Directors Report of HEG Ltd.

Mar 31, 2025

Your Directors have the pleasure of presenting their 53^rd Annual Report together with Audited Financial Statements for the
financial year ended 31^st March, 2025.

1. Financial Results

(H in Crores)

Particulars	2024-25	2023-24
Net sales	2137.34	2,379.82
Other operating income	15.37	15.08
Total income from operations (Net)	2152.71	2,394.90
Other income	126.68	141.67
Total income	2279.39	2,536.57
Profit before finance cost, depreciation and amortization	387.56	525.63
Finance cost	39.20	35.74
Profit before depreciation and amortization	348.36	489.89
Depreciation and amortization	200.54	174.65
Profit/(Loss) before tax	147.82	315.24
Provision for taxation:
Current tax	48.42	74.58
Deferred tax	(1.91)	9.12
Net Profit/(Loss) for the period	101.31	231.54
EPS (Basic) (D)	5.25	12.00

Note: No amount transferred to reserves.

2. Overall Performance

The Company recorded net sales of H2137.34 Crore
during the financial year 2024-25 as compared to
H2,379.82 Crore in the previous financial year. The Net
Profit during the financial year 2024-25 was H101.31
Crore as compared to a net profit of H231.54 Crore in
financial year 2023-24 translating to Basic Earnings Per
Share at H5.25 for the financial year 2024-25 as against
H12.00 in financial year 2023-24.

3. State of Company''s Affairs

The analytical review of the Company''s performance
and its businesses, including initiatives in the areas of

Human Resources and Corporate Social Responsibility
have been presented in the section of Management
Discussion and Analysis of this Annual Report.

Electrode Sector

According to data from the World Steel Association,
total global steel production remained largely
unchanged in CY 2024 compared to CY2023, at 1,882.6
mmt versus 1,897.9 mmt, indicating no significant
year-on-year growth.

Steel production outside of China was recorded at
approximately 877.5 mmt in CY2024, broadly in line
with 875.4 mmt in CY2023.

China''s steel production declined by 1.7% to 1,005.1
mmt in 2024 from 1,022.5 mmt in 2023, primarily due
to sustained weak domestic demand.

Owing to this, Chinese steel exports increased
significantly to 110.7 mmt in 2024, up from 90.3 mmt
in 2023 and 67 mmt in 2022, thereby intensifying
competitive pressures on global steel producers.

Among major steel-producing regions, the United
States registered a 2.4% decline in production,
totalling 79.5 mmt in 2024 compared to 81.4 mmt
in 2023.

India, now firmly established as the world''s
second-largest steel producer, reported a 6.3%
increase in production, reaching 149.6 mmt in 2024,
supported by robust domestic demand—particularly
from the infrastructure and real estate sectors.
It is noteworthy that in India, steel production is
predominantly conducted via the blast furnace route,
with a substantial portion also produced through
induction furnaces, which do not fall within our
customer base.

Owing to subdued industrial and manufacturing
activity, steel prices remained under pressure across
most key consuming markets throughout the year.

Despite ongoing pricing pressures on graphite
electrode demand, the Company operated at a
utilization rate of 77% in 2024-25, the highest among
all western graphite electrode manufacturers.

Needle coke prices remained stable during the year
and expected to remain at similar level for the first half
of 2025-26.

While short-term prospects for graphite electrodes
remain muted—primarily due to geopolitical
uncertainties impacting industrial activity in
developed markets—the long-term outlook remains
positive, driven by the global shift toward EAF-based
steelmaking.

To date, more than 100 mmt of new greenfield
EAF capacity has been announced globally. Of this,
approximately 11 mmt is operational, and an additional
54 mmt is expected to come online between 2025
and 2027.

We anticipate that graphite electrode demand will
gradually increase by 190,000-200,000 mt by 2030,
representing a significant rise over the current Ultra
High Power (UHP) demand (ex-China) of approximately
500,000-600,000 mt.

We remain among the most cost-competitive and
high-quality producers of graphite electrodes
globally. With our extensive customer base, we are
fully prepared to capture emerging opportunities.

Power Generation

The Company has captive power generation capacity
of 86 MW (comprising two thermal power plants and
a hydroelectric power facility).

The thermal plants remained closed for most of the
year 2024-25 due to un-economical price of coal
generated power.

Company currently buys its power needs from MP
state electricity board and hydro power generated is
sold in the market through IEX and bipartite power
purchase agreement with open access to consumers.

The turnover of the Power Segment marginally
decreased to H32.66 crore in FY 2024-25 from H33.83
crore in FY 2023-24.

4. Change in Share Capital

During the FY 2024-25, pursuant to the approval of
Shareholders through Postal Ballot on September 20,
2024, the Authorized Share Capital of the Company
stood sub-divided/ split as per below details:

Authorized Share Capital before sub-division/split:
H70,00,00,000 (Rupees Seventy Crores) divided into:

(a) 5,50,00,000 (Five Crore Fifty Lac) Equity Shares of
H10/- (Rs. Ten) each, and

(b) 15,00,000 (Fifteen Lac) Preference Shares of
H100/- (Rs. One hundred) each.

Authorized Share Capital after sub-division/split:
H70,00,00,000 (Rupees Seventy Crores) divided into:

(a) 27,50,00,000 (Twenty Seven Crores Fifty Lakhs)
Equity Shares of H2/- (Rs. Two) each, and

(b) 15,00,000 (Fifteen Lakhs) Preference Shares of
H100/- (Rs. One Hundred) each.

During the year under review, the Issued, Subscribed
and Paid-up Equity Share Capital of your Company
was re-organized from H38,59,55,060/-(Rupees Thirty
Eight Crore Fifty Nine Lakhs Fifty Five Thousand and
Sixty Only) divided into 3,85,95,506 (Three Crore
Eighty Five Lakhs Ninety Five Thousand Five hundred
and Six Only) Equity Shares of Face Value of H10/-
(Rupees Ten Only) each to H38,59,55,060/-(Rupees
Thirty Eight Crore Fifty Nine Lakhs Fifty Five Thousand
and Sixty Only) divided into 19,29,77,530 (Nineteen

Crore Twenty Nine Lakh Seventy Seven Thousand
Five Hundred Thirty) Equity Shares of Face Value of
H2/- (Rupees Two Only) each due to sub-division/split
of 1 (One) Equity Share of the Company of the face
value of H10/- (Rupees Ten Only) each fully paid into
5 (Five) Equity Shares of the Company of face value of
H2/- (Rupee Two Only) each fully paid up.

5. Material Changes and Commitments

No material changes and commitments affecting
the financial position of the Company have occurred
between the end of the financial year of the Company
to which the financial statements relate and the date
of the report.

6. Change in the Nature of Business

There is no change in the nature of business during
the financial year 2024-25.

7. Significant Developments

The Board of Directors of the Company at its meeting
held on 22 May 2024 had approved the Composite
Scheme of Arrangement amongst HEG Limited ("the
Company") and HEG Graphite Limited ("Resulting
Company") and Bhilwara Energy Limited ("Transferor
Company") and their respective shareholders and
creditors ("Scheme").

The proposed Scheme inter alia provides for:

(a) the demerger of the Demerged Undertaking
(i.e. Graphite Business) from the Company into
the Resulting Company on a going concern
basis and issue of equity shares by the Resulting
Company to the shareholders of the Company in
consideration thereof, and

(b) amalgamation of the Transferor Company with
the Company and issue of equity shares by the
Company to the shareholders of the Transferor
Company (except the Company itself) in
consideration thereof. The Appointed Date for
the Scheme is 1^st April 2024.

Thereafter, the Company had filed the requisite
application with the stock exchanges (viz. BSE Limited
and National Stock Exchange of India Limited) under
Regulation 37 of the listing Regulations ("Regulation
37 Application").

Taking into consideration the business needs, the
board of directors of the Transferor Company vide
its resolution dated 10 March 2025 has approved the
execution of definitive agreements in connection with
the issue of further shares to proposed investors.

In view of the aforesaid, the companies involved in
the Scheme have modified the Scheme basis SEBI''s
observation, after taking into account, inter alia, the
updated valuation reports issued by the registered
valuer and fairness opinion issued by the merchant
banker on the modified scheme.

The Company has thereafter filed fresh Regulation 37
application with the stock exchanges in relation to the
modified Scheme. The Scheme is, inter alia, subject to
receipt of approval from the statutory and regulatory
authorities, including BSE Limited, National Stock
Exchange of India Limited, jurisdictional National
Company Law Tribunal and the shareholders and
creditors (as applicable) of the Companies involved in
the Scheme.

Pending receipt of final approvals, no adjustments
have been made in the financial results for the year
ended 31^st March 2025.

8. Subsidiary, Associate Companies or Joint Ventures

a) Subsidiary Company

The Company has the following 3 (Three) Wholly
Owned Subsidiaries (WOS):

i. TACC Limited

TACC Limited had no business operations during
the financial year 2024-25 and Net Loss was
H0.21 Crore.

ii. HEG Graphite Limited

HEG Graphite Limited had no business operations
during the financial year 2024-25 and Net Loss
was H0.04 Crore.

iii. Bhilwara Infotechnology Limited

Bhilwara Infotechnology Limited had a
consolidated turnover (Revenue from
Operations) of H25.37 crore and Profit after Tax
was H0.87 crore as per their audited consolidated
financial statements for the financial year ended
31^st March, 2025.

In terms of provisions of Section 136(1) of the
Companies Act, 2013, the audited financial
statements of TACC Limited, HEG Graphite
Limited and Bhilwara Infotechnology Limited
WOS of HEG Limited, have been placed on the
website of the Company and are not being
annexed in this Annual Report.

The financial statements of the subsidiary
companies are kept for inspection by the
shareholders at the registered office of the

Company. The Company shall provide, the copy
of the financial statements of its subsidiary
companies to the shareholders free of cost upon
their request.

The Managing Director of the Company does not
receive any remuneration or commission from its
subsidiary except the sitting fee.

b) Associate Companies or Joint Ventures

There is One Associate of the Company namely
Bhilwara Energy Limited.

Bhilwara Energy Limited had a consolidated turnover
(Revenue from Operations) of H577.71 crore and
Net Profit (attributable to owners of the parent) was
H32.18 crore as per their audited consolidated financial
statements for the financial year ended 31^st March, 2025.

The Company has no Joint Ventures.

During the FY 2024-25, Bhilwara Infotechnology
Limited ("BIL") an associate company have become
the Wholly Owned Subsidiary Company pursuant
to purchase of the remaining shares of BIL by the
Company from the existing shareholders of BIL.

No Company has become/ceased to be Joint Venture
during the financial year 2024-25.

Performance of Associate Company & Subsidiary
Companies and their contribution to overall
performance of the Company has been mentioned in
the Notes to Accounts to the consolidated financial
statements.

Pursuant to the provisions of Section 129(3) of the
Companies Act, 2013, a statement containing the
salient features of financial statements of subsidiary
and associate companies is annexed in the Form
AOC-1 to the consolidated financial statements and
hence not repeated here for the sake of brevity.

9. Consolidated Financial Statements

The Consolidated Financial Statements have been
prepared by the Company in accordance with
applicable provisions of the Companies Act, 2013,
Accounting Standards and SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
The audited consolidated financial statements
together with Auditors'' Report form part of the Annual
Report. The Auditor''s Report does not contain any
qualification, reservation or adverse remarks.

10. Dividend

Your Directors are pleased to recommend a final
dividend at the rate of H1.80/- per equity share on

19,29,77,530 equity shares of face value of H2 each
for the financial year ended 31^st March, 2025 subject
to the approval of the Shareholders at the ensuing
53^rd Annual General Meeting (AGM) of the Company.
The dividend, if declared by the Shareholders in the
AGM will be subject to deduction of tax at source at
applicable rates.

As per Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
the Dividend Distribution Policy is attached as
Annexure-IV, which form part of this report and is also
available on the website of the Company.

11. Corporate Governance

A report on Corporate Governance forms part of
this Report along with the Auditors'' Certificate
on Corporate Governance as required under SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015. The Auditors'' Certificate for
the financial year 2024-25 does not contain any
qualifications, reservations or adverse remarks.

12. Management Discussion and Analysis

Management Discussion and Analysis Report as
required under the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 forms
part of the Annual Report.

13. Business Responsibility & Sustainability Report
(BRSR)

As per Regulation 34 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
a Business Responsibility & Sustainability Report
describing the initiatives taken by the Company from
an environmental, social and governance perspective
is attached as part of the Annual Report.

14. Internal Control / Internal Financial Control
Systems and Adequacy Thereof

The Company has an adequate internal control
system commensurate with the size and nature of its
business. An internal audit programme covers various
activities and periodical reports are submitted to the
top management. The Company has a well-defined
organisational structure, authority levels and
internal rules and guidelines for conducting business
transactions.

Further, the Internal Financial Control framework is
under consistent supervision of Audit Committee,
Board of Directors and also Independent Statutory
Auditors. During the year, no reportable material
weakness in the design or operations was observed.

15. Personnel

a) Industrial relations

The industrial relations during the period under review
generally remained cordial at all the plants of the
Company.

b) Particulars of employees

The information required pursuant to Section 197
read with Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
is annexed herewith as Annexure-I.

16. Public Deposits

Your Company has not invited any deposits from
public/ shareholders in accordance with Chapter V of
the Companies Act, 2013.

17. Significant and Material Orders Passed By the
Regulators or Courts or Tribunals

There were no significant material orders passed by
the Regulators/Courts/Tribunals during the financial
year 2024-25 which would impact the going concern
status of the Company and its future operations.

18. Conservation Of Energy, Technology Absorption,
Foreign Exchange Earnings and Outgo

The information with regard to Conservation of
Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo in accordance with the provisions
of Section 134(3)(m) of the Companies Act, 2013 read
with Rule 8 of the Companies (Accounts) Rules, 2014,
is given as Annexure-II forming part of this Report.

19. Directors and Key Managerial Personnel
i. DIRECTORS

(a) Appointment/ Cessation

Dr. Nand Gopal Khaitan (DIN: 00020588),
Shri Sandip Somany (DIN: 00053597) and
Shri Priya Shankar Dasgupta (DIN: 00012552)
were appointed as Independent Directors by
the Shareholders through Postal Ballot on
September 20, 2024 for a period of first term of
five consecutive years w.e.f. August 13, 2024 till
August 12, 2029 (both days inclusive).

Shri Manish Gulati (DIN:08697512) was
re-appointed by the shareholders as Whole Time
Director designated as Executive Director, liable
to retire by rotation in terms of Sections 152 of
the Act, through Postal Ballot on December 27,
2024 for a period of five years with effect from
March 1,2025 to February 28, 2030. Shri Manish

Gulati, will continue to act as Key Managerial
Personnel of the Company in terms of Section
2(51) of the Companies Act, 2013 and rules
thereto.

Shri Jayant Davar (DIN: 00100801) was re¬
appointed as an Independent Director in 52^nd
AGM held on 7^th August, 2024 for the second
term of five consecutive years with effect from
14^th August, 2024 upto 13^th August, 2029.

Shri Davinder Kumar Chugh, Independent
Director, resigned from the Board with effect
from May 22, 2024.

Dr. Kamal Gupta has completed his second term
as Independent Director on August 29, 2024.
Dr. Kamal Gupta was appointed as Non-Executive
Non-Independent Director w.e.f. November 14,
2024 and the Shareholders have approved the
same through Postal Ballot on December 27, 2024.

(b) Retire by Rotation/Continuation of Director

Shri Riju Jhunjhunwala (DIN: 00061060) and
Shri Shekhar Agarwal (DIN: 00066113) shall
retire by rotation at the ensuing Annual General
Meeting and being eligible, offer themselves
for re-appointment. The Board hereby
recommends their re-appointment for approval
of shareholders in the ensuing Annual General
Meeting.

Smt. Vinita Singhania (Presently Aged: 73 Years
2 Months) (DIN: 00042983), Director of the
Company will attain the age of 75 years in FY
2026-2027, therefore upon the recommendation
of Nomination & Remuneration Committee,
the Board has recommended continuation
of Smt. Vinita Singhania (DIN: 00042983) as
Non-Executive Non-Independent Director
subject to approval of shareholder by passing
special resolution pursuant to Regulation 17(1A)
of SEBI (LODR) Regulations, 2015.

The Board confirms that independent directors
appointed during the year possess the desired integrity,
expertise and experience. The Independent Directors
of the Company stated that they are in compliance
with the Section 150 of the Companies Act, 2013 read
with Rule 6 (1) & (2) of the Companies (Appointment &
Qualification of Directors) Rules, 2014.

All Independent Directors have given declarations that
they meet the criteria of independence as laid down
under Section 149(6) of the Companies Act, 2013

and Regulation 16 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations,
2015. They have also complied with the Code for
Independent Directors prescribed in Schedule IV of
the Companies Act, 2013.

In the opinion of Board, Independent Directors fulfil
the conditions specified in the Companies Act, 2013
read with schedules and rules thereto as well as the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Independent Directors are
independent of management.

The Company has a Code of Conduct for the Directors
and Senior Management Personnel. This Code is
a comprehensive code applicable to all Directors
and members of the Senior Management. A copy of
the Code has been put on the Company''s website
www.hegltd.com.

The brief profile, pursuant to Regulation 36 of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 and Secretarial Standards-2, of the
Directors eligible for appointment/re-appointment
forms part of the Notice of Annual General Meeting
and Corporate Governance Report.

ii. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the
Company as on 31^st March, 2025:

a) Shri Ravi Jhunjhunwala, Chairman, Managing
Director & CEO

b) Shri Manish Gulati, Executive Director

c) Shri Ravi Kant Tripathi, Chief Financial Officer

d) Shri Vivek Chaudhary, Company Secretary

20. Board Evaluation

The Board has carried out an annual evaluation of its
own performance, the Directors individually as well
as the evaluation of the working of its Committees,
in the manner as enumerated in the Nomination and
Remuneration Policy, in accordance with the provisions
of the Companies Act, 2013 and the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015. The evaluation exercise covered various aspects
of the Board''s functioning such as composition of the
Board & Committee(s), their functioning & effectiveness,
contribution of all the Directors and the decision
making process by the Board.

Your Directors express their satisfaction with the
evaluation process and inform that the performance of
the Board as a whole, its Committees and its member
individually were adjudged satisfactory.

21. Nomination and Remuneration Policy

The Nomination & Remuneration Policy of the
Company is in place and is attached as Annexure-III
to this Report.

22. Meetings of the Board

The Board of Directors met seven times in the financial
year 2024-2025 through Physical Meeting / Video
Conferencing as permitted by relevant MCA circulars
& SEBI Circulars read with Rule 3 of the Companies
(Meetings of Board and its Powers) Rules, 2014 under
provisions of the Companies Act, 2013. The intervening
period between any two consecutive Board Meetings
was within the maximum time gap prescribed under
the Companies Act, 2013, Regulation 17 of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015 and SS-1 issued by ICSI. The details
of the Board Meetings and the attendance of the
Directors are provided in the Corporate Governance
Report.

23. Contracts and Arrangements with Related Parties

The Board of Directors of the Company, acting upon
the recommendation of its Audit Committee of
Directors, has approved the policy and procedures
with regard to Related Party Transactions for
reviewing, approving and ratifying Related Party
transactions and in providing disclosures with
respect to the above transactions, as required under
the Companies Act, 2013, SEBI (Listing Obligations
Disclosure Requirements) Regulations, 2015 ("Listing
Regulations") as amended from time to time and other
applicable provisions, rules and regulations made
thereunder.

All related party contracts/arrangements/ transactions
that were entered into during the financial year were
on an arm''s length basis and were in the ordinary
course of business.

All Related Party Transactions are placed before
the Audit Committee for approval. Prior omnibus
approval of the Audit Committee was obtained for
the transactions which are of a foreseen and repetitive
nature. The statement of transactions entered into

pursuant to the omnibus approval so granted is
placed before the Audit Committee for approval on
a quarterly basis. The statement is also supported
by a Certificate from the Internal Auditor and Chief
Financial Officer.

The updated policy on Related Party Transactions as
approved by the Board is uploaded on the Company''s
website, the weblink of which is as under:
https://hegltd.com/wp-content/uploads/2022/05/
HEG_RPT-Policy_09.02.2022.pdf

There are no pecuniary relationships or transactions
of Non-Executive Directors vis-a-vis the Company
that have a potential conflict with the interests of the
Company.

In terms of Regulation 23 of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the
Company has submitted the half yearly disclosure of
related party transactions to the BSE Ltd. and National
Stock Exchange of India Ltd.

Since No material Related Party Transactions were
entered during the financial year of the Company.
Accordingly, the disclosure of Related Party
Transactions as required under Section 134(3)(h) of the
Companies Act, 2013 in Form AOC-2 is not applicable.

24. Committees of the Board

The Board has following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee and
ESG Committee*

• Risk Management Committee

*Name of Corporate Social Responsibility Committee has
been changed as "Corporate Social Responsibility and ESG
Committee” with effect from February 11,2025.

Details of all the committees, along with their charters,
composition and meetings held during the year, are
provided in the Report on Corporate Governance, as
part of this Annual Report.

All the recommendations of the Committees were
accepted by the Board during the financial year
2024-25.

25. Auditors

M/s SCV & Co LLP having (Firm Registration No-
000235N/N500089), Chartered Accountants, the
Statutory Auditors of the Company had been re¬
appointed as the Statutory Auditors for a second
term of 5 consecutive years from the conclusion of 50^th
Annual General Meeting (AGM) held on 1^st September,
2022 till conclusion of 55^th AGM of the Company,
on such remuneration as may be mutually agreed
between the Board of Directors of the Company and
the Statutory Auditors from time to time.

