Thermax Ltd

Dear Shareholder,

Your Directors have pleasure in presenting the 44th 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, 2025.

( Rs. in crore)

On a consolidated level, the group revenue was at Rs.10,389 crore (Rs.9,323 crore). The Group's international business was higher by 13.5% at Rs. 2,324 crore (Rs. 2,048 crore). Consolidated order booking for FY 2024-25 increased by 10.5 % to Rs. 10,337 crore (Rs. 9,355 crore). Order booking in international markets at Rs. 3,597 crore was higher by 72.3%.

Your Company, on a standalone basis, posted a revenue of Rs. 6,254 crore for the FY 2024-25, against last year's revenue of Rs. 5,822 crore. Revenue from exports was up 9.7% at Rs.1,181 (Rs. 1,077 crore). Order booking from continuing operations stood at Rs. 6,270 crore, higher by 9.0 % as compared to Rs. 5,751 crore in the previous year.

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.

There is no change in the nature of business of the Company.

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.

Your Company has also been assigned ESG rating of CareEdge-ESG 1 i.e. rating scale "Leadership" by CARE ESG Ratings Limited, a registered ESG ratings service provider.

The Board of Directors have recommended a dividend of Rs.14/- (700%) per equity share of face value of Rs. 2/- each for the year ended March 31, 2025. 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/2025/01/Dividend-Distribution-Policy_New.pdf

The closing balance of the retained earnings of the Company for FY 2024-25, after all appropriation and adjustments, was Rs. 3,387.54 crore on standalone basis and Rs. 4,144.60 crore on a consolidated basis. During the year, the Company has not transferred any amount to the General Reserve.

The paid-up equity share capital of the Company was Rs. 23.83 crore as on March 31, 2025. 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.

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

In accordance with Section 136 of the Companies Act, 2013 ("the Act") the Annual Report of your Company containing inter alia, financial statements and consolidated financial statements, has been placed on our website: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 our website: 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 incorporated First Energy 11 Private Limited on July 29, 2024 and First Energy 12 Private Limited on May 5, 2025 as step-down subsidiaries for undertaking renewable energy projects in different states of India.

FEPL entered into a Share Purchase Agreement on September 6, 2024, to acquire 100% stake in Onix Two Enersol Private Limited (OTEPL). As the sellers failed to fulfill certain closing conditions within the agreed and extended timelines, the acquisition has not been completed. FEPL has intimated the sellers about non-fulfilment of the conditions. Consequently, OTEPL has not been consolidated in the Group's accounts. The Company will update the Stock Exchanges on any material developments.

The Company entered into a Share Purchase and Share Subscription Agreement (SHA) for the acquisition of 100% of the equity share capital of TSA in one or more tranches. In accordance with the terms of the agreement, the Company acquired 51% of the equity share capital of TSA on April 19, 2024. Accordingly, TSA became a subsidiary of the Company with effect from the said date.

Thermax Chemical Solutions Private Limited (TCSPL) was incorporated as a wholly owned subsidiary on May 28, 2024.

TCSPL entered into a Shareholders Agreement with Vebro Polymers Holdings Limited, Manchester, England ("Vebro"). Pursuant to the said agreement, TVPIPL was incorporated as a wholly owned subsidiary of TCSPL on July 18, 2024. Thereafter, upon allotment of shares to Vebro on March 3, 2025, TVPIPL ceased to be a wholly owned subsidiary of TCSPL.

The Company entered into a Share Purchase and Share Subscription Agreement with Buildtech and its shareholders, Mr. Sunder Lal Kothari, Mr. Sanjiv Kapoor, and Mrs. Prapti Kothari. Pursuant to the agreement, the Company completed the acquisition of 100% of the equity share capital of Buildtech on December 17, 2024. Accordingly, Buildtech became a wholly owned subsidiary of the Company with effect from the said date.

Thermax Chemical Europe A/s was incorporated as a wholly owned step down subsidiary of the Company on December 06, 2024.

The Company has entered into Share Purchase

Agreement with Infinite Uptime Inc., USA for sale of stake in Covacsis. Accordingly, Covacsis has ceased to be an Associate Company.

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. 62.

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. 115.

A certificate from M/s. SVD & Associates, Practising 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 including BRSR core indicators describing the initiatives undertaken by the Company from environmental, social and governance perspectives is enclosed as Annexure 2 on page no.142. M/s. Price Waterhouse Chartered Accountants LLP has provided a reasonable assurance report on core BRSR indicators which forms part of the BRSR report.

