(xvi) Provisions, Contingent Liabilities and
Contingent Assets

Provisions are recognized when the company has a
present obligation (legal or constructive) as a result of
a past event, for which it is probable that an outflow of
resources embodying economic benefits will be required
to settle the obligation and are reliable estimate can be
made of the amount of the obligation. As the timing of
outflow of resources is uncertain, being dependent upon
the outcome of the future proceedings, these provisions
are not discounted to their present value.

A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may,
but probably will not require an outflow of resources.
When there is a possible obligation or a present
obligation in respect of which likelihood of outflow of
resources is remote, no provision or disclosure is made.

Contingent assets are neither recognised nor disclosed
in the standalone financial statements since this may
result in the recognition of income that may never be
realised.

(xvii) Earnings Per Share

Basic earnings per equity share is computed by dividing
the profit or loss for the period attributable to the

equity holders of the company by the weighted average
number of equity shares outstanding during the period.

Diluted earnings per share is computed by adjusting the
net profit or loss for the period attributable to equity
shareholders and the weighted average number of
shares outstanding during the period, for the effects of
all dilutive potential equity shares, if any.

(xviii) Financial instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

(i) Initial recognition

The company recognises the financial assets
and financial liabilities when it becomes party
to the contractual provision of the instruments.
All financial assets and liabilities are recognised
at fair value on initial recognition except for
trade receivables which are initially measured
at transaction price. Transaction costs that are
directly attributable to the acquisition of financial
assets and or issue of financial liabilities that are
not recognized at fair value through profit or
loss, are added to or reduced from the fair value
of the financial assets or financial liabilities, as
appropriate. Transaction cost directly attributable
to the acquisition of financial assets and financial
liabilities recognized at fair value through Profit or
Loss are recognised immediately in the Statement
of Profit and Loss.

(ii) Subsequent measurement

For the purposes of subsequent measurement,
financial instruments are classified as follows:

A. Non-derivative financial instruments

(a) Financial assets carried at amortized cost

A financial asset is subsequently measured at
amortized cost if it is held within a business
model whose objective is to hold the asset in
order to collect contractual cash flows and the
contractual terms of the financial instrument
give rise on specified dates to cash flows that
are solely payments of principal and interest
on the principal amount outstanding.

Interest income for such instruments
is recognised in profit or loss using the
effective interest rate (EIR) method, which

is the rate that exactly discounts estimated
future cash receipts through the expected
life of the financial asset to that asset's gross
carrying amount.

The carrying amounts of financial assets that
are subsequently measured at amortised
cost are determined based on the effective
interest method less any impairment losses.

(b) Financial assets at fair value through other
comprehensive income

A financial asset is subsequently measured
at fair value through other comprehensive
income if it is held within a business model
whose objective is achieved by both
collecting contractual cash flows and selling
financial assets and the contractual terms
of the financial asset give rise on specified
dates to cash flows that are solely payments
of principal and interest on the principal
amount outstanding.

Interest income for such instruments
is recognised in profit or loss using the
effective interest rate (EIR) method, which
is the rate that exactly discounts estimated
future cash receipts through the expected
life of the financial asset to that asset's gross
carrying amount.

Fair value movements are recognised in
the other comprehensive income (OCI)
until the financial asset is derecognised.
On de-recognition, cumulative gain or loss
previously recognised in OCI is reclassified
from the equity to the profit or loss.

(c) Financial assets at fair value through profit
or loss

A financial asset which is not classified in any
of the above categories are subsequently
measured at fair valued through profit or loss.

Dividend and interest income from such
instruments is recognized in the statement of
profit and loss, when the right to receive the
payment is established.

Fair value changes on such assets are
recognised in the statement of profit and loss.

(d) Investment in Subsidiary and Associates

Investment in subsidiary and associates is
carried at cost less provision for impairment,
if any. Investment is tested for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised
for the amount by which the carrying amount
of investment exceeds its recoverable amount.