Further the Auditors have confirmed their eligibility
under Section 141 of the Companies Act, 2013 read
with rules made thereunder.

The Auditors'' Report read along with Notes to
Accounts is self-explanatory and therefore does not
call for any further comments.

The Auditors'' Report does not contain any qualification,
reservation or adverse remark.

No fraud has been reported by the Statutory Auditors
under Section 143(12) of the Companies Act, 2013 and
the rules made thereunder.

26. Cost Auditors

In terms of sub-section (1) of Section 148 of the
Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014, as amended from time
to time, the Company is required to maintain the cost
records. Accordingly, such accounts and records have
been maintained by the Company.

The Cost Audit for financial year ended 31^st March, 2024
was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The
said Cost Audit Report was filed on 10^th September, 2024.

No fraud has been reported by the Cost Auditors
under Section 143(12) of the Companies Act, 2013 and
the rules made thereunder.

Based on the recommendation of Audit Committee
at its meeting held on 19^th May, 2025, the Board has
approved the re-appointment of M/s. N.D. Birla & Co.
(M. No. 7907), as the Cost Auditors of the Company
for the financial year 2025-2026 on a remuneration
of H3,00,000/- plus applicable taxes and out of pocket
expenses that may be incurred by them during the
course of audit.

As required under the Companies Act, 2013, the
remuneration payable to the Cost Auditor is required
to be placed before the Members in a general meeting
for their ratification. Accordingly, a resolution seeking
Member''s ratification for the remuneration payable to
M/s. N.D. Birla & Co., Cost Auditors is included in the
Notice convening the ensuing Annual General Meeting.

27. Secretarial Auditor

Pursuant to the provisions of Section 204 of the
Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Regulation 24A of the SEBI
(Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company had appointed
M/s. GSK & Associates, a firm of Company Secretaries
in Practice to undertake the Secretarial Audit of the
Company for the financial year 2024-25. The Secretarial
Audit Report is annexed herewith as Annexure-V.

No fraud has been reported by the Secretarial Auditors
under Section 143 (12) of the Companies Act, 2013 and
the rules made thereunder.

Further, in terms of the SEBI (Listing Obligations
& Disclosure Requirements) (Third Amendment)
Regulation, 2024, the Board upon the recommendation
of Audit Committee has recommended appointment
of M/s. GSK & Associates as the Secretarial Auditors of
the Company for a term of five consecutive financial
years commencing from the financial year 2025-26 till
the financial year 2029-30. The appointment will be
subject to shareholder''s approval at the ensuing AGM
and therefore is included in the notice convening the
ensuing Annual General Meeting.

28. Qualification, Reservation or Adverse Remark in
the Audit Reports

There is no qualification, reservation or adverse remark
made by the Statutory or Cost or Secretarial Auditors
in their Audit Reports issued by them.

29. Business Risk Management

The objective of risk management at the Company is
to protect shareholders value by minimizing threats or
losses, and identifying and maximizing opportunities.
An enterprise-wide risk management framework is
applied so that effective management of risk is an
integral part of every employee''s job.

The Risk Management Policy of the Company is in
place. The Company''s risk management strategy is
integrated with the overall business strategies of
the organization and is communicated throughout
the organization. Risk management capabilities aide
in establishing competitive advantage and allow
management to develop reasonable assurance
regarding the achievement of the Company''s
objectives.

The annual strategic planning process provides
the platform for identification, analysis, treatment
and documentation of key risks. It is through this
annual planning process that key risks and risk
management strategies are communicated to
the Board. The effectiveness of risk management
strategies is monitored both formally and informally
by management and process owners. There is no
major risk which may threaten the existence of the
Company.

The Company has duly constituted Risk Management
Committee inter-alia to oversee Risk Management
framework of the Company. The details pertaining to
the composition, meetings and terms of reference of
the Risk Management Committee are included in the
Report on Corporate Governance which forms part of
the Annual Report.

30. Corporate Social Responsibility (CSR)

As part of its initiatives under Corporate Social
Responsibility (CSR), the Company has undertaken
CSR projects directly and/or through implementation
agencies in the areas of promotion of education,
eradicating hunger & poverty, initiatives towards
Community Service and Rural Development,
Healthcare, Plantation & Environment Development,
Protection of National heritage, Art, Culture etc.
These projects were in accordance with the CSR Policy
of the Company and Schedule VII of the Companies
Act, 2013.

The Company has a policy on CSR and has constituted
a CSR Committee for undertaking CSR activities.
The Composition of Committees & other details are
provided in the Corporate Governance Report which
forms part of the Annual Report. During the year,
the name of CSR Committee has been changed to
Corporate Social Responsibility and ESG Committee
and also new members from Board have been inducted
in the Committee. Shri Manish Gulati, Executive
Director will also act as Chief Sustainability Officer.

The CSR policy may be accessed on the Company''s
website at the link mentioned below:
https://hegltd.com/wp-content/uploads/2021/06/
amended-csr-policy.pdf

The various CSR projects inter-alia undertaken
will bring qualitative changes in the lives of the
community around the plant location. One of the
Key project is that the Company has established first
mega kitchen "Akshaya Patra" in MP- Akshaya Patra
in Bhopal. The Kitchen has been serving meals to
900 schools feeding 50,000 children every day under
Central and MP Government Mid Day Meal Scheme
and number of meal served till today is 1.60 Crores .
Another key project is the empowerment of farmers
by encouraging farmers to change to fruit cropping
under NGO called Global Vikas Trust in the states of MP
and Maharashtra which is resulting in improvement
in their income between 8 to 10 times resulting in
bringing them out of poverty and higher familial
and societal status. The Company also runs Graphite
school at Mandideep, Bhopal, which is CBSE affiliated
and run by the Trust funded by the Company and is
a testament to our commitment to education and
community welfare. It has a modern facility that offers
a superior educational environment for approximately
1,900 students.

The Annual Report on CSR activities as required under
the Companies (Corporate Social Responsibility Policy)
Rules, 2014 is enclosed as Annexure-VI, forming part
of this report.

31. Internal Auditors

Pursuant to the provisions of Section 138 of
the Companies Act, 2013 and based on the
recommendation of Audit Committee, the Board has
approved the re-appointment of M/s. S.L. Chhajed &
Co. LLP, as the Internal Auditors of the Company for
the financial year 2025-2026.

32. Directors Responsibility Statement
The Directors confirm that:

i) In preparation of the annual accounts, the
applicable accounting standards have been
followed and there are no material departures
from the same;

ii) They have selected such accounting policies and
applied them consistently and made judgements
and estimates that are reasonable and prudent
so as to give a true and fair view of the state of
affairs of the Company at the end of the financial

year 2024-25 and of the profit of the Company
for the year under review;

iii) They have taken proper and sufficient care for
maintenance of adequate accounting records in
accordance with the provisions of the Companies
Act, 2013 for safe guarding the assets of the
Company and for preventing and detecting
frauds and other irregularities;

iv) They have prepared the annual accounts on a
going concern basis;

v) They have laid down internal financial controls
to be followed by the Company and that such
internal financial controls are adequate and are
operating effectively; and

vi) They have devised proper systems to ensure
compliance with the provisions of all applicable
laws and that such systems are adequate and
operating effectively.

33. Vigil Mechanism /Whistle Blower Policy

The Company has a vigil mechanism named
"Whistle Blower Policy", which is overseen by the
Audit Committee. The Policy inter-alia provides
safeguards against victimization of the Whistle Blower.
Employees and other stakeholders have direct access
to the Chairperson of the Audit Committee for lodging
concerns if any, for review. The policy is posted on
the website of the Company, the web link of which is
as under:

https://hegltd.com/wp-content/uploads/2018/07/

Whistle-Blower-Policy-08.05.2018.pdf

34. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered
under the provisions of Section 186 of the Companies
Act, 2013 form part of the notes to the financial
statements provided in the Annual Report.

35. Investor Education and Protection Fund (IEPF)

As required under Section 124 of the Companies
Act, 2013 the unclaimed interim dividend amount
aggregating to H80.21 Lakh lying with the Company
for a period of seven years pertaining to the financial
year ended on 31^st March, 2018, was transferred
during the Financial Year 2024-25, to the Investor
Education and Protection Fund established by
the Central Government. The details of same are
given in Corporate Governance Report under head
Shareholder Information.

36. Insider Trading

In compliance with the Securities and Exchange Board
of India (Prohibition of Insider Trading) Regulations,
2015 (Regulations), your Company has adopted the
following-

i) Code of Conduct for Regulating, Monitoring and
Reporting of Trading by Insiders- The said Code
lays down guidelines, which advise Insiders on
the procedures to be followed and disclosures
to be made in dealing with the shares of the
Company and cautions them on consequences
of non-compliances.

ii) Code of Practices and Procedures of Fair
Disclosures of Unpublished Price Sensitive
Information- The Code ensures fair disclosure of
events and occurrences that could impact price
discovery in the market.

iii) Policy for dealing with Unpublished Price
Sensitive Information (UPSI) and Whistle Blower
Policy for employees to report any leak or
suspected leak of UPSI- The policy aims to enable
the employees of the Company to report any leak
or suspected leak of UPSI, procedures for inquiry
in case of leak of UPSI or suspected leak of UPSI
and initiate appropriate action and informing the
SEBI promptly of such leaks, inquiries and results
of such inquiries.

iv) Internal Control Mechanism to prevent Insider
Trading- The Internal Control Mechanism
is adopted to ensure compliances with the
requirements given in the regulations and to
prevent Insider Trading. The Audit Committee
also review compliance with the provision of
regulations periodically.

37. Annual Return

In terms of the Section 92 (3) of Companies Act, 2013
as amended, the Annual Return of the Company is
placed on the website of the Company
https://hegltd.com/annual-general-meeting

38. General Disclosure

a) The Company has maintained Cost Records in
accordance with Section 148(1) of the Companies
Act, 2013.

b) The Company has a group policy in place against
Sexual Harassment in line with the requirements
of the Sexual Harassment of Women at the
Workplace (Prevention, Prohibition & Redressal)
Act, 2013. Internal Complaints Committee (ICC)

has been set up to redress complaints received
regarding sexual harassment. The Company
has complied with the provisions of above
said act. The Company has undertaken 23
workshops or awareness programmes against
sexual harassment of women at the workplace.
No complaint of Sexual Harassment was received
during the financial year 2024-25.

c) The Company is in compliance of all applicable
secretarial standards issued by The Institute of
Company Secretaries of India from time to time.

d) The details of difference between amount of
the valuation done at the time of one-time
settlement and the valuation done while taking
loan from the Banks or Financial Institutions
along with the reasons thereof: Not Applicable.

e) The details of application made or any
proceeding pending under the Insolvency and
Bankruptcy Code, 2016 (31 of 2016) during the
year along with their status as at the end of the
financial year: Not Applicable.

39. Key Initiatives with respect to Stakeholder
relationship, Customer relationship, Environment,
Sustainability, Health and Safety

The Company has duly constituted Stakeholders
Relationship Committee with broad terms of
reference, the details of which is provided in the
Corporate Governance Report which forms part of the
Annual Report.

As a responsible corporate citizen, the Company
supports the ''Green Initiative'' undertaken by the
Ministry of Corporate Affairs, Government of India,
enabling electronic delivery of documents including
the Annual Report etc. to shareholders at their e-mail
address registered with the Depository Participants
and Registrar & Transfer Agent.

To support the ''Green Initiative'' and in compliance
of Rule 18 of the Companies (Management and
Administration) Rules, 2014, as amended from time
to time, Members who have not yet registered their
email addresses or want to update a fresh email
id are requested to register the same with their
Depository Participant in case the shares are held
by them in electronic form and with Company''s
Registrar & Transfer Agents (RTA) in case the shares
are held by them in physical form for receiving all
communications, including Annual Report, Notices,
Circulars, etc., from the Company electronically.

The Company has also sent the communication to the
concerned shareholders with regard to registration of
their email address etc. with the Registrar and Share
Transfer Agent/ Depository Participants in connection
with service of documents through electronic mode.

Further, as permitted by MCA Circulars and SEBI
Circulars issued from time to time, the Notice of the
53^rd AGM and the Annual Report of the Company for
the financial year ended 31^st March, 2025 including
therein the Audited Financial Statements for the year
2024-25, are being sent only by email to the Members.

The Company remained agile to emerging market
opportunities by remaining connected with all its
customers across the lean period. This effort allowed
it to improve its capacity utilization better than most
peers in this space. A higher utilization helped in
better absorption of costs which improved cash flow.
The Company stays in contact with its customers
on a regular basis. The IT department is developing
solutions for increased transparency in business
operations and better connectivity with customers.

The Company is committed to protecting the
environment. The R&D team works closely with some
reputable research institutes to develop environment

friendly approaches for sustainable growth which
involves identifying alternative/ regenerative carbon
feedstock.

The Company supports the principles of inclusive
growth and equitable development through not
just its corporate social responsibility initiates but
through its core business as well. The Company''s
social upliftment initiatives focus around healthcare,
education, removing hunger, community
development and environmental conservation, which
facilitates in bettering lives and improving livelihood,
amongst others.

40. Acknowledgements

Your Directors wish to place on record, their
appreciation for the valuable assistance and support
received by your Company from banks, financial
institutions, the Central Government, the Government
of Madhya Pradesh, the Government of Uttar Pradesh
and their departments. The Board also thanks the
employees at all levels, for the dedication, commitment
and hard work put in by them. The Directors appreciate
and value the contribution made by every member of
the HEG family.

For and on behalf of the Board of Directors
Ravi Jhunjhunwala

Date: 19^th May, 2025 Chairman, Managing Director & CEO

Place: Noida (U.P.) DIN: 00060972

---

Mar 31, 2024

The Directors have the pleasure of presenting their 52^nd Annual Report together with Audited Financial Statements for the financial year ended 31^st March, 2024.

1. Financial Results

(Rs. in Crores)
Particulars	2023-24	2022-23
Net sales	2,379.82	2,435.32
Other operating income	15.08	31.92
Total income from operations (Net)	2,394.90	2,467.24
Other income	141.67	109.14
Total income	2,536.57	2,576.38
Profit before finance cost, depreciation and amortization	525.63	728.79
Finance cost	35.74	26.01
Profit before depreciation and amortization	489.89	702.78
Depreciation and amortization	174.65	102.30
Profit/(Loss) before tax	315.24	600.48
Provision for taxation:
Current tax	74.58	154.25
Deferred tax	9.12	(9.29)
Net Profit/(Loss) for the period	231.54	455.51
EPS (Basic) D	59.99	118.02
Note: No amount transferred to reserves.

2. Overall Performance

The Company recorded net sales of C2,379.82 Crore during the financial year 2023-24 as compared to C2,435.32 Crore in the previous financial year. The Net Profit during the financial year 2023- 24 was at C231.54 Crore as compared to a net profit of C455.51 Crore in financial year 2022-23 translating to Basic Earnings Per Share at C59.99 for the financial year 2023-24 as against C118.02 in financial year 2022-23.

3. State of Company’s Affairs

The analytical review of the Company’s performance and its businesses, including initiatives in the areas of Human

Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

Electrode Sector

As per World Steel Association’s data, total world steel production did not register any growth in CY2023 compared to CY2022 and remained more or less at the same level of 1888 million mt.

World Steel production outside China also remained at around 868 mmt — similar to 870 mmt in CY2022.

Chinese steel production while growing in the first half of 2023, dropped significantly in the second half and the full-year production of 1020 mmt was again in the same region as 2022 due to demand erosion.

However, persistent low domestic demand within China has resulted in increased Chinese steel exports which increased by 34% from 67 mmt in 2022 to 97 mmt in 2023 putting pressure on steel production in the rest of the world.

Amongst some of the large Steel producing regions - US stood at the same level in 2023 at 80.7 mmt as in 2022 while production in EU declined by 7 percent.

India ranked as the second-largest global steel producer, recorded a notable 11.8% increase in production, reaching 140.2 mmt on the back of healthy domestic demand from the infrastructure and real estate sectors. Here we need to remember that in India, steel production is predominantly thru blast furnace route and a significant portion of Steel is also produced from induction furnaces which is not our customer segment.

Due to weak industrial and manufacturing activities, steel prices remained subdued through the year in most steelconsuming markets.

Despite the pricing pressure on graphite electrodes, the Company operated at 81 % utilization, the highest utilization rate among all Western graphite electrode companies.

During the third quarter of FY24, the Company commercialized its brownfield expansion project to increase the existing capacity from 80,000 TPA to 1,00,000 TPA. Due to the long duration of the production cycle of our products commercial production from our expanded capacity will be in the market

during FY24-25.

The Needle coke prices keep correcting due to difficult market conditions but there is always a time lag between needle coke procurement time and sales of finished electrodes.

While the short-term prospects for graphite electrodes appear dismal owing primarily to geopolitical instability that has impacted industrial activity in developed nations, the long-term demand for graphite electrodes looks promising, considering a global thrust on adopting the EAF route for manufacturing steel.

Till date, as per company information, more than 90 mmt of new Greenfield capacities have already been announced and we keep seeing such announcements regularly.

Out of this, about 10 mmt is already in operation and another 30 mmt is expected to be in operation btw now and end of 2025.

We expect GE demand to increase gradually by around 150 to 200,000 mt by 2030, which is a significant increase over the current demand of around 5-600,000 tons UHP ex China.

We remain one of the most cost-competitive and quality producers of graphite electrodes in the world fully ready to capture any available opportunities.

Power Generation

The Company has captive power generation capacity of 76.5MW (comprising two thermal power plants and a hydroelectric power facility).

Company currently buys its power needs from MP state electricity board and excess power generated is sold in the market through IEX and bi-partite power purchase agreement with open access to consumers.

The turnover of the Power Segment marginally decreased to C33.83 Crore in FY 2023-24 (after inter-segmental sales) from C47.10 Crore in FY 2022-23.

4. Change in Share Capital

During the Financial Year 2023-24, there was no change in the Share Capital of the Company.

5. Material Changes and Commitments

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

6. Change in the Nature of Business

There is no change in the nature of business during the financial year 2023-24.

7. Subsidiary, Associate Companies or Joint Ventures

(i) Subsidiary Company

The Company has 1 (One) Wholly Owned Subsidiary (“Subsidiary or WOS”) namely TACC Limited incorporated on 26^th December, 2022.

TACC Limited had no business operations during the financial year 2023-24 and Net Loss was C152.62 Lakh.

In terms of provisions of Section 136(1) of the Companies Act, 2013, the audited financial statements of TACC Limited, WOS of HEG Limited, have been placed on the website of the Company and are not being annexed in this Annual Report.

The financial statements of the subsidiary are kept for inspection by the shareholders at the registered office of the Company. The Company shall provide, the copy of the financial statements of its subsidiary to the shareholders free of cost upon their request.

The Managing Director of the Company does not receive any remuneration or commission from its subsidiary except the sitting fee.

(ii) Associate Companies or Joint Ventures

There are two Associates of the Company namely Bhilwara Infotechnology Limited and Bhilwara Energy Limited.

Bhilwara Infotechnology Limited had a turnover (Revenue from Operations) of C27.77 crore and Profit After Tax was C5.36 crore in the financial

year 2023-24.

Bhilwara Energy Limited had a consolidated turnover (Revenue from Operations) of C475.10 crore and Net Profit (attributable to owners of the parent) was C 162.40 crore as per their audited consolidated financial statements for the financial year ended 31^st March, 2024.

The Company has no Joint Ventures.

No Company has become/ceased to be an Associate or Joint Venture during the financial year 2023-24.

Performance of Associate Companies & Subsidiary and their contribution to overall performance of the Company has been mentioned in the Notes to Accounts to the consolidated financial statements.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of financial statements of subsidiary and associate companies is annexed in the Form AOC-1 to the consolidated financial statements and hence not repeated here for the sake of brevity.

8. Consolidated Financial Statements

The Consolidated Financial Statements have been prepared by the Company in accordance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audited consolidated financial statements together with Auditors’ Report form part of the Annual Report. The Auditor’s Report does not contain any qualification, reservation or adverse remarks.

9. Dividend

Your Directors are pleased to recommend a final dividend at the rate of C22.50 per equity share on 3,85,95,506 equity shares of face value of C10 each for the financial year ended 31^st March, 2024 subject to the approval of the Shareholders at the ensuing 52^nd Annual General Meeting (AGM) of the Company. The dividend, if declared by the Shareholders in the AGM will be subject to deduction of tax at source at applicable rates.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is attached as Annexure IV, which form part of this report and is also available on the website of the Company.

10. Corporate Governance

A report on Corporate Governance forms part of this Report along with the Auditors’ Certificate on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Auditors’ Certificate for the financial year 202324 does not contain any qualifications, reservations or adverse remarks.

11. Management Discussion and Analysis

Management Discussion and Analysis Report as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of Annual Report.

12. Business Responsibility & Sustainability Report (BRSR)

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility & Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

13. Internal Control / Internal Financial Control Systems and Adequacy Thereof

The Company has an adequate internal control system commensurate with the size and nature of its business. An internal audit programme covers various activities and periodical reports are submitted to the top management. The Company has a well-defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

Further, the Internal Financial Control framework is under consistent supervision of Audit Committee, Board of Directors and also Independent Statutory Auditors. During the year, no reportable material weakness in the design or operations was observed.

14. Personnel

a) Industrial relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure-I.

15. Public Deposits

Your Company has not invited any deposits from public/ shareholders in accordance with Chapter V of the Companies Act, 2013.

