Praj Industries Management Discussions


Overview

Yourcompany,PrajIndustries(Praj),isaGloballeaderprovidingsolutionsspanningacrossBiofuels,Biomaterials,EnergyTransition & Climate Action, Critical Process Equipment & Modularization, High Purity Water Systems, Brewery & Beverages, and Zero Liquid Discharge Systems. With its motto of innovate, integrate and deliver, Prajs solutions have spanned Energy, Environment, Pharma and a wide cross section of process industry. Built over last four decades, 1000+ customer references spanning 100+ countries are a testimony of Prajs prowess. Bioeconomy has emerged as a promising pathway for sustainable climate action. Your company is the flag bearer of bioeconomy in India. Bio-MobilityTM and Bio-PrismTM are mainstays of Prajs initiatives in bioeconomy. Deep understanding of various biobased feedstock, expertise in developing technologies to process them for securing variety of sustainable products is bedrock of Prajs business. Bio-MobilityTM technology platform for producing biofuels solutions and Bio-PrismTM technology portfolio for production of renewable chemicals and materials are the mainstays of Prajs contribution to the global Bioeconomy. Sustainability is the core value of Praj, and all its R&D initiatives are aimed at reducing energy, carbon and water footprints while maximizing the plant yields. Your company has proven expertise in core process technologies, i.e. Fermentation and Distillation, that enables us to develop innovative solutions. Your company also has developed the unique capability of conceptualizing, engineering & manufacturing modular packages. This helps in optimizing the project timelines and minimize plant installation related risks. Understanding stated and unstated market needs is at the root of developing innovative solutions that help customers secure better financial performance. Your Company delivers value to customers with its unique TEMPO (Technology, Engineering,

Manufacturing, Project Management and Operations) model.

In addition to its own technology development, Praj has built strategic collaborations with global technology leaders. These are in the areas of co- developing and integrating complementary technologies, for creating unique customer value propositions. The world is witnessing climate adversities all around the world. Studies show that there is substantial rise in extreme weather events and climate calamities in the first two decades of current millennium as against last two decades of previous millennium.

May 2023 report of World Meteorological Organization has estimated weather and climate related disasters as USD 4.3 trillion and human casualties over 2 million in last five decades. This has further precipitated need for sustainable climate action to curb greenhouse gas emissions. The Race to Zero campaign towards carbon neutrality has gained strong momentum with several nations and global conglomerates announcing the roadmap to achieve net zero target. Transition to cleaner and greener alternatives from fossil-based energy sources has emerged as a promising pathway for achieving Net Zero. With innovative technology solutions in Bioeconomy and strong capabilities in modularization of processes your Company is well positioned to address opportunities arising in the energy transition field.

FY2022-23wasveryexcitingyearforyourcompany.Inaugurationofourambitious2GethanolplantatIOCLPanipat,commissioning of rice straw based high yield CBG project, execution activities at their optimal levels throughout the year, decision to set up new manufacturing facility and demo plant for bioplastic are the key highlights of the year. Though the challenges around volatile commodity prices, global inflation, supply chain imbalance existed for major part of FY 2022-23, your Company successfully stayed on course with continued focus on customers combined with our technology prowess and increasing favorable business environment.

Business Snapshot Bioenergy

Your Companys Bioenergy portfolio comprises of technology solutions for:

Conventional Biofuels: 1st generation also knows as low carbon ethanol produced from Sugary & Starchy feedstock.

Advanced biofuels: 2nd generation, getting recognized as ultra-low carbon ethanol and Renewable Natural Gas (RNG)/ Compressed Biogas (CBG)

Next Gen biofuels: Sustainable Aviation Fuel (SAF)

Future biofuels: Biohydrogen

Prajs Bio-MobilityTM platform of technologies envisages utilization of Bio based feedstock and organic waste for production of low carbon renewable transportation fuels across all modes of mobility i.e., Surface, Air and Marine. Bio-MobilityTM platform comprises of Biofuels both in liquid as well as gaseous form. Biofuels are produced using bio-based feedstock such as sugary (C molasses, B molasses, sugar syrup etc.), starchy (damaged/ surplus grains) and cellulosic (agri residues and biomass).

1st Generation (low carbon) Ethanol: Domestic

Ethanol blending program is helping achieve several objectives; Reducing the countrys dependence on crude oil imports, cutting carbon emissions to help conserve environment and boosting farmers income for inclusive growth.

