Anda di halaman 1dari 24

About company

HEG Ltd, a premier company of the LNJ Bhilwara group, is


today India's leading graphite electrode manufacturer. It has
one of the largest integrated Graphite Electrode plants in the
world, processing sophisticated UHP (Ultra High Power)
Electrodes.
The company exports over 80% of its production to more than
25 countries of the world.
The position the company enjoys today in India and abroad is
largely due to its commitment to constant upgradation of its
product quality to match international standards and to meet
new challenges to win and excel in all situations.
In the 1990's, we set our Vision to be : A vibrant globally
acknowledged top league player in Graphite Electrodes and
allied businesses with commitment to growth, innovation,
quality and customer focus.
In Graphite, our focus is on UHP grade electrodes, and we
have expanded our product range and established the same on
some of the toughest furnaces of our customers. Today, we
have years of experience supplying quality UHP grade
electrodes all over the world.
The encouragement from our customers has led us to increase
production capacity and become a significant global producer
of quality UHP grade electrodes for EAF application. Our ability
to source the best raw materials from sources worldwide and
the skills of our human resources has been the key to our
growth.
To maintain our competitiveness, we have set up a Captive
Power Plant totaling more than 77 MW.

As a responsible graphite electrode manufacturer, we continue


to invest in technology, development of new products and in
our human resources.

Board members

Shri L N Jhunjhunwala
Shri Ravi Jhunjhunwala
Shri Shekhar Agarwal
Shri Kamal Gupta
Shri D N Davar
Shri P Murari
Shri Lalit Mohan Lohani
Shri Riju Jhunjhunwala
Shri Om Parkash Bahl
Products

Chairman-Emeritus
Chairman & Managing Director
Vice-Chairman
Director
Director
Director
Nominee Director-LIC
Director
Director

1. Graphite Electrode Division


The main business of HEG is graphite which accounts for 80% of the revenue. Set up in
1977, in technical and financial collaboration with Societe Des Electrodes Et Refractaires
Savoie (SERS), a subsidiary of Pechiney of France, HEG is now the largest integrated
graphite plant in the world. Spread over an area of about 170 acres, HEG (graphite division)
has facilities for production of Graphite Electrodes and Graphite Specialities. Its plant is
located at Mandideep near Bhopal (MP).
The plant has a annual capacity to make 80,000 MT of UHP grade electrodes. It has three
captive power generation facilities which can together produce around 77 MW which fulfils
almost the entire requirement of the graphite plant.

2. p0wer

One of the major bottlenecks plaguing the Indian industry has been the shortage
of power. At HEG Limited, we realized this as early as 1995 and overcame this problem by
setting up the group's first hydropower project of 13.5 MW rated capacity in Tawanagar,
district HOSHANGABAD (M.P.) which was commissioned in 1997. The power generated at
this unit is wheeled to the graphite plant at Mandideep. This not only ramped up the
efficiency of the graphite plant but also opened up a window of opportunity for us to enter the
area of power generation.
Subsequently, when the Graphite Electrode capacity was increased from 66,000
tonnes/annum to 80,000 tonnes/annum, We have 64 MW captive termal power plant and
13.5 MW hydel power plant. The main equipments including the Turbine were sourced from
BHEL, India.

3. Activated Carbon Fabric (ACF)


ACF is a flexible form of activated carbon. The
activated carbon fabric is mechanically weak but
highly porous in nature. Due to this, it possesses
unique characteristics as compared to conventional
activated carbon, which is commonly used in
granular, palletised, powdered and moulded form.
Due to a thin fibrous shape in activated carbon
fabric, a fast intraparticle adsorption kinetics takes
place in gas and liquid phase adsorption.
Molecules/atoms of pollutants have an affinity
towards activated carbon fabric surface by physical
adsorption at low temperatures.