16. Significant and Material Orders Passed By The Regulators Or Courts Or Tribunals

There were no significant material orders passed by the Regulators/Courts/Tribunals during the financial year 2023-24 which would impact the going concern status of the Company and its future operations.

17. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-II forming part of this Report.

18. Directors and Key Managerial Personnel i. DIRECTORS

Shri Ravi Jhunjhunwala (DIN: 00060972) was re-appointed as Managing Director of the Company in the 51^st Annual General Meeting (“AGM”) held on 31^st August, 2023. The Re-appointment of Shri Ravi Jhunjhunwala, as Managing Director was approved in the said AGM for the period of five years with effect from 13^th February, 2024 upto 12^th February, 2029. He will continue to act as Chairman and Chief Executive officer of the Company in accordance with the Articles of Association and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Smt. Ramni Nirula (DIN: 00015330) was reappointed as an Independent Director in 51^st AGM held on 31^st August, 2023. The Re-appointment of Smt. Ramni Nirula, as an Independent Director was approved for the second term of five consecutive years with effect from 31^st October, 2023 upto 30^th October, 2028.

The first term of office of Shri Jayant Davar (DIN: 00100801), as an Independent Director is expiring on 13^th August, 2024. The Board has recommended the re-appointment of Shri Jayant Davar as an Independent Director upon the recommendation of Nomination and Remuneration Committee, for a second term of five consecutive years with effect

from 14^th August, 2024 upto 13^th August, 2029, subject to approval of Shareholders at the ensuing Annual General Meeting.

Shri Manish Gulati (DIN: 08697512) and Smt. Vinita Singhania (DIN: 00042983) shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board hereby recommends their re-appointment for approval of shareholders in the ensuing Annual General Meeting.

Shri Davinder Kumar Chugh, Independent Director, resigned from the Board with effect from 22^nd May, 2024. The Board places on record its appreciation for the valuable guidance and contribution provided by Shri Davinder Kumar Chugh in the deliberations of the Board during his tenure as Independent Director.

The Board confirms that independent director appointed during the year possess the desired integrity, expertise and experience. The Independent Directors of the Company stated that they are in compliance with the Section 150 of the Companies Act, 2013 read with Rule 6 (1) & (2) of the Companies (Appointment & Qualification of Directors) Rules, 2014.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. They have also complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.

In the opinion of Board, Independent Directors fulfil the conditions specified in the Companies Act, 2013 read with schedules and rules thereto as well as the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Independent Directors are independent of management.

The Company has a Code of Conduct for the Directors and Senior Management Personnel. This Code is a comprehensive code applicable to all Directors and members of the Senior Management. A copy of the Code has been put on the Company’s website www.hegltd.com.

The brief profile, pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards-2, of the Directors eligible for

appointment/re-appointment forms part of the Notice of Annual General Meeting and Corporate Governance Report.

ii. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company as on 31^st March, 2024:

a) Shri Ravi Jhunjhunwala, Chairman, Managing Director & CEO

b) Shri Manish Gulati, Executive Director

c) Shri Gulshan Kumar Sakhuja, Chief Financial Officer

d) Shri Vivek Chaudhary, Company Secretary

19. Board Evaluation

The Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees, in the manner as enumerated in the Nomination and Remuneration Policy, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The evaluation exercise covered various aspects of the Board’s functioning such as composition of the Board & Committee(s), their functioning & effectiveness, contribution of all the Directors and the decision making process by the Board.

Your Directors express their satisfaction with the evaluation process and inform that the performance of the Board as a whole, its Committees and its member individually were adjudged satisfactory.

20. Nomination and Remuneration Policy

The Nomination & Remuneration Policy of the Company is in place and is attached as Annexure-III to this Report.

21. Meetings of the Board

The Board of Directors met six times in the financial year 2023-2024 through Physical Meeting / Video Conferencing as permitted by relevant MCA circulars & SEBI Circulars read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 under provisions of the Companies Act, 2013. The intervening period between any two consecutive Board Meetings was within the maximum time gap prescribed under the Companies Act, 2013, Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SS-1 issued by ICSI. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

22. Contracts and Arrangements with Related Parties

The Board of Directors of the Company, acting upon the recommendation of its Audit Committee of Directors, has approved the policy and procedures with regard to Related Party Transactions for reviewing, approving and ratifying Related Party transactions and in providing disclosures with respect to the above transactions, as required under the Companies Act, 2013, SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) as amended from time to time and other applicable provisions, rules and regulations made thereunder.

All related party contracts/arrangements/ transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The statement of transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee for approval on a quarterly basis. The statement is also supported by a Certificate from the Internal Auditor and Chief Financial Officer.

The updated policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website, the weblink of which is as under: https://hegltd.com/wp-content/uploads/2022/05/HEG RPT-Policy 09.02.2022.pdf

There are no pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the Company.

In terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has submitted the half yearly disclosure of related party transactions on a consolidated basis to the BSE Ltd. and National Stock Exchange of India Ltd.

Since No material Related Party Transactions were entered during the financial year of the Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

23. Committees of the Board

The Board has following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Corporate Social Responsibility Committee

• Risk Management Committee

Details of all the committees, along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, as part of this Annual Report.

All the recommendations of the Committees were accepted by the Board during the financial year 2023-24.

24. Auditors

M/s SCV & Co LLP having (Firm Registration No-000235N/N500089), Chartered Accountants, the Statutory Auditors of the Company had been reappointed as the Statutory Auditors for a second term of 5 consecutive years from the conclusion of 50^th Annual General Meeting (AGM) held on 1^st September, 2022 till conclusion of 55^th AGM of the Company, on such remuneration as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors from time to time.

Further the Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 read with rules made thereunder.

The Auditors’ Report read along with Notes to Accounts is self explanatory and therefore does not call for any further comments.

The Auditors’ Report does not contain any qualification, reservation or adverse remark.

No fraud has been reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

25. Cost Auditors

In terms of sub-section (1) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain the cost records. Accordingly, such accounts and records have been maintained by the Company.

The Cost Audit for financial year ended 31^st March, 2023 was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The said Cost Audit Report was filed on 6^th September, 2023.

No fraud has been reported by the Cost Auditors under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

Based on the recommendation of Audit Committee at its meeting held on 22^nd May, 2024, the Board has approved the re-appointment of M/s. N.D. Birla & Co. (M. No. 7907), as the Cost Auditors of the Company for the financial year 2024-2025 on a remuneration of C3,00,000/- plus applicable taxes and out of pocket expenses that may be incurred by them during the course of audit.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member’s ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the ensuing Annual General Meeting.

26. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had appointed M/s. GSK & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report is annexed herewith as Annexure-V.

No fraud has been reported by the Secretarial Auditors under Section 143 (12) of the Companies Act, 2013 and the rules made thereunder.

The Board upon the recommendation of Audit Committee has re-appointed M/s. GSK & Associates, Company Secretaries in practice as Secretarial Auditor of the Company for the financial year 2024-25.

27. Qualification, Reservation or Adverse Remark in the Audit Reports

There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.

28. Business Risk Management

The objective of risk management at the Company is to protect shareholders value by minimizing threats or losses, and identifying and maximizing opportunities. An enterprise-wide risk management framework is applied so that effective management of risk is an integral part of every employee’s job.

The Risk Management Policy of the Company is in place. The Company’s risk management strategy is integrated with the overall business strategies of the organization and is communicated throughout the organization. Risk management capabilities aide in establishing competitive advantage and allow management to develop reasonable assurance regarding the achievement of the Company’s objectives.

The annual strategic planning process provides the platform for identification, analysis, treatment and documentation of key risks. It is through this annual planning process that key risks and risk management strategies are communicated to the Board. The effectiveness of risk management strategies is monitored both formally and informally by management and process owners. There is no major risk which may threaten the existence of the Company.

The Company has duly constituted Risk Management Committee inter-alia to oversee Risk Management framework of the Company. The details pertaining to the composition, meetings and terms of reference of the Risk Management Committee are included in the Report on Corporate Governance which forms part of the Annual Report.

29. Corporate Social Responsibility (CSR)

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken CSR projects directly and/or through implementation agencies in the areas of promotion of education, eradicating hunger & poverty, initiatives towards Community Service and Rural Development, Healthcare, Plantation & Environment Development, Protection of National heritage, Art, Culture etc. These projects were in accordance with the CSR Policy of the Company and Schedule VII of the Companies Act, 2013.

The Company has a policy on CSR and has constituted a CSR Committee for undertaking CSR activities. The Composition of Committees & other details are provided in the Corporate Governance Report which forms part of the Annual Report.

The CSR policy may be accessed on the Company’s website at the link mentioned below: https://hegltd.com/wp-content/uploads/2021/06/ amended-csr-policy.pdf

The various CSR projects inter-alia undertaken will bring qualitative changes in the lives of the community around the plant location. One of the key project is the empowerment of farmers by fruiting cycle under Project Global Raisen (Rural Economic Transformation) which will result in improvement in their income resulting into their higher familial and societal status. The Company has established first mega kitchen “Akshaya Patra” in Bhopal. The Kitchen has started serving meals to 900 schools feeding 50,000 children everyday. The Company also runs Graphite school at Mandideep, Bhopal, which is CBSE affiliated and run by the Company for last 22 years. The new school building has started from 5^th April, 2023 with the academic session of 2023-24 taking the total capacity of the school to 2,700 students.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure-VI, forming part of this report.

30. Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and based on the recommendation of Audit Committee, the Board has approved the re-appointment of M/s. S.L. Chhajed & Co. LLP, as the Internal Auditors of the Company for the financial year 2024-2025.

31. Directors Responsibility Statement The Directors confirm that:

i) In preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2023-24 and of the profit of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) They have prepared the annual accounts on a going concern basis;

v) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

32. Vigil Mechanism /Whistle Blower Policy

The Company has a vigil mechanism named “Whistle Blower Policy”, which is overseen by the Audit Committee. The Policy inter-alia provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review. The policy is posted on the website of the Company, the web link of which is as under:

https://hegltd.com/wp-content/uploads/2018/07/

Whistle-Blower-Policy-08.05.2018.pdf

33. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in the Annual Report.

34. Investor Education and Protection Fund (IEPF)

There was no dividend declared for the financial year 2015-16 in the Annual General Meeting held on 28^th September, 2016, hence no amount of unclaimed dividend and shares were required to be transferred to IEPF/IEPFA during financial year 2023-24.

The details of same are given in Corporate Governance Report under head Shareholder Information.

35. Insider Trading

In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (Regulations), your Company has adopted the following-

i) Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders- The said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.

ii) Code of Practices and Procedures of Fair Disclosures of Unpublished Price Sensitive Information-The Code ensures fair disclosure of events and occurrences that could impact price discovery in the market.

iii) Policy for dealing with Unpublished Price Sensitive Information (UPSI) and Whistle Blower Policy for employees to report any leak or suspected leak of UPSI- The policy aims to enable the employees of the Company to report any leak or suspected leak of UPSI, procedures for inquiry in case of leak of UPSI or suspected leak of UPSI and initiate appropriate action and informing the SEBI promptly of such leaks, inquiries and results of such inquiries.

iv) Internal Control Mechanism to prevent Insider Trading- The Internal Control Mechanism is adopted to ensure compliances with the requirements given in the regulations and to prevent Insider Trading. The Audit Committee also review compliance with the provision of regulations periodically.

36. Annual Return

In terms of the Section 92 (3) of Companies Act, 2013 as amended, the Annual Return of the Company is placed on the website of the Company https://hegltd.com/annual-general-meeting

37. General Disclosure

a) The Company has maintained Cost Records in accordance with Section 148(1) of the Companies Act, 2013.

b) The Company has a group policy in place against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The Company has complied with the provisions of above said act. The Company has undertaken 20 workshops or awareness programmes against sexual harassment of women at the workplace. No complaint of Sexual Harassment was received during the financial year 2023-24.

c) The Company is in compliance of all applicable secretarial standards issued by The Institute of Company Secretaries of India from time to time.

d) The details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof: Not Applicable.

e) The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year: Not Applicable.

38. Key Initiatives with respect to Stakeholder relationship, Customer relationship, Environment, Sustainability, Health and Safety

The Company has duly constituted Stakeholders Relationship Committee with broad terms of reference, the details of which is provided in the Corporate Governance Report which forms part of the Annual Report.

As a responsible corporate citizen, the Company supports the ‘Green Initiative’ undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report etc. to shareholders at their e-mail address registered with the Depository Participants and Registrar & Transfer Agent.

To support the ‘Green Initiative’ and in compliance of Rule 18 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, Members who have not yet registered their email addresses or want to update a fresh email id are requested to register the same with their Depository Participant in case the shares are held by them in electronic form and with Company’s Registrar & Transfer Agents (RTA) in case the shares are held by them in physical form for receiving all communications, including Annual Report, Notices, Circulars, etc., from the Company electronically. The Company has also sent the communication to the concerned shareholders with regard to registration of their email address etc. with the Registrar and Share Transfer Agent/ Depository Participants in connection with service of documents through electronic mode.

Further, as permitted by MCA Circulars and SEBI Circulars issued from time to time, the Notice of the 52^nd AGM and the Annual Report of the Company for the financial year ended 31^st March, 2024 including therein the Audited Financial Statements for the year 2023-24, are being sent only by email to the Members.

The Company remained agile to emerging market opportunities by remaining connected with all its customers across the lean period. This effort allowed it to improve its capacity utilisation better than most peers in this space. A higher utilisation helped in better absorption of costs which improved cash flow. The Company stays in contact with its customers on a regular basis. The IT department is developing solutions for increased transparency in business operations and better connectivity with customers.

The Company is committed to protecting the environment. The R&D team works closely with some reputable research institutes to develop environment friendly approaches for sustainable growth which involves identifying alternative/ regenerative carbon feedstock.

The Company supports the principles of inclusive growth and equitable development through not just its corporate social responsibility initiates but through its core business as well. The Company’s social upliftment initiatives focus around healthcare, education, removing

hunger, community development and environmental conservation, which facilitates in bettering lives and improving livelihood, amongst others.

39. Acknowledgements

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from banks, financial institutions, the Central Government, the Government of Madhya Pradesh, the Government of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them. The Directors appreciate and value the contribution made by every member of the HEG family.

---

Mar 31, 2023

Your Directors have the pleasure of presenting their 51^st Annual Report together with Audited Financial Statements for the financial year ended 31^st March, 2023.

1. Financial Results		(Rs. in Crore)
Particulars	2022-23	2021-22
Net sales	2,435.32	2,173.23
Other operating income	31.92	28.38
Total income from operations (Net)	2,467.24	2,201.61
Other income	109.14	79.55
Total income	2,576.38	2,281.16
Profit before finance cost, depreciation and amortization	728.79	606.77
Finance cost	26.01	7.49
Profit before depreciation and amortization	702.78	599.28
Depreciation and amortization	102.30	79.29
Profit/(Loss) before tax	600.48	520.00
Provision for taxation:
Current tax	154.25	129.56
Deferred tax	(9.29)	(0.14)
Net Profit/(Loss) for the period	455.51	390.58
EPS (Basic) C	118.02	101.20
Note: No amount transferred to reserves.

2. Overall Performance

The Company recorded net sales of C2,435.32 crore during the financial year 2022-23 as compared to C2,173.23 crore in the previous financial year. The Net Profit during the financial year 2022- 23 was at C455.51 crore as compared to a net profit of C390.58 crore in financial year 2021-22 translating to Basic Earnings Per Share at C118.02 for the financial year 2022-23 as against C 101.20 in financial year 2021-22.

3. State of Company''s Affairs

The analytical review of the Company''s performance and its businesses, including initiatives in the areas of Human Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

Electrode Sector

Since the start of 2021, all graphite companies started working at higher capacity utilization levels which continued upto early 2022.

With the start of Russia Ukraine war in Feb''22, the energy and electricity prices soared in the forthcoming months dragging down steel production in several countries.

The world ex China saw steel production fall by 7.7 percent in 2022 compared to 2021.

As electrode is a derived demand from steel production, the electrode demand also fell causing the GE industry capacity utilisation to fall in second half of 2022.

Also due to global uncertainty, steel companies brought down their inventory levels. This continued up till end of 2022.

As electricity and energy prices cooled from their high levels, gradually we saw steel production to start stabilising.

Meanwhile the prices also came under pressure as the capacity utilisations fell to lower levels.

Other cost elements like pitches, LNG metcoke, furnace oil and overseas freight also came down from their record high levels.

As 2023 began we are keeping a cautiously optimistic outlook and expecting the demand to return in by the end of 2023, early 2024.

As the developed world has clearly embarked on the path of decarbonisation, there are lot of new EAF capacities coming up in US in next 3-4 years. At the same time in Europe, the trend is to shift some of Blast furnace production to EAF.

China too remains on the growth path for EAF albeit slower than expected.

All of the above factors bode well for the GE industry and resulting in increase in demand and improving prices and operating margins in the coming years.

Our plant expansion is coming to completion and it should be fully operational in June 2023 well in time to take care of additional demand expected in coming years.

We remain one of the most cost competitive and quality producer of graphite electrodes in the world fully ready to capture any available opportunities.

Power Generation

The Company has captive power generation capacity of 76.5mw (comprising two thermal power plants and a hydroelectric power facility).

Company currently buys its power needs from MP State Electricity Board and excess power generated is sold in the market through IEX and bi-partite power purchase agreement with open access to consumers.

The turnover of the Power Segment marginally increased to C47.10 crore in FY 2022-23 (after inter-segmental sales) from C25.28 crore in FY 2021-22.

4. Change in Share Capital

During the Financial Year 2022-23, there was no change in the Share Capital of the Company.

5. Material Changes and Commitments

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

6. Change in the Nature of Business

There is no change in the nature of business during the financial year 2022-23.

7. Subsidiary, Associate Companies or Joint Ventures

(i) Subsidiary Company

The Company has 1 (One) Wholly Owned Subsidiary ("Subsidiary or WOS") namely TACC Limited incorporated on 26^th December, 2022.

TACC Limited had no business operations during the financial year 2022-23 and Net Loss was C125.23 Lakh.

In terms of provisions of Section 136(1) of the Companies Act, 2013, the audited financial statements of TACC Limited, WOS of HEG Limited, have been placed on the website of the Company and are not being annexed in this Annual Report.

The financial statements of the subsidiary are kept for inspection by the shareholders at the registered office of the Company. The Company shall provide, the copy of the financial statements of its subsidiary to the shareholders free of cost upon their request.

The Managing Director of the Company does not receive any remuneration or commission from its subsidiary except the sitting fee.

(ii) Associate Companies or Joint Ventures

There are two Associates of the Company namely Bhilwara Infotechnology Limited and Bhilwara Energy Limited.

Bhilwara Infotechnology Limited had a turnover (Revenue from Operations) of C29.88 crore and Net Profit was C2.53 crore in the financial year 2022-23.

Bhilwara Energy Limited had a consolidated turnover (Revenue from Operations) of C488.22 crore and Net Profit (attributable to owners of the parent) was C157.46 crore as per their audited consolidated financial statements for the financial year.

The Company has no Joint Ventures.

No Company has become/ceased to be an Associate or Joint Venture during the financial year 2022-23.

Performance of Associate Companies & Subsidiary and their contribution to overall performance of the Company has been mentioned in the Notes to Accounts to the consolidated financial statements.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of financial statements of subsidiary and associate companies is annexed in the Form AOC-1 to the consolidated financial statements and hence not repeated here for the sake of brevity.

8. Consolidated Financial Statements

The Consolidated Financial Statements have been prepared by the Company in accordance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audited consolidated financial statements together with Auditors'' Report form part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remarks.

9. Dividend

Your Directors are pleased to recommend a final dividend at the rate of C42.50 per equity share on 3,85,95,506 equity shares of face value of C10 each for the financial year ended 31^st March, 2023 subject to the approval of the Shareholders at the ensuing 51^st Annual General Meeting (AGM) of the Company. The dividend, if declared by the Shareholders in the AGM will be subject to deduction of tax at source at applicable rates.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is attached as Annexure-IV, which form part of this report and is also available on the website of the Company.

10. Corporate Governance

A report on Corporate Governance forms part of this Report along with the Auditors'' Certificate on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Auditors'' Certificate for the financial year 2022-23 does not contain any qualifications, reservations or adverse remarks.

11. Management Discussion and Analysis

Management Discussion and Analysis Report as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of Annual Report.

12. Business Responsibility & Sustainability Report (BRSR)

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility & Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

13. Internal Control / Internal Financial Control Systems and Adequacy Thereof

The Company has an adequate internal control system commensurate with the size and nature of its business. An internal audit programme covers various activities and periodical reports are submitted to the top management. The Company has a well-defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

Further, the Internal Financial Control framework is under consistent supervision of Audit Committee, Board of Directors and also Independent Statutory Auditors. During the year, no reportable material weakness in the design or operations was observed.

14. Personnel

a) Industrial relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure-I.

15. Public Deposits

Your Company has not invited any deposits from public/shareholders in accordance with Chapter V of the Companies Act, 2013.

16. Significant and Material Orders Passed By The Regulators Or Courts Or Tribunals

There were no significant material orders passed by the Regulators/Courts/Tribunals during the financial year 2022-23 which would impact the going concern status of the Company and its future operations.

17. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-II forming part of this Report.

18. Directors and Key Managerial Personnel

i. DIRECTORS

The Shareholders in their 50^th Annual General Meeting held on 1^st September, 2022 have approved the appointment of Shri Davinder Kumar Chugh as Independent Director for first term of 5 consecutive years .

