, optimizing the
usage of energy and resources through recycling and reuse procedures,
emissions are kept to an absolute minimum, driving a number of initiatives to
create value from waste and continuously striving to surpass the best industry
standards. We continuously strive to uplift the economic wellbeing of our
neighborhood communities through various initiatives like sustainable
livelihood, health care, and education. Invariably all specific initiatives follow
identification of need in consultation with the beneficiaries.
HEALTH, SAFETY AND ENVIRONMENT (HSE)
Health and safety of Hindustan Zinc’s employees is of paramount importance
to the Company. Preventing workplace accidents and controlling the incidence
of occupational diseases is a top priority, and several technological and
administrative controls have been put in place to achieve health, and
environment objectives. These include: Safety reviews and audits by internal
and external experts.
Routine safety inspection. Employing environment friendly technologies.
Incentives linked with safety performance. Compliance with all the legislations
applicable. Safety score-card. Ensure all our employees including contract
labours implement health and safety policies and procedures. Implementing
learning from near miss incidents/accidents/ first aids. Safety stewardship:
driving safety initiatives down the line.
HEALTH
In addition to various healthcare camps across 173 operational villages in the
neighborhood of its mines and plants (Social Responsibility), Hindustan Zinc
has six hospitals/dispensaries at its operating locations with all requisite
facilities, and with qualified doctors and nurses being available round the
clock. The Company also has tie-ups with reputed hospitals in the country to
provide best health and medical facilities to the employees and their
dependents.
SAFETY
The index used is the lost time injury frequency rate (LTIFR). It is the number
of injuries involving loss of work time per million working hours. In April 2007,
Hindustan Zinc set a target of reducing LTIFR by 20% at its operations. The
actual performance: LTIFR reduced by 44% from 5.46 in 2006-07 to 3.07 in
2007-08. Despite the Company’s continued focus on safety, there were,
unfortunately, five fatalities all related to contract workers. This is a cause of
concern. Hindustan Zinc continues to strengthen its focus on safety by
imparting training programmes to all contracted personnel and better
monitoring of safety related processes to minimize the risk of such incidents.
To sensitize the workforce on health and safety issues, the Company
conducts both introductory and specialized training. Safety training is
compulsory for all new employees and refresher training is periodically carried
out in the different facilities. In 2007-08, HSE training was given to 17,378
employees including contract workmen. Hindustan Zinc will continue to learn
and evolve its safety and occupational health systems according to its
changing needs and best practices in the Industry. Considering the
environment in which the Company is operating increased emphasis will now
be placed on behavioural aspects of industrial safety.
Environment
Hindustan Zinc’s approach towards environmental sustainability is to optimize
resource use, minimize the carbon footprint and conserve bio-diversity in and
around its operating locations. The Company has a qualified team of
environment professionals consisting of certified ISO auditors, environment
engineers, scientists and ecologists.
The team is governed by Hindustan Zinc’s HSE policy, and its functions are
reviewed at various for a such as daily operations meetings, monthly review
meetings at the plant and Company levels, and quarterly HSE Committee
meetings at the group corporate level. All employees from top management to
shop floor workmen are expected to champion the cause of environmental
protection. 2007-08 has seen significant improvement in energy and water
utilisation, reduction in emissions and adoption of environment friendly
technologies across all the operations.
Energy conservation
Hindustan Zinc’s total energy use during 2007-08 was 10.53 terra-joules (TJ).
This included 1.87 terra-watt hours (TWH) of electricity (equivalent to 6.7 TJ),
most of which was produced in captive power plants. About 3.8 TJ of energy
was produced and used ‘at-source’ for the smelting operations. Under Six-
Sigma initiatives, dedicated teams have taken up a number of projects to
reduce energy consumption. Their projects have resulted in a sustained
decrease in specific energy consumption over the last three years. Charts I
and J show the general trend in reduced energy use both in smelters and
mines.
Water Conservation
Similarly, there has been a significant reduction in the usage of water in the
Company’s operations. As shown in Charts K and L, water consumption has
come down significantly for both smelting and mining operations.
Wind Energy
Most of the power generated in India is produced by thermal power plants that
are fuelled by the large coal reserves in the country. We run our captive power
plants to meet the requirements of our mining and smelting operations. Our
power plants operate at the optimal capacity compared to the standard power
utility plants leading to more efficient power generation. In the previous
financial year we reported the commissioning of 38.4 MW wind energy in
Gujarat, and this year we added another 68.8 MW wind energy capacity
making a total installed capacity of 107.2 MW as on 31 March 2008. Further to
this we shall add another 17 MW of wind energy which is progressing as per
schedule.
Rural Infrastructure And Community

Development:
The creation of durable assets and the renovation repair and maintenance of
the existing public utility infrastructure is a major part of the Group's
community programme.
HZL, as part of ongoing community support to local needs at all units, has
undertaken the digging of tube wells and the maintenance of hand pumps. In
partnership with the Government of Rajasthan, HZL is contributing INR 186
million towards the cost
of constructing the Mansi-Wakal dam. This dam is due for completion in
August 2005 and will augment the drinking water supply of Udaipur. Tuticorin
has contributed INR 716,000 to implement the Government’s Sajaldhara
Scheme which will provide drinking water to 43 villages around Tuticorin and
benefit 20,000 people. MALCO undertook desilting operations at Yercaud
Lake by using local youths. This was an important task in revitalising local
drinking water sources. School children have planted saplings around the
sake for better recharge and the use of plastic in and around the lake has
been banned.
Child Care
There are 16 child care centres in Tamil Nadu and two in Orissa for children
between three and six years of age. This was developed in response to
research looking into the needs of families below the poverty line.
Female Empowerment
The Female Empowerment Scheme encourages women to complete their
higher education through Reengus College, founded in 1995. The programme
is driven by the belief that “if a woman in the family is educated then the entire
family gets educated”.
Financial And Organisational Support To People In Distress