Indias EBP 20 program is progressing as planned. To meet the 20% EBP target along with other industrial applications, India needs to have ~17 billion liters of ethanol production capacity. Over and above the EBP 20 targets, OMCs have floated Expression of

Interest (EOI) for building additional capacity of 3 billion litres for 8 ethanol deficit states viz. Tamil Nadu, Kerala, Andhra Pradesh,

Telangana, Gujarat, Rajasthan, Goa, Odisha, and Union Territories of Jammu & Kashmir and Ladakh. This will create an additional potential opportunity of around Rs. 40 billion.

During FY 2022-23 Ethanol production capacity addition in India continued its momentum. Around 70% of the new capacity was from plants on starchy feedstock. Currently the ethanol blending in petrol in India has crossed ~12% mark. India currently has the capacity to produce nearly 10 billion litres which is expected to increase it to 12.5 billion litres by late 2023.

In the Union Budget FY 2023-24, Green Growth as a part of Saptarshi priorities has emerged a strong development agenda. Several provisions made in the budget will bolster the nations bioeconomy and agritech sector in particular. This budget provides INR 35,000 crore for priority capital investments towards achieving Indias goal of net zero carbon emission. As a welcome measure for the financially stressed sugar sector, the budget provided a relief of INR 10,000 crore. Sugar mills will be allowed payments made to sugarcane farmers for the period prior to assessment year 2016-17 as expenditure under tax assessment. Several State Governments have started to create supportive policies to drive ethanol production in respective states. Transportationisthe2ndlargestconsumerofenergyafterindustryandalsothe2ndlargestemitterofGHGemissions.Decarbonization of transportation sector is an imperative to meet Nationally determined contributions. Indias transportation fuel mix scenario is evolving with inclusion of new age mobility solutions such as Bio-MobilityTM. Exclusive biofuels pavilion set up for the first time ever at India Auto Expo held in Delhi in January 2023 is a clear indication of growing acceptability of biofuels transportation. This bodes well for an agrarian economy like India that is blessed with abundant sun, land and agriculture.

Launch of flex fuel vehicles thatworkwithethanolblendofupto85%atIndiaAutoExpoisdefinitive indication of auto OEMs gearing up for reconfiguring their product mix. As a demonstration of how E-mobility and Bio-MobilityTM can coexist, Flexi-Fuel Strong Hybrid Electric concept car was showcased by leading global auto OEM. This car can run on blend of ethanol while onboard charging of batteries to power electric drive trains. In FY 2022-23, Our domestic bioenergy business has delivered a strong performance with a healthy order book. Around 75% of the orders came for ethanol plants based on the starchy feedstock. Sugar mills are also setting up dual feed plants and are adding starchy feedstock modules to their existing ethanol facility. Our execution activities are at their optimal levels with multiple project sites in different geographies. During the year, your company commissioned its first plant based on the Biosyrup as feedstock. Praj continues to maintain its strong leadership position with share higher than all others combined in domestic market. Our enquiry pipeline is showing a strong continued demand for starchy and sugary feedstock-based ethanol plants.

1st Generation (low carbon) Ethanol: International

Praj has developed unique technologies that can significantly reduce the carbon intensity as well energy footprint of existing ethanol plant. As ethanol producers shift focus to low carbon, Prajs capabilities in energy integration, process integration and process optimization are finding increasing traction in international markets. We have enhanced our reach in Europe, South &

North American markets to address this emerging need.

Our state-of-the-art technology solutions enhance the efficiency and sustainability of first-generation bioethanol plants. By optimizing feedstock utilization, minimizing waste, and reducing greenhouse gas emissions, our clients can comply with regulatory requirements and achieve their sustainability objectives.

The US Government passed Inflation Reduction Act (IRA) that has significant provisions of support on advancement across different modes of mobility. As a result of this development, low carbon ethanol has emerged as an interesting business opportunity. There are around 200 ethanol plants in the USA that would need to reduce their overall carbon intensity to be eligible for provisions of IRA. Your Company is currently in the process of completing Front End Loading (FEL) studies for several projects, that will help ethanol producers to finalize their investment decisions for deploying our low carbon

Owing to the slowdown in US market, this activity, while developing very healthily, might see little shift in timelines for project finalizations. With announcement of blending mandates in Canada & Mexico, our market development activities are finding good traction in these markets to generate leads.