Shri Ravi Jhunjhunwala (DIN: 00060972), whose current terms is expiring on 12^th February, 2024 was reappointed upon the recommendation of Nomination and Remuneration Committee as Managing Director in the Board Meeting held on 22^nd May, 2023 subject to Shareholders approval for a period of 5 years w.ef. 13^th February, 2024 to 12^th February, 2029. He will continue to act as Chairman and Chief Executive officer of the Company in accordance with the Articles of Association and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The first term of office of Smt. Ramni Nirula (DIN: 00015330), as Independent Director is expiring on 30^th October, 2023. The Board has recommended the re-appointment of Smt. Ramni Nirula as Independent Director upon the recommendation of Nomination and Remuneration Committee, for a second term of five consecutive years w.e.f. 31^st October, 2023 upto 30^th October, 2028, subject to approval of Shareholders at the ensuing Annual General Meeting.

Shri Riju Jhunjhunwala (DIN: 00061060) and Shri Shekhar Agarwal (DIN: 00066113) shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board hereby recommends their re-appointment for approval of shareholders in the ensuing Annual General Meeting.

The Board confirms that independent director appointed during the year possess the desired integrity, expertise and experience.

The Independent Directors of the Company stated that they are in compliance with the Section 150 of the Companies Act, 2013 read with Rule 6 (1) & (2) of the Companies (Appointment & Qualification of Directors) Rules, 2014.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. They have also complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.

In the opinion of Board, Independent Directors fulfil the conditions specified in the Companies Act, 2013 read with schedules and rules thereto as well as the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Independent Directors are independent of management.

The Company has a Code of Conduct for the Directors and Senior Management Personnel. This Code is a comprehensive code applicable to all Directors and members of the Senior Management. A copy of the Code has been put on the Company''s website www.hegltd.com.

The brief profile, pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards-2, of the Directors eligible for appointment/re-appointment forms part of the Notice of Annual General Meeting and Corporate Governance Report.

ii. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company as on 31^st March, 2023:

a) Shri Ravi Jhunjhunwala, Chairman, Managing Director & CEO

b) Shri Manish Gulati, Executive Director

c) Shri Gulshan Kumar Sakhuja, Chief Financial Officer

d) Shri Vivek Chaudhary, Company Secretary

19. Board Evaluation

The Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees, in the manner as enumerated in the Nomination and Remuneration Policy, in accordance with the provisions of the Companies

Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The evaluation exercise covered various aspects of the Board''s functioning such as composition of the Board & Committee(s), their functioning & effectiveness, contribution of all the Directors and the decision making process by the Board.

Your Directors express their satisfaction with the evaluation process and inform that the performance of the Board as a whole, its Committees and its member individually were adjudged satisfactory.

20. Nomination and Remuneration Policy

The Nomination & Remuneration Policy of the Company is in place and is attached as Annexure-III to this Report.

21. Meetings of the Board

The Board of Directors met four times in the financial year 2022-2023 through Physical Meeting and Video Conferencing as permitted by relevant MCA circulars & SEBI Circulars read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 under provisions of the Companies Act, 2013. The intervening period between any two consecutive Board Meetings was within the maximum time gap prescribed under the Companies Act, 2013, Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SS-1 issued by ICSI. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

22. Contracts and Arrangements with Related Parties

The Board of Directors of the Company, acting upon the recommendation of its Audit Committee of Directors, has approved the policy and procedures with regard to Related Party Transactions for reviewing, approving and ratifying Related Party transactions and in providing disclosures with respect to the above transactions, as required under the Companies Act, 2013, Listing Agreement [now SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 ("Listing Regulations")] as amended from time to time and other applicable provisions, rules and regulations made thereunder.

All related party contracts/arrangements/ transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The statement of transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee for approval on a quarterly basis. The statement is supported by a Certificate from the Statutory Auditors, Internal Auditor and Chief Financial Officer.

The updated policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website, the weblink of which is as under:

https://hegltd.com/wp-content/uploads/2022/05/ HEG RPT-Policy 09.02.2022.pdf

There are no pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the Company.

In terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has submitted the half yearly disclosure of related party transactions on a consolidated basis to BSE Ltd. and National Stock Exchange of India Ltd.

Since No material Related Party Transactions were entered during the financial year of the Company, accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

23. Committees of the Board

The Board has following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Corporate Social Responsibility Committee

Details of all the committees, along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, as part of this Annual Report.

All the recommendations of the Committees were accepted by the Board during the financial year 2022-23.

24. Auditors

M/s SCV & Co LLP having (Firm Registration No-000235N/N500089), Chartered Accountants, the Statutory Auditors of the Company had been re-appointed as the Statutory Auditors for a second term of 5 consecutive years from the conclusion of 50^th Annual General Meeting (AGM) held on 1^st September, 2022 till conclusion of 55^th AGM of the Company, on such remuneration as may be mutually agreed between the Board of Directors of the Company and the Statutory Auditors from time to time.

Further, the Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 read with rules made thereunder.

The Auditors'' Report read along with Notes to Accounts is self-explanatory and therefore does not call for any further comments.

The Auditors'' Report does not contain any qualification, reservation or adverse remark.

No fraud has been reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

25. Cost Auditors

In terms of sub-section (1) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain the cost records. Accordingly, such accounts and records have been maintained by the Company.

The Cost Audit for financial year ended March 31, 2022 was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The said Cost Audit Report was filed on 6^th September, 2022.

No fraud has been reported by the Cost Auditors under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

Based on the recommendation of Audit Committee at its meeting held on 22^nd May, 2023, the Board has approved the re-appointment of M/s. N.D. Birla & Co. (M. No. 7907), as the Cost Auditors of the Company for the financial year 2023-24 on a remuneration of C3 Lakhs plus applicable taxes

in establishing competitive advantage and allow management to develop reasonable assurance regarding the achievement of the Company''s objectives.

The annual strategic planning process provides the platform for identification, analysis, treatment and documentation of key risks. It is through this annual planning process that key risks and risk management strategies are communicated to the Board. The effectiveness of risk management strategies is monitored both formally and informally by management and process owners. There is no major risk which may threaten the existence of the Company.

The Company has duly constituted Risk Management Committee inter-alia to oversee Risk Management framework of the Company. The details pertaining to the composition, meetings and terms of reference of the Risk Management Committee are included in the Report on Corporate Governance which forms part of the Annual Report.

29. Corporate Social Responsibility (CSR)

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken CSR projects directly and/or through implementation agencies in the areas of promotion of education, eradicating hunger & poverty, initiatives towards Community Service and Rural Development, Healthcare, Plantation & Environment Development, Protection of National heritage, Art, Culture etc. These projects were in accordance with the CSR Policy of the Company and Schedule VII of the Companies Act, 2013.

The Company has a policy on CSR and has constituted a CSR Committee for undertaking CSR activities. The Composition of Committees & other details are provided in the Corporate Governance Report which forms part of the Annual Report.

The CSR policy may be accessed on the Company''s website at the link mentioned below:

https://hegltd.com/wp-content/uploads/2021/06/

amended-csr-policy.pdf

The various CSR projects inter-alia undertaken will bring qualitative changes in the lives of the community around the plant location. One of the key project is the empowerment of farmers by fruiting cycle under Project Global Raisen (Rural

and out of pocket expenses that may be incurred by them during the course of audit.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Member''s ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the ensuing Annual General Meeting.

26. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had appointed M/s. GSK & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2022-23. The Secretarial Audit Report is annexed herewith as Annexure-V.

No fraud has been reported by the Secretarial Auditors under Section 143 (12) of the Companies Act, 2013 and the rules made thereunder.

The Board upon the recommendation of Audit Committee has re-appointed M/s. GSK & Associates, Company Secretaries in practice as Secretarial Auditors of the Company for the financial year 2023-24.

27. Qualification, Reservation or Adverse Remark in the Audit Reports

There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.

28. Business Risk Management

The objective of risk management at the Company is to protect shareholders value by minimizing threats or losses, and identifying and maximizing opportunities. An enterprise-wide risk management framework is applied so that effective management of risk is an integral part of every employee''s job.

The Risk Management Policy of the Company is in place. The Company''s risk management strategy is integrated with the overall business strategies of the organization and is communicated throughout the organization. Risk management capabilities aide

Economic Transformation) which will result in improvement in their income resulting into their higher familial and societal status. The Company has established first mega kitchen "Akshaya Patra" in Bhopal. The Akshaya Patra Kitchen was inaugurated on 25^th January 2023 by Chief Minister of Madhya Pradesh, Shri Shivraj Singh Chouhan. The Kitchen has started serving meals to 842 Schools & Madrasa feeding 48,000 children everyday. The Company also run Graphite school at Mandideep, Bhopal, which is CBSE affiliated and run by the Company for last 21 years. The Company had also started construction of New school building which is going on in full swing and will be fully ready by 30^th June 2023. The present capacity of which is approx. 1400 students would be increased to approx. 2700 students.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure-VI, forming part of this report.

30. Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and based on the recommendation of Audit Committee, the Board has approved the re-appointment of M/s. S.L. Chhajed & Co. LLP, as the Internal Auditors of the Company for the financial year 2023-2024.

31. Directors Responsibility Statement

The Directors confirm that:

i) In preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2022-23 and of the profit of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) They have prepared the annual accounts on a going concern basis;

v) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

32. Vigil Mechanism /Whistle Blower Policy

The Company has a vigil mechanism named "Whistle Blower Policy", which is overseen by the Audit Committee. The Policy inter-alia provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for lodging concerns if any, for review. The policy is posted on the website of the Company, the web link of which is as under:

https://hegltd.com/wp-content/uploads/2018/07/

Whistle-Blower-Policy-08.05.2018.pdf

33. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in the Annual Report.

34. Investor Education and Protection Fund (IEPF)

As required under Section 124 of the Companies Act, 2013 the unclaimed dividend amount aggregating to C 15.89 Lakh lying with the Company for a period of seven years pertaining to the financial year ended on 31^st March, 2015, was transferred during the Financial Year 2022-23, to the Investor Education and Protection Fund established by the Central Government. The details of same are given in Corporate Governance Report under head Shareholder Information.

35. Insider Trading

In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (Regulations), your Company has adopted the following-

i) Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders- The

said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.

ii) Code of Practices and Procedures of Fair Disclosures of Unpublished Price Sensitive Information- The Code ensures fair disclosure of events and occurrences that could impact price discovery in the market.

iii) Policy for dealing with Unpublished Price Sensitive Information (UPSI) and Whistle Blower Policy for employees to report any leak or suspected leak of UPSI- The policy aims to enable the employees of the Company to report any leak or suspected leak of UPSI, procedures for inquiry in case of leak of UPSI or suspected leak of UPSI and initiate appropriate action and informing the SEBI promptly of such leaks, inquiries and results of such inquiries.

iv) Internal Control Mechanism to prevent Insider Trading- The Internal Control Mechanism is adopted to ensure compliances with the requirements given in the regulations and to prevent Insider Trading. The Audit Committee also review compliance with the provision of regulations periodically.

36. Annual Return

In terms of the Section 92 (3) of Companies

Act, 2013 as amended, the Annual Return of the

Company is placed on the website of the Company

https://hegitd.com/annuai-generai-meeting/

37. General Disclosure

a) The Company has maintained Cost Records in accordance with Section 148(1) of the Companies Act, 2013.

b) The Company has a group policy in place against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workpiace (Prevention, Prohibition & Redressai) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress compiaints received regarding sexuai harassment. The Company has compiied with the provisions of above

said act. The Company has undertaken 17 workshops or awareness programmes against sexuai harassment of women at the workplace. No complaint of Sexual Harassment was received during the financial year 2022-23.

c) The Company is in compiiance of aii applicable secretarial standards issued by The Institute of Company Secretaries of India from time to time.

d) The details of difference between amount of the vaiuation done at the time of one-time settiement and the vaiuation done whiie taking ioan from the Banks or Financiai Institutions along with the reasons thereof: Not Applicable.

e) The detaiis of appiication made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year aiong with their status as at the end of the financial year: Not Applicable.

38. Key Initiatives with respect to Stakeholder relationship, Customer relationship, Environment, Sustainability, Health and Safety

The Company has duly constituted Stakeholders Reiationship Committee with broad terms of reference, the details of which is provided in the Corporate Governance Report which forms part of the Annuai Report.

As a responsible corporate citizen, the Company supports the ''Green Initiative'' undertaken by the Ministry of Corporate Affairs, Government of India, enabiing eiectronic deiivery of documents inciuding the Annuai Report etc. to sharehoiders at their e-maii address registered with the Depository Participants and Registrar & Transfer Agent.

To support the ''Green Initiative'' and in compiiance of Rule 18 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, Members who have not yet registered their email addresses or want to update a fresh email id are requested to register the same with their Depository Participant in case the shares are heid by them in eiectronic form and with Company''s Registrar & Transfer Agents (RTA) in case the shares are held by them in physical form for receiving aii communications, including Annual

Report, Notices, Circulars, etc., from the Company electronically. The Company has also sent the communication to the concerned shareholders with regard to registration of their emaii address etc. with the Registrar and Share Transfer Agent/ Depository Participants in connection with service of documents through eiectronic mode.

Further, as permitted by MCA Circulars and SEBI Circulars issued from time to time, in view of the prevailing Covid-19 Pandemic, the Notice of the 51^th AGM and the Annual Report of the Company for the financial year ended 31^st March, 2023 inciuding therein the Audited Financiai Statements for the year 2022-23, are being sent oniy by emaii to the Members.

The Company remained agiie to emerging market opportunities by remaining connected with aii its customers across the iean period. This effort aiiowed it to improve its capacity utiiisation better than most peers in this space. A higher utiiisation heiped in better absorption of costs which improved cash flow. The Company stays in contact with its customers on a reguiar basis. The IT department is deveioping soiutions for increased transparency in business operations and better connectivity with customers.

The Company is committed to protecting the environment. The R&D team works cioseiy with some reputabie research institutes to deveiop environment friendiy approaches for sustainabie growth which invoives identifying aiternative/ regenerative carbon feedstock.

The Company supports the principies of inciusive growth and equitabie deveiopment through not just its corporate sociai responsibiiity initiates but through its core business as weii. The Company''s sociai upiiftment initiatives focus around heaithcare, education, removing hunger, working for the benefit of armed forces veterans and martyrs'' community deveiopment and environmentai conservation, which faciiitates in bettering iives and improving iiveiihood, amongst others.

39. Acknowledgements

Your Directors wish to piace on record, their appreciation for the vaiuabie assistance and support received by your Company from banks, financiai institutions, the Centrai Government, the Government of Madhya Pradesh, the Government of Uttar Pradesh and their departments. The Board aiso thanks the empioyees at aii ieveis, for the dedication, commitment and hard work put in by them. The Directors appreciate and vaiue the contribution made by every member of the HEG famiiy.

For and on behalf of the Board of Directors Ravi Jhunjhunwala

Chairman, Managing Director & CEO DIN: 00060972

Piace: Noida (U.P)

Date: 22^nd May, 2023

---

Mar 31, 2022

Your Directors have the pleasure of presenting their 50^th Annual Report together with Audited Financial Statements for the financial year ended 31^st March, 2022.

1. Financial Results		(B in Crores)
Particulars	2021-22	2020-21
Net sales	2,173.23	1,234.43
Other operating income	28.38	21.80
Total income from operations (Net)	2,201.61	1,256.23
Other income	79.55	112.91
Total income	2,281.16	1,369.14
Profit before finance cost, depreciation and amortisation	606.77	53.73
Finance cost	7.49	11.37
Profit before depreciation and amortisation	599.28	42.36
Depreciation and amortisation	79.29	73.12
Profit/(Loss) before tax	520.00	(30.76)
Provision for taxation:
Current tax	129.56	0.20
Deferred tax	(0.14)	(5.66)
Net Profit/(Loss) for the period	390.58	(25.30)
EPS (Basic) D	101.20	(6.56)
Note: No amount transferred to reserves.

2. Overall Performance

The Company recorded net sales of B2,173.23 Crores during the financial year 2021-22 as compared to B1,234.43 Crores in the previous financial year. The Net Profit during the financial year 2021- 22 was at B390.58 Crores as compared to a net loss of B25.30 Crores in financial year 2020-21 translating to Basic Earnings Per Share at B101.20 for the financial year 2021-22 as against B(6.56) in financial year 2020-21.

3. Impact of Covid-19

The Company has considered the possible effects that may result from the pandemic relating to COVID-19 in the preparation of the

Annual Accounts including the recoverability of carrying amounts of financial and non financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of these Annual Accounts, used internal and external sources of information and economic forecasts and expects that the carrying amount of these assets will be recovered.

The plant managed the Covid crises very well and has been running successfully since then without any interruption or slow down with our capacity utilisations / sales volumes going up consistently.

Since we export about 2/3^rd of our production to more than 35 countries including some of the largest Steel Companies globally.

Our business is based upon the steel sector (Electric arc furnaces) which is largely dependent upon the construction sector, automobiles and other white goods. There is revival of demand and steel production returning to pre COVID levels. We are optimistic that once the COVID-19 impact gets over, the growth of steel sector will rebound further.

4. State of Company''s Affairs

The analytical review of the Company''s performance and its businesses, including initiatives in the areas of Human Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

Electrode Sector

In past years from 2010-2017, electrode prices had dropped to unviable levels due to lower demand for electrodes compared to capacity. As a result of which 6 plants in the western world closed down taking out 200,000 tons of excess capacity. When the capacity got balanced, came the sudden clampdown on Steel industry and Graphite industry in China due to pollution concerns. As the western world electrode capacity was already balanced with demand as a result of closures and also because western world steel plants started producing more due to drop in steel exports from China, there was a sudden spurt in demand of electrodes which led to shooting up of electrode prices.

In the year of 2017 and 2018, other suppliers outside China increased their production levels to meet the additional demand. Meanwhile Chinese electrode players also modified their plants to meet the new pollution norms and brought back their capacity. At the same time the EAF did not grow as expected in China. This led to electrode supply becoming more than electrode demand and thus the normalization of electrode prices around middle of 2019.

As the electrode supply was less in 2018, most of the steel companies overbought electrodes creating excess inventories. When the electrode supply eased and prices started to fall, all the steel

companies started to correct their inventory levels from beginning of 2019.

By the end of 2020, the excess inventories with the customers got corrected and the consumption resulted in real demand for Graphite electrodes. At the same time, the COVID impact on economy started to wear out and consumption of steel returned to pre COVID levels.

Since the start of 2021, all graphite companies started working at higher capacity utilization levels which continues till date.

The pricing of electrodes kept increasing quarter by quarter for last 5 quarters. Although the key raw material prices also kept increasing quarter by quarter besides other inputs like pitches, metcoke, furnace oil, LNG , overseas freight etc, still the electrode prices were able to absorb the additional costs and turn out decent operating margins.

There are lot of new EAF capacities coming up in US in next 3-4 years. At the same time, due to decarbonisation pressures in developed economies like Europe, the trend is to shift some to Blast furnace production to EAF.

China too remains on the growth path for EAF albeit slower than expected.

All of the above factors bode well for the GE industry and resulting in increase in demand and improving prices and operating margins.

Our plant expansion is going on in full steam and we expect to complete construction by Dec 2022 and with a brief period of stabilisation and trials, we should start additional production by first quarter of 2023.

We remain one of the most cost competitive and quality producer of graphite electrodes in the world fully ready to capture any available opportunities.

Power Generation

The Company has captive power generation capacity of 76.5MW (comprising two thermal power plants and a hydroelectric power facility) leading to sustained supply of electricity for its graphite electrode facility. Company currently buys its power needs from MP state electricity board.

Excess power generated was sold in the market through IEX and bi-partite power purchase agreement with open access to consumers.

The turnover of the Power Segment marginally increased to B25.28 Crores in FY 2021-2022 (after inter-segmental sales) from B22.31 Crores in FY 2020-21 (after inter-segmental sales) due to following reason:

- Higher sales realisation on selling of power generating by hydel power plant.

- Increased Power intake from the Madhya Pradesh Electricity Board (MPEB) and reduced captive power from the thermal plant for availing rebate of B2 per kwh.

This initiative reduced the volume of captive generation of thermal and transfer to graphite, and reduced the average realisation in the power segment as the revenue in power segment is booked based on the corresponding rate of power defined by the state and utilities.

This measure, though has reduced revenue and bottom-line in the thermal power segment, had a favourable impact on the overall cost of power consumed in the graphite electrode business.

5. Change in Share Capital

During the Financial Year 2021-22, there was no change in the Share Capital of the Company.

6. Material Changes and Commitments

No material changes and commitments affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

7. Change in the Nature of Business

There is no change in the nature of business during the financial year 2021-22.

8. Subsidiary, Associate Companies or Joint Ventures

There are two Associates of the Company namely Bhilwara Infotechnology Limited and Bhilwara Energy Limited.

Bhilwara Infotechnology Ltd. had a turnover (Revenue from Operations) of B35.09 Crores and Net Profit was B1.79 Crores in the financial year 2021-22.

Bhilwara Energy Ltd. had a consolidated turnover (Revenue from Operations) of B388.94 Crores and

Net Profit (attributable to owners of the parent) was B81.16 Crores as per their audited consolidated financial statements for the financial year 2021-22.

The Company has neither have Subsidiaries nor Joint Ventures.

No Company has become/ceased to be an Associate or Joint Venture during the financial year 2021-22.

Performance of Associate Companies and their contribution to overall performance of the Company has been mentioned in the Notes to Accounts to the consolidated financial statements.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of financial statements is annexed in the Form AOC-1 to the consolidated financial statements and hence not repeated here for the sake of brevity.