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/2024/11/ Whistler-Blower-Policy.pdf

The overall Industrial Relations at all the manufacturing locations were peaceful during the year 2024-25.

1. Particulars of Employees

The details of employees are given below:

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.

2. Anti-Sexual Harassment Policy/Internal Committee

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 (IC) has been set up to redress complaints received regarding sexual harassment at workplace under the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Two complaints were received and resolved during the year 2024-25.

The Managing Director and CEO of the Company is 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 28,81,164 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) Regulations, 2021 (SBEB Regulations, 2021). No employee was issued stock options during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant. Your Company's Secretarial Auditor, M/s. SVD & Associates, Practising 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, 2025, is available on the website of the Company: https://www.thermaxglobal.com/thermax-disclosures-under-sebi-sbeb-regulations/

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, 2025, is available on the website of the Company: https://www.thermaxglobal.com/thermax-disclosures-under-sebi-sbeb-regulations/

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.187.

As a part of its initiative under Corporate Social Responsibility (CSR), the Company has undertaken projects 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. 48.

The Annual Report on CSR Activities is provided as Annexure 4 on page no. 190.

The details of the CSR Committee and CSR Policy are available on the Company's website: https://www. thermaxglobal.com/wp-content/uploads/2024/11/CSR-Policy.pdf

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 and one non-independent woman director as on March 31, 2025. 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.

Pursuant to Regulation 17(1D) of the Listing Regulations, the members have approved continuation of directorship of Mrs. Meher Pudumjee (DIN: 00019581), Non-Executive Director and Chairperson of the Company for a period of 5 (five) consecutive years commencing from April 01, 2024 to March 31, 2029 (both days inclusive).

Basis the recommendation of Nomination and Remuneration Committee, the Board vide its circular resolution dated December 12, 2024 approved the appointment of Mr. Parag Shah (DIN: 00374944) as Additional, Non-Executive Independent Director of the Company for a period of 5 (five) consecutive years with effect from December 12, 2024 to December 11, 2029 (both days inclusive). The justification of the Board on Mr. Shah's appointment forms part of the Postal Ballot Notice dated December 12, 2024. The members approved the appointment of Mr. Shah by passing a special resolution vide postal ballot on February 16, 2025. Further, in accordance with the provisions of the Companies Act, 2013, and the Company's Articles of Association, Mr. Pheroz N. Pudumjee (DIN: 00019602), Non-Executive, Non-Independent Director, retires by rotation and being eligible offers himself for reappointment. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors recommends his re-appointment.

Mr. Nawshir Mirza and Dr. Jairam Varadaraj completed their tenure as Non-Executive, Independent Directors of the Company on July 21, 2024.

The Board of Directors of the Company at their meeting held on June 18, 2020, appointed Mr. Ashish Bhandari (DIN: 05291138) as Additional Director & MD&CEO of the Company for a period of five years effective from September 01, 2020 valid till August 31, 2025. The same was approved by shareholders of the Company at the

AGM held on August 12, 2020. It is now proposed to reappoint Mr. Bhandari as MD&CEO of the Company for a further period of five years effective from September 1, 2025 till August 31, 2030 (both days inclusive).

Based on the recommendation(s) of Nomination and Remuneration Committee, the Board at its meeting held on May 09, 2025 has approved the re-appointment of Mr. Bhandari as MD&CEO of the Company for a period of five years effective from September 1, 2025 till August 31, 2030 (both days inclusive), subject to approval of the shareholders at the ensuring AGM of the Company. The above proposals forms part of the Notice convening 44th AGM of the Company.

The Company has received consent and necessary disclosures / declarations from the above directors as required under the Companies Act, 2013 and the Listing Regulations.

A calendar of meetings is prepared and circulated in advance to the directors. During the year, eight Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. For the FY 2024-25, one meeting of the independent directors was held on February 5, 2025.

The Company has formulated a policy on ‘Familiarisation Programme for Independent Directors', which is available on the Company's website: https://www.thermaxglobal. com/corporate-governance-policies-and-disclosures/

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

During the year, Ms. Janhavi Khele (Membership No. A20601) resigned from her position as the Company Secretary, Compliance Officer and Key Managerial Personnel of the Company vide her resignation letter dated January 21, 2025 effective April 18, 2025. Except this, there were no other changes in Key Managerial Personnel during the year.

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://www.thermaxglobal.com/wp-content/ uploads/2024/08/Selection-and-appointment-of-Directors.pdf

Pursuant to the provisions of the Companies Act, 2013, and Listing Regulations, annual evaluation of performance of the Board, its Committees and individual directors were carried out through an external agency. Recommendations arising from this entire process were deliberated upon by the Board to be used constructively in order to enhance its overall effectiveness.

