Dear Shareholders, 
 
 We have delivered on the objectives the Company had set out for itself
 for the fiscal 2011-12. While the top line and performance has been in
 line with our expectations, the margins though improving, need further
 attention. We will be taking this up during the coming year. Your
 Company has shown great resilience in the face of a global slowdown .
 In fact, resilience is ingrained in your Company''s fabric which
 allows it to endure tough times and bounce back, consolidate even
 against challenges, grow in the face of adversity and sustain the
 future. Just like the five elements'' of nature.
 
 Your Company is an amalgam of various experiences and expertise. On one
 side, it is an engineering and projects Company given the fact that we
 undertake a large number of projects in which our process engineering
 plays a critical role. On another, we are a biotech Company, as the
 process solutions we offer encompass biotech platform, which are honed
 at Praj Matrix, our R & D Center.  Each area of expertise offers
 opportunities that will enhance our growth prospects. We will examine
 and build on each skill set for our future growth.
 
 On the process engineering side your Company did undertake two new
 business lines over the past two years. Critical Process Equipment and
 Water & Wastewater Treatment Systems. The challenge now is to quickly
 integrate and scale up in the shortest time span. The best way is to
 consolidate and grow simultaneously. In line with this thought we have
 already resourced both the business lines adequately.
 
 Our acquisition of Neela Systems with its niche business model of
 serving high purity water segment is proof of the Company putting its
 money where it can realize value.
 
 To deliver on all aspects of the growth potential, your Company is
 working on a strategic growth plan.  As we complete this plan, we will
 be happy to share the same with all.
 
 We are also evaluating play in the bio-chemicals sector which is an
 outcome of our R & D focus. Praj Matrix has been working on various
 processes and biotech agenda which includes bio-chemicals, health &
 wellness and nutraceuticals. We are now in the process of developing
 business models for various opportunities. An identified team is
 developing a blue print for ''to-market'' strategy. The biochemicals
 market itself is a trillion dollar opportunity. It is expected to be
 the next frontier of technology play.
 
 Most importantly, on the lignocellulose biomass to ethanol front, the
 Board has given an in-principle consent to move ahead with a plan to
 set up a commercial scale demo plant which will be a technological feat
 in itself. This is expected to put your Company on the global map of
 advanced biofuels.
 
 The Company has endured tough times over the last two years. We are now
 back on the growth path.  It is time to make the future sustainable.
 
 Pramod Chaudhari
 
 Executive Chairman                                   Pune, May 2012