9. Consolidated Financial Statements

The Consolidated Financial Statements have been prepared by the Company in accordance with applicable provisions of the Companies Act, 2013, Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The audited consolidated financial statements together with Auditors'' Report form part of the Annual Report. The Auditor''s Report does not contain any qualification, reservation or adverse remarks.

10. Dividend

Your Directors are pleased to recommend a final dividend at the rate of B40/- per equity share on 3,85,95,506 equity shares of face value of B10 each for the financial year ended 31^st March, 2022 subject to the approval of the Shareholders at the ensuing 50^th Annual General Meeting (AGM) of the Company. The dividend, if declared by the Shareholders in the AGM will be subject to deduction of tax at source at applicable rates.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is attached as Annexure IV, which form part of this report and is also available on the website of the Company.

11. Corporate Governance

A report on Corporate Governance forms part of this Report along with the Auditors'' Certificate on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Auditors'' Certificate for the financial year 2021-22 does not contain any qualifications, reservations or adverse remarks.

12. Management Discussion and Analysis

Management Discussion and Analysis Report as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of Annual Report.

13. Business Responsibility Report

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

14. Internal Control / Internal Financial Control Systems and Adequacy Thereof

The Company has an adequate internal control system commensurate with the size and nature of its business. An internal audit programme covers various activities and periodical reports are submitted to the top management. The Company has a well-defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

Further, the Internal Financial Control framework is under consistent supervision of Audit Committee, Board of Directors and also Independent Statutory Auditors. During the year, no reportable material weakness in the design or operations was observed.

15. Personnel

a) Industrial relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment

and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure-I.

16. Public Deposits

Your Company has not invited any deposits from public/shareholders in accordance with Chapter V of the Companies Act, 2013.

17. Significant and Material Orders Passed By The Regulators Or Courts Or Tribunals

There were no significant material orders passed by the Regulators/Courts/Tribunals during the financial year 2021-22 which would impact the going concern status of the Company and its future operations.

18. Conservation Of Energy, Technology Absorption, Foreign Exchange Earnings And Outgo

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure-II forming part of this Report.

19. Directors and Key Managerial Personnel i. DIRECTORS

Shri Davinder Kumar Chugh (DIN: 09020244) was appointed upon the recommendation of Nomination and Remuneration Committee as an Additional Independent Director by Board of Directors on 11^th August, 2021 for first term of 5 consecutive years subject to approval of Shareholders. The Board have expressed their satisfaction with regard to integrity, expertise and experience of Shri Davinder Kumar Chugh and hereby recommends his appointment for approval of shareholders in the ensuing Annual General Meeting, as the matter has been considered as unavoidable.

Dr. Om Parkash Bahl ceased the office as Independent Director on completion of his second term on 29^th August, 2021.

Shri Manish Gulati (DIN: 08697512) and Smt. Vinita Singhania (DIN: 00042983) shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board hereby recommends their re-appointment

for approval of shareholders in the ensuing Annual General Meeting.

The Board confirms that independent director appointed during the year possess the desired integrity, expertise and experience. The Independent Directors of the Company stated that they are in compliance with the Section 150 of the Companies Act, 2013 read with Rule 6 (1) & (2) of the Companies (Appointment & Qualification of Directors) Rules, 2014.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. They have also complied with the Code for Independent Directors prescribed in Schedule IV of the Companies Act, 2013.

In the opinion of Board, Independent Directors fulfil the conditions specified in the Companies Act, 2013 read with schedules and rules thereto as well as the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Independent Directors are independent of management.

The Company has a Code of Conduct for the Directors and Senior Management Personnel. This Code is a comprehensive code applicable to all Directors and members of the Senior Management. A copy of the Code has been put on the Company''s website www.hegltd.com.

The brief profile, pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standards-2, of the Directors eligible for appointment/re-appointment forms part of the Notice of Annual General Meeting and Corporate Governance Report.

ii. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company as on 31^st March, 2022:

a) Shri Ravi Jhunjhunwala, Chairman, Managing Director & CEO

b) Shri Manish Gulati, Executive Director

c) Shri Gulshan Kumar Sakhuja, Chief Financial Officer

d) Shri Vivek Chaudhary, Company Secretary

Related Party transactions and in providing disclosures with respect to the above transactions, as required under the Companies Act, 2013, Listing Agreement [now SEBI (Listing Obligations Disclosure Requirements) Regulations, 2015 ("Listing Regulations")] as amended from time to time and other applicable provisions, rules and regulations made thereunder.

All related party contracts/arrangements/ transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The statement of transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee for approval on a quarterly basis. The statement is supported by a Certificate from the Statutory Auditors, Internal Auditor and Chief Financial Officer.

The updated policy on Related Party Transactions as approved by the Board is uploaded on the Company''s website, the weblink of which is as under:

https://hegltd.com/wp-content/uploads/2022/05/

HEG_RPT-Policy_09.02.2022.pdf

There are no pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the Company.

In terms of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has submitted the half yearly disclosure of related party transactions on a consolidated basis to the BSE Ltd. and National Stock Exchange of India Ltd.

Since No material Related Party Transactions were entered during the financial year of the Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

20. Board Evaluation

The Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees, in the manner as enumerated in the Nomination and Remuneration Policy, in accordance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The evaluation exercise covered various aspects of the Board''s functioning such as composition of the Board & Committee(s), their functioning & effectiveness, contribution of all the Directors and the decision making process by the Board.

Your Directors express their satisfaction with the evaluation process and inform that the performance of the Board as a whole, its Committees and its member individually were adjudged satisfactory.

21. Nomination and Remuneration Policy

The Nomination & Remuneration Policy of the Company is in place and is attached as Annexure-III to this Report.

22. Meetings of the Board

The Board of Directors met four times in the financial year 2021-2022 through Video Conferencing as permitted by relevant MCA circulars & SEBI Circulars read with Rule 3 of the Companies (Meetings of Board and its Powers) Rules, 2014 under provisions of the Companies Act, 2013. The intervening period between any two consecutive Board Meetings was within the maximum time gap prescribed under the Companies Act, 2013, Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SS-1 issued by ICSI. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

23. Contracts and Arrangements with Related Parties

The Board of Directors of the Company, acting upon the recommendation of its Audit Committee of Directors, has approved the policy and procedures with regard to Related Party Transactions for reviewing, approving and ratifying

24. Committees of the Board

The Board has following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Corporate Social Responsibility Committee

Details of all the committees, along with their charters, composition and meetings held during the year, are provided in the Report on Corporate Governance, as part of this Annual Report.

All the recommendations of the Committees were accepted by the Board during the financial year 2021-22.

25. Auditors

M/s SCV & Co LLP having (Firm Registration No-000235N/N500089), Chartered Accountants, the Statutory Auditors of the Company who had been appointed as the Statutory Auditors for a period of 5 years from the conclusion of 45^th Annual General Meeting (AGM), will complete their present term on the conclusion of 50^th AGM of the Company. The Board of Directors, on the recommendation of the Audit Committee, recommended for the approval of the members of the Company, the re-appointment of SCV & Co LLP having (Firm Registration No- 000235N/N500089), as Statutory Auditors for the second term of 5 years, from the conclusion of 50^th AGM of the Company till the conclusion of 55^th AGM of the Company with the authority to the Board to fix the remuneration for their tenure.

The Company has received confirmation from the Statutory Auditors to the effect that their re-appointment, if made, will be in accordance with the limits specified under the Companies Act, 2013 and they satisfy the criteria with respect to their eligibility, provided in Section 141 of the Companies Act, 2013 read with rules made thereunder.

The Auditors'' Report read along with Notes to Accounts is self explanatory and therefore does not call for any further comments.

The Auditors'' Report does not contain any qualification, reservation or adverse remark.

No fraud has been reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

26. Cost Auditors

In terms of sub-section (1) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to maintain the cost records. Accordingly, such accounts and records have been maintained by the Company.

The Cost Audit for financial year ended March 31, 2021 was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The said Cost Audit Report was filed on 8^th September, 2021.

No fraud has been reported by the Cost Auditors under Section 143(12) of the Companies Act, 2013 and the rules made thereunder.

Based on the recommendation of Audit Committee at its meeting held on 25^th May, 2022, the Board has approved the re-appointment of M/s. N.D. BirLa & Co. (M. No. 7907), as the Cost Auditors of the Company for the financiaL year 2022- 2023 on a remuneration of B3,00,000/- plus applicable taxes and out of pocket expenses that may be incurred by them during the course of audit.

As required under the Companies Act, 2013, the remuneration payabLe to the Cost Auditor is required to be pLaced before the Members in a generaL meeting for their ratification. AccordingLy, a resolution seeking Member''s ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the ensuing Annual General Meeting.

27. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of ManageriaL PersonneL) RuLes, 2014 and ReguLation 24A of the SEBI (Listing ObLigations and DiscLosure Requirements) ReguLations, 2015, the Company had appointed M/s. GSK & Associates, a firm of Company Secretaries in Practice to undertake the SecretariaL Audit of the Company for the financiaL year 2021-22. The SecretariaL Audit Report is annexed herewith as Annexure-V.

No fraud has been reported by the SecretariaL Auditors under Section 143 (12) of the Companies Act, 2013 and the ruLes made thereunder.

The Board upon the recommendation of Audit Committee has re-appointed M/s. GSK & Associates, Company Secretaries in practice as SecretariaL Auditor of the Company for the financiaL year 2022-23.

28. Qualification, Reservation or Adverse Remark in the Audit Reports

There is no qualification, reservation or adverse remark made by the Statutory or Cost or Secretarial Auditors in their Audit Reports issued by them.

29. Business Risk Management

The objective of risk management at the Company is to protect sharehoLders vaLue by minimizing threats or Losses, and identifying and maximising opportunities. An enterprise-wide risk management framework is appLied so that effective management of risk is an integraL part of every empLoyee''s job.

The Risk Management PoLicy of the Company is in pLace. The Company''s risk management strategy is integrated with the overaLL business strategies of the organization and is communicated throughout the organisation. Risk management capabiLities aide in estabLishing competitive advantage and aLLow management to deveLop reasonabLe assurance regarding the achievement of the Company''s objectives.

The annuaL strategic pLanning process provides the pLatform for identification, anaLysis, treatment and documentation of key risks. It is through this annuaL pLanning process that key risks and risk management strategies are communicated to the Board. The effectiveness of risk management strategies is monitored both formaLLy and informaLLy by management and process owners. There is no major risk which may threaten the existence of the Company.

The Company has duLy constituted Risk Management Committee inter-aLia to oversee Risk Management framework of the Company. The detaiLs pertaining to the composition, meetings and terms of reference of the Risk Management Committee are incLuded in the Report on Corporate Governance which forms part of the AnnuaL Report.

30. Corporate Social Responsibility (CSR)

As part of its initiatives under Corporate Social ResponsibiLity (CSR), the Company has undertaken CSR projects directLy and/or through impLementation agencies in the areas of promotion of education, eradicating hunger & poverty, initiatives towards Community Service and RuraL DeveLopment, HeaLthcare, PLantation & Environment DeveLopment, Protection of National heritage, Art, Culture etc. These projects were in accordance with the CSR PoLicy of the Company and Schedule VII of the Companies Act, 2013.

The Company has a policy on CSR and has constituted a CSR Committee for undertaking CSR activities. The Composition of Committees & other detaiLs are provided in the Corporate Governance Report which forms part of the AnnuaL Report.

The CSR poLicy may be accessed on the Company''s website at the Link mentioned beLow:

https://hegLtd.com/wp-content/upLoads/2021/06/

amended-csr-policy.pdf

The various CSR projects inter-alia undertaken will bring quaLitative changes in the Lives of the community around the pLant Location. One of the key project is the empowerment of farmers by fruiting cycLe under Project GLobaL Raisen (RuraL Economic Transformation) which wiLL resuLt in improvement in their income resuLting into their higher famiLiaL and societaL status. During the financiaL year 2021-22, the Company has established first mega kitchen in Bhopal which will provide 40,000 meals a day serving approx. 900 schools. The Capital expenditure have already been completed and kitchen will start once the Covid-19 pandemic eases. The Company aLso run Graphite schooL at Mandideep, BhopaL, which is CBSE affiLiated and run by the Company for Last 20 years. The present capacity of which is 1400 students. The Company had decided to buiLd a new modern schooL to house another 1500 children from class 6^th to 12^th. The construction has aLready been started and is expected to be compLeted by December, 2022.

The Annual Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure-VI, forming part of this report.

31. Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and based on the

recommendation of Audit Committee, the Board has approved the re-appointment of M/s. S.L. Chhajed & Co. LLP, as the InternaL Auditors of the Company for the financiaL year 2022-2023.

32. Directors Responsibility Statement

The Directors confirm that:

i) In preparation of the annual accounts, the appLicabLe accounting standards have been foLLowed and there are no materiaL departures from the same;

ii) They have seLected such accounting poLicies and appLied them consistentLy and made judgements and estimates that are reasonabLe and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2021-22 and of the profit of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting frauds and other irreguLarities;

iv) They have prepared the annuaL accounts on a going concern basis;

v) They have laid down internal financial controls to be foLLowed by the Company and that such internaL financiaL controLs are adequate and are operating effectively; and

vi) They have devised proper systems to ensure compliance with the provisions of all appLicabLe Laws and that such systems are adequate and operating effectiveLy.

33. Vigil Mechanism /Whistle Blower Policy

The Company has a vigiL mechanism named "Whistle Blower Policy", which is overseen by the Audit Committee. The Policy inter-aLia provides safeguards against victimization of the Whistle Blower. Employees and other stakeholders have direct access to the Chairperson of the Audit Committee for Lodging concerns if any, for review. The poLicy is posted on the website of the Company, the webLink of which is as under:

https://hegltd.com/wp-content/uploads/2018/07/

Whistle-Blower-Policy-08.05.2018.pdf

34. Particulars of Loans, Guarantees or Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in the Annual Report.

35. Investor Education and Protection Fund (IEPF)

As required under Section 124 of the Companies Act, 2013 the unclaimed dividend amount aggregating to B30.40 Lakh lying with the Company for a period of seven years pertaining to the financial year ended on 31^st March, 2014, was transferred during the Financial Year 202122, to the Investor Education and Protection Fund established by the Central Government. The details of same are given in Corporate Governance Report under head Shareholder Information.

36. Insider Trading

In compliance with the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015 (Regulations), your Company has adopted the foiiowing-

i) Code of Conduct for Regulating, Monitoring and Reporting of Trading by Insiders- The said Code lays down guidelines, which advise Insiders on the procedures to be followed and disclosures to be made in dealing with the shares of the Company and cautions them on consequences of non-compliances.

ii) Code of Practices and Procedures of Fair Disclosures of Unpublished Price Sensitive Information- The Code ensures fair disclosure of events and occurrences that could impact price discovery in the market.

iii) Policy for dealing with Unpublished Price Sensitive Information (UPSI) and Whistle Blower Policy for employees to report any leak or suspected leak of UPSI- The policy aims to enable the employees of the Company to report any leak or suspected leak of UPSI, procedures for inquiry in case of leak of UPSI or suspected leak of UPSI and initiate appropriate action and informing the SEBI promptly of such leaks, inquiries and results of such inquiries.

iv) Internal Control Mechanism to prevent Insider Trading- The Internal Control Mechanism is adopted to ensure compliances with the

requirements given in the regulations and to prevent Insider Trading. The Audit Committee also review compliance with the provision of regulations periodically.

37. Annual Return

In terms of the Section 92 (3) of Companies Act, 2013 as amended, the Annual Return of the Company is placed on the website of the Company www.hegltd.com on the following link:

https://hegitd.com/annuai-generai-meeting/

38. General Disclosure

a) The Company has maintained Cost Records in accordance with Section 148(1) of the Companies Act, 2013.

b) The Company has a group poiicy in piace against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workpiace (Prevention, Prohibition & Redressai) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress compiaints received regarding sexual harassment. The Company has complied with the provisions of above said act. The Company has undertaken 14 workshops or awareness programmes against sexual harassment of women at the workplace. No complaint of Sexual Harassment was received during the financial year 2021-22.

c) The Company is in compliance of aii appiicabie secretariai standards issued by The Institute of Company Secretaries of India from time to time.

39. Key Initiatives with respect to Stakeholder relationship, Customer relationship, Environment, Sustainability, Health and Safety

The Company has duly constituted Stakeholders Reiationship Committee with broad terms of reference, the detaiis of which is provided in the Corporate Governance Report which forms part of the Annuai Report.

As a responsible corporate citizen, the Company supports the ''Green Initiative'' undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents inciuding the Annuai Report etc. to sharehoiders at

their e-maii address registered with the Depository Participants and Registrar & Transfer Agent.

To support the ''Green Initiative'' and in compliance of Ruie 18 of the Companies (Management and Administration) Rules, 2014, as amended from time to time, Members who have not yet registered their emaii addresses or want to update a fresh emaii id are requested to register the same with their Depository Participant in case the shares are held by them in electronic form and with Company''s Registrar & Transfer Agents (RTA) in case the shares are held by them in physical form for receiving aii communications, inciuding Annuai Report, Notices, Circulars, etc., from the Company electronically. The Company has also sent the communication to the concerned shareholders with regard to registration of their emaii address etc. with the Registrar and Share Transfer Agent/ Depository Participants in connection with service of documents through eiectronic mode.

Further, as permitted by MCA Circulars and SEBI Circulars issued from time to time, in view of the prevailing Covid-19 Pandemic, the Notice of the 50^th AGM and the Annual Report of the Company for the financial year ended 31^st March, 2022 inciuding therein the Audited Financiai Statements for the year 2021-22, are being sent only by email to the Members.

During the year under review, the Company has also sent reminder letter to concerned sharehoiders who have not en-cashed any of the dividend warrants reiated to FY 2014-15 and FY 2017-18 to 2020-21, requesting them to claim their unpaid/unciaimed dividend of previous years.

The Company remained agiie to emerging market opportunities by remaining connected with aii its customers across the iean period. This effort aiiowed it to improve its capacity utiiisation better than most peers in this space. A higher utiiisation heiped in better absorption of costs which improved cash fiow. The Company stays in contact with its customers on a reguiar basis. The IT department is deveioping soiutions for

increased transparency in business operations and better connectivity with customers.

The Company is committed to protecting the environment. The R&D team works cioseiy with some reputabie research institutes to deveiop environment friendiy approaches for sustainabie growth which invoives identifying aiternative/ regenerative carbon feedstock.

The Company supports the principies of inciusive growth and equitabie deveiopment through not just its corporate sociai responsibiiity initiates but through its core business as weii. The Company''s sociai upiiftment initiatives focus around heaithcare, education, removing hunger, working for the benefit of armed forces veterans and martyrs'' community deveiopment and environmentai conservation, which faciiitates in bettering iives and improving iiveiihood, amongst others.

40. Acknowledgements

Your Directors wish to piace on record, their appreciation for the vaiuabie assistance and support received by your Company from banks, financiai institutions, the Centrai Government, the Government of Madhya Pradesh, the Government of Uttar Pradesh and their departments. The Board aiso thanks the empioyees at aii ieveis, for the dedication, commitment and hard work put in by them.

The Directors regret the ioss of iife due to COVID-19 pandemic and are deepiy gratefui and have immense respect for every person who risked their iife and safety to fight this pandemic. The Directors appreciate and vaiue the contribution made by every member of the HEG famiiy.

For and on behalf of the Board of Directors Ravi Jhunjhunwala

Chairman,

Piace: Noida (U.P) Managing Director & CEO

Dated: 25^th May, 2022 DIN: 00060972

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Mar 31, 2018

The Directors have the pleasure of presenting their 46^th Annual Report and audited statements of accounts for the year ended 31^st March, 2018.

(Rs. in crore)

1. Financial Results	2017-18	2016-17
Net sales	2,672.06	869.15
Other operating income	86.34	26.87
Total income from operations (Net)	2,758.40	896.02
Other income	12.37	7.13
Total income	2,770.77	903.15
Profit before finance cost, depreciation and amortisation	1,733.94	87.87
Finance cost	56.68	54.72
Profit before depreciation and amortisation	1,677.26	33.15
Depreciation and amortisation	72.55	73.92
Profit/Loss before tax	1,604.71	(40.77)
Provision for taxation:-
Current tax	513.56	1.12
Deferred tax	9.81	8.16
Net profit/Loss for the period	1,081.34	(50.05)
EPS (Basic) Rs.	270.61	(12.52)

2. OVERALL PERFORMANCE

The Company recorded net sales of RS.2,672.06 Crore during the financial year 2017-18 as compared to RS.869.15 crore in the previous financial year. The Net Profit during the financial year 2017-18 was at RS.1,081.34 Crore as compared to a net loss of RS.50.05 crore in financial year 2016-17 translating to basic earning per share at RS.270.61 for the financial year 201718 as against H(12.52) in financial year 2016-17.

3. STATE OF COMPANY’S AFFAIRS

The analytical review of the Company’s performance and its businesses, including initiatives in the areas of Human Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

ELECTRODE SECTOR

In recent years, electrode prices have been extremely low, as cheap iron ore and coking coal saw EAF players choosing to reroll blast furnace-produced semis, or utilise merchant pig iron. For every electrode they made, producers lost money, and consequently shuttered capacity as a survival strategy. About 200,000 TPA of electrode manufacturing capacity was shut over the last four years across the globe - most of which was permanently shut.

