Urja Global Ltd Management Discussions.

1. Market Overview

Energy can be harnessed directly from the sun, even in cloudy weather. Solar energy is used worldwide and is increasingly popular for generating electricity or heating and desalinating water.

2018 will be remembered as the year solar broke the 100 GW threshold of annual installations, and it will be recalled as the year solar in total reached a cumulative operational capacity of over 500 GW or 0.5 TW. 2018 will also likely go down in history as the year solar took a short break for the next growth phase.

Despite its rather low, one-digit year-on-year growth, solar was again the power generation technology with the largest capacity additions globally in 2018. More solar was deployed than for any other single technology.

Today, generation costs for solar power are significantly lower than for new nuclear and coal plants, but usually also below gas, and in the range of wind, depending on the region, even lower. Such price levels were reached in various geographies around the world (see Fig. 1). The lowest solar power price bid in 2018 was recorded at 1.38 INR (1.86 US cents) per kWh in India; although this was an escalating tariff with a special business model for government rooftop buildings.

In 2018, solar took a little break from the enormous growth rates seen in previous years. Although the solar market grew modestly by only 4%, it was enough to again outdo any other power generation technology last year. More solar PV was deployed than all fossil fuels and nuclear together. Solar also added more capacity than all renewables combined—including large hydro—and had twice as much installed than wind power

In 2018, the ground-mounted segment had a global share of newly installed capacity between 70 to 72%, as the major solar markets primarily rely on this type of PV application (see Fig. 2). There is no doubt that ground-mounted utility-scale PV will remain the dominant application for solar power over the 5-year span of this report. But with electric vehicles and smart cities making stronger inroads after 2020, there is a lot of potential for rooftop solar in the mid- to long-term, installing large quantities of utility-scale solar is much easier than establishing a distributed PV rooftop market, which takes a substantial period of time and a lot of effort to educate consumers, while setting up an effective platform with the right financing mechanisms and technical standards. For this reason emerging markets usually begin their solar chapter with tenders for utility-scale solar and usually struggle to set up the distributed rooftop segment, even if politicians generally prefer PV on roofs—which they consider to be the natural place for the technology as it avoids any potential conflicts on land use. The best example for such a development is India, which targets 100 GW of solar by 2022, with 40 GW coming from rooftop solar. But, of the 27 GW installed by the end of 2018, only

3.5 GW were rooftop systems—the bulk was utility-scale PV power plants.

2. Indian Solar Market

2.1 Introduction

The Indian renewable energy sector is the fourth most attractive renewable energy market in the world. As of October 2018, India ranked 5th in installed renewable energy capacity. According to 2018 Climate scope report India ranked second among the emerging economies to lead to transition to clean energy.

Installed renewable power generation capacity has increased at a fast pace over the past few years, posting a CAGR of 19.78 per cent between FY14-18. The focus of Government of India has shifted to clean energy after it ratified the Paris Agreement. With the increased support of government and improved economics, the sector has become attractive from investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWH by 2040, renewable energy is set to play an important role.

2.2 Market Size

As of February 2019, total renewable power installed capacity (excluding large hydro) in the country stood at 75.06 GW. Off-grid renewable power capacity has also increased. As of October 2018, generation capacities for Waste to Energy, Biomass Gasifiers, SPV systems stood at 175.28 MWeq, 163.37 MWeq and 767.51 MWeq, respectively.

With a potential capacity of 363 Gigawatts (GW) and with policies focused on the renewable energy sector, Northern India is expected to become the hub for renewable energy in India.

2.3Investments/ Developments

According to data released by the Department for Promotion of Industry and Internal Trade (DPIIT), FDI inflows in the Indian non-conventional energy sector between April 2000 and December 2018 stood at US$ 7.48 billion. More than US$ 42 billion has been invested in Indias renewable energy sector since 2014. New investments in clean energy in the country reached US$ 11.1 billion in 2018.

Some major investments and developments in the Indian renewable energy sector are as follows:

• Inter-state distribution of wind power was started in August 2018.

• In the first half of 2018, India installed 1 MW of solar capacity every hour.

