Your Directors present their 37^th Report together with the Audited Financial Statements for the year ended 31^st March, 2023. Financial Results (Standalone)

During the year under review, your Company has recorded total income of Rs.32,032 Mn. (previous year Rs. 21,140 Mn.), registering increase of 51.52% in total income. Profit after Tax increased by 44.53% to 2,376 Mn. (Previous year Rs.1,644 Mn.). The performance summary (standalone) is presented herewith:

State of Company's Affairs

Please refer Management Discussion & Analysis annexed to this report dealing with the state of Company's affairs at length. (Refer Annexure 1).

Summary of Consolidated Results

During the year, the Total Income stood at Rs. 35,738 Mn which is 50.19% more over last year (Rs. 23,795 Mn). Profit after tax was Rs. 2,398 Mn previous year's figure (Rs 1,502 Mn) registering an increase of 59.65 % over last year. The performance summary is presented herewith:

Dividend

The Board of Directors at its meeting held on 25^th May, 2023 has recommended Dividend of Rs. 4.50/- per share (225%) of Face value of Rs. 2/- for the financial year 2022-23.

The dividend is payable subject to shareholders' approval at the ensuing Annual General meeting (AGM). The final dividend payout, if approved by the shareholders in the ensuing AGM, will be around Rs. 826.71 Mn.

The dividend pay-out is in line with the Company's Dividend Distribution Policy.

Dividend Distribution Policy

In accordance with the Regulation 43A of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Company has formulated a Dividend Distribution Policy and the same is annexed herewith as Annexure 9. The Policy is also hosted on the website of the Company and can be viewed at www.praj.net

Investor Education and Protection Fund (IEPF)

Pursuant to the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016, the Company has transferred unclaimed/ unpaid dividend of Rs.12,21,883/- pertaining to the financial year 2014-15 & Interim Dividend of Rs. 15,25,700/- for the financial year 2015-16 to IEPF, on 21^st September 2022 & 12^th May, 2023 respectively. Further, the Company has also transferred corresponding 17,044 shares pertaining to the financial year 2014-15 to IEPF on 14^th October 2022. The transfer of 36,374 shares pertaining to unclaimed dividend for the financial year 2015-16 is under process.

Details of Nodal Officer

Mr. Dattatraya Nimbolkar, Chief Internal Auditor and Company Secretary has been appointed as Nodal Officer of the Company. Details in this regard are available on the website of the Company at www.praj.net

Reserves

The Company is not proposing any transfer to the General Reserve for the year 2022-23.

Credit Rating

a) CRISIL has re-affirmed “A1 " rating to the Company's short-term banking facilities which signifies that the degree of safety regarding timely payment of instruments is very strong.

b) CRISIL has also re-affirmed its rating of the Company's long-term bank facilities to “AA/stable'.

The “AA/Stable" rating signifies high safety with regard to timely payment of long-term financial obligations.

Subsidiaries

Praj Engineering & Infra Ltd. India, Praj HiPurity Systems Ltd. India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Far East Philippines Ltd. Inc., The Philippines, continue to be subsidiaries of your Company.

During the year, Company has formed Wholly Owned Domestic Subsidiary, Praj GenX Ltd. India, on 15^th March, 2023.

Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, except Praj GenX Ltd., are included in this Annual Report. Since Praj GenX Ltd. has not yet started its operations, consolidation of its Financial Statements is not done. Further, a statement containing the details of performance, financial position for each of the Company's subsidiaries in the prescribed format AOC-1 is also enclosed (Please refer Annexure 6). Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any member of the Company or its Subsidiaries by making a written request to the Company Secretary at the Registered Office of the Company in this regard. The Annual Accounts of the Subsidiary Companies are also available for inspection at the Company's and/or the concerned Subsidiary's Registered Office.

The Company has formulated a policy for determining 'material subsidiaries' and such policy is hosted on the Company's website

i.e. www.praj.net

Corporate Governance

Pursuant to the provisions of Regulation 34 (2) & (3) and 53(f), read with Schedule V to SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, Management Discussion and Analysis Report (Annexure 1), Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3), Business Responsibility & Sustainability Report (BRSR) (Annexure 8), Dividend Distribution Policy (Annexure 9) are annexed to this report.

Directors

Ms. Parimal Chaudhari (DIN 00724911) retired at 36^th Annual General Meeting held on 4^th August, 2022 and was re-appointed as Director of the Company.

Ms. Parimal Chaudhari (DIN 00724911) will retire at 37^th Annual General Meeting and being eligible, has offered herself for re-appointment as Director of the Company.

Members at 36^th Annual General Meeting held on 4^th August, 2022 had approved extension of tenure of Dr Pramod Chaudhari (DIN 00196415) as an Executive Chairman for a period of 29 months w.e.f 1^st August, 2022 till 31^st December, 2024.

