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Directors Report of Praj Industries Ltd.

Mar 31, 2016

The Directors are pleased to present the 30th Annual Report and the Audited Financial Statements for the year ended 31st March, 2016. Financial Results

In the year under review, your Company has recorded total income of Rs. 8362 Mn (previous year Rs. 8334 Mn). While the total income increased marginally, Profit before Tax increased by 15.40% to Rs. 787 Mn (previous year Rs. 682 Mn). Despite turbulent global economies, your Company''s performance has been stable. The performance summary is presented herewith:

(Rs. Mn.)

Particulars 2015-16 2014-15

Turnover 8240 8011

Other Income 122 323

Total Income 8362 8334

Total Expenses 7575 7652

PBT 787 682

PAT 667 685

( ) Balance in Profit & Loss account 4322 4081

Profit Available for Appropriations 4989 4766 Appropriations

Adjustment relating to Fixed Assets - 29 Dividend

- Interim 288 -

- Final (Proposed) - 287

- Dividend Tax (Interim Dividend) 59 -

- Dividend Tax (Final Dividend) - 59

- Transfer to General Reserve 67 69

Balance in Statement of Profit & Loss 4575 4322

State of Company''s Affairs

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

Summary of Consolidated Results

Total Income at Rs. 10304 Mn is lower by 1.48% over last year whereas PBT at Rs. 897 Mn is higher by 3.82% over last year.

(Rs. Mn)

Particulars 2015-16 2014-15

Turnover 10158 10119

Other income 146 340

Total income 10304 10459

Total expenses 9407 9595

PBT 897 864

PAT (after Minority Interest) 694 763

Dividend

The Board of Directors declared an Interim Dividend of Rs. 1.62 (81%) per equity share of Face Value of Rs. 2/- during the Financial Year 2015 - 2016. The dividend pay-out was Rs. 346. 959 Mn including dividend distribution tax. Your Directors are of the opinion that the said Interim Dividend be treated as Final Dividend for the Financial Year 2015 -2016.

Reserves

The Company proposes to carry Rs. 67 Mn to Reserves.

Credit Rating

a) CRISIL has reaffirmed "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 reaffirmed its rating of the Company''s long-term bank facilities to ''AA/Stable''.

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

Subsidiaries

During the year, your Company acquired balance 20% stake in its subsidiary Company viz. Praj HiPurity Systems Limited thus completing 100% acquisition and making Praj HiPurity Systems Limited a Wholly Owned Subsidiary of your Company.

Praj Engineering & Infra Ltd. (Formerly, Pacecon Engineering Projects Ltd.), India, Praj HiPurity Systems Ltd., India, Praj Americas Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) (Pty.) Ltd., South Africa, Praj Far East Philippines Ltd. Inc., The Philippines, Praj Sur America S.R.L., Argentina and Praj Industries (Namibia) Pty. Ltd., Namibia continue to be subsidiaries of your Company.

Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars for each of the Company''s subsidiaries is also enclosed. 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. http://www.prai.net/policies.html

Further, a statement containing salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 7 to the Board''s Report. The statement also provides the details of performance, financial position of each of the subsidiaries.

Corporate Governance

Pursuant to the provisions of Regulation 34(3) and 53(f), read with Schedule V of 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 Report (Annexure 10) are annexed to this report.

Directors

Mr. Daljit Mirchandani (DIN : 00022951) was appointed as Additional Director in the Board Meeting held on 28th May, 2015. Subsequently, he was appointed as Non Executive - Non Independent Director, liable to retire by rotation in the Annual General Meeting held on 6th August, 2015.

Mr. Gajanan Nabar, Director (DIN: 00714569) retired by rotation as Director of the Company on 6th August, 2015 and being willing and eligible, was re-appointed as Director of the Company.

Ms. Parimal Chaudhari, Director (DIN: 00724911) will retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered herself for reappointment.

The members in the Annual General Meeting held on 6th August, 2015, granted their approval for extension of the term of contract of Mr. Pramod Chaudhari to act as Executive Chairman of the Company for a further period of two years with effect from 1st August, 2015 on the same terms and conditions including remuneration.

The re-appointment of Mr. Gajanan Nabar as CEO & Managing Director ( DIN: 00714569) was approved by the members in the 29th Annual General Meeting held on 6th August, 2015, for a period of three years with effect from 1st August, 2014.

Composition of Key Managerial Personnel (KMP)

The Company has the following KMP;

Name of the KMP Designation Date of Appointment Date of Resignation

Mr. Pramod Chaudhari Executive Chairman 08.11.1985 N.A.

Mr. Gajanan Nabar CEO & MD 15.11.2010 N.A.

Mr. Dattatraya Nimbolkar CFO & Company Secretary 22.07.2011 N.A.

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 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) Internal Auditors

The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

b) Statutory Auditors

The members, in the 29th Annual General Meeting held 6th August, 2015, appointed M/s P.G. Bhagwat, Chartered Accountants, Pune as Statutory Auditors of the Company for a period of five years with effect from the conclusion of 29th Annual General Meeting held on 6th August 2015.

Pursuant to the provisions of Section 139 of the Companies Act, 2013 read with Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 the appointment of Statutory Auditors for the Financial Year 2016-17 needs to be ratified by the members.

The letter received from M/s P. G. Bhagwat also states that their appointment, if made, is as per eligibility required to be confirmed under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014.

Your Directors seek ratification from the members for the appointment of M/s P.G. Bhagwat, Chartered Accountants, Pune, as the Statutory Auditors of your Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the 31st Annual General Meeting of the Company.

c) Cost Auditors

Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the Financial Year 2016-17 at the remuneration as set out in item No. 4 of the explanatory statement which is subject to the ratification of members in the ensuing Annual General Meeting.

d) Secretarial Auditors

M/s KANJ & Associates, Pune, were appointed to conduct the secretarial audit of the Company for the Financial Year 2015-16, as required under Section 204 of the Companies Act, 2013 read with rules framed there under. The Secretarial Audit Report for Financial Year 2015-16 forms part of the Annual Report as Annexure 6.

The Board has appointed KANJ & Associates, Pune, as Secretarial Auditors of the Company for the Financial Year 2016-17.

Material changes and commitments, if any, 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

No material changes and commitments affecting the financial position of the Company occurred from the end of the Financial Year 2015-16 till the date of this report. Further there was no change in the nature of business of the Company.

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, the Board adopted Risk Management Policy and initiated necessary steps for framing, implementing and monitoring the risk management plan for the Company.

The main objective of this 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.

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, Competition, Business, Technology Obsolescence, Investments, Retention of talent, Finance, Politics and Fidelity.

As a matter of policy, these risks are assessed and appropriate steps are taken to mitigate the same.

The Risk Management Policy is also hosted on the Company''s website i.e. http://www.praj.net/policies.html

During the year, the Board of Directors has merged Risk Management Committee (which was formed pursuant to the provisions of erstwhile Clause 49 of the Listing Agreement) into Audit Committee and the role and responsibilities of Risk Management Committee are assigned to the Audit Committee.

However, pursuant to Regulation 21(5) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, (which came into effect from 1st December, 2015) constitution of Risk Management Committee is not applicable to your Company.

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.

Directors and KMP

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

The said policy is available on Company''s website i.e. http://www.praj.net/policies.html and is also attached as Annexure 8 to this report. ESOP

During the year, your Company allotted 5,07,330 shares on exercise of options under the Employee Stock Option Plan 2005 Grant IV & Employee Stock Option Plan 2011 Grant I. Consequent to the above, the Issued, Subscribed and Paid - up Share Capital of your Company increased from 177,465,079 shares (Rs. 354.930 Mn) as on 31st March, 2015 to 177,972,409 shares (Rs. 355.945 Mn) as on 31st March, 2016.

