Management Discussion and Analysis

ECONOMIC OVERVIEW:

In 2014-15, global economy remained in recovery phase. As a result of aggressive monetary policies carried by the advanced economies and correction in global commodity prices, the picture of macro economy improved and gained momentum.

After the general elections in May, 2014, India saw a significant improvement in market and business sentiments. Thereafter, a sharp correction in global commodities prices coupled with ongoing improvements in governance front, resulted in modest rise in the output of economic activities of India. As per the estimate of the Central Statistic Office (CSO) of India, in FY 2014-15, the Indian economy rose by 7.3 percent meeting with the initial forecast and slightly higher than 6.9 percent recorded in the brvious year. Almost all sectors of economy showed improvement led by sectors like electricity, manufacturing and finance. The inflation (based on CPI) rate in India was recorded at around 6 percent in FY 2014-15 from average close to 10 percent from FY 2008-09 until FY 2013-14, reaching an all time high of 11.16 percent in November of 2013. Sharp decrease in crude oil prices helped moderate fuel inflation, although increase in excise duty restricted the pass-through of oil prices to domestic retail prices. In 2014-15, the Government of India CGol1) has successfully managed the fiscal deficit, gap between government's expenditure and revenue, at 3.99 percent of GDP, beating its own revised estimate of 4.1 percent. The newly elected Modi's government in its first year has come out with various new polices, initiatives and national programmes to facilitate investment, foster innovation, enhance skill development and build best-in-class infrastructures.

We believe that the government's current prudent policies, programs (specially the 'Make in India' and 'Digital India' programmes) and commitment to fiscal consolidation open a huge scope for India to grow at faster speed. We further expect that the lower fiscal deficit would definitely help the government in reducing expenditure on interest payout and unblock funds for aggressive investments in growth oriented sectors like infrastructures and energy. The responsibility is now on industry to take full advantage of new policies and more resourceful operating environment. Industry now needs to embark on the new wave of investments to drive India's future growth and development.

POWER SECTOR-OVERVIEW AND OUTLOOK:

A competent and financially viable power sector is essential for growth of a nation. The availability of quality, reliable and affordable electricity is necessary for rapid socio-economic growth of the nation.

In the recent past, the Indian power sector has witnessed significant progress. The Gol'sfocus to achieve 'Power For All' has accelerated the growth in this sector. During 2014-15, the overall power generation has been increased to 1048 billion units (BU) from 967 BU during 2013-14 showing a growth rate of 8.4% over the brvious year which is the highest growth rate in the last two decades. The total power generation grew at a CAGR of 6.4 percent between 2008-09 and 2014- 15. During 2014-15, India added 22,566 MW of power generation capacity against a target of 17,830 MW. The total generation capacity (excluding renewable) grew at a CAGR of 10.4 percent between 2008- 09 and 2014-15. India's total installed power generation capacity stood at 2,67,637 MW as of March 31, 2015. The huge capacity addition coupled with higher power generation and improved transmission capacity has resulted in significantly reducing the power shortage to a record low of 3.6% during the year 2014-15. The Central Electricity Authority (CEA) of India has projected a base load energy shortage and peak shortage to be 2.1% and 2.6% respectively, in 2015-16. The marginal deficit figures indicate that India would become power surplus during the 12th five-year plan period.

However, as the Indian economy is on sustained growth path, energy consumption in the country will continue to rise. India needs smart and proactive approaches to meet the future demand of electricity as constant availability of the electricity would play a vital role in both fighting poverty and achieving the target of inclusive growth.

POWER TRANSMISSION & DISTRIBUTION SECTOR - OVERVIEW AND OUTLOOK:

After addressing the issue of power deficit, the government's focus is now more on transmission and distribution (T&D) sector. During the year 2014-15, a total of 22,101 circuit kilometers (ckm) of transmission lines have been commissioned against 16,748 ckm transmission lines in brvious year. As of March, 2015, India's high voltage network comprised 3,13,437 ckt. km. of 220 kV and above line.

The transformation capacity has been increased by 65,554 MVA during 2014-15 against the target of 47,871 MVA As of March, 2015, India's total transformer capacity was 5,82,600 MVA. Further, India has set very ambitious targets for transmission sector in 12th & 13th Five-year Plans. During the 12th Plan, around 1,10,000 ckt km of transmission lines, 2,70,000 MVA of alternating current (AC) substation capacity and 12,750 MW of HVDC capacity will be added. During the 13 th Plan around 62,800 ckt. km of transmission lines and 1,28,000 MVA of AC substation capacity and 15,000 MW of HVDC capacity will be added. The Gol has set a target of reducing India's Transmission and Commercial (ATC) losses to 17.1% by 2017 and to 14.1% by 2022.