In Europe region, we are witnessing potential opportunities for green field 1G projects in non-EU countries. As part of decarbonization strategy, several members of the European Union are increasing the ethanol production to comply with policy mandates e.g., Poland, Czech Republic, France, Hungary have implemented E10 program. Your Company has adopted a tailored market expansion strategy to establish a strong presence in the different markets which includes targeted marketing efforts, local representation, and customized solutions addressing the unique needs of each country in the region. This approach allows us to effectively engage with potential clients and capture a more significant expanding bioethanol market.

Your Company successfully commissioned Asias largest single train 510 KLPD syrup to ethanol plant. We have demonstrated the effective impact of our Process Enhancers (PE) solution in Brazil. Both these events will help improve our position as we move forward.

SERVICES BUSINESS

Our strong offering of an entire suite compromising of Enzymes, Yeast and Performance enhancers is finding a high acceptance in the market. Our performance enhancers improve yields, product quality and performance of the plant. These products are formulated using our deep knowledge of microbial biology, chemistry, feedstock, and industrial processes. Prajs performance enhancers are widely used in ethanol plants based on sugary as well as starchy feedstock in over 40 nations. With a view to enhancing our reach and service to customers we are building a strong distributor network in both the domestic and international market.

2nd Generation (ultra-low carbon) Ethanol

Lignocellulosic feedstock i.e., agricultural residue, softwood etc. is available in abundance and biofuels produced from this feedstock provide highest Carbon reduction. Your Companys first 2G ethanol plant at IOCL Panipat was unveiled by Hon. Prime Minister earlier this year. The plant has been commissioned and we have produced the first ethanol. Our team is now focusing its effort in establishing continuous operations and reliability enhancement of the plant along with the IOCL team. This plant will benefit more than 1,00,000 farmers and is expected to create around 1500 jobs for rural youth. 2G ethanol has higher potential to displace GHG emissions than 1G. This plant alone will help eliminate around 3,20,000 metric ton of CO2 every year which is equivalent to replacing 63,000 cars on road annually. 2G plant will address the serious concerns arising due to stubble burning. The success of this project will pave way for many projects in domestic as well as international markets. Your Company is also working on two more plants for HPCL and BPCL which are expected to commission in FY 24.

Scientists at Praj Matrix R&D center, continue to finetune intricate technical aspects to further improve commercial viability of enfinty TM technology for 2nd generation ethanol. Specificareas in this regard include- Development of process Integration solutions for both capital and operating cost reduction, co product development viz; CO2, lignosulfonates, bio- bitumen, CBG, Organic fertilizer. Your Company is also leveraging expertise of its partners in various sub systems.

Your Companys association with Sekab for catering to forest residue-based markets in northern Europe is progressing well. We are in advanced discussions with several potential customers in the Nordic region for deployment of CellunitiTM technology jointly developed with Sekab. Demonstration trials have been held successfully at the pilot facility at Sekab for this technology to several interested customers. Although we continue to be in dialogue with potential developers of 2G projects in Europe, uncertainties owing to prolonged war have added nearly two to three quarters to the decision cycle time. This Russia Ukraine war and Energy Crisis will further propel need for 2G ethanol which is the most sustainable fuel alternative. In the mid to long term, with several nations pursuing energy security based on captive resources, advanced biofuels are expected to find traction. In Europe, passing of Renewable Energy

Directive III (RED III) proposal will provide further boost to the demand for 2G ethanol.

Renewable Natural Gas (RNG)/ Compressed Biogas (CBG)

Ecosystem for CBG across the value chain is gradually building up. At the start of the year, the government made an upward revision in the minimum procurement price of CBG. To facilitate entrepreneurs for financial closure of the projects as well as promote setting up CBG Plants, the government announced that the CBG prices will be indexed to the prevalent Re Selling Price (RSP) of CNG in the market. Development of CBG projects is expected to gain momentum on the back of progressive policies such as introduction of 5% CBG mandate, exemptions in excise duty and GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme that envisages 500 new waste to wealth plants. To provide sustained supply of feedstock, financialsupport for collection of biomass has also been announced. CBG as an alternative to CNG has been receiving favorable response from consumers. OMCs are also gearing up for distribution and retailing system for last mile connectivity of CBG. Organic manure, the co-product from the plant is gaining acceptance from the farming community & fetching attractive price. This will further enhance project viability of CBG plants. During the year, some major corporates also announced their plans for significant investment in the CBG space.

