About Thermax Ltd

Incorporated in 1966 as Wanson India by A.S. Bhathena, Thermax Group is a Rs. 8,090 crore company headquartered in Pune, India. The Company offers integrated solutions in heating, cooling, power generation, water treatment and recycling, air pollution control and chemicals, with an emphasis on ensuring clean air, clean energy and clean water. As a one-stop utility solutions provider, Thermax extends comprehensive operations and maintenance support allied to each of its business verticals as well as a multitude of several specialised services, including retrofitting, revamping, upgrading, and auditing. Additionally, the Company has expanded its services portfolio by introducing digital solutions catering to all asset lifecycle need for a diverse range of its products. It operate globally through 34 international and 22 domestic offices, 14 manufacturing facilities - 10 in India and 4 overseas, spanning Europe and South East Asia. The company's international presence spans 90 countries across Asia, South East Asia, Africa, Europe, Americas and the Middle East. It has 10 wholly owned domestic subsidiaries and 22 wholly owned overseas subsidiaries. Thermax Limited, a limited liability engineering company was set up in 1966 as Wanson India by A.S. Bhathena. The Company was established on 30th June, 1980. Tulsi Fine Chemical Industries Private Ltd and Kailas Castings Private Ltd were merged with the company with effective from 1st July of the year 1982. As at 1st July 1989, Thermax became a deemed public company. In the year 1991, T. K. Steel Industries Ltd was merged with the company. During the year 1994, the company's status was changed from deemed public company public company. The process heat division came out with a new boiler design in the year 1995, an oil fired smoke boiler, shell Max and Combiac, a boiler specially designed to burn agro fuels like rice and groundnut husk, saw dust, coffee waste etc. also in the same year of 1995, a Memorandum of Understanding (MoU) was signed with Bharat Shell for thermic fluid, therma, for heat transfer system. The process heat projects division received an order from PT South Pacific Viscose, an Indonesian Company for supply of 3 boilers of 22.5 tonnes per hour of steam. Energy System Division of the company was born in the year 1996 by the way of merger of two division, one in the energy area and the other in heat recovery area to pool the expertise with a view to addressing the heat recovery business and also in the same year launched fine circulation fluidised bed combustion boiler. The MoU was signed with Bharat Shell and the Process Heat Division of the company. During the year 1997, the company had received the AD-Merkblatt certification for the entire manufacturing unit at Chinchwad. An electronic network called Thermnet linking all establishments of the company in the country was introduced during the year same year of 1997 and also Thermax had entered into a joint venture with Fuji Electric Company of Japan. The Company had introduced five new products in the standard packaged boiler range during the year 1998 and also launched a wide range of products incorporating Kawasaki modular technology in our Vapour Absorption Division. Thermax Co-gen Limited became a subsidiary of the company in the year 1999. During the same year 1999, the company had developed a more advanced process called PDP II. During the year 2000, Thermax had acquired ME Engineering, a UK-based company belonging to the Beel Industrial Boilers Plc group. The Company has signed an exclusive distribution agreement for South Asian markets with US company Purafil Inc to market their dry gas scrubbers popularly known as chemical filters. Thermax had signed a memorandum of understanding with the Society of Applied Microwave Electronics Engineering and Research for commercialisation of the latter's microwave disinfections system for treating pathological bio-medical waste generated by hospitals and research institutes. The Company had set up wholly owned subsidiary company in the US, namely Thermax Inc and another one in Detroit, USA in the year 2001. Thermax had acquired 50% of stake in Energy Performance Service (Thailand), a subsidiary of Energy Performance Service of Canada. The Company and Cummins Diesel Sales and Services had entered into a strategic alliance to provide attractive energy solutions to various industry segments. With the investment of US $ 200,000, the company had incorporated a wholly owned overseas (WOS) subsidiary in Brazil during the year 2003. Thermax had bagged an order for Captive Power Plant in the year 2004. During the year 2004-05, the company's chemical plant at Paudh, near Mumbai had received the OHSAS 18001:1999 certification from BVQI. COFEX 2005 honored with special award for Thermax's contribution to the HVAC industry. Thermax had inked a technical know-how transfer and license agreement with Balcke-Durr, Germany in October of the year 2007 for dry and wet electrostatic precipitators (ESPs), air pollution control equipment for power, industrial and utility segments upto 300 MW. As at February 2008, the company had signed a technical transfer license agreement with US-based Babcock & Wilcox Power Generation Group (B&W) to engineer, manufacture and sell sub critical B&W radiant utility boilers in India. As of May 2008, the company had inked a protocol of agreement for an export order, for supply of heat recovery steam generator (HRSG). Thermax had received an order from a major refinery in July of the year 2008, to supply pulverized coal fired boilers for their captive cogeneration plant valued at approximately Rs 8.2 billion and also in August of the same year 2008, received an order of Rs 4.15 billion, from a leading steel making for setting up a captive power plant for their upcoming blast furnace complex on an EPC basis. In 2008, Thermax started manufacturing chillers in China.In 2009, Thermax signed technology agreements with global leaders GE Water, USA and Wehrle Umwelt GmbH, Germany for advanced wastewater treatment. During the year under review, Thermax bagged its first IPP order worth Rs 1000 crore to build a 300 MW turnkey power plant in Andhra Pradesh. On 26 August 2009, Thermax Limited and SPX Corporation, a global infrastructure leader in providing power plant equipment and services, announced the establishment of a strategic joint venture to focus on equipment and services for India's growing power sector. The JV will operate on the basis of a license agreement with Balcke-Durr GmbH, Germany, a 100% subsidiary of SPX Corporation. The joint venture investment will be on a 51% Thermax and 49% SPX ownership basis and the new company will be based in Pune, India. On 20 December 2009, the foundation stone was laid for India's first public private partnership project for rural electrification at Shive village, Pune where Thermax will build solar thermal power plant with Department of Science & Technology, Government of India support. Thermax will also manage the operation & maintenance of the solar thermal power plant at Shive for a period of five years. On 10 March 2010, Thermax and Babcock & Wilcox Power Generation Group, Inc. (B&W PGG), a global leader in power generation industry and the original Babcock & Wilcox, announced the formation of a strategic joint venture to engineer, manufacture and supply supercritical boilers for the Indian power sector. The joint venture will also manufacture subcritical boilers over 300 megawatts (MW) in size. Thermax will own 51% share of the joint venture while United States-based B&W PGG will have 49% ownership. On 17 May 2010, Thermax signed a technology transfer license agreement with Lambion Energy Solutions, a German engineering company with expertise in converting waste to energy. The technology transfer will provide Thermax with high efficiency combustion systems for using biomass, high in moisture content, for energy generation. They will be integrated in its boilers and heaters with heat output ranging from 4 MW to 30 MW. Under the licensing agreement valid for a period of five years, a dedicated team from Thermax will work with Lambion to absorb and deploy this technology. Thermax will have an exclusive license to market heating systems, equipped with the new technology in India and SAARC countries, South East Asia, Middle East and Africa. On 9 November 2010, Thermax announced the acquisition of Danstoker A/S, a leading European boiler manufacturer and its German subsidiary, Omnical Kessel. The acquisition valued at Euro 29.5 million was completed on 8 November 2010. Danstoker, headquartered in Herning, Denmark has a 75 year tradition in manufacturing biomass based boilers and waste heat recovery systems for a wide range of industries. Its manufacturing facilities are located in both Denmark and Germany, where it had acquired Omnical in 2003. This acquisition will enable Thermax to leverage the ongoing renewable energy movement of Europe aimed at generating 20% of its overall energy generation from renewables. The acquisition offers a strategic fit for Thermax's packaged boiler business, under the Cooling & Heating Business Unit. In July 2011, Thermax unveiled unique solar cooling system at MNRE's Solar Energy Centre. On 25 July 2011, Thermax Limited and Amonix, Inc. announced an agreement that will bring proven, concentrated photovoltaic (CPV) technology for clean power generation to India. In this exclusive partnership, Amonix will offer high-performance solar power generation systems and Thermax will be the Engineering, Procurement and Construction (EPC) partner to provide turnkey solutions to customers in India. Amonix is the world leader in the design and manufacture of CPV technology. On 22 March 2012, Thermax announced the acquisition of the Steam Division of Virgo Valves & Controls Ltd, India and its German subsidiary company Rifox - Hans Richter GmbH, a leading steam traps and allied steam accessories manufacturer. The acquisition was completed on 21 March 2012 for a value of Rs. 13.39 crore (Euro 2 million). The acquisition will bring to the Thermax fold the manufacturing facilities of Rifox-Virgo in Germany and in India. The acquisition offers a strategic fit for Thermax's steam engineering business. In FY 2017-18, the Company won the highest ever export contract of USD 157 million from a leading African conglomerate for its refinery project coming up in Nigeria. Commercial production from its newly constructed facility at Dahej, Gujarat commenced on October 31, 2017. On September 13th, 2017, it won a USD 43 million contract from a leading cement company in UAE for a turnkey captive power plant, the first EPC order that Thermax will be executing for a GCC (Gulf Co-operation Council) country. It inaugurated the new manufacturing facility in Indonesia on July 26, 2017, expanding its footprint in international markets, especially the ASEAN countries. The Company, through its step-down subsidiary in Denmark, acquired 100% stake in Barite Investments Sp. z.o.o., Poland (Barite). With this, Danstoker Poland Sp. Zoo., erstwhile 'Barite', became a stepdown subsidiary of the company. Through its step-down subsidiary in Denmark, it acquired certain assets and production activities of Barite Investments Sp. z.o.o. in Poland, for advancing its business in Eastern Europe. It concluded a Rs. 327 crore Order from a public sector company based in Western India for its upcoming chemical plant. The project is for a BTG (Boiler-Turbine-Generator) package on EPC basis for its captive co generation power plant of 2 x 65 MW capacity. It secured a Rs. 503 crore order from a leading public sector fertiliser company to set up three natural gas based EPC co-generation plants (each of 20 MW capacity) at its facilities in Haryana and Punjab. It commissioned a 5.76 MW rooftop solar PV captive power plant, the second largest plant in India for a public sector hydrocarbon company. During 2018, the company increased its equity stake from 54.67% to 76% in First Energy Private Limited (FEPL), Pune, an alternative energy solutions company. New 22,000 sq. ft. manufacturing facility for steam engineering products was commissioned at Savli, Gujarat in FY'18. The emerging Process Cooling portfolio of Thermax has been structured as a new Strategic Business Unit, effective April 1, 2018, to bring about better focus at a global level. The Solar business commissioned India's second largest single-roof solar PV project on a turnkey basis. In May 2018, Thermax entered into a preliminary understanding with Babcock & Wilcox India Holdings Inc. (B&W) to acquire the shareholding of the latter. In FY'19, Company concluded an order of Rs. 340 crore from a leading Indian steel major for a specially designed waste heat boiler, electric turbo generators and ancillary equipment for their production facility in Maharashtra, India. On January 31, 2019, it inaugurated production unit at Sri City, Andhra Pradesh to manufacture a wide range of vapour absorption machines comprising chillers, heat pumps and heaters in its first phase, with a capacity of 400 machines per year. The division launched a Remote Online Support System (ROSS) - a web-based solution that helps to monitor, troubleshoot and supervise chillers remotely. During the year, the company introduced a new series of Thermax absorption chillers that are designed to provide an additional efficiency of 7% to 8% over traditional offerings. It acquired the JV partner's stake in Thermax Babcock & Wilcox Energy Solutions (TBWES), which became a wholly owned subsidiary of the company. Subsequently, the shareholders approved the transfer of the Boiler & Heater (B&H) business to TBWES through a 'slump sale' effective October 1, 2019. It has acquired the entire stake in Thermax SPX Energy Technologies Ltd. (TSPX) held by the joint venture partners namely, Mutares Holding-24 AG, Germany and Balcke Duerr GmbH, Germany. Subsequent to the acquisition, TSPX has now become a wholly owned subsidiary of Thermax. It commissioned a 40 MW coal-based captive power plant for a leading cement and clinker manufacturer in the UAE; Thermax's first full-fledged EPC project in the Middle East, for a leading cement and manufacturing company in UAE. It commissioned 21 units of exhaust gas boilers for a power generation and distribution company in Bangladesh for their 200 MW integrated power plant. The Company, has set up a step-down subsidiary company in Nigeria (through Wholly Owned Subsidiary (WOS) of the company, Thermax Engineering Construction Company Limited), named 'Thermax Engineering Construction FZE', which was incorporated on August 31, 2018, as a prerequisite for executing projects in the region. It commissioned a 25 MW captive cogen plant for a paper manufacturing unit located in Samaal, the Philippines on an EPC basis to generate power and steam for the process. This was a repeat order from the customer, the earlier one being the first overseas power plant for Thermax. In the third quarter of FY2019-20, Company concluded another order of Rs. 431 crore from a public-private joint venture power company to set up two FGD systems at their thermal power plant in Jharkhand, comprising two units of FGD systems of 525 MW capacity each. It further concluded an order of Rs. 471 crore from an Indian government power company to set up two Flue Gas Desulphurization (FGD) systems at their thermal power plant in Jharkhand. As a part of customer's drive to meet the mandate for regulating SOx emissions from coal fired power plants, they plan to install two units of FGD systems of 500 MW capacity each at their plant. It completed the supply of its largest export order comprising four utility boilers, eight heat recovery steam generators, two flue gas steam generators and a hot oil heater for the largest refinery and petrochemical project in Nigeria, West Africa, all in a modular form. Apart from these, it received the ISO 27001:2013 certification, the highest and internationally accepted benchmark in information security standards. During the year 2020, the Water and Waste Solutions business developed several new products such as in-house multi-effect evaporators (for zero liquid discharge systems), prefabricated systems and portable water testing kits. As a value add, plant audit service was extended to customers and spares business was enhanced with focus on on-time delivery. In FY 2020-21, Company booked an order of Rs. 320 crore to set up a captive Combined Heat and Power (CHP) plant on EPC basis for a public sector biorefinery company in Assam. It partnered with Defence Research and Development Organisation (DRDO) for the supply of fuel cell stacks, to realize India's ambition of developing homegrown Air Independent Propulsion system for the Scorpene class submarines of the Indian Navy. A crucial milestone of the programme was the successful demonstration of a land based prototype to the Indian Navy on March 8, 2021. The group announced an agreement with Power Roll, a developer of unique, low-cost and lightweight flexible solar films, to develop the market for solar film in India. It won first export order for the Flue Gas Desulphurisation unit during the year 2021, from a customer in Saudi Arabia. This first order to supply air pollution equipment for lignin fired boilers and alumina calcination added a new layer to the company's strength in the niche domain. The Steam Engineering division secured orders from a Malaysia-based rubber glove manufacturer for steam accessories and services. This has been the fastest growing industry since January 2020, and gained further momentum amid the rise in COVID-19 cases globally. To further boost efficiencies, Thermax undertook restructuring during the year in its global operations to consolidate its presence. It closed down its China subsidiary - TZL (Thermax (Zhejiang) Cooling & Heating Engineering Co. Limited, China) and has proposed liquidation of Thermax Senegal S.A.R.L, post winding up of operations. Thermax also sold a non-profitable service business segment of Boilerworks A/S. Entities have been established in Thailand and Nigeria to steer the expansion of the project business overseas. Thermax's latest state-of-the-art Cooling plant at Sri City continued to leverage its automation capabilities, and delivered 30 machines in September 2020 - the highest number of units in a single month. With the commissioning of Phase II of resin production at Thermax's Dahej plant in Gujarat during the year, manufacturing capacity at the facility went up to 20,000 m3 per year from 10,000 m3 in the previous fiscal. One of the key projects executed by Thermax during the pandemic was the remote commissioning of a large auxiliary boiler in Egypt. With meticulous planning and execution, TBWES, Company's subsidiary, commissioned a unit of 50 TPH natural gas, acetone and water gas fired boiler for a chemical company. All critical processes were carried out through Remote Online Service Support (ROSS). The operations were conceptualised with adequate SOPs and O&M manuals, and a live view of the Data Collection System was conducted. The project paved the way for Thermax to develop a service model that can yield substantial cost savings for its customers. The company has set up a step-down subsidiary company through a wholly owned subsidiary of the company, Thermax Onsite Energy Solutions Limited (TOESL) named Enernxt Private Limited, which was incorporated on January 5, 2021, for starting the Bio-CNG business of TOESL. During the year 2021, it acquired the remaining 24% stake in First Energy Private Limited (FEPL) effective December 21, 2020. It approved the voluntary liquidation of Thermax Sustainable Energy Solutions Limited (TSES), a wholly owned subsidiary of the company under the Insolvency and Bankruptcy Code, 2016, which commenced on April 5, 2021. Besides this, it approved the liquidation and writing off of investments in its step-down wholly owned subsidiaries Thermax Hong Kong Limited (THKL) and Thermax (Zhejiang) Cooling and Heating Engineering Company Ltd. (TZL China) on March 17, 2021. In FY 2021-22, the Company bagged Rs. 1, 176 crore order from an Indian Public Sector Undertaking (PSU) for setting up a sulphur recovery block. It concluded two large flue gas desulphurisation (FGD) orders in Q3 and Q4 of Rs. 830 crore and Rs. 545 crore respectively from power sector companies. It expanded the renewable energy business to offer solutions in wind and storage batteries besides solar on an opex basis. It launched 'Thermax Edge', a comprehensive IoT-based digital platform for customers to fulfill their product and service requirements. In July 2022, Thermax incorporated Thermax Bioenergy Solutions Private Limited (TBSPL) thru shareholders' agreement with EverEnviro Resource Management for setting up a bio-CNG turnkeyprojects. The Company acquired minority stakes in ExactSpace and Covacsis. In 2023, the Company's subsidiary, First Energy Private Limited (FEPL), commissioned 180 MWp captive Solar and solar-wind hybrid farms in Maharashtra, Gujarat and Tamil Nadu. Four specialised operations centres were set up in Pune and Chennai for constant monitoring of assets. In 2023, 4 x 1000 TR hot water absorption chillers commissioned for a synthetic textile manufacturer in western India, to be utilised for process air cooling. It Commissioned the first pre-fabricated MEE as part of the ETP-ZLD solutions for the F&B industry; executed a large 33 TPH biomass cogeneration plant for an aluminium major in Karnataka; commissioned biomass boiler plants for steam supply to a pharmaceutical major, a zero liquid discharge plant for a steel major, and two solar PV plants for power supply to two chemical companies.

