Genus Power Infrastructures Ltd Management Discussions.

FORWARD-LOOKING STATEMENT

The report contains forward-looking statements, identified by words like plans, expects, will, anticipates, believes, intends, projects, estimates and so on. All statements that address expectations or projections about the future, but not limited to the companys strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Since these are based on certain assumptions and expectations of future events, the company cannot guarantee that these are accurate or will be realised. The companys actual results, performance, or achievements could thus differ from those projected in any forward-looking statements. The company assumes no responsibility to publicly amend, modify, or revise any such statements based on subsequent developments, information, or events. The company disclaims any obligation to update these forward-looking statements, except as may be required by law.

COMPANY OVERVIEW

Genus Power Infrastructures Limited (also referred to as "Genus" or the "company"), an ISO 9001 & 14001 & 45001 certified company, is an integral part of the "Kailash Group". Genus is a prominent smart metering solutions provider, offering affordable and sustainable metering solutions to its clients across the world.

Genus manufactures a full spectrum of smart metering equipment and solutions, designed and developed in its own R&D centre. Genus thereby provides end-to-end metering solutions to the power distribution industry with metering communication including controls and automation software.

Genus has created inroads, in areas where it has robust avenues of getting recurring revenue in the form of facility management system (FMS), providing domain-related software to the utilities. Genus offers prepaid vending software in addition to its online smart prepaid metering solutions.

Genus has ventured into a new vertical, offering Smart Gas Meters for measuring volumes of natural gas and LPG (Liquid Petroleum Gas), supplied through pipelines.

Genus also offers customised, advanced and sustainable Engineering, Construction and Contracts (ECC) solutions on turnkey basis to the power transmission and distribution sector. It complements the core metering business of the company. Genus ECC solutions include transmission lines, transmission towers, substations, switchyard, rural/household/industrial electrification infrastructure and network refurbishment, besides real-time energy accounting, monitoring and auditing for the utilities.

Genuss key customers include state electricity boards (SEBs), power distribution companies (DISCOMs) and private utilities. Genus also caters to overseas markets, where it deploys whole-current meters, prepaid meters and smart meters.

Since inception, Genus has been following the ideology of using Indian technology and resources to produce products that are truly Made-in- India. Genus has its own R&D centre, which is recognized by the Ministry of Science & Technology, Government of India, and accredited by National Accreditation Body for Testing Labs (NABL). To convert its research into reality, Genus has state-of-the-art manufacturing facilities at Jaipur, Haridwar and Guwahati with complete forward and backward integration to deliver products/services at affordable prices. Genus is also equipped with a full-fledged tool room for making dies and molds, automated SMT lines, dedicated IT division for enabling advanced IT enabled solutions, advanced designs software and is well versed in lean assembly techniques. All these

make Genus independent for constant up-gradation and innovation of product/services and capable for providing customized solutions to its clients. Genuss innovation drive helps in its endeavor to stay a step ahead of competition.

Genus possesses various national and international quality accreditations/ certifications such as BIS, KEMA, STS, ZIGBEE, UL, DLMS etc., which gives an additional confidence to the clients for using its products and solutions. Genus is also a CMMI Level 3 company. These all bear testimony of the quality of its products, services, and production processes. It gives Genus an edge in complying with international standards and requirements.

INDUSTRY STRUCTURE, DEVELOPMENTS, OPPORTUNITIES, AND THREATS

POWER TRANSMISSION & DISTRIBUTION (T&D) SECTOR

Indias power transmission and distribution (T&D) sector is currently suffering from high aggregate technical and commercial (AT&C) losses, gap between average cost of supply and average revenue realised (ACS- ARR), and mounting outstanding dues of DISCOMs. Indias T&D losses have been over 20 percent of generation, which is more than twice the world average. The ideal level of T&D losses ranges between six to eight percent. However, T&D losses have been declining since 2001-02 with the government reforms initiatives such as higher budgetary allocation, focus on modernisation of power T&D infrastructures, electrifying villages, railway electrification, enhanced public-private participation, and electricity for all.

The power sector has witnessed substantial transformation from both the demand and supply-side. The generation and transmission of electricity in India have made commendable progress. The total installed capacity has reached to 387.37 GW as on May 31, 2021. The overall generation (including generation from grid connected renewable sources) in the country has been increased from 1110.458 BU during 2014-15 to 1381.855 BU during 2020-21. Further, the country has already accomplished two major landmarks in the rural electrification arena, firstly, 100% village electrification under Deen Dayal Upadhyaya Gram Joyti Yojana, and secondly universal household electrification under Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhaagya). The Government of India has also provided assistance through various schemes for improving the distribution sector such as Integrated Power Development Scheme (IPDS), Deen Dayal Upadhyaya Gram Jyoti Yojana, etc.

Transmission and distribution play a key role in the entire value chain of the power sector. The current situation in India demands heavy investment in electricity generation, transmission, and distribution networks, especially for high GDP growth and sharp revival in the economy. The government of India might consider some more relief or stimulus for this sector. The main demand drivers of this sector include high T&D losses, increasing demand of power to an ever-rising population and the governments reform initiatives.

Reform Based Result Linked Power Distribution Scheme

In June 2021, Cabinet Committee on Economic Affairs (CCEA) approved Reforms-based Results-linked Power Distribution sector Scheme - to be implemented in five years to FY26 - worth Rs.3.03 lakhs crore. Of this, the Centres share would be Rs.97,631 crore. The balance funds will be harnessed by the DISCOMs via assorted means, including borrowings, but ideally through public-private partnership mode ventures. The scheme is aimed at providing financial assistance to DISCOMS for infrastructure creation, up-gradation of system, capacity building, and process improvement. The Scheme seeks to improve the operational efficiencies and financial sustainability of all DISCOMs/ Power Departments excluding Private Sector DISCOMs by providing conditional financial assistance to DISCOMs for strengthening of supply infrastructure.