Members at 36^th Annual General Meeting held on 4^th August, 2022 had approved extension of tenure of Mr. Sachin Raole (DIN 00431438) as CFO & Director-Resources for a period of 5 years w.e.f 1^st August, 2022 till 31^st July, 2027.

Based on the recommendation of Nomination & Remuneration Committee, Board at its meeting held on 3^rd February, 2023, has approved re-appointment of Mr. Shishir Joshipura (DIN 00574970) as a CEO & Managing Director for a period of 27 months w.e.f 1^st April, 2023 till 30^th June, 2025, subject to approval of Shareholders at 37^th Annual General Meeting.

Based on the recommendation of Nomination & Remuneration Committee, Board vide Circular Resolution No. CIR/BM/01/2023-24, has approved re-appointment of Dr Shridhar Shukla (DIN 00007607) as an Independent Director of the company for a further period of 5 years w.e.f 12^th April, 2023 till 11^th April. 2028, subject to approval of Shareholders at 37^th Annual General Meeting by way of Special Resolution.

Composition of Key Managerial Personnel (KMP)

The Company has the following KMPs as on 31^st March 2023;

Composition of Audit, Nomination & Remuneration Committee

For details, kindly refer the Corporate Governance Report annexed to this Report (Annexure 3).

Declaration from Independent Directors

The Independent Directors have submitted their annual declaration to the Board confirming that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed there under.

Auditors

a) Statutory Auditors

Current tenure of P G BHAGWAT LLP, Chartered Accountants, Pune (Firm Regn. No. 101118W/W100682), Statutory Auditors of the Company will expire on the date of 39^th Annual General Meeting to be held in the calendar year 2025.

b) Internal Auditors

The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically during Financial Year 2022/23 and submitted their reports to the Audit Committee.

Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

The Board has appointed Khare Deshmukh & Co., Chartered Accountants Pune, as Internal Auditors of the Company for the Financial Year 2023-24.

c) Cost Auditors

Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the Financial Year 2023-24 at the remuneration as set out in item No. 5 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.

d) Secretarial Auditors

M/s KANJ & Co., LLP, Pune, were appointed to conduct the Secretarial Audit of the Company for the Financial Year 2022-23, as required under Section 204 of the Companies Act, 2013 read with rules framed thereunder. The Secretarial Audit Report (MR-3) for Financial Year 2022-23 forms part of the Annual Report as Annexure 5.

The Board has appointed M/s KANJ & Co. LLP, Pune, as Secretarial Auditors of the Company for the Financial Year 2023-24.

Material changes and commitments, if any, affecting the financial position of the Company those occurred between the end of the financial year to which these financial statements relate and the date of the report:

There were no material changes and commitments, affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of the report.

Statement concerning development and implementation of Risk Management Policy of the Company.

In accordance with the provisions of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (LODR) the Board has amended Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.

Based on market capitalization rank as on 31^st March 2023, provisions of Regulation 21 of SEBI (LODR), Regulations 2015, as amended from time to time, are applicable to the Company for the Financial Year 2023-24. As per amended Regulation 21 of SEBI LODR Regulations, it is mandatory for the Company to constitute Risk Management Committee. However, Company had already constituted Risk Management Committee at its Board Meeting held on 16^th May 2019.

The main objective of Risk Management policy is to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business of the Company.

The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

In today's challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter alia are risks emanating from; Regulations, Cyber Risks, Competition, Business, Technology obsolescence, Investments, Retention of talent, Finance, Politics and Fidelity etc. In today's complex business environment, Cyber risks have considerably increased. During the year, we continued our efforts to keep ourselves up to date with cyber security events globally to achieve higher compliance and its continued sustenance.

As a matter of Risk Management Policy, these risks are assessed and steps, as appropriate, are taken to mitigate the same.

The Amended Risk Management Policy is hosted on the Company's website i.e.www.praj.net

The Company has instituted adequate Internal Controls and processes to have a cohesive view of risks, optimal risk mitigation responses and efficient management of internal control and assurance activities.

In the opinion of the Board, there are no risks which may threaten the existence of the Company.

Internal Financial Controls:

The Company has in place, adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

Remuneration Policy for Directors and KMPs:

The Company's remuneration policy for Directors / KMPs is directed towards rewarding performance based on periodical review of achievements. The remuneration policy is in consonance with the existing industry practice.

The said policy is available on Company's website i.e. www.praj.net and is also attached as Annexure 7 to this report.

esor

During the year, your Company allotted 40,000 shares on exercise of options under the Employee Stock Option Plan 2011. Consequent to the above, the Issued, Subscribed and Paid-up Share Capital of your Company increased from 183,673,088 (number of shares) (Value Rs.367.346 Mn.) as of 31^st March, 2022 to 183,713,088 (number of shares) (Value Rs.367.426 Mn.) as of 31^st March, 2023.

