Praj Industries Ltd

To,

The Members of Praj Industries Limited

Your Directors are pleased to present the 39^th Report together with the Audited Financial Statements of Praj Industries Limited ("the

Company") for the financial year ended on 31 ^st March, 2025.

1. FINANCIAL HIGHLIGHTS AND STATE OF COMPANY'S AFFAIRS :

The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014. During the year under review, your Company recorded a standalone total income of 28,056 Mn., (previous year 30,580 Mn.), with profit 2,644 Mn. (previous year 2,804 Mn.). On a consolidated level, total income stood at 32,789 Mn. (previous year 35,098 Mn.), with profit after tax of2,189 Mn. (previous year 2,834 Mn.).

* Includes Debt instruments balance through Other Comprehensive # Includes Debt instruments balance through Other Comprehensive

2. MANAGEMENT DISCUSSION AND ANALYSIS REPORT :

Management Discussion and Analysis Report for the financial year under review, as stipulated under regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") forms part of this Annual Report.

3. DIVIDEND :

The Board of Directors at its meeting held on 29^th April,

Dividend of2025hasrecommended final 6/- per share

(i.e. 300%) of face value of 2/- each for the financial year 2024-25. The dividend is payable subject to shareholders' approval at the ensuing Annual General Meeting (AGM). The final dividend pay-out, if approved by the shareholders in the ensuing AGM, will be around 1,102.879 Mn.

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

4. DIVIDEND DISTRIBUTION POLICY :

In accordance with the Regulation 43A of the Listing

Regulations, the Company has formulated a Dividend

Distribution Policy which is available on the Company's website and link for the same is given in "Annexure 1".

5. RESERVES :

During the year under review, the Company does not propose to transfer any amount to the General Reserve.

6. CREDIT RATING :

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

(ii) CRISIL has also re-affirmedits rating of the Company's long-term bank facilities to "AA/Stable". The "AA/Stable" rating signifies high safety with regard to timely payment of long-term financial obligations.

7. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) :

During the year, Dr Pramod Chaudhari completed his tenure as Executive Chairman on 31st December,

2024.

The shareholders through Postal Ballot by way of Special Resolution on 20^th December, 2024, approved the appointment of Dr Pramod Chaudhari (DIN : 00196415) as Non-Executive Chairman (in the category of Non-Executive Non-Independent Director) of the Company for a period of five (5) years w.e.f. 1st January, 2025 to 31st December, 2029. Further, based on the recommendation of Nomination and Remuneration Committee (NRC), the Board at its Meeting held on 29^th April, 2025 has approved the appointment of Dr Pramod Chaudhari as Founder Chairman & Group Mentor (Whole Time Director in the category of Executive Director) for a period of five (5) years with effect from 1st July, 2025 till 30^th June, 2030 , subject to approval of shareholders by way of Special Resolution at 39^th Annual General Meeting of the Company.

Based on the recommendation of NRC, the Board at its meeting held on 30^th January, 2025 has appointed Mr. Ashish Gaikwad (DIN : 07585079) as the Managing

Director-Designate w.e.f. 3^rd February, 2025 till 30^th June, 2025 and thereafter as the Managing

Director from 1st July, 2025 till 31st January, 2030, which was further approved by the shareholders through Postal Ballot by way of Ordinary Resolution on 21^st March, 2025.

Based on the recommendation of NRC, the Board at its meeting held on 25^th October, 2024 has appointed Mr. Ajay Narayan Deshpande (DIN : 03435179) as an Independent Director for a period of three (3) years w.e.f. 25^th October, 2024 to 24th October, 2027, which was further approved by the shareholders through Postal Ballot by way of Special Resolution on 20^th December, 2024.

The Board is of the opinion that Mr. Ajay Narayan Deshpande is a person of integrity and possesses requisite skills, experience and knowledge relevant to the Company's business and it would be beneficial to have his association with the Company as an

Independent Director.

Board, on the recommendation of NRC, at its meeting held on 26^th June, 2025, has considered and approved appointment of Mr. Berjis Desai (DIN : 00153675) as an Additional Director (in the category of Non-Executive Non-Independent Director), liable to retire by rotation w.e.f. 1st July, 2025, subject to approval of the shareholders at 39^th AGM of the Company.