The scheme aims to bring down Indias average aggregate technical and commercial loss from the present level of 21.4% to 12-15%, and gradually narrow the deficit between the cost of electricity and the price at which it is supplied to zero by 2024-25. The reforms are also aimed at improving the reliability and quality of power supply. The program would merge the ongoing works of the Integrated Power Development Scheme (IPDS), Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY), and the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (SAUBHAGYA).

The initiative encourages state-specific intervention in place of a one- size-fits-all drive. The participation is subject to pre-qualification criteria, including publication of audited financial reports, upfront liquidation of state governments dues or subsidy to DISCOMS, and non-creation of additional regulatory assets. The program has plans to incorporate 250 million smart meters, 10,000 feeders, and 400,000 km of low-tension overhead lines. Of the total funds to be mobilized, as much as Rs.1.5 lakhs crore will be used for installation of 250 million smart meters and these projects are likely to be executed through the PPP route. The scheme has proposed to install approximately 100 million smart meters by December 2023 in the first phase. The funds will be released to DISCOMs subject to them meeting reform-related milestones, with state-run Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) nominated as nodal agencies for implementation of the scheme.

Importantly, last year, NTPC Limited, the Power Grid Corporation of India Limited (PGCIL), REC Limited, and PFC formed a joint venture (JV) for providing a common backend infrastructure facility (CBIF) to DISCOMs for faster rollout of smart meters in the country. Each of these companies was to infuse Rs.1.5 billions into the JV. The development of a CBIF is to facilitate the rollout of smart meters by offering a plug-and-play architecture with standardized, integrated, and scalable backend infrastructure.

Installation of smart meters can unlock a slew of capabilities that the utilities in India badly need - increase billing efficiency, remote billing, automatic outage reporting, flexibility with time-of-use tariffs, and add new revenue streams.

IntelliSmart Infrastructure Private Ltd. (IntelliSmart)

Energy Efficiency Services Limited (EESL), along with the National Investment and Infrastructure Fund (NIIF), has formed a JV namely IntelliSmart Infrastructure Private Ltd. (IntelliSmart) to implement the smart meter rollout programme of DISCOMs. IntelliSmart operates on OpEx model, which is a typical build-operate-transfer (BOT) model, where-in IntelliSmart will undertake the capex part and install the smart meters without charging any money to DISCOMs. Once the meters are commissioned, the utilities start saving on the AT&C losses to the tune of Rs.225 per meter/month on an average. IntelliSmart charges between Rs.75 and Rs.100 per meter/month from the utility. Thus, these smart meters become an instrument of pay as you save. Under this model, the DISCOMs are not investing anything and paying the fees through savings they make. Currently, DISCOMs have been pre-dominantly employing the capex model that is not efficient. As they set up a few thousand meters on capex mode, it takes away their valuable funds that can be invested into network correction. IntelliSmart is proactively canvassing pay-as-you- save model in order to break the inertia of DISCOMs, who are resisting the adoption of OpEx model. The investment is done by IntelliSmart that is backed by sovereign wealth fund NIIF.

SMART ENERGY METER AND PREPAYMENT METER

Distribution is the most important link in the entire power sectors value

chain. It is the only segment, which generates cash for the entire power sector-value chain. Smart meters play a key role in cash generation. Smart meters typically record energy consumption near real-time and generate accurate bills of consumption apart from communicating accurate information to the consumer for greater clarity of consumption behavior, managing energy use and reducing their energy bills. It simultaneously enables electricity suppliers for system monitoring and customer billing. Smart Meters offer numerous other benefits to DISCOMs as well as consumers.

Smart energy meters are a vital part of the advanced metering infrastructure (AMI). It is very important component for the modern power infrastructure sector and Indias ongoing power sector reforms initiatives specially to cut AT&C losses. It also has the potential to make the power sector increasingly resilient, transparent, digitized, and accountable. A seamless and consumer-focused energy ecosystem is the way forward and, thus increasing the adoption of smart meters across the country.

Smart meters are no longer a point of debate or contention for the stakeholders in Indian power sector. According to the latest study, the DISCOMs average billing efficiency is 83% and collection efficiency is 93% in India. Due to this under-billing and under-recovery of collections, more than Rs.1 lakh crore of revenue is lost annually by DISCOMs. The ministry of power is likely to make installation of smart meters, a component of regulatory requirement as it will be a part of the proposed National Power Tariff Policy, making the installation of smart meters compulsory.

The rollout of new scheme i.e. Reforms-Linked, Result-Based Scheme for Distribution (RLRBSD) by the Government of India is a very important harbinger for Indian smart metering industry as about half of the total funds of the scheme are likely to be deployed for installation of smart meters. This scheme is to be implemented for the next 5 years to reform the Indian power sector by creating new infrastructure. This scheme is being seen to address the core issues of billing-collection inefficiencies and pilferage that cripple the Indian power sector. It is also vital to note that the disbursements under the scheme will be linked to the adherence of the loss reduction trajectory and there will be annual reviews to assess the DISCOMs performance. At the same time, the Pay-as-you-save model (devised by IntelliSmart) could be the game changer for Indian smart metering business, for it will lead to easier capex funding as well as lower working capital cycle for DISCOMs.

The credit profiles of DISCOMs continue to remain stressed due to higher levels of AT&C losses, inadequate tariffs in relation to their cost of supply and inadequate subsidy support from the respective state governments. Total outstanding dues of the DISCOMs towards power generating firms stood at over Rs.1.35 lakhs crore as of December 2020. Such high levels of liabilities are unsustainable for DISCOMs and adhering to the power sector reform measures being undertaken by the central government has therefore become indispensable.