(e) Financial liabilities

Financial liabilities are subsequently carried
at amortized cost using the effective interest
method, except for contingent consideration
recognized in a business combination or is
held for trading or it is designated as at FVTPL
which is subsequently measured at fair value
through profit and loss. For trade and other
payables maturing within one year from the
balance sheet date, the carrying amount
approximates fair value due to the short
maturity of these instruments.

All changes in fair value in respect of liabilities
measured at fair value through profit and
loss are recognised in the statement of profit
and loss.

B. Derivative financial instruments

The company holds derivative financial
instruments such as foreign exchange forward and
option contracts to mitigate the risk of changes in
exchange rates on foreign currency exposures. The
counterparty for these contracts is generally a bank.

Although the company believes that these
derivatives constitute hedges from an economic
perspective, they may not qualify for hedge
accounting under Ind AS 109, Financial Instruments.
Any derivative that is either not designated a
hedge, or is so designated but is ineffective as per
Ind AS 109, is categorized as a financial asset or
financial liability, at fair value through profit or loss.

Derivatives not designated as hedges are
recognized initially at fair value and attributable
transaction costs are recognized in the statement
of profit and loss when incurred. Subsequent to
initial recognition, these derivatives are measured
at fair value through profit or loss and the resulting
exchange gains or losses are charged to Statement
of Profit and Loss.

C. Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments
are recorded at the proceeds received. Incremental
costs directly attributable to the issuance of equity
instruments and buy back of equity instruments
are recognized as a deduction from equity, net of
any tax effects.

(iii) Impairment of Financial Assets

Financial assets that are carried at amortized cost
and fair value through other comprehensive income
(FVOCI) are assessed for possible impairments
basis expected credit losses taking into account
the past history of recovery, risk of default of the
counterparty, existing market conditions etc. The
impairment methodology applied depends on
whether there has been a significant increase in
credit risk since initial recognition.

Expected Credit Losses are measured through a
loss allowance at an amount equal to:

• 12-months expected credit losses (expected
credit losses that result from those default
events on the financial instrument that are
possible within 12 months after the reporting
date); or

• Lifetime expected credit losses (expected credit
losses that result from all possible default events
over the life of financial instruments).

For trade receivables or any contractual right to
receive cash or another financial asset that result
from transaction that are within the scope of Ind AS
115 and Ind AS 116, the Company always measures
the loss allowance at an amount equal to lifetime
expected credit losses.

For all other financial assets, expected credit losses
are measured at an amount equal to the 12-month
ECL, unless there has been a significant increase
in credit risk from initial recognition in which case
those are measured at lifetime ECL.

(iv) De-recognition

A financial asset (or, a part of a financial asset) is
primarily derecognized when:

(i) The contractual right to receive cash flows from
the financial assets expire, or

(ii) The company transfers the financial assets or
its right to receive cash flow from the financial
assets and substantially all the risks and rewards
of ownership of the asset to another party.

On de-recognition of a financial asset, the difference
between the asset's carrying amount and the
sum of the consideration received/receivable is
recognised in the profit or loss.

A financial liability (or, a part of financial liability) is
derecognized when the obligation specified in the
contract is discharged or cancelled or expires.

On de-recognition of a financial liability, the
difference between the carrying amount of
the financial liability de-recognised and the
consideration paid/payable is recognised in profit
or loss.

(v) Offsetting financial instruments

Financial assets and financial liabilities are offset
and the net amount is reported in the balance
sheet, if there is a currently enforceable legal right
to offset the recognised amounts and there is an
intention to settle them on a net basis or to realise
the assets and settle the liabilities simultaneously.

(vi) Write-off

The gross carrying amount of a financial asset is
written off when the Company has no reasonable
expectations of recovering the financial asset in its
entirety or a portion thereof.

