Dear Members,
 
 The Directors have pleasure in presenting their 39th annual report and
 audited statements of accounts for the year ended 31st March, 2011.
 
 1. (i) Financial results                                (Rs. in crore)
 
                                              2010-11         2009-10
 
 Turnover :
 
 Domestic                                      444.95          461.17 
 
 Export                                        854.31          807.27 
 
 Less : Excise Duty                             22.71           21.15 
 
      : Inter Division Sales                   162.90          115.89 
 
 Net Sales                                   1,113.65        1,131.40
 
 Other Income                                   38.43           14.99 
 
 Total Income                                1,152.08        1,146.39
 
 
 Profit before Interest, Depreciation 
 and Amortisation                              262.35          354.00 
 
 Interest                                       36.62           59.26 
 
 Profit before Depreciation and Amortisation   225.73          294.74
 
 Depreciation and Amortisation                  57.65           52.41 
 
 Profit Before Tax                             168.07          242.32 
 
 Provision for Taxation:- 
 
 Current year                                   42.97           70.48 
 
 Deferred                                       (1.28)          (0.09) 
 
 Fringe Benefit Taxes                             -             (0.01) 
 
 Income Tax for earlier years                   (2.48)           0.88 
 
 Net Profit for the Period                     128.86          171.06 
 
 EPS (Basic)                                    30.08           41.10 
 
 EPS (Diluted)                                  30.08           40.91 
 
 (ii) Appropriations
 
 Amount available for appropriation            362.62          316.94 
 
 Dividend :
 
 a) On Equity Shares
 
 i) Interim Dividend                            21.42             -
 
 ii) Proposed Dividend                          21.42           42.83
 
 b) Corporate Dividend Tax
 
 i) On Interim Dividend                          3.41              -
 
 ii) On final Dividend                           3.48            7.28 
 
 Transfer to :
 
 a) General Reserve                             25.00           25.00
 
 b) Capital Redemption Reserve                    -              3.30
 
 c) Debenture Redemption Reserve                 19.04           4.77 
 
 Balance carried forward                        268.85         233.76
 
 2. Overall Performance
 
 The Company recorded Net Sales Rs.1113.65 crore as compared with Rs.1131.40
 crore in the previous year. The Net Profit was at Rs.128.86 crore as
 compared with Rs.171.06 crore in 2009-10 translating to basic earning per
 share at Rs.30.08 as against Rs.41.10 in FY 2009-10.
 
 3. Subsidiary Company & Consolidated Financial Statements
 
 The statement pursuant to Section 212 of the Companies Act, 1956
 relating to the Subsidiary Company ''M/s HEG Graphite Products and
 Services Ltd'' is annexed. Also, the consolidated financial statements
 along with the Auditors Report thereon, form part of the Annual Report.
 
 In terms of the Circular of the Ministry of Corporate Affairs dated 8th
 February, 2011, the Board of Directors has decided not to annex the
 annual accounts of the Subsidiary company in this Annual Report. The
 annual accounts of the Subsidiary company and the related detailed
 information shall be made available to the shareholders of the Company
 and the Subsidiary company seeking such information at any point of
 time. The annual accounts of the Subsidiary Company shall also be kept
 for inspection by any shareholder at the registered office of the
 Company and of the Subsidiary Company. The Company shall furnish a hard
 copy of details of accounts of Subsidiary Company to any shareholder on
 demand.
 
 4. Dividend
 
 The Board of Directors had approved the payment of Interim- Dividend @
 Rs.5/- per Equity Share of Rs.10/- each at its meeting held on the 7th
 February, 2011.
 
 The Board, has recommended a final dividend at the rate of Rs.5/- per
 share on Equity Shares of Rs.10/- each for the financial year ended 31s
 March, 2011, subject to your approval at the Annual General Meeting.
 
 5. Operations Graphite Electrodes
 
 During the year under review, the production volumes of Graphite
 Electrodes were higher as compared with the last financial year. Growth
 in volumes was offset by moderation in realisations which contributed
 to lower margins.
 
 Power Generation
 
 HEG''s strategic planning resulted in reliable captive power generation
 of about 77 MW. The current capacity of power will be self-sufficient
 even at expanded graphite electrode capacity levels of 80,000 TPA.
 
 6. Capacity Expansion of the Graphite Electrode Plant at Mandideep
 
 The expansion plan of graphite electrode manufacturing capacity of the
 Company to 80,000 TPA from current level of 66,000 TPA is progressing
 as per schedule.
 
 Phase I of the capacity expansion is operational, with full capacity
 commercial production expected to be operational by October 2011.
 
 7. Buyback of its Equity Shares by the Company
 
 The Board of Directors of the Company approved the Buyback of its
 Equity Shares from open market through Stock Exchanges vide a
 Resolution passed at its meeting held on the 14th March, 2011. The
 Buyback was approved for an aggregate amount upto Rs.67.50 Crores. The
 Buyback of shares commenced on the 11th April, 2011.
 