Thermax Ltd Chairman Speech

MESSAGE FROM THE CHAIRPERSON

I am delighted to present the 42^nd Annual Report of your Company for the financial year 2022-23.1 am very happy to mention that almost every division of the company did a lot better than the previous year, not just in numbers and growth, but achieving several firsts. New and stronger partnerships were entered into, and businesses developed new applications especially focussed on reducing our customer's carbon and water footprints. They implemented new processes, penetrated newer markets and most importantly, built a growth mindset, capable of thinking big, challenging themselves, being innovative, and doing things differently.

Heartfelt thanks to Ashish Bhandari, our Managing Director & CEO, for partnering in our vision to shift the Company's predominant focus towards green. We thank our Executive Council members, our Strategic Business Unit heads and all our employees for their hard work and execution. Thank you to our customers who have had continued faith in Thermax; to all our vendor and business partners, as well as all other stakeholders. This year, we developed an extensive strategy framework for the period 2023-26, tying into our overarching strategic priorities for 2030. Sincere gratitude to our Board members for their valuable guidance and advice.

Even though the year 2022-23 started with the Russia-Ukraine war and the sudden increase in commodity and freight prices, we have reached new milestones, with the highest revenue and profit in our Company's history. Unfortunately, with all the good news, it pains me to report a negative arbitration award of Rs. 250 crore slapped on the Company in the month of June 2023. Since the 2022-23 results were already audited, it does not form a part of the financials; however, we have mentioned the award in this Annual Report.

The Company will be appealing the matter.

In the past year, we saw demand across business segments with an uptick in order book predominately from the refinery, steel, power, and chemical sectors. The order pipeline in waste heat recovery for cement and steel, waste-to-energy and build-own-operate based solutions grew. Our Industrial Products group comprising Heating, Water and Waste Solutions, Cooling and Air Pollution Control witnessed a demand from sugar, distilleries, paper and pulp, and food processing industries for green offerings.

Going forward, although India is on a growth trajectory, we are seeing a marginal slowdown in industrial infrastructure orders. If the government continues to invest heavily in infrastructure projects, Thermaxwill benefit from the ‘derived demand', through investments in refineries, steel, and cement.

Since the Company operates and reviews its businesses in four major buckets, we have decided to project the same going forward. Thus we have realigned our businesses into four segments: Industrial Products, Industrial Infra, Green Solutions and Chemical. Both Industrial

Products and Industrial Infra are predominantly green while the Green Solutions business provides 100% sustainable offerings.

As always, a strong ESG proposition has formed a key ingredient and filter for our decisions and actions. The ‘E' (Environmental) impact of ESG is gaining traction the world over. Customers are constantly looking for economically viable solutions that have a lower carbon footprint. With the current war, every country has started to think of energy security seriously. The recently concluded COP27 summit carries forward the legacy of Glasgow - mainly on fossil fuels and emission reduction, by agreeing to keep the 1.5-degree temperature rise target alive and countries agreeing to ‘phase down' coal use. For India, this enhances the emphasis on energy security through renewables and the use of coal with carbon capture, to bring down the dependence on oil and chemical imports. Thermax has developed and partnered with companies for technologies that could provide an alternative to importing chemicals.

We are also constantly developing as well as looking to buy technologies that will help our customers with energy transition.

Thermax is witnessing a growing interest in renewable opex solutions, based on long-term agreements.

I am happy to share that within one year, our subsidiary, First Energy Private Limited (FEPL), has successfully commissioned solar and solar-wind hybrid farms to fulfil our customers' captive renewable power requirements. Another subsidiary under our Green Solutions segment, TOESL (Thermax Onsite Energy Solutions Limited), has achieved significant growth in revenues. Responding to the rising demand for utilities through build-own-operate solutions, TOESL is expanding its portfolio to include other sustainable avenues, such as cogeneration, recycled water, biomass gasification, and bio-CNG, and also spreading geographically.

Thermax responded to the challenge of stubble burning, to counter carbon emissions and produce a value added product. Every year in November,

India enjoys a hearty kharif or rice harvest season, but the flip side of a good yield is an abundance of waste paddy straw stubble which is burned in farms prior to the next sowing season. The impact of this burning (apart from other factors) leaves northern India, especially parts of Delhi NCR and Punjab regions, choked by smog.

To address this issue, Thermax, in partnership with EverEnviro and utilising Primove's technology, has been able to convert this waste into bio-CNG, which is predominantly used in vehicles. The technology is a promising solution to replace carbon-positive fossil fuels and reduce the import of costly natural gas.

Being a first-of-its- kind, the outcome is encouraging, but is taking time to reach the committed output.

Our clean energy portfolio is set to be augmented with the government's support to green technologies and the various reforms introduced in the Union Budget for an increased focus on energy transition and environmental well-being. One of these is green hydrogen. With our recent partnership with Fortescue Future Industries (FFI), Australia, we believe, overtime, that the production of green hydrogen will be a key step forward in decarbonising hard-to-abate industries in India, such as refineries, fertilisers, and steel.

Although not a large emitter of C0₂ within the company, we have charted our decarbonisation path. By 2025, we will achieve 25% reduction in C0₂, from our 2019 baseline, to support India in transitioning into a low-carbon economy. Progress has been made by enhancing operational efficiency, renewable energy generation, procurement, and fuel switch. In this financial year, we have achieved an absolute reduction of 17% in emissions from the base year of 2019. Moreover, our carbon emission intensity with respect to revenue has improved by 38.6%.