India's Power T&D networks rebrsent the critical arteries of the entire power supply value chain. The growth of power sector is clearly dependent to development of a robust and a reliable T&D network. Even after a commendable growth in power generation over the past decades, India is likely to experience very high shortages in the Southern and North-Eastern Regions to the tune of 19.8% and 4.0%, respectively in 2015-16 (as per CEA). Aggravating this condition more is that some of India's electricity surplus states do not have ample power migration infrastructure, which could reduce the shortages in other parts of the country. Furthermore, India's current T&D capacity does not match the generation capacities and load requirements.

Despite attainting focus from the Policy makers, India's T&D sector remains under stress and T&D industry continues to face a number of issues such as delay in statutory clearances for commissioning of projects and sluggish redressal systems; no guidelines on use of technology and the focus on lowest price for competitive bidding; inadequate br-bid due diligence of inexperienced players; and financial inability of power distribution agencies to upgrade the outdated & faulty systems due to high T&D losses. High T&D losses are mainly caused by poor & non-performing infrastructure, illegal tapping of lines and faulty electric meters that undervalue actual utilization of electricity and also lead to reduced payment collection. As per the Report, the discoms posted around 25 percent AT&C losses in 2012- 13, which is still very high. Moreover, the actual AT&C losses of discoms might be higher than official estimates as a large number of consumers still remain unmetered and their information is not available for calculation.

Hence, there is an urgent need to timely address the issues of T&D sectorto ensure power demand is effectively met in the future. Taking the above, Government of India (Gol) has taken several positive initiatives through a range of schemes and programmes to improve the T&D sector. Some of them are as follows:

Integrated Power Development Scheme (IPDS): Gol launched IPDS in November, 2014 with a total outlay of INR 326 billion, which includes a budgetary support of INR 255 billion. The IPDS aims of strengthening of sub-transmission and distribution networks in the urban areas; metering of distribution transformers / feeders / consumers in the urban area; and IT enablement of distribution sector and strengthening of distribution network.

Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY): Gol launched the DDUGJY in November, 2014 with a total outlay of INR 440 billion, which includes a budgetary support of INR 335 billion. The Scheme was launched with the aim of separation of agriculture and nonagriculture feeders; strengthening of sub-transmission and distribution networks in the rural areas; metering of distribution transformers / feeders / consumers in the rural area; and Rural Electrification.

National Electricity Fund (NEF): With an aim to promote investment in the distribution sector, Gol has also set up National Electricity Fund (Interest Subsidy Scheme). Under this Scheme, interest subsidy is provided on loans disbursed to the Power Distribution Companies (Discoms) - both in public and private sector, with the objective to facilitate improvement in the distribution network for areas not covered by RGGVY and R-APDRP project areas.

Financial Restructuring Scheme: Gol has also notified the scheme for Financial Restructuring of State Distribution Companies to attain their financial turnaround by restructuring their short term liabilities.

In order to achieve the Gol's ambitious target of delivering 24X7 electricity, India needs to focus on development and deployment of smart grid across the country. In the recent past, the Gol has launched the National Smart Grid Mission (NSGM) in order to effectively implement the goals envisaged in its "Smart Grid Vision and Roadmap for India". NSGM is an institutional mechanism for planning, monitoring and implementation of policies and programs related to Smart Grid activities. NSGM would focus on implementation of a smart electrical grid based on state-of-the art technology in the fields of automation, communication and IT systems that can monitor and control power flows from points of generation to points of consumption.

Further in order to revamp the transmission sector, Gol has introduced the Electricity (Amendment) Bill, 2014. These amendments are aimed at promoting competition, efficiency in operation and improvement in quality of supply of electricity. The Gol has also set up an Advisory Group for integrated development and structural reforms in the Power sector. The Union Cabinet has also approved several projects for strengthening of intra-state T&D systems in various states of India.

Having regard to all these development schemes in recent past, the Indian power sector gives a massive opportunity in power T&D and power equipments manufacturing in the coming years.

ENERGY METERING INDUSTRY-REVIEW ANDOUTLOOK:

Energy Metering is the backbone of the power distribution channel, which is the most critical and the only revenue generation link in the entire power supply value chain. It holds more significance in Indian context, given that the distribution sector suffers from aggregate technical and commercial (AT&C) losses of around 25 percent. Electricity theft costs the Indian power sector around $16.02 billion per year, which is very high as compared to other countries. In India's current power situation, smart metering system is very essential in reducing AT&C losses through accurate monitoring and billing, and thereby improving revenue collection efficiency of power Discoms. It is considered as an automated process key to AT&C losses reduction.

In the past few years, metering industry has seen revolutionary changes, where advanced technologies have fast replaced the conventional ones. Most power utilities in India have replaced their electromechanical meters with electronic meters. These electronic energy meters are accurate, fast, tamper-proof and secure instruments as compared to conventional meters. This technology advancement is giving a fillip to revenue collection efficiency of power utilities mainly by reducing instances of tampering, and by correct billing.

New metering technologies like automated meter reading (AMR), brpaid meter, meter with IR port and RF modules are gaining momentum as well. The industry is significantly focusing on using latest communications, IT and automation technology to provide even more strong and smart solutions, every time.