(xix) Statement of Cash flows

The statement of cash flows is prepared in
accordance with the Indian Accounting Standard
(Ind AS) - 7 "Statement of Cash flows" using the
indirect method for operating activities whereby
profit for the period is adjusted for the effects
of transaction of a non-cash nature, and item of
income or expenses associated with investing or
financing cash flows. The cash flows from operating,
investing and financing activities of the company
are segregated. The Company considers all highly
liquid investments that are readily convertible to
known amounts of cash to be cash equivalents.

(xx) Cash and cash equivalents

The Cash and cash equivalent in the balance sheet
comprise balance at banks and cash on hand and
short-term deposits with original maturity period

of three months or less from the acquisition date,
which are subject to an insignificant risk of changes
in value.

(xxi) Dividends

Final dividends on shares are recorded as a liability
on the date of approval by the shareholders and
interim dividends are recorded as a liability on the
date of declaration by the Board of Directors.

2.4 Significant accounting judgements, estimates
and assumptions

The preparation of financial statements in conformity
with Indian Accounting Standards (Ind AS) require
management to make judgements, estimates and
assumptions in the application of accounting policies that
affect the reported amount of income, expenses, assets
and liabilities and disclosure of contingent liabilities.

The estimates and associated assumptions are based on
historical experience and other factors that are considered
to be relevant. Actual results may differ from these
estimates. The estimates and underlying assumptions are
reviewed on an ongoing basis and the effect of revision
to accounting estimates is recognized prospectively from
the period in which the estimate is revised.

The following are the areas of critical judgements,
estimates and assumptions that the management
has made in the process of preparation of standalone
financial statements and that have the significant effect
on the amounts recognised in the standalone financial
statements:

Useful lives of property, plant and equipment

The estimated useful lives of property, plant and equipment
are based on a number of factors including the effects of
obsolescence, internal assessment of user experience
and other economic factors (such as the stability of the
industry and known technological advances) and the
level of maintenance expenditure required to obtain the
expected future cash flows from the asset. The Company
reviews the useful life of property, plant and equipment at
the end of each reporting date.

Defined benefit plans and other post¬
employment benefits

The cost of the defined benefit plan and other post¬
employment benefits and the present value of such
obligation are determined using actuarial valuations. An
actuarial valuation involves making various assumptions

that may differ from actual developments in the future.
These include the determination of the discount rate,
future, salary increases and mortality rates etc. Due to the
complexities involved in the valuation and its long-term
nature, a defined benefit obligation is highly sensitive
to changes in these assumptions. All assumptions are
reviewed at each reporting date.

Provisions/Contingencies

Management judgement is required for estimating
the possible outflow of resources, if any, in respect of
contingencies/claims/litigations against the Company
as it is not possible to predict the outcome of pending
matters with accuracy. The Company annually assesses
such claims and monitors the legal environment on
an ongoing basis, with the assistance of external legal
counsel, wherever necessary.

Fair Value measurements

When the fair values of financial assets and financial
liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets, their
fair values are measured using valuation techniques,
including the discounted cash flow model, underlying
asset model, comparable companies multiple method
and comparable transaction method which involve
various judgements and assumptions.

Current tax and Deferred tax

Significant judgement is required in determination of
provision for current tax and deferred tax e.g. determination
of taxability of certain incomes and deductibility of certain
expenses etc. The carrying amount of income tax assets/
liabilities is reviewed at each reporting date. The factors
used in estimates may differ from actual outcome which
could lead to signification adjustment to the amounts
reported in financial statements.

Inventories

Management estimates the net realizable values of
inventories, taking into account the most reliable evidence
available at each reporting date. The future realization
of these inventories may be affected by market driven
changes.

2.5. Current - non-current classification

All assets and liabilities have been classified as current and
non-current on the basis of the following criteria:

Assets

An asset is classified as current when it satisfies any of the
following criteria:

a) it is expected to be realised in, or is intended for
sale or consumption in, the company's normal
operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be realised within 12 months after
the reporting date; or

d) It is cash or cash equivalent unless it is restricted
from being exchanged or use to settle a liability for
at least 12 months after the reporting date.

