Thermax Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2017

1. This Statement has been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on May 30, 2017.

2. First time adoption of Ind AS: The Company adopted Indian Accounting Standards ("Ind AS") from April 1, 2016 and accordingly, the transition was carried out, from the Accounting Principles generally accepted in India as specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (previous GAAP), in accordance with Ind AS-101 "First time adoption of Indian Accounting Standards". Accordingly, the impact on transition has been recorded in opening reserves as at April 1, 2015 and the periods presented have been restated / reclassified.

3. The figures for the quarter ended March 31 are the balancing figures between audited figures in respect of the full financial year up to March 31 and the unaudited published year-to-date figures up to December 31, being the date of the end of the third quarter of the financial year which were subject to limited review.
4. The consolidated financial results for the corresponding quarter ended March 31, 2016 are based on the information compiled by the management as per Ind AS after making necessary adjustments to ensure that the financial results provide a true and fair view of the results in accordance with Ind AS. This information has not been subject to review by the auditors.
5. "During the previous year, the Commissioner of Central Excise, upon adjudication of the show cause-cum demand notices issued by the Department for the period June 2000 till March 2015, has raised demands of Rs. 1,263.24 crores (including penalty but excluding interest not presently quantified). During the year, the Company was served an additional demand order of Rs.67.40 crores (including penalty but excluding interest not presently quantified) for the period April 2015 to September 2015 for the same matter.

These demands are of excise duty payable on inclusion of the cost of bought out items in the assessable value of certain products manufactured by the Company, though such duty paid bought out items are directly dispatched by the manufacturers thereof to the ultimate customer, without being received in the Company’s factory. The Company filed an appeal against the said orders received before CESTAT, Mumbai. Based on an independent legal advice, the Company is confident of the issue being ultimately decided in its favour and accordingly, no provision has been considered necessary as at March 31, 2017."

6. "Considering the current market scenario and performance of certain subsidiaries and joint ventures, the Company has accounted for following impairment on investments (as exceptional items) in the standalone financial results.

i) Thermax Babcock & Wilcox Energy Solutions Private Limited – Rs.111.84 Crores

ii) Thermax (Zhejiang) Cooling & Heating Engineering Company Limited – Rs.5 Crores and

iii) First Energy Private Limited (FEPL)– Rs.16 Crores.

In the consolidated financial results, exceptional item include impairment of certain intangible assets in FEPL amounting to Rs.17.84 Crores.

7. The Board of Directors has recommended a dividend of Rs. 06/- per share of face value of Rs. 2/- (300%) which is subject to approval of shareholders at 36th Annual General Meeting.

8. Events after the reporting date:

Thermax Limited, through its step-down subsidiary in Denmark, has acquired 100% share capital of Barite Investments SP. Z.O.O., Poland ("Barite) in April, 2017. With this, Barite became a step-down subsidiary of the Group. Subsequent to March 31, 2017, as part of a definitive agreement entered into with Weiss SP. Z.O.O. in Poland, Thermax acquired the assets and production activities related to boiler manufacturing. The transaction was completed on April 2017, on which date the control has been transferred to the Group. The total consideration involved is Rs 23 Crores and is payable in cash.