India is currently witnessing a paradigm shift in the field of energy metering, where smart metering technologies are being used extensively by the power utilities. Apart from keeping power consumption details, a smart metering technology works for data analytics, tamper detection, network management and outage management. Smart metering systems, described as the next generation instruments, provide consumers with realtime information on their energy use and thereby promote for energy conservation through energy consumption management.

India's Prime Minister Narendra Modi Ji has ramped up India's solar power capacity target under the National Solar Mission by five times to 100 GW by 2022. The target has been split into 40 GW Rooftop and 60 GW through Large and Medium Scale Grid Connected Solar Power Projects. Most of these projects are grid-tied projects. Under these projects, net-metering has a very pivotal role. Some of the states in India have already implemented net metering policy for buyback of extra electricity generated. It opens up vast opportunities for net metering solutions in India.

Rapid urbanization, extensive power capacity addition and government's focus on smart grid infrastructures are constantly supporting the growth of smart metering industry. India's current size of the energy meter market is estimated to be around INR 2200 crore and it is expected to grow at a CAGR of around 10 percent over the next 4-5 years. As per the report, India will spend around $21.6 billion in funding smart grid technology development during 2015-2025 and around 130 million smart meters are expected to be installed by 2021.

Undoubtedly, Smart meters are the way forward for India's power transmission and distribution sector. But it is still a long way off, with several obstacles on the way like divergent standard specification across different states, Discoms' focus on low pricing products instead of high technology and quality, lengthy testing/clearance processes, insufficient due-diligence of unorganized & inexperienced bidders, and government's insufficient funding & incentives for modernization of outdated & faulty meters. Indian government needs to carefully address these issues timely to achieve its power mission.

However the new government is striving for development of the distribution sector. The government has initiated several new programmes and policies such as 'Integrated Power Development Scheme' and 'Deen Dayal Upadhyaya Gram Jyoti Yojana' mainly to strengthen the sub-transmission and distribution networks, including metering of distribution transformers / feeders / consumers.

In recent years, the global market of smart metering solution has also been growing significantly. As per the report, the global market for smart meters is expected to grow to an estimated $20 billion by 2018.

The overseas market is estimated to continue expanding as many countries have started to adopt smart grid technology and large rollouts are now moving forward. Annual global shipments of smart meters are projected to reach at 131 million units in 2018.

Going forward, the Metering Industry is aspiring to take a quantum leap into the future.

BUSIN ESS AREAS - REVIEW AN D OUTLOOK:

(A) SMART METERING SOLUTIONS:

For over two decades, Genus has backed the growth of the Indian Metering Industry with installation of around 31 million electronic energy meters across the country.

Genus, with a commitment of continuous value addition through its world-class in-house 'Research and Development Centre', provides a best series of smart metering solutions to the power distribution sector in India. Genus, by combination of unmatched experience and cutting-edge engineering, offers on-demand complete metering solutions to the power utilities that drive unique features and manufacturing excellence.

Genus offers a widest range of trusted and innovative metering solutions, which mainly includes Smart Energy Management solution for AMI implementation including communication modules & Software's, Single & Three Phase Outdoor Meter, PLC based DIN-Rail Prepayment Meter, Rack mounted ABT Compliant Meter with DLMS protocol, Distribution Transformer (DT) Meters, Portable Reference Meters, Equipment Device Controller for load management, Hand Held Equipment for data downloading & processing, Gas Meter for domestic consumers, Smart Street Light Management Solution, Netmetering Solution for solar energy, Data Concentrator, Energy

Management Solution for building management and DC Metering Solution.

Genus has successfully developed Net Meters for solar energy sector and has started selling of these meters to selective users and grid-tied project developers. Genus is confident of being in the front line to tap Net Metering Market in India. This shall give an opportunity to Genus to replicate the same in other developing countries, which are going for grid tied solar projects.

Genus is fully competent for crafting advanced metering infrastructure for the power utilities, where it can provide web based online energy auditing software capable of providing various MIS reports, composite solution for distribution transformer metering, inbuilt GSM/GPRS modem for remote communication, inbuilt LPR modem for local communication and alert mechanism through SMS/EmaiL Genus's inhouse developed 'networking and remote access solutions' that leverage modern networking and wireless communication technologies, magnify the efficiency of energy metering infrastructure. Providing customized solutions according to the challenges faced by the power utilities/customers is the forte of Genus.

With extensive experience and top notch indigenous technology in the form of smart metering solution, Genus not only helps the power utilities in shrinking their T&D losses but also help them in making technologically advanced and thereby taking the power sector to new heights. Genus's smart metering solutions brcisely tackles the issues of distribution utilities through its unique features such as tamperproof design & packaging, AMR techniques, accurate billing, auditing, meter data analysis, outage management and more. Genus's solutions have demonstrated in past, a tremendous result in reducing the T&D losses and improving revenue collection efficiency of the power utilities across the country.

