2. Overall Performance

The Company recorded net sales of C2551.77 Crore during
the financial year 2025-26 as compared to C2137.34 Crore
in the previous financial year. The Net Profit during the
financial year 2025-26 was C180.72 Crore as compared
to a net profit of C101.31 Crore in financial year 2024-25
translating to Basic Earnings Per Share at C 9.36 for the
financial year 2025-26 as against C5.25 in financial year
2024-25.

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 published by the World Steel
Association, total global crude steel production declined
by 2.0% in CY 2025 to 1,803.8 mmt, compared with 1,840.9
mmt in CY 2024, reflecting continued weakness in global
steel demand.

Steel production in the world ex-China increased by
0.9% to 843.0 mmt in CY2025 from 835.8 mmt in CY2024,
indicating relatively resilient demand trends across ex¬
China markets.

China's steel production declined by 4.4% from 1,005.0
mmt in 2024 to 960.8 mmt in 2025, mainly due to
prolonged weak domestic demand and continued stress
in the real estate sector. In contrast, China's steel exports
increased by 7.5% year-on-year to a record 119 mmt in
2025, up from 110.7 mmt in 2024.

Over the last five years, despite an overall 7.5% decline in
steel production, China's exports surged by 78%, rising
from 67 mmt in 2021 to 119 mmt in 2025, thereby exerting
pressure on graphite electrode demand in global markets
outside China.

Among major steel-producing countries, the United
States registered a 3.1% increase in production to 82.0
mmt in 2025, compared with 79.5 mmt in 2024.

India, firmly established as the world's second-largest
steel producer, reported a 10.4% increase in production
to 164.9 mmt in 2025, supported by robust domestic
demand, particularly from the infrastructure and real
estate sectors. It is noteworthy that steel production in
India is predominantly through the blast furnace route,
with a substantial share also produced through induction
furnaces, which do not form part of the Company's
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 in the graphite
electrode industry, the Company operated at a capacity
utilisation rate of 91 % during FY 2025-26, the highest
among all western graphite electrode manufacturers.

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

While short-term prospects for graphite electrodes
remain cautiously optimistic, near-term market conditions
continue to be influenced by geopolitical tensions and
trade disruptions arising from conflicts in the Middle
East and the Russia-Ukraine region, which are impacting
industrial activity in developed markets. Nevertheless, the
long-term outlook remains positive, driven by the global
transition toward EAF-based steelmaking.

To date, more than 100 mmt of new greenfield EAF
steelmaking capacity has been announced globally. Of
this, approximately 21 mmt became operational between
2022 and 2025, while an additional 60 mmt is expected to
come on stream between 2026 and 2028.

The Company anticipates 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 in ex-China markets of
approximately 500,000-600,000 mt.

The Company remains among the most cost-competitive
and high-quality producers of graphite electrodes

globally. Supported by an extensive customer base, the
Company is well positioned to capitalise on 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 2025-26 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 C28.95 Crore in FY 2025-26 from C32.66 Crore in
FY 2024-25.

4. Change in Share Capital

During the Financial Year 2025-26, there was no change in
the Share Capital of the Company.

The Authorized Share Capital of the Company as at 31^st
March, 2026 was C70,00,00,000 (Rupees Seventy Crores)
divided into:

a) 27,50,00,000 (Twenty Seven Crore Fifty Lakhs) Equity
Shares of C2/- (Rupees Two) each, and

b) 15,00,000 (Fifteen Lakhs) Preference Shares of Rs100/-
(Rupees One Hundred) each.

The Issued, Subscribed and Paid-up Equity Share
Capital of the Company as at 31^st March, 2026 was
C38,95,55,060/-(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 C2 (Rupees Two only).

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 2025-26.

7. Significant Developments

The Board of Directors of the Company at its meeting held

on 22^nd 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 1⁵¹ 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^th March, 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
10^th March, 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 8^th January,
2026 and 9^th January, 2026 respectively. Thereafter, the
Scheme was filed with the Hon'ble National Company Law
Tribunal, Indore Bench on 24^th January, 2026.

Pursuant to order dated 26^th March, 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, 5^th
May, 2026.

Pending receipt of final approvals from NCLT, no
adjustments have been made in the Audited financial
results/ statements for the quarter and financial year
ended 31^st March, 2026.

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 2025-26 and Net profit was C0.02 Crore.

ii. HEG Graphite Limited

HEG Graphite Limited had no business operations
during the financial year 2025-26 and Net Loss was
C0.03 Crore.

iii. Bhilwara Infotechnology Limited

Bhilwara Infotechnology Limited had a consolidated
turnover (Revenue from Operations) of C7.37 Crore
(from continued and discontinued operations) and
Profit after Tax was C10.42 Crore (from continued
and discontinued operations) as per their audited
consolidated financial statements for the financial
year ended 31^st March, 2026.

