It is my privilege to present the 37th Annual Report of your company. Duringthe financial year 2017-18 Thermax Group posted a total revenue of Rs. 4602 crore ascompared to Rs. 4704 crore in the previous year.
Profit after tax and minority interest was Rs. 231 crore (Rs. 216 crore).
Though the year started with a lower order booking business picked up substantially inFY 2017-18 against the backdrop of an anticipated global economic recovery leading toinvestments in select sectors.
Revenue from the international business was higher by 13.2% at Rs. 1794 crore ascompared to Rs. 1585 crore in the previous year.
Consolidated order booking for the year increased by 45.2% to Rs. 6380 crore (Rs.4394 crore).
On behalf of the Board let me thank our Managing Director & CEO M.S. Unnikrishnanand his team our employees for their commendable efforts our supplier partners and mostimportantly our customers for their continued support. Our Board members as always havebeen a source of continued guidance and strength. My sincere thanks and gratitude to allof them.
This year effective August 8 2018 Mrs. Anu Aga and Dr. Mashelkar will be retiring asdirectors on the Board.
Dr. Mashelkar has been a tremendous asset to Thermax.
He spearheaded the Innovation Council within the company and has been very helpful withregard to our Chemical division and the new Dahej plant. On behalf of the Board and thecompany I would like to thank him for his illustrious contribution in steering thefortunes of our company.
It was my mother Anu Aga who took over as Chairperson of Thermax when my fatherRohinton Aga suddenly passed away in 1996. By the year 2000 she had to make manyuncomfortable tough decisions and mainly thanks to them and the commitment of ourpeople the company turned around. Even though she retires she will always be availableto all of us. With her grounded wisdom and free spirit she will continue to be ourguiding light especially with regard to governance HR practices and socialresponsibility. On behalf of the Board and all our employees as well as otherstakeholders our heartfelt thanks to Anu.
We wish them both good health and happiness.
Coming back to the business situation on the domestic front private spending andinvestment in infrastructure continued to be sluggish in 2017-2018 except for a fewselect sectors. The economy was further impacted by temporary disruptions post GSTimplementation and the Indian banking system remains beleaguered with nonperforming assets(NPAs) on account of wilful defaults and governance failures.
However after an almost decade-long slump we are beginning to witness a turnaround.Though it positions us for a promising year ahead the future should be seen with cautiousoptimism - with the recent rising cost of crude oil increase in interest rates and therun up to the 2019 general elections in India. Moreover despite the global economicrecovery we need to be cautious as rising protectionism across the world poses a threatto exports.
As mentioned earlier we have been witnessing some investments in cement metalschemicals and refineries.
Consumption-led sectors like food textile and dairy continue to give us consistentbusiness. The need for reliable power coupled with energy-efficient technologies isgenerating a renewed interest in captive cogeneration. Capex investments from refineriesto gear up for the Bharat VI norms have been providing new opportunities for your company.
In recent years especially after the COP-21 Paris agreement for climate change wehave experienced a radical shift in the global outlook towards energy and environmentnorms. As the prospects for thermal power have diminished globally posing challenges forthe manufacture of supercritical boilers Thermax is entering into a definitive agreementto acquire the stake of Babcock & Wilcox in our Joint Venture Thermax Babcock andWilcox Energy Solutions Pvt. Ltd. (TBWES). Although there is a limited visibility forsupercritical boilers this will provide Thermax access to the modern manufacturingfacility of TBWES and also to a few B&W technologies.
We will be in a position to share further details once the agreement is firmed up.
Responding to the fervour in the area of solar power Thermax has been a discerningplayer in the rooftop sector and in the coming year will selectively participate inprospecting for EPC projects. Last year we installed India's second largest rooftop solarPV captive power plant for a public sector hydrocarbon company.
Your company's strategy of expanding its operations in select overseas markets paidgood dividends during the year. Thermax bagged its highest ever export order from a majorindustry conglomerate in Africa and the project execution is progressing. The US marketproved to be beneficial for sale of chillers and chemicals. We made inroads in the GulfCooperative Council (GCC) region with our first EPC based captive power plant project fora cement company.
Your company is strengthening its product portfolio to mitigate the impact of thecyclical nature of project businesses. I am happy to share that our new manufacturingfacility in Indonesia (mentioned in last year's report) is now fully operational andcatering to the ASEAN region. Through our subsidiary in Denmark we acquired certainassets of a company in Poland providing us access to east European markets and themanufacturing muscle to back our business plans in that region which will pick up overtime. Our global facility for chemical resins at Dahej Gujarat commenced commercialproduction in October 2017. Another state-of-the-art facility at Sri City Andhra Pradeshwill shortly begin production of vapour absorption chillers. Recognising the rising demandfor more energy efficient and environment- friendly solutions your company isdiversifying its cooling portfolio beyond absorption cooling and entering the growingprocess cooling market with energy efficient products. We expect this new business tocontribute to our growth prospects in the next 4-5 years.
Digitisation and IoT (Internet of Things) are being progressively introduced within thecompany be it in our products manufacturing facilities or processes in order to make usfaster better and more efficient for our customers.
On the CSR front Thermax Foundation continues its investment in time and resourcespredominantly in the field of school education for the economically underprivileged inpartnership with three NGOs and the Pune Municipal Corporation. The outcome is hearteningsince the work is not just with students and teachers but also with the community theycome from in order to make the impact more sustainable.
During the year we revisited and discontinued two of our internally run projects -Leadership Institute for Teachers (LIFT) and Aakar Pune Project. We realised that theseinitiatives were not creating the desired social impact and hence it would be prudent toinvest our time and resources through NGOs both in our current projects in Pune and alsoaround our manufacturing facilities in Gujarat.
In conclusion on behalf of the Board let me thank all our employees customerssupplier partners our shareholders and well-wishers for their support and faith inThermax.
With best wishes