During FY 2022-23, your Company commissioned two more CBG plants working on industrial effluent and rice straw. Our first rice straw based commercial plant for HPCL has commenced biogas generation and flaring. This high yield plant is now under stabilization and should start the regular dispatch of CBG by the end of third quarter. With this your Company now has CBG projects operating on different feedstocks namely rice straw and press mud, industrial effluent.

Our customers are now seeking solutions for different varieties of agriculture residues. Our R&D is working on a program to find optimal solution for addressing this need. After conducting extensive trials at our demo plant, we are integrating our learnings to enhance scope and performance of our solutions in the field.

With its unique capabilities and learnings from initial projects, your Company is in good position to cater to emerging opportunities in the CBG space.

Sustainable Aviation Fuel (SAF)

Taking Bio-MobilityTM platform forward in the aviation sector, your Company has made significant progress in technology development for production of SAF using biobased feedstock. Globally civil aviation industry generates approx. 1 billion tons of GHG emissions per year, which is around 2 to 3% of total global emissions. Emissions from the global aviation sector are rising at the rate of 2.5% per year, affecting mankind as a whole. To limit the global warming to 2 deg. C, it is imperative to decarbonize this ‘hard to abate aviation sector, and this requires national as well as international goals/policies. With calls for cleaner skies are getting louder, SAF has emerged as a next big opportunity in the biofuels space.

SAF has similar properties as that of conventional jet fuel, however it leaves lower carbon footprint. It can be produced using sustainable and renewable feedstock such as biomass, sugars, starches, waste lipids and organic waste. SAF is considered as a priority solution to decarbonize aviation in near term due to its high greenhouse gases (GHG) savings potential, availability of sustainable feedstock and rapidly maturing technologies for processing the feedstock to SAF. The EU & USA have already set aggressive targets for adoption of SAF and other countries are following the course to reduce the carbon footprint of aviation sector. India has a great potential to contribute in SAF by becoming global refueling location. Your Company has entered strategic partnerships with Gevo, Inc (USA), Axens (France) and IOCL to explore opportunities in the SAF space. This year, Praj entered into MOU with Axens, France to work jointly on projects in India for production of SAF from low carbon alcohols through Alcohol-to-Jet (ATJ) pathway. Axens will provide its JetanolTM Alcohol-To-Jet technologies for conversion of alcohols to SAF. Praj brings to the table proven expertise in modularized solutions, integration services for complete project and technology for production of low carbon isobutanol and ethanol from conventional bio-sourced feedstock.

Praj has also partnered with Indian Oil Corporation Limited (IOCL) to explore opportunities to set up plants for production of Alcohol to Jet (ATJ) fuels and other biofuels. As per the MoU, Praj and IOCL will form a joint venture to set up the production facility for SAF. Both Praj and IOCL boards have given go ahead for formation of joint venture.

In a very significant development, your company partnered with AirAsia India and Indian Oil Corporation Limited commercial flight in India powered by a blend of ‘indigenous SAF. On 19th May 2023, AirAsia India flight i5-767 departed from Pune to New Delhi using a blend of indigenous SAF produced by Praj. Hon. Union Minister of Petroleum and Natural Gas, Hardeep Singh Puri, received this special flight at Delhi airport. The SAF sourced for this initiative was produced by Praj in partnership with Gevo Inc using bio-based feedstock . Praj produced SAF samples in its R&D facility, Praj Matrix, which underwent detailed testing at IOCL laboratories before it was blended for the special flight.

Your Company is exploring innovative technology solutions for production of Biohydrogen from biobased feedstock to align with Flagship National Hydrogen Mission.

Critical Process Equipment & Skids (CPES)

CPES specializes in conceptualizing, engineering & manufacturing of modular process packages and critical equipment for various process plant projects. Your Companys capability to conceptualize, design and manufacture complex modules is finding increasing acceptance from leading customers across the globe. Modularization has emerged as the growth engine for business with significant intake from leading customers from Oil & Gas and Fertilizers field across the globe.