Our deepest sympathies go out to all those who suffered in the unprecedented
Tsunami disaster. The Group extended both financial and in-kind support. The
Group contributed INR 15 million to the disaster relief funds in addition to one
day’s wages contributed
by employees. Relief material in the form of clothes, blankets, stoves, food
packets and utensils from the MALCO and Sterlite operations located in Tamil
Nadu were distributed to the victims.
HZL has undertaken various activities as part of drought and famine relief in
the villages around its units in Rajasthan. The activities primarily focus on
providing fodder to livestock, drinking water to humans and livestock, and
digging/deepening of
wells. Immediate relief in terms of food packets and clothes were distributed to
an area near Rampura Agucha mine which experienced flash floods.
Fire tenders, ambulance and medical aid are routinely offered in emergencies
to assist in areas near to Group units.
Corporate Social Responsibility (CSR)

is an integral part of Hindustan Zinc’s business philosophy. Its centrality has
led the Company to undertake several projects aimed at achieving sustainable
socio-economic development of the villages in the vicinity of its plants and
mines. Our approach towards sustainability is to generate and establish
socioeconomic wealth and creating opportunities of entrepreneurship,
employment, and self-sustained businesses for the local community in which
we operate. More importantly we see ourselves as a major facilitator in their
socio-economic development. Through our various initiatives
and a team of 150 qualified CSR professionals, specialists and fieldworkers,
we are positively impacting the lives of 54,209 families across 173 operational
villages in the
neighbourhood of its mines and plants.
AWARDS AND RECOGNITION

The Company has received several awards in 2007-08, both at an overall
corporate level as well as for its individual operating units. However our efforts
towards being a responsible corporate through various sustainable
development initiatives were recognised at the local, national and international
levels. Some of these are given below.
Corporate:
-Golden Peacock Award for Excellence in Corporate Governance, 2007.
-Dun & Bradstreet – American Express Corporate Award 2007 for being the
Top Indian Company in the Non-Ferrous Metals Sector.
Environment/Industrial Activity/Operational Efficiencies:

-Water Efficient Unit Award to Chanderiya Smelter Complex by Confederation
of Indian Industry- GBC, Hyderabad.
-TERI Corporate Environmental Award 2007.
-Asian Power Plant of the Year Award 2007 & Best Emission Reduction
Project in Asia by Asian Power, Singapore.
-Greentech Environmental Excellence Golden Award to Chanderiya Smelter

Complex and Rampura Agucha Mine.
-Greentech Environmental Excellence Silver Award to Debari Zinc Smelter

and Vizag Zinc Smelter.
-Excellence in All Round Performance in Industrial Activity to Vizag Zinc

Smelter by Federation of Andhra Pradesh Chambers of Commerce & Industry.
-Institute of Cost & Works Accountants of India Award for Excellence in Cost
Management for 2006-07.
Safety:
-Golden Peacock Award for Occupational Health and Safety for 2007, for the
Chanderiya
Smelter Complex.
-International Safety Award 2006 from British Safety Council, UK, for the
Debari Zinc Smelter.
-Safety Gold Award 2007 from Royal Society for Prevention of Accidents (UK),
for the Debari Zinc Smelter.
-Meritorious Achievement in NSCI Awards 2006 by National Safety Council of
India, for the Debari Zinc Smelter.
-Safety Innovation Award by Institution of Engineers, Delhi, for the Chanderiya

Smelter Complex and the Debari Zinc Smelter.
Corporate Social Responsibility (CSR):

-Golden Peacock award for Corporate Social Responsibility, 2007.
-TERI Corporate Social Responsibility Award 2007.
-Reader’s Digest Pegasus Corporate Social Responsibility Award 2007.
-State Population Stabilisation Award 2007, Chanderiya Smelter Complex.
-State Level Bhamashah Award 2007: Chanderiya Smelter Complex and the
Debari Zinc Smelter.
WORKING CAPITAL MANAGEMENT
In day to day working of business concern, Working Capital plays an important

role, because Working Capital is required for payment of wages, expenses,
raw materials and payment to creditors. Whether a business firm is earning
profit or incurring loss or facing financial crises can be seen with the help of
quantum of Working Capital due to shortage of Working Capital a business
firm is lame, because there is no sufficient Working Capital a business can not
run its business smoothly. Due to this reason working capital management
has assumed greater importance in every business firm.
The Management of Working Capital is concerned with the management of

the firms current accounts, which includes current assets and current
liabilities.
Working Capital plays equivalent vital role in the business as blood plays in
the human body. Shortage fixed can be tolerated by a business concern for
short period but shortage of working capital can create lots of serious
problems within a period of few days.
In this modern area of cut – throat competition, it has become essential to

provide certain facilities to customers to capture the market; the credit facility
is one of them. Thus working capital is required as there is a time gap
between credit self and collection proceeds from the customers.
Reciprocal relationship between current assets and current liabilities is the

main these of the theory of working capital management.
CONCEPTS OF WORKING CAPITAL
Working Capital means the funds available for day to day operation of an
enterprise. There are two concepts of Working Capital.
(1) GROSS WORKING CAPITAL

(2) NET WORKING CAPITAL
(1) GROSS WORKING CAPITAL –

Gross working capital, simply called as working capital refers to the
firm’s investment in current assets. Current assets are the assets, which in
ordinary course of business can be converted into cash within an accounting
year. Current assets include cash and bank balances, short term loans and
advances bills receivables, sundry debtors, inventory, prepaid expenses,
accrued incomes, money receivable (within 12 months).
The gross working capital focuses attention of two aspects of current
assets management.
a) Optimum investment in current assets and
b) Financing of current assets.
The consideration of the level of investment in current assets should
avoid two danger points-excessive and inadequate investments in current
arranging funds to finance current assets. Whenever a need for working
capital funds arises due to the increasing level of business activity or for any
other reason arrangement should be made quickly.
(2) NET WORKING CAPITAL –

Net working capital refers to the difference between the current assets
and current liabilities. Current liabilities are those claims of outsiders, which
are accepted, to measure for payment with an accounting year and include
creditors, bills payable and outstanding expenses.
Net Working Capital = Current Assets – Current Liabilities
Net working capital can be positive or negative. A positive net working
capital will arise when current assets exceeds current liabilities. It is a
quantitative concept, which indicates the liquidity position of the firm and
suggests the extent to which working capital needs may be financed by
permanent sources of funds.
Working capital can be classified into two categories i.e.
1. Permanent working capital.
2. Temporary or variable working capital.
Permanent working capital:

It is the minimum amount of investment in all current assets which is required
at all times to carry out minimum level of business activities. Tandon
committee has reserved to this type of working capital as “Core Current
Assets”. Amount of permanent working capital remains in the business in one
form or another. It also grows with the Size of the business. It is permanently
needed for the business, and therefore be financed out of long-term funds.
Variable working capital:

The amount of working capital over permanent working capital is known as
variable working capital. The amount of such working capital keeps on
fluctuating from time on the business activities. It may further be divided into
seasonal working capital and special working capital. Seasonal working
capital is required to meet the seasonal demands of busy periods occurring at
stated intervals. On the other hand, special working capital is required to meet
extraordinary needs for contingencies. Events like strikes, fire, unexpected
competition, rising price tendencies or initiating a big advertisement campaign
require such capital.
NEEDS OF WORKING CAPITAL

