Thermax Ltd.की ऑडीटर रिपोर्ट

Mar 31, 2026

1. We have audited the accompanying standalone
financial statements of Thermax Limited (“the
Company”), which comprise of the Standalone
Balance Sheet as at March 31, 2026, and the
Standalone Statement of Profit and Loss (including
Other Comprehensive Income), the Standalone
Statement of Changes in Equity and the Standalone
Statement of Cash Flows for the year then ended, and
notes to the standalone financial statements, including
material accounting policy information and other
explanatory information.

2. In our opinion and to the best of our information and
according to the explanations given to us, the aforesaid
standalone financial statements give the information
required by the Companies Act, 2013 (“the Act") in

the manner so required and give a true and fair view
in conformity with the accounting principles generally
accepted in India, of the state of affairs of the Company
as at March 31,2026, and total comprehensive
income (comprising of profit and other comprehensive
income), changes in equity and its cash flows for the
year then ended.

Basis for Opinion

3. We conducted our audit in accordance with the
Standards on Auditing (SAs) specified under Section
143(10) of the Act. Our responsibilities under those
Standards are further described in the “Auditors’
Responsibilities for the Audit of the Standalone
Financial Statements” section of our report. We are
independent of the Company in accordance with the
Code of Ethics issued by the Institute of Chartered
Accountants of India together with the ethical
requirements that are relevant to our audit of the
standalone financial statements under the provisions
of the Act and the Rules thereunder, and we have
fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We
believe that the audit evidence we have obtained

is sufficient and appropriate to provide a basis for
our opinion.

Key audit matters

4. Key audit matters are those matters that, in our
professional judgement, were of most significance
in our audit of the standalone financial statements of
the current period. These matters were addressed
in the context of our audit of the standalone financial
statements as a whole and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.

Key audit matter	How our audit addressed the key audit matter
1. Accounting for Revenue from Contracts with Customers	As	part of our audit, our procedures included the following:
The total revenue for the year is recognised based on the	•	Understood and evaluated the design and tested the operating
accounting policies disclosed in Note 21 to the standalone		effectiveness of internal financial controls pertaining to
financial statements.		revenue recognition.
The Company recognises revenue in accordance with Ind	•	Assessed the appropriateness of the revenue recognition
AS 115 “Revenue from Contracts with Customers”, based on		accounting policies in accordance with Ind AS 115 “Revenue from
the nature and type of contract (i.e., products, projects and		Contracts with Customers”.
services) involved. This involves application of significant	•	Obtained and examined, on a sample basis, underlying documents
judgements including:		to assess the nature of contractual performance obligations, the timing of transfer of control and other relevant terms with respect
• identification of distinct performance obligations;		to revenue recognition.
• allocation of consideration to identified performance	•	Tested, on a sample basis, revenue transactions recorded closer
obligations; and		to the financial year-end date by verifying the underlying dispatch
• recognition of revenue over a period of time or at a point in		documents to assess whether revenue is recognised in the correct
time, based on the terms of the contract.		financial period.
We considered the above as a key audit matter as there is an	With respect to a sample of contracts wherein revenue is recognised
inherent and presumed risk of fraud in revenue recognition,	under ‘over a period of time’ method, performed the following
including identification of contractual obligations, timing	procedures:
of transfer of control, complexities involved and significant	•	Obtained management’s calculations of the measure of progress
management judgement in making forecasts of future		determined using the input method, tested the mathematical
cost to complete the contract, assessment of contract risk		accuracy of the cost to complete and re-performed the calculation
contingencies, expected cost savings or cost overruns,		of revenue recognised during the year.
right to receive payments for performance completed till	•	Verified supporting documents and performed cut off procedures
date, recognition for potential onerous obligations, variable		for contract related costs incurred during the reporting period.
consideration (liquidated damages and others), all of which	•	Evaluated Management’s assessment of right to receive payments
have a consequential impact on the amount of revenue		for performance completed till date, variable consideration,
recognised in the standalone financial statements.		claims, penalties, price or scope variations.
	•	Tested the actual cost incurred and billing done during the year with supporting documents.
	•	Obtained the breakdown of estimated total contract costs and
		tested elements of the committed costs by obtaining executed underlying documents.
	•	Performed procedures on balance cost estimation including contingencies, compared actual costs to budgeted costs and assessed the variances with management and the rationale for recording changes to the estimated cost during the year.
	•	Evaluated the adequacy of the presentation and disclosures in standalone financial statements.
2. Assessment of Impairment of trade receivables and	As	part of our audit, our procedures included the following:
contract assets	•	Evaluated the design and tested the operating effectiveness of
As at March 31, 2026, the Company recorded an impairment		the internal controls over the Management''s assessment for
allowance of INR 309.80 crore for its trade receivables and		impairment of trade receivables and contract assets.
contract assets (Refer note 7 (c)).	•	Assessed the appropriateness of the Company’s accounting
Impairment of financial assets and contract assets is		policies for recognition and measurement of ECL in accordance
accounted through allowance for Expected Credit Losses		with Ind AS 109 “Financial Instruments".
(ECL) in accordance with Ind AS 109 "Financial Instruments".	•	Obtained an understanding of Management’s assessment
Management uses a provision matrix to compute impairment		of recoverability of outstanding trade receivables
under ECL in respect of such balances.		and contract assets and evaluated the consistency of
The assumptions used for estimating the ECL in respect of these balances is an area which is influenced by significant		Management’s assessment with underlying documents and recovery expectations.
management judgement. It requires the Company to estimate	•	Assessed the completeness of balances considered for ECL
the timing and amount of realisation of these receivables		and tested its ageing on a sample basis by agreeing those to
based on past collection experience, contract status, and		contractual terms.
consideration of other internal and external sources of	•	Tested the key assumptions and arithmetical accuracy of the
information. Given the relative significance of these balances to		provision matrix model used by the Management to calculate
the standalone financial statements, management judgement		the probability of default and estimate the ECL, including
and uncertainties involved to assess the recoverability of trade		specific provisions, if any, in respect of trade receivables and
receivables and contract assets, we determined this to be a key		contract assets.
audit matter.	•	Evaluated the adequacy of the presentation and disclosures in the standalone financial statements.

Key audit matter	How our audit addressed the key audit matter
3. Impairment of investments in certain subsidiaries	As	part of our audit, our procedures included the following:
The Company’s impairment provision for investment in subsidiaries as at March 31,2026 is INR 233.11 crore against investments of INR 1,867.92 crore (refer note 5 (a)).	•	Understood and evaluated the design and tested the operating effectiveness of internal controls over the Management''s assessment of impairment of investments in subsidiaries, including preparation of the DCF model.
The Company accounts for investments in subsidiaries at cost (less accumulated impairment, if any).	•
		Evaluated the Company''s accounting policy in respect of impairment assessment of investment in subsidiaries.
The Management, with assistance of experts, wherever
required, has estimated the recoverable value based on the	•	Evaluated the competence, capability, independence and
‘value in use’ approach determined using discounted cash flow		objectivity of the management’s expert.
(‘DCF’) model requiring judgements with respect to key inputs/ assumptions like: • Future cashflows	•	Assessed the cash flow projections and assumptions used in the DCF model, tested the mathematical accuracy and perused the report of the management’s expert.
	•	Together with auditor''s valuation expert, tested the appropriateness of key assumptions like discount rate and terminal growth rate and performed sensitivity analysis within a reasonable and foreseeable range to corroborate that the recoverable amount of the investment is not materially different to
• Discount rate (weighted average cost of capital) • Terminal growth rate • Economic and entity specific factors
The recoverable value is highly sensitive to changes in the above management assumptions and could lead to material changes in the estimated recoverable amount, impacting both, potential impairment charge or reversal and, accordingly, this has been considered as a key audit matter.	•	the Company''s valuation. Evaluated the adequacy of the presentation and disclosure of impairment in the standalone financial statements.

Other Information

5. The Company’s Board of Directors is responsible for
the other information. The other information comprises
the information included in the Annual Report, but
does not include the standalone financial statements
and our auditors’ report thereon. The Annual Report is
expected to be made available to us after the date of
this auditors’ report.

Our opinion on the standalone financial statements
does not cover the other information and we will not
express any form of assurance conclusion thereon.

In connection with our audit of the standalone
financial statements, our responsibility is to read the
other information identified above when it becomes
available and, in doing so, consider whether the
other information is materially inconsistent with the
standalone financial statements or our knowledge
obtained in the audit, or otherwise appears to be
materially misstated.

When we read the Annual Report, if we conclude
that there is a material misstatement therein, we are
required to communicate the matter to those charged
with governance and take appropriate action as
applicable under the relevant laws and regulations.

Responsibilities of Management and
those charged with governance for the
Standalone Financial Statements

6. The Company’s Board of Directors is responsible
for the matters stated in Section 134(5) of the Act
with respect to the preparation of these standalone
financial statements that give a true and fair view
of the financial position, financial performance,
changes in equity and cash flows of the Company in
accordance with the accounting principles generally
accepted in India, including the Indian Accounting
Standards specified under Section 133 of the Act.
This responsibility also includes maintenance of
adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of
the Company and for preventing and detecting frauds
and other irregularities; selection and application of
appropriate accounting policies; making judgements
and estimates that are reasonable and prudent;
and design, implementation and maintenance
of adequate internal financial controls, that were
operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to
the preparation and presentation of the standalone
financial statements that give a true and fair view and
are free from material misstatement, whether due to
fraud or error.

7. In preparing the standalone financial statements,

Board of Directors is responsible for assessing the
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern and using the going concern basis of
accounting unless Board of Directors either intends to
liquidate the Company or to cease operations, or has
no realistic alternative but to do so.

8. Those Board of Directors are also responsible for
overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of
the Standalone Financial Statements

9. Our objectives are to obtain reasonable assurance
about whether the standalone financial statements as
a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditors’ report
that includes our opinion. Reasonable assurance

is a high level of assurance but is not a guarantee
that an audit conducted in accordance with SAs will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of
these standalone financial statements.