We remain committed to transforming Thermax as a future-ready, agile, productive, and effective organisation. We are leveraging tech-enabled processes and digitisation to ensure customer delight externally and reduce bureaucracy as well as repetitive processes internally. Leveraging the company's experience in the domains of energy and environment over 55 years, Thermax introduced a unique digital solution called ‘Edge Live' over a year ago.

Our customers have experienced increased efficiency, improved plant performance, enhanced uptime and knowledge management of their industrial assets.

We understand that a sustainable business, in the long run, is one that maintains a consistent focus on the ‘S' (Social) imperative of ESG.

Being a responsible organisation, we constantly find opportunities to take actions not only towards the planet, but also our people, and positively impact society.

The initiative Social Compact (SoCo), which Thermax and other companies have signed up for along with the NGO Dasra and others, ensures greater dignity and equity for unorganised industrial workers in India. Apart from our own manufacturing facilities and sites, Thermax started a worker facilitation centre (WFC) in Pune and another in Savli to help informal workers across industries access benefits linked to government schemes they are entitled to, such as the e-Shram card, BOCW benefits, Aadhaarcard, PAN card, and health insurance. I am delighted that our own workers in Pune have come forward to volunteer their time for this initiative.

To further social equity, we are partnering with local communities near our manufacturing locations. During FY 2022-23, Thermax Foundation collaborated with NGOs such as Lokbharati and Manavlok, along with like-minded corporates, to provide skill development programmes for youth and capacity-building initiatives for farmers respectively.

We also continue our support towards school education and the alumni programme at The Akanksha Foundation and iTeach. I'd like to express my heartfelt appreciation and commend our NGO partners, the CSR team and the local support from our employees, for their unwavering efforts in making a positive impact on people's lives.

Last year we put together a Diversity, Equity, and Inclusion strategy, focussing on four pillars: enhancing diversity representation, nurturing and sponsoring talent, fostering mindset change, and promoting openness and inclusiveness in the workplace. We've taken some baby steps in hiring more women in leadership roles as well as on the shop floor and a few differently-abled individuals in our workforce. We aim to double the women working with Thermax within the next three years.

Through our ethical and inclusive corporate governance practices, which form an integral part of our Environmental, Social, and Governance (ESG) framework, we aim to add value to all our stakeholders and successfully fulfil our long-term business objectives. Once again, my heartfelt gratitude and appreciation to every stakeholder who has and continues to partner with us on this journey. We thank you for your ongoing trust and support.