• With 28 deals, clean energy made up 27 per cent of US$ 4.4 billion merger and acquisition (M&A) deals which took place in Indias power sector in 2017.

• In March 2018, ReNew Power finalized a deal estimated at US$ 1.55 billion to acquire Ostro Energy and make it the largest renewable energy company in India.

• Worlds largest solar park named Shakti Sthala was launched in Karnataka in March 2018 with an investment of Rs 16,500 crore (US$ 2.55 billion).

• Solar sector in India received investments of over US$ 10 billion in CY 2017.

• Private Equity (PE) investments in Indias wind and solar power have increased by 47 per cent in 2017 (January 1 to September 25) to US$ 920 million, across nine deals, as compared to US$ 630 million coming from 10 deals during the corresponding period in 2016**.

• As of March 2019, Eversource Capital, a Joint venture of Everstone and Lightsource plans to invest US$ 1 billion in renewable energy in India through its Green Growth Equity Fund.

2.4Government initiatives

Some initiatives by the Government of India to boost the Indian renewable energy sector are as follows:

• A new Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.

• The Ministry of New and Renewable Energy (MNRE) launched the "ATAL JYOTI YOJANA (AJAY)" to illuminate dark regions across five states through solar power. It is a sub scheme under off -grid and decentralized solar application scheme of Ministry of New and Renewable Energy (MNRE), Govt. of India.

• The ministry of power has waived the levy of inter-state transmission charges and losses on transmission of electricity through the inter-state transmission system for wind and solar projects commissioned till 31st March, 2022

• The government has implemented a scheme namely "Kisan Urja Suraksha Evam Utthaan Mahabhiyaan (KUSUM)" with an outlay of t 34,422 crore and provides opportunities for small solar plants in rural areas and for solarisation of irrigation pumps

• The ministry has launched a scheme namely "SAUBHAGYA-Pradhan Mantri Sahaj Har Ghar Yojanawith a total outlay of t 16,320 crore. The objective of the scheme is to provide last mile connectivity and electricity connections to all households in rural and urban areas. As of 2nd May, 2019, 99.99% of all households in the country have been electrified while 18,734 households remain to be electrified. It is expected to increase the demand for power in the country and thereby increase the utilization of generation assets.

• The ministry has also announced a policy named "The National Wind Solar Hybrid Policy" for optimization of use of land and transmission infrastructure and achieving better grid stability through reduced variability. Capacity of 840MW has already been tendered out and another 1.8GW is under bidding.

• The Jawaharlal Nehru National Solar Mission was launched on the 11th January, 2010 by our former Prime Minister, Dr. Manmohan Singh. The Mission has set the ambitious target of deploying 20,000 MW of grid connected solar power by 2022 and aims at reducing the cost of solar power generation in the country through (i) long term policy; (ii) large scale deployment goals; (iii) aggressive R&D; and (iv) domestic production of critical raw materials, components and products. It has been envisaged to achieve grid tariff parity by 2022.

2.5 Achievements in the sector

• Solar capacity has increased by eight times between FY 2014-18. India added record 11,788 MW of renewable energy capacity in 2017-18.

• A total of 47 solar parks with generation capacity of 26,694 MW have been approved in India up to November 2018, out of capacity of 4,195 MW has been commissioned.

• Inter-state distribution of wind power was started in August 2018.

• Power generation from renewable energy sources (excluding large hydro) in India reached record 101.84 billion units in FY18 and has reached 107.22 billion units between April 2018- January 2019

2.6 The Road Ahead

• The Government of India is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other for hydro, bio among other. As of June 2018, Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much ahead of its target of 175 GW as per the Paris Agreement. Indias renewable energy sector is expected to attract investments of up to US$ 80 billion in the next four years.It is expected that by the year 2040, around 49 per cent of the total electricity will be generated by the renewable energy, as more efficient batteries will be used to store electricity which will further cut the solar energy cost by 66 per cent as compared to the current cost.* Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually.