During the year, your Company has given following grants under Employees Stock Option Plan 2011;

Sr. No. No. of Options Exercise Price/Option

Grant II 1,20,000 114.32

Grant III 1,00,000 85.32

Grant IV 1,10,000 81.70

Grant V 60,000 85.37

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

In order 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 posted on the website of Company at http://www.praj. net/policies.html

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.11 to the Standalone Financial Statements).

Contracts and arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the Financial Year 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 had 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 the link: http://www.praj.net/policies.html

The summary 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 sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms 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 2015-16, all the transactions entered into with related parties were at arm''s length. However, 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. 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 long-term strategic planning.

d) Commitment to the fulfillment of a Directors'' obligations and fiduciary responsibilities; these include participation in the Board and the Committee Meetings.

In pursuance of 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.

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 made by the Statutory Auditors or Secretarial Auditors in their report. Extract of Annual Return

The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 in prescribed Form MGT-9 is as per Annexure 5 to this report.

Number of Board Meetings conducted during the year under review

The Board met six times during the Financial Year, 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.

Directors'' Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:-

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

(b) the Directors had 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 had 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 had prepared the annual accounts on a going concern basis;

(e) the Directors had 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 had 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 under consideration, there were no such instances.

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 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished hereunder:

Sr. Name Designation Remuneration No. paid Financial Year 2015-16 Rs. Mn

1 Mr. Pramod Chaudhari Executive Chairman 62.151

2 Mr. Gajanan Nabar CEO & MD 35.337

3 Mr. Berjis Desai Non-Executive 1.350 Independent Director

4 Mr. Kishor Chaukar Non-Executive 0.700 Independent Director

5 Ms. Parimal Chaudhari Non-Executive 1.170 Director

6. Mr Prakash Kulkarni Non-Executive 1.600 Independent Director

7 Mr. Rajiv Maliwal Non-Executive 0.600 Independent Director

8 Mr. Sivaramakrishnan Iyer Non-Executive 1.480 Independent Director

9 Mr. Daljit Mirchandani Non Executive 9.116 Non-Independent Director

10 Mr. Dattatraya Nimbolkar CFO & Company 6.793 Secretary

Sr. No. Name % increase in Ratio of the Comparison of the remuneration remuneration Remuneration of over Financial of each Director the KMP against Year 2014-15 to median the performance remuneration of of the Company employees for Financial Year 2015-16

1 Mr.Pramod Chaudhari -2.5* 78.5 Profit before Tax increased by 15.4%

2 Mr.Gajanan Nabar 1.7** 33.5** Profit before Tax increased by 15.4%

3 Mr.Berjis Desai 7.1 1.7 N.A.

4 Mr.Kishor Chaukar 22.8 0.9 N.A.

5 Ms.Parimal Chaudhari 8.3 1.5 N.A.

6 Mr Prakash Kulkarni 6.7 2.0 N.A.

7 Mr.Rajiv Maliwal 5.3 0.8 N.A.

8 Mr.Sivaramakrishnan Iyer 12.1 1.9 N.A.

9 Mr.Daljit Mirchandani *** 13.6 N.A.

10 Mr.Dattatraya Nimbolkar 7.7 N.A. Profit before Tax increased by 15.4%

* Based on Normalized remuneration for Financial Year 2014-15.

** Based on Normalized remuneration for Financial Year 2015-16.

*** Mr. Daljit Mirchandani was appointed as Director w.e.f. 28.05.2015.

The median remuneration of employees of the Company during the Financial Year was Rs. 0.792 Mn. In the Financial Year, there was an increase of 9.4% in the median remuneration of employees.

There were 978 permanent employees on the rolls of Company as on 31st March, 2016.

Relationship between average increase in remuneration and Company performance:

The Profit before Tax for the Financial Year ended 31st March, 2016 increased by 15.4% whereas the increase in median remuneration was 9.4%. The average increase in median remuneration was in line with the industry standards.

Comparison of Remuneration of the Key Managerial Personnel(s) against the performance of the Company:

The total normalized remuneration of Key Managerial Personnel reduced by 0.7% from Rs. 96.138 Mn in 2014-15 to Rs. 95.481 Mn in 2015-16 whereas the Profit Before Tax increased by 15.4 % to Rs. 786.769 Mn in 2015-16 (Rs.681.592 Mn in 2014-15).

Variations in the market capitalisation of the Company:

The market capitalisation as on 31st March, 2016 was Rs.15,875.139 Mn (Rs.11,073.821Mn as on 31st March, 2015)

Price Earnings ratio of the Company was 22.54 as on 31st March, 2016 and was 15.29 as at 31st March, 2015.

Percent increase over/ decrease in the market quotations of the shares of the Company as compared to the rate at which the Company came out with the last public offer in the year-

The Company had come out with initial public offer (IPO) in January, 1994. An amount of Rs.4/- invested in one equity share of the said IPO would be worth Rs.89.20 as on 31st March, 2016 indicating a Compounded Annual Growth Rate of 15%. This is excluding the dividend accrued thereon.

Average percentage increase made in the salaries of employees other than the managerial personnel in the last Financial Year i.e. 2015- 16 was around 10 % whereas the managerial remuneration for the same Financial Year reduced by 0.7%.

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 Directors, Key Managerial Personnel and other Employees.

The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year -

Not Applicable;

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 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given in Annexure 9 to this Report.

"Group" for SEBI Takeover Regulations:

For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, persons constituting ''Group'' as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are - Mr. Pramod Chaudhari, Ms. Parimal Chaudhari, Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle Communication, Fusiontech Ventures Private Limited, Plutus Properties LLP and Parimal and Pramod Chaudhari Family Discretionary Trust.

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

No such events occurred during the Financial Year 2015-16.

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 employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Energy Conservation, Technology Absorption, Adaptation, Innovation:

While Praj''s operations are not very energy intensive, Praj has been making efforts to reduce its energy and water foot print by implementing solar power system and water recycle and reuse system in its various facilities.

Sustainability remains at the core of all solutions offered by your Company. During the year, Your Company has -

1. filed 33 new patents

2. commissioned first plant based on novel Ecosmart technology in Europe

3. introduced new sustainable technologies which contributed 10% to the order intake

There is progress on the 2nd Generation ethanol technology and your Company is making headway in installing a 12 MT 2nd Generation Integrated Bolt-On "Smart Bio Refinery" Demo Plant in Maharashtra. This will be a multi-feed, multi-product facility complete with integrated effluent treatment system.

Foreign Exchange Earnings & Outgo

(Rs.Mn.)

Particulars 31/3/2016 31/3/2015

Earnings 4184 3364

Outgo 967 826

Net Foreign Exchange Earnings 3217 2538

Your Company has retained its status as a net forex earner consecutively for past 19 years.

Acknowledgements

Your Directors wish to place on record their appreciation towards all associates including Customers, Collaborators, Government Agencies, Financial Institutions, 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: Mumbai Pramod Chaudhari

Date: 20th May, 2016 Executive Chairman


Mar 31, 2015

To The Members of Praj Industries Limited,

The Directors are pleased to present the 29th Annual Report and the Audited Statements of Account for the year ended 31st March, 2015.