Current assets include the current portion of non-current
financial assets.

All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the
following criteria:

a) it is expected to be settled in the company's normal
operating cycle;

b) it is held primarily for the purpose of trading;

c) it is due to be settled within 12 months after the
reporting date; or

d) There is no unconditional right to defer settlement of
the liability for at least 12 months after the reporting
date. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue
of equity instruments do not affect its classification.

Current liabilities include current portion of non-current
financial liabilities.

All other liabilities are classified as non-current
Operating cycle

Operating cycle is the time between the acquisition of
assets for processing/servicing and their realization in
cash or cash equivalents. The normal operating cycle is
considered as twelve months.

3. Applicability of new and revised Ind AS

Ministry of Corporate Affairs ("MCA") notifies new
standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued
from time to time.

In May 2025, MCA notified amendments to Ind AS 21 - The
Effects of Changes in Foreign Exchange Rates, applicable
w.e.f. April 1, 2025. The Company has reviewed the
amendment and based on its evaluation has determined
that it does not have any impact in its standalone financial
statements.

In August 2025, MCA notified the following
amendments to:

a. Ind AS 1, Presentation of Financial Statements,
applicable w.e.f. April 1, 2025 - The amendment
relates to classification of liabilities as current or non¬
current and non-current liabilities with covenants.
In the context of classifying a liability as current, it
removes the requirement of existence of a right to
defer settlement for at least 12 months after the
reporting date and instead requires that the said
right should exist on the reporting date and have
substance. The amendment also introduces guidance
on classification of liabilities with covenants. The

Company has no impact of these amendments in
its classification criteria of current and non-current
liabilities.

b. Ind AS 7, Statement of Cash Flows and Ind AS 107,
Financial Instruments: Disclosures, applicable
w.e.f. April 1, 2025 - The amendment in Ind AS 7
requires to inform users of financial statements of
the existence of supplier finance arrangements and
explain the nature of the arrangements, the carrying
amount of liabilities and the range of payment
due dates. Ind AS 107 has been amended to add
supplier finance arrangements as a factor that may
cause concentration of liquidity risk. The Company
has reviewed the amendment and based on its
evaluation has determined that it does not have any
impact in its standalone financial statements.

c. Ind AS 12, International Tax Reform - Pillar Two Model
Rules applicable immediately - The amendments
provide a temporary mandatory relief from deferred
tax accounting for top-up tax and disclose that they
have applied the relief. This relief is immediate and
applies retrospectively. The Company has reviewed
the amendment and based on its evaluation has
determined that it does not have any impact in its
standalone financial statements.

(iv) Fair value technique used and its hierarchy

The Company has obtained independent valuations of its investment property from independent registered valuer as defined
under rule 2 of the Companies (Registered valuers and valuation) Rules, 2017. The fair value measurement for investment
property has been categorised as Level 2 fair value based on the inputs to the valuation technique used. The main inputs
considered by the valuer are government rates, property location, market research & trends, contracted rentals, terminal
yields. discount rates and comparable values, as appropriate.

(v) The aggregate depreciation has been included under depreciation and amortisation expense in the statement of profit and
loss.

Note (i): Update regarding sub-division of equity Shares (New Face Value C 2 per equity share) undertaken in previous year
2024-25:

(a) Pursuant to approval granted by the Shareholders of HEG Limited through Postal Ballot on September 20, 2024, for
the Sub-Division of one (1) equity share of HEG Limited ('Company') of Face Value of C 10 each into five (5) equity
shares of Face Value of C 2 each, necessary post sub-division credits have been made to the shareholders holding
shares in demat form as on record date through NSDL/CDSL system and new share certificates have been issued to
the shareholders having shares in physical form. Record Date for the said Sub-Division was October 18, 2024.