3. Opportunities and Threats 3.1 Possible Opportunities:

• The convergence of solar, batteries and EVs will democratize energy production and offer billions of people access to cheap, carbon-neutral energy;

• Capital Subsidy at the rate upto 30% of the benchmark cost for general category states (upto 70% of the benchmark cost for special category states i.e., North MNRE PV Rooftop Cell;

• There are provisions of concessional import duty/ excise duty exemption, accelerated depreciation and tax holiday for setting up grid connected rooftop power plants;

• Renewable energy technologies for meeting Indias growing energy demands, both for production and substantive purpose in an environmentally benign manner is being discussed nationally as well as internationally.Energy dependence on imports;

• With expanding investment flows and growing production capacities, employment in the renewable energy sector has started growing at a rapid pace and this growth is likely to accelerate in the years ahead;

• Compared to fossil power plants, renewable energy is expected to generate more jobs per unit of installed capacity, per unit of power generated and per rupee invested;

• The Government had set up a target of to achieve 20,000 MW through solar by the end of 13th Plan Period i.e. 2022.

• "Make in India" initiative not only helps the country to source its defence requirements domestically but also opens up large export opportunities.

3.2 Potential Threats:

• Safety and Security remains high risk factor for our Business

• Delay in tendering process of the Government;

• Lack of technical support for remote locations;

• Non-utilization of our available manufacturing capacity;

• Long term return of investments;

• Change in long term government policy;

• Lack of cooperation from local distribution utility

4. Future Outlook

During the year under review, the Company has executed various projects and initiatives. Lithium- ion batteries come at a premium but have 3-4 times the life of a lead-acid battery. It becomes an obvious choice for existing owners looking to replace batteries. The Company is looking to promote sales of Electric Vehicles to reduce vehicular pollution. Batteries product range from 23Ah to 200Ah for segment such as E-rickshaw, solar, inverters UPS for both home and industrial usage.

With declining costs and improving performance, LED products have been seeing increased adoption for general illumination applications. This is a positive development in terms of energy consumption, as LEDs use significantly less electricity per lumen produced than many traditional lighting technologies.

Solar power in India at current level is already cheaper than electricity generated through diesel. Support from various Central and States Government for solar power industry is continuously increasing.

5. Risks and Concerns

At Urja, the risk management framework sets guidelines for operations so that the Company can continue on the path of sustainable change. These risks are monitored for changes in their exposure and are reported during the course of year.

1. Urja continuously monitors the global environment, work with advisors, partners and governments. Our well-diversified business across geographies and industry verticals ensure sustainable business growth.

2. The company has price escalation clause with its major clients for compensating it with any price volatility. However the chances of lag in price rise in input and finished goods always remains.

3. The Company places utmost importance on ensuring safety of its employees, visitors to our premises and the communities we operate in. The Company has been achieving continuous improvement in safety performance through a combination of systems and processes as well as cooperation and support of all employees. The Company has robust training programs and reporting mechanisms in place designed to ensure regulatory compliance and mitigate the risks associated with workplace injury and conducts regular Safety audits. The Company has developed programs to promote a healthy and safe workplace, as well as progressive employment policies focused on the well-being of the thousands of employees who work in it. These policies and programs are reviewed regularly by the Board of Directors.

4. The Company has been operating under competitive environment since inception. Being one of the largest producer of explosives the Company has deep domain knowledge, state of art manufacturing facilities, skilled work force, delivery capabilities, efficient sales force and economies of scale to help retain its competitive positioning amongst peers.

5. The Companys Human Resource agenda continues to remain focused on reinforcing the key thrust areas i.e. being the employer of choice, building an inclusive culture and a strong talent pipeline, building capabilities in the organization and continuing to focus on progressive employee relations policies. The ability of the Company to properly develop, train and retain its employees with the appropriate skill set could affect the Companys future performance. There is always a risk associated with the loss of key personnel.

Succession plans have been identified for key roles including the depth of management talent throughout the Company and its subsidiaries. Solar invests heavily in "hiring right" and "talent development & engagement". This helps provide fulfilling careers to members in Solar.

6. Urja has a dedicated in-house compliance team which manages these operations. We have knowledgeable consultants across the countries who supports us in adhering to country specific compliance requirement. Further the Company has invested in compliance systems and processes to ensure that all its functions and units are aware of the laws and regulations to comply with and that adequate Monitoring mechanism are put in place to ensure compliance. Urja appoints local business leaders and management teams who bring a strong understanding of the local operating environment and strong customer relationships.