Please refer Annexure 4 to this report for the particulars required to be disclosed pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014 and Clause 14 of SEBI (Share Based Employee Benefits) Regulations, 2014.

Vigil Mechanism / Whistle Blower Policy:

To ensure that the activities of the Company and its employees are conducted in a fair and transparent manner by adoption of highest standards of professionalism, honesty, integrity and ethical behaviour, the Company has adopted a Vigil Mechanism/ Whistle Blower Policy. This policy is explained in Corporate Governance Report and is also hosted on the website of Company at www.praj.net.

Details of policy developed and implemented by the Company on its Corporate Social Responsibility initiatives:

Kindly refer Annexure 2 to this Report.

Particulars of loans, guarantees or investments made under section 186 of the Companies Act, 2013:

Loans, Guarantees and Investments covered under Section 186 of the Companies Act, 2013 form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No 5 & 26 to the Standalone Financial Statements).

Contracts and arrangements with Related Parties:

All contracts / arrangements / transactions entered by the Company during the Financial Year 2022-23 with related parties were in the ordinary course of business and on an arm's length basis. Such transactions form part of the notes to the financial statements provided in this Annual Report. (Please refer Note No 29 to the Standalone Financial Statements).

During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions which is available on the Company's website at www.praj.net

The information in respect of Related Party transactions is given below.FORM AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto:

1. Details of contracts or arrangements or transactions not at arm's length basis;

N.A. as there were no transactions during the year which were not at arm's length.

2. Details of material contracts or arrangement or transactions at arm's length basis;

During the financial year 2022-23, all the transactions entered into with related parties were at arm's length. Also, these transactions were not material.

Performance Evaluation:

Regulation 4 (2) (f) (ii) (9) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 mandates that the Board shall monitor and review the Board evaluation framework annually. Also, the Companies Act, 2013 states that a formal annual evaluation needs to be made by the Board of its own performance and that of its committees and individual Directors. In addition, Schedule IV to the Companies Act, 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The Board works with the Nomination & Remuneration Committee to lay down the evaluation criteria for the performance of Executive / Non-Executive / Independent Directors.

Independent Directors have three key roles -Governance, Control and Guidance. Some of the performance indicators based on which the Independent Directors are evaluated include:

a) Ability to contribute to and monitor the Company's Corporate Governance practices.

b) Ability to contribute by introducing international best practices to address top-management issues.

c) Active participation in medium to long-term strategic planning.

d) Commitment to the fulfillment of Directors' obligations and fiduciary responsibilities, which include participation in the

Board and the Committee Meetings.

In pursuance of the above, the Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors.

The evaluation of all the Directors, Committees and the Board as a whole was conducted based on the criteria and framework adopted by the Board. The Board approved the evaluation results as collated by the Nomination & Remuneration Committee, at its meeting held on 25^th May, 2023.

Explanation or comments on qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and the Secretarial Auditors in their reports:

There were no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors and Secretarial Auditors in their report.

Extract of Annual Return:

As per Companies (Amendment) Act, 2017, effective from 28^th August, 2020, Company is not required to disclose Extract of Annual Return (MGT-9) in the Directors' Report. Further, Company is required to place copy of Annual Return on its website and web-link of Annual Return is required to be given in the Directors' Report. Accordingly Annual Return (Form MGT-7) for the financial year 2022-23 is available on the website of the Company at www.praj.net.

Number of Board Meetings conducted during the year under review:

The Board met four times during the financial year (two meetings through video conferencing and two meetings through physical mode), the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013 and the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 as amended from time to time.

Directors' Responsibility Statement:

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement as follows for Financial Year 2022-23:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period.

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) the Directors have prepared the annual accounts on a going concern basis.

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Details in respect of frauds reported by auditors under sub-section (12) of Section 143 other than those which are reportable to the Central Government:

During the year, there was no such incidence of fraud reported by Statutory Auditors to the Management.

Deposits:

The Company has neither accepted nor renewed any deposits during the year under review and also did not have any outstanding deposits at the end of the year.

Remuneration ratio of the Directors / Key Managerial Personnel (KMP) / Employees:

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company and Directors is furnished hereunder:

The median remuneration of employees of the Company during the financial year was Rs. 1.234 Million. In the financial year 2022-23, there was an increase of around 5% in the median remuneration of employees.

There were 1063 permanent employees on the rolls of Company as on 31^st March, 2023.

Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e., 2022-23 was around 9% whereas the managerial remuneration for the same financial year increased by around 28%.

The key parameters for the variable component of remuneration paid to the Directors are considered by the Board of Directors based on the recommendations of Nomination and Remuneration Committee as per the Remuneration Policy for the Directors, Key Managerial Personnel and other Employees.