(b) As a result of above said sub-division, Promoter/Promoter Group shareholding has been changed from 2,15,27,974
equity shares of Face Value of C 10 each to 10,76,39,870 equity shares of Face Value of C 2 each (Ratio 5 : 1). Pre and
Post sub-division holding percentage was appearing same i.e. 55.78%. There was no change in percentage holding
of Promoter/Promoter Group.

(c) Total paid up share capital (in equity shares) has been changed from 3,85,95,506 equity shares of Face Value of C 10
each to 19,29,77,530 equity shares of Face Value of C 2 each. There was no change in paid up share capital (Pre and
Post sub-division of equity shares) in Rupees i.e. C 38,59,55,060.

Note (ii): Update regarding change in Promoter/Promoter Group shareholding:

During the financial year ended 31^st March, 2026, Redrose Vanijya LLP has increased its shareholding from 28.95% to 29.46%
by way of acquisition of 9,69,000 equity shares (0.51%) from secondary market and in this regard necessary disclosures have
been made to BSE Limited and National Stock Exchange of India Limited.

Nature and purpose of reserves

1) Capital reserve:

The Capital reserve has been created on account of warrant money forfeited and profit made on hive off of steel business.

2) Capital redemption reserve:

The capital redemption reserve has been created at the time of redemption of preference shares and buy back of own shares.
The reserve can be utilised for issuing bonus shares.

3) Retained earnings

Retained earnings refer to net earnings not paid out as dividend but retained to be reinvested in the core business. The amount
is available for distribution of dividend to the equity shareholders.

(ii) Nature of security against loans

a) Working capital borrowings from banks are secured by first charge against hypothecation of all stocks present and
future, stores, spare parts, packing materials, raw materials, finished goods, goods in transit / process, book debts,
outstanding monies receivable, claims, bills etc.

b) Pari-passu second charge over entire fixed assets (including land & building and plant & machineries) of the Company in
respect of Graphite & Thermal Power Unit at Mandideep and Hydel Power unit at Tawa Nagar, Hoshangabad.

(iii) Refer note 45B for classification of financial liabilities

(iv) Refer note 46 for carrying amount of assets pledged as security for borrowings.

(v) Refer note 45C for information about liquidity risk and market risk in respect of borrowings.

Note 37: Segment information

The Company's Chief Operational Decision Makers consisting of Chairman, Managing Director & CEO examines the Company's
performance both from product and geographic perspective and has identified two segments, i.e., Graphite electrodes (including
other carbon products) and Power. The business segments are monitored separately for the purpose of making decisions about
resource allocation and performance assessment.

The reportable segments are:

• Graphite Electrodes (including other carbon products)- The segment comprises of manufacturing of graphite electrodes.

• Power Generation - The segment comprises of generation of power for sale.

Segment measurement

The measurement principles for segment reporting are based on Ind AS 108. Segment's performance is evaluated based on
segment revenue and profit/loss from operating activities. Operating revenues and expenses related to both third party and inter¬
segment transactions are included in determining the segment results of each respective segment.

Inter segment transactions are carried out at arm's length price.

Terms and conditions of transactions with related parties

All related party transactions entered during the year were in ordinary course of the business and on arm's length basis.
Outstanding balances at the year-end are unsecured and settlement occurs in cash.

There have been no guarantees provided or received for any related party as at March 31,2026 and March 31,2025.

For the year ended March 31,2026, the Company has not recorded any impairment in respect of any bad or doubtful debts
due from related parties (March 31,2025: Nil).

Note 40: Disclosures required as per Indian Accounting Standard-19 "Employee Benefits"

(A) Defined contribution plan

The Company makes contribution to Provident fund, ESIC and retirement benefits plans for eligible employees under the
scheme and recognised as expense and included in the Note 30 Employee benefit expenses under the head "Contribution to
provident and other funds". The details are as under:

(B) Defined benefit plan

The Company sponsors funded defined benefit plan for qualifying employees. This defined benefit plan of gratuity is
administered by a separate trust that is legally separate from the entity. The trust is responsible for investment policy with
regard to the assets of the trust and the contributions are invested in a scheme with fund managed by Insurer as permitted
by Law. The management of fund is entrusted with the Insurer. The liability for employee gratuity is determined on actuarial
valuation using projected unit credit method.

