Thermax Ltd. — Annual Report 2020

Jul 7, 2020

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July 7, 2020

To The Secretary National Stock Exchange of India BSE Limited Limited PJ Towers, Dalal Street Exchange Plaza, C-1, Block G, Mumbai: 400 001 Bandra Kurla Complex, Bandra (E) Company Scrip Code: 500411 Mumbai – 400 051

Company Scrip Code: THERMAX EQ

Sub: Disclosure of Related Party Transactions.

Ref: Regulation 23(9) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 .

Dear Sir,

Pursuant to Regulation 23(9) of Listing Regulations, please find enclosed details of Related Party Transactions on a consolidated basis for the year ended March 31, 2020.

You are requested to kindly acknowledge receipt of the above.

Thanking you,

Yours faithfully,

For THERMAX LIMITED

Sd/-

Kedar P. Phadke Company Secretary

Encl: As above

Note:

As permitted, this letter is being submitted under Sd/- mode due to work from home as per the Government advisory on Covid-19 and as a part of safety measure.

Thermax Limited Notes to consolidated financial statements for the year ended March 31, 2020

(All amounts are in Rupees Crores, except per share data and unless stated otherwise)

Interests in other entities

Group information A Subsidiaries The consolidated financial statements of the Group includes subsidiaries listed in the table below. Unless otherwise stated, they have share capital consisting solely of equity shares that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The country of incorporation or registration is also their principal place of business.

Sr No.	Name of the entity	Place of business/ Country of incorporation	Ownership interest held by the Group	Ownership interest held by the Group	Principal activities
			March 31, 2020	March 31, 2019
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31	Thermax Onsite Energy Solutions Ltd Thermax Instrumentation Ltd. Thermax Engineering Construction Company Ltd. Thermax Sustainable Energy Solutions Ltd. Thermax International Ltd. Thermax Europe Ltd. Thermax Inc. Thermax do Brasil Energia e Equipamentos Ltda Thermax (Zhejiang) Cooling & Heating Engineering Company Ltd. Thermax Netherlands BV. Thermax Denmark ApS Danstoker A/S Ejendomsanp artsselskabet Industrivej Nord 13 Boilerworks A/S Boilerworks Properties ApS Danstoker Poland Spółka Z Ograniczona Odpowiedzialnoscia Rifox-Hans Richter GmbH Spezialarmaturen Thermax Sdn.Bhd Thermax Engineering Singapore Pte. Ltd. PT Thermax International Indonesia Thermax Senegal S.A.R.L First Energy Private Limited Thermax Energy & Environment Philippines Corporation Thermax Energy & Environment Lanka (Private) Limited Thermax Nigeria Limited Thermax Babcock & Wilcox Energy Solutions Pvt Ltd## Thermax Cooling Solutions Limited (formerly known as Thermax SPX Energy Technologies Ltd)^ Thermax Engineering Construction FZE Thermax International Tanzania Limited^^ Thermax (Thailand) Limited^^^ ESOP Trust and Employee Welfare Trusts**	India India India India Mauritius United Kingdom USA Brazil China Netherlands Denmark Denmark Denmark Denmark Denmark Poland Germany Malaysia Singapore Indonesia Senegal India Philippines Sri Lanka Nigeria India India Nigeria Tanzania Thailand India	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 76% 100% 100% 100% 100% 100% 100% 100% 100% 100%	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 76% 100% 100% 100% 100% 100% 100% NA NA 100%	Supply of steam and heat on build, own and operate basis Civil, Erection & Commissioning and Operation and Maintenance of power plants Installation of industrial machinery and equipment Carbon Advisory Services Investment Company Sale and service of vapour absorption chillers Sale and service of vapour absorption chillers and sale of chemicals Rendering services including technical assistance Products and services in heating, cooling, waste heat recovery, captive power, water treatment and recycling, waste management and performance chemicals Investment Company Investment Company Produces and sells boilers to the energy market Own and lease out property within Group Produces and supplies high-pressure boilers and components Own and lease out the property within Group Produces and supplies high-pressure boilers and components Manufacturing steam trap systems Turnkey solutions provider Investment Company Manufacturing of industrial products Plant management services Alternative energy solution company Marketing and sales of component parts of boilers Marketing and sales of component parts of boilers Marketing and sales of component parts of boilers Manufacture of steam or other vapour generating boilers and hot water boilers other than central heating boilers Supply and erection commissioning of Air cooled condenser (ACC), Rotary air Pre-Heater (RAPH), electrostatic precipitator (ESP), Bag Houses Operation and Maintenance Supervision for project business, operation and maintenance services and sales related support. Trade and investment support office. Employee welfare
Thermax Hong Kong Ltd. (wholly owned subsidiary) has not been considered for consolidation as the same has become 'Dormant' during the year 2009-10. The non-controlling interest held in First Energy Private Limited is not material to the Group. Hence, the disclosures required under Para 12 of Ind AS 112 Disclosure of Interests in other entities are not considered necessary. ##On July 19, 2018, Thermax Babcock & Wilcox Energy Solutions Private Limited (TBWES) had become a wholly owned subsidiary of the Company. For detail, refer note 36 (A).