In physical adsorption there is a Van Der Waals interaction, having a long range, but weak forces.
Molecules of pollutant bouncing across the activated carbon fabric surface gradually loses its energy
and finally comes to rest on it. Due to weak bonds in the physical adsorption molecules can be
removed from the activated carbon fabric surface by giving a heat energy. This property is utilised in
regenerating activated carbon fabric.
Features of ACF
It is of minimum 90% pure form of activated carbon
It is soft and easy to handle
It has a BET surface area (SBET) of the range from 1,000 to 2,500 m2 g-1 with a high degree of
adsorption and desorption characteristics. Effective adsorption is several hundred times higher
than that of GAC, PAC or palletized activated carbon.
ACF is made up of filament yarn, due to which ACF is electrically conductive and hence it can be
regenerated by passing a low voltage current across the ACF surface or by heating ACF at 100 oC
for 15 to 30 minutes.
The distribution of pore size is in narrow range < 10 nm.

Usage
ACF is used in :
Air-conditioner filters.
Air purifying filters.
Clean rooms.
All other types of pollution control filters.
Anti pollution masks - for personal protection against gaseous vapours / fumes and bad odours.
Refrigerator deodouriser - to arrest odours in refrigerators.
Cigarette filters - to trap harmful chemicals present in cigarette smoke.

B. Carbon Blocks
HEG also makes Fine Grain Carbon Blocks for various applications on special orders. These blocks
are used by the customers to make value added products like Heat Exchangers, etc.
C. Graphite Specialities
HEG has a small graphite Speciality division to cater to the requirements of customers who need
Graphite Products in specific sizes and shapes. These are manufactured to individual customer
requirements as per specs and requirements

Awarded ISO 9001:2008 & ISO 14001:2004 Certifications.

Awarded 'Rajiv Gandhi National Quality Commendation Award 2001 for Quality" by the
Bureau of Indian Standards, Government of India.
HEG Ltd bagged the prestigious National Export Award instituted by the Ministry of
Commerce, Government of India, for outstanding export performace for the year 1997-98.
HEG has also won the country's top export award instituted by the Chemical & Allied
Products Export Promotion Council (CAPEXIL) for outstanding exports for 18 consecutive
years. For 2001-02, HEG was awarded the Highest Export Award.
HEG has the largest Integrated Graphite Electrodes manufacturing plant in South Asia

and the Middle East. It is also the second largest in the world.
HEG has been regularly exporting electrodes since 1981 and today exports more than
80% of its production.
HEG's graphite electrodes are exported to 25 countries around the world, including
developed countries like USA, Canada, Germany, France, Italy, South Korea, Australia
etc. - a reward for our commitment to World winning Quality and Performance.

Human Resource Management


HEG operates in an industry where technical competence and
expertise is paramount. The company maintains that Human
Resources is a key driver of business growth.
Organizational Development
HEG believes that productivity enhancement comes from wellstructured and focused training and development programmes. The
Company continually endeavours to equip its workforce with the
latest tools and techniques to help
them raise their level of efficiency and effectiveness. In 2003, M/S Hewitt Associates were retained
by HEG for HR Intervention and initiatives broadly covering Job Evaluation, Performance
Measurement, Competency Assessment and Development, Organization Re-structuring and Reward
Management. The company has subsequently implemented most of the recommendations and is of
the view that each of these initiatives would go a long way in fostering an environment that allows
employees to fully utilize their abilities to perform better and to drive the performance of the
company.
Fostering a Quality-conscious organisational culture
Quality is not merely limited to being the cornerstone of HEG's sustainable competitive advantage
but is actively sought to be used as a facilitator of business growth. The Company on its part,
constantly engages its employees, programmes aimed at ingraining a culture of quality in its
workforce. HEG has further extended the quality initiative to its processes via a comprehensive
Statistical Process Control System (SPC) based on Six Sigma Tools & Techniques. This has enabled
the Company to attain international standards in manufacturing besides enhancing productivity.
Moreover, the Company invites global consultants from time to time to seek assistance in its efforts to
continuously improve processes.
Performance Metrics and Remuneration
The Company manages a highly-motivated and capable team of employees. Besides, the nature of the
business requires that in-house competence and expertise be conserved and developed. As a
manifestation of that concept, HEG has outlined a performance management system with the
Balanced Score Card as the core. This seeks to not only motivate employees but also attract fresh
talent into the fold.