Our strong brand reputation in proving unfailing metering solutions reflects in our long association with the clients. More than 80 percent of the clients, we have served over the past two decades, are still with us. Long relationship coupled with engineering excellence, has provided us many years of consistent and harmonious business operation with our clients. Our clients include nearly all the private power utilities and the State Electricity Boards (SEBs)in India. Genus core values are in line with what existing and potential customers look for resolving their issues.

We continuously review and update our product portfolio keeping in mind the current issues and future requirements of the power sector, especially of power distribution utilities. The reviewing process gives us an indication of areas into which we can expand our business. To grow our business, we also focus on innovation and the development of our products and services through our in-house R&D centre (recognized by the Ministry of Science & Technology, Government of India and accredited by National Accreditation Body for Testing Labs 'NABL') and state-of-the-art facilities coupled with complete forward and backward integration setup. This keeps us ahead of our competitors and helps us to respond quickly to the changing needs of the power utilities. However, our innovation always underpins our core values and provides customers with a consistent and reliable experience. Our solutions have therefore become synonymous with innovation and obvious choice of power utilities in India.

The use of smart meters has also been rising rapidly in overseas markets in recent years. Development of smart grid, government policy mandates and fiscal incentives have been the key drivers of demand for smart energy meters in a multitude of overseas markets, and tend to attract manufacturers that have potential to cater the global demand. With a view to capture and hold a position in international market, Genus is strongly focusing on exports. Genus, with its global delivery network and extensive domain experience & technological expertise to provide world-class smart metering solutions, is fully equipped to cater the global demand of smart metering solutions, meeting with the international specifications.

Genus is also actively participating in many of the Smart Grid pilot projects announced by the Ministry of Power of India, either directly or indirectly as OEM suppliers of smart metering solutions.

In the year 2014-15 Genus has approached and successfully installed its brpaid metering solutions in some of the African countries.

In 2014-15, Genus has touched new milestone in production and sale of metering solutions. During this financial year, Genus has produced around 5.26 million meters and installed around 4.90 million meters.

(B). ENGINEERING. CONSTRUCTIONS AND CONTRACTS CECC") IN POWER SECTOR:

Genus has been providing one-stop advanced solutions of energy metering to Indian power distribution utility for over two decades.

These decades of industrial experience and technological prowess on the back of in-house R&D centre, propelled us to enter into the business of providing long-lasting turnkey' Engineering, Constructions and Contracts' CECC') solutions to the power transmission and distribution (T&D) sector in India. Genus has been providing turnkey ECC solutions to the power utilities since last 10 years. Genus taps the world's most advanced engineering technology to provide total engineering and construction solution from 'concept to commissioning' with key differentiators such as smart metering solutions, automatic meter reading technology, IT-enabled communication technology and advance metering infrastructure.

Currently, the Indian power T&D sector is struggling with various key issues such as transmission & distribution losses, outdated & extinct technology, low metering & billing of energy consumption, power leakage & pilferage, outage management, inadequate auditing and

reporting. Widely regarded as leader in providing advance metering infrastructures, Genus has continued to enjoy high reputation for providing most reliable power infrastructure targeting the issues of the power T&D sector. Genus solutions truly deal with operational and maintenance issue of power distribution infrastructure. Genus turnkey ECC solution focuses on identifying root causes of problems and resolves the issue from its root.

Genus ECC team is comprised of highly qualified and experience engineers and consultants. The team's focus remains on achieving excellence in providing advanced & reliable T&D infrastructures solutions meeting the future requirement of the power sector. Genus offers turnkey solutions of MV, HV& EHV substations and transmission lines and executes turnkey jobs upto 420KV. Apart from switchyard/sub-stations arid transmission lines up to 420KV, Genus turnkey offer also covers rural electrification, distribution lines, HVDS and process industry plant electrification. Moreover, Genus is competent in capacity augmentation with revamping & upgrading of old power transmission lines & substations. Genus proficiency in providing advanced metering infrastructures offers real value addition in its turnkey ECC solutions.

Starting from scratch in the year 2005, Genus today has marched a long way to success. Genus now has a proven track record of completion of various ECC projects across the country. These include several electrical feeder lines/transmission lines, sub-stations and rural electrification at Chhattisgarh, Madhya Pradesh, Karnataka, Orissa and Telangana and also several 33/11KV and 11KV/0.415KV sub-stations with associated feeder lines for NHPC and various other DISCOMs.

Genus is proud to state that in these 10-odd years, it has created many landmarks, such as commissioning of 220 KV transmission line, 100 kilometers of 132KV transmission line and 132KV sub-station, over one million BPL connections & counting under RGGVY scheme, rural electrification of more than 10,000 villages & counting under RGGVY scheme, 25,000 kilometers LT lines, 9,000 kilometers of HT lines, over 50 sub-stations of 33kV, 10,000 kilo meters HVDS project (Single phasing work) and more.

Genus turnkey ECC solutions have turnaround many areas of power utilities in India mainly by tremendous reduction in the transmission and distribution losses. It has unique dual capabilities of providing advanced metering infrastructures and long industrial experience of responding to new demands quickly and effectively being total independent with in-house R&D centre.