Smart meters can play an important role in solving this challenge, as installing these meters can immensely improve the financial situation of power distribution companies. SEBs have already witnessed that implementation of smart metering is proving to be extremely beneficial. All across the country momentum is building up in favour of smart meters. In light of the thrust being given by the central government, the tender activity for smart metering should pick up pace in the second half of the calendar year of 2021. Prepaid smart metering also leads to immediate generation of working capital for DISCOMs which is highly advantageous, as the revenue is generated at the point of sale, which otherwise takes a couple of months.

As smart meters are high-end products (viz-a-viz conventional meters), the profitability is also better. With end-clients increasingly requesting for

end-to-end solutions with Facility Management Services (FMS), it leads to increased incentive of recurring revenue. We expect the FMS component of our revenue to constitute about 8% to 10% of our total revenue, in near future.

Metering industry in India has also realised that smart meters require a lot of customisation and R&D as every SEBs has its own specifications. Thus, smart meters in India cannot be commoditised and will continue to come under custom-built category. Considering the specialised nature of the smart meter industry in India and an enormous market, we expect price realisation to remain healthy and the forthcoming period of 6 to 7 years to remain very favourable. Also, as a strategy we have designed our building and manufacturing infrastructure in a way, which will enable us to easily scale-up and even double our manufacturing capacity in a short period (less than 6 months), whenever applicable.

Enormous demand for smart meters is expected due to the constant thrust of the ministry of power and state governments. In addition, there are reports that due to security concerns, Chinese companies may most likely not be considered for the smart metering programme in India. The union power ministry is not in favour of state-run EESL using Chinese meters, given that these are connected to the electricity distribution networks, which is a sensitive sector. If Chinese players are forbidden to participate in tenders for smart meters, then it will be a big boost for Indian smart metering industry, as Chinese companies used to enjoy export subsidy support from their government, distorting the level playing field for Indian suppliers.

Smart meters have proved their worth during lockdown, as it helped curtail the losses for the DISCOMs that had adopted them. Smart meters enabled these DISCOMs to handle their operations smoothly in the time of crisis, as they were able to generate 95% of billing efficiency during the lockdown, as against just 29% for the rest. Smart meters helped DISCOMs in handling the COVID-19 led crisis effectively by enabling auto collection of meters read over the air, reducing the need for manual intervention, remote connect/ disconnect and enabling digital payments of bills. The DISCOMs using smart meters have seen 15-20% average increase in monthly revenue per consumer, according to the EESL, showcasing a wide gulf between smart meter users and otherwise, highlighting their remarkable efficacy. The utility are estimated to recover their entire investment in smart meters in just 2-3 years, by way of huge savings from decrease in power theft and increase in collections.

Indias energy consumption is set to grow 4.2% a year by 2035, fastest among all major economies. More than 25 crore consumers are grid connected, whose conventional meters will need to be replaced by smart meters. The ongoing government policies and reforms programs such as Deen Dayal Upadhyaya Gram Jyoti Yojana, UDAY IPDS, National Smart Grid Mission, Power Tariff Policy, Saubhagya, Make-in-India, Digital India, and Smart Cities are also very crucial to accelerate the adoption of smart metering solutions in India. Thus, there is a tremendous growth prospect for us in the years ahead and we are fully geared up to capitalize on this enormous opportunity."

SMART GAS METER

Smart gas meters automatically measure the various factors such as pressure, volume, and temperature of the gas flowing in the pipeline. Adoption of smart gas meters in industrial, commercial, and residential spaces is a very important step toward providing access to gas for every individual. Governments standards and policies have pushed the smart gas meter market. Moreover, in the recent years, increase in safety concerns and standards have led the smart gas meter market to register a rapid growth.

The rising adoption of Internet of Things (IoT) has increased digitalization in the gas industry at a significant rate. The IoT is a system of inter-related objects and equipment that transmit information, digitally. The growing digitalisation is offering numerous benefits to day-to-day operations, such as improved control over gas quality and cost reduction.

Energy utilities globally are heavily investing in smart grid technologies that offer automatic monitoring and controlling of gas consumption, development of new business models, reduction in outages and shorten response times during natural hazards. At the end-user level, smart grids are offering demand flexibility and consumer participation in the energy system operations through distributed generation and storage.

The automated meter reading (AMR) technology is expected to lead the smart gas meter in the coming years. The growing demand for cost- effective smart gas meters and the need for automated collection of meter readings without physical inspection would drive the smart gas meter market in the years ahead.

PERFORMANCE AND OUTLOOK OF GENUS PRODUCTS & SERVICES: SMART ENERGY METERING SOLUTIONS

Genus manufactures and provides a complete range of sustainable and advanced Smart Metering solutions with a unique combination of all solution layers such as Hardware & Devices, Data Communication, Data Acquisition and Data Analytics & Reporting. These include a portfolio of robust software and end-to-end solutions such as Prepaid Vending Software, Head-end System (HES) and many more. The hardware components of the solutions include Smart Meters, Multifunction Single-Phase/Three-Phase Electricity Meter, LTCT Operated Meter, Smart Residential Meter with Integrated GSM / GPRS Modem / LTE-M / NBIOT / RF / Wi-Fi connectivity, Smart DT Meter with Integrated Communication Modules, Prepaid Meters, Smart Prepaid Meters, Modems, High-end Multifunction Panel Meter, Data Collector Unit (DCU), Multi-Channel DC/AC Energy Meter. Some valueadding end-to-end solutions include Dual Prepayment Metering Solution, Automatic Power Factor Controller, Smart Group Metering Solution, Thread-Through Metering Solution for Distribution Transformer, Common Meter Reading Instrument, Grid & Sub-Station Meter and Net-metering Solutions for rooftop solar system. Genus also provides Smart Street Light Management Solutions for Smart City initiatives.