Your Company created an additional capacity at the Kandla facility to cater to the growing demand. The additional capacity has been fully operational since second half of FY 2022-23.

Energy Transition and Climate Action

Energy Transition and Climate Action (ETCA) has become a strong development agenda globally. Energy giants are investing heavily in various projects to address the growing demand of Low-Carbon fuels. Our ability to Modularize engineering solutions across the technology platforms is helping us to create a significant competitive advantage.

ToaddressthegrowingopportunitybasketfromtheETCAagenda,yourCompanyhasdecidedtolaunchanewsubsidiary-PrajGenX Limited. This new business endeavor will focus on developing cutting edge modularized solutions as well as critical equipment by leveraging its multi-disciplinary Engineering strengths through a dedicated "Center of Excellence for Modularization". This business will cater to demands from industries coming under ETCA sectors such as Blue and Green Hydrogen, Carbon Capture, Waste-To-Energy and Low Carbon Fuels etc. A state-of-the-art new manufacturing facility is being set up near a major port with an investment of Rs. 100 crores. This facility will be able to produce very large equipment and multiple large modules without dimensional constraints. Your company is moving ahead with project development and expects to start commercial production by the fourth quarter of FY 2023-24.

Zero Liquid Discharge Solutions

Your Company offers comprehensive range of solutions for industrial effluent treatment, recycling and zero liquid discharge (ZLD) systems to customers across several sectors namely metals, power, specialty chemicals, fertilizers, refinery & petrochemicals,

F&B, etc.

In FY 22-23, we continued to work on execution of one of the largest ZLD projects in India. This prestigious project is nearing mechanical completion. The learnings from this project are being deployed to shape our strategy going forward. Your Company is also strategically focusing on wastewater treatment technologies which will help in reducing the overall carbon intensity. We are leveraging our core competence in Industrial biotechnology and microbiology to develop advanced technology for treating high COD and high TDS wastewater streams. We are also bringing a modularization approach to our ZLD offerings and have already received the first order for a modularized ZLD system. We are witnessing robust enquiry pipeline across key focus segments such as Metals, Chemicals and F&B sectors.

Brewery & Beverage

Your Company offers customized plants, equipment & technology solutions to customers in the brewing & beverage industry. Praj has proven expertise ranging from engineering and designing to construction of plants and process equipment.

After adversely affected previous year, beer consumption finally crossed the pre pandemic levels in the H2 of FY 2022-23.

Hospitality & tourism sectors are peaking up the momentum which has resulted in an increase in beer consumption and hence the upward movement in market demand. Your Company is now witnessing healthy flow of enquiries from India as well as Africa markets and expects the business to get back to its normalcy in FY 2023-24. Your Company is leveraging its knowledge of hygienic manufacturing and process expertise to expand its offerings for other beverages. As part of this strategy, we are building Indias largest Apple juice concentrate plant in Himachal Pradesh. The plant is in the last phase of execution and will be commissioned in the 2nd quarter of FY 2023-24.

Praj HiPurity Systems (PHS)

PHS is a wholly owned subsidiary of Praj. PHS offers high purity water systems (WS), Modular Process Systems (MPS) including fermentation-based solutions to customers engaged in biopharmaceuticals, sterile formulations, complex injectables & nutraceuticals.

As Indian pharma industry transits to global size capacity build in biopharma space, fermentation technologies are set to acquire center stage. There is also a huge interest and potential for creating fermentation-based manufacturing capacity in the country. The geo-strategic position of India, its ability to provide alternative manufacturing eco-system next to China and deep know-how has expanded opportunities for various Indian business houses to foray in building capacity for Biotech led products. Under the PLI scheme, there are more than 20 players looking at setting up fermentation-based manufacturing facilities to cater to emerging demands. In FY 2022-23 PHS took a strategic decision to leverage on parent companys capabilities in fermentation space and develop solutions around high-capacity fermenters. We have received an interesting order for large-size fermenters for the pharma application from Oman apart from 30 Fermenter orders for various emerging & established clients in India. International business is seeing equal growth opportunities with improved business traction as clients from various regions are products especially in the post-covid era. There are 8-10 countries increasinglyaimingtobeself-sufficient identified in the non-regulated & semi-regulated segments which have strong potential to grow and are focused on by PHS.