Funds are required for an enterprise for day to day running. These funds are
generated usually through sales. However, sales don’t convert into cash
instantaneously. This is always time gap between the sales activity and
receipt of cash. Working Capital is required for this period in order to sustain
operating activity of an enterprise.
Therefore, it is clear that Working Capital is required because of time gap
between sales and actual realization of cash. This time gap is technically
termed as operating or cash cycle of business.
Approaches for financing working capital:

There are three approaches to financing the working capital:
1. Hedging approach
2. Conservation approach
3. aggressive approach
Hedging approach:
A firm is said to be following Hedging approach if it matches the maturity of
the debt with the maturity of assets. For the firm following hedging approach,
long term financing will be used to finance fixed assets and permanent current
assets and short term
financing for temporary or variable current assets. As the level of these assets
increases, the long financing level also increases. However, it should be
realized that exact matching is not possible because of the uncertainty about
the expected lives of assets.
2). Conservative approach:

A firm in practice may adopt a conservative approach in financing its current
and fixed assets. The financing policy of the firm is said to be conservative
when it depends more on long term funds for financing needs. Under a
conservative plan, the firm finances its permanent assets and also a part of
temporary current assets, the idle long-term funds can be invested in the
tradable securities to conserve liquidity. The conservative plan relies heavily
on long term financing.
3). Aggressive approach:

A firm may be aggressive in financing its assets. A firm follows aggressive
policy when it uses more short-term financing than warranted by the matching
plan. Under an aggressive policy, the firm financing a part of its permanent
current assets with short term financing. Some extremely aggressive firms
may even finance a part of their fixed assets with short-term financing.
Importance of working capital:

A business firm must maintain an adequate level of working capital in order to
run its business smoothly. It is worthy to note that both excessive and
inadequate working capital positions are harmful. Out of two, inadequacy of
working capital is more dangerous for a firm. Excessive working capital results
in idle funds on which no profits are earned. Similarly insufficiency of working
capital results in interruption of production. This will lead to inefficiencies,
increase in costs and reduction in profits. Working capital is like the lifeblood
of business. If it becomes weak, the business can hardly prosper and survive.
No business can run successfully with out and adequate amount of working
capital.
The following are the few advantages of adequate working capital in the
business:
 Cash Discount: Adequate working capital enables a firm to avail cash
discount facilitates offered to it by the suppliers. The amount of cash
discount reduces the cost of purchase.
 Goodwill: Adequate working capital enables a firm to make prompt
payment. Making prompt payment is a base to create and maintain
goodwill.
 Ability to face crisis: The provision of adequate working capital facilities
to meet situations of crisis and emergencies. It enables a business to
with stand periods of depression smoothly.
 Credit-worthiness: It enables a firm to operate its business more
efficiently because there is not delay in getting loans from banks and
others on easy and favorable terms.
 Regular supply of raw materials: It permits the carrying of inventories
at a level that would enable a business to serve satisfactory the needs
of its customers. That is it ensures regular supply of raw materials and
continuous production.
 Expansion of markets: A firm which has adequate working capital can
create favorable market condition i.e., purchasing its requirements in
bulk when prices are lower and holding its inventories for higher. Thus
profits are increased.
 Increased productivity.
 Research programs.
 High Morale.
Problems of inadequate working capital:
 Firm may not be able to take advantage of profitable business
opportunities.
 Production facilities cannot be utilized fully.
 Short-term liabilities cannot be paid because of non-availability of
funds.
 Its low liquidity may lead to low profitability. In the same way, low
profitability results in low liquidity.
 It may not be able to take advantages of cash discounts.
 Credit worthiness of the firm may be damaged because of lack of
liquidity. Thus it may be lose its reputation; thereafter a firm may not be
able get credit facilities.
Danger of excessive working capital:

 A firm may be tempted to over trade and lose heavily.
 Unable to extract benefits of customers’ credit
 The situation may lead to unnecessary purchases and accumulation of
inventories. This cause more chances of theft, waste, losses etc.
 There arises an imbalance between liquidity and profitability.
 Excessive working capital means funds are idle.
 The situation leads to greater production, which may not be having
matching demand.
 The excess of working capital leads to carelessness about cost of
production.
Determinants of Working Capital:

The need of working capital is not always the same it varies from year to
year or even month-to-month depending upon a number of factors. There is
no set of rules or formulate to determine the working capital needs of the
firm. Each factor has its own importance and its importance of the factors
changes for firms over time.
In order to determine the proper amount of working capital of concern,
the following factors should be considered.
 Nature of business.
 Size of the business unit.
 Seasonal variation.
 Time consumed in manufacturing.
 Turnover of circulating capital.
 Need to stockpile raw material and finished goods.
 Growth and expansion.
 Business cycle fluctuations.
 Terms of purchase and sale.
 Pricing level changes.
 Inventory turnover.
 Dividend policy.
Ratio to measure the efficiency of working capital:

 Current Ratio : Current assets / Current liabilities
 Quick Ratio : (current assets – Inventories) /Current liabilities
 Sales to cash: Sales during a period / Average cash balance.
 Average collection period: Debtors divided by annual credit sales and
the resulting figure multiplied by 365. This ratio indicates how many
days of credit is being obtained from the suppliers.
 Average payment Period: Creditors divided by annual credit purchase
and the resultant figure is multiplied by 365. This ratio indicates how
many days of credit are being obtained from the suppliers.
 Inventory turnover ratio: Sales /Average inventory.
Working capital policy:
Working capital management policies have a great effect on firm’s profitability,
liquidity and its structural health. A finance manager should therefore, chalk
out appropriate
Working capital policies in respect of each competent of working capital so as
to ensure high profitability, proper liquidity and sound structural health of the
organization.
In order to achieve this objective the financial manager has to perform
basically following two functions:
1. Estimating the amount of working capital.
2. Sources from which these funds have to be raised.
Objectives of Working Capital Management:

The objectives of working capital management are two fold:
1. Maintenance of working capital and
2. Ability of ample funds at the time of need.
The basic goal of working capital management is to manage each of the
funds current assets and current liabilities in such a way that an acceptable
level of net working capital is always maintained in the business.
Operating Cycle:
Working capital is required because of the time gap between the sales and
their actual realization in cash. This time gap is technically terms as operating
cycle of the business.
In case manufacturing company, the operating cycle of time necessary to
complete the following cycle of event.
 Conversion of cash into raw materials.
 Conversion of raw materials into work in progress.
 Conversion of work in progress into finished goods.
 Conversion of finished goods into accounts receivables.
 Conversion of accounts receivable into cash.
This cycle is continuous phenomena. In case of “Trading Firm” the operating
cycle will include the length of time required to:
a) Cash into inventories.
b) Inventories into accounts receivables.
c) Accounts receivables into cash.
In case of “Financing Firm” the operating cycle includes the length of time
taken for one year.
a) Conversion of cash debtors, and
b) Conversion of debtors into cash.
Working capital turnover ratio:
It measures the efficiency of the employment of working capital.
Generally higher the turnover, greater is the efficiency and larger the sale of
profits. Working capital turnover ratio can be calculating with help of the
following formula.
Sales
Working capital turnover ratio =
Net working capital
Year 2001- 2002- 2003- 2004- 2005- 2006- 2007-

02 03 04 05 06 07 08
Curren 692.88 736.57 1116.0 736.89 1309. 1480.9 2711.6
t 0 4 0 38 5 3
Assets
Curren 294.54 299.43 446.88 511.73 603.1 826.76 898.44
t 4 2 7 8
Liabilit
y
Workin 398.33 437.14 669.11 225.16 706.2 654.19 1813.1
g 6 2 3 0 9
Capital
Sales 1418.4 1608.7 2079.0 2456.1 4326. 9220.4 8736.9
07 22 13 1 26 5 1
Workin 3.56 3.68 3.11 10.91 6.13 14.09 4.82
g
Capital
T/o
Ratio
WORKING CAPITAL TURNOVER RATIO
Working Capital T/o Ratio Working Capital T/o

Ratio
16
14
12
10
8
6
4
2
0
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Interpretation: It measures the efficiency with which the working capital is

being used by a firm. Higher ratio indicates effective utilization of working
capital. Minimum ratio is of 3.11 in the year 2003-04 and the maximum is
14.09 in the year 2006-07. Increase in the ratio during the study period shows
that the working capital has been utilized efficiently .The trend line shows
upward trend in this ratio; which indicates that company can utilize working
capital effectively in near future.
CASH –
Cash in the business may be compared to the back bone of the human
body, back bone gives the strength to the human body and cash gives
profit and solvency to the business. In a business ultimately a transaction
results either in flow or out flow of cash. The term cash is used in two
senses. In narrow sense it is used for cash, cheques, drafts and demand
deposits in bank. In broad sense it also includes near cash assets like-
marketable securities and fixed deposits in bank. Cash in hand, as an asset
it has no any earning power in itself. But a minimum cash balance is
essential to meet the requirements of the business. The question arise that
what is the proper level of cash or how much cash be kept by a business.
There is no any formula to determine the proper level of cash, which should
be kept by a business. The proper level of cash depends on various factors
like- nature of business, period of credit sale and the position of receivables
and inventory. Now the question arise that what is the aim ti keeping cash.
According to Keynes there are three motives for keeping cash:
1) Transaction motive
2) Precautionary motive and
3) Speculative motive
In general we can say that a business keeps cash to take day to day
obligations, to take benefit from favourable market conditions and to allow
for contingencies.
CASH MANAGEMENT
Cash is the medium of exchange on the common purchasing power and which
is the most significant components of working capital. Cash is the basis input
required to keep the organization running on a continuous basis. At the same
time it is the ultimate output which is expected to be realized by selling goods
and services. An organization should hold sufficient cash, neither more, nor
less. Since excessive cash remain idle which in turn increases the cost
without contributing anything towards the profitability of the organization and in
the opposite case, trading and / or manufacturing operation will be disrupted.
In other words, it can be stated that the higher the level of unused cash, the
greater is the cost of holding it in the form of loss of interest which could have
been earned either by investing it in securities or by reducing the burdun of
interest charges by paying off the loans taken previously. If the level of cash
balance is more than the desired level it shows mismanagement of funds.
Therefore, for smooth functioning and hjgher profitability, proper and effective
cash management is of paramount importance.
Cash is the most liquid asset that a firm owns. It includes money and
instruments like cheque, money orders or bank drafts which banks normally
accepts for deposit and immediately credit to the depositer’s account.
Sometimes near- cash items, such as marketable securities or bank time
deposits are also included cash. The basis characteristic of near- cash assets
is that they can easily be converted into cash.
Concept included:-
Cash management can be seen from two different perspectives depending on
how many
responsibilities it includes: treasury management (basic cash management)
and advanced cash
management.
Basic cash management:

Treasury management or basic cash management propitiates the
development of administrative
techniques conducive to optimizing the level of disposable assets to be
maintained by a company. To prevent breaks in the trading cycle due to lack
of cash, administrators must calculate the cash amount to their level of
activity, plan the timing of the relevant payments and collections and draw up
a policy of investment in assets with high liquidity that can be converted to
cash at a low transactional cost.
It is essential to establish the right level of disposable assets to short-term
financial
investments at companies. Holding wrong amount in cash or cash equivalent
may interrupt the
normal flow of business activities. also the wrong safety margin may result in
financial
difficulties, with firms unable to meet needs that may arise at any given time or
unable to take
advantage of unexpected investment opportunities. Maintaining a cash
surplus thus has a number of advantages. it enables companies to carry on
the normal transactions that arise in the
course of their activities and avoid any treasury gaps. On the other hand it
helps them cover any
unexpected needs for cash by acting as a preventive balance. However, there
are also disadvantages in being too conservative, as reflected in the
opportunity costs entailed by assets with little or no profitability . Having liquid
assets available constitutes an opportunity cost for a
company, as the return on those assets is lower then the return on productive
investments, but there may still be transaction costs arising from the sale or
purchase of financial assets, and disadvantages in terms of taxation. This
overall analysis should strive to shorten collection periods, lengthen payment
periods and avoid idle resources that do not generate returns .
advanced cash management:-