Warmly,

Chairperson

Thermax Ltd Company History

Incorporated in 1966 as Wanson India by A.S. Bhathena, Thermax Group is a Rs. 8,090 crore company headquartered in Pune, India. The Company offers integrated solutions in heating, cooling, power generation, water treatment and recycling, air pollution control and chemicals, with an emphasis on ensuring clean air, clean energy and clean water. As a one-stop utility solutions provider, Thermax extends comprehensive operations and maintenance support allied to each of its business verticals as well as a multitude of several specialised services, including retrofitting, revamping, upgrading, and auditing. Additionally, the Company has expanded its services portfolio by introducing digital solutions catering to all asset lifecycle need for a diverse range of its products. It operate globally through 34 international and 22 domestic offices, 14 manufacturing facilities - 10 in India and 4 overseas, spanning Europe and South East Asia. The company's international presence spans 90 countries across Asia, South East Asia, Africa, Europe, Americas and the Middle East. It has 10 wholly owned domestic subsidiaries and 22 wholly owned overseas subsidiaries. Thermax Limited, a limited liability engineering company was set up in 1966 as Wanson India by A.S. Bhathena. The Company was established on 30th June, 1980. Tulsi Fine Chemical Industries Private Ltd and Kailas Castings Private Ltd were merged with the company with effective from 1st July of the year 1982. As at 1st July 1989, Thermax became a deemed public company. In the year 1991, T. K. Steel Industries Ltd was merged with the company. During the year 1994, the company's status was changed from deemed public company public company. The process heat division came out with a new boiler design in the year 1995, an oil fired smoke boiler, shell Max and Combiac, a boiler specially designed to burn agro fuels like rice and groundnut husk, saw dust, coffee waste etc. also in the same year of 1995, a Memorandum of Understanding (MoU) was signed with Bharat Shell for thermic fluid, therma, for heat transfer system. The process heat projects division received an order from PT South Pacific Viscose, an Indonesian Company for supply of 3 boilers of 22.5 tonnes per hour of steam. Energy System Division of the company was born in the year 1996 by the way of merger of two division, one in the energy area and the other in heat recovery area to pool the expertise with a view to addressing the heat recovery business and also in the same year launched fine circulation fluidised bed combustion boiler. The MoU was signed with Bharat Shell and the Process Heat Division of the company. During the year 1997, the company had received the AD-Merkblatt certification for the entire manufacturing unit at Chinchwad. An electronic network called Thermnet linking all establishments of the company in the country was introduced during the year same year of 1997 and also Thermax had entered into a joint venture with Fuji Electric Company of Japan. The Company had introduced five new products in the standard packaged boiler range during the year 1998 and also launched a wide range of products incorporating Kawasaki modular technology in our Vapour Absorption Division. Thermax Co-gen Limited became a subsidiary of the company in the year 1999. During the same year 1999, the company had developed a more advanced process called PDP II. During the year 2000, Thermax had acquired ME Engineering, a UK-based company belonging to the Beel Industrial Boilers Plc group. The Company has signed an exclusive distribution agreement for South Asian markets with US company Purafil Inc to market their dry gas scrubbers popularly known as chemical filters. Thermax had signed a memorandum of understanding with the Society of Applied Microwave Electronics Engineering and Research for commercialisation of the latter's microwave disinfections system for treating pathological bio-medical waste generated by hospitals and research institutes. The Company had set up wholly owned subsidiary company in the US, namely Thermax Inc and another one in Detroit, USA in the year 2001. Thermax had acquired 50% of stake in Energy Performance Service (Thailand), a subsidiary of Energy Performance Service of Canada. The Company and Cummins Diesel Sales and Services had entered into a strategic alliance to provide attractive energy solutions to various industry segments. With the investment of US $ 200,000, the company had incorporated a wholly owned overseas (WOS) subsidiary in Brazil during the year 2003. Thermax had bagged an order for Captive Power Plant in the year 2004. During the year 2004-05, the company's chemical plant at Paudh, near Mumbai had received the OHSAS 18001:1999 certification from BVQI. COFEX 2005 honored with special award for Thermax's contribution to the HVAC industry. Thermax had inked a technical know-how transfer and license agreement with Balcke-Durr, Germany in October of the year 2007 for dry and wet electrostatic precipitators (ESPs), air pollution control equipment for power, industrial and utility segments upto 300 MW. As at February 2008, the company had signed a technical transfer license agreement with US-based Babcock & Wilcox Power Generation Group (B&W) to engineer, manufacture and sell sub critical B&W radiant utility boilers in India. As of May 2008, the company had inked a protocol of agreement for an export order, for supply of heat recovery steam generator (HRSG). Thermax had received an order from a major refinery in July of the year 2008, to supply pulverized coal fired boilers for their captive cogeneration plant valued at approximately Rs 8.2 billion and also in August of the same year 2008, received an order of Rs 4.15 billion, from a leading steel making for setting up a captive power plant for their upcoming blast furnace complex on an EPC basis. In 2008, Thermax started manufacturing chillers in China.In 2009, Thermax signed technology agreements with global leaders GE Water, USA and Wehrle Umwelt GmbH, Germany for advanced wastewater treatment. During the year under review, Thermax bagged its first IPP order worth Rs 1000 crore to build a 300 MW turnkey power plant in Andhra Pradesh. On 26 August 2009, Thermax Limited and SPX Corporation, a global infrastructure leader in providing power plant equipment and services, announced the establishment of a strategic joint venture to focus on equipment and services for India's growing power sector. The JV will operate on the basis of a license agreement with Balcke-Durr GmbH, Germany, a 100% subsidiary of SPX Corporation. The joint venture investment will be on a 51% Thermax and 49% SPX ownership basis and the new company will be based in Pune, India. On 20 December 2009, the foundation stone was laid for India's first public private partnership project for rural electrification at Shive village, Pune where Thermax will build solar thermal power plant with Department of Science & Technology, Government of India support. Thermax will also manage the operation & maintenance of the solar thermal power plant at Shive for a period of five years. On 10 March 2010, Thermax and Babcock & Wilcox Power Generation Group, Inc. (B&W PGG), a global leader in power generation industry and the original Babcock & Wilcox, announced the formation of a strategic joint venture to engineer, manufacture and supply supercritical boilers for the Indian power sector. The joint venture will also manufacture subcritical boilers over 300 megawatts (MW) in size. Thermax will own 51% share of the joint venture while United States-based B&W PGG will have 49% ownership. On 17 May 2010, Thermax signed a technology transfer license agreement with Lambion Energy Solutions, a German engineering company with expertise in converting waste to energy. The technology transfer will provide Thermax with high efficiency combustion systems for using biomass, high in moisture content, for energy generation. They will be integrated in its boilers and heaters with heat output ranging from 4 MW to 30 MW. Under the licensing agreement valid for a period of five years, a dedicated team from Thermax will work with Lambion to absorb and deploy this technology. Thermax will have an exclusive license to market heating systems, equipped with the new technology in India and SAARC countries, South East Asia, Middle East and Africa. On 9 November 2010, Thermax announced the acquisition of Danstoker A/S, a leading European boiler manufacturer and its German subsidiary, Omnical Kessel. The acquisition valued at Euro 29.5 million was completed on 8 November 2010. Danstoker, headquartered in Herning, Denmark has a 75 year tradition in manufacturing biomass based boilers and waste heat recovery systems for a wide range of industries. Its manufacturing facilities are located in both Denmark and Germany, where it had acquired Omnical in 2003. This acquisition will enable Thermax to leverage the ongoing renewable energy movement of Europe aimed at generating 20% of its overall energy generation from renewables. The acquisition offers a strategic fit for Thermax's packaged boiler business, under the Cooling & Heating Business Unit. In July 2011, Thermax unveiled unique solar cooling system at MNRE's Solar Energy Centre. On 25 July 2011, Thermax Limited and Amonix, Inc. announced an agreement that will bring proven, concentrated photovoltaic (CPV) technology for clean power generation to India. In this exclusive partnership, Amonix will offer high-performance solar power generation systems and Thermax will be the Engineering, Procurement and Construction (EPC) partner to provide turnkey solutions to customers in India. Amonix is the world leader in the design and manufacture of CPV technology. On 22 March 2012, Thermax announced the acquisition of the Steam Division of Virgo Valves & Controls Ltd, India and its German subsidiary company Rifox - Hans Richter GmbH, a leading steam traps and allied steam accessories manufacturer. The acquisition was completed on 21 March 2012 for a value of Rs. 13.39 crore (Euro 2 million). The acquisition will bring to the Thermax fold the manufacturing facilities of Rifox-Virgo in Germany and in India. The acquisition offers a strategic fit for Thermax's steam engineering business. In FY 2017-18, the Company won the highest ever export contract of USD 157 million from a leading African conglomerate for its refinery project coming up in Nigeria. Commercial production from its newly constructed facility at Dahej, Gujarat commenced on October 31, 2017. On September 13th, 2017, it won a USD 43 million contract from a leading cement company in UAE for a turnkey captive power plant, the first EPC order that Thermax will be executing for a GCC (Gulf Co-operation Council) country. It inaugurated the new manufacturing facility in Indonesia on July 26, 2017, expanding