 8. Corporate Governance
 
 A report on Corporate Governance forms part of the Annual Report along
 with the Auditors'' Certificate on its compliance.
 
 9. Management Discussion and Analysis
 
 Management Discussion and Analysis Report as required under the Listing
 Agreements with the Stock Exchanges forms part of the Annual Report.
 
 10.  Internal Control Systems and Adequacy thereof
 
 The Company has an adequate internal control system commensurate with
 the size and nature of its business.
 
 Internal audit programme covers various areas of activities and
 periodical reports are submitted to the management. The Audit Committee
 reviews financial statements and internal audit reports along with
 internal control systems. The Company has a well-defined organisational
 structure, authority levels and
 
 internal rules and guidelines for conducting business transactions.
 
 11. Personnel
 
 a) Industrial Relations
 
 Industrial relations during the period under review generally remained
 cordial at all the plants of the Company.
 
 b) Particulars of Employees
 
 The information of employees receiving salary in excess of the limits
 as prescribed under the provisions of sub section (2A) of Section 217
 of the Companies Act,1956, who were employed throughout or for a part
 of the financial year under review is given as an annexure forming part
 of this Report.
 
 12. Public Deposits
 
 Your Company has not invited any deposits from public/ shareholders in
 accordance with Section 58A of the Companies Act, 1956.
 
 13. Conservation of Energy, Technology Absorption, Foreign Exchange
 Earnings and Outgo
 
 The information with regard to Conservation of Energy, Technology
 Absorption, Foreign Exchange Earnings and Outgo in accordance with the
 provisions of Section 217(1)(e) of the Companies Act, 1956 read with
 the Companies (Disclosures of particulars in the Report of Board of
 Directors) Rules, 1988, is given as an annexure forming part of this
 Report.
 
 14. Directors
 
 a) Shri Riju Jhunjhunwala at his request was relieved from the position
 of Executive Director w.e.f. 27th July, 2010 and continues to be a
 Non-Executive Director
 
 b) Three of your Directors namely Shri L.N. Jhunjhunwala, Dr.  Kamal
 Gupta and Shri P. Murari shall retire by rotation at the ensuing Annual
 General Meeting and being eligible, offer themselves for
 re-appointment. The Board recommends their reappointment.
 
 c) LIC nominated Shri Lalit Mohan Lohani as its nominee on the Board of
 the Company in place of Shri Mohanraj Nair. His appointment was
 approved w.e.f. 27th July, 2010. The Board appreciates the services
 rendered by Shri Mohanraj Nair during his tenure as Director of the
 Company.
 
 d) Your Directors inform you about the sad demise of Shri V.K.  Mehta,
 who was Director on the Board of the Company and appreciate the
 valuable services rendered by Shri V K Mehta during his tenure as a
 Director of the Company. Shri Niket A.R.
 
 Mehta, who was Alternate Director to Shri V.K. Mehta, consequently
 ceased to be the Alternate Director.
 
 15. Auditors
 
 M/s Doogar & Associates, Chartered Accountants and M/s S.S.  Kothari
 Mehta & Co., Chartered Accountants, Auditors of the Company, will
 retire from their office at the ensuing Annual General Meeting. They
 are, however, eligible for re- appointment. They have furnished a
 Certificate to the effect that their appointment will be in accordance
 with limits specified in sub-section (IB) of Section 224 of the
 Companies Act, 1956. You are requested to consider their appointment.
 
 The Auditors'' Report read alongwith notes to accounts is self
 explanatory and therefore does not call for any further comments.
 
 16. Directors Responsibility Statement
 
 The Directors confirm that:
 
 (i) in preparation of the annual accounts, the applicable accounting
 standards have been followed and there are no material departures from
 the same;
 
 (ii) they have selected such accounting policies and applied them
 consistently and made judgments and estimates that are reasonable and
 prudent so as to give a true and fair view of the state of affairs of
 the Company at the end of the financial year ended 31st March, 2011 and
 of the profit of the Company for the year under review;
 
 (iii) they have taken proper and sufficient care for maintenance of
 adequate accounting records in accordance with the provisions of the
 Companies Act, 1956 for safeguarding the assets of the Company and for
 preventing and detecting frauds and other irregularities; and
 
 (iv) they have prepared the annual accounts on a going concern basis.
 
 17. Acknowledgements
 
 Your Directors wish to place on record, their appreciation for the
 valuable assistance and support received by your Company from banks,
 financial institutions, Central Government, Govt.  of Madhya Pradesh,
 Govt. of Uttar Pradesh and their departments. The Board also thanks the
 employees at all levels, for the dedication, commitment and hard work
 put in by them for the Company''s achievements.
 
                             For and on Behalf of the Board of Directors
 
 Place : Noida                                   Ravi Jhunjhunwala
 
 Dated: April 29, 2011                Chairman & Managing Director