Genuss in-house R&D centre allows it to make constant upgradation and addition in its existing products/services range, which is one of the best available ranges across the world. With this, Genus takes pride in its relentless efforts to provide finest indigenously designed & developed products/services to its clients. Genuss wide range of the smart metering products/solutions include -

• Smart Prepayment Metering Solutions

- Prepayment Electricity Meter (Agrim™)

o DINRAIL Single Phase Meter, BS Mount Single and Three Phase Meters

- Dual Prepayment Solution (Agrim™)

• Residential & Commercial Solutions

- Multifunction Single Phase Meter - (Sugam, Shikhar 100)

- Multifunction Three Phase Meter - (Sugam, Shikhar 300)

- Three Phase Four Wire LT/HT CT Operated Meter

• Smart Metering Solutions

- Smart Residential Single Phase Meter with Integrated GSM /

GPRS Modem - ("Saksham 145")

- Three Phase Smart Meter with integrated GSM/GPRS - ("Saksham 345")

- Three Phase LTCT Meter with integrated GSM/GPRS - ("Saksham 340")

• Industrial Solutions

- HTCT Meter (Smart Meter with Integrated Communication)

- Automatic Power Factor Controller (APFC)

• Distribution Transformer Metering Solutions / Audit Metering Solutions

- Thread Through Metering Solution for Distribution Transformer - ("Sampoorna")

- Smart DT Meter with Integrated Communication ("Saksham 340")

• Calibration Equipment

- Portable Reference Meter for Single Phase ("Achook 1080")

- Portable Reference Meter for Three Phase ("Achook 3080")

• Smart City Light Management

- Smart Street Light Management System (SSLMS).

- Multifunctional Meter ("Samarth")

- Multi-Channel Direct Current Energy Meter ("Samarth-DC")

• Net Metering / Renewable Energy Management

- Bi-Directional (Net) Metering Solution

- Grid & Sub-Station Meter

• Grid / Open Access

- Grid & Sub-Station Meter ("Daksh")

- Communication Devices

- Common Meter Reading Instrument ("Samvaad+")

In every way, Genus is firmly on its way for becoming a more future-ready company. A step towards readiness for large-scale meter deployments for AMI, Genus has engaged itself in the architecture and design of Head- End System (HES), which is a key product for AMI Software portfolio. Enhancements are in progress on its Meter Data Management System (MDMS). Software portfolio, enhanced with addition of product modules to tap opportunities as a system integrator and lead bidder, are as follows:

• HES deployments on Cloud IT infra for a robust and secure environment for AMI Solutions.

• Mobile Apps for field usage and meter readings through various communications like BLE and Optical port.

• Standard Transfer Specification (STS) Token-based Vending System - A secure message protocol between a Point-of-Sale Vending Station and Meters, supported by a secure key management system and protocol. Being a global standard, it enhances our export capabilities.

• Dual PPM readiness - NUB offering for societies/sub-meters to support (Generator & Mains based inputs)

• Development on Gas Meter AMR solution.

• Smart Prepayment System. We have successfully deployed it at one of the domestic customers, which enhances our capabilities in the prepayment segment.

Genus is also working as a System Integrator (Lead bidder) to integrate Genus meters with third party communication modules, HES and MDMS and package it for large-scale deployments.

Riding on its large installation-base of more than 65 million electricity meters and domain expertise, Genus has embarked on an ambitious program on smart metering in line with the smart grid vision of the Government of India. The effect of COVID-19 led disruptions on business operation has dissipated. During the year under review, the company could deliver annual production and sales of around 3.3 million units of electronic energy meters of different types.

Genus is one of the largest suppliers of smart meters in India and is currently executing a large contract for EESL. EESL plays a vital role in implementing Indias ambitious plan of rolling out smart meters as planned by the Ministry of Power, Government of India. Genus was the first company in Asia Pacific to achieve the milestone of supplying 1.5 million Smart Meters to EESL, bearing testimony of the manufacturing capability of an Indian company for such an advanced meter amid global competition.

The smart meters commissioned in various states have played an important role during the COVID-19 pandemic. The nationwide lockdown and social distancing prohibited DISCOMs from physically taking the monthly meter readings. All states, where Genus Smart Meters were installed, have been able to take readings remotely that resulted in bill generation and collection, helping DISCOMs to sustain their operations even in tough conditions.

During the FY 2020-21, the order inflow has remained sluggish as the tendering process has been delayed and spilled over to the second half of the current financial year. However, the tendering process has been robust in the current year. We have participated in tenders about worth Rs.3,000 crore and are getting ready to participate in tenders about worth Rs.7200 crore. We expect healthy order inflows in the current year. There is an increased thrust by the government authorities on smart meters, as it remains the key catalyst for reducing the AT&C losses faced by DISCOMs. Export

The world faced humanitys biggest crisis since World War II. Almost every country got affected by the devastating Corona virus disease (COVID-19) in the FY 2020-21. It went through the greatest uncertainty. Undoubtedly, the pandemic put the world economy at a major risk, ravaging the economic foundations of world trade. India and in turn Genus exports was no exception. Genus export plunged to low after years of steady growth during this uncertain period. It had to grapple with disruptions in both domestic and global demand due to pandemic induced challenges. COVID-19 led lockdown and subsequent slow down in the partner countries, where Genus was focusing had a major effect on its exports. The global economic slowdown dented demand and to add to that lower international demand & oil prices, tourism segment coming to a halt, resultant reduction in foreign exchange earnings, international flight disruptions, poor deployment of meters, absence of inspection, restriction in the movement of goods, the large-scale logistical disruptions in the countries of Genus interest have been significant contributing factors that impacted exports. The overseas inquiries, opportunities, and tenders were very limited during this period. Overseas EPC projects almost came to a standstill, which in turn affected meter supplies.