its footprint in international markets, especially the ASEAN countries. The Company, through its step-down subsidiary in Denmark, acquired 100% stake in Barite Investments Sp. z.o.o., Poland (Barite). With this, Danstoker Poland Sp. Zoo., erstwhile 'Barite', became a stepdown subsidiary of the company. Through its step-down subsidiary in Denmark, it acquired certain assets and production activities of Barite Investments Sp. z.o.o. in Poland, for advancing its business in Eastern Europe. It concluded a Rs. 327 crore Order from a public sector company based in Western India for its upcoming chemical plant. The project is for a BTG (Boiler-Turbine-Generator) package on EPC basis for its captive co generation power plant of 2 x 65 MW capacity. It secured a Rs. 503 crore order from a leading public sector fertiliser company to set up three natural gas based EPC co-generation plants (each of 20 MW capacity) at its facilities in Haryana and Punjab. It commissioned a 5.76 MW rooftop solar PV captive power plant, the second largest plant in India for a public sector hydrocarbon company. During 2018, the company increased its equity stake from 54.67% to 76% in First Energy Private Limited (FEPL), Pune, an alternative energy solutions company. New 22,000 sq. ft. manufacturing facility for steam engineering products was commissioned at Savli, Gujarat in FY'18. The emerging Process Cooling portfolio of Thermax has been structured as a new Strategic Business Unit, effective April 1, 2018, to bring about better focus at a global level. The Solar business commissioned India's second largest single-roof solar PV project on a turnkey basis. In May 2018, Thermax entered into a preliminary understanding with Babcock & Wilcox India Holdings Inc. (B&W) to acquire the shareholding of the latter. In FY'19, Company concluded an order of Rs. 340 crore from a leading Indian steel major for a specially designed waste heat boiler, electric turbo generators and ancillary equipment for their production facility in Maharashtra, India. On January 31, 2019, it inaugurated production unit at Sri City, Andhra Pradesh to manufacture a wide range of vapour absorption machines comprising chillers, heat pumps and heaters in its first phase, with a capacity of 400 machines per year. The division launched a Remote Online Support System (ROSS) - a web-based solution that helps to monitor, troubleshoot and supervise chillers remotely. During the year, the company introduced a new series of Thermax absorption chillers that are designed to provide an additional efficiency of 7% to 8% over traditional offerings. It acquired the JV partner's stake in Thermax Babcock & Wilcox Energy Solutions (TBWES), which became a wholly owned subsidiary of the company. Subsequently, the shareholders approved the transfer of the Boiler & Heater (B&H) business to TBWES through a 'slump sale' effective October 1, 2019. It has acquired the entire stake in Thermax SPX Energy Technologies Ltd. (TSPX) held by the joint venture partners namely, Mutares Holding-24 AG, Germany and Balcke Duerr GmbH, Germany. Subsequent to the acquisition, TSPX has now become a wholly owned subsidiary of Thermax. It commissioned a 40 MW coal-based captive power plant for a leading cement and clinker manufacturer in the UAE; Thermax's first full-fledged EPC project in the Middle East, for a leading cement and manufacturing company in UAE. It commissioned 21 units of exhaust gas boilers for a power generation and distribution company in Bangladesh for their 200 MW integrated power plant. The Company, has set up a step-down subsidiary company in Nigeria (through Wholly Owned Subsidiary (WOS) of the company, Thermax Engineering Construction Company Limited), named 'Thermax Engineering Construction FZE', which was incorporated on August 31, 2018, as a prerequisite for executing projects in the region. It commissioned a 25 MW captive cogen plant for a paper manufacturing unit located in Samaal, the Philippines on an EPC basis to generate power and steam for the process. This was a repeat order from the customer, the earlier one being the first overseas power plant for Thermax. In the third quarter of FY2019-20, Company concluded another order of Rs. 431 crore from a public-private joint venture power company to set up two FGD systems at their thermal power plant in Jharkhand, comprising two units of FGD systems of 525 MW capacity each. It further concluded an order of Rs. 471 crore from an Indian government power company to set up two Flue Gas Desulphurization (FGD) systems at their thermal power plant in Jharkhand. As a part of customer's drive to meet the mandate for regulating SOx emissions from coal fired power plants, they plan to install two units of FGD systems of 500 MW capacity each at their plant. It completed the supply of its largest export order comprising four utility boilers, eight heat recovery steam generators, two flue gas steam generators and a hot oil heater for the largest refinery and petrochemical project in Nigeria, West Africa, all in a modular form. Apart from these, it received the ISO 27001:2013 certification, the highest and internationally accepted benchmark in information security standards. During the year 2020, the Water and Waste Solutions business developed several new products such as in-house multi-effect evaporators (for zero liquid discharge systems), prefabricated systems and portable water testing kits. As a value add, plant audit service was extended to customers and spares business was enhanced with focus on on-time delivery. In FY 2020-21, Company booked an order of Rs. 320 crore to set up a captive Combined Heat and Power (CHP) plant on EPC basis for a public sector biorefinery company in Assam. It partnered with Defence Research and Development Organisation (DRDO) for the supply of fuel cell stacks, to realize India's ambition of developing homegrown Air Independent Propulsion system for the Scorpene class submarines of the Indian Navy. A crucial milestone of the programme was the successful demonstration of a land based prototype to the Indian Navy on March 8, 2021. The group announced an agreement with Power Roll, a developer of unique, low-cost and lightweight flexible solar films, to develop the market for solar film in India. It won first export order for the Flue Gas Desulphurisation unit during the year 2021, from a customer in Saudi Arabia. This first order to supply air pollution equipment for lignin fired boilers and alumina calcination added a new layer to the company's strength in the niche domain. The Steam Engineering division secured orders from a Malaysia-based rubber glove manufacturer for steam accessories and services. This has been the fastest growing industry since January 2020, and gained further momentum amid the rise in COVID-19 cases globally. To further boost efficiencies, Thermax undertook restructuring during the year in its global operations to consolidate its presence. It closed down its China subsidiary - TZL (Thermax (Zhejiang) Cooling & Heating Engineering Co. Limited, China) and has proposed liquidation of Thermax Senegal S.A.R.L, post winding up of operations. Thermax also sold a non-profitable service business segment of Boilerworks A/S. Entities have been established in Thailand and Nigeria to steer the expansion of the project business overseas. Thermax's latest state-of-the-art Cooling plant at Sri City continued to leverage its automation capabilities, and delivered 30 machines in September 2020 - the highest number of units in a single month. With the commissioning of Phase II of resin production at Thermax's Dahej plant in Gujarat during the year, manufacturing capacity at the facility went up to 20,000 m3 per year from 10,000 m3 in the previous fiscal. One of the key projects executed by Thermax during the pandemic was the remote commissioning of a large auxiliary boiler in Egypt. With meticulous planning and execution, TBWES, Company's subsidiary, commissioned a unit of 50 TPH natural gas, acetone and water gas fired boiler for a chemical company. All critical processes were carried out through Remote Online Service Support (ROSS). The operations were conceptualised with adequate SOPs and O&M manuals, and a live view of the Data Collection System was conducted. The project paved the way for Thermax to develop a service model that can yield substantial cost savings for its customers. The company has set up a step-down subsidiary company through a wholly owned subsidiary of the company, Thermax Onsite Energy Solutions Limited (TOESL) named Enernxt Private Limited, which was incorporated on January 5, 2021, for starting the Bio-CNG business of TOESL. During the year 2021, it acquired the remaining 24% stake in First Energy Private Limited (FEPL) effective December 21, 2020. It approved the voluntary liquidation of Thermax Sustainable Energy Solutions Limited (TSES), a wholly owned subsidiary of the company under the Insolvency and Bankruptcy Code, 2016, which commenced on April 5, 2021. Besides this, it approved the liquidation and writing off of investments in its step-down wholly owned subsidiaries Thermax Hong Kong Limited (THKL) and Thermax (Zhejiang) Cooling and Heating Engineering Company Ltd. (TZL China) on March 17, 2021. In FY 2021-22, the Company bagged Rs. 1, 176 crore order from an Indian Public Sector Undertaking (PSU) for setting up a sulphur recovery block. It concluded two large flue gas desulphurisation (FGD) orders in Q3 and Q4 of Rs. 830 crore and Rs. 545 crore respectively from power sector companies. It expanded the renewable energy business to offer solutions in wind and storage batteries besides solar on an opex basis. It launched 'Thermax Edge', a comprehensive IoT-based digital platform for customers to fulfill their product and service requirements. In July 2022, Thermax incorporated Thermax Bioenergy Solutions Private Limited (TBSPL) thru shareholders' agreement with EverEnviro Resource Management for setting up a bio-CNG turnkeyprojects. The Company acquired minority stakes in ExactSpace and Covacsis. In 2023, the Company's subsidiary, First Energy Private Limited (FEPL), commissioned 180 MWp captive Solar and solar-wind hybrid farms in Maharashtra, Gujarat and Tamil Nadu. Four specialised operations centres were set up in Pune and Chennai for constant monitoring of assets. In 2023, 4 x 1000 TR hot water absorption chillers commissioned for a synthetic textile manufacturer in western India, to be utilised for process air cooling. It Commissioned the first pre-fabricated MEE as part of the ETP-ZLD solutions for the F&B industry; executed a large 33 TPH biomass cogeneration plant for an aluminium major in Karnataka; commissioned biomass boiler plants for steam supply to a pharmaceutical major, a zero liquid discharge plant for a steel major, and two solar PV plants for power supply to two chemical companies.