In 2014-15, the Company has successfully commissioned First 220 KV Switchyard with 100MVA transformer and 220 KV multi circuit Tx Line for Telangana (Andhra Pradesh) Transmission Corporation Limited CTSTRANSCO1) in Hyderabad. This project also has distinction of having tallest (55 meter high) multi circuit transmission line tower in the states of Andhra Pradesh and Telangana.

Following the distinct business strategy, Genus is concentrating more on effectively and timely completion of its existing turkey assignments. Currently, Genus is undertaking various turnkey ECC projects for power transmission and distribution sector in India, some of these are summarized below:

• Commissioning of 132KV D/C Transmission Lines and Sub- Stations for Jharkhand State Electricity Board in Gumla, Lohrdaga and Simdega (Jharkhand).

• Commissioning of 132KV D/C Transmission Lines for MP Power Transmission Company Limited in Gwalior, Madhya Pradesh.

• Commissioning of 220KV Transmission Lines and Sub-Stations (bay extension work) for Karnataka Power Transmission Corporation Limited in Thallak, Chitradurga, Karnataka.

• Rural electrification works under the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) for Uttarakhand Power Corporation Ltd (UPCL) in Roorkee, Haridwar, Kashipur, Rudrapurand Haldwani (Uttarakhand).

• Setting up of 230/110KV AIS Sub-Stations for Tamil Nadu Transmission Corporation Limited, in Chennai, Tamil Nadu.

• Setting up of 220/33/11KV Sub-Stations and 220KV D/C Transmission Lines for NESCL-NTPC Electric Supply Company Limited in Hazaribagh, Jharkhand.

• Setting up of 33/11KV Sub-Stations and the associated incoming/outgoing feeder line works for West Bengal State Electricity Distribution Company Limited in Cooch Behar and Dakshin Shivganj (West Bengal).

With India moving from energy-deprived country to energy-surplus country through emphasizing on development of Smart Grid and huge budgetary support, there is a strong requirement of smart, efficient and reliable power transmission and distribution infrastructure across the country. Genus, to grab the emerging market opportunities and with an aim to contribute toward 'Make in India' drive, is aggressively magnifying the areas of operation, technological domains and execution capabilities with the support of its fleet of over 100 engineers and complete backward integration. Genus is firmly ready to entrench itself as 'Technology Leader' and 'Market Leader' in providing the turnkey ECC solution for the power T&D sector.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEMS

Genus believes that in order to ensure consistent business growth, it is indispensable that risks be effectively identified, analyzed and then mitigated by means of appropriate control measures. The Company follows a proactive risk management process, which aims to anticipate and report potential risks in time and prompt implementation of controls to mitigate the potential negative impact of various risks. During the year under review, the Board of Directors of the Company has formed a 'Risk Management Committee' CRMC') in compliance of the revised Clause 49 of the Listing Agreement with Stock Exchanges and Companies Act, 2013 to assist the Board in fulfilling its corporate governance duties by overseeing the responsibilities with regard to the identification, evaluation and mitigation of operational, strategic, financial and environmental risks. The RMC has the overall responsibility of monitoring and reviewing the risk management plans/policies and associated practices of the Company. The RMC also reviewed and approved a 'Risk Management Policy', which lays down procedures about the risk assessment and risk minimization.

The Company has already put-in place a combrhensive risk management and control mechanism, commensurate with the size, scale and complexity of its operations. It mandates the participation of every department/division in formulation & execution of appropriate control measures/techniques. It also mandates the sharing of relevant information across the divisions of the Company. Head of Departments has responsibility for implementation of the risk management plan/system as may be applicable to their respective areas of functioning and report to the Risk Management Committee.

The Company has also integrated its risk management and control mechanism with internal controls and audit supported by SAP ERP, which ensures smooth running of day-to-day operations, regulatory standards and minimised risk.

The Company's internal audit department continually audits all the key areas of operations so that weak areas of operations can be identified and appropriate actions could be taken early to improve the overall efficiency by making informed decisions. The management also periodically reviews the efficacy of all the existing policies and strategies followed by the Company. Regular training programs and workshops were conducted for recording, monitoring, and controlling internal risks and mitigating them through conversant and objective strategies and plans.

The Audit Committee regularly evaluates the internal financial controls and risk management systems of the Company. The CEO and CFO certificate provided in the CEO and CFO certificate section of this Annual Report reveals the adequacy of the internal control systems and procedures in the Company

RISKS AND CONCERNS

Genus like any other business enterprises has some risks and concern areas related to its activities and operations. Some of the major risks, their impacts and measures undertaken by the Company are as follows:

RAW MATERIAL RISK

Impact: Non availability of good quality electronics components and accessories could negate the qualitative and quantitative production of the Company's products and services. Further, some of the components and materials are procured from international suppliers, thus availability and pricing of such materials depend on global situation.