During the year, your Company also booked its first order in the Semiconductor sector. This is our first significant

WFI system which is based on proven and successful GLACIER™ Technology. Like developed countries, in Indian subcontinent the demand for COLD WFI is expected to grow by significant double digit over the next 3-5 years.

Innovation and R&D

Your Companys focus has always been on expanding its business horizons in bioeconomy by leveraging its technology-led innovative solutions. Your Company is committed to developing innovative solutions to decarbonization and carbon recycling. The guiding principle for R&D is ‘Technologies with lowest Carbon intensity and Best in Class. Praj Matrix, our R&D center, continued its relentless efforts on two programs, "Bio-MobilityTM & "Bio-PrismTM." The uniqueness of Matrix is that it develops futuristic technology solutions in the space of renewable fuels and chemicals starting from feed stock to product using unique blend of skills in microbiology, molecular biology, fermentation, chemical catalysis, process engineering and analytical chemistry". Apart from working on continuous improvement of technologies for existing 1G ethanol, 2G ethanol and CBG businesses for variety of feedstocks, Praj Matrix is committed to the advancement of Sustainable Aviation Fuel (SAF), marine biofuels and Bio-Hydrogen as part of its Bio-MobilityTM platform.

As a part of Bio-PrismTM platform, your Company has been working on technology for production of Bioplastics, an apt sustainable solution to provide alternative to plastics. During the year, Praj Matrix made significant progress on Polylactic acid

Polyhydroxyalkanoates (PHA). We have successfully developed end-to-end technology, from feedstock to resin. We are exploring suitable partners for production of these products as well as for application development. To accelerate the commercialization of bioplastics, your company is setting up a first-of-kind pilot cum demo plant for PLA at Jejuri in the outskirts of Pune with capex of around Rs. 60 crores. This pilot facility will be initially used for scaled production of Lactic Acid and lactide & subsequently for other products like PHA or other fermentation-based products like Butadiene. We are also setting up a "Multipurpose catalysis lab" that will need an investment of around INR 16 crore. This lab is an important element to combine biology with Chemistry & Catalysis science. In this catalysis lab we shall be exploring sustainable aviation fuel technologies starting from fermentation products like ethanol and iso butanol. Additionally, this lab will also facilitate our research on biohydrogen technology and use of compressed biogas technologies for biohydrogen production. This facility will be operational by the end of August 2023.

To explore the development of newer applications of biopolymers, we have entered into a Memorandum of Understanding (MoU) with Institute of Chemical Technology (ICT), Mumbai. Praj has set up "Parimal and Pramod Chaudhari Centre of Excellence and Innovation for Biopolymers" (CoEI), with State of the Art laboratory for developing novel methods & standards for biopolymers characterization, processing and modification. Besides enhancing existing usage of biopolymers in medical and cosmetic field,

CoEI intends to expand its application in other sectors. These include industries such as packaging, food service, consumer goods, agriculture, textiles, electronics, energy storage etc.

In the year gone by, your Company was granted 25 Indian patents and 73 international patents. Your company filed over 400 international patents till last year.

Manufacturing Capability

Your Companys manufacturing capability is substantiated by a multi-disciplinary engineering team, world-class manufacturing facilities at four different locations with excellent connectivity to ports and highways. These are located at Sanaswadi, Urawade, Wada in Maharashtra and Kandla in (Gujarat). To address growing opportunity basket from Energy Transition and Climate Actions (ETCA) agenda, your Company is setting up most modern manufacturing facility to be housed into a new subsidiary. The new facility will be set up near a major port with an investment of Rs. 100 crores. Sanswadi and Kandla facilities are approved by global multinational and EPC companies for supply of equipment and skids. The facilities are accredited with ASME U & U2, R Stamps and NB Registrations.

The ASME BPE compliant facility located at Wada serves clients in the pharmaceutical industry.

With utmost importance to employee safety, all our facilities, including project sites adhere to Health Safety and Environment (HSE) norms. With concerted efforts in value engineering, manufacturing excellence initiatives and quality programs, your Company is able to enhance productivity and capacity from existing infrastructure. Focus on institutionalizing best industry practices, Zero D program (Zero defect, Zero delay, Zero Deviation) has helped rollout higher volumes of quality products. We have been able to leverage our strong supply chain network and vendor base to optimize delivery. As part of our ESG initiatives, your Company has brought in relentless focus on greening of supply chain by helping our MSME vendor base to upgrade their process and practices.