Thermax Ltd Directors Reports

Your directors have pleasure in presenting the Forty Second Annual Report on the business and operations of the Company, together with the audited financial statements of your Company for the year ended March 31, 2023.

(Rs. crore)

Your Company, on a standalone basis, posted a revenue of Rs. 5,141 crore for the financial year 2022-23, against last year's revenue of Rs. 4,015 crore. Revenue from exports was up 10.6% at Rs. 1,053 (Rs. 952 crore). Order booking from continuing operations stood at Rs. 5,307 crore, lower by 22.7% as compared to Rs. 6,867 crore in the previous year.

On a consolidated level, the group revenue was at Rs. 8,090 crore (Rs. 6,128 crore). The Group's international business was higher by 25.8% at Rs. 2,041 crore (Rs. 1,622 crore). Consolidated order booking for FY 2022-23 decreased by 6.6% to Rs. 8,788 crore (Rs. 9,410 crore). Order booking in international markets at Rs. 2,064 crore was higher by 9.9%.

There have been no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year and the date of this report.

Your Company has been rated ‘AA+/ Stable (Reaffirmed) for Long Term Rating and A1 + (Reaffirmed) for Short Term Rating' by Credit Rating Information Services of India Limited (CRISIL) for its banking facilities. The rating reflects your Company's continued good parentage, credit profile, liquidity position, strong corporate governance practices, financial flexibility and conservative financial policies.

The Board of Directors have recommended a dividend of Rs. 10/- (500%) per equity share of face value of Rs. 2/- each for the year ended March 31, 2023. The dividend is subject to the approval of members at the ensuing Annual General Meeting (AGM).

In accordance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Company has adopted the Dividend Distribution Policy, which is made available on the Company's website and can be accessed using the link: https:// www.thermaxglobal.com/wp-content/uploads/2020/03/ DIVIDEND-DISTRIBUTION-POLICY.pdf

The closing balance of the retained earnings of the Company for FY 2022-23, after all appropriation and adjustments, was Rs. 2,649 crore on standalone basis and Rs. 3,142 crore on consolidated basis. During the year, the Company has not transferred any amount to General Reserve.

The paid-up equity share capital of the Company was Rs. 23.83 crore as on March 31, 2023. There were no public or preferential rights or bonus issued during the year.

The Company has not issued any shares with differential voting rights, sweat equity shares. The details of stocks granted during the year are provided on the website of the Company.

During the year under review, there was no instance to report containing Statement of Deviation(s) orVariation(s) in share capital as per Regulation 32 of Listing Regulations.

In accordance with Section 136 of the Act, the Annual Report of your Company containing inter alia, financial statements and consolidated financial statements, has been placed on ourwebsite: https://www.thermaxglobal.com/ annual-reports/which can be accessed using the above link.