In spite of such hurdles, Genus could manage to make low volume exports to Nepal, Malaysia, Nigeria, Zanzibar (Tanzania), Chad, Afghanistan, Singapore, whenever the situation looked a little better. It helped Genus to maintain its continuity with the customers.

However, Genus used this lean period to prepare itself with more products in its product portfolio, presenting itself as a technical partner in setting up assembly plants in overseas destinations, exploring its prospects as a ODM/OEM player for some of the reputed US and Europe brands, getting in touch with most of the new clients online, exploring virtual meeting and exhibitions, so that it can bounce back with greater impact when the situation normalizes after second / third wave of lockdowns in the countries of its interest.

The global demand and therefore the pick-up in exports are expected to be slow and gradual in the first two quarters of FY 2021-22. It would be linked to the containment of the global spread of the pandemic, vaccination of the larger population of respective countries, resumptions of international flights and the revival in global demand.

Since metering is an important element for the growth of economy and energy infrastructure in all the developing countries, Genus is confident with its vast experience and improved capability that it will once again emerge back as a major exporter of Metering Products and Solutions from India in the near future.

SMART GAS METER

Genus manufactures and provides Smart Gas Meters for domestic consumers.

Genus is also slowly gaining a foothold in the gas meter market. Recently we have bagged an order for supplying 10,000 gas meters, which we believe is a very good beginning. In addition, 80-90% of Indian gas meter market is currently being catered by only one company. This shall provide us an opportunity to make our presence felt and play a key role in the market. We also plan to leverage our connections with government authorities to gain market share in the gas metering business.

We believe that the digitalization of distribution grids, optimization of network operations, smart cities drive, digital India drive, impetus on advanced metering infrastructure (AMI) and growing investment in smart grid technologies are offering tremendous growth prospect for us in the years ahead and we are fully geared up to capitalize on this enormous opportunity.

ENGINEERING, CONSTRUCTIONS, AND CONTRACTS (ECC) FOR POWER T&D SECTOR

Genus provides the total end-to-end solutions of Engineering, Constructions and Contracts (ECC) on turnkey basis to Indian power distribution utilities. In an integrated package, Genus provides complete power infrastructure solutions (design-to-install) to the power utilities to make power distribution cost-effective and thus enhance overall profitability. Its solutions include setting up of switchyard / substations (upto 400KV), transmission lines (upto 400KV), complete rural electrification, distribution lines & HVDS and industry plant electrification. Genus also provides its solutions/services for restoration and upgradation of the existing power transmission and distribution network. Genuss ECC solution is dedicated to fulfill the requirements of power utility for the future grid.

Genus ECC solutions from concept to commissioning are driven by the most advanced engineering technology available across the globe. The key differentiators are smart metering solutions, automatic meter reading technology, and IT-enabled communication technology.

Genus has demonstrated its capability with timely completion of numerous prestigious ECC works/projects across varied terrain and adverse climatic conditions. These include several electrical feeder lines, transmission lines, substations, and rural electrification works in Uttar Pradesh, Rajasthan, Maharashtra, West Bengal, Chhattisgarh, Madhya Pradesh, Karnataka, Tamil Nadu, Orissa and Telangana, for the DISCOMs and private utilities.

Genus has achieved many milestones in short span of time, such as:

- 100 kilometers of 132kV transmission line and 132kV sub-station

- One million plus BPL connections and 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

- More than 60 substations of different ratings upto 220kV

- 10,000 kilometers HVDS project (Single phasing work)

- 220 kV LILO Transmission Line and 220/132/33 kV Sub-stations

In the FY 2020-21, the company has successfully completed projects of rural electrification work including 11 KV feeder segregation, under the Sansad Adarsh Gram Yojna and other works on partial turnkey basis under Deen Dayal Upadhyaya Gram Jyoti Yojna, PVVNL, Bijnor and PVVNL, J P Nagar.

Currently, Genus is undertaking following prestigious ECC projects:

• Designing, engineering, supply of equipments for Substation, Transmission Line and associated system for construction of 220 KV Substation at Chhatti Bariatu, 33 KV Substation at Kerandari, 33 KV D/C Line from Chhatti Bariatu to Kerendari and 200 KV D/C Line from Pakri Barwadih to Chhatti Bariatuand from Patratu to Pakri Barwadih along with installation of DG Sets (NTPC Jharkhand).

Following the distinct business strategy, Genus continues to adopt a conservative view in selecting its clientele, with security of payment and margin becoming key focal points.

RISKS AND CONCERNS

Our business operations encounter many risks that can affect our survival and growth. As a result, it is important to adequately identify and deal with potential risks that may come in the way of progress and growth. We believe that once a risk has been identified and assessed, it is then easy to mitigate it. We can timely evaluate a plan for handling potential threats and then develop structures to address them. It boosts the confidence of becoming a successful entity.

For assessment and management of risks, the company regularly reviews and evaluates potential risk exposures through a board-level risk management committee and a robust risk-management system. Risks are also assessed and managed at various levels with a top-down and bottom-up approach covering the enterprise, business units, geographies, functions, and projects. Pursuing our risk management system, we have identified some risks and concerns, which are related to our business operations, financial matters and other important areas. The details of some key risks, its potential impacts, and mitigation strategies are as follows:

COVID-19 pandemic or likewise other pandemic

Impact: Continuation of COVID-19 pandemic or likewise other pandemic may disrupt demand, production and supplies. It may further increase costs to production. The revenues and profitability of the company may also be adversely affected. The collection delay and defaults by consumers may put more pressure on financially ailing DISCOMs. Government budgets may also be challenged due to diversion on COVID-19 resulting in lower subsidy and stretching the working capital cycle. Fall in industrial & commercial demand may affect cross-subsidies available to other consumers. Reform measures may be delayed if COVID-19 sustains over a substantial period.