These plans typically expose the Company to actuarial risks such as Investment risk, Interest rate risk, Longevity risk and
Salary risk.

(i) Investment risk

The probability or likelihood of occurrence of losses related to the expected return on investment. if the actual return on plan
assets is below the expected return, it will create plan deficit.

(ii) Interest risk

The plan exposes the Company to the risk of fall in interest rates. A fall in interest rates will result in an increase in the ultimate
cost of providing the above benefit and will thus result in an increase in value of the liability.

(iii) Longevity risk

The present value of defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan
participants. An increase in the life expectancy of the plan participants will increase the plans liability.

(iv) Salary risk

The present value of defined benefit plan is calculated with the assumption of salary increase rate of plan participants in
future. Deviation in rate of increase in salary in future for plan participants from the rate of increase in salary used to determine
the present value of obligation will have a bearing on the plan's liability.

The following table set out the funded status of the gratuity plan and amounts recognised in the balance sheet:

The Company does not face liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the
obligations related to lease liabilities as and when they fall due.

(g) Short- term leases

The Company incurred C 47.58 Lakhs during the year ended March 31, 2026 towards expense relating to short-term leases
having tenure of less than 12 months (previous year C 36.87 Lakhs).

(ii) Company as a lessor

The Company has given on lease building under operating lease. The rental income recorded for the year ended March 31,
2026 is C 133.73 Lakhs (previous year C 153.99 Lakhs). In accordance with Indian Accounting Standard (Ind AS-116) on 'Leases',
disclosure of the future minimum lease income in the aggregate and for each of the following periods is as follows:

Note 42: Events after the reporting period

The Board of Directors of the company has recommended a final dividend of C 3.40/- per equity share of the face value of C 2 each
(previous year C 1.80/- per equity share of face value of C 2 each) which is subject to the approval of shareholders in the ensuing
Annual General Meeting.

Note 43: Corporate Social Responsibility (CSR)

The Company meeting the applicable threshold under Section 135 of the Companies Act, 2013 ("Act") read with related rules
thereto, is mandatorily required to spend at least 2% of its average net profit for the immediately preceding three financial years
on Corporate Social Responsibility (CSR) activities. The funds were utilized throughout the year on the activities which are specified
in Schedule VII of the Companies Act, 2013. The disclosures in this regard are as under:

Note 45: Financial instruments and risk management
45A. Capital management

The Company's objective when managing capital are to:

(i) Safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and

(ii) Maintain an optimal capital structure to reduce the cost of capital

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt."

The Company monitors capital using a gearing ratio, which is net debt (net of cash and cash equivalents) divided by total
equity.

The Company is not subject to any externally imposed capital requirements.

(b) Fair value measurement

The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current
transaction between willing parties, other than in a forced or liquidation sale. This section explains the judgements and
estimates made in determining the fair values of the financial instruments. To provide an indication about the reliability of
inputs used in determining fair values, the Company has classified its financial instruments into three levels prescribed under
the accounting standards.

The Company uses the following hierarchy for determining and disclosing the fair value of the financial instruments by
valuation techniques:

Level 1: Quoted prices (unadjusted) in the active markets for identical assets or liabilities.

Level 2: Other techniques for which all the inputs have a significant effect on the recorded fair values are observable, either
directly or indirectly.

Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data. Sensitivity of Level 3 Financial Instruments is insignificant.

The following methods and assumptions were used to estimate the fair values:

Quoted equity investments: Fair value is derived from quoted market prices in active markets.