10. As part of an audit in accordance with SAs, we exercise
professional judgement and maintain professional
scepticism throughout the audit. We also:

• Identify and assess the risks of material
misstatement of the standalone financial
statements, whether due to fraud or error, design
and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the
override of internal control.

• Obtain an understanding of internal control relevant
to the audit in order to design audit procedures that
are appropriate in the circumstances. Under Section
143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has
adequate internal financial controls with reference
to standalone financial statements in place and the
operating effectiveness of such controls.

• Evaluate the appropriateness of accounting
policies used and the reasonableness of
accounting estimates and related disclosures made
by management.

• Conclude on the appropriateness of management’s
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether

a material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company’s ability to continue as a going concern.

If we conclude that a material uncertainty exists,
we are required to draw attention in our auditors’
report to the related disclosures in the standalone
financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the
date of our auditors’ report. However, future events
or conditions may cause the Company to cease to
continue as a going concern.

• Evaluate the overall presentation, structure and
content of the standalone financial statements,
including the disclosures, and whether the
standalone financial statements represent the
underlying transactions and events in a manner that
achieves fair presentation.

11. We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.

12. We also provide those charged with governance with
a statement that we have complied with relevant
ethical requirements regarding independence, and
to communicate with them all relationships and
other matters that may reasonably be thought to
bear on our independence, and where applicable,
related safeguards.

13. From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the standalone
financial statements of the current period and are
therefore the key audit matters. We describe these
matters in our auditors’ report unless law or regulation
precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that

a matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
benefits of such communication.

belief, as disclosed in the Note 31 to
the standalone financial statements,
no funds have been received by
the Company from any person(s)
or entity(ies), including foreign
entities (“Funding Parties”), with the
understanding, whether recorded in
writing or otherwise, that the Company
shall, whether directly or indirectly, lend
or invest in other persons or entities
identified in any manner whatsoever
by or on behalf of the Funding Party
(“Ultimate Beneficiaries”) or provide any
guarantee, security or the like on behalf
of the Ultimate Beneficiaries; and

(c) Based on such audit procedures that we
considered reasonable and appropriate
in the circumstances, nothing has
come to our notice that has caused
us to believe that the representations
under sub-clause (a) and (b) contain any
material misstatement.

v. The dividend declared and paid by the
Company during the year in respect of
the prior year ended March 31, 2025 is in
accordance with Section 123 of the Act to the
extent it applies to declaration and payment
of dividend.

Further, as stated in note 15(b) to the
standalone financial statements, the Board
of Directors of the Company has proposed
final dividend for the year which is subject to
the approval of the members at the ensuing
Annual General Meeting. The dividend
declared is in accordance with Section 123 of
the Act to the extent it applies to declaration
of dividend.

Other Matter

14. The standalone financial statements of the Company
for the year ended March 31,2025, were audited by
prior auditors under the Act who, vide their report
dated May 09, 2025, expressed an unmodified opinion
on those standalone financial statements.

Report on other legal and regulatory
requirements

15. As required by the Companies (Auditor’s Report)

Order, 2020 (“the Order”), issued by the Central
Government of India in terms of sub-section (11) of
Section 143 of the Act, we give in the Annexure B a
statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.

16. As required by Section 143(3) of the Act, we
report that:

(a) We have sought and obtained all the information
and explanations which to the best of our
knowledge and belief were necessary for the
purposes of our audit.

(b) In our opinion, proper books of account as
required by law have been kept by the Company
so far as it appears from our examination of those
books, except for the matters stated in paragraph
16(h)(vi) below on reporting under Rule 11(g) of
the Companies (Audit and Auditors) Rules, 2014
(as amended).

(c) The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss (including other
comprehensive income), the Standalone
Statement of Changes in Equity and the
Standalone Statement of Cash Flows dealt with
by this Report are in agreement with the books
of account.

(d) In our opinion, the aforesaid standalone financial
statements comply with the Indian Accounting
Standards specified under Section 133 of the Act.

(e) On the basis of the written representations
received from the directors as on March 31,2026,
taken on record by the Board of Directors, none of
the directors is disqualified as on March 31,2026,
from being appointed as a director in terms of
Section 164(2) of the Act.

(f) With respect to the maintenance of accounts and
other matters connected therewith, reference is
made to our remarks in paragraph 16(b) above
and paragraph 16(h)(vi) below.

(g) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure A”.

(h) With respect to the other matters to be included in
the Auditors’ Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014
(as amended), in our opinion and to the best of
our information and according to the explanations
given to us:

i. The Company has disclosed the impact of
pending litigations on its financial position
in its standalone financial statements

- Refer Note 30 to the standalone
financial statements.

ii. The Company has made provision, as
required under the applicable law or
Indian Accounting Standards, for material
foreseeable losses, if any, on long-term
contracts including derivative contracts -
Refer Note 17 and Note 18 to the standalone
financial statements.

iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by
the Company during the year.

iv. (a) The management has represented

that, to the best of its knowledge
and belief, other than as disclosed in
Note 31 to the standalone financial
statements, no funds have been
advanced or loaned or invested
(either from borrowed funds or share
premium or any other sources or kind
of funds) by the Company to or in any
other person(s) or entity(ies), including
foreign entities (“Intermediaries”),
with the understanding, whether
recorded in writing or otherwise, that
the Intermediary shall, whether directly
or indirectly, lend or invest in other
persons or entities identified in any
manner whatsoever by or on behalf of
the Company (“Ultimate Beneficiaries”)
or provide any guarantee, security
or the like on behalf of the
Ultimate Beneficiaries;

(b) The management has represented
that, to the best of its knowledge and

vi. Based on our examination, which included
test checks, the Company has used multiple
accounting software for maintaining its books
of account, which have a feature of recording
audit trail (edit log) facility and that has
operated throughout the year for all relevant
transactions recorded in the software, except
as disclosed in note 43 to the standalone
financial statements. During the course
of performing our procedures, other than
the instances of audit trail not maintained
(as disclosed in note 43 to the standalone
financial statements) where the question
of our commenting does not arise, we did
not notice any instance of audit trail feature
being tampered with. Further, the audit trail,
to the extent maintained in the prior year, has
been preserved by the Company in respect
of the software described in note 43 to the
standalone financial statements as per the
statutory requirements for record retention.

17. The Company has paid/ provided for managerial
remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197
read with Schedule V to the Act.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Amit Borkar

Partner

Membership Number: 109846

UDIN: 26109846NVWXVZ9769

Place: Pune

Date: May 7, 2026

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Mar 31, 2025

To the Members of Thermax Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone financial statements of Thermax Limited (“the Company”), which comprise the Standalone balance sheet as at March 31, 2025, the Standalone statement of profit and loss, including other comprehensive income, the Standalone cash flow statement and the Standalone statement of changes in equity for the year then ended, and notes to the Standalone financial statements, including a summary of material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2025, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the Standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these

requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone financial statements.

Emphasis of Matter

We draw attention to Note 30A (c) of the Standalone financial statements relating to the Arbitral Award against the Company for claims of Rs. 218.45 crore by the Arbitral Tribunal under a contract with customer for dispute and related provisions. The Company has made a provision of Rs. 50.63 crore and for the balance amount, no provision has been considered necessary. The Company has received stay of operation and execution of the Arbitral Award by the High Court of Bombay after depositing an amount of Rs. 218.45 crore. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone financial statements for the financial year ended March 31, 2025. These matters were addressed in the context of our audit of the Standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the Standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the Standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying Standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
A) Accounting for Revenue from Contracts with Customers
(as described in Note 21 of the Standalone financial statements)
Revenues are recognised under Ind AS 115, Revenue	Our audit procedures included the following:
from Contracts with Customers basis the nature and type of contracts (i.e. products, projects and services) involved. We consider accounting of revenue contracts to be an	• We understood the Company’s policies and processes, control mechanisms and methods in relation to the revenue recognition for revenue from contracts with customers and evaluated the design and operative
area posing a significant risk of material misstatement	effectiveness of the financial controls through our test
and accordingly a key audit matter as due to the varied	of control procedures
nature of the contracts, identification of contractual obligations, timing of transfer of control, significant judgements involved in determining the contract costs, rights to receive payments including those for performance completed till date and recognition for potential loss making contracts/ onerous obligations. Revenue and profits for the year may	• We obtained and read the terms of sample revenue contracts to evaluate the management’s process to assess nature of contractual performance obligations, timing of transfer of control to customers and other relevant terms necessary for revenue recognition during the year
deviate significantly on account of changes in the	• We tested revenue, on sample basis, recorded
above judgements and estimates. Accordingly, this is	during the period closer to year-end by testing the
considered as a Key Audit Matter.	underlying documentation
The total revenues for the year amounted to Rs.	• For contracts, on sample basis, accounted for under
6,233.67 crore and recognised based on the	‘over the period in time’ method, we performed the
accounting policies disclosed in the Note 21 to the	following procedures among others:
Standalone Financial Statements.	• Provision for liquidated damages and claims: Discussed with management and project teams to understand the status of the project, likelihood of customers imposing any contractual penalties through inspection of the relevant documents, etc. • Contingency provisions: Understood the management’s estimate and rationale for recording and changes to the contingency provision during the year. We discussed progress to date with project teams to determine whether the remaining contingency provision is sufficient for the residual risks identified for those projects. • Assessment of costs-to-complete: Performed procedures on balance cost estimation, compared actual costs to budgeted costs and discussed variances with project teams, tested the costs accrued at year-end and tested the significant assumptions for balance costs-to-complete. • We performed analytical procedures and conducted inquiries about any unusual trends of revenue recognition, checked exceptions for contracts with low or negative margins, loss making contracts/ onerous contracts, contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts, etc.