Mitigation: The company has implemented stringent cost control measures across the organization to preserve liquidity to survive tough times and respond to any unexpected events in the future due to the pandemic. The company has adopted a system of constant discussion with its customers, vendors and other stakeholders to propel the business forward. The company is taking all the possible steps to ensure smooth functioning of operations. All the establishments and offices are sanitized regularly to ensure safety and security of our staff members and other stakeholders. All COVID safety protocols related to temperature sensing, wearing of safety gears (masks, goggles, face shields), social distancing, sanitizing and washing hands are being adhered to very stringently. The company is taking all necessary steps to adhere to the guidelines for social distancing and other safety measures provided by the Ministry of Home Affairs along with the various directives issued by relevant Government authorities, keeping in mind safety, health, and well-being of the employees and other stakeholders across all our locations. The company is encouraging it teams to work from home (WFH) to minimize the disturbance of business, greater access to talent, increased productivity for individuals and teams, lower costs, more individual flexibility and improved employee capability. By providing information about COVID-19 vaccination and establishing supportive policies and practices (like free of cost vaccination), the company is helping increase vaccine uptake among its workforce.

Raw material

Impact: Non-availability of good quality electronics components and accessories may negate the qualitative and quantitative production of a companys products and services. Some of the components and materials are procured from international suppliers, thus availability and pricing of such materials depend on global situation. The world is passing through a serious crisis of non-availability of semiconductor chips & lead times of most electronic components have increased to more than 40 weeks.

Mitigation: The Company has adopted a robust inventory management system based on adoption of multiple sourcing strategies in order to ensure timely availability of raw materials specially electronics components and accessories used as raw material in the meters amidst this global crisis. In order to thwart the risk of delayed deliveries of passive components like micro controllers, multi-layer ceramic capacitors (MLCCS) & chip resistors following global shortages, the company has signed long-term strategic supply agreements with some key manufacturers & distribution partners. A separate dedicated function, Production, Planning & Control (PPC) ensures efficient operations in order to bring about the desired manufacturing results in terms of quality, quantity, timely deliveries, and cost. The Company has complete forward and backward integration facilities to carry out manufacturing of sub-parts / assemblies in-house. Adoption of Kraljic Matrix has further improved supply-chain management of the company. The companys hedging policy and practices enables it to reduce and/or adjust the impact of fluctuations in foreign exchange on raw materials costs.

Technology changes and obsolescence

Impact: Rapidly evolving technology, change in its consumption patterns and obsolescence of its existing forms offer a great challenge to survival of companies especially those in the field of electronics. Company needs to remain agile to keep pace with the changing customer expectations. Failure to cope may result in loss of market share and impact business growth.

Mitigation: Genus adopts a customer centric approach in product development and focuses on providing customised solutions. Genus marketing team keeps track of new technology initiative planned by the DISCOMS well before it is actually implemented. Genus has an inhouse 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 technology development. Genus has a full-fledged tool room for making dies and moulds, automated SMT lines, dedicated IT division for enabling advanced IT enabled solutions, advanced designs software and Lean Assembly techniques. The above preparedness helps Genus to keep pace with changing customer expectations. Genus has several national and international quality accreditations / certifications. Thus, Genus is self-sufficient in constant technology up-gradation, innovation activities, and providing customized solutions to its customers. Genus in-house R&D capability keeps it ahead of time in introducing new/improved products into the market.

Cost inflation

Impact: Escalating raw material prices following growing demand and global shortages may cause cost inflation and affect the profitability of the company. Increased freight may also dent profitability.

Mitigation: In order to de-risk the escalation in raw material prices, Genus enters into purchasing arrangements / agreements with key distributors on a yearly basis. The Company has embarked upon an improvement drive to reduce the bill of materials cost per product based on innovative R&D initiatives, engineering interventions and application of modern end to end

supply chain management theories. The net result is that the Company is able to save so far about 5% on its raw material costs on a year-to-year basis. However, in the current circumstances the world has witnessed significant increase in metal & semiconductor prices, Genus is trying to minimize the impact through product innovations & engineering interventions. The process of estimation of projects is carried out in advance in the case of non-escalation contracts with the vision to protect the possible increase in the inputs of the contracts. The companys hedging policy and practices enables it to reduce and/or adjust the impact of fluctuation in foreign exchange on raw materials costs. In order to minimize the risk of increased freight, the Company is optimizing the droppings/dispatch of consignments. Our contacts are redefined to reflect the actual increase in input costs & accordingly only pay for the same.

Quality

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

Mitigation: The company has an advanced test facility, fully automated & state-of-the-art manufacturing facilities, and tool rooms along with advanced software, equipment and automatic test systems and comprehensive quality checks, to ensure conformance of raw materials and products to the highest quality standards. Genus ensures raw materials are properly checked as per Genus Quality standards at supplier premises. We go to the extent of helping suppliers in establishing a high quality test set up for them. Genus takes recourse to resolve its quality issues using the power of lean sigma methodologies. Adhering to continuous improvement is a constant practice of the Company. The quality of the companys products has not only led to better acceptance in even the fiercely competitive markets but also has resulted in high repeat orders/ business because of increased customer loyalty. Genus also deploys PDI (Pre Delivery Inspection) to make sure the customer gets products as per its exact requirement. The company has numerous national and international recognitions/accreditations/certifications, which strengthen its quality commitment.

Competition

Impact: The increased presence of global participants and local unorganized players in the field is always a challenge for the company. It may affect turnover and profitability of the company.

Mitigation: Driven by a spirit of innovation and armed with a globally competitive in-house R&D lab, the Company is able to constantly improve existing products and develop new products/services with distinct features at optimal cost to stay ahead of competition. Use of IT software and latest technologies, provides a competitive advantage to the company. 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. The company believes that in the end, quality is the sole consideration of the consumers and has therefore never compromised on the quality of the products for short-term benefits.