Mitigation: The Company has an adequate inventory management system, which ensures uninterrupted supply of electronic components and accessories used as raw material. A separate dedicated department ensures efficient production planning and control in order to bring about the desired manufacturing results in terms of quality, quantity, time and cost. Furthermore, the Company has complete forward and backward integration facility to carry out manufacturing of its products in-house. The Company's hedging policy and practices enable it to reduce and/or adjust the impact of fluctuation in foreign exchange on raw materials costs.

TECHNOLOGY CHANGES AND OBSOLESCENCE RISK

Impact: Rapid emergence of new technology and obsolescence of products/technologies offer a great challenge to survival of companies specially those in the field of electronics.

Mitigation: Genus has an in-house globally competitive Research & Development Laboratory, which is recognised by the Ministry of Science & Technology, Government of India and accredited by National Accreditation Body for Testing Labs 'NABL' to perform inhouse tests. Thus, Genus is self-sufficient in constant technology upgradation, innovation activities and providing customized solutions to its customers. Genus in-house R&D Lab permits it to remain updated with the newest in technology and allows it to continuously improve the quality of its products and develops new products for diversification.

COST INFLATION RISK

Impact: Escalation in raw material prices coupled with the global price hike in raw materials due to growing demand and shortage of raw materials may cause cost inflation and affect the profitability of the Company. Moreover, increased freight could dent profitability.

Mitigation: To derisk the escalation in raw material prices, Genus enters into back-to-back purchasing arrangement/agreement for procurement of raw materials, immediately upon receipt of order. The process of estimation of projects is carried out in case of nonescalation contracts with the vision to protect the possible increase in the inputs of the contracts. Further, the Company's hedging policy and practices enable it to reduce and/or adjust the impact of fluctuation in foreign exchange on raw materials costs.

QUALITY RISK

Impact: Highest quality parameters are a must for any electronic /power related business or industry. Any reduction/failure on quality front due to laxity or inferior raw material could lead to severe consumer attrition.

Mitigation: The Company has fully automated and State-of-the-art Manufacturing Facilities and Tool Rooms along with advanced software, equipments and automatic test systems, which ensures the conformance to the highest quality standards and combrhensive quality checks, resulting in superior products. The quality of the Company's products has not only led to better acceptance in even the fiercely competitive markets but also has resulted in high repeat orders/business on account of increased customer loyalty. Moreover the Company has various recognitions / accreditations / certifications like ISO 9001:2008, ISO 14001:2004, IEQC, CE/EMI/EMC/ETDC, DLMS, SONCAP, MNRE, KEMA, NABL, ZIGBEE, IEC, SABS, CMMI and STQC strengthening its quality commitment.

COMPETITION RISK

Impact: The growing brsence of global participants and local unorganized players in the field is a challenge for the Company. It may affect turnover and profitability of the Company.

Mitigation: Driven by spirit of innovation and armed with globally competitive in-house R&D lab, the Company is able to develop new products/services with distinct features by using IT and Lean production techniques, which provide the competitive advantage to the Company. Further its state-of-the-art manufacturing facilities strategically placed in tax holiday zones in India enables the Company to offer unmatched quality at a competitive price. Further the Company believes that in the long run, quality is the sole consideration of the consumers and has therefore never compromised on its ageing or its high-end technology.

DELAYS IN EXECUTION OFTURNKEY ECC PROJECTS

Impact: The Company's turnkey ECC projects business may face challenge of delay in timely execution of projects mainly because of various procedural clearances/approvals and shortage of materials/equipments and manpower. This could lead to delays in payments thereby disturbing the working capital cycle and increasing the overall cost of the project.

Mitigation: With the past experiences, the management periodically reviews the activities & development of projects to ensure timely & successful completion and adopts the appropriate strategies/ techniques to minimise the anticipated risk.

REALISATIONS ANDLIQUIDITY RISK Impact:

The liquidity position of the Company may be affected due to delays in recovery of dues and may negatively impact the operations and earnings of the Company. Any decline in the realisations would directly affect the Company's performance.

Mitigation: Since the Company has its most of business with government bodies/institutions/agencies, so there is no risk of nonpayment from clients. The management also formulates strategies and takes necessary actions to collect the dues from clients in time to ensure smooth flow of funds. The short term fund requirements are fulfilled by obtaining working capital facilities from Banks/Fls.

FOREIGN EXCHANGE RISK

Impact: Since the Company receives a portion of its revenues and incurs a part of its expenses in different foreign currencies and therefore if there is an adverse change in the foreign currency exchange rates that may negatively impact the Company.

Mitigation: At Genus, most of the foreign currency exposures are hedged to the maximum extent. Further the Company receives a portion of its revenues and incurs a part of its expenses in foreign currency, it reduces the impact of any change in the foreign currency exchange rates. The management adopts the appropriate strategies/techniques to minimise the negative impact of any adverse change in the foreign currency exchange rates.

LEGISLATIVE CHANGES RISK

Impact: Legislative changes resulting in a change in the duties and taxes and uncertainties with government policies and priorities can affect operations.