Key audit matters	How our audit addressed the key audit matter
	•	We read and tested the presentation and disclosures in the Standalone financial statements are in accordance with Ind AS 115
B) Impairment of Investments in Subsidiaries
(as described in Note 5(a) and 40 of the Standalone financial statements)
During the year, impairment indicators were	Our audit procedures included the following:
identified by the management for investments in certain subsidiaries. Management’s assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting	•	We understood the management’s process of evaluating the triggers for impairment, forecasting the future cash flows, evaluation of assumptions and comparison of estimates to externally available industry, economic and financial data, wherever available and necessary.
the future cash flows. Changes to assumptions could	•	We assessed that the methodology and assumptions
lead to material changes in the estimated recoverable		used by management to estimate the recoverable
amount, impacting both potential impairment		value of each investment is consistent with
charges and also potential reversals of impairment.		accounting standards.
Accordingly, this is considered as a key audit matter.	•	We compared the carrying values of the Company’s investment in these subsidiaries to their respective financial statements which were available with their respective net asset values and discussed with management about their performance and future outlook.
	•	We involved valuation experts to assist in evaluating the valuation methodology, identifying and testing key assumptions and estimates used in preparing the cash flow forecasts, wherever required.
	•	We considered the potential impact of possible downside changes in these key assumptions as part of sensitivity analysis.
	•	We read and assessed the presentation and disclosures of such impairment in the Standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
C) Impairment of trade receivables and contract assets
(as described in notes 7 and 9(b) of the Standalone financial statements)
Impairment of financial assets and contract assets	Our audit procedures included the following:
is accounted through allowance for Expected Credit Losses (ECL) under Ind AS 109 and is expected to reflect the general pattern of deterioration or improvement in the credit quality of financial	•	We evaluated the management’s key data sources and assumptions used in the ECL to determine impairment allowance.
instruments. Impairment of financial assets is a key	•	We understood the management’s basis to consider
audit matter as the Company has devised a model to		the associated risks for identifying homogeneous
recognise impairment through ECL using individual		group of receivables and contract assets.
receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under ECL method is highly judgemental as it requires management to	•	We evaluated the process followed by the Company for determination of credit risk and the resultant basis for classification of receivables into various stages.
make significant assumptions on customer payment	•	For a sample of receivables, we tested the ageing of
behavior and other relevant/risk characteristics		the receivables and contract assets considered for
when assessing the Company’s statistics of historical		impairment calculations.
information and estimating the level and timing of expected future cash flows. Considering the materiality and the complexity involved, this is considered a Key Audit Matter.	•	We assessed the completeness of receivables and contract assets included in the ECL calculations as of the reporting date.
As at the March 31, 2025, the Company recorded an impairment provision of Rs. 297.23 crore for its receivables and contract assets.	•	We considered the consistency of various inputs and assumptions used by the Company’s management to determine impairment provisions.
	•	We read and tested the disclosures in the notes to Standalone financial statements are as per the relevant accounting standards.
We have determined that there are no other key audit matters to communicate in our Report.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Business Responsibility Report, Sustainability Report and Director’s Report of the Annual Report, but does not include the Standalone financial statements and our Auditor’s report thereon.

Our opinion on the Standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based

on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those charged with governance for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these Standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also

as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether

a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the Standalone financial statements, including the disclosures, and whether the Standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of

includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,

most significance in the audit of the Standalone financial statements for the financial year ended March 31, 2025 and are therefore, the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters stated in the paragraph 2(j)(vi) below on reporting under Rule

11(g);

(c) The Standalone balance sheet, the Standalone statement of Profit and Loss including other comprehensive income, the Standalone cash flow statement and Standalone statement of changes in equity dealt with by this Report are in agreement with the books of account;

(d) The matter against the Company described in ‘Emphasis of Matter’ paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(e) In our opinion, the aforesaid Standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(f) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(j) (vi) below on reporting under Rule 11(g);

(g) On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of section 164 (2) of the Act;

(h) With respect to the adequacy of the internal financial controls with reference to these Standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this Report;

(i) In our opinion, the managerial remuneration for the year ended March 31,2025 has been paid

/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(j) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone financial statements

- Refer Note 30(A) to the Standalone financial statements;

ii. The Company has made provision, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Notes 17(a) and 18 to the Standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

iv. a) The management has represented

that, to the best of its knowledge and belief, other than as disclosed

in the Note 31 (B) to the Standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come

to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement;

v. a) The final dividend paid by the

Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend;

b) As stated in Note 15(b) to the

Standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with accordance with section 123 of the Act to the extent it applies to declaration of dividend; and

vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that, audit trail feature is not enabled for certain master data and direct changes to data when using certain access rights, as described in Note 43 to the Standalone financial statements. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with, in respect of accounting softwares where the audit trail has been enabled. Additionally, the audit trail of relevant prior years has been preserved by the Company as per the statutory requirements for record retention, to the extent it was enabled and recorded in those respective years, as stated in Note 43 to the Standalone financial statements.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vaibhav Kumar Gupta

Partner

Membership Number: 213935

UDIN: 25213935BMOZUI5217

Place of Signature: Pune

Date: May 9, 2025

---

Mar 31, 2024

Thermax Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Thermax Limited (“the Company”), which comprise the Balance Sheet as at March 31,

2024, the Statement of Profit and Loss, including Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the Standalone financial statements, including a summary of material accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, its profit including other comprehensive income, its cash flows and the changes ir equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the standalone Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 30(A)(c) of the standalone financial statements relating to the Arbitral Award against the Company for claims of Rs. 218.45 Crore by the Arbitral Tribunal under a contract with customer for dispute and related provisions. The Company has made a provision of Rs. 50.63 Crore and for the balance amount, no provision has been considered necessary. The Company has received stay of operation and execution of the Arbitral Award by the High Court of Bombay after depositing an amount of Rs. 218.45 Crore. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2024. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
A) Accounting for Revenue from Contracts with Customers
(as described in Note 21 of the Standalone financial statements)
The Company’s revenue comprises of revenue	Our audit procedures included the following:
generated from sale of industrial products as well as from Engineering, Procurement and Construction (EPC) contracts. The total revenues for the year amounted to Rs. 5,782.59 Crore.	•	We understood the Company’s policies and processes, control mechanisms and methods in relation to the revenue recognition for revenue contracts and evaluated the design and operative
Revenues are recognised under Ind AS 115, Revenue from Contracts with Customers basis the nature and type of the contracts. We consider accounting of revenue contracts to be an area posing a significant risk of material misstatement and accordingly a key audit matter as due to the varied nature of the contracts, identification of contractual obligations, point of time for transfer of control, significant judgements involved in determining the contract costs (including costs incurred to date and	•	effectiveness of the financial controls from the above through our test of control procedures. We obtained and read the terms of sample revenue contracts to evaluate the management’s process to assess nature of contractual performance obligations, the point of time for transfer of control to customer and other relevant terms necessary for revenue recognition.
estimated total cost), rights to receive payments including	•	We tested revenue, on sample basis, recorded
those for performance completed till date and recognition		during the period closer to year-end by testing the
for loss making contracts/ onerous obligations. Revenue		supporting documentation.
and profits for the year may deviate significantly on account of changes in the above judgements and estimates.	•	We performed analytical procedures and conducted inquiries with senior management about any unusual trends of revenue recognition.
	•	For EPC contracts, on sample basis, we performed the following procedures among others:
		- Provision for liquidated damages and claims:
		Discussed with management and project teams to understand the status of the project and likelihood of customers imposing any contractual penalties through inspection of the relevant documents and correspondences.
		- Contingency provisions: Understood the
		management’s estimate and rationale for the contingency provision movement during the year. We analysed the movement throughout the life of the contract and discussed progress to date with project teams to determine whether the remaining contingency provision is sufficient coverage for the residual risks identified for those projects.
		- Assessment of costs-to-complete: Performed
		procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams, tested that the costs incurred were accrued at year-end and tested the significant assumptions for balance costs-to-complete.

Key audit matters	How our audit addressed the key audit matter
	•	Performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts/ onerous contracts, contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required.
	•	We read and tested the presentation and disclosure in the standalone financial statements are in accordance with applicable accounting standards.
B) Impairment of Investments in Subsidiaries
(as described in Note 5(a) and 40 of the Standalone financial statements)
During the year, impairment indicators were identified by	Our audit procedures included the following:
the management for investments in certain subsidiaries. Management’s assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows.	•	We understood the management’s process of evaluating the triggers for impairment, forecasting the future cash flows, evaluation of assumptions and comparison of estimates to externally available industry, economic and financial data, wherever available and necessary.
Changes to assumptions could lead to material changes	•	We assessed that the methodology used by
in the estimated recoverable amount, impacting both		management to estimate the recoverable
potential impairment charges and also potential reversals		value of each investment is consistent with
of impairment taken in prior years. Accordingly, this is		accounting standards.
considered as a key audit matter.	•	We assessed the assumptions used by the management to determine the recoverable amount of the investment in subsidiaries.
	•	We compared the carrying values of the Company’s investment in these subsidiaries to their respective financial statements which were available with their respective net asset values and discussed with management about their performance and future outlook.
	•	We involved valuation experts to assist in evaluating the valuation methodology, identifying and testing key assumptions and estimates to test the reasonableness of key assumptions used in preparing the cash flow forecasts, wherever required.
	•	We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis.
	•	We read and assessed the presentation and disclosure of such impairment in the standalone financial statements.
We have determined that there are no other key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Business Responsibility Report, Sustainability Report and Director’s Report of the Annual Report, but does not include the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged With Governance for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial

statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged With Governance are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether

due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether

a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• We communicate with Those Charged With Governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide Those Charged With Governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with Those Charged With Governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2024 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1 ” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report, to the extent applicable, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except that back-up of books and records (i.e., employee reimbursement system) maintained in electronic mode has not been maintained on servers physically located in India on a daily basis as mentioned in Note 43(A) of the standalone financial statements and except for the matters stated in the paragraph 2 (j) (vi) below on reporting under Rule 11(g);

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) The matters against the Company described in ‘Emphasis of Matter'' paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(f) On the basis of the written representations received from the directors as on March 31,

2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this Report;

(h) In our opinion, the managerial remuneration for the year ended March 31, 2024 has been paid

/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(i) The modification relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above on reporting under section 143(3)(b) and paragraph 2 (j) (vi) below on reporting under Rule 11(g);