This period saw an unusual increase in demand even as supply remained squeezed. Overall EAF production has increased by around 10% on year so far in 2017, perhaps aided by hikes in coking coal last year that saw melting become more economically viable. This was a fallout of reduced exports of steel products from China (steel export quantity for 2017 declined by around 30% year-on-year) which allowed other steel manufacturers to reignite their EAF infrastructure shoring the demand for electrodes. This, when combined with the curtailment of Chinese electrode capacity and short needle coke supply, the main raw material for the melting sticks, pushed up spot prices for electrodes by at least tenfold during the year. As a result, contractual terms for electrodes, which have been annual in nature for decades, altered to quarterly deals. HEG has proved that it is amongst the first to cope up with the enhanced requirement of the electrodes globally. The Company got an interesting opportunity to prove the utility of state of art technology it added in 2012, which it grabbed with open arms. The results of the year demonstrates our belief that we are on a strong footing.

POWER GENERATION

The Company has captive power generation capacity of 76.5MW (comprising two thermal power plants and a hydroelectric power facility) leading to sustained supply of reliable, energy for its graphite electrode facility. Excess power generated was sold in the market through IEX and bi-partite power purchase agreement with open access consumers.

Sale of excess power generated a turnover of RS.19.56 crore in 2017-18 against RS.25.68 crore in 2016-17. This was primarily due to an increase in consumption of power in the graphite electrode operations. Thus, leaving small surplus for external sale.

With the prediction of average rainfall by the Met department for the forthcoming year, the prospect of using lowest cost hydel power in plant activities would help strengthen the results of this segment favourably. Thermal facilities provide both flexibility to operations and also an opportunity to optimise cost in times when it is required the most.

4. MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

5. CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business during the financial year 2017-18.

6. SUBSIDIARY, ASSOCIATE COMPANIES OR JOINT VENTURES

(i) Subsidiary Company

Your Directors informs that M/s HEG Graphite Products and Services Ltd, a wholly owned subsidiary (“WOS”) ceased to be subsidiary of the Company, since the name of WOS has been struck-off from the Register of Companies under Section 248 (5) of the Companies Act, 2013, upon the application made by WOS under Section 248(2) of the Companies Act, 2013 and WOS stands dissolved w.e.f. 21st December, 2017. At present, the Company does not have any subsidiary.

(ii) Associate Companies or Joint Ventures

There are two Associates of the Company namely Bhilwara Infotechnology Ltd. and Bhilwara Energy Ltd. Bhilwara Infotechnology Ltd. had a turnover of RS.44.21 crore and Net Profit was RS.4.33 crore in the financial year 2017-18. Bhilwara Energy Ltd had a consolidated turnover of RS.317.72 crore and Net Profit was RS.55.84 crore as per their financial statements (audited & consolidated) for the financial year 2017-18. The Company has no Joint Ventures.

No Company has become/ceased to be an Associate or Joint venture during the financial year 2017-18.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of financial statements is annexed in the Form AOC-1 to the consolidated Financial Statement and hence not repeated here for the sake of brevity.

7. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The audited consolidated financial statements together with Auditors’ Report form part of the Annual Report. The Auditor’s Report does not contain any qualification, reservation or adverse remarks.

8. DIVIDEND

Your Directors had approved the payment of Interim Dividend @ RS.30/- per Equity Share of RS.10/- each at its meeting held on 8th February, 2018 and the same has been paid to all the eligible shareholders within the stipulated time.

Your Directors are pleased to recommend a final dividend on equity shares at the rate of RS.50/- per Share on Equity Shares of RS.10/- each for the financial year ended 31^st March, 2018, subject to your approval at the Annual General Meeting.

As per Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Dividend Distribution Policy is attached as Annexure IV, which form part of this report and is also available on the website of the Company.

9. CORPORATE GOVERNANCE

A report on Corporate Governance forms part of this Report along with the Auditors’ Certificate on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Auditors’ Certificate for the financial year 2017-18 does not contain any qualifications, reservations or adverse remarks.

10. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Report.

11. BUSINESS RESPONSIBILITY REPORT

As per Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Business Responsibility Report describing the initiatives taken by the Company from an environmental, social and governance perspective is attached as part of the Annual Report.

12. INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUACY THEREOF

The Company has an adequate internal control system commensurate with the size and nature of its business. An internal audit programme covers various activities and periodical reports are submitted to the management. The Company has a well-defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

Besides, the Companies Act, 2013 has put primary responsibility of implementing a robust Internal Financial Control framework and is under consistent supervision of Audit Committee, Board of Directors and also independent Statutory Auditors. During the year, no reportable material weakness in the design or operation were observed.

13. PERSONNEL

a) Industrial relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of employees

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure - I.

14. PUBLIC DEPOSITS

Your Company has not invited any deposits from public/ shareholders in accordance with Chapter V of the Companies Act, 2013.

15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There were no significant material orders passed by the Regulators/ Courts/ Tribunals during the financial year 201718 which would impact the going concern status of the Company and its future operations.

16. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure II forming part of this Report.

17. DIRECTORS AND KEY MANAGERIAL PERSONNEL

One of your Directors namely Shri S.N Bhattacharya (holding DIN 06758088), shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for reappointment. The Board recommends his re-appointment.

The first term of office of Smt. Vinita Singhania (DIN 00042983), as Independent Director, expires at the ensuing Annual General Meeting.

The Board has recommended the re-appointment of Smt. Vinita Singhania (DIN 00042983), as Independent Director of the Company for a second term of 5 (five) consecutive years.

The brief profile, pursuant to Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, of the Director eligible for appointment/ re-appointment forms part of the Corporate Governance Report.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

18. BOARD EVALUATION

The Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees, in the manner as enumerated in the Nomination and Remuneration Policy, in accordance with the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The evaluation exercise covered various aspects of the Board’s functioning such as composition of the Board & Committee(s), their functioning & effectiveness, contribution of all the Directors and the decision making process by the Board.

Your Directors express their satisfaction with the evaluation process and inform that the performance of the Board as a whole, its Committees and its member individually was adjudged satisfactory.

19. NOMINATION AND REMUNERATION POLICY

The Nomination & Remuneration Policy of the Company is in place and is attached as Annexure - III to this Report.

20. MEETINGS OF THE BOARD

The Board of Directors met 5 (five) times in the financial year 2017-2018. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

21. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All related party contracts/arrangements/transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The statement of transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee for approval on a quarterly basis. The statement is supported by a Certificate from the Statutory Auditors and CFO.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website, the weblink of which is as under:http://hegltd.com/wp-content/uploads/2018/05/Policy_on_Related_Party_Transactions-HEG-Limited.pdf

There are no pecuniary relationships or transactions of Non- Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the company.

No material Related Party Transactions i.e transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements were entered during the financial year of the Company. Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

22. AUDIT COMMITTEE

The composition of the Audit Committee is stated in the Corporate Governance Report. All the recommendations of the Audit Committee were accepted by the Board during the financial year 2017-18.

23. AUDITORS

The appointment of M/s. S C Vasudeva & Co., Chartered Accountants (Firm Registration No. 000235N), Auditors of the Company, who were appointed at 45th Annual General Meeting held on September 22, 2017, for a period of 5 years till the conclusion of the 50^th AGM of the Company to be held in the year 2022, subject to ratification of the appointment by the Members at every AGM, will be placed before the members at this Annual General meeting for ratification.

With effect from April 1, 2018, M/s. S C Vasudeva & Co., Chartered Accountants, the Statutory Auditors of the Company, has been merged with M/s. S.P. Puri & Co., Chartered Accountants, and the name of the new firm is SCV & Co., Chartered Accountants (SCV). There would not be any change in the date of establishment of firm as registered with ICAI. The FRN 000235N remain same.

Further, the Auditors have confirmed their eligibility under Section 144 of the Companies Act, 2013 and the rules made thereunder.

The Auditors’ Report read along with notes to accounts is self-explanatory and therefore does not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

24. BUSINESS RISK MANAGEMENT

The objective of risk management at the Company is to protect shareholders value by minimizing threats or losses, and identifying and maximising opportunities. An enterprise-wide risk management framework is applied so that effective management of risk is an integral part of every employee’s job.

The Risk Management Policy of the Company is in place. The Company’s risk management strategy is integrated with the overall business strategies of the organization and is communicated throughout the organisation. Risk management capabilities aide in establishing competitive advantage and allow management to develop reasonable assurance regarding the achievement of the Company’s objectives.

The annual strategic planning process provides the platform for identification, analysis, treatment and documentation of key risks. It is through this annual planning process that key risks and risk management strategies are communicated to the Board. The effectiveness of risk management strategies is monitored both formally and informally by management and process owners. There is no major risk which may threaten the existence of the Company.

25. COST AUDITORS

The Cost Audit for financial year ended March 31, 2017 was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The said Cost Audit Report was filed on 29^th August, 2017.

Based on the recommendation of Audit Committee at its meeting held on 8^th May, 2018, the Board has approved the re-appointment of M/s. N.D. Birla & Co. (M. No. 7907), as the Cost Auditors of the Company for the financial year 20182019 on a remuneration of RS. 2 Lacs plus service tax and out of pocket expenses that may be incurred by them during the course of audit.

As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member’s ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

26. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. GSK & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial year 2017-18. The Secretarial Audit Report is annexed herewith as Annexure V. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Board has re-appointed M/s. GSK & Associates, Company Secretaries in practice as Secretarial Auditor of the Company for the financial year 2018-19.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As part of its initiatives under “Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of promotion of education, eradicating hunger & poverty, initiatives towards Community Service and rural development, Healthcare, Plantation & Environment Development, Protection of National heritage, art, culture etc. These projects were in accordance with the CSR Policy of the Company and Schedule VII of the Companies Act, 2013.

The CSR Committee comprises Shri Ravi Jhunjhunwala (Chairman), Shri Dharmendar Nath. Davar and Smt. Vinita Singhania.

The CSR policy may be accessed on the Company’s website at the link mentioned below: http://hegltd.com/wp-content/uploads/2018/05/Corporate_Social_Responsibility_Policy.pdf

The Annual Report on CSR activities is enclosed as Annexure VI, forming part of this report.

28. INTERNAL AUDITORS

Based on the recommendation of Audit Committee at its meeting held on 30th May, 2017, the Board has approved the re-appointment of M/s. S.L. Chhajed & Co, as the Internal auditors of the Company for the financial year 2018-2019.

29. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that:

i) In preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year 2017-18 and of the profit of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) They have prepared the annual accounts on a going concern basis;

v) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

30. VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has a vigil mechanism named “Whistle Blower Policy” in place. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and the policy is also posted on the website of the Company, the weblink of which is as under: http://hegltd.com/wp-content/uploads/2018/05/whistle.pdf

31. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in the Annual Report.

32. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in form MGT-9 as required under Section 92(3) under Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure VII to this report.

33. GENERAL DISCLOSURE

a) The Company has a group policy in place against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. No complaint of sexual harassment was received during the financial year 2017-18.

b) The Company is in compliance of all applicable secretarial standards issued by The Institute of Company Secretaries of India from time to time.

34. ACKNOWLEDGEMENTS

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from banks, financial institutions, the Central Government, the Government of Madhya Pradesh, the Government of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them.

For and on behalf of the Board of Directors

Ravi Jhunjhunwala

Place: Noida (U.P.) Chairman, Managing Director & CEO

Dated: 8^th May, 2018 DIN 00060972

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Mar 31, 2017

Dear Members

The Director’s have the pleasure of presenting their 45^th Annual Report and audited statements of accounts for the year ended 31^st March, 2017.

(Rs. in crore)

1. Financial Results	2016-17	2015-16
Net sales	869.15	888.82
Other operating income	26.87	20.83
Total income from operations (Net)	896.02	909.65
Other income	7.13	4.11
Total income	903.15	913.76
Profit before finance cost, depreciation and amortisation	87.79	140.57
Finance cost	54.72	60.31
Profit before depreciation and amortisation	33.07	80.26
Depreciation and amortisation	73.92	79.30
Profit/Loss before tax	(40.85)	0.96
Provision for taxation:-
Current year	8.12	5.71
Income tax for earlier years	1.12	2.80
Loss for the period	(50.10)	(7.55)
EPS (Basic) Rs.	(12.54)	(1.92)

2. OVERALL PERFORMANCE

The Company recorded net sales of Rs.869.15 Crore during the financial year 2016-17 as compared to Rs.888.82 Crore in the previous financial year. The Net loss during the financial year 2016-17 was at Rs.50.10 Crore as compared to a net loss of Rs.7.55 Crore in financial year 2015-16 translating to basic earning per share at Rs.(12.54) for the financial year 2016-17 as against Rs.(1.92) in financial year 2015-16.

3. STATE OF COMPANY’S AFFAIRS

The analytical review of the Company’s performance and its businesses, including initiatives in the areas of Human Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

Graphite Electrodes

Significant reduction in EAF denominated steel making globally during the year under review coupled with increased exports of steel from China, forced the pertinent industry players to operate below 55% capacity in the first half of 2016-17. Situation improved for the better towards the second half, when the steel industry witnessed significant reduction in their inventories of electrodes, envisaging fall in prices to continue. There was another year in succession where the pressure on prices continued unabated. Towards the end of the financial year, fall in prices were majorly arrested and the new orders for the following year, showed signs of slight improvement as well. It can safely be said, that the worst is over for the industry and the Company is ready to ride through with the reversal cycle of demand and growth.

Major consolidation in the Graphite Electrode Industry, the process of which started in 2014, seems to have ended this year, with the acquisition of world’s second largest producer by an existing Graphite Electrode producer. This coupled with permanent closure of nearly 2,00,000 metric tonne of inefficient and high cost manufacturing facilities globally, adjusted the supply side favorably for the industry, thus making way for the industry to adjust prices, going forward.

With enhanced capacity utilization levels witnessed in recent past due to demand growth particularly in India and closure on ground of polluting steel manufacturing units in China, the Company stands on a firm footing to reap the benefits as a result of improved demand and prices, going forward.

Power Generation

Power business comprises of facilities, which are primarily run for meeting captive requirement of manufacturing graphite electrodes and in the process, also sells surplus power in the open market.

The power segment, which comprises of both hydro generation facility and also a thermal generation facility performed exceeding well this year, especially the hydro segment. Both India and Madhya Pradesh, where the hydro plant is located witnessed above average rainfall during the year, which helped the Company in generating one of the highest number of units in past decade.

Since the generation in Thermal power generating facilities is primarily to meet production requirement of graphite electrodes, the improvement in levels of capacity utilization for the year as a whole, improved overall efficiency of the segment and in turn bottomline. Long term tie up with the state run coal company continue to keep the coal cost under check and immune from volatile market forces. This has not only optimized the SHR of coal, but also helped improve this segment’s results for the year under review.

4. MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

5. CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business during the financial year 2016-17.

6. SUBSIDIARY, ASSOCIATE COMPANIES OR JOINT VENTURES

(i) Subsidiary Company

In terms of provisions of Section 136(1) of the Companies Act, 2013, the audited financial statements of HEG Graphite Products and Services Ltd, the wholly owned subsidiary of the Company, have been placed on the website of the Company and are not being annexed in this Annual Report.

The financial statements of the subsidiary Company are kept for inspection by the shareholders at the registered Office of the Company. The Company shall provide, the copy of the financial statements of its subsidiary Company to the shareholders upon their request.

There were no business operations in the subsidiary Company. The subsidiary reported a net loss of Rs.32,573 in the financial year 2016-17.

The Managing Director of the Company does not receive any remuneration or commission from its subsidiary.

The Board of Directors of the Company at its meeting held on 30^th May, 2017 has accorded its in-principle approval for closure of its wholly owned subsidiary i.e. HEG Graphite Products and Services Limited. This wholly owned subsidiary was incorporated in the year 2009 but has never carried out any commercial operation.

(ii) Associate Companies or Joint Ventures

There are two Associates of the Company namely Bhilwara Infotechnology Ltd. and Bhilwara Energy Ltd. Bhilwara Infotechnology Ltd. had a turnover of Rs.40.77 Crore and Net Profit was Rs.3.96 Crore in the financial year 2016-17. Bhilwara Energy Ltd had a consolidated turnover of Rs.383.43 Crore and Net Profit was Rs.14.85 Crore for the financial year 2016-17. The Company has no Joint Ventures.

No Company has become/ceased to be a Subsidiary, Associate or Joint Venture during the financial year 2016-17.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of financial statements of the Company’s subsidiary and associate Companies in Form AOC-1 is attached to the Consolidated Financial Statements of the Company.

7. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The audited consolidated financial statements together with Auditors’ Report form part of the Annual Report.

The Auditor’s Report does not contain any qualification, reservation or adverse remarks.

8. DIVIDEND

In view of absence of net profits, no dividend is being recommended for the financial year 2016-17.

9. CORPORATE GOVERNANCE

A report on Corporate Governance forms part of the Annual Report along with the Auditors’ Certificate on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015. The Auditor’s Certificate for the financial year 2016-17 does not contain any qualifications, reservations or adverse remarks.

10. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of the Annual Report.

11. INTERNAL CONTROL / INTERNAL FINANCIAL CONTROL SYSTEMS AND ADEQUACY THEREOF

The Company has an adequate internal control system commensurate with the size and nature of its business. An internal audit programme covers various activities and periodical reports are submitted to the management. The Company has a well-defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

Besides, the Companies Act, 2013 has put primary responsibility of implementing a robust Internal Financial Control framework and is under consistent supervision of Audit Committee, Board of Directors and also independent Statutory Auditors. During the year, no reportable material weakness in the design or operation were observed.

12. PERSONNEL

a) Industrial relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure - I.

13. PUBLIC DEPOSITS

Your Company has not invited any deposits from public/ shareholders in accordance with Chapter V of the Companies Act, 2013.

14. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

There were no significant material orders passed by the Regulators/ Courts/ Tribunals during the financial year 2016-17 which would impact the going concern status of the Company and its future operations.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure II forming part of this Report.

16. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Directors inform you about the resignation of Shri Dantuluri Satyanarayana Ravindra Raju from the Directorship and Executive Directorship of the Company w.e.f. 31^st August, 2016. The Board appreciates the valuable contribution and guidance extended by Shri Dantuluri Satyanarayana Ravindra Raju during his short- tenure as an Executive Director of the Company.

Shri Satish Chand Mehta was appointed as an Independent Director of the Company w.e.f. 23^rd June, 2016.

Pursuant to the recommendation of the Nomination and Remuneration Committee, Shri Raju Rustogi, Chief Financial Officer of the Company has also been appointed as the Chief Operating Officer of the Company w.e.f. 1^st September, 2016.

Shri Ashish Sabharwal, Company Secretary and Compliance Officer of the Company has resigned and relieved from the services of the Company w.e.f. 30^th November, 2016.

Shri Vivek Chaudhary, a member of the Institute of Company Secretaries of India (Membership No. ACS 13263), has been appointed as Company Secretary and Compliance Officer of the Company w.e.f. 30^th May, 2017.

One of your Directors namely Shri Shekhar Agarwal, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

The brief profile, pursuant to Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, of the Director eligible for appointment / re-appointment forms part of the Corporate Governance Report / Notice of Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the. SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

17. BOARD EVALUATION

The Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The exercise covered various aspects of the Board’s functioning such as composition of the Board & Committee(s), their functioning & effectiveness, contribution of all the Directors and the decision making process by the Board.

The Directors express their satisfaction with the evaluation process.

18. FAMILIARIZATION PROGRAMMES FOR THE INDEPENDENT DIRECTORS

In compliance with the requirements of the SEBI (LODR) Regulations, 2015, the Company has put in place familiarization programme for the Independent Directors to familiarize them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates business model, etc. It is also available on the Company website and a weblink thereto is as under: http://www.hegltd.com/pdf/Details_of_Familiarisation_Programmes_imparted_to_Independent_Directors.pdf

19. NOMINATION AND REMUNERATION POLICY

The Nomination & Remuneration Policy of the Company is in place and is attached as Annexure - III to this Report.

20. MEETINGS OF THE BOARD

The Board of Directors met 4 (four) times in the financial year 2016-2017. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

21. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All related party contracts/arrangements/transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The statement of transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee for its review on a quarterly basis. The statement is supported by a Certificate from the CFO.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website, the weblink of which is as under: http://www.hegltd.com/pdf/Policy_on_Related_Party_ Transactions_HEG_ Limited.pdf

There are no pecuniary relationships or transactions of Non-Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the company.

No material Related Party Transactions i.e. transactions exceeding ten percent of the annual consolidated turnover as per the last audited financial statements were entered during the financial year by the Company. Accordingly, the disclosure of Related Party Transactions as required under 134 (3) (h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

22. AUDIT COMMITTEE

The composition of the Audit Committee is stated in the Corporate Governance Report. All the recommendations of the Audit Committee were accepted by the Board during the financial year 2016-17.

23. AUDITORS

M/s. Doogar & Associates, Chartered Accountants and M/s. S.S. Kothari Mehta & Co., Chartered Accountants, Auditors of the Company, will mandatorily retire from their office at the ensuing Annual General Meeting. They are, however, not eligible for re-appointment in terms of provisions of Section 139 of the Companies Act, 2013 and rules thereunder. The Auditors’ Report read along with notes to accounts is self-explanatory and therefore does not call for any further comments. The Auditors’ Report does not contain any qualification, reservation or adverse remark.

During the year under review, the Auditors had not reported any matter under Section 143 (12) of the Companies Act, 2013; therefore, no detail is required to be disclosed under Section 134 (3) (ca) of the Companies Act, 2013.