Digitalization

Your Company makes a continued effort to adopt new technologies that help in process improvements to deliver customer centric solutions. RemoteBridgeTM – our unique remote plant monitoring system leverages Industry 4.0 technologies to deliver reliability to customers plant operations. It helps improve plant performance by providing insights for strategic, tactical and operational level interventions through real time data analytics. We have also taken digitalization initiatives that will help us achieve improved process efficiency and enhanced capacity.

Human Capital

Your Company truly believes that people are at the core of growth and sustainability. To make the organization ready in this phase of growth, your Company has made significant leaps in terms of talent attraction, engagement and retention. has always been on skilling-reskilling of talent, explore and implement newer ways of attracting and retaining talent and focus on their wellbeing. As part of Talent Development and Management, employees were nominated under various ongoing Learning and Development initiatives with an objective of unleashing, developing, accelerating and nurturing talent. To strengthen competencies, your Company has also partnered with reputed educational institutes for industry-academia interface. The overall economic growth across the bio/engineering space has provided us enormous opportunities to explore unique avenues of talent attraction and retention. We are in the phase of designing exciting career paths through lateral movements across the functions. e.g., we have designed a specialist versus generalist path for Process Engineers with a view to providing them diverse career opportunities as a Subject Matter Expert (SME) or as a Generalist. At the entry level, we are investing in creating a strong talent pipeline through a structured program for Trainees. We have hired Post Graduate Engineers from premium colleges and designed structured growth paths for them.

Enhancement of Diversity and Inclusion initiatives have been one of the key focus areas. As part of our efforts towards building a Women talent pipeline, we have taken efforts towards hiring of special batch of women (trainees) named as ‘Amruta Batch. To ensure safe working environment for women colleagues, Gender Sensitization Workshops on the provisions of the POSH Act were conducted for all employees and associates of vendor partners, working across different Praj locations.

With a view to provide a seamless employee experience digitalization initiative was taken across the various portfolios of human capital function. With the help of our digitalization partner, your company has automated Employee Data processes and flows to facilitate process transformations. In addition to this, various other technology platforms (applications) / functionalities were launched for the employees to automate the routine workflows and ensure faster decision-making and completion.

Health and Wellness is an important aspect in productivity. As a part of Employee Wellness Initiative different sessions by subject matter experts were organized with focus on mental, emotional and physical health. Employee Health Check-up camps were conducted across all Praj locations for detailed medical examination of all employees. We have introduced a dedicated Helpline for medical assistance and availability of 24X7 ambulance facility across the country. To highlight the importance of workplace safety, several awareness programs were organized in the interest of employees.

On the communication with employees front, periodic webinars, quarterly connect programs, induction programs were conducted to help employees stay abreast with company developments and engage with Chairman, CEO & MD, and the Leadership team. Your Company conducted various employee engagement initiatives like Hi-Tea with Leadership, social and cultural gatherings among others.

Awards & Recognition

In FY 2022-23, Your Company was bestowed with the following awards, certifications, and accolades-

• Bestowed with the prestigious Golden Peacock Award in the Innovative Product and Service category for BIOSYRUP?

• Ranked 2nd in Biofuels Digests list of 50 Hottest Companies in the Bioeconomy 2023

• Praj tops Fortune Indias THE NEXT 500 in Engineering Sector

• Ranked 43rd in the Fortune Indias Next 500 – 2023 ranking.

• Bagged 39th Rank among ‘Elite 100 published by Dalal Street Investment Journal

• Received Special Supplier Award from Baker Hughes

• Praj won the ‘Excellence in Product Innovation & Design 2022 award for its ground-breaking BIOSYRUP? product by Manufacturing Today magazine.

• Praj conferred with ‘Climate Action Programme CAP 2.0 Committed Award 2022 By CII - ITC Center of Excellence for Sustainable Development.

• Praj won Best Machinery Manufacturing (Distillery) Award for its contribution to the sugar industry by Bharatiya Sugar In FY 2022-23 Praj Executive Chairman Dr Pramod Chaudhari received following awards,

• ‘Jeevan Sadhana Gaurav Award 2023 presented by Savitribai Phule Pune University (SPPU) for contributions to advancements of science and technology.

