Chapter: 1 INTRODUCTION

India has been one of the best performers in the world economy in recent years, but rapidly rising inflation and the complexities of running the worlds biggest democracy are proving challenging. Because of the slowdown in the world economy there is an effect also on the Indian economy but it was very less seen in the Boiler industry. India has to compete ever harder in the energy market place in particular and has not been as adept at securing new fossil fuel sources as the Chinese. The Indian Government is looking at alternatives, and has signed a wide-ranging nuclear treaty with the US, in part to gain access to nuclear power plant technology that can reduce its oil thirst, and for this Nuclear power plants Supercritical and Ultra Supercritical Boilers are to be used as power generation equipment. After completing Comprehensive project I in Boiler Industry, We have a good idea about Boiler manufacturers and their market coverage. Market share of some of the organizations are ; BHEL :-65% Thermax:- 14.87% Cethar Vessels :- 13.65% The business scenario in the energy segment was not favorable during the last year, due to the crisis impacting the country's economy. Many customers faced difficulties obtaining financial closure for large scale projects. Even smaller projects were impacted due to loss in business confidence and banks' unwillingness to provide finance even to meet the working capital requirements of many companies.

As, Thermax is having a good market share in Boiler manufacturing we have taken Thermax micro analysis as our Comprehensive Project II.

As, Thermax is having different working areas like; Boiler & Heater, Power ,Heating ,Cooling ,Cooling & Heating Services ,Environmental Business ,Chemical ,Water & Water Solutions etc. During the Last year Thermax witnessed major consolidation of processes, products and internal systems in order to improve and provide better solutions to the customer. This included development of new cost effective products for the Heating & Cooling businesses, innovative solutions in the Service business, participation in municipal and public sector projects, along with advanced technology tie-ups and internal process enhancement for cost leadership and on-time execution. we have set these objectives to achieve; 1. To Collect the Primary and Secondary data on Thermax. 2. To analyze the different working areas of Thermax. 3. To analyze Manufacturing Facilities of Thermax. 4. To Study Marketing Activities Related to Thermax. 5. To Study Personnel Department activities of Thermax. 6. To Do financial Analysis of Thermax. 7. DuPont analysis for the Thermax.
8. 9.

To Do PESTEL analysis of Thermax. To Do SWOT of the Thermax.

10. To analyze the porters five force model with respect to Thermax. 11. To Study technological collaboration of Thermax.

Chapter: 2 COMPANY OVERVIEW

About Company Thermax Ltd. is an INR 3,246 crore (USD 800 million) company, providing a range of engineering solutions to the energy and environment sectors. Thermax headquarter is in Pune, India and operate globally through 19 International offices, 12 Sales & Service offices and 4 Manufacturing facilities - three of which are in India and one in China. Thermax presence spans 75 countries across Asia Pacific, Africa and the Middle East, CIS countries, Europe, USA and South America. Tuning to the needs of the day, all solutions of Thermax are innovative, energy-efficient, environment-friendly and easy to operate. History of Thermax Thermax came into being by harnessing the power of steam, produced by boilers. Thus the business was born in 1966. It was also the year A S Bhathena collaborated with a Belgian company, Wanson, to commence business operation as Wanson India Ltd., manufacturing small boilers at a unit in Dadar, Mumbai . The company was renamed Thermax Limited in 1980. Under the astute stewardship of our Late Chairman R D Aga, Thermax moved into a bigger orbit, leading to its present status. The journey from Vaporax and Thermopac products from the early years, to the current stable of products; from bagging our first export order to establishing a presence in the overseas markets, has been an arduous one. The cornerstones to building up the current-day organization were a focus on quality, meeting demands of customers and adhering to internationally accepted standards.

Vision & Mission of the Thermax are as Follows Vision To be a globally respected high performance organization offering sustainable solutions in energy and environment. Mission

We aspire to become a leading technology company with a global outlook delivering world-class products and services to customers. We exist to fulfill the needs of our customers best understood through an enlightened partnership with him. Our challenge is to continually expand and define new markets by expanding the frontiers of research and engineering and customer applications in our chosen field of business. We seek dependable partnership with our suppliers to generate a strong mutual interest in each others welfare. We live by high value of integrity and excellence in management. We strive to contribute substantially to the global priority areas of energy conservation, environment protection and enrichment of society. Our commitment is to create an organization, which nurtures the talent and enterprise of our people, helping them to grow and find fulfillment, in an open culture.