treasury management as a set of techniques that act on the short-term
liquidity of
a company, and at the same time affect those factors and processes that
translate immediately into cash, with the ultimate aim of increasing the
profitability of the company and improving working capital management . cash
management as an overall, integrated service of which the customer takes
that part that best suits him. The management of interest-exchange rate risk
and the management of contractual relationships with financial institutions are
other functions that have been added to cash management, with the purpose
of increasing profitability with the minimum risk and in the best conditions .
it is based on payment and collection management, liquidity
management and banking management which has taken on a broader
perspective includes the planning of disposable treasury assets and their
subsequent monitoring, a strategy for investing surpluses to obtain maximum
profitability and finance deficits with minimum costs, management of
interest-rate and exchange-rate risks and, finally, banking management . Cash
management brings together actions concerned with liquidity management,
payment and collection management, treasury forecasts, banking
management, investment of treasury surpluses
and deficit and financing management functions and financial risk
management.
advanced cash management, not only involves financial tools and
techniques for managing liquidity but entails an entire corporate culture.
“Corporate culture” means “the set of beliefs, expectations and basic
principles shared by the members of an organization .
MOTIVES FOR HOLDING CASH
The term cash with reference to cash management is used in two senses. In a
narrow sense, it is used broadly to cover currency and generally accepted
equivalents of cash, such as cheques, drafts and demand deposits in banks.
The broad view of cash also includes near cash assets, such as marketable
securities and time deposits in banks. The main characteristics of these is that
they can be readily sold and converted into cash. They serve as a reserve
pool of liquidity that provides cash quickly when needed. There are four
primary motives for maintaining cash balances : (i) Transaction motive; (ii)
Precautionary motive; (iii) Speculative motive ; and (iv) Compensating motive.
TRANSACTION MOTIVE –
An important reason for maintaining cash balances is the transaction motive.
This refers to the holding of cash to meet routine cash requirements to finance
the transaction which a firm carries on in the ordinary course of business. A
firm enters into a variety of transactions to accomplish its objectives which
have to be paid for in the form of cash. Business concerns that have highly
predictable inflows and outflows of funds can hold relatively less cash then
firms that have irregular cash flows.
PRECAUTIONERY MOTIVE –
It is also related to the nature and level of business activity. Precautionary
balances are those which are set aside because cash inflows and outflows are
not synchronized. For example, precautionary balance may be used to meet
an unanticipated expenses as the result of an unanticipated decline in sales
revenues.
SPECULATIVE MOTIVE –
It refers to the desire of a firm to take advantage of opportunities which
present themselves at unexpected moments and which are typically outside
the normal course of business. The speculative balances are sensitive to
interest rate changes and are usually hold in the form of interest hearing
securities.
COMPENSATING BALANCE –
A compensating balance is the fourth motive for holding cash. This motive is
with commercial banks that require borrowers to leave a portion of their
borrowed funds in deposit at the bank. Banks may require, that 10% of a loan
be left in deposit. There are two reasons for requiring a compensating
balance; it raise the effective interest rate for banks and it provides banks with
funds to make additional loans.
OBJECTIVE OF CASH MANAGEMENT
The basic objectives of cash management are two – fold : (a) to meet the cash
disbursement needs (payment schedule); and (b) to minimize funds
committed to cash balances. These are conflicting and mutually contradictory
and the task of cash management is to reconcile them.
MEETING PAYMENTS SCHEDULE –
The important of sufficient cash to meet the payment schedule can hardly be
overemphasized. The advantages of adequate cash are: (i) it prevents
insolvency or bankruptc arising out of the inability of a firm to meets its
obligations; (ii) the relationship with the bank is not strained; (iii) it helps in
fostering good relations with trade creditors and suppliers of raw materials, as
prompt payment may help their own cash management; (iv) a cash discount
can be availed of if payment is made within the due date; (v) it leads to a
strong credit rating which enables the firm to purchase goods on favourable
terms and to maintain its line of credit with banks and other sources of credit;
(vi) to take advantages of favourable business opportunities that may be
available periodically; and finally, (vii) the firm can meet unanticipated cash
expenditure with a minimum of strain during emergencies, such as strikes,
fires or a new marketing campaign by competitors.
MINIMISING FUNDS COMMITTED TO CASH BALANCES –

The second objective of cash management is to minimize cash balances. In
minimizing the cash balances, two conflicting aspects have to be reconciled. A
high level of cash balance will, as shown above, ensure prompt payment
together with all the advantages. But it also implies that large funds will remain
idle, as cash is a non-earning assets and the firm will have to forego profits.
CONTROL OVER CASH FLOWS
Drawing of cash plan is not enough, a strict compliance of plan is required

through proper control of cash collections and payments. On the other hand
inflow is to be accelerated, so as to cope with the growing requirements
whereas outflow must be checked. There must also be a proper channedl of
arrangement of investment of surplus cash. For this cash periodical reports
are very much helpful.
ALLOCATION OF CASH INFLOW-

Cash can be conserved through maximized inflow and lesser permanent
investment. Collection can be accelerated by reducing the time gap caused by
waiting time, To speed up collections the followings techniques may prove
useful:
 LOCK BOX SYSTEM -

In this system, a firm establishes the collection centers in
accordance with the concentration of customers hires a post office
box and instruct its customer to remit the bills of cheques directly
to this box. The firm’s authorized bank picks up the remittance
collects for the gain and supply the detail of cheques collected.
Although it is a costlier system but the cheques are collected
immediately.
 PROMPT PAYMENT BY CUSTOMERS –

Prompt billing with the notification what the custmer has to pay,
the period of payment is the way to ensure prompt payment from
customers. Use of modern devices for billing and enclosure of a
sell addressed return envelope will speed up collection from
customers. Another technique which is commonly used is trade
discount.
 PROMPT CONVERSION OF PAYMENTS INTO CASH –

There is a time lag between the cheque is prepared and mailed by
the customer and the time the funds are converted into cash by
the bank. The early conversion of payments into cash, as a
technique to speed up collections, is done to reduce the time lag
between posting the cheque by customer and the realization of
cheque from bank.
 DECENTRALISED COLLECTIONS –
When a number of collection centers are operating instead of
single collection centers at the head office, the time lag between
mailing can be reduced. This is called decentralized system of
collection of bill at multiply centers. This is useful technique to
speed up the collection of accounts receivable.
Besides, collection of payments personally is one of the important
means to accelerate the inflow of funds.
 SLOW DISBURSEMTNS –
A firm should make its payments using the credit terms to their
fullest extent. There is no advantage in paying the amount sonner
than expected or agreed to as this source is free from interest. But
a firm must not make undue delays which may endanger its credit
standing.
In disbursement the centralized system for payment is also very
much helpful in conversation of funds. Payment flot is also one of
the resources of funds. Once a cheque is issued, it takes a
particular time in transit and on the basis flow can be calculated.
Finance Manager of a firm can take advantage of flot in
disbursement but he must be careful, as it may prove riskly.
Advantages of sample cash funds:

a) A shield for technical inefficiency.
b) Maintenance of goodwill.
c) Availing of cash discount.
d) Good bank-relations.
e) Exploitation of business opportunities.
f) Encouragement to new investment.
g) Increase in efficiency.
h) Over coming abnormal financial situations.
Effective cash management requires:
 Systematically anticipating the future.
 Good liaison and sharing data/information across organization

boundaries.
 Clear understanding of responsibilities and accountabilities.
 Sound accounting systems and controls.
 Systematic, timely and effective monitoring, analysis and reporting