Financial Results

In the year under review, your Company has recorded total income of Rs. 8334 Mn. (previous year Rs. 8048 Mn). While the total income increased by 3.6%, Profit before Tax decreased by 13.0% to Rs. 682 Mn. (previous year Rs. 784 Mn). Despite turbulent global economy, your Company''s performance has been stable. The performance summary is presented herewith:

(Rs Mn.) Particulars 2014-15 2013-14

Turnover 8011 7827

Other Income 323 221

Total Income 8334 8048

Total Expenses 7652 7264

PBT 682 784

PAT 685 624

( ) Balance in Profit & Loss account 4081 3980

Profit Available for Appropriations 4766 4604

Appropriations

Adjustment relating to Fixed Assets 29 -

Dividend

- Interim - 106

- Final (Proposed) 287 287

- Dividend Tax (interim Dividend) - 18

- Dividend Tax (final Dividend) 59 49

- Transfer to General Reserve 69 63

Balance in Statement of Profit & Loss 4322 4081

State of Company''s Affairs

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

Summary of Consolidated Results

Total Income at Rs. 10459 Mn is higher by 3.7% over last year whereas PBT at Rs. 864 is higher by 12.4% over last year.

(Rs Mn.) Particulars 2014-15 2013-14

Turnover 10119 9858

Other income 340 230

Total income 10459 10088

Total expenses 9595 9319

PBT 864 769

PAT (after Minority Interest) 763 546

Dividend

The Board of Directors of your Company has recommended a final dividend of Rs. 1.62 (81%) per equity share of Face Value of Rs. 2/- for the Financial Year ended 31st March, 2015. The dividend is payable subject to shareholders'' approval at the ensuing AGM. The final dividend pay-out will be Rs. 346.020 Mn. (Dividend: Rs. 287.493 Million and Dividend Distribution Tax: Rs. 58.527 Million).

Reserves

The Company proposes to carry Rs. 69.000 Million to Reserves.

Credit Rating

a) CRISIL has reaffirmed "A1 " rating to 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 reaffirmed its rating of the Company''s long-term bank facilities to ''AA/Stable''. The "AA" rating signifies high safety with regard to timely payment of long-term financial obligations.

Subsidiaries

During the fiscal, your Company has divested from BioCnergy Europa B. V., The Netherlands and the subsidiary was closed. Hence it ceased to be the subsidiary of the Company.

Apart from the above, Pacecon Engineering Projects Ltd., India, Praj HiPurity Systems Ltd. (formerly Neela Systems Ltd.) India, Praj Americas, Inc., U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) (Pty.) Ltd, South Africa, Praj Far East Philippines Ltd. Inc., The Philippines, Praj Sur America SRL, Argentina and Praj Industries (Namibia) Pty. Ltd., Namibia continue to be subsidiaries of your Company.

Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars for each of the Company''s subsidiaries is also enclosed. 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. http://www.prai.net/policies.html

Further, a statement containing salient features of the financial statements of our subsidiaries in the prescribed format AOC-1 is appended as Annexure 7 to the Board''s Report. The statement also provides the details of performance, financial position of each of the subsidiaries.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report (Annexure 1) and Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3) are annexed to this report.

Directors

Mr. Utpal Sheth (DIN : 00081012) retired by rotation as Director of the Company on 28th July, 2014 and pursuant to his unwillingness to act as a Director, ceased to be the Director of the Company with effect from 28th July, 2014.

Mr. Gajanan Nabar, Director (DIN: 00714569) will retire by rotation at the ensuing Annual General Meeting and, being eligible, has offered himself for reappointment.

Pursuant to the provisions of the Section 161(1) of the Companies Act, 2013 read with the Articles of Association of the company, Mr. Daljit Mirchandani (DIN: 00022951) is appointed as Additional Director with effect from 28th May, 2015 and he shall hold office only up to the date of this Annual General Meeting and being eligible, has offered himself for re-appointment as Director liable to retire by rotation.

Mr. Gajanan Nabar was reappointed as CEO & Managing Director in the Board meeting held on 28.07.2014, subject to the approval of members in the ensuing Annual General Meeting, for a period of three years with effect from 01.08.2014.

The contract with Mr. Pramod Chaudhari (DIN: 00196415) to act as the Executive Chairman of the Company will expire on 31st July, 2015. The Board, in its meeting held on 28th May, 2015, has, subject to the approval of the members in the ensuing Annual General Meeting, extended the term of his contract to act as Executive Chairman of the Company for a further period of two years with effect from 1st August, 2015 on the same terms and conditions including remuneration.

Composition of Key Managerial Personnel (KMP)

The Company has the following KMP;

Name of Designation Date of Date of the KMP Appointment Resignation Mr.Pramod Chaudhari Executive Chairman 08.11.1985 N.A. Mr.Gajanan Nabar CEO & MD 15.11.2010 N.A.

Mr.Dattatraya Nimbolkar CFO & Company 22.07.2011 N.A. Secretary

Mr. Dattatraya Nimbolkar was appointed as Chief Financial Officer in addition to his holding of office as the Company Secretary in the Board meeting held on 26th May, 2014.

Composition of Audit and 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 declaration to the Board that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 read with rules framed thereunder.

Auditors

a) Internal Auditors

The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

b) Statutory Auditors

Your Directors would like to inform you that the Company has received a letter dated 10th June, 2015 from the Statutory Auditors B. K. Khare & Co., Chartered Accountants, Mumbai (Firm Regn. No. 105102W), conveying their unwillingness to continue as the Statutory Auditors of the Company. Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, any casual vacancy caused in the office of the Statutory Auditors of the Company shall be filled by the Board of Directors within thirty days of such resignation, but if such casual vacancy is due to resignation of the Statutory Auditors, such appointment shall also be approved by the Company at a General Meeting convened within three months of the recommendation of the Board and the Auditor shall hold the office till the conclusion of the next Annual General Meeting. Considering the casual vacancy in the office of Statutory Auditors, the Company has vide its letter dated 13th June, 2015 approached M/s. P G. Bhagwat, Chartered Accountants, Pune (Firm Regn. No. 101118W); to act as the Statutory Auditors of the Company. M/s. P G. Bhagwat, Chartered Accountants, Pune, have conveyed their willingness to act as Statutory Auditors of the Company vide their letter dated 13th June, 2015 subject to the approval of shareholders in the ensuing Annual General Meeting. The Board of Directors has, subject to the approval of the shareholders in the ensuing Annual General meeting, appointed M/s. P G. Bhagwat, Chartered Accountants, Pune as Statutory Auditors of the Company for a period of five years with effect from Financial Year 2015-16.

In view of the above, the Statutory Auditors of your Company, M/s. P G. Bhagwat, Chartered Accountants, Pune, shall hold office from the date of their appointment by the Board of Directors till the conclusion of this Annual General Meeting and shall, subject to your approval, hold the office of Statutory Auditors from the conclusion of this Annual General Meeting until the conclusion of the Sixth Annual General Meeting of the Company to be held after this meeting.

The letter received from M/s. P G. Bhagwat, also states that their appointment, if made, is as per eligibility required to be confirmed under Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules 2014.

Your Directors recommend the appointment of M/s. P G. Bhagwat, Chartered Accountants, Pune, as the Statutory Auditors of your Company at the ensuing Annual General Meeting

Your Directors also place on record sincere thanks to B. K. Khare & Co. for their valuable contribution.

c) Cost Auditors

The Cost Audit Report under The Companies (Cost Audit Report) Rules, 2011 for the year 2013-14 was duly filed with the Ministry of Corporate Affairs on 18th September, 2014.

Your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company for the year 2015-16 at the remuneration as set out in item No 8 of the explanatory statement which is subject to the approval of members in the ensuing Annual General Meeting.

d) Secretarial Auditors

Kanj & Associates, Pune, Practising Company Secretaries, were appointed to conduct the secretarial audit of the Company for the financial year 2014-15, as required under Section 204 of the Companies Act, 2013 read with rules framed thereunder. The Secretarial Audit Report for FY 2014-15 forms part of the Annual Report as Annexure 6.