Mr. Suhas Baxi (DIN : 00649689) ceased to be an Independent Director of the Company w.e.f.

7^th August, 2024 due to completion of his tenure.

Ms. Parimal Chaudhari (DIN : 00724911) retires by rotation at the ensuing AGM and not offered herself for re-appointment.

In view of the above, the Board, on the basis of recommendation of NRC, at its meeting held on 29^th April, 2025 has considered and approved the appointment of Mr. Parth Chaudhari (DIN : 07010109) as a Non-Executive Non-Independent Director, liable to retire by rotation, w.e.f. the date of 39th AGM i.e.

11th August, 2025 in place of Ms. Parimal Chaudhari.

The Company has the following KMPs as on 31^st March, 2025;

During the year, due to the appointment of Dr Pramod Chaudhari as a Non-Executive Chairman, he ceased to be the KMP of the Company w.e.f. 1st January, 2025.

8. DECLARATION FROM INDEPENDENT DIRECTORS :

The Independent Directors have submitted their annual declaration to the Board confirming that they fulfill all the requirements as stipulated in Section 149(6) and 149(7) of the Act read with rules framed there under and Regulations

16(1)(b) and 25 of the Listing Regulations.

9. SUBSIDIARY COMPANIES :

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

Your Company has incorporated Foreign Wholly Owned Subsidiary Company, Praj Projects (Tanzania) Ltd. on 2^nd December, 2024 to execute the project in Tanzania. Consolidated Financial Statements of the Company prepared in accordance with Section 129(3) of the Act, and the applicable Accounting Standards, which include the results of the Subsidiary Companies, forms part of this Annual Report. Further, a statement containing salient features of the financial statements of all subsidiaries in prescribed Form AOC-1, is enclosed as "Annexure 2". Copies of Annual Accounts and related detailed information of all the subsidiaries can also be sought by any shareholder of the Company or its Subsidiaries by making a written request to the Company Secretary on the address of 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 Registered Office. The separate Audited Financial Statements respect of each of the Subsidiary Companies are also available on the website of your Company at https ://www. praj.net/investors-type/financial-reports-of-subsidiaries/ The Company has formulated a policy for determining ‘material subsidiary' which is hosted on the Company's website and link for the same is given in "Annexure 1".

Pursuant to and in compliance with Section 135 of the Act and Rule 5 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board has constituted a CSR Committee. The details of the CSR

Committee constitution, CSR activities and other details, as required under Section 135 of the Act and the CSR Rules, are given in the CSR Report at "Annexure 3".

The CSR Policy is placed on the Company's website and link for the same is given in "Annexure 1".

Pursuant to Regulation 34 of the Listing Regulations, Report on Corporate Governance along with the certificate from a Practising Company Secretary certifying compliance with conditions of Corporate Governance is annexed to this

Report as "Annexure 4".

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the BRSR on initiatives taken from an environmental, social and governance perspective, in the prescribed format is annexed to this Report as "Annexure 5".

The Board met five (5) times during the financial year, the details of which are given in the Corporate Governance

Report which forms an integral part of this Annual Report.

The intervening gap between any two meetings was within the period prescribed by the Act and the Listing Regulations as amended from time to time.

The details of all the Committees such as composition, terms of reference and meetings held during the year under review are set out in the Corporate Governance

Report which forms an integral part of this Annual Report.

P. G. BHAGWAT LLP, Chartered Accountants, (Firm Regn. No. 101118W), were appointed as the Statutory Auditors of the Company for a period of five (5) years from 34^th AGM until the conclusion of 39th AGM to be held in the calendar year 2025. year 2025 The Auditor's Report does not contain any qualifications, reservations, adverse remarks disclaimer.

Based on the recommendations of Audit Committee, the Board at its meeting held on 26^th June, 2025 has recommended to the shareholders of the Company, appointment of M/s MSKA & Associates, Chartered Accountants (Firm Reg. No. : 105047W) as Statutory Auditors of the Company w.e.f. date of 39th AGM till the conclusion of 44^th AGM to be held in the financial year 2030 at a remuneration of 4.125 Mn. per annum plus applicable taxes and reimbursement of out-of- pocket expenses on actuals, if any.

