HEG Director Discussions


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

Particulars 2022-23 2021-22
Net sales 2,435.32 2,173.23
Other operating income 31.92 28.38
Total income from operations (Net) 2,467.24 2,201.61
Other income 109.14 79.55
Total income 2,576.38 2,281.16
Profit before finance cost, depreciation and amortization 728.79 606.77
Finance cost 26.01 7.49
Profit before depreciation and amortization 702.78 599.28
Depreciation and amortization 102.30 79.29
Profit/(Loss) before tax 600.48 520.00
Provision for taxation:
Current tax 154.25 129.56
Deferred tax (9.29) (0.14)
Net Profit/(Loss) for the period 455.51 390.58
EPS (Basic) C 118.02 101.20

Note: No amount transferred to reserves.

2. Overall Performance

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

3. State of CompanyRs.s Affairs

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

Electrode Sector

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Power Generation

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

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

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

4. Change in Share Capital

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

5. Material Changes and Commitments

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

6. Change in the Nature of Business

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

7. Subsidiary, Associate Companies or Joint Ventures

(i) Subsidiary Company

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

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

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

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

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

(ii) Associate Companies or Joint Ventures

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

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

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

The Company has no Joint Ventures.

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

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

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

8. Consolidated Financial Statements

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

9. Dividend

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

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

10. Corporate Governance

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

11. Management Discussion and Analysis

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

12. Business Responsibility & Sustainability Report (BRSR)

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

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

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

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

14. Personnel

a) Industrial relations

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

b) Particulars of employees

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

15. Public Deposits

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

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

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

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

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

18. Directors and Key Managerial Personnel

i. DIRECTORS

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

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

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

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

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

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

(2) of the Companies (Appointment & Qualification of Directors) Rules, 2014.

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

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

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

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

ii. KEY MANAGERIAL PERSONNEL

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

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

b) Shri Manish Gulati, Executive Director

c) Shri Gulshan Kumar Sakhuja, Chief Financial Officer

d) Shri Vivek Chaudhary, Company Secretary

19. Board Evaluation

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

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

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

20. Nomination and Remuneration Policy

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

21. Meetings of the Board

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

22. Contracts and Arrangements with Related Parties

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

All related party contracts/arrangements/ transactions that were entered into during the

financial year were on an armRs.s length basis and were in the ordinary course of business.

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

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

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

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

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

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

23. Committees of the Board

The Board has following statutory committees:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Corporate Social Responsibility Committee

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

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

24. Auditors

M/s SCV & Co LLP having (Firm Registration No- 000235N/N500089), Chartered Accountants, the Statutory Auditors of the Company had been re-appointed as the Statutory Auditors for a second term of 5 consecutive years from the conclusion of 50th Annual General Meeting (AGM) held on 1st September, 2022 till conclusion of 55th 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 AuditorsRs. Report read along with Notes to Accounts is self-explanatory and therefore does not call for any further comments.

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

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

25. Cost Auditors

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

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

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

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

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 MemberRs.s ratification for the remuneration payable to M/s. N.D. Birla & Co., Cost Auditors is included in the Notice convening the ensuing Annual General Meeting.

26. Secretarial Auditor

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

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

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

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

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

28. Business Risk Management

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

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

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

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

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

29. Corporate Social Responsibility (CSR)

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

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

The CSR policy may be accessed on the CompanyRs.s website at the link mentioned below:

https://hegltd.com/wp-content/uploads/2021/06/amended-csr-policy.pdf

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

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

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

30. Internal Auditors

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

31. Directors Responsibility Statement

The Directors confirm that:

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

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

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

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

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

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

32. Vigil Mechanism /Whistle Blower Policy

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

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

Whistle-Blower-Policy-08.05.2018.pdf

33. Particulars of Loans, Guarantees or Investments

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

34. Investor Education and Protection Fund (IEPF)

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

35. Insider Trading

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

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

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

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

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

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

36. Annual Return

In terms of the Section 92 (3) of Companies

Act, 2013 as amended, the Annual Return of the

Company is placed on the website of the Company

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

37. General Disclosure

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

39. Acknowledgements

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

For and on behalf of the Board of Directors Ravi Jhunjhunwala

Chairman, Managing Director & CEO

DIN: 00060972

Piace: Noida (U.P)

Date: 22nd May, 2023