(j) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements

- Refer Note 30(A) to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts

- Refer Note 9(b) to the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

iv. a) The management has represented

that, to the best of its knowledge and belief, other than as disclosed in the Note 31(B) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind

of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come

to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement;

v. a) The final dividend paid by the

Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend;

b) As stated in Note 15(b) to the

standalone financial statements, the Board of Directors of the Company have proposed final dividend for the

year which is subject to approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with accordance with section 123 of the Act to the extent it applies to declaration of dividend; and

vi. Based on our examination which included test checks, the Company has used accounting software for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that, audit trail feature is not enabled for certain master data and direct changes to data when using certain

access rights, as described in Note 43(B) to the standalone financial statements. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of the accounting software.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vaibhav Kumar Gupta

Partner

Membership Number: 213935

UDIN: 24213935BKENGC6639

Place: Pune

Date: May 10, 2024

---

Mar 31, 2023

To the Members of Thermax Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Thermax Limited (“the Company”), which comprise the Balance sheet as at March 31 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Financial Statements’ section of our report. We are independent of the Company in accordance with

the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matter	How our audit addressed the key audit matter
A) Accounting for Revenue from Contracts with Customer (as described in Note 21 of the standalone financial statements)
The Company’s revenue comprises of revenue generated from sale of industrial products as well as from Engineering, Procurement and Construction (EPC) contracts. The total revenues for the year amounted to Rs. 5,120.14 crores. Revenues are recognised under Ind AS 115, Revenue from Contracts with Customers basis the nature and type of the contracts. We consider accounting of revenue contracts to be an area posing a significant risk of material misstatement and accordingly a key audit matter as due to the varied nature of the contracts, identification of contractual obligations, point of time for transfer of control, significant judgements involved in determining the contract costs (including costs incurred to date and estimated total cost), rights to receive payments including those for performance completed till date and recognition for loss making contracts/ onerous obligations. Revenue and profits for the year may deviate significantly on account of changes in the above significantly on account of change in judgements and estimates.	Our audit procedures included the following: • We understood the Company’s policies and processes, control mechanisms and methods in relation to the revenue recognition for revenue contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures. • We obtained and read the terms of sample revenue contracts to evaluate the management’s process to assess nature of contractual performance obligations, the point of time for transfer of control to customer and other relevant terms necessary for revenue recognition. • We tested revenue, on sample basis, recorded during the period closer to year-end by testing the supporting documentation. • We performed analytical procedures and conducted inquiries with senior management about any unusual trends of revenue recognition. • For EPC contracts, on sample basis, we performed the following procedures among others: • Provision for liquidated damages and claims: Discussed with management and project teams to understand the status of the project and likelihood of customers imposing any contractual penalties through inspection of the relevant documents and correspondences. • Contingency provisions: Understood the management’s estimate and rationale for the contingency provision movement during the year. We analyzed the movement throughout the life of the contract and discussed progress to date with project teams to determine whether the remaining contingency provision is sufficient coverage for the residual risks identified for those projects • Assessment of costs-to-complete: Performed procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams, tested that the costs incurred were accrued at year-end and tested the significant assumptions for balance costs-to-complete. • Performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts/ onerous contracts, contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required. • We read and tested the presentation and disclosure in the standalone financial statements are in accordance with applicable accounting standards.

Key audit matter	How our audit addressed the key audit matter
B) Impairment of Investments in Subsidiaries (as described in Note 5(a) and 42 of the standalone financial statements)
During the year, impairment indicators were identified by the management for investments in certain subsidiaries. Management’s assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Changes to assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly, this is considered as a key audit matter.	Our audit procedures included the following: • We understood the management’s process of evaluating the triggers for impairment, forecasting the future cash flows, evaluation of assumptions and comparison of estimates to externally available industry, economic and financial data, wherever available and necessary. • We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards. • We assessed the assumptions used by the management to determine the recoverable amount of the investment in subsidiaries. • We compared the carrying values of the Company’s investment in these subsidiaries to their respective financial statements which were available with their respective net asset values and discussed with management about their performance and future outlook. • We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis. • We read and assessed the presentation and disclosure of such impairment in the standalone financial statements.
C) Impairment of trade receivables and contract assets (as described in Note 7 and 9(b) of the standalone financial statements)
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognise impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly judgmental as it requires management to make significant assumptions on customer payment behavior and other relevant / risk characteristics when assessing the Company’s statistics of historical information and estimating the level and timing of expected future cash flows. As at the March 31, 2023, the Company recorded an impairment provision of Rs. 263.85 crores for its receivables and unbilled revenue.	Our audit procedures included the following: • We evaluated the management’s key data sources and assumptions used in the ECL model to determine impairment allowance. • We understood the management’s basis to consider the associated risks for identifying homogeneous group of receivables. • We evaluated the process followed by the Company for determination of credit risk and the resultant basis for classification of receivables into various stages. • For a sample of receivables, we tested the ageing of the receivables considered for impairment calculations. • We assessed the completeness of financial assets included in the ECL calculations as of the reporting date. • We considered the consistency of various inputs and assumptions used by the Company’s management to determine impairment provisions. • We read and tested the disclosures in the notes to standalone financial statements are as per the relevant accounting standards.
We have determined that there are no other key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. The other information comprises the Business Responsibility Report, Sustainability Report and Director’s Report including annexure to the Director’s Report of the Annual Report, but does not include the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether

a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report)

Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report

that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except that back-up of books and records (i.e. employee reimbursement system) maintained in electronic mode has not been maintained on servers physically located in India on a daily basis as mentioned in Note 45 of standalone financial statements;

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph (b) above.

(g) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this Report;

(h) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid

/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(i) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 31(A) to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts -Refer Note 9(b) and 17(b) to the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;

iv. a) The management has represented

that, to the best of its knowledge and belief, other than as disclosed in the note 32(B) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the

understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures

performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. a) The final dividend paid by the Company

during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

b) As stated in note 15(b) to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend; and

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Vaibhav Kumar Gupta

Partner

Membership No.: 213935

UDIN: 23213935BGYWXW7010

Place: Pune

Date: May 17, 2023

---

Mar 31, 2022

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Thermax Limited (“the Company”), which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act.

Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Financial Statements’ section of our report.

We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
A) Revenue recognition for engineering, procurement and construction contracts
(refer Note 21(c) of the standalone financial statements)
The Company’s significant portion of business is undertaken through Engineering, Procurement and Construction (EPC) contracts. Revenue from these contracts is recognized over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers. We consider the accounting for such contracts to be an area posing a significant risk of material misstatement and accordingly a key audit matter, as due to the nature of the contracts, revenue is accounted over a period of time (using input method) which requires identification of contractual obligations, significant judgement with regards to determining contract costs incurred till date compared to estimated total contract costs, the Company’s rights to receive payments for performance completed till date, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Revenues and profits for the year under audit, may deviate significantly on account of changes in such judgements and estimates. Revenue from such contracts amounted to Rs. 2,122.42 crores for the year.	Our audit procedures included the following: • We understood the Company’s policies and processes, control mechanisms and methods in relation to the revenue recognition for these contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures. • We evaluated management’s estimates and assumptions for a selected (risk-based method) sample contracts and inspected the underlying documents which form the basis of revenue recognition under the input method. We evaluated the management’s process to recognize revenue over a period of time, determine cost estimates, status of the projects and tested the arithmetical accuracy of the same. • Amongst others, for a sample of contracts, we performed the following procedures: - Provision for liquidated damages: Our procedures involved discussions with management and project teams to understand the status of the project and on-going discussions with the customers in terms of likelihood of imposing any contractual penalties and analyzed the above through inspection of the relevant documents and correspondences. - Contingency provisions: We understood the management’s estimate and rationale for provision movement during the year. We analyzed the movement throughout the life of the contract and discussed progress to date with individual project teams to determine whether the remaining contingency was sufficient to cover residual risks of those projects. - Assessment of costs-to-complete: We performed procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams. We tested that the costs incurred were accrued at year-end and tested the assumptions for balance costs-to-complete. • We performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts/ onerous contracts, contracts with significant changes in cost estimates and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required. • We read and tested the presentation and disclosure of such EPC contracts in the standalone financial statements.

Key audit matters	How our audit addressed the key audit matter
B) Impairment of investments in subsidiaries (refer in Note 5(a), 6(a) and 41 of the standalone financial statements)
During the current year, impairment indicators were identified by the management for investments in certain subsidiaries. Management’s assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes in some of the inputs used for forecasting the future cash flows. Changes to assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly, this is considered as a key audit matter.	Our audit procedures included the following: • We understood the management’s process of evaluating the triggers for impairment, forecasting the future cash flows, evaluation of assumptions and comparison of estimates to externally available industry, economic and financial data, wherever available and necessary. • We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards. • We assessed the assumptions used by the management to determine the recoverable amount of the investment in subsidiaries. • We compared the carrying values of the Company’s investment in these subsidiaries to their respective financial statements which were available with their respective net asset values and discussed with management about their performance and future outlook. • We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis. • We read and assessed the presentation and disclosure of such impairment in the standalone financial statements.
C) Impairment of trade receivables and contract assets (refer Note 7 and 9(b) of the standalone financial statements)
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognize impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly judgmental as it requires management to make significant assumptions on customer payment behavior and other relevant risk characteristics when assessing the Company’s statistics of historical information and estimating the level and timing of expected future cash flows. As at the March 31, 2022, the Company recorded an impairment provision of Rs. 266.42 crores for its receivables and unbilled revenue.	Our audit procedures included the following: • We evaluated the management’s key data sources and assumptions used in the ECL model to determine impairment allowance. • We understood the management’s basis to consider the associated risks for identifying homogeneous group of receivables. • We evaluated the process followed by the Company for determination of credit risk and the resultant basis for classification of receivables into various stages. • For a sample of receivables, we tested the ageing of the receivables considered for impairment calculations. • We assessed the completeness of financial assets included in the ECL calculations as of the reporting date. • We considered the consistency of various inputs and assumptions used by the Company’s management to determine impairment provisions. • We read and tested the disclosures in the notes to standalone financial statements are as per the relevant accounting standards.