The Board has appointed Kanj & Associates, Pune, Practising Company Secretaries, as secretarial auditors of the Company for the financial year 2015-16.

Material changes and commitments, if any 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

No material changes and commitments affecting the financial position of the Company occurred from the end of the financial year 2014-15 till the date of this report. Further there was no change in the nature of business of the Company.

Statement concerning development and implementation of risk management policy of the Company

In accordance with Clause 49 of the listing agreement, the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company by way of Risk Management Policy.

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

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, Competition, Business, Technology obsolescence, Investments, retention of talent, finance, politics and fidelity.

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

The Risk Management Policy is also hosted on the Company''s website i.e. http://www.praj.net/policies.html During the year, your Directors have constituted a Risk Management Committee which;

i. Identifies, assesses, manages and monitors risk.

ii. allows investors and other stakeholders to be informed of material changes to the Company''s risk profile.

iii. recommends to the Board and then formally announces clear standards of ethical behaviour required of directors, employees and contractors and encourages observance of those standards.

The Company has a system of monitoring, reporting and mitigating the major risks and uncertainties that can impact its ability to achieve its strategic business plans.

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.

Policy on Director''s appointment, remuneration including criteria for determining qualifications, positive attributes, independence of a Director and other matters

The Company''s Remuneration Policy for Directors, Key Managerial Personnel and other employees is available on Company''s website i.e. http://www.prai.net/policies.html and is also attached as Annexure 8 to this report.

Criteria for evaluation of KMPs

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

ESOP

Please refer Annexure 4 to this report for the particulars pursuant to Rule 12 (2) of the Companies (Share Capital and Debentures) Rules, 2014.

Familiarization programme for Independent Directors:

The Board of Directors of the Company has adopted familiarization program for Independent Directors. The details of such program are posted on the Company''s website i.e. http://www.prai.net/policies.html. This Program aims to provide insights into the Company to enable the Independent Directors to understand its business in depth and contribute significantly to the Company.

Vigil Mechanism / Whistle Blower Policy

In order 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 also posted on the website of company i.e. http://www.praj.net/policies.html.

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.

Contracts and arrangements with related parties

All contracts/ arrangements/ transactions entered by the Company during the financial year 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.

During the year, the Company had 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.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company''s website i.e. http://www.praj.net/policies.html.

The summary 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 sub-section (1) of Section 188 of the Companies Act, 2013 including certain arms 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 arrangements or transactions at arm''s length basis;

During the financial year 2014-15, all the transactions entered into with related parties were at Arm''s Length. However, these transactions were not material.

Performance evaluation

Clause 49 of the Listing Agreement mandates that the Board shall monitor and review the Board evaluation framework. 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. 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 our corporate governance practices.

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

c) Active participation in long-term strategic planning.

d) Commitment to the fulfillment of a director''s obligations and fiduciary responsibilities; these include participation in Board and Committee meetings.

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.

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 made by the Statutory Auditors or Secretarial Auditors in their report.

Extract of annual return

The extract of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and administration) Rules, 2014 in prescribed Form MGT-9 is as per Annexure 5 to this report.

Number of Board meetings conducted during the year under review

The Board met Six times during the financial year, 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 Listing Agreement.

Directors'' Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013 the Board hereby submits its responsibility Statement:

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

(b) the directors had selected such accounting policies and applied them consistently and made judgements 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 and loss of the Company for that period;

(c) the directors had 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 had prepared the annual accounts on a going concern basis; and

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

(f) the directors had 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 under consideration, there were no such instances.

Deposits

The Company has neither accepted nor renewed any deposits during the year under review.

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 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Director is furnished hereunder

Name Designation Remuneration paid FY 2014-15 Rs Mn.

Mr.Pramod Executive 50.132 Chairman Chaudhari

Mr.Gajanan Nabar CEO & MD 26.091

Mr.Berjis Desai Non- 1.260 Executive Independent Director

Mr.Kishor Chaukar Non- 0.570 Executive Independent Director

Ms.Parimal Chaudhari Non- 1.080 Executive Director

Mr.Prakash Kulkarni Non- 1.500 Executive Independent Director

Mr.Rajiv Maliwal Non- 0.570 Executive Independent Director

Mr.Sivaramakrishnan S.Iyer Non- 1.320 Executive Independent Director

Mr.Dattatraya Nimbolkar CFO & 6.307 Company Secretary

Name %increase/ Ratio of the Comparision (decrease)in remuneration of the remuneration of each remuneration over Director of the KMP Fy 2013-14 to median against the remuneration performance of of employees the company for Fy 2014-15

Mr.Pramod (20.2) 69.2 Profit before Chairman Tax reduced by 13.0%

Mr.Gajanan (8.4) 36.0 Profit before Nabar Tax reduced by 13.0%

Mr.Berjis (6.7) 1.7 NA Desai r.Kishor (5.0) 0.8 NA Chaukar Ms.Parimal (7.7) 1.5 NA Chaudhari Mr.Prakash (2.0) 2.1 NA Kulkarni Mr.Rajiv (5.0) 0.8 NA Maliwal Mr.Sivaramakr- (2.2) 1.8 NA ishnan S.Iyer Mr.Dattatraya 2.0 NA Profit before Nimbolkar Tax reduced by 13.0%

Note - 1: Details not given for Mr. Utpal Sheth as he was a Director only for part of the financial year 2014-15

i.e. upto 28th July, 2014.

Note - 2: Details not given for Mr. Daljit Mirchandani as he was not a Director during the financial year 2014-15.

The median remuneration of employees of the Company during the financial year was Rs. 0 .724 Million. In the financial year, there was an increase of 9.7% in the median remuneration of employees;

There were 979 permanent employees on the rolls of Company as on 31st March, 2015.

Relationship between average increase in remuneration and Company performance:-

The Profit before Tax for the financial year ended 31st March, 2015 reduced by 13.0% whereas the increase in median remuneration was 9.7%. The average increase in median remuneration was in line with the industry standards.

Comparison of Remuneration of the Key Managerial Personnel (s) against the performance of the Company

The total remuneration of Key Managerial Personnel decreased by 15.4% from Rs. 97.508 Million in 2013-14 to Rs. 82.530 Million in 2014-15 whereas the Profit before Tax decreased by 13.0% to Rs. 681.592 Million in 2014-15 (Rs. 784.400 Million in 2013-14).

Variations in the market capitalisation of the Company

The market capitalisation as on 31st March, 2015 was Rs. 11,073.821 Million (Rs. 9,316.917 Million as on 31st March, 2014). Price Earnings ratio of the Company was 15.29 as at 31st March, 2015 and was 14.91 as at 31st March, 2014.

Percent increase over/ decrease in the market quotations of the shares of the Company as compared to the rate at which the Company came out with the last public offer in the year- The Company had come out with initial public offer (IPO) in January, 1994. An amount of Rs. 4 invested in one equity share of the said IPO would be worth Rs. 62.4 as on 31st March, 2015 indicating a Compounded Annual Growth Rate of 14.0%. This is excluding the dividend accrued thereon.

Average percentage increase made in the salaries of employees other than the managerial personnel in the last financial year i.e. 2014-15 was around 8.0% whereas the Managerial Remuneration for the same financial year came down by 16.5%.

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 Directors, Key Managerial Personnel and other Employees.

The ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year - Not Applicable.

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 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is given in Annexure 9 to this report.

Employee Stock Option Plan

The information to be disclosed as per SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed to this Report (Annexure 4).