It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other Employees.

Particulars of employees:

The information required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, duly amended, in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Annual Report, excluding the aforesaid information, is being sent to all the members and others entitled to receive it. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

Details of significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations in future:

There were no such events that occurred during the Financial Year 2022-23.

Prevention of Sexual Harassment Policy:

The Company has in place Prevention of Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. All Women employees (permanent, contractual, temporary, trainees) are covered under this policy.

The Company has constituted Internal Committee as per the aforesaid Act.

Energy Conservation, Technology Absorption, Adaptation, Innovation:

As continued efforts towards Decarbonisation of transportation sector, Globally Low Carbon Ethanol production is need of an hour and PRAJ has developed technology solutions focusing on reduction of carbon intensity (CI) approaching towards net zero emission. Low CI ethanol also helps customers in improving profitability and addressing the market requirements for advanced biofuels like Sustainable Aviation Fuel etc.

Four out of the ten principles used for such assessment fall perfectly within our sphere of influence. These are given below:

• Continuous efforts for reduction of Carbon intensity for production of renewable Fuels, Chemicals.

• Use of technologies that minimize overall water and energy consumption.

• Value maximization by exploring technology for creation of value added coproducts (High Protein DDGS)

• Compliance to all applicable safety, health and environmental regulations.

Praj Technology and Engineering Group has their focus on the designing and engineering of plants and machinery and processes that minimize consumption of energy and water. The plants are designed to meet regulatory norms of environment, health and safety and thereby reduce customers' compliance risks.

Our Business Sustainability Systems monitor the critical norms demonstrating that every new generation plant beats the previous benchmarks of yield, consumption of water, energy and effluents.

Infusing Sustainability principles into design and engineering of plants and machinery and providing sustainability solutions to the customers is of prime significance. Number of technologies developed during Financial Year 2022-23 is as under,

• Energy Integration (El): Advanced energy integration technology using 'pressure booster technique' for 80% reduction of thermal energy requirement in Distillation, Dehydration and Evaporation section.

• Process Integration (PI): Thin stillage from starch based plants is rich source of energy but difficult in digestion due to high Nitrogen and Sulphate contents. PRAJ has developed technology for maximization of biogas production from thin stillage which can be integrated to reduce thermal energy requirement for plant.

• Process optimization (PO): Wet cake is a rich source of fiber. Conversion of Fiber to ethanol for 6-7% higher alcohol yield and high protein DDGS production.

Implementation of all above technologies (EI PI PO) will help customers to achieve 45% reduction in greenhouse gas emissions.

• Co-product maximization: For corn based plant, corn fractionation technology for production of Hi-protein DDGS and corn oil recovery techniques helps to maximize profitability. PRAJ is working with different technology approach to meet this customer need.

• RenGas Technology: Advanced and efficient bioprocess for production of bio-methane from industrial waste and agrireside namely press mud, rice straw, cotton stalk, Empty fruit bunch etc.

• enfinity Technology: Ultra low Carbon- Lignocellulose Ethanol technology developed in PRAJ R & D center is now under execution and optimization of steam, water, chemical and enzyme consumption with further improvement of GHG savings.

• Cellunity Technology: Ultra low carbon-Softwood to ethanol technology has been developed with unique wet and dry SO2 pretreatment and being offered in European market.

• Sustainable Aviation Fuel (SAF): For de-carbonization of aviation industry, from sugary feedstock SAF will be produced via ASTM approved Alcohol to Jet (ATJ) pathway.

Key Highlights for Financial Year 2022-23:

1. During this financial year, your company has successfully demonstrated IBA dehydration, Bio-methanated spent wash advanced treatment technology.

2. The first plant using enfinity technology for production of ultra low carbon from cellulosic feedstock has been mechanically completed and ready for commissioning.

3. Execution of FEL orders based on low CI energy integration technologies in USA.

4. Successful first commercial test flight on the SAF sample produced in PRAJ Matrix.

5. Lignocellulosic ethanol Alcohol is produced using enfinity technology.

6. Executing front end engineering design orders for low CI energy integration technology.

7. In the year gone by, the Company was granted One (1) Indian and Eight (8) International patents brining the total to Twenty Five (25) granted Indian patents and Seventy Three (73) granted International patents and over 300 patent applications till date.

Total number for patent is less due to :

• Expiry of 3 Indian Patents (after completion of 20 years)

• Abandonment of 3 International and 1 Indian Patents.

Foreign Exchange Earnings & Outgo:

Acknowledgements:

Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Bankers, Suppliers, Shareholders, Auditors, Employees and others who have reposed their confidence in the Company.

For and on behalf of the Board of Directors

Place: Pune Dr Pramod Chaudhari

Date: 25/05/2023 Executive Chairman