Prestigious ‘Jagatik Marathi Bhushan Award 2023 Jagatik Marathi Mandal for stellar global achievements as first-generation techno entrepreneur

• "Special Industry Recognition Award" at the 6th Edition of Renewable Energy India (REI) Awards 2022 for contributions in growth of renewable energy sector

• "Sustainability Champion of The Year 2022 by Manufacturing Today for advancing cause of sustainable development

• ‘Outstanding Contributor to the Cross-Border Trade Award by IACC for greater collaborations in Indo-US business corridor

Future Outlook

Industry and transportation sector are expected to intensify their efforts to minimize carbon emissions and harness greener energy sources to fulfill net zero obligations. Your company has a two-pronged strategy in Bioeconomy viz. Bio-MobilityTM platform of technologies for sustainable decarbonization and Bio-PrismTM portfolio of technologies for carbon recycling. Through these solutions, your Company is making significant contributions for sustainable climate actions.

Energy Transition and Climate Action (ETCA) has emerged as a very important agenda globally. COP 28 Climate Change summit being held in UAE in November 2023 will only accelerate climate action. Indian economy with strong domestic consumption story, is expected to show resilience amid global recession fear. However, concerns about energy and food security owing to prolonged war in Europe remain. Several leading financial forecasting slowdown in global economy and associated measures due to fiscal tightening may affect demand cycle. Although under control for now, the latent risk of inflation due to the volatile economic environment needs to be watched. Potential escalation of trade war between USA and China may create global supply chain imbalances with potential effect on commodity pricing. Indias EBP 20 program is marching ahead of its target. There is clear recognition that biofuels have an increasingly important role to play as they address a multitude of issues across the economic, social and environmental spectrum. The introduction of flex fuel vehicles, ethanol driven power generators, diesel blending program etc. are likely to drive future demand beyond EBP 20.

Demand for Low carbon ethanol in the USA has opened significant opportunities for modernization of old ethanol country.

The successful demonstration of Indias first commercial flight powered by the blend of indigenous sustainable aviation fuel will accelerate the development of SAF opportunity. As India becomes signatory to CORSIA, mandatory blending of SAF from 2027 in accordance with the agreement will create significant opportunity. The Indian government on SAF in near future. If we target to blend 1% SAF blending in Jet fuel, India will require around 14 crore litres of SAF/annum.

The successful commissioning of a 2G ethanol plant at IOCL Panipat will certainly help in reinforcing confidenceamong potential developers across the globe. With the commissioning of HPCLs rice straw based CBG plant, your company now has references for its CBG technology for a variety of feedstock namely press mud, industrial waste as well as agricultural waste. The Energy transition and Climate action (ETCA) space has opened an array of opportunities and your company is setting up a modern facility to address the same. The introduction of modularization to our ZLD offerings has generated interest among our customers and we believe it will help us have a differentiated edge among the competition. PHS business is capitalizing on parent companys Fermentation capabilities to explore increasing opportunities in large size- High-Capacity fermenters space. Overall, we remain very positive on continued development of potential across our bioenergy and engineering businesses. Despite global economic challenges, we expect a favorable business environment aided by stabilized commodity prices and an ever-increasing awareness to decarbonize global economy.

as compared to immediately previous Financial Year), in Key Financial Detailsofsignificant

Ratios along with detailed explanation therefor, required vide Part B of Schedule V to SEBI (Listing Obligations and Disclosure Requirements) [Amendment] Regulations 2018:

Ratio UOM 31-Mar-23 31-Mar-22 Variation Major reason for variance
Debtors Turnover Days 79 81 -2% N.A.
Inventory Turnover Days 71 126 -44% Better inventory management and sale of non-moving stock items.
Interest Coverage Times N.A. N.A. N.A. N.A.
Current Ratio Times 1.45 1.44 1% N.A.
Debt Equity ratio Times N.A. N.A. N.A. N.A.
Operating Profit Margin % 9.19% 8.93% 3% N.A.
Net Profit Margin % 7.54% 7.97% -5% N.A.
RONW % 24.09% 19.53% 23% Increase in profit after tax & revenue and effective asset management

Forward looking Statments:

Statements in this report particularly those which relate to Management Discussion and Analysis describing the Companys future plans, projections, estimates, and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.