"Group" for SEBI Takeover Regulations

For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, persons constituting ''Group'' as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are - Mr. Pramod Chaudhari, Ms. Parimal Chaudhari, Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle Communication, Fusiontech Ventures Private Limited, Plutus Properties LLP and Parimal and Pramod Chaudhari Family Discretionary Trust.

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

No such events occurred during the financial year 2014-15.

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 Workplace (Prevention, Prohibition & Redressal) Act; 2013. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Your Directors state that during the year under review, there were no cases filed pursuant to The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Energy Conservation, Technology Absorption, Adaptation, Innovation

Sustainability remains at the core in everything your Company undertakes.

During the year, your Company has -

1. been granted one international patent. With this, total number of granted patents stands at 16.

2. in association with Praj HiPurity Systems Limited and Praj Matrix - The Innovation Center, launched innovative Biowiz bio-reactor for the pharmaceutical industry.

3. developed and commercialized Ecophotox (Advanced Photochemical Oxidation) application for distillery condensate treatment & recycle.

4. introduced Customized Research Services & Solutions (CRSS).

The efforts on 2G ethanol technology are also on right path and Your Company is awaiting the final approval on the Government assistance. The demonstration project has received environmental clearance.

For and on behalf of the Board of Directors Place: Pune Pramod Chaudhari Date: 13th June, 2015 Executive Chairman


Mar 31, 2013

To The Members of Praj Industries Limited,

The Directors are pleased to present the 27th Annual Report and the Audited Statements of Account for the year ended 31st March, 2013.

Financial Results

In the year under review, your Company has recorded a total income of Rs. 7556 Mn (previous year Rs. 9237 Mn). While the total income decreased by 18%, Proft before Tax decreased by 28% to Rs. 807 Mn (previous year Rs. 1119 Mn). Considering very turbulent economic environment, your Company''s performance has been stable. The performance summary is presented herewith:

(Rs. in Mn) 2012-13 2011-12

Turnover 7264 8805

Other Income 292 432

Total Income 7556 9237

Total Expenses 6749 8118

PBT 807 1119

PAT 662 658

( ) Balance in Proft and Loss account 3720 3462

Proft Available for Appropriations 4382 4120 Appropriations

- Dividend

Final (Proposed) 287 287

- Dividend Tax 49 47

- Transfer to General Reserve 66 66

Balance in Statement of Proft and Loss 3980 3720

Praj and Local Execution Companies:

The execution related responsibility is borne by the execution arm of your Company also known as Local Execution Companies (LEC). Each LEC is a subsidiary/step down subsidiary of your Company. These comprise of Praj Industries (Sierra Leone) Limited, Praj Industries (Tanzania) Limited, Pacecon Engineering Projects Limited, Praj Far East Philippines Limited Inc. and Praj Far East Co. Limited. Considering the combined results of Praj and LECs, the total income for FY 2012-13 receded by 10% while proft before tax has reduced by 26%, as summarized below:

(Rs. in Mn)

2012-13 2011-12

Operating Income 8282 9118

Other Income 267 411

Total Income 8549 9529

Total Expenses 7714 8394

PBT 835 1135

PAT 678 669

Dividend

The Board of Directors of your Company has recommended a dividend of Rs. 1.62 per equity share (81%) of face value of Rs. 2/- each for the Financial Year ended 31st March, 2013. The dividend is payable subject to shareholders'' approval at the ensuing AGM. The dividend payout will be ? 336 Mn including dividend distribution tax.

Credit Rating

a) CRISIL has reaffrmed “P1 ” rating to Company''s short-term banking facilities which signifes that the degree of safety regarding timely payment of instruments is very strong.

b) CRISIL has also reaffrmed its rating of the Company''s long-term bank facilities to ‘AA/Stable''. The “AA” rating signifes high safety with regard to timely payment of long-term fnancial obligations.

Subsidiaries

Your Company has formed a subsidiary by name Praj Far East Philippines Ltd. Inc., in Philippines on 17th August, 2012.

Your Company has divested its stake in Praj Jaragua Bioenergia S.A., Brazil, on 22nd October, 2012. The Company had already provided for the divestment in earlier years.

Apart from the above, Pacecon Engineering Projects Ltd., BioCnergy Europa B. V., Netherlands, Praj Americas Inc., Texas, Houston, U.S.A., Praj Far East Co. Ltd., Thailand, Praj Industries (Africa) Pty. Ltd., South Africa and Neela Systems Ltd. continue to be the subsidiaries of your Company.

The Central Government has granted exemption under Section 212(8) of the Companies Act, 1956, from attaching to the Balance sheet of the Company, the Accounts and the other documents of its Subsidiary Companies. In view of this, Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for each of the Company''s subsidiaries is also enclosed. Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any investor of the Company or its Subsidiaries on making a written request to the Company Secretary at the Registered Offce 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 Offce.

Proceedings under Section 132 of the Income Tax Act, 1961

In April 2012 the Income Tax Department initiated proceedings against the Company under Section 132 of the Income Tax Act, 1961. Currently, the proceedings are pending before the Settlement Commission. As per Company''s estimate, adequate provision for liability arising out of this has already been made in the books of account.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report (Annexure 1), Sustainability Report (Annexure 2) and Report on Corporate Governance and Compliance Certifcate on Corporate Governance (Annexure 3) are annexed to this report.

Directors

Mr. Kishor Chaukar and Mr. Prakash Kulkarni, Directors, retire by rotation from the Board and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

Auditors

a) Internal Auditors

The Internal Auditors, M/s. Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically and submitted their reports to Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

b) Statutory Auditors

The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, (Registration Number 105102W) hold offce until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.

c) Cost Auditors

The Compliance Report under The Companies (Cost Accounting Records) Rules, 2011 for the year 2011-12 was duly fled with the Ministry of Corporate Affairs on 28th December, 2012.

The Central Government had approved appointment of M/s. Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2012-13. The Cost Audit Report for the year 2012-13 is due for fling with the Ministry of Corporate Affairs on 27th September, 2013.

Your Company has reappointed them as Cost Auditors of the Company for the year 2013-14.

Directors'' Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

- The accounting policies selected have been applied consistently and judgements and estimates made 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 fnancial year 2012-13 and of the proft of the Company for that period;

- Proper and suffcient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The annual accounts have been prepared on a going concern basis. Employee Stock Option Plan

The information to be disclosed as per SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed to this Report (Annexure 4).

Additional Statutory Information

Particulars of Employees:

The statement of particulars required pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011, forms a part of this Report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Offce. The statement is also available for inspection at the Registered Offce, during working hours up to the date of the Annual General meeting.

“Group” for SEBI Takeover Regulations:

For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, persons constituting ‘Group'' as defned in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are - Mr. Pramod Chaudhari, Mrs. Parimal Chaudhari, Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle Communication, Fusiontech Ventures Private Limited, P-CUBE Trusteeship Services Private Limited and Plutus Properties LLP.

Energy Conservation, Technology Absorption, Adaptation, Innovation:

Your Company''s operations are not energy or water intensive. However, as part of its sustainability focus, it provides solutions which focus on reducing energy, water and carbon footprints.

Your Company has intensifed its innovation program. It has enhanced its focus on application of patents to monetize technology development and discovery. During the year, the Company has applied for 9 patents.

The discovery based innovation is focused on development of new products and processes. The Company has chalked out a program to develop different biochemicals and human health and wellness products. These are high value products which can be produced at the factory at Jejuri, which was commissioned during the fscal.

Your Company has:

- Successfully commercialized the ECOSMART technology which was developed in the previous fscal.