Focus of the company Thermax solutions specifically focus on:

Heating equipment - using a variety of fuels, including biomass Absorption chillers - fired by waste heat or steam Power and captive cogeneration plants Waste heat recovery units

Waste water management systems pre-treatment, waste water treatment and chemical conditioning of water, sewage effluent treatment and recycling

Air pollution control systems Performance improving chemicals.

Functions of Thermax

Product Range From experience of over three decades in the energy sector, they offer a range of boilers and thermal oil heaters, energy chillers and customized products like exhaust gas boilers. Thermax absorption chillers have found a niche in green energy systems in Europe and Australia. They also help industries reduce energy costs by shifting to abundantly available, alternate energy such as biomass. Thermax provides industries with clean technologies that recover pollutants; thereby reducing their hazardous impact on the environment. Today, many iron & steel, cement, fertilizer and chemical industries reduce emissions using our air pollution control systems. Industries in the US and Japan consistently use our hi-grade ion exchange resins for specialized applications. Brief of Working Areas Boiler & Heater: The Boiler & Heater business witnessed growing working area for Thermax, As domestic consumption & export of Boiler increased. New demand for Retrofit and Modernization (R&M) projects in South East Asia and Middle East also emerged. The division successfully commissioned the heat recovery systems and auxiliary boilers for a major refinery in the current Year. Power: Thermax's Power business execution capability was highlighted with the commissioning of eight plants comprising of 10 units totaling 198 MW the highest ever for previous any year then 2009. Interestingly, some of the projects were commissioning of new products, commissioned on washery rejects. The plants commissioned also included small power plants catering to less than 12 MW requirements with customers identifying the benefits and EPC capability of Thermax. This was achieved due to the division's internal

capability building and efficiency improvement by way of Enterprise Resource Planning (ERP) and automation software for faster engineering. Cooling The Cooling business has sustained its growth and performance during this year with exports contributing to 41% of the income. The business achieved an overall double digit growth of 15% compared to the previous year (2008) in order booking. It once again emerged as the leader in the domestic market. Heating The Heating business posted an increase of 30% in total income as compared to last year 2008 with exports accounting for 34% of its business. During the first half of the year, heating business of Thermax performed well. This was due to better engineering solutions provided to customers who were impacted by high fuel oil prices. The neighboring markets of Sri Lanka and Thailand along with other overseas markets adopted the fuel shift from oil to biomass based heating systems. Project Management of Thermax Thermaxs project management capabilities extend to setting up energy-environment projects for customers in several markets. This is backed by a robust and innovative R&D setup, involved in technology development and adaptation for various industrial applications.

Thermax is having following subsidiaries

Domestic Thermax Engineering Construction Co. Ltd. Thermax Instrumentation Ltd. Overseas Thermax Inc., USA Thermax Europe Ltd., UK Thermax (Zhejiang) Cooling & Heating Engineering Co.Ltd., China Thermax do Brasil (TdB) Energia e Equipamentos Ltda., Brazil Corporate Philosophy Thermax is committed to Conserving energy and preserving the environment', two areas vital for the world. We support industry and business establishments to be energy efficient and environment-friendly. The products and services we offer must be developed, sold and serviced through the eyes of the customer and measured by their voices. If we are obsessed with the quality of our products and services and our customer, growth and profit are bound to follow. We are convinced that all businesses need to focus on growth and profit else, they cannot exist. However, we also realise that if business is run solely on growth and profit, it will die, since there is no purpose for its existence. Awards Earned by Thermax are

Enertia Award 2008, for Business Excellence and Financial Engineering. Featured, three years in a row (2005-07) in the Forbes Asia list of Best under a Billion' companies. Listed by Business Today among the top 100 of India's 500 most valuable companies in 2007. Top prize for R&D team for the most innovative product design at the BRY Air Award for excellence in HVAC&R (2007). The Award was for the development of lithium bromide absorption chillers.

Zee Astitva Business Woman of the Year Award, 2007 to Anu Aga, Director, Thermax, for her contributions to industry and society. Financial Express Young Achiever Award 2006 to Meher Pudumjee, Chairperson, Thermax. National Award for the R&D team at ACREX, 2006 for the design of Trigenie, the chiller that works on exhaust gas and other sources of heat. Fireside, the house magazine of Thermax won the Gold Award for the best internal house magazine, 2007, from the Association of Business Communicators of India.