Your Directors have recommended the appointment of M/s. S.C. Vasudeva & Co. Chartered Accountants (Firm Registration No. 000235N) as Statutory Auditors of the Company to hold office for a period of 5 consecutive years from the conclusion of the 45^th Annual General Meeting of the Company scheduled to be held in the year 2017 till the conclusion of 50^th Annual General Meeting to be held in the year 2022 subject to the approval of the shareholders in the ensuing Annual General Meeting and subject to ratification by members at every subsequent Annual General Meeting. They have furnished a certificate to the effect that their appointment will be in accordance within the applicable provisions of the Companies Act, 2013.

24. BUSINESS RISK MANAGEMENT

The objective of risk management at the Company is to protect shareholders value by minimizing threats or losses, and identifying and maximising opportunities. An enterprise-wide risk management framework is applied so that effective management of risk is an integral part of every employee’s job.

The Risk Management Policy of the Company is in place for Risk Assessment and Mitigation. It is periodically reviewed by the Audit Committee / Board of Directors. The Company’s risk management strategy is integrated with the overall business strategies of the organization and is communicated throughout the organisation. Risk management capabilities aide in establishing competitive advantage and allow management to develop reasonable assurance regarding the achievement of the Company’s objectives.

The annual strategic planning process provides the platform for identification, analysis, treatment and documentation of key risks. It is through this annual planning process that key risks and risk management strategies are communicated to the Board. The effectiveness of risk management strategies is monitored both formally and informally by management and process owners. There is no major risk which may threaten the existence of the Company.

25. COST AUDITORS

The Cost Audit for financial year ended March 31, 2016 was conducted by M/s. N.D. Birla & Co. (Firm Registration No. 000028). The said Cost Audit Report was filed on 27^th August, 2016.

Based on the Audit Committee recommendations at its meeting held on 30th May, 2017, the Board has approved the re-appointment of M/s. N.D. Birla & Co. (Firm Registration No. 000028), as the Cost Auditors of the Company for the financial year 2017- 2018 on a remuneration of Rs.2 lacs plus service tax and out of pocket expenses that may be incurred by them during the course of audit. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member’s ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

26. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. GSK & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the Financial year 2016-17. The Secretarial Audit Report is annexed herewith as Annexure IV. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Board has re-appointed M/s. GSK & Associates, Company Secretaries in practice as Secretarial Auditor of the Company for the financial year 2017-18.

27. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of promotion of education, eradicating hunger & poverty, initiatives towards Community Service and Rural Development, Healthcare, Plantation & Environment Development, Protection of National heritage, Art, Culture etc. These projects were in accordance with the CSR Policy of the Company and Schedule VII of the Companies Act, 2013.

The CSR Committee comprises Shri Ravi Jhunjhunwala (Chairman), Shri Dharmendar Nath Davar and Smt. Vinita Singhania.

The CSR policy may be accessed on the Company’s website at the link mentioned below: http://hegltd.com/pdf/Corporate_Social_Responsibility_Policy.pdf

The Annual Report on CSR activities is enclosed as Annexure V, forming part of this report.

28. INTERNAL AUDITORS

Based on the Audit Committee recommendations at its meeting held on 30^th May, 2017, the Board has approved the re-appointment of M/s. S.L. Chhajed & Co, as the Internal auditors of the Company for the financial year 2017-2018.

29. DIRECTORS RESPONSIBILITY STATEMENT The Directors confirm that:

i) In preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31^st March, 2017 and of the loss of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) They have prepared the annual accounts on a going concern basis;

v) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

30. VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has a vigil mechanism named “Whistle Blower Policy” in place. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and the policy is also posted on the website of the Company, the weblink of which is as under: http://hegltd.com/pdf/Whistle_Blower_Policy_HEG.pdf

The policy provides for adequate safeguard against victimization of director(s) / employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no person has denied access to the Audit Committee.

31. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in the Annual Report.

32. EXTRACT OF ANNUAL RETURN

The extract of the Annual Return in form MGT-9 as required under Section 92(3) and Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended as Annexure VI to this report.

33. GENERAL DISCLOSURE

The Company has a group policy in place against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. The Company has undertaken four workshops / awareness programs against sexual harassment at workplace. No complaint of sexual harassment was received during the financial year 2016-17.

34. ACKNOWLEDGEMENTS

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from banks, financial institutions, the Central Government, the Government of Madhya Pradesh, the Government of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them.

For and on behalf of the Board of Directors

Place: Noida (U.P.) Ravi Jhunjhunwala

Dated: 30^th May, 2017 Chairman, Managing Director & CEO

---

Mar 31, 2015

Dear Members,

The Directors have the pleasure of presenting their 43rd Annual Report and audited statements of accounts for the year ended 31st March, 2015.

(Rs. in crore)

1. (i) FINANCIAL RESULTS 2014-15 2013-14

Net sales 1234.63 1458.91

other operating income 5.89 7.90

total income from operations (net) 1240.52 1466.81

other income 11.55 21.77

Total income 1252.06 1488.58

profit before exceptional items, finance cost, depreciation and amortisation 207.61 267.76

Exceptional items (22.18) (25.36)

Profit before finance cost, depreciation and amortisation 185.44 242.40

Finance cost 65.76 72.30

Profit before depreciation and amortisation 119.67 170.10

Depreciation and amortisation 75.36 72.66

profit before tax 44.32 97.44

Provision for taxation:-

Current year 5.32 10.65

Income tax for earlier years - 0.17

net profit for the period 39.00 86.62

EPS (Basic) Rs. 9.76 21.68

(ii) Appropriations

Amount available for appropriation 457.80 455.51

Dividend :

a) on Equity Shares

Proposed dividend 11.99 23.98

b) Dividend distribution tax

on proposed dividend 2.40 4.07

Transfer to:

General reserve 3.90 8.66

Balance carried forward 439.52 418.80

2. OVERALL PERFORMANCE

The Company recorded net sales of Rs.1234.63 crore during the financial year 2014-15 as compared to Rs.1458.91 crore in the previous financial year. The Net profit during the financial year 2014-15 was at Rs.39.00 crore as compared to Rs.86.62 crore in financial year 2013-14 translating to basic earning per share at Rs.9.76 for the financial year 2014-15 as against Rs.21.68 in financial year 2013-14.

3. STATE OF COMPANY'S AFFAiRS

The analytical review of the Company's performance and its businesses, including initiatives in the areas of Human Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

Graphite Electrodes

The year under review was one of the most challenging years for the Company, as the Graphite Electrode industry saw erosion in margins. The Company by reformulating its operational management discipline, was able to reduce the effect of declining margins.

The major initiatives during financial year 2014-15 were undertaken to usher in qualitative improvement. A keen emphasis was laid on optimising costs across all operational and commercial areas. Company's focus on reducing working capital continued to show improvements in the level of plant inventories, receivables and other current assets, thereby releasing cash for productive purposes.

Graphite Electrode segment has become increasingly challenging, reflected by weakness in demand. Journey on reducing working capital, cost reduction and reduced debt position, adds strength to the Company in times like these and will reap the first mover benefit, as the tide turns favourable.

power Generation

Power Generation comprises of facilities, which are primarily run for meeting captive requirement of manufacturing graphite electrodes and in the process, also sells surplus power in the open market.

The power segment went through a challenging phase and the Company continues to utilise bulk of the power generated for captive purposes. Hydro power generation was also lower due to insufficient rains in the region.

Reduced operating levels in Graphite Electrode segment and limited availability of cost effective coal during the year made it imperative for the Company, to optimise on specific coal consumption, to ensure healthy bottomline.

The Company will be affected by the completion of the exemption period of duty payment on one of its power generation facility. This will have an impact on the cost of power generation, going forward.

4. MATERIAL cHANGEs And coMMiTMENTs DuRING the year

No material changes and commitments, affecting the financial position of the Company have occurred between the end of the financial year of the Company to which the financial statements relate and the date of the report.

5. change in the nature of business

There is no change in the nature of business during the financial year 2014-15.

6. subsidiary, associate companies or joint ventures

(i) Subsidiary company

In terms of provisions of Section 136(1) of the Companies Act, 2013, the audited financial statements of M/s. HEG Graphite Products and Services Ltd, subsidiary Company of the HEG Ltd, have been placed on the website of the Company and are not being annexed in this Annual Report.

The financial statements of the subsidiary Company are kept for inspection by the shareholders at the registered office of the Company. The Company shall provide, the copy of the financial statements of its subsidiary Company to the shareholders upon their request.

There were no business operations in the subsidiary Company. The subsidiary reported a net loss of Rs.30,495/- in the financial year 2014-15.

The Managing Director of the Company does not receive any remuneration or commission from its subsidiary.

(ii) Associate companies or Joint ventures

There are two Associates of the Company namely M/s. Bhilwara Infotechnology Ltd and M/s. Bhilwara Energy Ltd. M/s. Bhilwara Infotechnology Ltd had a turnover of Rs.37.07 crore and Net Profit was Rs.4.65 crore in the financial year 2014-15. M/s. Bhilwara Energy Ltd had a turnover of Rs.416.77 crore and net Loss (after Minority Interest) was Rs.17.70 crore as per their financial statements (unaudited but limited reviewed and consolidated) for the financial year 2014-15. The Company has no Joint ventures.

No Company has become/ceased to be a Subsidiary, Associate or Joint venture during the financial year 2014-15.

A report on the performance and financial position of Subsidiary and Associate Companies as per the Companies Act, 2013 is annexed in the Form AoC-1 to the consolidated Financial Statement and hence not repeated here for the sake of brevity.

7. CONSOLiDATED FiNANCiAL STATEMENTS

The Consolidated Financial Statements have been prepared by the Company in accordance with the applicable Accounting Standards. The audited consolidated financial statements together with Auditors' Report form part of the Annual Report.

8. DiViDEND

The Board has recommended a dividend at the rate of Rs.3/- per share on Equity Shares of face value of Rs.10/- each for the financial year ended 31st March, 2015, subject to your approval at the Annual General Meeting.

9. CORPORATE GOVERNANCE

A report on Corporate Governance forms part of the Annual Report along with the Auditors' Certificate on its compliance.

10. MANAGEMENT DiSCUSSiON AND ANALYSiS

Management Discussion and Analysis Report as required under the Listing Agreements with the Stock Exchanges forms part of the Annual Report.

11. INTERNAL Control Systems AND ADEQuACY THEREOF

The Company has an adequate internal control system commensurate with the size and nature of its business. An internal audit programme covers various activities and periodical reports are submitted to the management. The Audit Committee reviews financial statements, internal audit reports along with internal control systems. The Company has a well- defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

12. PERSONNEL

a) industrial relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) particulars of employees

The information required pursuant to Section 197 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed herewith as Annexure - I.

13. puBLIC DEpOSiTS

Your Company has not invited any deposits from public/ shareholders in accordance with Chapter v of the Companies Act, 2013.

14. significant AND MATERiAL ORDERS pASSED By THE REGuLATORS OR COuRTS OR TRiBuNALS

There are no significant and material orders passed by the regulators or courts or tribunals during the financial year 2014-15.

15. CONSERvATiON OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is given as Annexure II forming part of this Report.

16. DIRECTORS AND KEY MANAGERIAL pERSONNEL

one of your Directors namely Shri Shekhar Agarwal, shall retire by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The Board recommends his re-appointment.

The brief profile, pursuant to Clause 49 of the Listing Agreement of the Director retiring by rotation at the ensuing Annual General Meeting and being eligible, for re-appointment, forms part of the Corporate Governance Report.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of the Listing Agreement.

Shri Raju Rustogi, Chief Financial Officer of the Company was designated as key Managerial Personnel of the Company under the provisions of Section 203 of the Companies Act, 2013 w.e.f. 30th July, 2014.

17. BOARD EVALUATiON

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, the directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

18. NOMiNATiON AND REMUNERATiON POLiCY

The Board, on the recommendation of the Nomination & Remuneration Committee approved a policy for appointment and removal of Directors, key Managerial Personnel and Senior Management and their remuneration. The policy is appended as Annexure - III forming part of this Report.

19. MEETiNGS OF THE BOARD

The Board of Directors met 4 (four) times in the financial year 2014-15. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report.

20. contracts and arrangements wITH related pARTiES

All related party contracts/arrangements/transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are of a foreseen and repetitive nature. The statement of transactions entered into pursuant to the omnibus approval so granted is placed before the Audit Committee for approval on a quarterly basis. The statement is supported by a Certificate from the CFO.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

weblink:

http://www.hegltd.com/policy on related party transactions.aspx

There are no pecuniary relationships or transactions of Non- Executive Directors vis-a-vis the Company that have a potential conflict with the interests of the Company.

21. AUDIT COMMITTEE

The composition of the Audit Committee is stated in the Corporate Governance Report. All the recommendations of the Audit Committee were accepted by the Board during the financial year 2014-15.

22. AUDITORS

M/s. Doogar & Associates, Chartered Accountants and M/s. S.S. kothari Mehta & Co., Chartered Accountants, Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re- appointment. They have furnished a Certificate to the effect that their re-appointment will be in accordance with the applicable provisions of the Companies Act, 2013. You are requested to consider their re-appointment. The Auditors' Report read along with notes to accounts is self-explanatory and therefore does not call for any further comments. The Auditors' Report does not contain any qualification, reservation or adverse remark.

23. BUSINESS RISK MANAGEMENT

The objective of risk management at the Company is to protect shareholder value by minimising threats or losses and identifying and maximising opportunities. An enterprise- wide risk management framework is applied so that effective management of risk is an integral part of every employee's job.

The Risk Management Policy of the Company is in place. The Company's risk management strategy is integrated with the overall business strategies of the organisation and is communicated throughout the organisation. Risk management capabilities aide in establishing competitive advantage and allow management to develop reasonable assurance regarding the achievement of the Company's objectives.

The annual strategic planning process provides the platform for identification, analysis, treatment and documentation of key risks. It is through this annual planning process that key risks and risk management strategies are communicated to the Board. The effectiveness of risk management strategies is monitored both formally and informally by management and process owners. There is no major risk which may threaten the existence of the Company.

24. COST AUDITORS

The Cost Audit for financial year ended March 31, 2014 was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The due date for filling the Cost Audit Report in xBRL mode for financial year ended March 31, 2014 was September 27, 2014 and Cost Audit Report was filed on September 09, 2014.

Based on the Audit Committee recommendations at its meeting held on 14th May, 2015, the Board has approved the re-appointment of M/s. N.D. Birla & Co. (M. No. 7907), as the Cost Auditors of the Company for the financial year 2015-16 on a remuneration of Rs.2 lakhs plus service tax and out of pocket expenses that may be incurred by them during the course of audit. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member's ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the Annual General Meeting.

25. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. GSk & Associates, a firm of Company Secretaries in practice to undertake the Secretarial Audit of the Company for the financial year 2014-15. The Secretarial Audit Report is annexed herewith as Annexure IV. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. The Board has re-appointed M/s. GSk & Associates, Company Secretaries in practice as Secretarial Auditor of the Company for the financial year 2015-16.

26. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken projects in the areas of promotion of Education, Eradicating hunger & poverty, initiatives towards Community Service and rural development, Healthcare, Plantation & Environment Development, Protection of National heritage, art, culture etc. These projects were in accordance with the CSR Policy of the Company and Schedule VII of the Companies Act, 2013.

The CSR Committee comprises Shri Ravi Jhunjhunwala (Chairman), Shri D.N. Davar and Smt. Vinita Singhania.

The CSR policy may be accessed on the Company's website at the link mentioned below:

http://www.hegltd.com/pdf/Corporate Social Responsibility Policy.pdf

The Annual Report on CSR activities is enclosed as Annexure V forming part of this report.

27. INTERNAL AUDITORS

Based on the Audit Committee recommendations at its meeting held on 14th May, 2015, the Board has approved the re-appointment of M/s. S.L. Chhajed & Co, as the Internal Auditors of the Company for the financial year 2015-16.

28. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that:

i) In preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2015 and of the profit of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities;

iv) They have prepared the annual accounts on a going concern basis;

v) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

29. VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has a vigil mechanism named "Whistle Blower Policy" in place. The details of the Whistle Blower Policy are explained in the Corporate Governance Report and the policy is also posted on the website of the Company. The weblink is: http://www.hegltd.com/whistle-blower-policy.aspx

30. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

31. EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT - 9 is annexed herewith as Annexure vI.

32. GENERAL DISCLOSURE

The Company has a group policy in place against Sexual Harassment in line with the requirements of the Sexual Harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. Two complaints of Sexual Harassment were received during the financial year 2014-15 and were disposed off within the prescribed time-limit.

33. ACKNOWLEDGEMENTS

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from banks, financial institutions, the Central Government, the Government of Madhya Pradesh, the Government of uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them for Company's achievements.

For and on behalf of the Board of Directors

Place: Noida (u.P.) Ravi Jhunjhunwala Dated:14th May, 2015 Chairman, Managing Director & CEO

---

Mar 31, 2013

Dear members,

The Directors have pleasure in presenting their 41st Annual Report and audited statements of accounts for the year ended 31st March, 2013.

1. (i) Financial Results

(Rs. in Crore)

2012-13 2011-12

Net Sales 1617.43 1423.99

Other Operating Income 5.18 0.62

Total Income from Operations (Net) 1622.61 1424.61

Other Income 13.60 16.79

Total Income 1636.21 1441.40

Profit before Exceptional items, Finance cost, Depreciation and 306.71 258.60 Amortisation

Exceptional Items (55.20) (92.85)

Profit before Finance cost, Depreciation and Amortisation 251.51 165.75

Finance cost 63.60 40.68

Profit before Depreciation and Amortisation 187.91 125.08

Depreciation and Amortisation 62.64 57.93

Profit Before Tax 125.27 67.14

Provision for Taxation:-

Current Year 16.09 6.66

Income Tax for earlier years 3.39 (1.84)

Net Profit for the Period 105.79 62.32

EPS (Basic) Rs. 26.48 15.34

(ii) Appropriations

Amount available for appropriation 406.23 331.17

Reversal of proposed dividend and dividend distribution tax on shares - 1.23 bought back Dividend :

a) On Equity Shares

Proposed Dividend 31.97 19.98

b) Dividend Distribution Tax

On Proposed Dividend 5.43 3.24

Transfer to:

a) General Reserve 25.00 7.50

b) Debenture Redemption Reserve - 1.25

c) Transfer from Debenture Redemption Reserve 25.07 -

Balance carried forward 368.90 300.43

2. Overall Performance

The Company recorded Net Sales Rs.1617.43 crore as compared with Rs.1423.99 crore in the previous year. The Net Profit has increased to Rs.105.79 crore as compared with Rs.62.32 crore in 2011-12 translating to basic earning per share at Rs.26.48 as against Rs.15.34 in Financial Year 2011-12.

3. Subsidiary Company and Consolidated Financial Statements

The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary Company ''M/s HEG Graphite Products and Services Ltd'' is annexed. Also, the consolidated financial statements along with the Auditors Report thereon, form part of the Annual Report.

In terms of the Circular of the Ministry of Corporate Affairs dated 8th February, 2011, the Board of Directors has decided not to annex the annual accounts of the subsidiary Company in this Annual Report. The annual accounts of the subsidiary Company and the related detailed information shall be made available to the shareholders of the Company and the subsidiary Company seeking such information at any point of time. The annual accounts of the subsidiary company shall also be kept for inspection by any shareholder at the registered office of the Company and of the subsidiary Company. The Company shall furnish a hard copy of details of accounts of subsidiary Company to any shareholder, on demand.

4. Dividend

The Board, has recommended a dividend at the rate of Rs.8/- per share on Equity Shares of Rs.10/- each for the financial year ended 31st March, 2013, subject to your approval at the Annual General Meeting.

5. Operations

The analytical review of the Company''s performance and its businesses, including initiatives in the areas of Human Resources and Corporate Social Responsibility have been presented in the section of Management Discussion and Analysis of this Annual Report.

Graphite Electrodes

During the year under review, the production volumes of graphite electrodes were almost similar as compared with the last financial year. Operational efficiencies, better exchange rates coupled with controlled finance costs, improved margins.

Power Generation

Better availability of linkage coal for our captive thermal power plants and record power generation at our hydel power unit has helped improve the bottomline during the year.

The Company''s installed captive power capacity mitigates risk of erratic power supply from the State grid for the entire expanded Graphite Electrode capacity of 80,000 TPA.

6. Corporate Governance

A report on Corporate Governance forms part of the Annual Report along with the Auditors'' Certificate on its compliance.

7. Management Discussion and Analysis

Management Discussion and Analysis Report as required under the Listing Agreements with the Stock Exchanges forms part of the Annual Report

8. Internal Control Systems and adequacy thereof

The Company has an adequate internal control system commensurate with the size and nature of its business.

An internal audit programme covers various activities and periodical reports are submitted to the management. The Audit Committee reviews financial statements and internal audit reports along with internal control systems. The Company has a well defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

9. Personnel

a) Industrial Relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of Employees

The information of employees receiving salary in excess of the limits as prescribed under the provisions of Sub-section (2A) of Section 217 of the Companies Act, 1956, who were employed throughout or for a part of the financial year under review is given as an annexure forming part of this Report.

10. Public Deposits

Your Company has not invited any deposits from public/ shareholders in accordance with Section 58A of the Companies Act, 1956.

11. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.

12. Directors

Three of your Directors namely Shri D.N. Davar, Shri Shekhar Agarwal and Dr. Kamal Gupta shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their re- appointment.

Your Directors inform you about the resignation of Shri K N Memani w.e.f. 19th March, 2013. The Board appreciates the valuable contribution and guidance extended by Shri K. N. Memani during his tenure as a Director of the Company.