- Successfully commissioned a ZLD system for Textile Wastewater Management at a Dyeing Unit in Southern India.

- Installed a ‘low-water'', ‘low-steam'' distillation technology that has ensured that intake of water is reduced signifcantly (see sustainability report)

- Commenced commercial production of livestock health and nutrition product, which was developed at Praj Matrix - the innovation center.

Net Foreign Exchange Earnings 2669 2080

Your Company has retained its status as a net forex earner for past many years.

Acknowledgements

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

For and on behalf of the Board of Directors

Place: Pune Pramod Chaudhari

Date: 13th May, 2013 Executive Chairman


Mar 31, 2012

To The Members of Praj Industries Limited,

The Directors are pleased to present the 26th Annual Report and the Audited Statements of Accounts for the year ended 31st March, 2012.

Financial Results

In the year under review, your Company has achieved a significant growth in total income of Rs 9237 Mn (previous year Rs 5777 Mn). While the total income increased by 60%, Profit before Tax increased by 87% to Rs1119 Mn (previous year Rs 599 Mn). Highlights of performance are indicated below:

(Rs in Mn)

2011-12 2010-11

Turnover 8805 5529

Other Income 432 248

Total Income 9237 5777

Total Expenses 8118 5178

PBT 1119 599

PAT 658 535

( ) Balance in Profit & Loss Account 3462 3252

Prof it Available for Appropriations 4120 3787 Appropriations

- Dividend

Interim - -

Final (Proposed) 287 233

- Dividend Tax 47 38

- Transfer to General Reserve 66 54 Balance in Profit & Loss Account 3720 3462

Dividend

The Board of Directors of your Company have recommended a dividend of Rs 1.62 per equity share (81%) of face value of Rs 21- each for the Financial Year ended 31st March, 2012. The dividend is payable subject to shareholders' approval at the ensuing AGM. The dividend payout will be Rs 334 Mn including dividend distribution tax.

Credit Rating

a) CRISIL has reaffirmed "P1 " rating to 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 reaffirmed its rating of the Company's long-term bank facilities to 'AA/Stable'. The 'AA' rating signifies high safety with regard to timely payment of long-term financial obligations. Buy-back of Equity Shares

Your Company, pursuant to the approval of the Board of Directors under Section 77A of the Companies Act, 1956, decided to buy-back fully paid-up equity shares of the Company at a price not exceeding Rs90/- per equity share from the open market through the Stock Exchanges for an aggregate amount not exceeding Rs558.639 Mn being 10% of the aggregate of the Company's total paid-up equity share capital and free reserves as on 31st March, 2011.

The Company has closed the Buy-back on 24th April, 2012, after buying back 7,313,644 equity shares for a total consideration of Rs 558.638 Mn (exclusive of Brokerage, STT and other charges) utilizing the Securities Premium account. All the equity shares bought back have been extinguished. Post Buy-back, the paid-up equity shares of your Company stand at 177,465,079 nos.

Strategic Acquisition

During the year under review:

Your Company has acquired majority stake (50.20%) in Neela Systems Ltd " Neela" on 6th January, 2012 for a consideration of Rs 646 Mn. Neela is a Mumbai based Company having business interests in Water Treatment and Modular Process Systems, focused on Biotech, Pharma, Life Sciences and Cosmetics Industries. Future arrangements provide for further increase in stake by Praj. Neela is now a subsidiary of your Company.

Subsidiaries

Your Company has formed a wholly owned subsidiary by name Praj Industries (Africa) Pty. Ltd., in South Africa on 19th July, 2011. Praj Industries (Africa) Pty. Ltd., also formed two wholly owned subsidiaries by name Praj Industries (Tanzania) Ltd., Tanzania and Praj Industries (Sierra Leone) Ltd., Sierra Leone on 20th September 2011 and 28th October 2011, respectively.

Apart from the above, Pacecon Engineering Projects Ltd., BioCnergy Europa B. V., Netherlands, Praj Jaragua Bioenergia S.A., Brazil, Praj Americas Inc., Texas, Houston, U.S.A and Praj Far East Co. Ltd., Thailand continue to be the subsidiaries of your Company and are operating in their respective areas.

The Central Government has granted exemption under Section 212(8) of the Companies Act, 1956, from attaching to the Balance sheet of the Company, the Accounts and the other documents of its Subsidiary Companies. In view of this, Consolidated Financial Statements of the Company, which include the results of the said Subsidiary Companies, are included in this Annual Report. Further, a statement containing the particulars prescribed under the terms of the said exemption for each of the Company's subsidiaries is also enclosed. Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any investor of the Company or its Subsidiaries on 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 Subsidiaries' Registered Office.

Proceedings under Section 132 of the Income Tax Act, 1961

In the month of April 2012, proceedings were initiated by the Income Tax Department under Section 132 of the Income Tax Act, 1961. Though the Company is yet to receive a demand notice from the Income Tax Department, it is in the process of gathering the information / documents and tax advice.

Due to this, the Company is not in a position to reliably estimate the liability (if any) arising out of these proceedings. The management, on the basis of best estimate, has made a prudential provision of Rs250 Mn in the Statement of Profit and Loss which the Company presently believes to be adequate. In the subsequent quarters, when more clarity is achieved, the difference, if any, between the above referred provision and envisaged liability will be debited I credited to the Profit & Loss Account as the case may be.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion & Analysis Report (Annexure 1), Sustainability Report (Annexure 2) and Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3) are annexed to this report.

Directors

Mr. Berjis Desai and Mr. Rajiv Maliwal, Directors, retire by rotation from the Board and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

Auditors

a) Internal Auditors

The Internal Auditors, M/s. Khare Deshmukh & Co., Chartered Accountants, Pune, have conducted internal audits periodically and submitted their reports to Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

b) Statutory Auditors

The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, (Registration Number 105102W) hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their re-appointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.

c) Cost Audit

Pursuant to the directives of the Ministry of Corporate Affairs, your Company has appointed Mr. Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company under Section 233B of the Companies Act, 1956 for the year 2012-13.

Directors' Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

- The accounting policies selected have been applied consistently and judgments and estimates made 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 2011-12 and of the profit of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The annual accounts have been prepared on a going concern basis.

Employee Stock Option Plan

The information to be disclosed as per SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed to this Report (Annexure 4).

Additional Statutory Information

Particulars of Employees:

The statement of particulars required pursuant to Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Amendment Rules, 2011, forms a part of this report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office. The statement is also available for inspection at the Registered Office, during working hours up to the date of the Annual General Meeting.

"Group" for SEBI Takeover Regulations:

For the purpose of Regulation 2 (1) (t) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, persons constituting 'Group' as defined in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 are - Mr. Pramod Chaudhari, Ms. Parimal Chaudhari, Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle Communication and Fusion tech Ventures Private Limited.

Energy Conservation, Technology Absorption, Adaptation, Innovation:

Your Company values innovation and invests considerable resources in promoting this value. The Company is constantly enhancing its offerings in the market as it recognizes that this is the most effective way to grow sustain ably. Each year, it incorporates incremental innovation in order to improve competitiveness of its offerings. The Company focuses on energy, water and product yields for its existing business lines. While Praj Matrix carries out discovery based Research & Development, application related innovation is carried out by the Center of Innovation & Applied Technology as well as various groups working in tandem with them. The Company drives innovation through 'market-in' approach and through 'internal initiatives'.

Your Company is proceeding with its in-house program for scale-up of its Lignocellulosic biomass to ethanol program. During the fiscal, your Company acquired the rights to Qteros 'Consolidated Bio Processing Platform', after ceasing of the Joint Development Program.