6. Internal control systems and its adequacy

Your Company has optimal internal control systems and procedures in place to handle all its business processes. Urja Group has clearly defined roles and responsibilities for all managerial positions. Its financial parameters are monitored and controlled effectively through its Tally ERP software system. The Companys internal control system is commensurate with its size, scale and complexities of its operations.

The Audit Committee of the Board of Directors actively reviews the adequacy and effectivenessof the internal control systems and suggests improvements to strengthen the same. The Company has a robust Management Information System, which is an integral part of the control mechanism as a result of which Company is strengthening further.

The Audit Committee of the Board of Directors, Statutory Auditors and the Business Heads are periodically apprised Audit plays a key role in providing assurance to the Board actions taken by the management are presented to the Audit Committee of the Board.

The Company has identified inherent reporting risks for each major element in the financial statements and put in place controls to mitigate the same. These risks and the mitigation controls are revisited periodically in the light of changes in business, IT systems, regulations and internal policies.

Based on its evaluation (as defined in Section 177 of Companies Act 2013 and Regulation 18 of SEBI Regulations, 2015), the audit committee has concluded that, as of March 31, 2019, internal financial controls were adequate and operating effectively.

The internal audit is entrusted to M/s NVA & Co. a firm of Chartered Accountants. The main thrust of internal audit is to test and review controls, appraisal of risks and business processes, besides benchmarking controls with best practices in the industry.

7. Financial Performance

During the year 2018-19 under review, the Companys Net Sales were Rs. 1,321,467,648 as against Rs. 1,279,799,367 last year. Net Profit was Rs. 13,156,541 as against Rs. 11,368,067 last year.

The Revenue, Expenses and Net Income of the Company has increased by Rs. 4,16,68,280 Rs. 4,00,97,516 & Rs. 15,70,764 in the year 2018-19 under review thereby registering a growth of 3.26%, 3.18% and 9.22% Respectively.

Particulars For the year ended 31.03.2019 For the year ended 31.03.2018
Total Revenue 1,321,467,648 1,279,799,367
Total Expenses 1,302,855,881 1,262,758,365
Net Income (I-II) 1,86,11,766 1,70,41,002

Similarly, The Current Assets and Current Liabilities of the Company has increased by Rs. 57,40,11,720 and Rs. 56,41,61,971 for the year 2018-19, thereby registering a growth of 37.48 % and 43.68 % Respectively.

Particulars For the year ended 31.03.2019 For the year ended 31.03.2018
Current Assets 2,105,457,426 1,531,445,706
Current Liabilities 1,855,828,336 1,291,665,395

The Company recognizes its people as a long-term critical asset. It encourage to build an entrepreneurial culture, enabling the employees to think beyond the set targets. Solar Industries has always lived by its people philosophy, which center around talent acquisition, training and development, leadership development, maintaining healthy employee relations, emphasis on compliances and on productivity improvement. In order to achieve these goals, the Company regularly undertakes training and development programmes, engages employees in various activities and encourages talent through mentoring and entrusting them with responsible positions.

9. Cautionary Statement

This document contains statements about financial and operating results of Urja Global Limited, which are forward looking. By their nature, forward looking statements require the Company to make assumptions and are subject to inherent risks and uncertainties. There is a significant risk that the assumptions, predictions and other forward-looking statements will not prove to be accurate. Readers are cautioned not to place undue reliance on forward looking statements as a number of factors could cause assumptions, actual future results and events to differ materially from those expressed in the forward looking statements. Accordingly, this document is subject to the disclaimer and qualified in its entirety by the assumptions, qualifications and risk factors referred to in the managements discussion and analysis of Urja Global Limiteds Annual Report, 2018- 19.

On behalf of the Board of Directors
Sd/- Sd/-
New Delhi Sunil Kumar Mittal Yogesh Kumar Goyal
12th August, 2019 Whole Time Director Whole Time Director
DIN:07610472 DIN:01644763