Further, the financial statements of the subsidiaries have also been placed on ourwebsite: https:// www.thermaxglobal.com/subsidiary-annual-report/

The report on the growth trends and outlook of those subsidiaries which impact your Company's performance reasonably are captured in the Management Discussion and Analysis section of this report.

Through its wholly owned subsidiary, First Energy Private Limited (FEPL), the Company has established below step-down subsidiaries for undertaking Group Captive Solar projects in different states of India:

Further, FEPL has acquired two subsidiaries, namely Jalansar Wind Energy Private Limited and Kanakal Wind Energy Private Limited on June 22, 2022, for commissioning captive solar project in Maharashtra.

With a view of consolidating the solar projects of the Group under one roof of FEPL, the Company transferred the solar plants of Thermax Onsite Energy Solutions Limited (TOESL), to FEPLw.e.f. March 30, 2023.

During the year, the Company has executed Shareholders, Agreement with EverEnviro Resource Management Private Limited (EverEnviro) on July 27, 2022 to incorporate new company which will execute Technology, Engineering, Procurement & Construction ("TEPC") scope for the bio-CNG projects. Pursuant to the same, a new subsidiary was incorporated i.e. Thermax Bioenergy Solutions Private Limited (TBSPL) on August 12, 2022.

Further, Thermax Senegal S.A.R.L, a wholly owned subsidiary of the Company, stands liquidated effective December 14, 2022. Further, Thermax Sustainable Energy Solutions Limited, wholly owned subsidiary of the Company, stands liquidated as per the order of The National Company Law Tribunal, Mumbai Bench (NCLT) issued on April 25, 2023.

Further, during the year, the Board of Directors of the Company have approved proposal / Scheme of restructuring of Thermax Cooling Solutions Limited, a wholly owned subsidiary of the Company. Accordingly, a Scheme of Arrangement between Thermax Cooling Solutions Limited (TCSL/Demerged Company) and Thermax Instrumentation Limited (TIL/Resulting Company), wholly owned subsidiaries of the Company, under sections 230 to 232 read with section 66 of the Companies Act, 2013 have been filed with the National Company Law Tribunal.

The Scheme is subject to necessary approval from regulatory authorities.

The Management Discussion and Analysis section highlighting the performance of the Company's Industrial Products, Industrial Infra, Green Solutions and Chemicals, including details of select subsidiaries, information on the Company's health, safety and environment measures, human resources, risk management and internal controls, is given on page no. 24.

A detailed report on Corporate Governance as per Listing Regulations and disclosures required as per section 134 and 177 of the Companies Act, 2013, is attached as Annexure 1 on page no. 71.

A certificate from M/s. SVD & Associates, Company Secretaries, Pune, regarding compliance with the conditions of corporate governance as required under Schedule V of the Listing Regulations forms part of this Report.

Your Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India (ICSI) as amended from time to time.

In terms of the Listing Regulations, Business Responsibility and Sustainability Report describing the initiatives taken by the Company from environmental, social and governance perspectives is enclosed as Annexure 2 on page no. 96.

The Company has a ‘Whistleblower Policy' as a part of the vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the policy are provided in the Corporate Governance Report and also available on the website of the Company: https:// www.thermaxglobal.com/wp-content/uploads/2021 /08/Thermax- Ltd. -Whistleblower- PoIicy-. p df

The overall Industrial Relations at all the manufacturing locations was peaceful during the year 2022-23.

The Company has signed Long Term Settlements (LTS) with the trade union at three locations:

• Chinchwad: On 1^st June 2022 for 3 years period from 1/5/2022 to 30/4/2025

• Savli: on 30^th September, 2022 for 5 years period from 1 /4/2022 to 31 /3/2027

• Paudh: on 21^st November, 2022 for 3 years period from 1/7/2022 to 30/6/2025

The total number of permanent employees on the rolls of the Company as on March 31, 2023, was 2,572 compared to 2,410 employees in the previous year.

At the group level, the total number of permanent employees are 4,818 compared to 4,634 employees in the previous year.

The information required pursuant to section 197 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, duly amended, in respect of employees of the Company, forms part of Annexure A to this Board's report and information required pursuant to Rule 5(2) will be provided upon request.

In terms of Section 136 of the Act, the Annual Report excluding the aforesaid information is being sent to all the members and others entitled to receive it. Any shareholder interested in obtaining such particulars may write to the Company Secretary.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. All employees (permanent, contractual, temporary and trainees) are covered under this policy. To build awareness in this area, the Company has been carrying out online induction/refresher programmes across the organisation on a periodic basis.

An Internal Committee (1C) has been set up to redress complaints received regarding sexual harassment at the workplace under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

There were no complaints received or disposed of during the year 2022-23.

The Managing Director and CEO of the Company are not in receipt of any remuneration and/or commission from any Holding / Subsidiary Company, as the case may be.

The Company has a Thermax Employees ESOP & Welfare Trust which holds 29,06,250 equity shares of Rs. 2/- each of the Company.

The trust has not entered into any transaction of buying or selling of shares in the secondary market.

With a view to motivate the key workforce, seeking their contribution to the corporate growth, to create an employee ownership culture, to attract new talents and to retain them for ensuring sustained growth, your Company has implemented an employee stock option plan namely Thermax Limited Employee Stock Option Plan 2021' ("ESOP 2021 "/ "Plan") covering the employees of the Company and its Group Companies including subsidiary and its associate companies.

The scheme was approved by the shareholders through postal ballot on January 13, 2022 with requisite majority.

During the year under review, the Nomination and Remuneration Committee (NRC) and the Board of Directors of your Company, have approved grant of stock options to employees under ESOP 2021.

There were no material changes made in the ESOP 2021 during the year. The above-mentioned Scheme is in compliance with the SEBI (Share-Based Employee Benefits & Sweat Equity) Regulation,

2021 (SBEB Regulations, 2021). Your Company's Secretarial Auditor, M/s. SVD & Associates, Company Secretaries, Pune, has certified that the Company's above-mentioned Scheme has been implemented in accordance with the SBEB Regulations, 2021.

In line with regulation 14 of the SBEB Regulations, 2021, a statement giving complete details, as at March 31, 2023, is available on the website of the Company: https://www.thermaxglobal.com/ wp-content/uploads/2023/06/ESOP-Disclosure- Under-Regulation-14-FY22-23.pdf

The Company has various Employee Welfare Trusts primarily for providing medical, housing and educational aid to its employees and their families. These trusts presently hold 36,35,190 equity shares of Rs. 2/- each of the Company. None of the trusts had any dealings in the secondary market.

In line with regulation 14 of the SBEB Regulations, 2021, a statement giving complete details, as at March 31, 2023, is available on the website of the Company: https://www.thermaxglobal.com/ wp-content/uploads/2023/06/Disclosure-SBEB- Sheet.pdf

The information on the conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act,

2013, read with Rule 8 of the Companies (Accounts) Rules,

2014, is provided as Annexure 3 on page no. 132.

As a part of its initiatives under Corporate Social Responsibility (CSR), the Company has undertaken project in the area of education. The project is in accordance with Schedule VII of the Companies Act, 2013. Since 2007,

CSR initiatives have been undertaken through Thermax Foundation, the details of CSR activities are provided under CSR Activities and CSR Policy on page no. 135.

The details of the CSR Committee and CSR Policy are available on the Company's website: https:// www.thermaxglobal.com/corporate-governance- policies-and-disclosures/

The Board of Directors of your Company comprises of 9 directors, viz., two non-executive directors, one executive director and six independent directors, including one independent woman director as on March 31, 2023. As per the Articles of Association of the Company, one-third of the Directors, other than Independent Directors and Chairperson, are liable to retire by rotation at the AGM of the Company every year.

Dr. Ravi Shankar Gopinath was appointed as an Independent Director of the Company for a term of 5 (five) consecutive years commencing from November 10, 2021 at the 41^st AGM and Dr. S. B. Pandit was re-appointed as an Independent Director of the Company for a second term of 5 (five) consecutive years commencing from from May 30, 2022 at the 41^st AGM.