Competency Sustainment
Present-day best practices require that succession planning not be restricted to senior management but
also encompass key positions across relevant job categories. HEG as a truly global and modern
organisation believes in preparing tomorrow's leaders today. To that end, the Company has put in
place an effective process to sustain a talent pool that can seamlessly handle organisational change at
all times.
Industrial Relations
HEG has consistently chosen to engage its unions and labour force while initiating major changes that
directly affect them. Furthermore, employees are empowered to bring to the fore issues relevant to
them from time to time. The manner of engagement between the management and its workforce over
the years has led to the creation of mutual understanding and trust between the two.

technology
The principal raw materials used in the manufacture of electrodes are Needle coke and pitch.
The Needle coke is crushed, screened and mixed with pitch in controlled proportion at about
160C. The paste, extruded through an extrusion press, is stored as 'Green Stock'. The Green
Stock is baked slowly to 800C in specially designed furnaces. The meticulously controlled
conditions ensure the pitch cokes satisfactorily. Before coking, the pitch loses a considerable
amount of volatile matter and the resulting electrodes are known as 'Baked Electrodes'.
For high mechanical strength, density and current carrying capacity, the Baked Electrodes are
impregnated with special pitch to fill completely the porosity which results from the volatile matter
being driven off during baking. Following impregnation, the products are baked again to ensure
complete coking of Impregantion Pitch.
The Baked Electrodes then undergo a process of Graphitisation, which involves heating them to
temperatures in the range of 2800 - 3000C in lengthwise graphitisation furnaces. The
Graphitisation process itself lasts only 8 to 12 hours and the cooling down period takes several
hours.
After being taken out from the furnace, the electrodes are subjected to very strict quality control
checks before being passed for machining.
The machining operation involves turning of the electrodes to the required diameter and matching
end sockets to accept threaded nipples. All sockets and nipples are machined to very close
tolerances.

We accord the highest priority to the protection of the


environment and conservation of resources in our premises. In
this endeavour we are committed to:
Maintaining cleanliness at our workplace.
Optimize utilization of resources including water, energy,
stationery.
Wastes minimization, including solid and liquid wastes.
Compliance with all the applicable laws and other requirements.
strive for continual improvement in our environmental
performance.
Create environmental awareness among our employees, contractors
and other stakeholders.

VISION
A vibrant globally acknowledged top league player in Graphite
Electrode & allied business with commitment to growth,
innovation, quality & customer focus.
MISSION
To become a leading international player in Graphite
Electrodes & related businesses by leveraging our core
competence and there by enhancing value to our customers,
shareholders, employees & society.

Quality Policy

We, in heg, are


committed to
being a
customerwhere quality is
innovation is the way of life.

oriented organisation
the inspiration and

We believe that world is our market and therefore competitive


quality of our products, response and service is the essence of
our being.
We recognise that the involvement of the employees is basic to
quality and for continuing growth and improvements.
We would involve our suppliers in the continuing programme
for quality improvement.
We believe that quality can only be obtained in a safe, clean
and orderly environment and therefore, we are committed to
these basics in our day to day activity.
Safety Policy
We in heg, are committed to being a safe and eco-friendly
organisation. We believe that protection of our personnel and
the environment is one of our prime responsibilities.
We, therefore, commit ourselves to:

Introduce sound safety, health and environment management


practices.
Conduct our business responsibly through adoption of safer,
healthier, cleaner and energy-efficient technologies.
Comply with all applicable legal and other requirements, related
to safety, health and environment.
Continually improve our safety, health and environmental
performance by developing effective controls of our operations.
Investigate the accidents to identify root causes and introduce
corrective and preventive measures.
Generate a high degree of awareness amongst all the interested
parties.
K Vaidyanathan
(Chife Operating Officer)

The Company's philosophy on Corporate Governance


envisages the attainment of the highest levels of transparency,
accountability and equity, in all facets of its operations, and all
its interactions with the stakeholders,
including shareholders, employees, customers, government,
suppliers and lenders and to build the confidence

of the society in general. The company is committed to pursue


growth by adhering to the highest national and
international standards of Corporate Governance.