Delays in execution of projects

Impact: The companys projects business may face challenges of delay in timely execution of projects mainly because of various procedural clearances/approvals and shortage of materials/equipment and work force. This may lead to delays in payments thereby disturbing the working capital cycle and increasing the overall cost of the project.

Mitigation: With the experiences gained, 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 / cost and time overrun.

Realizations and liquidity

Impact: The liquidity position of the company may be affected due to delays in recovery of dues. Any decline or delay in the realizations may increase costs of production and negatively affect the companys operations and earnings.

Mitigation: Since the company has most of its business with government bodies/institutions/agencies, it foresees no major risk of non-payment from its clients. However, the management adopts appropriate strategies, takes all necessary actions to collect the dues from the clients without any delay, and ensures smooth flow of funds. The short-term fund requirements are fulfilled by obtaining working capital facilities from Banks/FIs. The companys vast experience of business, Pan-India presence of experienced & strong marketing team, milestone-based project planning to complete project in time, clientele selection as per their paying capacity, focus on private utilities, export business based on LC, prompt delivery & servicing and involvement of top management in case of substantial delays among others also alleviate the risk of non-realisation.

Currency volatility

Impact: Since the company receives a part 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 may negatively affect the company.

Mitigation: The company follows a defined system of currency hedging and accordingly it hedges its foreign currency exposures. The company receives a portion of its revenues in foreign currency, which also 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. The company also takes regular advisory on the subject from market expert.

Legislative changes

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

Mitigation: The role of the power sector in the growth of the economy of India ensures the continuous attention and investment of the Government in this sector. 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 in the power sector domain. Non-compliance to complex and changing regulations Impact: With increased regulatory pressures and 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 companys 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 available professionals for legal compliance and corporate governance. The companys compliance teams at all levels are regularly provided training for their improvement and updating. The companys internal audit department led by qualified personnel plays an important role in implementing and monitoring the compliance of statutory requirements.

Increase in borrowing cost

Impact: The company may feel the pressure of high borrowing costs due to increased interest on bank loans. The weakening rupee may also add to the woes of the company in sourcing funds from the global markets as

well. The borrowing cost may increase because of increased working loans to execute higher amounts of orders.

Mitigation: The Company focuses on optimum utilisation of available credit limits, optimum mix of financial facilities & instruments like buyers credit, payment of MSME vendors through online platform of Trade Receivables Discounting System (TReDS), maximum utilization of export packing credit limits, more funding through WCDL route rather than case credit and banking arrangement with reputed banks (PSU/private bank). The Company uses it current assets through better management of borrowings & available funds. It focuses on reduction and/or reshuffling in the higher-cost debts. The Company continues to rely on short-term debt to meet its working capital requirements. The long-term debt is used largely to support the capital expenditure incurred towards expansion. Cyber attacks

Cyber security risk means any risk of business loss, financial loss, disruption, or damage to the reputation of Company, arising from compromised Information Systems (Information Technology and Human Capital) Impact: Uncovered Cyber Security risks can lead to disruption of operations, financial losses or damage to the business and reputation of an organisation. This may arise from various root causes like lack of control policies, compromised IT infrastructure, insufficient Cyber security measures, Virus / Malware attacks (like Trojans, Ransomware, etc), inappropriate behavior of users. Company needs to tackle the many security challenges it faces on a daily basis including reduction in costs related to managing security risk, and improvement in its overall cyber security posture.

Mitigation: The Company recognizes cyber security risk as an enterprise business risk, not just an information technology (IT) problem. The Company has built appropriate skills and deployed resources in-house to secure its information assets, effectively while optimizing business performance. The Company has an in-house team of IT professionals to manage cyber security issues, which anticipates and detects the cyber threats it is about to face or is facing and promptly responds to a cyber security incident. Keeping view of above, the Company has taken up the following measures:

• Well defined Cyber Security Policies and Procedures has been implemented

• Primary Data Center Jaipur is protected by multiple layers of firewalls with necessary policies to cover the cyber security measures.

• Other location data centers are also protected with firewalls

• All internet connections are terminated at our perimeters and 100% network traffic is monitored and controlled with Firewall and Policies

• VLAN for internal LAN security is implemented

• Access to information assets are provisioned as per the approved profiles of individuals

• All endpoints are secured with necessary endpoint protection systems and they are centrally managed from datacenters

• Regular internal reviews and audits by external agencies are carried out for continuous improvement.

• Regular training on Cyber security is being provided to all the users

With all the above we have sufficiently established Cyber Security System at Genus.

Litigation risks

Impact: Given the scale of the companys operations, litigation risks can arise from commercial disputes, tax and employment related matters.

This may incur legal costs, distract management, garner negative media attention, and pose a reputation. Adverse rulings can result in substantive damages.

Mitigation: Company has strengthened its internal processes and controls to ensure compliance with contractual obligations, adequately. Potential disputes are promptly brought to the attention of management and dealt with appropriately. The company has a dedicated team of in-house legal-counsels and has a network of highly reputed global law firms. The company has developed a robust mechanism to track and respond to notices as well as defend the companys position in all claims and litigation. DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT SYSTEM/POLICY

Genus believes that the identification, analysis, and response to risk factors, that form part of the life of a business, are most essential to ensure sustainable business growth. Genus focuses on attempting to control, as much as possible, future outcomes by acting proactively rather than reactively. Genus follows a proactive risk management process, which aims to anticipate and report potential risks on time and prompt implementation of controls to mitigate the potential negative impact of the risks.

The company has developed a comprehensive risk management and control mechanism, which 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. 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-today operations, regulatory standards and mitigates risk. The internal audit department audits all the key areas of operations to identify and report weak areas of operations. 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.