(and decision making).
 Budget disciplne including the effective application of sanctions

where necessary.
Benefits:-
 Reduced amounts kept in our bank accounts without incurring overdraft
charges, hence kept more funds invested
 Better estimate of amounts available for investing (budgets and forecast)
 Assisted in decisions on internal lending and external borrowing

Size of minimum cash flow depends upon:-
 Reduced amounts kept in our bank accounts without incurring overdraft
charges, hence kept more funds invested
 Better estimate of amounts available for investing (budgets and forecast)
 Assisted in decisions on internal lending and external borrowing
Max. cash bal. depends upon:-

 Available (short-term) investment opportunities
– e.g. money market funds, CDs, commercial paper
 Expected return on investment opportunities.
o e.g. If expected returns are high, organizations should be quick to

invest excess cash
 Transaction cost of withdrawing cash and making an investment
 Demand for Cash for daily transactions
(Cash Budget helpful)
Instrument of excess fund:-

Treasury bills maturity upto 1 year safest and most liquid
short term investment
Commercial maturity on demand
Nonbank financial institutional maturity negotiatable
Certificates of deposit negotiatable but normally 30, 60, 90 days
representative a term bank deposit and more liquid becoz they can be sold
any time
Need of cash
Transaction need:- cash facilitates the meeting of the day to day expenses
and other debt payment normally inflow of cash operation should be sufficient
for this purpose but in many cases it is only the reserve cash bal. that can
enable the firm to make payment in time.
Speculative needs:- cash may be held in order to take advantages of
profitable opportunities that may present themselves and which may be lost
for want of ready cash.
Precautionary motive:- sometimes cash act for providing safety against
unexpected events
Different models of cash management

William j. baumol’s eoq model :- in this model optimum cash level is that level
where the carrying cost and transaction cost are minimum (carrying cost =
holding cost) transaction cost refers to cost involved in getting the marketable
securities converted into cash . this happen when the firm found falls short of
cash and has to sell the securities resulting in clerical brokerage registration
cost.
The formula to determine the cost
MILLER-ORR CASH MANAGEMENT MODEL:-
By through this model the net cash flow is completely stochastic.when
changes in cash bal. occur randomly the application of control theory serve a
useful purpose. It is a control limit model this model is determined the time
and size of transfer b/w an inverstment account and cash account . in this the
control limits are set for cash bal.
Research methodology :-
RESEARCH
Research refers to search for knowledge. We can also define research as

“Scientific & Systematic search for pertinent information on a specific topic”.
Research is careful investigation or enquiries for new facts in any branch of
knowledge. Researches are basically systematic enquiry with customer’s,
critical examination with objectives to search new facts or interpret known
facts in new light. Research methodology is a way to systematically solve the
research problem.. It is a systematic investigation to find solutions to a
problem. The investigation is guided by previously collected information.
Man’s knowledge grows by studying what is already known and revising past
knowledge in the light of new findings.
METHOD OF RESEARCH
 Historical method- In which information is collected about the past from

written records of all types, reports, documents, newspapers, diaries,
travelers’ accounts, etc.
 Experimental method- In which variables being studied is control by the
investigator. In other words, the effect of one variable is observed while

other relevant variables are held constant.
 Survey method- In which a systematic study of a particular community or
a group or an institution is made for analyzing the problem/issue/event.

 Statistical method- In which data is collected quantitatively or by statistics.
A statistics may be a measure of central tendency of dispersion of

correlation of a difference between two samples.
TYPES OF DATA
Research requires systematic collection of data. For example, to determine

the potential market for a new product, the researcher might stud 500
consumers in a certain geographical area. It must be ascertained that the
group contains people representing variables such as income level, education,
living style etc. The quality of data will greatly effect the conclusion. Hence,
the data should be taken ensure accuracy. It depends upon the source
utilized. Data should be classified in to two categories-
 Primary data- Primary data is one, which is collected by the investigator
himself for the purpose of specific inquiry or study & I have complete my
research through observation, discussion & interview.
 Secondary data- Secondary data is one, which has already been
collected by others. For example- journals, reports, government publications,

publication of professional, research organizations etc & in this I use
company Manvel, company reports, company magazine, company website
etc.
Research Objectives
 The primary objective is to determine how an organization can achieve
excellence in managing cash in an organization .
 To tell the organization that how much cash the organization save when
the company keep the cash at a certain limit.

 To suggest how a HZL can effectively utilize the additional (excess) fund
in the different activities or valuable projects or effectively utilize the
additional fund where it needed.
 To know what the cost occur if the company keep additional fund in the
organization.
CASH MANAGEMENT OF HINDUSTAN ZINC LIMITED
Monthly
Date Inflow Outflow Balance Difference Cumulative
01.4.08 161,279.00 161,279.00
30.4.08 490,026.00 435,980.00 215,325.00 54046 215,325.00
31.5.08 537,990.00 427,408.00 325,907.00 110582 325,907.00
30.6.08 567,093.00 313,720.00 579,280.00 253373 579,280.00
31.7.08 521,060.00 861,499.00 238,841.00 -340439 238,841.00
29.8.08 727,883.00 719,329.00 247,395.00 8554 247,395.00
29.9.08 2,976,421.00 3,021,765.00 202,051.00 -45344 202,051.00
31.10.08 8,408,550.00 8,455,967.00 154,634.00 -47417 154,634.00
29.11.08 1,868,998.00 1,767,072.00 256,560.00 101926 256,560.00
31.12.08 358,784.00 265,946.00 349,398.00 92838 349,398.00
31.1.09 525,467.00 648,453.00 226,412.00 -122986 226,412.00
28.2.09 413,707.00 246,724.00 393,395.00 166983 393,395.00
30.3.09 481,843.00 661,878.00 213,360.00 -180035 213,360.00
Findings:-
The graph and the table shows that the company never goes out of cash . on
the monthly basis company always have sufficient cash to meet its day to day
expenses .
The minimum balance that the company have in the whole year on the
monthly basis is 154634 at the end of the month of oct. 2008.
The maximum balance that the company have in the whole year at the end of
June.
As the graph shows firstly the company monthly balance growing to the end of
the month of june after that the company given the bank clearance and the
balance goes down to 238841 from the balance of 579280. Then the balance
is around of that after that come at the lowest level of the year then grow at
the end of Dec. in two months and by the slowing recovery of the money the
balance goes down and then grow because the company recovery is good
after that at the end of financial year the balance is decrease as comparison to
previous year.
Graph on the basis of daily cash balance of the company