Chairman message
Dear Shareholders,
Fiscal 2012-13 was a heartening year when, despite
prevailing challenges, we grew net sales 14% and net
profit 70% over the previous year.
Challenging times
Graphite electrodes, a vital input in steel making, represents
an indirect proxy of economic growth. In 2012, the global
economic momentum decelerated on account of various
intertwined factors the eurozone crisis, US fiscal cliff, forex
volatility, disruption of global oil supplies and slowing
investments in emerging economies. The result is that the
global steel industry grew a mere 1.2% (but for China it would
have gone down), the lowest in a decade. Global steel players
incurred sizeable losses in 2012. As a natural extension, this
affected graphite electrode demand. Long-term contracts gave
way to need-based spot purchases. The global industry
encountered a 100,000 MT increase in production capacity
(65,000 MT in China), creating an oversupply that pared
realisations.
Inspired response
The scenario was even more challenging for HEG Limited.

The Company commissioned its 14,000 TPA expansion during


the previous year, taking its total capacity to 80,000 TPA. So at
a time when even marketing the volumes of the previous year
would have posed a challenge, the Company was now
required to bring new capacities on stream without a
compromise in efficiencies on the one hand and with adequate
marketing on the other.
I am happy to state that HEG responded commensurately to
the situation. The Company created new markets and
customers. It marketed value-added products to discerning
customers. It optimised resource consumption. It strengthened
operating efficiencies. It widened funds sourcing and
rationalized costs (for working capital) by close to 100 bps.
Besides, the Company was fortunate that abundant rainfall
translated into the second highest hydropower generation in
our history. Besides our thermal power efficiencies were the
best ever too.
The result was that despite a slowdown, the Companys sales
volumes remained at 2011-12 levels; the Company improved
realisations at the time of an industry-wide decline in
realisations.
Fast forward
The global economy is expected to revive gradually even as
downside risks remain significant. The recessionary conditions
in Europe could persist; the Euro region will continue to pose
the largest global downside risk. The IMF estimate for global
GDP growth in 2013 is 3.25% (a downgrade from its initial
estimate of 3.5%).
Once the global economy begins to revive, inventory
restocking could emerge coupled with improved steel
production. Global steel usage is expected to grow from 1.2%
in 2012 to 2.9% in 2013 (Source: World Steel Association),
strengthening EAF furnace output and rising graphite

electrode demand. This rebound could well be driven by the


US, where the US economy is estimated to grow 1.7% in
2013. The EAF-based steel sector (more than 60% of the US
steel capacity) could catalyse the demand for graphite
electrodes.
While the demand side appears tentatively encouraging,
supply side estimates suggest 130,000 MT of additional
graphite electrode capacity coming into play in 2013-14
(100,000 MT in China), increasing the overhang and
depressing realisations.
In India, the proposed infrastructural investments indicate a
rapid increase in steel consumption. A number of integrated
steel producers are commissioning EAF units, the fastest and
the most cost-effective route to address increasing steel
demand. In turn, this is likely to strengthen the demand for
graphite electrodes, creating a widening market for local
players like us.
Roadmap
HEG has created a multi-pronged blueprint to sustain its
momentum.
Operations: Cost optimisation and quality management will
remain priorities. Having stabilised a highly automated facility
in 2012-13, the Company will maximise utilization leading to
cost reduction, widen its sourcing to secure timely and cost
effective input supplies, and save energy.
Marketing: The Company will strengthen customer
relationships to account for a larger wallet share, widen its
geographic presence and manufacture larger electrodes.
Financing: The Company will seek to stay liquid, optimise the
cost of funds and strengthen interest cover and engage in
progressive debt repayment.

Value
HEG has invested in various initiatives to enhance stakeholder
value across the long-term. What was an Rs 565 crore
revenue company in 2002-03, grew to Rs 946 crore in 2007-08
and Rs 1,617 crore in 2012-13. This is the result of the
Companys sustained investment in its business during
industry downtrends, thereby protecting its viability across
market cycles.
On behalf of the management and the Board of Directors, I
would like to thank you for your continued support. I also take
this opportunity to thank our customers, employees, suppliers,
service providers, financial institutions and bankers for their
contribution towards the Companys success.
With best regards,
Ravi Jhunjhunwala
Chairman & Managing Director

Director Report
Print

Mar2012 Mar 2013


Dear members,
The Directors have pleasure in presenting their 41st Annual
Report and
audited statements of accounts for the year ended 31st March,
2013.