13. Auditors

M/s Doogar & Associates, Chartered Accountants and M/s S.S.Kothari Mehta & Co., Chartered Accountants, Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. They have furnished a Certificate to the effect that their re-appointment will be in accordance with limits specified in Sub-section (IB) of Section 224 of the Companies Act, 1956. You are requested to consider their re-appointment.

The Auditors'' Report read along with notes to accounts is self explanatory and therefore does not call for any further comments.

14. Cost Auditors

In conformity with the directives of the Central Government and based on the Audit Committee recommendations at its meeting held on May 3, 2013, the Board has approved the re- appointment of M/s. N.D. Birla & Co., as the Cost Auditors of the Company for the financial year 2013-2014, subject to approval of the Central Government.

15. Directors Responsibility Statement The Directors confirm that:

i) In preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

ii) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2013 and of the profit of the Company for the year under review;

iii) They have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safe guarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

iv) They have prepared the annual accounts on a going concern basis.

16. Acknowledgements

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from banks, financial institutions, the Central Government, the Government of Madhya Pradesh, the Government of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them for Company''s achievements.

For and on behalf of the Board of Directors

Place: Noida (U.P.) Ravi Jhunjhunwala

Dated: May 3, 2013 Chairman & Managing Director

---

Mar 31, 2012

The Directors have pleasure in presenting their 40th Annual Report and audited statements of accounts for the year ended 31st March, 2012.

1. (i) Financial results

(Rs. in crore)

2011-12 2010-11

Turnover :

Domestic 509.45 444.95

Export 1128.55 854.31

Less : Excise Duty 27.41 22.71

: Inter Division Sales 186.60 162.90

Net Sales 1423.99 1113.65

Other Income 16.79 26.81

Total Income 1440.78 1140.46

Profit before Exceptional items, Finance cost, Depreciation and Amortisation 258.60 246.85

Exceptional Items 92.85 –

Profit before Finance cost, Depreciation and Amortisation 165.75 246.85

Finance cost 40.68 21.57

Profit before Depreciation and Amortisation 125.08 225.28

Depreciation and Amortisation 57.93 57.31

Profit Before Tax 67.14 167.98

Provision for Taxation:-

Current Year 1.61 42.88

Deferred 5.05 (1.28)

Income Tax for earlier years (1.84) (2.48)

Net Profit for the Period 62.32 128.86

EPS (Basic) (Rs.) 15.34 30.08

(ii) Appropriations:-

Amount available for appropriation 331.17 362.62

Reversal of proposed dividend and dividend distribution tax on shares bought back 1.23 –

Dividend :

a) On Equity Shares

i) Interim Dividend – 21.42

ii) Proposed Dividend 19.98 21.42 b) Dividend Distribution Tax

i) On Interim Dividend – 3.41

ii) On Proposed Dividend 3.24 3.48

Transfer to :-

a) General Reserve 7.50 25.00

b) Debenture Redemption Reserve 1.25 19.04

Balance carried forward 300.43 268.85



2. Overall Performance

The Company recorded Net Sales Rs.1423.99 crore as compared with Rs.1113.65 crore in the previous year. The Net Profit was at Rs.62.32 crore as compared with Rs.128.86 crore in 2010-11 translating to basic earning per share at Rs.15.34 as against Rs.30.08 in Financial Year 2010-11.

3. Subsidiary Company & Consolidated Financial Statements

The statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Company 'M/s HEG Graphite Products and Services Ltd' is annexed. Also, the consolidated financial statements alongwith the Auditors Report thereon, form part of the Annual Report.

In terms of the Circular of the Ministry of Corporate Affairs dated 8th February, 2011, the Board of Directors has decided not to annex the annual accounts of the Subsidiary Company in this Annual Report. The annual accounts of the Subsidiary Company and the related detailed information shall be made available to the shareholders of the Company and the Subsidiary Company seeking such information at any point of time. The annual accounts of the Subsidiary Company shall also be kept for inspection by any shareholder at the registered office of the Company and of the Subsidiary Company. The Company shall furnish a hard copy of details of accounts of Subsidiary Company to any shareholder on demand.

4. Dividend

The Board, has recommended a dividend at the rate of Rs.5/- per share on Equity Shares of Rs.10/- each for the financial year ended 31st March, 2012, subject to your approval at the Annual General Meeting.

5. Operations

Graphite Electrodes

During the year under review, the production volumes of Graphite Electrodes were higher as compared with the last financial year. Growth in volumes was offset by increase in costs and foreign currency fluctuations which contributed to lower margins.

Power Generation

HEG's strategic planning resulted in reliable captive power generation of about 77 MW. The current capacity of power is self-sufficient at the expanded graphite electrode capacity levels of 80,000 TPA.

6. Capacity Expansion of the Graphite Electrode Plant at Mandideep

The expansion plan of graphite electrode manufacturing capacity of the Company from 66,000 TPA to 80,000 TPA was completed in February, 2012.

7. Buyback of its Equity Shares by the Company

The Board of Directors of the Company had approved the Buyback of its Equity Shares from open market through Stock Exchanges vide a Resolution passed at its meeting held on the 14th March, 2011. The Buyback was approved for an aggregate amount upto Rs.67.50 crore. The Buyback of shares commenced on the 11th April, 2011. The Company completed the buy back of Equity Shares through open market purchases on 11th November, 2011. 28,85,765 Shares were bought back and extinguished and entire amount of Rs.67.50 crore was utilised.

8. Corporate Governance

A report on Corporate Governance forms part of the Annual Report along with the Auditors' Certificate on its compliance.

9. Management Discussion and Analysis

Management Discussion and Analysis Report as required under the Listing Agreements with the Stock Exchanges forms part of the Annual Report

10. Internal Control Systems and Adequacy thereof

The Company has an adequate internal control system commensurate with the size and nature of its business.

Internal audit programme covers various activities and periodical reports are submitted to the management. The Audit Committee reviews financial statements and internal audit reports along with internal control systems. The Company has a well defined organisational structure, authority levels and internal rules and guidelines for conducting business transactions.

11. Personnel

a) Industrial Relations

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of Employees

The information of employees receiving salary in excess of the limits as prescribed under the provisions of sub section (2A) of Section 217 of the Companies Act,1956, who were employed throughout or for a part of the financial year under review is given as an annexure forming part of this Report.

12. Public Deposits

Your Company has not invited any deposits from public/shareholders in accordance with Section 58A of the Companies Act, 1956.

13. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.

14. Directors

Two of your Directors namely Dr. O. P. Bahl and Shri Riju Jhunjhunwala shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re- appointment. The Board recommends their re-appointment.

15. Auditors

M/s Doogar & Associates, Chartered Accountants and M/s S.S. Kothari Mehta & Co., Chartered Accountants, Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re- appointment. They have furnished a Certificate to the effect that their appointment will be in accordance with limits specified in sub-section (IB) of Section 224 of the Companies Act, 1956. You are requested to consider their appointment.

The Auditors' Report read alongwith notes to accounts is self explanatory and therefore does not call for any further comments.

16. Directors Responsibility Statement

The Directors confirm that:

(i) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2012 and of the profit of the Company for the year under review;

(iii) they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) they have prepared the annual accounts on a going concern basis.

17. Acknowledgements

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from Banks, Financial Institutions, Central Government, Government of Madhya Pradesh, Government of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them for Company's achievements.

For and on Behalf of the Board of Directors

Ravi Jhunjhunwala

Chairman & Managing Director

Place: Noida (U.P)

Dated: May 10, 2012

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting their 39th annual report and audited statements of accounts for the year ended 31st March, 2011.

1. (i) Financial results (Rs. in crore)

2010-11 2009-10

Turnover :

Domestic 444.95 461.17

Export 854.31 807.27

Less : Excise Duty 22.71 21.15

: Inter Division Sales 162.90 115.89

Net Sales 1,113.65 1,131.40

Other Income 38.43 14.99

Total Income 1,152.08 1,146.39

Profit before Interest, Depreciation and Amortisation 262.35 354.00

Interest 36.62 59.26

Profit before Depreciation and Amortisation 225.73 294.74

Depreciation and Amortisation 57.65 52.41

Profit Before Tax 168.07 242.32

Provision for Taxation:-

Current year 42.97 70.48

Deferred (1.28) (0.09)

Fringe Benefit Taxes - (0.01)

Income Tax for earlier years (2.48) 0.88

Net Profit for the Period 128.86 171.06

EPS (Basic) 30.08 41.10

EPS (Diluted) 30.08 40.91

(ii) Appropriations

Amount available for appropriation 362.62 316.94

Dividend :

a) On Equity Shares

i) Interim Dividend 21.42 -

ii) Proposed Dividend 21.42 42.83

b) Corporate Dividend Tax

i) On Interim Dividend 3.41 -

ii) On final Dividend 3.48 7.28

Transfer to :

a) General Reserve 25.00 25.00

b) Capital Redemption Reserve - 3.30

c) Debenture Redemption Reserve 19.04 4.77

Balance carried forward 268.85 233.76

2. Overall Performance

The Company recorded Net Sales Rs.1113.65 crore as compared with Rs.1131.40 crore in the previous year. The Net Profit was at Rs.128.86 crore as compared with Rs.171.06 crore in 2009-10 translating to basic earning per share at Rs.30.08 as against Rs.41.10 in FY 2009-10.

3. Subsidiary Company & Consolidated Financial Statements

The statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Company 'M/s HEG Graphite Products and Services Ltd' is annexed. Also, the consolidated financial statements along with the Auditors Report thereon, form part of the Annual Report.

In terms of the Circular of the Ministry of Corporate Affairs dated 8th February, 2011, the Board of Directors has decided not to annex the annual accounts of the Subsidiary company in this Annual Report. The annual accounts of the Subsidiary company and the related detailed information shall be made available to the shareholders of the Company and the Subsidiary company seeking such information at any point of time. The annual accounts of the Subsidiary Company shall also be kept for inspection by any shareholder at the registered office of the Company and of the Subsidiary Company. The Company shall furnish a hard copy of details of accounts of Subsidiary Company to any shareholder on demand.

4. Dividend

The Board of Directors had approved the payment of Interim- Dividend @ Rs.5/- per Equity Share of Rs.10/- each at its meeting held on the 7th February, 2011.

The Board, has recommended a final dividend at the rate of Rs.5/- per share on Equity Shares of Rs.10/- each for the financial year ended 31s March, 2011, subject to your approval at the Annual General Meeting.

5. Operations Graphite Electrodes

During the year under review, the production volumes of Graphite Electrodes were higher as compared with the last financial year. Growth in volumes was offset by moderation in realisations which contributed to lower margins.

Power Generation

HEG's strategic planning resulted in reliable captive power generation of about 77 MW. The current capacity of power will be self-sufficient even at expanded graphite electrode capacity levels of 80,000 TPA.

6. Capacity Expansion of the Graphite Electrode Plant at Mandideep

The expansion plan of graphite electrode manufacturing capacity of the Company to 80,000 TPA from current level of 66,000 TPA is progressing as per schedule.

Phase I of the capacity expansion is operational, with full capacity commercial production expected to be operational by October 2011.

7. Buyback of its Equity Shares by the Company

The Board of Directors of the Company approved the Buyback of its Equity Shares from open market through Stock Exchanges vide a Resolution passed at its meeting held on the 14th March, 2011. The Buyback was approved for an aggregate amount upto Rs.67.50 Crores. The Buyback of shares commenced on the 11th April, 2011.

8. Corporate Governance

A report on Corporate Governance forms part of the Annual Report along with the Auditors' Certificate on its compliance.

9. Management Discussion and Analysis

Management Discussion and Analysis Report as required under the Listing Agreements with the Stock Exchanges forms part of the Annual Report.

10. Internal Control Systems and Adequacy thereof

The Company has an adequate internal control system commensurate with the size and nature of its business.

Internal audit programme covers various areas of activities and periodical reports are submitted to the management. The Audit Committee reviews financial statements and internal audit reports along with internal control systems. The Company has a well-defined organisational structure, authority levels and

internal rules and guidelines for conducting business transactions.

11. Personnel

a) Industrial Relations

Industrial relations during the period under review generally remained cordial at all the plants of the Company.

b) Particulars of Employees

The information of employees receiving salary in excess of the limits as prescribed under the provisions of sub section (2A) of Section 217 of the Companies Act,1956, who were employed throughout or for a part of the financial year under review is given as an annexure forming part of this Report.

12. Public Deposits

Your Company has not invited any deposits from public/ shareholders in accordance with Section 58A of the Companies Act, 1956.

13. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.

14. Directors

a) Shri Riju Jhunjhunwala at his request was relieved from the position of Executive Director w.e.f. 27th July, 2010 and continues to be a Non-Executive Director

b) Three of your Directors namely Shri L.N. Jhunjhunwala, Dr. Kamal Gupta and Shri P. Murari shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The Board recommends their reappointment.

c) LIC nominated Shri Lalit Mohan Lohani as its nominee on the Board of the Company in place of Shri Mohanraj Nair. His appointment was approved w.e.f. 27th July, 2010. The Board appreciates the services rendered by Shri Mohanraj Nair during his tenure as Director of the Company.

d) Your Directors inform you about the sad demise of Shri V.K. Mehta, who was Director on the Board of the Company and appreciate the valuable services rendered by Shri V K Mehta during his tenure as a Director of the Company. Shri Niket A.R.

Mehta, who was Alternate Director to Shri V.K. Mehta, consequently ceased to be the Alternate Director.

15. Auditors

M/s Doogar & Associates, Chartered Accountants and M/s S.S. Kothari Mehta & Co., Chartered Accountants, Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re- appointment. They have furnished a Certificate to the effect that their appointment will be in accordance with limits specified in sub-section (IB) of Section 224 of the Companies Act, 1956. You are requested to consider their appointment.

The Auditors' Report read alongwith notes to accounts is self explanatory and therefore does not call for any further comments.

16. Directors Responsibility Statement

The Directors confirm that:

(i) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2011 and of the profit of the Company for the year under review;

(iii) they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) they have prepared the annual accounts on a going concern basis.

17. Acknowledgements

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from banks, financial institutions, Central Government, Govt. of Madhya Pradesh, Govt. of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them for the Company's achievements.

For and on Behalf of the Board of Directors

Place : Noida Ravi Jhunjhunwala

Dated: April 29, 2011 Chairman & Managing Director

---

Mar 31, 2010

The Directors have pleasure in presenting their 38th Annual Report and audited statements of accounts for the year ended 31st March, 2010. We are delighted to report a buoyant operating performance. Our graphite electrode segment continued to contribute strongly towards revenue growth, primarily driven by improved operating efficiencies, cost effectiveness measures and a better product mix.

1) (i) FINANCIAL RESULTS (Rs. in Crore)

2009-10 2008-09

Turnover:

Domestic 461.17 317.59

Export 807.27 832.35

Less : Excise Duty 21.15 23.98

: Inter Division Sales 115.89 96.96

Net Sales 1131.40 1029.00

Other Income 14.99 16.94

Total Income 1146.39 1045.95

Profit before Interest, Depreciation and Amortization 354.00 274.73

Interest 59.26 66.75

Profit before Depreciation and Amortization 294.74 207.98

Depreciation and Amortization 52.41 46.60

Profit Before Tax 242.32 161.39

Provision for Taxation :-

Current Year 70.48 46.95

Deferred (0.09) 1.37

Fringe Benefit Tax (0.01) 0.48

Income Tax for earlier Years 0.88 5.60

Net Profit for the Period 171.06 106.99

EPS (Basic) 41.10 24.36

EPS (Diluted) 40.91 24.36

(ii) Appropriations

Amount available for appropriation 316.94 202.97

Dividend :

a) Proposed Dividend on Equity Shares 42.83 27.43

b) Corporate Dividend Tax 7.28 4.66 Transfer to :

a) General Reserve 25.00 25.00

b) Capital Redemption Reserve 3.30 --

c) Debenture Redemption Reserve 4.77 --

Balance carried forward 233.76 145.87

2. OVERALL PERFORMANCE

The Company recorded Net Sales Rs. 1131.40 crore as compared to Rs. 1029 crore in the previous year. The Net Profit increased to Rs.171.06 as compared to Rs. 106.99 in 2008-09 translating to basic earning per share at Rs. 41.10 as against Rs. 24.36 in FY 2008-09. The core graphite electrodes segment and the power division posted healthy growth rates.

3. SUBSIDIARY COMPANY & CONSOLIDATED FINANCIAL STATEMENTS

M/s HEG Graphite Products and Services Ltd was incorporated as an wholly owned subsidiary of the Company on 18th September, 2009. The accounts of Subsidiary Company form part of the Annual Report alongwith the statement pursuant to Section 212 of the Companies Act, 1956. Also the consolidated financial statements alongwith the Auditors Report thereon, form part of the Annual Report.

4. DIVIDEND

The Board, has recommend a dividend at the rate of Rs.10/- per share on Equity Shares of Rs.10/- each for the financial year ended March 31, 2010, subject to your approval at the Annual General Meeting.

5. OPERATIONS

GRAPHITE ELECTRODES

During the year under review, the production of Graphite Electrodes was lower as compared to FY 2008-09. Being a challenging year, when the volumes witnessed moderation, the margins still remained encouraging.

POWER GENERATION

HEGs strategic planning has resulted in reliable captive power generation of about 77 MW. A new thermal power plant with a capacity of 33 MW has commenced operations since May, 2009, making it a total of two thermal power plants with total capacity of about 64 MW and a hydroelectric power plant with a capacity of 13.5 MW. The current capacity will result in a self-sufficiency level of power at 80,000 TPA production of Graphite Electrodes.

6. CAPACITY EXPANSION OF GRAPHITE ELECTRODE PLANT AT MANDIDEEP

Your Company has at its Board Meeting held on 29th January, 2010 approved the expansion plans of its graphite electrodes manufacturing capacity to about 80,000 TPA from current level of about 66,000 TPA at an estimated capital cost of Rs. 206 crore. This will help HEG consolidate its manufacturing lead in graphite electrodes segment at the shortest schedule and optimum cost.

7. BUYBACK OF EQUITY SHARES BY THE COMPANY

The Company successfully completed the Buyback of Equity Shares on 18th August, 2009 with the buyback and extinguishment of 32,95,703 shares at an average price of Rs. 147.15 per share. Almost the entire amount approved for Buyback i.e. Rs. 48.50 Crore was utilized.

8. CORPORATE GOVERNANCE

A report on Corporate Governance forms part of the Annual Report along with the Auditors Certificate on its compliance.

9. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion & Analysis Report as required under the Listing Agreements with the Stock Exchanges forms part of the Annual Report.

10.INTERNAL CONTROL SYSTEMS AND ADEQUACY THEREOF

The Company has an adequate internal control system commensurate with the size and nature of its business.

Internal audit programme covers various areas of activities and periodical reports are submitted to the management. The Audit Committee reviews financial statements and internal audit reports along with internal control systems. The Company has a well-defined organizational structure, authority levels and internal rules and guidelines for conducting business transactions.

11. PERSONNEL

A) INDUSTRIAL RELATIONS

The industrial relations during the period under review generally remained cordial at all the plants of the Company.

B) PARTICULARS OF EMPLOYEES

The information of employees getting salary in excess of the limits as specified under the provisions of sub section (2A) of Section 217 of the Companies Act,1956, who were employed throughout or for a part of the financial year under review is given as an annexure forming part of this Report.

12. PUBLIC DEPOSITS

Your Company has not invited any deposits from public / shareholders in accordance with Section 58A of the Companies Act, 1956.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO.

The information with regard to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosures of particulars in the Report of Board of Directors) Rules, 1988, is given as an annexure forming part of this Report.

14. DIRECTORS

a) The Board of Directors had appointed Shri Riju Jhunjhunwala, as Executive Director of the Company at its meeting held on 30th April, 2009, for a period of 5 years and approved his remuneration for a period of 1 year. Now his remuneration has been approved for the period of 2 years as per the terms and conditions enumerated in the resolution being put up for your approval.

b) Three of your Directors namely Shri D.N. Davar, Shri K.N. Memani and Shri Shekhar Agarwal shall retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for reappointment. The Board recommends their appointment.

c) Shri R.C. Surana has ceased by way of premature retirement to be the Executive Director, Director and Employee of the Company in accordance with a mutual agreement between Shri R.C. Surana and the Company w.e.f. 30th April, 2010. The Board appreciates and puts on record the services rendered by Shri R.C. Surana during his association with the Company.

15. AUDITORS

M/s Doogar & Associates, Chartered Accountants and M/s S.S. Kothari Mehta & Co., Chartered Accountants, Auditors of the Company, will retire from their office at the ensuing Annual General Meeting. They are, however, eligible for re-appointment. They have furnished a Certificate to the effect that their appointment will be in accordance with limits specified in sub-section (IB) of Section 224 of the Companies Act, 1956. You are requested to consider their appointment.

The Auditors Report read alongwith notes to accounts is self explanatory and therefore does not call for any further comments.

16. DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that:

(i) in preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March,2010 and of the profit of the Company for the year under review;

(iii) they have taken proper and sufficient care for maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(iv) they have prepared the annual accounts on a going concern basis.

17. ACKNOWLEDGEMENTS

Your Directors wish to place on record, their appreciation for the valuable assistance and support received by your Company from Banks, Financial Institutions, Central Government, Govt. of Madhya Pradesh, Govt. of Uttar Pradesh and their departments. The Board also thanks the employees at all levels, for the dedication, commitment and hard work put in by them for Companys achievements.

For and on behalf of the Board,

Place :Noida (U.P.) (RAVI JHUNJHUNWALA)

Dated:April 30, 2010 CHAIRMAN & MANAGING DIRECTOR