We have determined that there are no other key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s Board of Directors is responsible for the other information. The other information comprises the Business Responsibility Report and Director’s Report including annexure to the Director’s Report of the Annual Report but does not include the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give

a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,

2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 31(A) to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 9(b) and 17(b) to the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

iv. a) The management has represented that, to the

best of its knowledge and belief, other than as disclosed in the note 32(B) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement

of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of the written representations received from the directors as on March 31, 2022 taken

on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls with reference to these standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(g) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid/ provided by the Company to its directors in accordance

with the provisions of section 197 read with Schedule V to the Act;

foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

v. a) The dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.

b) As stated in Note 15(b) to the standalone financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Tridevlal Khandelwal

Partner

Membership Number: 501160

UDIN: 22501160AJHQHI3278

Place of Signature: Pune

Date: May 20, 2022

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Mar 31, 2019

Report on the Audit of the Standalone Ind AS Financial Statements Opinion

We have audited the accompanying standalone Ind AS financial statements of Thermax Limited (“the Company”), which comprise the Balance sheet as at March 31, 2019, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the financial statements, Including a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Companies Act, 2013, as amended (“the Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2019, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the ‘Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements’ section of our report. We are independent of the Company in accordance with the ‘Code of Ethics’ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained Is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Emphasis of Matter

We draw attention to note 32(A)(a) of the standalone Ind AS financial statements relating to the demand orders/ show cause notice on the Company for Rs. 1,383.51 crores (including penalty of Rs. 325.29 crores and excluding interest not presently quantified) by the Commissioner of Central Excise, Pune. The Company has filed an appeal against the said orders and filed replies to the show cause notice cum demand order. Our opinion is not qualified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment were of most significance in our audit of the standalone Ind AS financial statements for the financial year ended March 31,2019. These matters were addressed in the context of our audit of the standalone Ind AS financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the standalone Ind AS financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone Ind AS financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone Ind AS financial statements.

Key audit matters	How our audit addressed the key audit matter
(a) Revenue recopnitlon for Engineering. Procurement and Constructions contracts
(refer note 21 of the standalone Ind AS financial statements)
The Company’s significant portion of business is undertaken through Engineering, Procurement and Construction (EPC) contracts. Revenue from these contracts is recognized over a period of time in accordance with the requirements of Ind AS 115, Revenue from Contracts with Customers. Due to the nature of the contracts, revenue Is accounted over a period of time (using input method) which requires identification of contractual obligations, significant judgement with regards to determining contract costs incurred to date compared to estimated total contract costs, the Company’s rights to receive payments for performance completed till date, changes in scope and consequential revised contract price and recognition of the liability for loss making contracts/ onerous obligations. Revenues and profits for the year under audit, may deviate significantly on account of change in such judgements and estimates. Revenue from such contracts amounted to Rs. 3,546.88 crores (including Rs. 1,556.87 pertaining to discontinued operations).	Our audit procedures included the following - We understood the Company’s policies and processes, control mechanisms and methods in relation to the revenue recognition for these contracts and evaluated the design and operative effectiveness of the financial controls from the above through our test of control procedures - We evaluated management’s estimates and assumptions for a selected (risk-based method) sample contracts. We inspected the underlying documents which form the basis of revenue recognition under the input method. We evaluated the management’s process to recognize revenue over a period of time, total cost estimates, status of the projects and re-calculated the arithmetical accuracy of the same. - Amongst others, for a sample of contracts, we performed the following procedures: - Provision for liquidated damages: Our procedures involved discussions with management and project teams to understand the status of the project and on-going discussions with the customers in terms of likelihood of imposing any contractual penalties and analyzed the above through inspection of the relevant documents and correspondences. - Contingency provisions: We understood the management’s estimate and rationale for provision movement during the period. We analyzed the movement throughout the life of the contract, and discussed progress to date with Individual project teams to determine whether the remaining contingency was sufficient to cover residual risks on the project. - Assessment of costs-to-complete: We performed analytical procedures on balance cost estimation, tested the historical accuracy of previous forecasts and discussed variances with project teams. We tested that the costs incurred were accrued at year end and also tested the assumptions for balance costs-to-complete.

Key audit matters	How our audit addressed the key audit matter
	- We performed analytical procedures and checked exceptions for contracts with low or negative margins, loss making contracts, contracts with significant changes in cost estimates, probable penalties due to delay in contract execution and significant overdue net receivable positions for contracts with marginal or no movement to determine the level of provisioning required. - We read and tested the presentation and disclosure of such EPC contracts In the standalone Ind AS financial statements.
fb) ImDainment of investment in subsidiaries (refer note 5 and note 40 of the standalone Ind AS financial statements)
During the current year, impairment indicators were identified by the management on the investments of Rs 928.89 crores. Management’s assessment for impairment of investments in subsidiaries requires estimation and judgement around assumptions used, including the recoverable value of underlying tangible assets. Furthermore, the value in use is highly sensitive to changes In some of the inputs used for forecasting the future cash flows. Changes to assumptions could lead to material changes in the estimated recoverable amount, impacting both potential impairment charges and also potential reversals of impairment taken in prior years. Accordingly, this is considered as a key audit matter.	Our audit procedures for investment balances included the following: - We understood the management’s process of forecasting the future cash flows, evaluated the assumptions and compared the estimates to externally available industry, economic and financial data, wherever available & necessary; - We assessed that the methodology used by management to estimate the recoverable value of each investment is consistent with accounting standards; - We engaged experts to assess the assumptions and methodologies used by the management to determine the recoverable amount of the investment in subsidiaries; - We compared the carrying values of the Company’s investment in these subsidiaries and joint ventures for which audited financial statements were available with their respective net asset values and discussed with management about their performance and future outlook; - We considered the potential impact of reasonably possible downside changes in these key assumptions as part of sensitivity analysis - We read and assessed the presentation and disclosure of such impairment In the standalone Ind AS financial statements.

Key audit matters	How our audit addressed the key audit matter
(c) Impairment of financial and contract assets: (refer note 7 and note 9(b) of the standalone Ind AS Financial Statements)
Impairment of financial assets and contract assets is covered through Expected Credit Losses (ECL) method under Ind AS 109 and is expected is to reflect the general pattern of deterioration or improvement in the credit quality of financial instruments. Impairment of financial assets is a key audit matter as the Company has devised a model to recognize impairment through ECL using individual receivables or for homogeneous group of receivables with similar credit risk characteristics. The calculation of the impairment allowance under expected credit losses is highly Judgmental as it requires management to make significant assumptions on customer payment behaviour and other relevant risk characteristics when assessing the Company’s statistics of historical information and estimating the level and timing of expected future cash flows. As at the March 31, 2019, the Company recorded an impairment provision of Rs 441.14 crores for its receivables and unbilled revenue.	Our audit procedures performed included the following: - We evaluated the management’s key data sources and assumptions used in the Expected Credit Loss (ECL) model to determine impairment provisions; - We understood the management’s basis to consider the associated risks for identifying homogeneous group of receivables; - we evaluated the process followed by the Company’s for determination of credit risk and the resultant basis for classification of receivables into various stages. - For a sample of receivables, we tested the ageing of the receivables considered for impairment calculation; - We assessed the completeness of financial assets included in the ECL calculations as of the reporting date; - We considered the consistency of various inputs and assumptions used by the Company’s management to determine impairment provisions; - we assessed the related disclosures in the notes to financial statements.

We have determined that there are no other key audit matters to communicate in our report.

Information Other than the Financial Statements and Auditor’s Report Thereon

The Company’s BoaFd of Directors Is responsible for the other information. The other information comprises the information included in the Chairman’s statement, managing director’s statement, business responsibility report and director’s report including annexure to the director’s report of the annual report of the company, but does not include the standalone Ind AS financial statements and our auditor’s report thereon.

Our opinion on the standalone Ind AS financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone Ind AS financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of theAct read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone Ind AS financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Charged With Governance are also responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind AS financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material If, individually or In the aggregate, they could reasonably be expected to Influence the economic decisions of users taken on the basis of these standalone Ind AS financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

- Identify and assess the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that Is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

- Evaluate the overall presentation, structure and content of the standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, Including any significant deficiencies in Internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31,2019 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) The matter described in Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31,2019 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2019 from being appointed as a director in terms of Section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(h) In our opinion, the managerial remuneration forthe year ended March 31,2019 has been paid / provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;

(i) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended in our opinion and to the best of our information and according to the explanations given to us:

I. The Company has disclosed the Impact of pending litigations on its financial position In its standalone Ind AS financial statements - Refer Note 32(A)(a) to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer note 18(b) to the standalone Ind AS financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

Annexure 1 as referred to in paragraph 1 under the heading ‘Report on Other Legal and Regulatory Requirements’ of our report of even date

Re: Thermax Limited (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were identified on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties Included In property, plant and equipment are held In the name of the Company.

(ii) The inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31,2019 and no material discrepancies were noticed in respect of such confirmations.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Accordingly, the provisions of clause 3(iii)(a), (b)and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entitles in which they are Interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v)of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the manufacture of chemicals, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income tax, duty of custom, goods and services tax, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, duty of custom, goods and services tax, cess and other statutory dues were outstanding, at the year end, fora period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:

Name of the Statute	Nature of Dues	Forum where the dispute is pending	Period to which amount related	Disputed dues, not deposited™ (Rs. in crores)
Central Excise Act, 1944	Excise Duty	Supreme Court	1997 - 98	[net of deposit Rs 5.31]
		Appellate Tribunal	200CM)1 to 2015-16	1,360.87 [net of deposit Rs 23.72]
Income Tax Act, 1961	Income Tax	High Court	AY 1993-94, AY 1996-97 and AY 1997-98	(net of deposit Rs. 1.99)
		Appellate Tribunal	AY 2004-05 to AY 2009-10	38.70
		Appellate Authority upto Commissioner Level	AY 2015-16 and AY 2017-18	88.71
Central Sales Tax and Local Sales tax	Sales Tax and Value Added Tax	High Court	2000-01,2001-02, 2010-11, to 2014-15	43.58 [net of deposit Rs 0.24]
		Appellate Tribunal	2003-04,2006-07, 2008-09,2013-14	0.44
		Appellate Authority upto Commissioner Level	2004-05,2006-07 to 2014-15	18.55 [net of deposit Rs 0.58]
Finance Act, 1994	Service Tax	Appellate Tribunal	2012-13 to 2015-16	2.66 [net of deposit Rs 0.16]
Customs Act, 1962	Custom duty	Supreme Court	2005-06	[net of deposit Rs 0.56]
		Appellate Authority upto Commissioner Level	2005-06	0.59 [net of deposit Rs 0.02]

‘net of deposits paid under protest

Excluding the Interest and penalty thereon

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowings to banks. The Company has no loan/ dues towards any financial institution, debenture holders or from the government.