Mitigation: The role of power sector in the growth of economy of India ensures the continuous attention and investment of the Government in this sector. As a result, the future outlook of the Company remains flourishing. Further, in order to accelerate the growth and for meaningful diversification, the management continues to put in place sustained efforts to explore newer and wider horizons.

COMPLIANCE AND REGULATORY RISK

Impact: With increased regulatory brssures and more complex legal requirements, there is a challenge for every company to protect its brand and mitigate the risk of non-compliance in a way that supports performance objectives, sustains value and protects the brand.

Mitigation: The Company's compliance officers, advisors and experts work closely with management to assess, improve and enhance its compliance programs/procedures on an ongoing basis. The Company has hired/employed the best professionals for legal compliance and corporate governance. The Company's compliance teams at all levels are regularly provided trainings for their improvement and updation.

Company's internal audit department led by qualified personnel play an important role in implementing and monitoring the compliance with statutory requirements.

OTHER RISKS

Apart from the risks mentioned above, the Company's business is exposed to other operating risks, which are mitigated through regular monitoring and corrective action, where required.

CORPORATE SOCIAL RESPONSIBILITY(CSR) CSR Vision

A vision statement clears the picture what a company would like to achieve or accomplish. Genus vision is "SERVING SOCIETY THROUGH INDUSTRY." Over the years, we have been focusing on sustainable business practices encompassing economic, environmental and social imperatives that not only cover business but also that of the communities around us. Genus leverages its resources to advocate the broad vision and aspirations of the yearly plan. Our Company focuses on combrhensive growth by fostering social capital through health and education initiatives and creating access to opportunities and resources through economic development and infrastructural support gambit envisaged by the policies.

Genus CSR vision entails -

• To promote employability through technical education for vulnerable sections of society by pulsating partnerships with the government, NGO's, trusts and other organizations.

• To eradicate hunger and poverty by providing equipments/ systems to poor and unemployed people to make them selfemployed and thereby bring them into the mainstream of the society.

• To promote environmental sustainability and ecological balance by supporting the mission of green initiative through proactively involvement in tree plantation.

• To promote healthcare by providing financial and manpower assistance to various healthcare programs and institutions.

• To promote animal welfare by providing financial assistance for construction and maintenance of Gaushala for gau-sewa, specially taking care of injured and medically challenged cows, bulls & calves.

CSR Committee and CSR Expenditure

At Genus, CSR structure is governed and headed by the Board Level CSR Committee formed keeping in mind all this prospects regarding CSR (also in conformity to provisions of Companies Act 2013). The CSR Committee is consistently working on the Company's CSR mission through various ways as per the Company's CSR policy framed in line with provisions of the Companies Act, 2013.

In 2014-15, Genus has contributed more than 2% of the average net profits (adjusted for merger and demerger) of the Company made during the three immediately brceding financial years, in pursuance of its Corporate Social Responsibility Policy. The contribution in this regard has been made to the registered NGO's, Trusts and other organizations that are proactive in the fields of social and environmental commitments. Your Company is not limited only up to the munificence but also includes large number of maneuver that lead to social commitments, protection of environment , promoting education and healthcare activities.

Focus Areas

As mentioned above, Genus made the uppermost maneuver to implement the above policies and procedure.

• Education

In order to enhance education in rural and backward areas, our Company sponsored various programmes in association with Rajasthan Vanvasi Kalyan Parishad CRKVP'), Udaipur.

Company planned an education programme named as "Eklavya Vidhya Mandir" which is conducted in far reaching areas of the tribal belts of Rajasthan. By this initiative many rural students got the opportunity to read and write. Apart from running schools company also takes up activities like free distribution of uniforms and study materials especially for students in the tribal dominated area.

For detailed information of above please visit "http:// www.genus.in /Social/commit3.aspx".

• Healthcare.

Due to lack of medical facilities, appropriate diet and unawareness rural people face mutiple troubles. To reduce health related problems and to create awareness regarding healthy living as well as to educate them on various medical problems, Company in association of RKVP organized medical camps and awareness programs like AROGYA RAKSHAK YOJNA in remote villages with one Arogya Rakshak (Health Worker) in one village with a kit of 18 first aid medicines. Hundreds of people were benefitted by these camps.

For detailed information of above please visit "http:// www.genus.in/Social/commit4.aspx".

• Naturopathy Centre (Moradabad)

According to a survey done in 2013 by a leading medical team, there are more than 67 million diabetic patients in India and more than 30 million patients in the br-diabetic stage & health disorder. As in line to serve the society, we have supported in setting up the Baldev Agarwal Naturopathy Centre in Moradabad, whose main objective is to deliver the services for healthy life to every class of people at subsidized rates. The main objective of this organization is to serve mankind in such a way that each person can experience True Happiness. We believe that a healthy mind resides only in a healthy body and a combination of both these virtues makes a man happy. The mission of this naturopathy centre is to serve the people with drugless therapies like yoga, Physiotherapy, acupuncture, hygienic diets hydrotherapy etc.