^ On February 25, 2019, Thermax Cooling Solutions Limited had become a wholly owned subsidiary of the Company. For detail, refer note 36 (B). ** The Group has ESOP trust and Employee Welfare Trusts for the welfare of the employees. Pursuant to the arrangement between the Trusts and the Holding Company, the Holding Company has determined that it has power to direct the relevant activities of the trust while being exposed to variable returns from its involvement with these entities. As a result, these entities have been consolidated in these financial statements. ^^ Date of incorporation December 7, 2019. There are no transaction during the year, hence not consolidated. ^^^ Date of incorporation March 9, 2020. There are no transaction during the year, hence not consolidated.

B Parent entity	B Parent entity	B Parent entity
Sr No.	Name of the entity	Place of business/ Country of incorporation	Ownership interest held by the Group		Type
			March 31, 2020	March 31, 2019
1	RDA Holdings Pvt Ltd	India	53.99%	53.99%	Ultimate Holdingcompany
The above percentage of shareholding is before elimination of Trust's holding**.

Thermax Limited Notes to consolidated financial statements for the year ended March 31, 2020

(All amounts are in Rupees Crores, except per share data and unless stated otherwise)

35 Related party disclosures

A For details of Holding company and Joint ventures, refer note 34.

B Individuals having significant influence over the Group by reason of voting power, and their relatives

• 1 Mrs. Meher Pudumjee - Chairperson

• 2 Mrs. Anu Aga - (Retired on August 8, 2018)

• 3 Mr. Pheroz Pudumjee - Director

• 4 Mr. Zahaan Pudumjee - Relative of Chairperson / Director

C Key Management Personnel:

• 1 Mr. M S Unnikrishnan - Managing Director and Chief Executive Officer

• 2 Dr. Raghunath A. Mashelkar - Independent Director (Retired on August 8, 2018)

• 3 Dr. Valentin A. H. von Massow - Independent Director

• 4 Dr. Jairam Varadaraj - Independent Director

• 5 Mr. Nawshir Mirza - Independent Director

• 6 Mr. Harsh Mariwala - Independent Director

• 7 Mr. Sashishekhar Balakrishna (Ravi) Pandit - Independent Director

• 8 Mrs. Rajani Kesari - Independent Director

9 Mr. Rajendran Arunachalam - Chief Financial Officer w.e.f. June 1, 2019 10 Mr. Amitabha Mukhopadhyay (Resigned on May 31, 2019)

11 Mr. Kedar Phadke - Company Secretary

D Enterprises with whom transactions have taken place during the year, over which control is exercised by individuals listed in ‘B’ and 'C' above:

• 1 Thermax Foundation, India

• 2 ARA Trusteeship Company Private Limited, India

• 3 Marico Limited

• 4 Aster DM Healthcare Limited

5 Elgi Ultra Industries Limited 6 Elgi Equipments Limited

7 The Akanksha Foundation

8 Festo India Private Limited

E Transactions with related parties:

Particulars	Joint Ventures	Joint Ventures	Enterprises over which control is exercised by Individuals having Significant influence over the company and Key Management Personnel	Enterprises over which control is exercised by Individuals having Significant influence over the company and Key Management Personnel	Key Management Personnel and Individuals having Significant influence over the company mentioned in B and C above	Key Management Personnel and Individuals having Significant influence over the company mentioned in B and C above	Total	Total
	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019
a. Transactions during theyear
Sales ofproducts and services	-	-	0.68	1.07	-	-	0.68	1.07
Miscellaneous income	-	0.36	-	-	-	-	-	0.36
Purchase of raw material and components	-	15.16	0.35	-	-	-	0.35	15.16
Miscellaneous expense	-	-	0.01	-	-	-	0.01	-
Remuneration to keymanagementpersonnel*	-	-	-	-	6.93	6.17	6.93	6.17
Donation	-	-	8.26	8.33	-	-	8.26	8.33
Director's sittingfees	-	-	-	-	0.44	0.50	0.44	0.50
Commissionpaid	-	-	-	-	3.70	3.46	3.70	3.46
Rentpaid	-	-	-	-	0.51	0.44	0.51	0.44

• Does not include gratuity and leave encashment since the same is calculated for all employees of the Group as a whole.