The company have the highest balance in the year on the date of 08.09.2008
and 14.10.2008 and 22.10.2008. the balance amounts are 2486434 and
2768175 and 1947297 respectively.
ANALYSIS OF THE CASH DATA:-
weekly average of the idle fund on the basis of the limit of 50,000:-
Date weekly average
08.04.2008 101,144
15.04.2008 135,720
24.04.2008 198,424
01.05.2008 159,824
09.05.2008 124,823
20.05.2008 235,401
31.05.2008 289,773
10.06.2008 310,533
18.06.2008 444,830
27.06.2008 481,707
05.07.2008 435,555
15.07.2008 225,572
24.07.2008 358,470
02.08.2008 276,182
11.08.2008 188,292
20.08.2008 340,229
28.08.2008 107,001
06.09.2008 191,173
16.09.2008 543,688
24.09.2008 567,128
04.10.2008 205,497
14.10.2008 589,013
22.10.2008 607,241
01.11.2008 65,905
10.11.2008 105,876
19.11.2008 149,464
27.11.2008 194,381
06.12.2008 198,034
15.12.2008 294,256
23.12.2008 311,086
01.01.2009 310,154
09.01.2009 347,190
17.01.2009 288,807
27.01.2009 172,241
04.02.2009 170,753
12.02.2009 229,307
23.02.2009 295,881
03.03.2009 321,946
12.03.2009 361,507
20.03.2009 222,527
28.03.2009 158,947
31.03.2009 157,368
The above shows amount is the idle cash average if the company keep the
cash balance 50,000 .
The date and the amount which shows on the above table are taking the
weekly average of the idle fund on the basis of the cash limit of 50,000. The
company can invest this much amount of the on the monthly basis and get the
profit.
The company can invest the money (shows above) in the other investment
project.
The total average amount which company can invest is 11472851.07 Rs.
If the company invest the money on the weekly basis into the commercial
papers at the rate of interest of 11.50% the company can gain total 25,372.65
Rs.
If the company give the money on the loan to the some other person on the
weekly basis then the company can gain the total interest of 26476 Rs.
If the company keep it in bank then the company gain 7723 Rs.
At the limit of 75,000:

The company can invest total10422851.07 amount of money on the weekly
basis if the company keep the minimum amount of balance 75000 Rs.
papers at the rate of interest of 11.50% the company can gain total 23,050.54
Rs.
At the limit of 100000:
The company can invest total 9372851 amount of money on the weekly basis
if the company keep the minimum amount of balance 100000 Rs.
papers at the rate of interest of 11.50% the company can gain total 20728 Rs.



On the monthly basis at the limit of 50000
monthly
Date average int@11.50% int @12 %
30.4.08 148,910 1,427 1,489
31.5.08 212,239 2,034 2,122
30.6.08 421,065 4,035 4,211
31.7.08 319,379 3,061 3,194
29.8.08 209,434 2,007 2,094
29.9.08 412,404 3,952 4,124
31.10.08 399,980 3,833 4,000
29.11.08 151,670 1,454 1,517
31.12.08 283,625 2,718 2,836
31.1.09 254,754 2,441 2,548
28.2.09 265,168 2,541 2,652
30.3.09 245,845 2,356 2,458
If the company can invest total average on the monthly basis Rs.3324472 Rs
then the company gain 31860 Rs. at the interest rate of 11.50% and if the
company invest it at the rate of 12% then the company gain 33245 Rs.
On the monthly basis at the limit of 75,000:
monthly
30.4.08 123,910.2 1,187 1,239
31.5.08 179,518.8 1,720 1,795
30.6.08 377,250.0 3,615 3,773
31.7.08 309,234.4 2,963 3,092
29.8.08 189,044.2 1,812 1,890
29.9.08 371,159.8 3,557 3,712
31.10.08 345,135.0 3,308 3,451
29.11.08 122,198.5 1,171 1,222
31.12.08 255,660.7 2,450 2,557
31.1.09 229,753.7 2,202 2,298
28.2.09 224,795.9 2,154 2,248
30.3.09 224,596.9 2,152 2,246
On the basis of month at the limit of 100000

monthly
30.4.08 98910.2 948 989
31.5.08 154518.8 1,481 1,545
30.6.08 352250.0 3,376 3,523
31.7.08 284234.4 2,724 2,842
29.8.08 164044.2 1,572 1,640
29.9.08 346159.8 3,317 3,462
31.10.08 320135.0 3,068 3,201
29.11.08 97198.5 931 972
31.12.08 230660.7 2,210 2,307
31.1.09 204753.7 1,962 2,048
28.2.09 199795.9 1,915 1,998
30.3.09 199596.9 1,913 1,996

monthly
30.4.08 73910.2 708 739
31.5.08 129518.8 1,241 1,295
30.6.08 327250.0 3,136 3,273
31.7.08 259234.4 2,484 2,592
29.8.08 139044.2 1,333 1,390
29.9.08 321159.8 3,078 3,212
31.10.08 295135.0 2,828 2,951
29.11.08 72198.5 692 722
31.12.08 205660.7 1,971 2,057
31.1.09 179753.7 1,723 1,798
28.2.09 174795.9 1,675 1,748
30.3.09 174596.9 1,673 1,746
monthly
30.4.08 48910.2 469 489
31.5.08 104518.8 1,002 1,045
30.6.08 302250.0 2,897 3,023
31.7.08 234234.4 2,245 2,342
29.8.08 114044.2 1,093 1,140
29.9.08 296159.8 2,838 2,962
31.10.08 270135.0 2,589 2,701
29.11.08 47198.5 452 472
31.12.08 180660.7 1,731 1,807
31.1.09 154753.7 1,483 1,548
28.2.09 149795.9 1,436 1,498
30.3.09 149596.9 1,434 1,496
monthly
30.4.08 23910.2 229 239
31.5.08 79518.8 762 795
30.6.08 277250.0 2,657 2,773
31.7.08 209234.4 2,005 2,092
29.8.08 89044.2 853 890
29.9.08 271159.8 2,599 2,712
31.10.08 245135.0 2,349 2,451
29.11.08 22198.5 213 222
31.12.08 155660.7 1,492 1,557
31.1.09 129753.7 1,243 1,298
28.2.09 124795.9 1,196 1,248
30.3.09 124596.9 1,194 1,246
monthly
30.4.08 -1090 -10 -11
31.5.08 54519 522 545
30.6.08 252250 2,417 2,523
31.7.08 184234 1,766 1,842
29.8.08 64044 614 640
29.9.08 246160 2,359 2,462
31.10.08 220135 2,110 2,201
29.11.08 -2802 -27 -28
31.12.08 130661 1,252 1,307
31.1.09 104754 1,004 1,048
28.2.09 99796 956 998
30.3.09 99597 954 996
If the company can invest total average on the monthly basis Rs.1452258Rs
Conclusion:
In the limit of 50000 cash company go out of cash in 5 times from 22 to