(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer/ further public offer/ debt Instruments and term loans hence, reporting under clause (ix) Is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/ provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and section 188 of the Act where applicable and the details have been disclosed in the notes to the standalone Ind AS financial statements, as required by the applicable Accounting Standards.

(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with him as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IAof the Reserve Bank of India Act, 1934 are not applicable to the Company.

Annexure 2 as referred to In paragraph 2(g) under the heading ‘Report on Other Legal and Regulatory Requirements’ of our report of even date

Report on the Internal Financial Controls under Clause (I) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Thermax Limited (“the Company”) as of March 31, 2019, in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate Internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting with reference to these standalone Ind AS financial statements based on our audit. We conducted our audit In accordance with the Guidance Note and the Standards on Auditing as specified under section 143(10) of the Act to the extent applicable to an audit of internal financial controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of Internal financial controls over financial reporting with reference to these standalone Ind AS financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting with Reference to these financial statements

A company’s internal financial control over financial reporting with reference to these standalone Ind AS financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting with Reference to these Standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone Ind AS financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone Ind AS financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting with reference to these standalone Ind AS financial statements and such internal financial controls over financial reporting with reference to these standalone Ind AS financial statements were operating effectively as at March 31, 2019, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

For SRBC & COLLP

Chartered Accountants

ICAI Firm Registration Number; 324982E/E300003

Per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place: Pune

Date: May 22,2019

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Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Thermax Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to note 32A(a) of the standalone Ind AS financial statements relating to the demand orders/ show cause notice on the Company for Rs. 1,376.92 crores (including penalty of Rs. 325.29 crores and excluding interest not presently quantified) by the Commissioner of Central Excise, Pune. The Company has filed an appeal against the said orders and filed replies to the show cause notice cum demand order. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the “Annexure 1” a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) The matter described in Emphasis of matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of written representations received from the directors as on March 31,2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company with reference to these standalone Ind AS financial statements and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 32A(a) to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 18(b) to the standalone Ind AS financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; iv. The disclosure with respect to holding of and dealings in Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018 and accordingly have not been reported by us. Refer note 13(c) of the standalone Ind AS financial statements.

Annexure 1 referred to in paragraph 1 under the heading “Report on Other Legal and Regulatory Requirements” of our report of even date

Re: Thermax Limited (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31,2018 and no material discrepancies were noticed in respect of such confirmations.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Accordingly, the provisions of clause 3(iii)(a), (b)and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of chemicals, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:

Name of the Statute	Nature of Dues	Forum where the dispute is pending	Forum where the dispute is pending	Disputed dues, not deposited* (Rs. in crores)
Central Excise Act, 1944	Excise Duty	Supreme Court	1997-98	- [net of deposit Rs 5.31]
		Appellate Tribunal	2000-01 to 2015-16	1,360.31 [net of deposit Rs 20.34]
Income Tax Act, 1961	Income Tax	Appellate Tribunal	AY 2003-04 to 2009-10	25.71
		Appellate Authority upto Commissioner Level	AY 2014-15	0.13
Central Sales Tax and Local Sales tax	Sales Tax and Value Added Tax	High Court	2000-01,2001-02,2010-11, 2012-13 to 2014-15	43.58 [net of deposit Rs 0.24]
		Appellate Tribunal	2003-04, 2006-07, 2008-09,2013-14	0.43
		Appellate Authority upto Commissioner Level	2004-05, 2006-07 to 2014-15	17.51 [net of deposit Rs 0.56]
Finance Act, 1994	Service Tax	Appellate Tribunal	2012-13 to 2015-16	2.62 [net of deposit Rs 0.20]
Customs Act, 1962	Custom duty	Supreme Court	2005-06	- [net of deposit Rs 0.56]
		Appellate Tribunal	2005-06	0.56 [net of deposit Rs 0.02]

*net of deposits paid under protest

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a bank. The Company has no loan/dues towards any financial institution, debenture holders orfrom the government.

(ix) According to the information and explanations given by the management, the Company has not raised any money way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable Accounting Standards.

(xiv) According to the information and explanations given to us and on an overall examination of the Balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting under clause 3(xiv) is not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any noncash transactions with directors or persons connected with them as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For SRBC & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

Per Tridevlal Khandelwal

Partner

Membership Number: 501160

Place of Signature: Pune

Date: May 18,2018

---

Mar 31, 2017

INDEPENDENT AUDITOR’S REPORT

To the Members of Thermax Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying Standalone Ind AS financial statements of Thermax Limited (‘the Company’), which comprise the Balance Sheet as at March 31,2017, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (‘the Act’) with respect to the preparation of these Standalone Ind AS financial statements that give a true and fair view of the (financial position), (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the Standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Standalone Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the Standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

We draw attention to note 32A(a) of the standalone audited financial statements, relating to the demand orders on the Company for Rs.1,330.64 crores (including a penalty of Rs.325.29 crores and excluding interest not presently quantified) by the Commissioner of Excise, Pune. The Company has filed an appeal against the said orders. Our report is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s report) Order, 2016 (‘the Order’) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the ‘Annexure 1’, a Statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid Standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) The matter described in sub-paragraph under the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;

(f) On the basis of written representations received from the directors as on March 31,2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2017, from being appointed as a director in terms of section 164 (2) of the Act;

(g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in ‘Annexure 2’ to this report;

(h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Ind AS financial statements - Refer note 32 to the Standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 19 to the Standalone Ind AS financial statements;

Hi. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in Note 13(c) to these Standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8,2016 and December 30,2016 as well as dealings in Specified Bank Notes during the period from November 8,2016 to December 30,2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management.

Annexure 1 referred to in paragraph 1 under the heading “Report on other legal and regulatory requirements” of our report of even date

Re: Thermax Limited (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying with third parties have been confirmed by them as at March 31,

2017 and no material discrepancies were noticed in respect of such confirmations.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’). Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits to which the provisions of Sections 73,74,75 and 76 or any other relevant provisions of the Act and the Rules framed there under to the extent notified, are applicable. Therefore, the provisions of clause 3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of chemicals, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, custom duty, excise duty, value added tax, cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, custom duty, excise duty, value added tax, cess and other statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues of income-tax, sales-tax, service tax, duty of custom, duty of excise value added tax and cess on account of any dispute, are as follows:

(Rs. in Crores)

Name of the Statute	Nature of Dues	Forum where the dispute is pending	Period to which amount related	Disputed dues, not deposited*
Central Excise Act, 1944	Excise Duty	CESTAT	2000-01 to 2015-16	1,329.46
Central Sales Tax Act and Local Sales tax (including Works Contract)	Sales Tax	Appellate Authority up to Commissioner level	1992-93,1996-97, 2003-04, 2004-05, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11,2011-12, 2012-13, 2014-15	3.56
		High Court	2000-01,2001-02,2010-11,2013-14, 2014-15	43.21
		Tribunal	2006-07, 2008-09	1.25
Income Tax Act, 1961	Income Tax	Appellate Authority up to Commissioner level	2006-07 to 2013-14	1.60
Service Tax (Finance Act, 1994)	Service Tax	CESTAT	2012-13, 2015-16	0.91
Customs Act, 1962	Custom Duty	CESTAT	2005-06	0.52
Grand Total				1,380.51

* Net of amount deposited under product.

(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to a bank. The Company has no loan/ dues towards any financial institution, debenture holders or from the government.

(ix) According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer / further public offer / debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Standalone Ind AS financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or material fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management, the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable Accounting Standards.

(xiv) According to the information and explanations given to us and on an overall examination of the Balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting under clause 3(xiv) is not applicable to the Company and, not commented upon.

(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with them as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

To the Members of Thermax Limited

We have audited the internal financial controls over financial reporting of Thermax Limited (‘the Company’) as of March 31, 2017 in conjunction with our audit of the Standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the ‘Guidance Note’) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

ForSRBC&COLLP For B. K. Khare & Co

ICAI Firm registration number: 324982E/ E300003 ICAI Firm registration number:105102W

Chartered Accountants Chartered Accountants

perTridevlal Khandelwal per H.P. Mahajani

Partner Partner

Membership No.: 501160 Membership No.: 030168

Place: Pune Place: Pune

Date: May 30,2017 Date: May 30,2017

---

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of THERMAX LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statements of Profit and Loss and Cash Flow for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31,2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor''s Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by Section 143(3) of the Act, we report that:

a. we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c. the Balance Sheet, the Statement of Profit and Loss and Cash Flow dealt with by this Report are in agreement with the books of account;

d. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended);

e. On the basis of written representations received from the directors as on March 31, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014(as amended), in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements under Note 29 (Contingent Liabilities) and Note 30 to the financial statements

ii. Company did not have any long-term contracts including derivate contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditor''s Report referred to in Point 9 of Report on Other Legal and Regulatory Requirements in our report of even date

1 (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management in accordance with a planned program of physical verification which, in our opinion is reasonable having regard to the size of the Company and the nature of its assets.The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account. In our opinion, the frequency of verification is reasonable.

2 (a) The Management has conducted physical verification of inventory at reasonable intervals during the year.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of business.

(c) The Company has maintained proper records of inventory and the discrepancies noticed on physical verification of inventories were not material and have been properly dealt with in books of account.

3 The Company has not granted any loans, secured or unsecured to any of the companies, firms nor other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii)(a) and (b) of the said order are not applicable to the company.