Investments in mutual funds/ fixed maturity Plans/bond funds : Fair value is determined by reference to quotes from the
financial institutions, i.e. net asset value (NAV) declared by fund house.

Investment in market linked non-convertible debentures: Fair value is determined by reference to valuation provided by
CRISIL.

Investment in infrastructure trust: Fair value is derived on the basis of valuation certificate by independent professional based
on net asset at fair value approach, in this approach the net asset at fair value is used to capture the fair value of these
investments.

Derivative contracts: The Company has entered into foreign currency contracts to manage its exposure to fluctuations in
foreign exchange rates . These financial exposures are managed in accordance with the Company's risk management
policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on
information derived from observable market data, i.e., mark to market values determined by the authorised dealers banks.

Note 45C Financial risk management

This note explains the risk which Company is exposed to and policies and framework adopted by the Company to manage these
risks.

The Company's principal financial liabilities comprise borrowings, trade and other payables and the main purpose of these financial
liabilities is to manage finances for the day to day operations of the Company. The Company's principal financial assets include
trade and other receivables, and cash and bank balances that arise directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management oversees the management
of these risks. The Board of Directors reviews and approves policies for managing each of these risks, which are summarized below.

(A) Market risk:

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk, such as equity price
risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments,
and derivative financial instruments. The sensitivity of the relevant profit or loss item is the effect of the assumed changes in
respective market risks.

Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in
foreign exchange rates. Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily
with respect to USD and EURO. The Company uses foreign currency forward contracts to hedge its risks associated with
foreign currency fluctuations relating to accounts receivable and accounts payable. The use of foreign currency forward
contracts is governed by the Company's strategy approved by the Board of Directors, which provide principles on the use of
such forward contracts consistent with the Company's Risk Management Policy. The Company does not use forward contracts
for speculative purposes.

(iii) Security price risk:

(a) Price risk:

The Company manages the surplus funds majorly through investments in debt based fixed maturity plans, mutual fund
schemes, equity instruments, infrastructure trust and Optionally Convertible Debenture (OCD). The price of investment in
Fixed Maturity Plans, mutual fund schemes is reflected though net asset value (NAV) declared by the asset management
Company on daily basis as reflected by the movement in the NAV of invested schemes. The price of investment in equity
instruments is reflected through price listed on stock exchange. The price of investment in infrastructure trust is reflected
through valuation certificate by the independent professional on quarterly basis where valuation is determined based on fair
value of assets of trust as on date of valuation. The valuation of OCD is taken based upon valuation report by independent
registered valuer. The Company is exposed to price risk on such Investments.

(B) Credit risk:

Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial
loss to the Company. The Company is exposed to credit risk from its operating activities (primarily trade receivables, loans to
employees and security deposits). Credit risk on cash and cash equivalents, other bank balances is limited as the Company
generally invests in deposits with banks and financial institutions with high credit ratings assigned by credit rating agencies.
The Company's credit risk in case of all other financial instruments is negligible.

To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial
conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.

The Company considers the probability of default upon initial recognition of assets and whether there has been a significant
increase in credit risk on an ongoing basis through each reporting period.

The Company's major sales are export based which is diversified in different countries and none of the customer contributes
10% or more of the total Company's revenue for the financial year 2025-26 and 2024-25

Liquidity risk is defined as the risk that Company will not be able to settle or meet its obligation on time or at a reasonable price.
The financial liabilities of the Company, other than derivatives, include loans and borrowings, trade and other payables. The
Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.
The Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition,
processes and policies related to such risk are overseen by senior management. Management monitors the Company's net
liquidity position through rolling, forecast on the basis of expected cash flows.

Prudent liquidity risk management implies maintaining sufficient availability of standby funding through an adequate line up
committed credit facilities to meet financial obligations as and when due.

(iii) Trade receivables and contract balances

The Company classifies the right to consideration in exchange for deliverables as receivable.