As required under the Listing Regulations, M/s MSKA

& Associates, the auditors have confirmed their eligibility and they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered

Accountants of India.

The Internal Auditors, Khare Deshmukh & Co., Chartered Accountants, Pune have conducted internal audits periodically duringfinancial year 2024-25 and submitted their reports to the Audit Committee. Their reports have been reviewed by the Statutory Auditors and the Audit Committee.

The Board has appointed Khare Deshmukh & Co., Chartered Accountants Pune, as Internal Auditors of the Company for the financial year 2025-26.

In terms of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, your Company has appointed Dhananjay V. Joshi & Associates, Cost Accountants as Cost Auditors of the Company financialyear 2025-26 at for the the remuneration of 0.325 Mn. which is subject to ratification by the shareholders at the 39 th AGM. The maintenance of cost records as specified under Section 148 of the Act is applicable to the Company, and accordingly, all the cost records are made and maintained by the Company and audited by the cost auditors.

Based on the recommendations of Audit Committee, the Board at its meeting held on 26^th June, 2025 has approved appointment of M/s MSN Associates, Company Secretaries (Firm Registration No. 29533) as Secretarial Auditors of the Company for a period of five (5) consecutive year w.e.f. till 2029-30, subject to approval financial of shareholders at 39^th AGM at a remuneration of 0.25 Mn. per annum plus applicable taxes and reimbursement of outof- pocket expenses on actuals, year ending on 31st March, ifany,forthefinancial 2026.

As required under the Listing Regulations, M/s. MSN Associates, the Secretarial Auditors have confirmed their eligibility, and they hold a valid certificate of Peer Review issued by the Institute of Company Secretaries of India.

In accordance with the provisions of Section 204 of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s KANJ & Co., LLP, Practising Company Secretaries, to conduct the Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Audit Report (MR-3) for the financial year 2024-25 forms part of the Annual Report as "Annexure 6". The Secretarial AuditReportforthefinancialyear 2024-25 does not contain any qualifications, reservations, adverse remarks or disclaimer.

Pursuant to and in compliance with the provisions of Regulation 24A(2) of the Listing Regulations, M/s KANJ & Co. LLP, Practising Company Secretaries have issued Annual Secretarial Compliance Report for the financialyear ended 31st March, 2025. The Company has submitted the said report to the Stock Exchanges within the prescribed time frame.

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

Pursuant to Regulation 21 of the Listing Regulations, the Company has constituted a Risk Management Committee, details of the Committee along with terms of reference are provided in the Corporate Governance Report which forms an integral part of this Annual Report.

The Company has framed a Risk Management Policy to ensure sustainable business growth and to promote a pro-active approach in identifying, reporting, evaluating and mitigating risks associated with the business of the Company. The policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues. The Risk Management Policy is hosted on the Company's website and link for the same is given in "Annexure 1".

The enterprise risks and their mitigation plans are presented by the risk owners to the Risk Management Committee. The Enterprise Risk Management (ERM) framework is aimed at effectively mitigating the business and enterprise risks through strategic actions. The mitigation plans for enterprise and business risks are reviewed and updated on a periodic basis to the Risk Management, Audit Committee and the Board of Directors of the Company.

In today's challenging and competitive environment, strategies for mitigating inherent risks associated with business and for accomplishing the growth plans of the Company are imperative. The common risks inter-alia are risks emanating from; Regulations, Cyber Risks, Competition, Business, Technology obsolescence,

Investments, Retention of talent, Finance, Politics and Fidelity etc. In today's complex business environment, Cyber risks have considerably increased.

During the year, we continued our efforts to keep ourselves up to date with cyber security events globally to achieve higher compliance and its continued sustenance.

As mentioned in Risk Management Policy, these risks are assessed and steps, as appropriate, are taken to mitigate the same.

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.