4 In our opinion and according to the information and explanations given to us, the Company is having an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. On the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across, nor have we been informed of, any continuing failure to correct any major weaknesses in the aforesaid internal control system of the Company in respect of these areas.

5 The Company has not accepted any deposits within the meaning of Section 73 of the Act and rules framed there under.

6 We have broadly reviewed the books of accounts maintained by the Company, pursuant to the rules made by the Central Government for the maintainance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records maintained as aforesaid.

7 (a) According to the records of the Company and information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident fund, Employees'' state insurance, Income tax, Sales tax, Wealth tax and service tax, duty of customs, duty of excise, value added tax, cess and other applicable statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us and records of the Company examined by us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of excise, duty of customs, value added tax and cess which have not been deposited on account of any dispute except as follows:

Name of Statute Nature of Dues Forum where (including interest the dispute is and penalty as appli pending cable)

Central Excise Act,1944 Excise duty CESTAT

Supreme court

Central Sales Tax Sales tax Appellate Act and local Sales Authority up to Tax(lncludingWorks Commissioner Contract) level

High Court

Tribunal

Customs Act, 1962 Custom duty CESTAT

lncome Tax Act,1961 Income Tax Appellate Authority up to Commissioner''s level

Service Tax ( Finance Service tax CESTAT Act,1994)

Name of Statute Period to which Disputed dues, amount related not deposited (Rs in Crore)

Central Excise Act, 1944 2001-02,2003-04, 11.44 2005-06, 2006-07, 2007-08, 2008-09, 2009-10, 2012-13, 2014-15

1997-98,2006-07 5.44

Central Sales Tax 1992-93,2000-01, 5.84 Act and local Sales Tax 2001- 02, 2003-04, (Including Works Contract) 2004-05, 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13

2000- 01,2001-02, 1.36 2002- 03, 2003-04, 2004-05, 2010-11

2001- 02,2006-07, 1.28 2008-09

Customs Act, 1962 2005-06 0.45

Income Tax Act 1961 2003-04, 2007-08 to 23.17 2013-14

Service TAx Finance Act 1994 2012-13 0.13

(c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

8 The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date and in the immediately preceding financial year.

9 Based on the records examined by us and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the Balance Sheet date.

10 According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year, except as mentioned below :

Sr. Type of Guarantee Beneficiary Subsidiary Issued In Favour Of No.

1 Letter of Comfort Thermax Babcock and ICICIBank wilcox Energy Solutions Private Limited

2 Corporate Guarantee Rifox - Hans Richter Syd Bank Germany GmbH

Type of Gurantee To the extent of Amount of Guarantee

Letter of Comfort Rs. 66.30 Crore

Corporate Guarantee Euro 0.45 Million

11 In our opinion, and according to the information and explanations given to us, during the year, no term loans have been obtained by the Company.

12 During the course of our examination of the books of accounts carried out in accordance with generally accepted auditing practices in India, we have neither come across any significant instance of fraud on the Company or instance of fraud by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.

For B. K. Khare & Co. Chartered Accountants Firm''s Registration Number 105102W

H. P. Mahajani Partner Membership Number: 030168

Place: Pune Date : May 26, 2015

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Thermax Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the statement of Profit and Loss, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by ''the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date

(i) (a) The Company has maintained proper records to show full particulars, including quantitative details and situation, of its fixed assets.

(b) The Fixed assets of the Company have been physically verified by the management at reasonable intervals during the year & the discrepancies noticed have been properly dealt with in the books of account.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

(ii) (a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

(iii) The Company has not taken or granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, provisions of the clause 4 (iii) (b), (c), (d), (f) and (g) of the Companies (Auditor''s Report) Order, 2003 are not applicable and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, during the course of our audit, we have neither come across nor we have been informed of any instance of continuing failure to correct major weakness in the aforesaid internal control procedures.

(v) (a) On the basis of our examination of the books of account, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market prices prevailing at the relevant time as evaluated on the basis of quotations obtained from parties / prices charged by the Company in case of similar transactions during the year and considering that having regard to certain items purchased / sold are of a special nature in respect of which suitable alternative sources do not exist for obtaining comparative quotations in general.

(vi) The Company has not accepted any deposits within the meaning of section 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the Company''s present internal audit system is commensurate with the size and nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records maintained as aforesaid.

(ix) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us ,in our opinion ,the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have generally been regularly deposited by the Company during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) As at 31st March 2013, according to the records of the Company and the information and explanations given to us, the following are the particulars of disputed dues on account of Sales-tax, Income-tax, Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that have not been deposited on account of a dispute:

(x) The Company has neither accumulated losses as at 31st March 2013, nor has it incurred any cash loss either during the financial year ended on that date or in the immediately preceding financial year.

(xi) Based on our audit procedures and according to the information and explanations given by the Management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank or to debenture holders as at the balance sheet date.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In our opinion and according to the information & explanation given to us the Company is not a dealer or trader in, securities, debentures and other investments. However, in respect of transactions relating to investment in certain securities, the company has maintained proper records of transactions & contracts during the year and timely entries have been made there in. Further, such securities have been held by the company in its own name.

(xv) Based on the information and explanations given to us, in our opinion, the terms and condition on which the Company has given counter guarantees/ corporate guarantees on behalf of its subsidiaries to the banks during the year, are not prima facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, funds raised on short term basis have not been used for long term investment.

(xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xvix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any significant instant of fraud on or by the company, either noticed or reported during the year, nor have we been informed of such case by the Management.

For B. K. Khare & Co.

Chartered Accountants

Firm registration number: 105102W

H. P. Mahajani

Place: Pune Partner

Date: May 22, 2013 Membership No.: 030168

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Thermax Limited as at 31st March 2012, and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India (the "Act"), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account have been kept by the Company as required by law, so far as appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

(e) On the basis of written representations received from the Directors, as on 31st March 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, together with the Notes thereon and attached thereto, give, in the prescribed manner, the information required by the Act and also give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012;

(ii) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors' Report (Referred to in paragraph 3 of our report of even date)

1. (a) The Company has maintained proper records to show full particulars, including quantitative details and situation, of its fixed assets.

(b) The fixed assets of the Company have been physically verified by the management at reasonable intervals during the year and the discrepancies noticed have been properly dealt with in the books of account.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

3. The Company has neither granted nor taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act. As the Company has not granted/taken any loans, secured or unsecured, to/from companies, firms etc., listed in the register maintained under Section 301 of the Act, paragraphs 4(iii)(a) to (g) of the Order, are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, during the course of our audit we have neither come across nor have we been informed of any instance of continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) On the basis of our examination of the books of account, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market prices prevailing at the relevant time as evaluated on the basis of quotations obtained from parties / prices charged by the Company in case of similar transactions during the year and considering that having regard to certain items purchased / sold are of a special nature in respect of which suitable alternative sources do not exist for obtaining comparative quotations in general.

6. The Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company's present internal audit system is commensurate with its size and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the company in respect of product where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts -and records have been made and maintained. We have not, however, made a detailed examination of the records maintained as aforesaid.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have generally been regularly deposited by the Company during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employee's state insurance, income tax, wealth tax, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues were outstanding at the year end, for the period exceeding six months from the date they became payable.

(c) As at 31st March 2012, according to the records of the Company and the information and explanations given to us, the following are the particulars of disputed dues on account of Sales-tax, Income-tax, Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that have not been deposited on account of a dispute:

Name of the Nature of dues Amount under Period to which Forum where the statute dispute not yet the amount relates Dispute is pending deposi -ted (Rs. Crore)

Central Sales TaxAct and local sales Sales tax including interest and 0.03 1992-93 Appellate Authority -upto tax Acts (Including works contract) penalty as applicable 0.00 2000-01 Commissioner's level 0.01 2001-02

0.02 2003-04

0.02 2004-05

3.97 2004-05

0.01 2006-07

0.82 2007-08

0.90 2008-09

1.23 2009-10

1.28 2003-04

0.04 2003-04

3.80 2003-04

2.46 2004-05

0.00 2001-02 Tribunal

1.14 2006-07

0.05 2000-01 High Court

0.41 2001-02

0.18 2002-03

0.16 2003-04

0.34 2004-05

The Centra Excise Act. 1944 Excise dutyl including interest 0.70 2003-04 Appellate Auth -ority -upto and penalty as applicable 0.03 2009-10 Commissioner's level 0.20 2001-02 Tribunal

0.34 2003-04

0.85 2005-06

0.07 2006-07

0.22 2008-09

0.15 2007-08

0.02 2001-02

3.84 2006-07 Supreme court

1.60 1997-98

Custom Act. 1962 Custom duty including interest 0.34 2005-06 Appellate Author -ity -upto and penalty as applicable Commissioner's level

Service Tax Service tax including interest 0.43 2003-04 CESTAT, Mum (Finance Act, 1994) and penalty as applicable 2.31 2005-06

ESI Act , 1948 Dues, interest and penalty as 0.02 1989-91 ESI Court applicable 0.02 1989-91

0.05 1987-89 High Court

Income Tax Act,1961 Income Tax inclu -ding interest and 11.92 2008-09 to Commissioner (Appeals) penalty as applicable 5.37 2012-13 & 2007-08 to 2010-11

Maharashtra Mathadi, Hamal,& Work of Mathadi nature carried 0.24 2008-09 High Court other Manual Workers Act 1969 out by unregistered workers w.r.t. applicability of the Mathadi Act.

10. The Company has neither accumulated losses as at 31st March 2012, nor has it incurred any cash loss either during the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the Management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank or to debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. However, in respect of transactions relating to investment in certain securities, the Company has maintained proper records of transactions and contracts during the year and timely entries have been made therein. Further, such securities have been held by the Company in its own name.

15. Based on the information and explanations given to us, in our opinion, the terms and conditions on which the Company has given counter guarantees / corporate guarantees on behalf of its subsidiaries to the banks during the year, are not prima facie prejudicial to the interest of the Company.

16. The Company has not taken any term loan during the year.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, funds raised on short term basis have not been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. No debentures have been issued by the the company during the year.