In terms of provisions of Section 136(1) of the Companies
Act, 2013, the audited financial statements of all the
Wholly Owned Subsidiaries namely TACC Limited, HEG
Graphite Limited and Bhilwara Infotechnology 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 C909.66 Crore and Net Profit
(attributable to owners of the parent) was C243.22 Crore
as per their audited consolidated financial statements for
the financial year ended 31^st March, 2026.

The Company has no Joint Ventures.

No Company has become/ceased to be Joint Venture
during the financial year 2025-26.

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 C3.40 /- (i.e. 170%) per equity share on
19,29,77,530 equity shares of face value of C2/- each for
the financial year ended 31^st March, 2026 subject to the
approval of the Shareholders at the ensuing 54^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 and can be accessed at: https://hegltd.com/
wp-content/uploads/2018/04/Dividend-Distribution-
Policy.pdf .

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 2025-26 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 in place adequate internal financial
controls with reference to financial statements,
commensurate with the size, scale and complexity of its
operations, in line with the requirements of the Companies
Act, 2013 and the SEBI (LODR) Regulations, 2015.

A risk-based internal audit programme covers key business
processes, and its findings are periodically reviewed by
the management and the Audit Committee. The Company
also has a well-defined organizational structure, clearly
laid down authority levels, and documented policies and
procedures for efficient conduct of its business.

The internal financial controls are regularly monitored
by the Audit Committee, the Board and the Statutory
Auditors. During the year, no material weakness in the
design or operating effectiveness of such controls 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
2025-26 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

The Shareholders upon the recommendation of
Nomination and Remuneration Committee and the
Board of Director have approved in the 53^rd Annual
General Meeting of the Company held on August 20,
2025, the continuation of Smt. Vinita Singhania (DIN:
00042983) as a Non-Executive Non-Independent
Director of the Company, liable to retire by rotation,
who would attain the age of 75 years on March 12,
2027 in FY 2026-27

There was no cessation of Director during the
FY 2025-26.

(b) Retire by Rotation/Continuation of Director

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 Shekhar Agarwal (DIN: 00066113) (Presently
Aged: 73 Years 8 Months), Non-Executive Director
Non-Independent Director of the Company
will attain the age of 75 years in FY 2027-2028,
therefore upon the recommendation of Nomination
& Remuneration Committee, the Board has

recommended continuation of Shri Shekhar Agarwal
(DIN: 00066113) 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
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.

Furthermore, all Independent Directors have
duly registered their names in the data bank
maintained by the Indian Institute of Corporate
Affairs, in accordance with the applicable statutory
requirements.

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 issued
by ICSI, of the Directors eligible for appointment/
re-appointment forms part of the Notice of Annual
General Meeting.

ii. KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the
Company as on 31^st March, 2026:

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

b) Shri Manish Gulati, Executive Director

c) Shri Puneet Anand, President and Group Chief
Strategy Officer

d) Shri Ravi Kant Tripathi, Chief Financial Officer

e) 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. The
Nomination and Remuneration Policy of the Company is
available on the Company's website and can be accessed
at: https://hegltd.com/wp-content/uploads/2022/05/

HEG_NRC-Policy_09.02.2022.pdf

22. Meetings of the Board

The Board of Directors met five (5) times in the financial
year 2025-2026 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, 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

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 2025-26.

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, 2025
was conducted by M/s. N.D. Birla & Co. (M. No. 7907). The
said Cost Audit Report was filed on 27^th August, 2025.

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 29^th April, 2026, 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 2026-2027 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.

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
Shareholder in their 53^rd Annual General Meeting have
approved the appointment of M/s. GSK & Associates, a
firm of Company Secretaries in Practice for a term of five
consecutive financial years commencing from the financial
year 2025-26 till the financial year 2029-30 to undertake
the Secretarial Audit of the Company. The Secretarial Audit
Report for FY 2025-26 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.

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 Company has in place a comprehensive enterprise¬
wide risk management framework to identify, assess,
monitor and mitigate risks, with the objective of
safeguarding shareholder value and ensuring sustainable
business growth. The Risk Management Policy of the
Company is aligned with the overall business strategy
and is disseminated across the organization, making risk
management an integral part of business processes and
decision-making.

Key risks are identified and evaluated as part of the annual
planning process, and appropriate mitigation plans are
implemented. The status of key risks and the effectiveness
of mitigation measures are periodically reviewed by
the management and placed before the Board. The
Company has constituted a Risk Management Committee
in accordance with the requirements of the SEBI (LODR)
Regulations, 2015 to oversee the risk management
framework. Details relating to its composition, meetings
and terms of reference are provided in the Corporate
Governance Report forming part of this Annual Report.