For detailed information of above please visit "http:// genus.in/Social/commit6.aspx".

• Animal Welfare.

With a step to serve animals, the Company contributed significant amount to ISCKON and Rajaldesar Gaushala where they apply innovative ways to work with the bull and engage their God-given strength in the service of others, under humane and loving conditions. They are properly sheltered and fed with healthy stapple feed.

For detailed information of above please visit "http:// genus.in/Social/commit2.aspx".

• Hunger and Poverty.

In order to eradicate hunger and poverty from our country, Genus made a small effort in association with ISCKON in their programme named as "Food for Life". This program is the world largest and vegetarian non-profit food relief organization. Its efforts span the globe, with projects occupying over 60 countries. It provides over 1,500,000 free meals daily.

• Environmental Sustainability

As more and more trees and forests are imprudently being cleared away each day to give way to fulfill the needs of industries, housing colonies and hotels & motels, the issue of ecological imbalance is becoming a cause of concern. However, with a view to maintain the balance of nature, Genus Group forwarded their step for plantation of trees and creating basic awareness around us signifying importance of green environment and ecological balance in our life.

For detailed information of above please visit "http:// genus.in/social/Environment.aspx" It is a matter of pride that the Genus has been able to reinforce the life of less privileged people to a good extent The Company however recognizes that more needs to be done. It is gearing itself to play a mounting role to promote inclusive and sustained growth of community around us. This process, in turn will bring all around positive change in the life of people, particularly for those sections of society which needs to be most.

REVIEW OF FINANCIAL PERFORMANCE

The financial performance of the Company has been given separately in the Directors' Report.

HUMAN RESOURCES

Genus ethnicity and repute as a leader in providing best-in class engineering and EPC services, urge us to magnetize and retain some of the best talents in the country. With a vision that looks beyond the brsent, Genus focuses on escalating its business competence by attracting the right flair and also by upgrading skill of its existing employees. In result, we have a very strong and indefatigable team, which fosters the growth and prosperity of the Company. Our employees are very professional and ready to take challenges in dayto- day activities. Their unfailing and on-time performance allows us to tackle with various tasks simultaneously. Therefore Genus considers them as the most valuable and dynamic asset of the Company. Our HR department is very concentrated to maintain healthy environment for our employees. Genus is determined to create better future of our employees.

Regarding utilizing our endeavors to give the convenient and powerful HR arrangement, a web based Employee Self Service (ESS) gateway was provided. The ESS gateway conveys the data, apparatuses, and administrations that rebrsentatives need to carry out their occupations and deal with theirown particular vital work occasions.

To align the Company's goal with the employees' agreed measures, skills, competency requirements, development plans and the delivery of results, the Company continues to strengthen its Employee Performance Management System. Under this system, Genus's emphasis remains on improvement, learning and development in order to achieve the overall business strategy and to create a high performance shared workforce, understanding about what is to be achieved at an organization level.

Genus always concentrates on employee's training and development. In line of this strategic policy, the Company has conducted various programmes and workshop such as effective communication aptitude, workshop on teamwork, proficient adequacy and advance excel, which upgraded their working conduct and upheld in different fields. This empowers cross-fertilization of thoughts and subsequently guaranteeing superior. It likewise helps in making a creative culture and understanding the strategies and standards over the market Further, special training programmes are also conducted to keep its employees updated with the latest cutting-edge developments in their respective fields of work and to promote them to take up new challenges outside their familiar domains. Cross-functional learning and developing managerial capabilities is the crux of Genus1 training agenda.

Genus firmly believes that its employees are the real assets of the organization and they really contribute for the stability and prosperity of the organization. The Company dependably tries to give its employees sound workplace and urge them to perform better. With the vision of compensating its dedicated high performing workers and empowering them for better execution, the Company also concedes ESOPs. Genus eternally gives central significance to the employees' wellbeing. In this direction, the Company has taken various health insurance policies for its employees and their families and also organizes periodically medical check-ups to increase health awareness among employees.

To rejuvenate the employees from their daily working, Genus conducted Annual Sports Meet in which all the employees participated with full spirit. Also the Company conducted drawing competition and slogan competition for the kids of the employees and annual programs for the workers which were well received by all. The main purpose of conducting these programs is to develop team spirit and healthy environment in the Company.

At brsent, the total number of permanent employees on the roll of the Company is 1162.

CAUTIONARY STATEMENT

The statements in the 'Management Discussion and Analysis' Report, describe the Company's objectives, projections, estimates, anticipations, expectations, intentions, plans and believes, which may be forward-looking statements within the meaning of the applicable laws and regulations. These forward looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to brdict and progressive within the meaning of applicable security laws and regulations. Actual results may differ from those exbrssed or implied, depending upon economic conditions, Government policies and other incidental factors.

For and on behalf of the Board of Directors

Ishwar Chand Agarwal

Chairman

Jaipur, August 12, 2015