20. The Company has not raised any money by public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.

For B.K. Khare & Company

Chartered Accountants

Firm Regn. No.105102W

H.P. Mahajani Place : Pune Partner

Date : May 11, 2012 Membership No. 30168

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Mar 31, 2011

1. We have audited the attached Balance Sheet of Thermax Limited as at 31st March 2011, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India (the “Act”), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account have been kept by the Company as required by law, so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

(e) On the basis of written representations received from the Directors, as on 31st March 2011, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, together with the Notes thereon and attached thereto, give, in the prescribed manner, the information required by the Act and also give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors Report (Referred to in paragraph 3 of our report of even date)

1. (a) The Company has maintained proper records to show full particulars, including quantitative details and situation, of its fixed assets.

(b) The fixed assets of the Company have been physically verified by the management at reasonable intervals during the year and the discrepancies noticed have been properly dealt with in the books of account.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

3. The Company has neither granted nor taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act. As the Company has not granted/taken any loans, secured or unsecured, to/from companies, firms etc., listed in the register maintained under Section 301 of the Act, paragraphs 4(iii)(a) to (g) of the Order, are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, during the course of our audit we have neither come across nor have we been informed of any instance of continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) On the basis of our examination of the books of account, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market prices prevailing at the relevant time as evaluated on the basis of quotations obtained from parties / prices charged by the Company in case of similar transactions during the year and considering that having regard to certain items purchased / sold are of a special nature in respect of which suitable alternative sources do not exist for obtaining comparative quotations in general.

6. The Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Companys present internal audit system is commensurate with its size and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the company in respect of product where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts -and records have been made and maintained. We have not, however, made a detailed examination of the records maintained as aforesaid.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund,Employees State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have generally been regularly deposited by the Company during the year with the appropriate authorities.

(b) As at 31st March 2011, according to the records of the Company and the information and explanations given to us, the following are the particulars of disputed dues on account of Sales-tax, Income-tax, Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that have not been deposited on account of a dispute:

Name of the Nature of dues Amount under Period to statute dispute not yet which the deposited amount (Rs. Crore) relates

Central Sales Tax Act Sales tax including 0.025 1992-93 and Local Sales Tax Acts interest and penalty, 0.001 2000-01 (including works contract) as applicable 0.010 2001-02

5.117 2003-04

6.484 2004-05

0.004 2007-08

1.157 2006-07

0.053 2000-01

0.038 2001-02

0.043 2003-04

0.372 2001-02

0.184 2002-03

0.158 2003-04

0.336 2004-05

The Central Excise Act, 1944 Excise duty including interest 0.657 2003-04 and penalty, as applicable

0.034 2009-10

0.188 2001-02

0.323 2003-04

0.848 2005-06

0.159 2007-08

0.065 2006-07

4.417 1999-00

0.218 2008-09

3.838 2006-07

1.598 1997-98

Customs Act, 1962 Customs duty including interest 0.321 2005-06 and penalty, as applicable

Service Tax Service Tax including intereset 0.406 2003-04 (Finance Act, 1994) and penalty, as applicable 2.186 2005-06

ESI Act, 1948 Dues, interest and penalty as 0.022 1989-91 applicable 0.048 1987-89

Income Tax Act, 1961 Income Tax including interest 0.846 2005-06 and penalty as applicable 0.564 2006-07 1.035 2007-08

0.655 2008-09

Maharashtra Mathadi, Hamal, Work of Mathadi Nature carried 0.167 2008-09 & other Mannual Workers Act out by unregistered workers w.r.t. 1969 applicability of the Mathadi Act



Name of the statute Forum where the dispute is pending

Central Sales Tax Act Appellate Authority - upto and Local Sales Tax Acts Commissioners level (including works contract)



Tribunal

High Court



The Central Excise Appellate Authority-upto Act, 1944 Commissioners level Tribunal







Supreme Court

Customs Act, 1962 Tribunal

Service Tax Tribunal (Finance Act, 1994)

ESI Act, 1948 ESI Court High Court

Income Tax Act,1961 Appellate Authority-upto Commissioners level

Maharashtra Mathadi, Hamal, Advisory Committee under & other Mannual Workers Act Maharashtra Mathadi, Hamal, & other 1969 Manual Workers Act 1969



10. The Company has neither accumulated losses as at 31st March 2011, nor has it incurred any cash loss either during the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the Management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank or to debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. However, in respect of transactions relating to investment in certain securities, the Company has maintained proper records of transactions and contracts during the year and timely entries have been made therein. Further, such securities have been held by the Company in its own name.

15. Based on the information and explanations given to us, in our opinion, the terms and conditions on which the Company has given counter guarantees / corporate guarantees on behalf of its subsidiaries to the banks during the year, are not prima facie prejudicial to the interest of the Company.

16. The Company has not taken any term loan during the year.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, funds raised on short term basis have not been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. No debentures have been issued during the year.

20. The Company has not raised any money by public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the Management.

For B.K. Khare & Company Chartered Accountants Firm Reg. No. 105102W

H.P. Mahajani Partner (Membership no. 30168)

Place: Pune Date : May 3, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Thermax Limited as at 31st March 2010, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India (the “Act”), and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above:

(a) We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

(b) In our opinion, proper books of account have been kept by the Company as required by law, so far as appears from our examination of those books;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Act;

(e) On the basis of written representations received from the Directors, as on 31st March 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act; and

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, together with the Notes thereon and attached thereto, give, in the prescribed manner, the information required by the Act and also give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors’ Report (Referred to in paragraph 3 of our report of even date)

1. (a) The Company has maintained proper records to show full particulars, including quantitative details and situation, of its fixed assets.

(b) The fixed assets of the Company have been physically verified by the management at reasonable intervals during the year and the discrepancies noticed have been properly dealt with in the books of account.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory of the Company has been physically verified by the management during the year. In our opinion the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company has maintained proper records of inventory and the discrepancies noticed on physical verification between the physical stocks and the book records were not material.

3. The Company has neither granted nor taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under Section 301 of the Act. As the Company has not granted/taken any loans, secured or unsecured, to/from companies, firms etc., listed in the register maintained under Section 301 of the Act, paragraphs 4(iii)(a) to (g) of the Order, are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. Further, during the course of our audit we have neither come across nor have we been informed of any instance of continuing failure to correct major weaknesses in the aforesaid internal control procedures.

5. (a) On the basis of our examination of the books of account, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market prices prevailing at the relevant time as evaluated on the basis of quotations obtained from parties / prices charged by the Company in case of similar transactions during the year and considering that having regard to certain items purchased / sold are of a special nature in respect of which suitable alternative sources do not exist for obtaining comparative quotations in general.

6. The Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company’s present internal audit system is commensurate with its size and nature of its business.

8. We have broadly reviewed the books of accounts maintained by the Company in respect of product where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records maintained as aforesaid.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the undisputed statutory dues in respect of Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable, have generally been regularly deposited by the Company during the year with the appropriate authorities.

(b) As at 31st March 2010, according to the records of the Company and the information and explanations given to us, the following are the particulars of disputed dues on account of Sales-tax, Income-tax, Custom Duty, Wealth tax, Service tax, Excise Duty and Cess matters that have not been deposited on account of a dispute:

Name of the Nature of dues Amount under statute dispute not yet deposited (Rs. Crore)

Central Sales Tax Act Sales tax including 0.025 and Local Sales Tax Acts interest and penalty, 0.001 (including works contract) as applicable 0.010

5.117 6.864 0.004 0.123 0.053 0.037 0.008 0.086 0.336 0.373 0.184 0.158 The Central Excise Act, 1944 Excise duty including interest 0.066 and penalty, as applicable 0.611 0.190 0.371 0.842 0.144 0.061 4.271 0.218 3.838 5.301 Customs Act, 1962 Customs duty including interest 1.667 and penalty, as applicable Service Tax Service Tax including intereset and 0.383 (Finance Act, 1994) penalty, as applicable 2.065

ESI Act, 1948 Dues, interest and penalty as 0.022 applicable 0.046

Income Tax Act, 1961 Income Tax including interest 0.055 and penalty as applicable 5.941



Name of the Period to which Forum where the Statue the amount relates dispute is pending

Central Sales Tax Act and Local Sales Tax Acts (including works contract) 1992-93 Appellate Authority - upto 2000-01 Commissioner’s level 2001-02

2003-04

2004-05

2007-08

2006-07

2000-01 Tribunal

2001-02

2002-03

2003-04

2004-05 High Court

2001-02

2002-03

2003-04

The Central Excise Act, 1944 2009-10 Appellate Authority- upto 2003-04 Commissioner’s level 2001-02 Tribunal

2003-04

2005-06

2007-08

2006-07

1999-00

2008-09

2006-07 Supreme Court

1997-98 Supreme Court

Customs Act, 1962 2005-06 Tribunal

Service Tax (Finance Act, 1994) 2003-04 Tribunal

2005-06 Tribunal

ESI Act, 1948 2008-09 ESI Court

2008-09 High Court

Income Tax Act, 1961 2001-02 Appellate Authority- upto

2005-06 Commissioner’s level

10. The Company has neither accumulated losses as at 31st March 2010, nor has it incurred any cash loss either during the financial year ended on that date or in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank or to debenture holders as at the balance sheet date.

12. The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, considering the nature of activities carried on by the Company during the year, the provisions of any special statute applicable to chit fund/ nidhi/ mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities. However, in respect of transactions relating to investment in certain securities, the Company has maintained proper records of transactions and contracts during the year and timely entries have been made therein. Further, such securities have been held by the Company in its own name.

15. Based on the information and explanations given to us, in our opinion, the terms and conditions on which the Company has given counter guarantees / corporate guarantees on behalf of its subsidiaries to the banks during the year, are not prima facie prejudicial to the interest of the Company.

16. The Company has not taken any term loan during the year.

17. Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, in our opinion, funds raised on short term basis have not been used for long term investments.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. No debentures have been issued during the year.

20. The Company has not raised any money by public issue during the year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of such case by the management.

For B.K. Khare & Company Chartered Accountants

H.P. Mahajani

Place :Pune Partner

Date :May 12, 2010 (Membership no. 30168)

Firm Reg. No. 105102W