In the opinion of the Board, there are no material risks that
may threaten the existence of the Company.

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 & ESG 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. 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. Approximately
44,000 students from around 501 Schools and Madrasas
have been enrolled under the Mid-Day Meal Programme
and a total of about 2.25 Crore meals have been served up
to March 2026. 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. Global Vikas Trust has positively impacted
the lives of over 30,000 farmers, resulting in the plantation
of approximately 7.00 Crore trees across Madhya Pradesh
and Maharashtra. 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 2026-2027.

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 2025¬
26 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

During the year under review, the Company has made
loans, provided guarantees and made investments in

compliance with the provisions of Section 186 of the
Companies Act, 2013. Such transactions, inter-alia, include
the following:

i. Loan of C100 Crore extended to TACC Limited, a
wholly owned subsidiary, which was fully repaid
during the year.

ii. Corporate Guarantee provided in favour of State
Bank of India on behalf of TACC Limited, a wholly
owned subsidiary, in respect of financial assistance
amounting to C1,230 Crore to be availed by the said
subsidiary.

iii. Loan of C210 Crore extended to Bhilwara Energy
Limited, an associate company.

iv. Subscription of debentures (OCDs) amounting
to C400 Crore of TACC Limited, a wholly owned
subsidiary.

The details of all loans, guarantees and investments
covered under the provisions of Section 186 of the
Companies Act, 2013 are disclosed in the notes to the
financial statements forming part of the Annual Report.

35. Investor Education and Protection Fund (IEPF)

As required under Section 124 of the Companies Act, 2013,
the following unclaimed dividend was transferred during
the Financial Year 2025-26, to the Investor Education and
Protection Fund established by the Central Government:

i. C1,16,65,650 pertaining to Unclaimed final dividend
of FY 2017-18

ii. C78,07,860 pertaining to Unclaimed interim dividend
of FY 2018-19

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.

The Company has duly and timely disclosed to the Stock
Exchanges all instances of violation of the Securities and
Exchange Board of India (Prohibition of Insider Trading)
Regulations, 2015, as required under the applicable
provisions. Appropriate actions have been taken in
accordance with the Company's Code of Conduct.

The Company continues to strengthen its internal controls
and sensitization mechanisms to ensure strict adherence
to the applicable regulations and to prevent recurrence of
such instances.

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 20 workshops or awareness
programmes against sexual harassment of women at
the workplace. No complaint of Sexual Harassment
was received during the financial year 2025-26.

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.

f) The Company is Compliant with the applicable
provisions of the Maternity Benefit Act, 1961 and
has policies, systems and Process in place to ensure
ongoing compliance.

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

The Company has duly constituted a Stakeholders'
Relationship Committee with broad terms of reference
in compliance with the requirements of the Companies
Act, 2013 and the SEBI (LODR) Regulations, 2015. The
details relating to its composition, meetings and terms
of reference are provided in the Corporate Governance
Report forming part of this Annual Report.

As a responsible corporate citizen, the Company
continues to support the 'Green Initiative' of the Ministry
of Corporate Affairs, Government of India, by enabling
electronic delivery of documents, including the Annual
Report, Notices and other communications to Members
at their registered email addresses. Members who have
not registered or wish to update their email addresses
are requested to register the same with their Depository
Participants or with the Company's Registrar and Share
Transfer Agent, as applicable, in accordance with Rule
18 of the Companies (Management and Administration)
Rules, 2014.

In line with the applicable MCA and SEBI circulars issued
from time to time, the Notice of the AGM and the Annual
Report for the financial year ended 31^st March, 2026 are
being sent to Members through electronic mode. The
Company has also taken necessary steps to communicate
with Members for registration/updation of their email
addresses for seamless electronic communication.

The Company remained responsive to evolving market
conditions and continued to maintain close engagement
with its customers, which enabled better capacity
utilisation and operational efficiency. Improved utilisation
supported optimal absorption of costs and strengthened
cash flows. The Company continues to stay connected
with its customers on a regular basis.

The IT function is focused on developing and
strengthening digital capabilities aimed at enhancing
transparency in business operations and improving
customer connectivity.

The Company is committed to environmental protection
and sustainable development. The R&D team works in
collaboration with reputed research institutions to develop
environment-friendly solutions, including identification of
alternative and regenerative carbon feedstock, to support
sustainable growth.

The Company supports the principles of inclusive growth
and equitable development through its Corporate Social
Responsibility initiatives as well as through its core
business activities.

The CSR programmes focus on areas such as healthcare,
education, eradication of hunger, community
development and environmental sustainability, thereby
contributing to improvement in quality of life and
livelihoods.

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: April 29, 2026 Chairman, Managing Director & CEO
Place: Noida (U.P.) DIN: 00060972