1. (i) Financial Results


(Rs. in Crore)
2012-13
Net Sales

2011-12

1617.43

Other Operating Income

1423.99
5.18

Total Income from Operations (Net)


1424.61
Other Income
Total Income

1622.61

13.60
1636.21

Profit before Exceptional items, Finance


cost, Depreciation and
306.71
Amortisation
Exceptional Items

0.62

16.79
1441.40

258.60

(55.20)

(92.85)

Profit before Finance cost, Depreciation


and Amortisation
251.51

165.75

Finance cost

63.60

40.68

Profit before Depreciation and Amortisation


125.08
Depreciation and Amortisation
Profit Before Tax

187.91

62.64
125.27

57.93

67.14

Provision for Taxation:Current Year


Income Tax for earlier years

16.09

6.66
3.39

Net Profit for the Period

105.79

EPS (Basic) Rs.

26.48

(1.84)
62.32
15.34

(ii) Appropriations
Amount available for appropriation

406.23

Reversal of proposed dividend and dividend


distribution tax on shares
bought back Dividend :

331.17

1.23

a) On Equity Shares
Proposed Dividend

31.97

19.98

b) Dividend Distribution Tax


On Proposed Dividend

5.43

3.24

Transfer to:
a) General Reserve

25.00

b) Debenture Redemption Reserve

7.50
-

1.25

c) Transfer from Debenture Redemption Reserve


-

25.07

Balance carried forward

300.43

368.90

2. Overall Performance
The Company recorded Net Sales Rs.1617.43 crore as
compared with
Rs.1423.99 crore in the previous year. The Net Profit has
increased to
Rs.105.79 crore as compared with Rs.62.32 crore in 2011-12
translating
to basic earning per share at Rs.26.48 as against Rs.15.34 in
Financial
Year 2011-12.
3. Subsidiary Company and 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, has recommended a dividend at the rate of Rs.8/per share

on Equity Shares of Rs.10/- each for the financial year ended


31st
March, 2013, subject to your approval at the Annual General
Meeting.
5. Operations
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.
Graphite Electrodes
During the year under review, the production volumes of
graphite
electrodes were almost similar as compared with the last
financial
year. Operational efficiencies, better exchange rates coupled
with
controlled finance costs, improved margins.
Power Generation
Better availability of linkage coal for our captive thermal power
plants and record power generation at our hydel power unit has
helped
improve the bottomline during the year.
The Company''s installed captive power capacity mitigates risk
of

erratic power supply from the State grid for the entire expanded
Graphite Electrode capacity of 80,000 TPA.
6. Corporate Governance
A report on Corporate Governance forms part of the Annual
Report along
with the Auditors'' Certificate on its compliance.
7. 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
8. Internal 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 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.

9. 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 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.
10. Public Deposits
Your Company has not invited any deposits from public/
shareholders in
accordance with Section 58A of the Companies Act, 1956.
11. 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.
12. Directors
Three of your Directors namely Shri D.N. Davar, Shri Shekhar
Agarwal
and Dr. Kamal Gupta shall retire by rotation at the ensuing
Annual
General Meeting and being eligible, offer themselves for
re-appointment. The Board recommends their re- appointment.
Your Directors inform you about the resignation of Shri K N
Memani
w.e.f. 19th March, 2013. The Board appreciates the valuable
contribution and guidance extended by Shri K. N. Memani
during his
tenure as a Director of the Company.
13. 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 re-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
re-appointment.
The Auditors'' Report read along with notes to accounts is self
explanatory and therefore does not call for any further
comments.
14. Cost Auditors
In conformity with the directives of the Central Government and
based
on the Audit Committee recommendations at its meeting held
on May 3,
2013, the Board has approved the re- appointment of M/s. N.D.
Birla &
Co., as the Cost Auditors of the Company for the financial year
2013-2014, subject to approval of the Central Government.
15. 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,
2013 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 safe guarding 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.
16. 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 for Company''s


achievements.
For and on behalf of the Board of Directors
Place: Noida (U.P.)
Dated: May 3, 2013
Director

Ravi Jhunjhunwala
Chairman & Managing

Anda mungkin juga menyukai