Dear Members,

Your Directors have the pleasure of presenting their 54^th Annual Report together with Audited Financial Statements for the financial year ended 31^st March, 2026.

1. Financial Results

(C in Crores)

Note: No amount transferred to reserves.

2. Overall Performance

The Company recorded net sales of C 2551.77 Crore during the financial year 2025-26 as compared to C 2137.34 Crore in the previous financial year. The Net Profit during the financial year 2025-26 was C 180.72 Crore as compared to a net profit of C 101.31 Crore in financial year 2024-25 translating to Basic Earnings Per Share at C 9.36 for the financial year 2025-26 as against C 5.25 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.

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.

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 C 32.66 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 C 70,00,00,000 (Rupees Seventy Crores) divided into: a) 27,50,00,000 (Twenty Seven Crore Fifty Lakhs) Equity Shares of C 2/- (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 C 38,95,55,060/-(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 C 2 (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 8 (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^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):

TACC Limited had no business operations during the financial year 2025-26 and Net profit was C 0.02 Crore.

HEG Graphite Limited had no business operations during the financial year 2025-26 and Net Loss was C 0.03 Crore.

Bhilwara Infotechnology Limited had a consolidated turnover (Revenue from Operations) of C 7.37 Crore (from continued and discontinued operations) and Profit after Tax was C 10.42 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.

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

Bhilwara Energy Limited had a consolidated turnover (Revenue from Operations) of C 909.66 Crore and Net Profit (attributable to owners of the parent) was C 243.22 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

TheConsolidatedFinancialStatementshavebeenprepared 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.

Your Directors are pleased to recommend a final dividend at the rate of C 3.40 /- (i.e. 170%) per equity share on 19,29,77,530 equity shares of face value of C 2/- 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 .

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.

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

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.

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.

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

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.

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

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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 C 3,00,000/- 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.

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.

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

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.

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.

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.

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.

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

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 C 100 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 C 1,230 Crore to be availed by the said subsidiary.

iii. Loan of C 210 Crore extended to Bhilwara Energy

Limited, an associate company.

iv. Subscription of debentures (OCDs) amounting to C 400 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.

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.

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.

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.

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.

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.