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/2024/11/ 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, 2025, 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 judgement 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, 2025, 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.

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. Hence disclosure of particulars of contracts or arrangements with related parties referred to in sub- section (1) of section 188 Act in the prescribed form AOC-2 is not required.

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.

Company has adopted policy on Related Party Transactions which is available on the Company's website: https://www.thermaxglobal.com/wp-content/ uploads/2024/11/Related-Party-Transactions-Policy.pdf None of the directors have any pecuniary relationships or transactions vis-?-vis the Company except as disclosed under Sr. No. 2 of the Corporate Governance Report.

The financial statements for the year ended March 31, 2025, 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. 320.

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, 2025, 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 any person 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 and material orders passed by the regulators and courts or tribunals, which would impact the going concern status of the Company.

Your Board confirms that there are no proceeding(s) 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 at Thermax Group is carried out by the in-house Internal Audit Department with support of co-sourcing audit firms. 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. For more information on the Risk Management Committee, please refer the Corporate Governance section of this report. 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. For more information refer page no. 102 of the Management Discussion and Analysis section of this report.

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

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.

Based on the recommendations of the Audit Committee and subject to approval of members, the Board of Directors of the Company at their Meeting held on March 20, 2025 approved the appointment of M/s. Price Waterhouse Chartered Accountants LLP, Firm Registration No. 012754N/N500016 as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of the 44th AGM of the Company till the conclusion of the 49th AGM of the Company. The proposal for their appointment forms part of the Notice convening the 44th AGM of the Company and is subject to the approval of the shareholders.

In terms of section 148 of the Companies Act, 2013, read with the Companies (Cost Records and Audit) Rules, 2014, M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, have been appointed as the cost auditors of the Company for FY 2024-25.

The maintenance of cost records as specified under section 148 of the Companies Act, 2013 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 had appointed M/s. SVD & Associates, Practising Company Secretaries, Pune, to undertake the secretarial audit of the Company for FY 2024-25. The Secretarial Audit Report for FY 2024-25 is attached as Annexure 5 on page no. 192.

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

As per Regulation 24(1)(a) of the Listing Regulations, the appointment of Secretarial Auditors is subject to the approval of the shareholders. Based on the recommendations of the Audit Committee, the Board at its meeting held on May 9, 2025, approved the appointment of M/s. Makarand M. Joshi & Co., Peer Reviewed Firm of Company Secretaries in Practice (Firm Registration Number: P2009MH007000) as the Secretarial Auditors of the Company for a term of five years commencing from FY 2025-26 to FY 2029-30. M/s. Makarand M. Joshi & Co. have confirmed that they meet the eligibility criteria as prescribed under the Listing Regulations. The proposal for their appointment forms part of the Notice convening the 44th AGM of the Company and is subject to the approval of the shareholders.

The internal audit at Thermax Group is carried out by the in-house Internal Audit Department with co-sourcing support. Mr. Satish Jayaram, Chief Internal Auditor, was assigned new roles and responsibilities within the organisation and accordingly ceased to be Chief Internal Auditor of the Company effective May 9, 2025.

Based on the recommendations of the Audit Committee, the Board at its meeting held on May 9, 2025, appointed Mr. Tushar Dahale as the Chief Internal Auditor of the Company effective May 10, 2025.

During the year ended March 31, 2024, the Company received certain whistleblower complaints. The Company conducted detailed investigations into these matters in line with its Vigil Mechanism and Code of Conduct. Certain findings were identified in one instance. Appropriate actions have been taken with respect to the concerned employees and vendors in connection with the matter. The amount involved in the instance is below the threshold prescribed under Rule 13(1) of the Companies (Audit and Auditors) Rules, 2014.

During the year under audit, none of the Auditors have reported any matter under section 143(12) of the Act. Therefore, no details are required to be disclosed in this regard.

The Annual Return of the Company for the FY 2024-25 to be filed with the Registrar of Companies is available on website of the Company at https://www.thermaxglobal. com/annual-returns/ Since the Annual General Meeting is proposed to be held on July 31, 2025, the Company shall upload final copy of the Annual Return for FY 2024-25, once the same is filed with the Registrar of Companies.

Disclosures as required under clause 5A of Para A of Part A of Schedule III of the Listing Regulations are given in the Corporate Governance Report attached as Annexure 1 to this Report.

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. 20.

Your directors place on records 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 their faith in the Company and its future.