During the year, the risk analysis and assessments were conducted and no major risks were noticed, which may threaten the existence of the company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Genus has adopted an effective and adequate internal control system, which are commensurate with its size, nature, scale, and complexity of the business operations. It is designed to provide reasonable assurance regarding the achievement of objectives relating to operations, reporting, and compliance. Genus internal control system involves everything that controls all potential risks and concerns to the company. The company has aligned its systems of internal financial control with the requirements of Companies Act, 2013 (the "Act"), on the lines of the globally accepted risk- based framework.

The chief executive officer of the company has overall responsibility for designing and implementing effective internal control. He is accountable to the board of directors, which provides governance, guidance, and oversight. The internal auditors and external auditors of the company also measure the effectiveness of internal control through their efforts. They assess whether the controls are properly designed, implemented and working effectively, and make recommendations on how to improve internal control. The audit committee also discusses with management, internal and external auditors, and major stakeholders, the quality and adequacy of the companys internal controls system and risk management process, and their effectiveness and outcomes, and meets regularly and privately with the internal auditor. All staff members are responsible for reporting

problems of operations, monitoring and improving their performance, and monitoring non-compliance with the corporate policies and various professional codes, or violations of policies, standards, practices, and procedures. Their particular responsibilities are documented in their individual personnel files. Staff and junior managers are also involved in evaluating the controls within their own department using a control selfassessment.

Genuss management had assessed the effectiveness of the companys internal control over financial reporting as defined in clause 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the "Listing Regulations) as of March 31, 2021. The CEO and CFO certificate confirming the establishment, maintenance and the effectiveness of internal financial control systems of the company pertaining to financial reporting, has been provided in this annual report. The statutory auditors of the company have audited the financial statements included in this annual report and have issued an attestation report on the companys internal control over financial reporting as defined in section 143 of Act. Based on its evaluation as defined in section 177 of Act and clause 18 of Listing Regulations, the audit committee had concluded that as of March 31, 2021, the internal financial controls were adequate and operating, effectively.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Genus has an online Human Resource Management System (HRMS), which automated several HR processes and leads to better data management and reporting. Genus has defined sets of code of conduct for its employees to reinforce the core values of the company. Genus has also adopted the whistleblower policy, vigil mechanism, POSH policy and several other mechanisms to discourage/prevent wrong practices, discrimination, and harassment at the workplace. Genus has also implemented an inclusive Rewards & Recognition policy to encourage a culture of appreciation across all levels.

Looking at the challenges ahead, training and constant skill upgradation of the existing workforce is the need of the hour. To support improving competency, empowering personnel, and realizing self-potential to deliver best performance, the company had organised/arranged numerous training and leadership development programs/sessions in FY 2020-21 for its employees, which includes -

Skills and Competency Development Programs:

• Session on Creative Solutions by Lets Design Life • Training on ESIC Act 1948 & its Benefits
• Training on Google Spreadsheet (Fundamentals) • Training on GST (Fundamentals)
• Session on MSME Guidelines of Govt. of India • Training on Design of Experiment
• Training on Importance of • Training on Variability
Mechanical in Metering • Training on Mediclaim Policy
• Training on ISO 9001:2015 • Training on Income Tax
• Training on Google Spreadsheet (Advance) • Session on Developing Next Generation Consumer
• Training on Tendering Process and Techniques Electronics Products through Simulation
• Training on IS 16444 • Session on Designing Smart
• Training on ABT Meter • Training on Cyber Security Reliable and Energy Efficient Appliances with Simulation
• Training on PMP • Session on Combating Neck &
(Project Management Back Pain at Work/Work From
Complimentary) Home
• Training on Inventory • Training on TQM-Portal • Contest for Enlighten Your
Management Workplace
(Fundamentals) • Training on Data Studio
• Webinar on Ergonomics • Training on SAP-MM Module
• Training on Group Meter • Training on Basics of Kaizen
• Training on Provident Fund • Webinar on Combating Neck/
• Training on G-Slides Back Pain While Working At
Office
• Training on Performance
Management System (PMS)

Leadership Development Programs

Genus also focuses on developing the succession planning and for that, a LDP was designed and conducted in the FY 2020-21. This program has covered 31 Hi-Potential leaders to equip themselves to take up higher leadership roles in Genus.

In the FY 2020-21, Genus also focused on nourishing its workforce apart from attracting the best talent, Genus HR department remained committed to providing a flexible, safe, and motivational working environment. To rejuvenate and motivate the employees, during the year under review, Genus celebrated/organized several programs/sessions, such as -

• Diwali Celebration with Ethnic Wear

• Navratri 2020 Celebration by Color Codes

• 6th International Yoga Day-2020

• Swaccha Genus Day

• Training on Understanding Human Behavior for better Relationships

• Session on Boost Up Your Emotional Immunity

• Session on Mental Health

• Session on Managing Mental Well Being

• Awareness Session on Convalescent Plasma Donation

• Session on Brain Health and Its Warning Signs

• Session on Welfare & Wellness

• Training on Personal Effectiveness

• Session on Nutrition for COVID-19 Patients and for those recovering from it

• Session on Nutrition for Pre and Post COVID-19 Patients

• Session on Protective Management of COVID-19

• Town Hall Meetings

As on March 31, 2021, the company had 1128 permanent employees spread across different locations, with an attrition rate of less than 5%. Overall, harmonious industrial relations prevailed at all the companys units during FY 2020-21.

REVIEW OF FINANCIAL PERFORMANCE

The financial performance of the company has been reviewed separately in the directors report.

For and on behalf of the Board of Directors
Ishwar Chand Agarwal
Chairman
DIN: 00011152
Jaipur, July 29, 2021