The balances of trade receivables and advance from customers at the beginning and end of the reporting period have been
disclosed at Note 10 and 24 respectively.

The revenue recognised during the year ended March 31,2026 includes revenue against advances from customers amounting
to C 781.18 Lakhs (previous Year- C 657.12 Lakhs) at the beginning of the year. Advance from customers of current year will be
recognised as revenue in coming twelve months.

(iv) Performance obligations and remaining performance obligations

The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized
as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in
revenue.

Note 52

The Company has taken borrowings from banks on the basis of security of current assets. The quarterly returns/statements filed by

the Company with the banks are in agreement with the books of account.

Note 53: Disclosures required as per Schedule III to the Companies Act,2013

(i) The Company did not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956 during the financial year.

(ii) No proceeding have been initiated or pending against the Company for holding any benami property under the Benami
Transactions (Prohibition) Act, 1988 (45 of 1988).

(iii) The Company has not been declared as willful defaulter by any bank or financial Institution or other lender.

(iv) No funds that have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries, except as mentioned in note 44 (4)

(v) No funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("funding party")
with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly lend or invest
in other persons or entities in any manner whatsoever by or on behalf of the funding party ("Ultimate beneficiaries") or
provide any guarantee, security or the like on behalf of the ultimate beneficiaries.

(vi) During the financial year, the Company has not traded or invested in Crypto currency or virtual currency.

(vii) The Company does not have any charge or satisfaction thereof which is pending for registration with ROC beyond the
statutory period.

(viii) The Company has utilised the borrowings from banks and financial institutions for the specific purpose for which it was taken.

(ix) The Company did not have any long-term contracts including derivative contracts for which there were any material
foreseeable losses except as mentioned in note 45 (C)

(x) The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act 1961(such as search, survey or any other
relevant provisions of the Income Tax Act, 1961.

Note 54:

The Board of Directors of the Company at its meeting held on May 22, 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
April 1,2024.

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
March 10, 2025 has approved the execution of definitive agreements in connection with the issue of further shares to 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 modified scheme was approved by the board of directors of respective
companies on March 10, 2025. 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 (NCLT) and the shareholders and creditors
(as applicable) of the Companies involved in the Scheme. Approval/observation letters from BSE and NSE were received on
January 8, 2026 and January 9, 2026 respectively. Thereafter, the Scheme was filed with the Hon'ble National Company Law
Tribunal, Indore Bench on January 24, 2026.

Pursuant to order dated March 26, 2026, the Hon'ble NCLT has directed convening of meetings of the Equity Shareholders, Secured
Creditors and Unsecured Creditors of HEG Limited and Equity Shareholders of Bhilwara Energy Limited through Video Conferencing
/ Other Audio Visual Means for approval of the Scheme. Accordingly, notices have been issued to the respective stakeholders and
the meetings are scheduled to be held on Tuesday, May 5, 2026.

Pending receipt of final approvals from NCLT, no adjustments have been made in the standalone financial statements for the
financial year ended March 31,2026.

Note 55:

The Government of India, vide notification dated November 21,2025, has notified the Code on Wages, 2019, the Industrial Relations
Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and Working Conditions Code, 2020 (collectively
referred to as the "Labour Codes"), which consolidate and replace existing multiple labour legislations. In accordance with Ind AS
19 - Employee Benefits, changes to employee benefit plans resulting from the new labour codes are treated as plan amendments,
requiring immediate recognition of past service cost as expense in the statement of profit and loss. This approach is consistent with
the guidance issued by the Institute of Chartered Accountants of India. The implementation of the Labour Codes has resulted in
an increase of C 1,066.68 Lakhs in the provision for gratuity and long-term compensated absences, which has been recognized as
an employee benefit expense in the standalone financial statements for the year ended March 31,2026. The Company continues
to monitor developments on the rules to be notified by regulatory authorities, including clarifications/additional guidance from
authorities and will continue to assess the accounting implications basis such developments/guidance.