The Company has in place, adequate internal financial controls with reference to Financial Statements commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

The information required pursuant to Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, duly amended, in respect of Directors & KMPs of the Company is furnished hereunder :

¹appointed as the Non-Executive Chairman w.e.f. 1st January, 2025

²appointed as the Managing Director-Designate w.e.f. 3^rd February, 2025

3ceased to be an Independent Director w.e.f. 7^th August, 2024 ⁴appointed as an Independent Director w.e.f. 25^th October, 2024

*not comparable since the appointment was for part of the year (i.e. either in previous year or during FY 2024-25) and therefore not given.

The median remuneration of employees of the Company during the financial year 2024-25 was 1.385 Mn., there was an increase of around 9% in the median remuneration of employees.

There were 1318 permanent employees on the rolls of the Company as on 31^st March, 2025.

Average percentage increase made in the salaries of employees other than the managerial personnel in the financial year 2024-25 was around 10% whereas the managerial remuneration for the same financial year increased by around 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 NRC as per the Remuneration Policy for the Directors, KMP and other Employees.

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

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are available to shareholders for inspection on request. In terms of Section 136 of the Act, the said statement is open for inspection at the Registered Office of the Company. The Annual Report is being sent to the shareholders excluding the aforesaid statement. Any shareholder interested in obtaining a copy of the same may write to the Company Secretary.

The Company's Remuneration Policy for Directors/KMPs related is directed towards rewarding performance based on periodical review of achievements. The Remuneration Policy is in consonance with the existing industry practice which is attached as "Annexure 7" to this Report.

The said policy is also available on the Company's website and link for the same is given in "Annexure 1".

During the year under review, your Directors confirm that no shares were issued by the Company under the Employee Stock Option Plan 2011 of the Company.

The Company vide letter dated 3rd February, 2025, has granted 4,21,000 options to Mr. Ashish Gaikwad, Managing Director-Designate at 565/- per option under Employee Stock Option Plan 2011 Grant XII.

A statement giving complete details, as at 31^st March, 2025, pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, is available on the Company's website at https ://www. praj.net/wp-content/uploads/2025/06/ESOP-Disclosure-Report-2024-25.pdf.

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. Key features of this policy are given in Corporate Governance Report. Policy is hosted on the website of the Company and link for the same is given in "Annexure 1".

The details of loans, guarantees and investments covered under Section 186(4) of the Act are given in the notes to the Audited Standalone Financial Statements. (Please refer Note nos. 4, 11 & 30 to the Standalone Financial

Statements)

All contracts / arrangements / transactions entered by the Company during the financial year 2024-25 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. Particulars of related party transactions are provided in Note no. 30 in the Standalone Financial

Statements. partyThere were no materially significant transactions which could have potential conflict with the interests of the Company at large. None of the transactions with related parties falls under the scope of Section 188(1) of the Act. The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 in Form AOC-2 does not apply to the Company for the financial year 2024-25 and hence the same is not provided. Your Company has formulated a policy on related party transactions which is available on the Company's website and link for the same is given in "Annexure 1".

Pursuant to and in compliance with the provisions of Section 134 of the Act and Rules made thereunder and as provided in Schedule IV to the Act and the Listing

Regulations, the Board works with the NRC 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 :

(i) Ability to contribute to and monitor the Company's corporate governance practices.

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

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

Directors'(iv) Commitment to the fulfillment obligations and fiduciary responsibilities, which include participation in the Board and the 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.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, Annual Return for the financial year ended on 31^st March, 2025, in prescribed Form No. MGT-7 to be filed Ministry of Corporate Affairs is available on the website of the Company at https ://www.praj.net/investors-type/ annual-return/.

In accordance with the provisions of Section 134(5) of the Act, the Board hereby submits its responsibility statement for the financial year 2024-25 as follows :

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

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 31st March, 2025 and of the profit of the Company for the year ended on that date. (iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

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

(v) the Directors have laid down internal financialcontrols to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and (vi) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

During the year, the Auditors have not reported to the Audit Committee, any incidence of fraud as defined under Section 143(12) of the Act, committed against the Company by its officers or employees.

The Company has not accepted any deposits from public as per the provisions of Sections 73 and 74 of the Act read with Rules made thereunder and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

The Company has complied with the applicable Secretarial

Standards (as amended from time to time) on meetings of the Board of Directors and General Meetings issued by the Institute of Company Secretaries of India.