Your Company has;

- Developed Xylose (Pentose sugar) fermentation strain with scale up of the microbe to pilot plant with minimum media and very low retention time. When incorporated into Praj's LC to Ethanol Technology, it will add significant value in terms of cost of production.

- Incorporated a specially designed MVR evaporation system in its solutions which significantly reduces steam consumption.

- Developed a distillation system called ECOSMART wherein capacity expansion can be undertaken with performance intensification such as enhancement of biogas in biomethanation of distillery effluent and other process and wastewater treatment applications.

- Commissioned a Sequential Batch Reactor system for wastewater treatment in the agrichemicals sector. This system is offered entirely through internal developmental efforts. The system considerably reduces energy for treatment of wastewater

Other than this, your Company has introduced many new schemes and processes for lowering energy, water consumption and generation of wastewater. The initiatives taken by your Company to enhance its commitment to Sustainable Practices are given in the Sustainability Report, enclosed separately.

Foreign Exchange Earnings & Outgo

(Rs in Mn)

31/03/2012 31/03/2011

Earnings 3634 1838

Outgo 1554 850

Net Foreign Exchange Earnings 2080 988

Your Company has retained its status as a net forex earner.

Acknowledgements

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

For and on behalf of the Board of Directors

Place: Pune Pramod Chaudhari

Date: 29th May, 2012 Executive Chairman


Mar 31, 2011

The Directors are pleased to present the 25th Annual Report and the Audited Statements of Accounts for the year ended 31st March, 2011.

Financial Results

In the year under review, your Company has recorded a total income of Rs. 5820 million (previous year Rs. 6447 million). While the total income decreased by 10% Profit before Tax decreased by 54% to Rs.599 million (previous year Rs. 1231 million). The performance was impacted by adverse global market conditions.

(Rs. in million)

2010-11 2009-10

Turnover 5529 6023

Other Income 291 424

Total Income 5820 6447

Total Expenses 5220 5216

PBT 599 1231

PAT 535 1139

(+) Balance in Profit & Loss account 3252 2538

Profit Available for Appropriations 3787 3677 Appropriations

- Dividend

Interim - 266

Final (Proposed) 233 - Dividend Tax 38 45

- Transfer to General Reserve 54 114 Balance in Profit and Loss Account 3462 3252

Dividend

Your Board of Directors decided to recommend a dividend of Rs. 1.26 per equity share (63%) of face value of Rs. 2/- each for the Financial Year ended 31st March, 2011.

Credit Rating

a) CRISIL has reaffi rmed "P1+" rating to Companys short-term banking facilities which signifi es that the degree of safety regarding timely payment of instruments is very strong.

b) CRISIL has also reaffi rmed its rating of the Companys long-term bank facilities to AA/Stable. The "AA" rating signifi es high safety with regard to timely payment of long-term fi nancial obligations.

Subsidiaries

Pacecon Engineering Projects Ltd. (PEPL), BioCnergy Europa B. V., Netherlands, Praj Jaragua Bioenergia S.A., Brazil, Praj Americas Inc., Texas, Houston and Praj Far East Co. Ltd., Thailand are subsidiaries of your Company and are operating in their respective areas.

Your Company has received approval from the Ministry of Corporate Affairs, Government of India under Section 212 (8) of the Companies Act, 1956 exempting it from attaching various documents in respect of subsidiary companies, as set out under Section 212 (1) of the Companies Act, 1956, to the Annual Accounts of your Company, for the Financial Year ended 31st March, 2011. As per the terms of the letter, a statement containing brief fi nancial details of the Companys subsidiaries for the year

ended 31st March, 2011 is included in the annual report. The annual accounts of these subsidiaries and the related detailed information will be made available to any member of the Company and its subsidiaries at any point of time upon request. The same will also be made available for inspection by any member of the Company / its subsidiaries at the registered offi ce of the Company.

Strategic Partnership / Joint Ventures

Your Company has entered into a strategic partnership with Qteros Inc., USA to accelerate commercialization efforts for industrial-scale cellulosic ethanol production. (Please refer to Annexure 1 for more details.)

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report (Annexure 1), Sustainability Report (Annexure 2) and Report on Corporate Governance and Compliance Certifi cate on Corporate Governance (Annexure 3) are annexed to this report.

Directors

Ms. Parimal Chaudhari and Mr. Sivaramakrishnan Iyer, Directors, retire from the Board by rotation and being eligible, offer themselves for re-appointment at the ensuing Annual General Meeting.

Mr. Prakash Kulkarni, who was appointed on 11th October, 2010 in the casual vacancy caused by the resignation of Mr. Anil Joshi, holds offi ce upto the date of the forthcoming Annual General Meeting. The Company has received Notice in writing along with requisite deposit from a member under Section 257 of the Companies Act, 1956 proposing candidature of Mr. Prakash Kulkarni for the offi ce of Director liable to retire by rotation.

During the year, Mr. Shashank Inamdar stepped down as CEO & Managing Director of the Company effective 15th November, 2010 and subsequently resigned from the offi ce of additional director with effect from 3rd February 2011. The Board placed on record its appreciation for the valuable contribution made by Mr. Inamdar during his tenure with the Company.

Mr. Gajanan Nabar was appointed as an Additional Director of the Company with effect from 15th November, 2010. He was also appointed as CEO & Managing Director of the Company. A detailed profi le of Mr. Nabar is forming part of Corporate Governance Report. In terms of Section 260 of the Companies Act, 1956 he shall hold offi ce upto the date of the ensuing Annual General Meeting. The Company has received Notice in writing along with requisite deposit from a member under Section 257 of the Companies Act, 1956 proposing candidature of Mr. Gajanan Nabar for the offi ce of Director not liable to retire by rotation.

Mr. Pramod Chaudhari, Promoter Director, continues to lead as Executive Chairman of the Company.

Auditors

a) Internal Auditors

The Internal Auditors, M/s. Khare Deshmukh & Co., Chartered Accountants, Pune have conducted the internal audits periodically and submitted their reports to Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

b) Statutory Auditors

The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, (Registration Number 105102W) hold offi ce until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224 (1B) of the Companies Act, 1956.

Directors Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from the same;

- The accounting policies selected have been applied consistently and judgements and estimates made 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 fi nancial year 2010-11 and of the Profit of the Company for that period;

- Proper and suffi cient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The annual accounts have been prepared on a going concern basis. Employee Stock Option Plan

- During the year, your Company allotted 40,231 equity shares on exercise of options under the Employee Stock Option Plan 2005 Grant I, II & III. Consequent to the above, the Issued, Subscribed and Paid-up Equity Share Capital of your Company increased from 184,738,492 equity shares (Rs. 369.477 million) to 184,778,723 equity shares (Rs. 369.557 million) as of 31st March, 2011.

- During the year, the Company has issued Grant IV - Plan A & Plan B of Options under the Employee Stock Option Plan 2005 aggregating 1,950,000 options to senior executives including new CEO & MD of the Company at the rate of Rs. 72.70 per option.

- The information to be disclosed as per SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed to this Report (Annexure 4).

Additional Statutory Information

Particulars of Employees:

The statement of particulars required pursuant to section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011, forms a part of this Report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Offi ce. The statement is also available for inspection at the Registered Offi ce, during working hours upto the date of the Annual General meeting.

Group for SEBI Takeover Regulations:

For the purpose of Regulation 3 (1) (e) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, persons constituting Group as defi ned in the Monopolies and Restrictive Trade Practices Act, 1969 are - Mr. Pramod Chaudhari, Mrs. Parimal Chaudhari, Moriyaset Trust, Mr. Parth Chaudhari, P-Cube Enterprises Private Limited, Turtle Communication and Fusiontech Ventures Private Limited.