Mrs. Rajani Kesari (DIN: 02384170) was appointed as Independent Director of the Company from November 14, 2018 to November 13, 2023. Considering the performance evaluation, contribution to the Company during her first term of office, her knowledge, qualification and experience along with skills and expertise she brings on the Board and based on recommendations of the Nomination and Remuneration Committee, the Board approved the re-appointment of Mrs. Kesari for a second term of consecutive five years commencing from November 14, 2023 to November 13, 2028, subject to approval of shareholders at the ensuing Annual General Meeting (AGM) of the Company.

Further, in accordance with the provisions of the Companies Act, 2013 and the Company's Article of Association,

Mr. PherozN. Pudumjee (DIN: 00019602), Non-Executive, Non-Independent Director, retires by rotation and being eligible offers himself for re-appointment. Based on the recommendation of Nomination and Remuneration Committee, the Board of Directors recommends his re-appointment. A proposal for his re-appointment forms part of the Notice of the 42^nd AGM of the Company.

The Company has received the necessary declarations from the above directors as required under the Companies Act, 2013 and the Listing Regulations. Further, Mrs. Kesari has also confirmed that she meets the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations.

Dr. Valentin Albrecht Herwart (DIN: 00239314) ceased to be Director (Non-Executive, Independent Director) of the Company upon completion of his second term at the close of business hours on July 21, 2022.

A calendar of meetings is prepared and circulated in advance to the directors. During the year, six Board Meetings were convened and held, the details of which are given in the Corporate Governance Report.

For the financial year 2022-23 the Independent Director conducted one meeting on February 10, 2023.

The Company has formulated a policy on ‘Familiarisation Programme for Independent Directors', which is available on the Company's website: www.thermaxglobal.com.

The details of all committees and their terms of reference are set out in the Corporate Governance Report.

During the year under review, there were no changes in the Key Managerial Personnel of the Company.

The Remuneration Policy details for selection, appointment and remuneration of directors and senior management are given in the Corporate Governance Report, and the said policy is available on the Company's website: https:// vvww. thermaxglobal.com/wp-content/uploads/2020/03/ Policy-on-Selection-and-Appointment-of-Directors-and- their-Remuneration.pdf

Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual evaluation of its performance.

The Company recognises and embraces the importance of a diverse Board for its success. Your Company believes that a truly diverse Board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender that will help in retaining its competitive advantage. The Board Diversity Policy adopted by the Board outlines its approach to diversity. The policy is available on the website: https://www.thermaxglobal.com/ wp-content/uploads/2021 /04/Board-Diversity-Policy.pdf

In terms of Section 134(3)(c) of the Companies Act,

2013, the Directors of your Company, to the best of their knowledge and belief and according to the information and explanations obtained by them in the normal course of their work, state that, in all material respects:

a) In the preparation of the annual financial statements for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) Appropriate accounting policies have been selected, applied consistently and judgment and estimates have been made that are reasonable and prudent to give a true and fair view of the state of affairs of the Company as on March 31, 2023, and of the profit of the Company for the year ended on that date;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The annual financial statements have been prepared on a going concern basis;

e) Proper internal financial controls were in place and the financial controls were adequate and operating effectively; and

f) Proper systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Please refer to the Internal Controls section of the Management Discussion and Analysis for further details.

During the year under review, there were no frauds reported by the auditors of the Company to the Audit Committee or the Board under section 143(12) of the Act.

All related party transactions entered into during the financial year were at arm's length basis and were in the ordinary course of business. There were no materially significant related party transactions made by the Company with promoters, directors, key managerial personnel or other designated persons, which may have a potential conflict with the interest of the Company at large.

All related party transactions are placed before the Audit Committee. Prior omnibus approval of the Audit Committee is obtained annually for transactions that are foreseeable and repetitive. The transactions entered pursuant to the omnibus approval so granted along with the statement giving details of all related-party transactions are placed before the Audit Committee for their approval on a quarterly basis.

Pursuant to the latest amendments by the SEBI, the Company has adopted the revised policy on Related Party Transactions which is available on the Company's website: https://www.thermaxglobal.com/wp-content/ uploads/2023/03/RPT-Policy, pdf

None of the directors have any pecuniary relationships or transactions vis-a-vis the Company except as disclosed under Sr. No. 2 of the Corporate Governance Report.

The financial statements for the year ended March 31, 2023, have been prepared as per Schedule III to the Companies Act, 2013, as amended from time to time. The consolidated financial statements of the Group are prepared in compliance with the Accounting Standards and Listing Regulations. The cash flow for the year is attached to the balance sheet. A separate statement containing the salient features of subsidiaries and joint ventures in the prescribed Form (AOC-1) is available on page no. 244.

During the year, your Company has not accepted deposits from the public, and as such no principal or interest was outstanding as on March 31, 2023, as per the provisions of the Companies Act, 2013 and the Rules framed thereunder.

The details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013, are given in the notes to the financial statements.

Pursuant to the provisions of Section 67(3)(c) of the Companies Act, 2013, and rules made thereunder, the Company has not given any loan to persons in the employment of the Company including its Directors or Key Managerial Personnel, in order to purchase or subscribe shares of the Company.

There are no significant material orders passed by the regulators and courts, which would impact the going concern status of the Company.

Your Board confirms that there is no proceeding pending under the Insolvency and Bankruptcy Code, 2016.

There was no instance of one-time settlement with any Bank or Financial Institution during the year under review.

The internal audit atThermax Group is carried out by the in-house Internal Audit Department with co-sourcing support. For scope determination, planning the audit and conducting reviews, the Internal audit department has been consistently following an audit cycle of July to June every year, which ensures review of transactions included in financial year April to March. The internal audit is risk based with a focus on controls for management of risks.

The Directors consider this approach to meet the desired purpose of Internal Audit.

The details in respect of internal financial control and their adequacy are included in the Management Discussion and Analysis section, which is a part of this report.

The Board of Directors of the Company have formed a Risk Management Committee to assess the risks facing the business and the mitigation measures taken thereof.

The committee is responsible for assisting the Board in understanding existing risks and reviewing the mitigation and elimination plans for those. The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically bifurcated between the committees of the Board and addressed through mitigating actions on a continued basis.

M/s. SRBC & Co. LLP, Chartered Accountants, were appointed as the statutory auditors for a period of five years commencing from the 39^th AGM until the conclusion of the 44^th AGM.

In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of statutory auditors is not required to be ratified at every AGM.

As required under the Listing Regulations, M/s. SRBC & Co. LLP, 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 details of total fees for all services paid by the Company and its subsidiaries, on a consolidated basis, to the statutory auditors are set out in the Corporate Governance Report.

The Auditor's Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

In terms of Section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, M/s. DhananjayV. Joshi & Associates, Cost Accountants, Pune, have been appointed as the cost auditors of the Company for FY 2022-23.

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.

The Cost Auditor's Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

In accordance with the provisions of Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. SVD & Associates, Company Secretaries, Pune, to undertake the secretarial audit of the Company for FY 2022-23. The Secretarial Audit Report for FY 2022-23 is attached as Annexure 5 on page no. 137.

The Secretarial Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimer.

The Annual Return of the Company for the financial year 2022-23 to be filed with Registrar of Companies is available on website of the Company at https://www.thermaxglobal. com/wp-content/uploads/2023/06/Thermax-MGT-7-web. pdf.

Since the Annual General Meeting is proposed to be held on August 1, 2023, the Company shall upload final copy of the Annual Return for FY 2022-23, once the same is filed with the Registrar of Companies.

Your Company is proud to have received various awards during the year. Details of the awards received during the year are given on page no. 59.

Your Directors place on record their appreciation for the continued support extended during the year by the Company's customers, business associates, suppliers, bankers, investors and government authorities. 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 for continuing to repose faith in the Company and its future.

Chairperson

(DIN: 00019581)

Pune, May 17, 2023

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