27.08.2008 and the company needed to take the cash from bank for the
payment of day to day expenses.
The company have 8 times abnormal cash balance these cash balances are
for the specified purpose.
The company never go out of cash in the financial year 2008-09
At the cash limit of 75000 company 4 times go out of cash and needed cash
from the bank in the financial year of 2008-09
At the cash limit of 100000 company never go out of cash .
At the limit of 125000 company will not go out of cash but have little excess
fund with him.
Now the company keep average of 2,00,000 Rs on the daily basis .
As far as the advances concerns of the company then the company needed to
control on to the company given advances the company advances credit more
the debit Rs. 11761218.
The difference comes in the expenses because of the company take cash
advance from the contractor for the purpose of general insurance . and for
other purpose so the company directly deposit the cash into the insurance
company.
The company have some excess fund in his books . so the company can
invest those excess fund into some other project.
The company recovery is good in the initial months then the recovery position
is not so much good so the company need to improve the recovery policies.
When the company cash goes more then 5,00,000 at that times the company
give the bank clearance
The Hindustan zinc limited needed to give the advance to many company for
the purchases of raw material like IOC and other.
If the company keep the cash at the limit of 50,000 then the company gain the
profit to invest the excess fund of11472851 at the rate of 12% by given loan to
somebody and gain the interest of 26475 Rs.
REFERENCES & BIBLIOGRAPHY
1. Prasanna Chandra (1993) ‘Fundamental of Financial Management’,

Tata McGraw-Hill publishing company Ltd, third edition, pp 18.1-19.13,
21.1-22.17.
2. Bhalla V. K.(2003) ‘Working Capital Management’, Anmol Publication,
fifth edition, pp. 1-71, 45.
3. Kothari C. R. (2005) ‘RESEARCH METHODOLOGY’ New age

international Ltd, fifth edition pp.1-2, 31, and 95.
4. Journals of Hindustan Zinc Limited
5. Jain , Khandelwal , Pareek (2003) ‘COST ACCOUNTING’ Ajmera

Book Company, Third edition
7. Khan , Jain (2004) ‘MANAGEMENT ACCOUNTING’ Tata
McGrow-Hill Publishing Company Limited, Third edition.
8. Pandey, “Financial Management”, Vikas Publishing House Ltd.
Eighth Edition.
9. www.Google.com
10. www.Vedantasource.com
11. www.hzlindia.com
12. Company data
13. Company books
CERTIFICATE
This is to certify that Miss. NEHA GAUTAM a student of BBA I Year at

GOVT. PG COLLAGE BUNDI (RAJ.) completed Major Research Project
entitled “CASH MANAGEMENT” The project has been completed after
studying for one year in BBA course and for partially fulfilling the
requirements for award of degree of beachler of Business
Administration of GOVT. COLLEGE BUNDI(RAJ.)
The Major Research Project has been completed under the guidance of
“Mr.S.N.LADDHA” is as per norms and guidelines provided.

Cash Management

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Hindustan Zinc Smelter, Chanderiya is a refinery located in 10 km north of Chittorgarh,

3.1 Title of Study ------------------------------

3.2 Duration of study -------------------------

3.3 Objective of Study------------------------

3.4 Type of Research------------------------

3.5 Data Collection and Sampling--------

3.6 Scope of Study----------------------------

4. Facts and Findings-----------------------------------------

5. Data Analysis and Interpretation----------------

8. Recommendation and Suggestions--------------------

Today HZL is India’s leading Zinc producer.

HZL is a vertically integrated Mining & Smelting company, gearing up to:

 Harnessing mining resources to help India maintain self-sufficiency in

Sustainable development is an integral part of our business philosophy. Our processes

Hindustan Zinc Smelter, Chanderiya is a refinery located in 10 km north of Chittorgarh,

INDIAN MARKET: ZINC

FIRST USE OF ZINC:

ZINC OXIDE The most widely used zinc compound, zinc

DIE CASTINGS Zinc is a ideal material for die castings and is

Rajpura Dariba Mines

Location 75 km north-east of Udaipur, Rajasthan, India

Capacity 1.3 MTPA ore Including Sindesar Kurd mine’s

Details An underground mine with onsite concentrator and

Capacity 1.2 MTPA ore

Details An underground mining complex consisting of four

Ore Grade Zinc 4.3%,Lead1.9%

Certifications ISO 9001:2000, ISO 14001:1996, OHSAS 19001:1999

Chanderiya Lead Zinc Smelters(CLZS)

Certifications ISO 9001:2000, ISO 14001:1996, OHSAS 19001:1999 (For Pyro

Location 12 km east of Udaipur, Rajasthan, India

Capacity 90,000 TPA of refined Zinc

Details A hydrometallurgical smelter using RLE technology. Main by-

Certifications ISO 9001:2000, ISO 14001:1996, OHSAS 19001:1999

VIZAG ZINC SMELTER

Location 17 km from Vishakhapatnam, Andhra Pradesh, India

Capacity 56,000 TPA of refined Zinc

Details A hydrometallurgical smelter using RLE technology. Main by-

Certifications ISO 9001:2000, ISO 14001:1996, OHSAS 19001:1999

• Be a lowest cost zinc producer on a global scale, maintaining market leadership .

• One of the world’s largest integrated zinc and lead producer.

TYPES OF ZINC PRODUCES BY HZL

First Use End-Use

High Grade Zinc

First Use End-Use

Prime Western Grade Zinc

Corrosion Protection (galvanizing,

CHANDERIYA LEAD ZINC SMELTER

1) Raw Material Handling Plant (R.M.H.)

2.1 Concentrate Storage

2.2 Material Feeding System and Fluid Bed Furnace

3) LEACHING & PURIFICATION -

4) Jarosite precipitation – It is required to remove the iron from ZnSO4 solution,

5) Pre-Neutralisation – This stage is to eliminate the residual iron in clear solution

2.1 Neutral Leaching

3ZnOFe2O3 + 12H2SO4 === 3ZnSO4 + 3Fe2(SO4)3 + 12H2O

2.3 Jarosite Precipitation

3 Fe2((SO4)3 + 10 H2O + Na2SO4 = (Na)2 (Fe6(SO4)4(OH)12) + 6 H2SO4

2.4 Jarosite Disposal

2.5.1 Cold Purification

2.5.2 Hot Purification