Energy Conservation, Technology Absorption, Adaptation, Innovation

Your Company offers innovative solutions to customers through continual research and development. During the year, your Company,

- developed a pre-processing system for sand removal from cassava chips for which the Company has fi led a patent.

- worked on value-added products which can be derived out of brewery spent yeast;

- developed a technology package for Hyloronic Acid, a high value ingredient used in skin care formulations and in osteo - arthritic and opthalmic treatments. Patent fi ling is in process.

- introduced an effl uent treatment special process for evaporation of biomethanated spentwash. The same is being tried out at a commercial scale operation.

- developed Technology for production of "Value added Fermentation Nutrition Products" from waste streams of Brewery Plants.

Other than this, your Company has introduced many new schemes and processes for lowering energy and water consumption and generation of wastewater. The initiatives taken by your Company to enhance its commitment to Sustainable Practices are given separately in a Sustainability Report, enclosed separately.

Acknowledgements

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

For and on behalf of the Board of Directors

Place: Pune Pramod Chaudhari

Date: 24th May, 2011 Executive Chairman


Mar 31, 2010

The Directors are pleased to present the 24th Annual Report and the Audited Statements of Accounts for the year ended 31st March, 2010, together with the notice of the Annual General Meeting.

Financial Results

In the year under review, your Company has recorded a total income of Rs. 6447 million (previous year Rs. 7957 million). While the total income decreased by 19 %, Profit before Tax decreased by 23% to Rs. 1231 million (previous year Rs. 1608 million). The performance was impacted by adverse global market conditions, against which your Companys performance can be considered modest.

(Rs. in million)

2009-10 2008-09

Turnover 6023 7719

Otherlncome 424 238

Total Income 6447 7957

Total Expenses 5216 6349

PBT 1231 1608

PAT 1139 1298

Dividend

The Board of Directors had declared an Interim Dividend of Rs. 1.44 per share on Face Value of Rs. 21- per share (72 %) for the financial year 2009 - 2010. The Board has decided not to recommend any further dividend for the Financial Year 2009-2010.

Credit Rating

a. CRISIL has reaffirmed "P1+" rating to Companys short term banking facilities which signifies that the degree of safety regarding timely payment of instruments is very strong.

b. CRISIL has also upgraded its rating of the Companys long-term bankfacilities to AA/Stable from AAVStable.The "AA" rating signifies high safety with regard to timely payment of long-term financial obligations.

Subsidiaries

Pacecon Engineering Projects Ltd. (PEPL), BioCnergy Europa B. V., Netherlands, Praj Jaragua Bioenergia S.A., Brazil and Praj Far East Co. Ltd., Thailand are subsidiaries of your Company and are operating in their respective areas.

During the year under review, your Company divested its shareholding in Praj Schneider Inc., USA. Consequently, it ceases to be a subsidiary of your Company. This decision was taken keeping in mind the need to re-structure its business in North and

South America. This led the Company to incorporate a new wholly owned subsidiary inTexas, Houston called Praj Americaslnc.

Your Company has applied to the Central Government for exemption from attaching the audited accounts of the subsidiaries to the Annual Accounts of your Company, for the financial year ended 31st March, 2010. The said application is under process and final approval letter is awaited. A statement containing brief financial details of the Companys subsidiaries for the year ended 31st March, 2010 is included in the annual report. The annual accounts of these subsidiaries will be made available for inspection to members of the Company / its subsidiaries upon request at the registered office of the Company.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with the Stock Exchanges, Management Discussion and Analysis Report (Annexure 1), Sustainability Report (Annexure 2) and Report on Corporate Governance and Compliance Certificate on Corporate Governance (Annexure 3) are annexed to this report.

Directors

During the year under review.Mr.Rajiv Maliwal has been appointed as Additional Director with effect from 14th August, 2009. He holds office upto the date of the ensuing Annual General Meeting. He is eligible for appointment as Director. Mr. Daljit Mirchandani retired at the 23rd Annual General Meeting held on 9th July, 2009.

Mr. Berjis Desai and Mr. Kishor Chaukar retire by rotation in terms of Article 83 of the Articlesof Association of the Companyand being eligible offer themselves for re-appointment.

Auditors

a) Internal Auditors

The Internal Auditors, M/s. Khare Deshmukh &Co., Chartered Accountants, Pune, (Formerly known as M/s. Khare & Bhide) have conducted the internal audits periodically and submitted their reports to Audit Committee. Their reports have been reviewed by Audit Committee and Statutory Auditors.

b) Statutory Auditors

The Statutory Auditors, M/s. B. K. Khare & Co., Chartered Accountants, Mumbai, hold office until the conclusion of the ensuing Annual General Meeting. The Company has received a letter from them to the effect that the ir re-appointment,if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956.

Directors Responsibility Statement

In accordance with the requirements of Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that:

- In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

- The accounting policies selected have been applied consistently and judgements and estimates made 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 2009-10 and of the profit of the Company for that period;

- Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- The annual accounts have been prepared ona going concern basis.

Employee StockOption Plan

- During the year, your Company allotted 1,307,410 equity shares on exercise of options under the Employee StockOption Plan 2005 Grant I &II. Consequent to the above, the Issued, Subscribed and Paid - up Equity Share Capital of your Company increased from 183,431,082 equity shares (Rs. 366.862 million) to 184,738,492 equityshares(Rs.369.477million)asofMarch31,2010.

- During the year, the Company has issued Grant III of Options under the Employee Stock Option Plan 2005 aggregating 3,029,626 options to its eligible employees at the rate of Rs.81.75 per option.

- The information to be disclosed as per SEBI (Employees Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is annexed to this Report (Annexure 4).

Particulars of Employees

The statement of particulars required pursuant to section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2002, forms a part of this Report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office and the same will be sent by post. The statement is also available for inspection at the Registered Office, during working hours upto the date of the Annual General Meeting.

Energy Conservation, Technology Absorption, Adaptation, Innovation

Thetechnology.plant&equipmentofferedbyyourCompanyadopts sustainability criterion in terms of energy, water, environment, safety and social dimensions.

Towards this end, your Company carries out R & D for systems that will enhance sustainability.

The Company specifically focusses on innovation and has set up a facility called Praj Matrix - The Innovation Center, which is currently engaged in development of cellulosicethanol program.

Your Company has taken an initiative to enhance its commitment to sustainable practices. A Sustainability Report is separately enclosed. Towards these initiatives, the Annual Report for the year ended 31st March, 2010 contains only those details that are statutorily required to be published in the Annual Report along with Abridged Standalone Financial Statements prepared in compliance with the provisions of Section 219 of the Companies Act, 1956. The complete and full set of Annual Report is made available on the Companys web-site at www.praj.net in the Investors Lounge Section. The same is also available for inspection at the Registered Office during working hours upto the date of the Meeting. Any member interested in obtaining a copy of the full Annual Report may write to the Company Secretary or email us at investorsfeedback@praj.net

Foreign Exchange Earnings & Outgo_

Rs. in millions

31/03/2010 31/03/2009

Earnings 2676 3553

Outgo 762 1018

NFE 1914 2535

Acknowledgements

Your Directors wish to place on record their appreciation towards all associatesincludingCustomers,Collaborators,GovernmentAgencies, Financial Institutions, Bankers, Suppliers, Shareholders, Employees and others who have reposed their confidence in the Company.

For and on behalf of the Board of Directors

Shashank Inamdar Sivaramakrishnan Iyer CEO & MD Director

PLACE : PUNE

DATE : 29TH MAY, 2010



 
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