During the year under review, pursuant to and in compliance with the provisions of Sections 124 and 125 of the Act and Rules made thereunder, the Company has transferred : (i) 33,189 equity shares whose dividend has remained unclaimed / unpaid for a consecutive period of seven (7) years to IEPF and (ii) 13,74,153/- (Rupees Thirteen Lakhs Seventy Four Thousand One Hundred Fifty Three only), being the unclaimed dividend, pertaining to the final dividend for the financial year 2016-17 to IEPF after giving notice to the shareholders to claim their unclaimed / unpaid dividend.

As on 31st March, 2025, 2,98,650 equity shares are lying with IEPF.

During the year, therewerenosignificantmaterial orders passed by the regulators and courts, which would impact the going concern status of the Company.

There were no proceedings admitted against the Company under IBC 2016.

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

The Company has constituted Internal Committee for each location. The Name of all Committee members and their contact details are available on the Company's notice board along with the Policy on Prevention of Sexual Harassment (POSH), which is accessible to all employees of the Company.

Awareness programs are conducted on the POSH during the financial year. Also, all new joinees at the Company undergo separate induction on POSH policy. Your Directors state that during the year under review, there were no complaints received pursuant to the POSH

Act.

Your Company focuses on energy conservation through various means integrated into its technology and operational principles :

• Biogas unit is installed at some of the manufacturing facilities of the Company to process waste.

• Design and Engineering Focus : The Praj

Technology and Engineering Group designs and engineers plants and machinery with a focus on minimizing energy and water consumption.

• Use of solar energy and Low electricity consumption : Installation of solar plants at various locations as well as usage of Green energy has resulted in to considerable saving in energy consumption. Approximately 33% of our electricity requirement is currently met with renewable energy.

Praj is technology based Company. The Company is actively involved in developing and deploying technologies. These technologies are used by various customers.

Praj has developed an energy-efficient solution to reduce the carbon intensity (CI) of corn-based ethanol production. This innovation achieves significant lowering of the overall energy demand in ethanol plants by optimizing thermal integration.

Praj patented technology namely, RenGas efficiently generates bio-methane from agricultural residues such as Rice straws, Napier grass and sugar mill waste, press- mud.

The Company also has an innovative solution for developed markets that converts whole stillage into Biogas alongside Distiller's Corn Oil (DCO). Praj has developed multiple technologies for feedstocks, PMStabTM for preservation of yield efficiency of press mud, BMSolveTM and NGStab for pretreatment of biomass and Napier grass respectively.

Praj has developed technology to produce Bio-Bitumen, a renewable alternative to fossil-based bitumen for eco-friendly road construction.

The Company has developed technology for producing SAF from sugary feedstock via the Alcohol-to-Jet (ATJ) fuel route, aiming to decarbonize the aviation industry.

A Pilot/Demo unit for SAF at Praj R&D has achieved successful mechanical completion.

The Company has indigenously developed integrated Polylactic Acid Technology at Jejuri. This facility houses fermentation, chemical synthesis, separation and purification sections along with other supporting sections. Bio-based plastics, which are made up of natural monomers and contain safer additives, are biodegradable and provide an effective solution to mitigate the hazards of plastics.

The Company makes continuous efforts to reduce carbon and enhance GHG emission savings for the production of renewable products, including fuels and chemicals.

Your Company has spent 699.2 Mn. on Research and Development during the financial year 2024-25.

Your Company has retained its status as a net forex earner consecutively for past 27 years.

On 28^th March, 2025, a fire incident occurred at the office block of Praj Matrix, R&D center in Pune. There was no loss of human life, and the safety of all personnel was ensured. None of the Praj operations were adversely impacted due to this incident.

Your Directors wish to place on record their appreciation for the continued co-operation and support extended to the Company by Customers, Collaborators, Government Authorities, Bankers, Suppliers, Auditors. They also place on record their appreciation for the dedication and value-added contribution made by all the employees. Your directors would also like to thank all the shareholders who have reposed confidence in the Company and its future.