Dividend paid to RDA Holdings Pvt. Ltd., India is Rs. 90.06 (March 31, 2019: Rs. 38.60) including interim dividend for the year 2019-20.

Particulars	Joint Ventures	Joint Ventures	Enterprises over which control is exercised by Individuals having Significant influence over the company and Key Management Personnel	Enterprises over which control is exercised by Individuals having Significant influence over the company and Key Management Personnel	Key Management Personnel and Individuals having Significant influence over the company mentioned in B and C above	Key Management Personnel and Individuals having Significant influence over the company mentioned in B and C above	Total	Total
	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019	March 31, 2020	March 31, 2019
b. Balances as at theyear end
Trade receivables	-	-	**	0.07	-	-	**	0.07
Securitydeposit	-	-	-	-	0.18	0.53	0.18	0.53
Tradepayables and other liabilities	-	-	0.15	-	-	-	0.15	-

** represents amount less than a lakh rupees.

Thermax Limited

Notes to consolidated financial statements for the year ended March 31, 2020 (All amounts are in Rupees Crores, except per share data and unless stated otherwise)

F Related party transactions include transactions pertaining to the following parties with whom the percentage of the transactions are 10 % or more of the total of the above:

Particulars	March 31, 2020	March 31, 2019
Transactions during the year Sale of product and services Marico Limited Elgi Ultra Industries Limited Aster DM Healthcare Limited Miscellaneous income Thermax Cooling Solutions Limited (formerly known as Thermax SPX Energy Technologies Ltd) Purchase of raw material and components Elgi Equipments Limited Festo India Private Limited Thermax Cooling Solutions Limited (formerly known as Thermax SPX Energy Technologies Ltd) Miscellaneous expense The Akanksha Foundation Remuneration to key management personnel Mr. M. S. Unnikrishnan Mr. Rajendran Arunachalam Mr. Amitabha Mukhopadhyay Donation Thermax Foundation, India Directors sitting fees Mrs. Meher Pudumjee Mr. Pheroz Pudumjee Dr. Valentin A. H. von Massow Dr. Jairam Varadaraj Mr. Nawshir Mirza Mr. Ravi Pandit Commission paid Mrs. Meher Pudumjee Mr. Pheroz Pudumjee Dr. Valentin A. H. von Massow Dr. Jairam Varadaraj Mr. Nawshir Mirza Mr. Harsh Mariwala Mr. Ravi Pandit Mrs. Rajani Kesari Mr. M. S. Unnikrishnan Rent paid Mrs. Meher Pudumjee Mrs. Anu Aga Mr. Pheroz Pudumjee	0.55 0.13 - - 0.30 0.05 - 0.01 4.00 1.27 1.26 8.26 0.06 0.08 0.06 0.07 0.06 0.06 0.45 0.20 0.35 0.20 0.35 0.25 0.15 0.15 1.60 0.14 0.24 0.14	0.85 - 0.21 0.36 - - 15.16 - 3.63 - 2.23 8.33 0.07 0.09 0.07 0.08 0.06 0.05 0.45 0.20 0.30 0.15 0.35 0.20 0.15 0.06 1.60 0.13 0.18 0.13
Particulars	March 31, 2020	March 31, 2019
Trade receivables Marico Limited Trade payables and other liabilities Elgi Equipments Limited Festo India Private Limited Marico Limited Security deposits Mrs. Anu Aga Mr. Pheroz Pudumjee	** 0.03 0.02 0.10 - 0.18	0.07 - - - 0.35 0.18

** represents amount less than a lakh rupees.

G. Terms and conditions of related party transactions:

The sales to and purchases from related parties are assessed to be at arm’s length by the management. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash.

There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2020, the Group has not recorded any impairment of receivables relating to amounts owed by related parties (March 31, 2019: Rs. Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates. All outstanding balances are unsecured and repayable in cash.