Corporate Social Responsibility Thermax believes that corporate organizations should think beyond profit and reach out for the wellbeing of the larger society. Guided by the vision of its founder Chairman Rohinton Aga - 'profit is not just a set of figure but of values' - over the years, Thermax has worked on a modest CSR agenda to fulfill its obligations to its wider circle of stakeholders including the communities in which it operates. The CSR programme of the company got a formal structure and a governing body when the Thermax Social Initiative Foundation (TSIF) was formed in March, 2007 as a not-forprofit body registered under Section 25 of the Companies Act. Convinced that education can be the best enabler to come up in life, the Foundation has decided to primarily focus on initiatives in this crucial area. Thermax, as a part of its social obligation, is committed to:

Provide quality education to the underprivileged children. Create an environment that respects the communities and the natural environment. As a signatory to CIIs initiative on affirmative action, work to achieve the defined objectives. Involve and encourage employees and their families to participate in the various social initiatives of the company.

As per Chairman Anu aga says, I would like our company to play a bigger role in community affairs with complete adherence to the tenets of good corporate governance. We will actively commit ourselves to initiatives that can help improve the quality of life of the communities in which we live and work.

Chapter: 3 MANUFACTURING
Manufacturing Process The Manufacturing Process of Boilers is of concern for us and therefore the process discussed under considers various steps of its manufacturing. Thermax offers a range of solutions for integrated energy and environment management through a combination of in-house R&D and sourcing of technologies from world leaders in the respective areas. The R&D effort is highly market-driven; identification and definition of customer needs is the first step in Thermax's Product Development Process. And many of the technologies that have come out of this process have become generic names and trend-setters in Industry. An early success was Thermopac, the first high temperature liquid phase heater. Replacing electricity as the heating medium by oil or coal, the Thermopac generates higher temperatures for shorter process times. The 14 manufacturing plants with over 50,000 square metres of covered area are equipped with state of the art facilities for plate bending, cold rolling, hot rolling, continuous welding, membrane panel welding, CNC Co-ordinate drilling/milling and physical, chemical and non-destructive testing facilities. All equipment is designed and manufactured to international standards like ASME, BS, DIN, GOST and the IBR Code for Land Boilers in India. The facilities have been inspected by renowned agencies like Lloyds, Bureau Veritas, SGS, EIL and TUV. Through supplier partnerships, Thermax has established reliable sources of supply for quality components, structurals and piping and the group also sources globally for the best cost and quality advantage.

Thermax's engineers have expertise in handling over 30 different kinds of industrial dusts: from Cement, to carbon black, asbestos, coffee and even milk powder. Air pollution abatement equipment supplied by Thermax has prevented the spread of cement raw material that could have polluted an area larger than Uttar Pradesh and Madhya Pradesh, India's largest states, had it been released from a vantage point. But clean air is not the only bonus. Companies that have opted for Thermax's pollution abatement technologies have also recorded significant commercial benefits. Take the case of Gujarat Ambuja's cement plant in Kodinar in the state of Andhra Pradesh .Thermax reverse air bag house at this location handles a gas flow of 4,50,000 cubic metres per hour. It also collects 320 tonnes of cement a day as a bonus. Sometimes the commercial benefit is less tangible. But it still makes a big difference. In the Bhilai steel plant, the dust content of the exhaust gas of rotary kilns was much higher than the permissible emission limit till the plant management invested in a Thermax wet scrubber based gas cleaning system. Each production plant is dedicated to one product family, leading to faster deliveries and better quality. Through a group wide TQM movement initiated in 1993, process changes are continuously implemented to lower throughput time, inventories, material costs and wastage. Through horizontal integration with production and sales, material groups have reduced procurement lead times drastically. With suppliers also getting aligned, the stock position is very close to actual day-to-day needs. Design, Materials, Production and Marketing work as customers to each other, for the quality and cost benefit of the customer outside. Procurement For manufacturing of Boilers the main components & raw material is Steel and Steel tubes. Thermax procure the steel plates & steel tubes as per the client specification from the big steel manufacturers like; Tata Steel, Essar steel etc.

Thus, in all small as well as some big parts are outsourced and they are mainly procures materials from good quality material manufacturers to maintain the Quality standards and Client loyalty. As per the Client guidelines and specification given, Thermax procures material, and undertake manufacturing operation. After successfully manufacturing of the Boilers they have some Quality standards on which all the manufactured Boilers are tested and then after matching clients specification they are transported to the clients premises. The installation of the Boilers is very difficult and undertaken by the manufacturer or the client so, they are having very talented workforce for the installation and testing. DESIGNING AND DRAWING PHASE OF PROJECT: Thermax provide chimney design calculations as per IS 6533 to meet the pollution control board norms Sizing and designing ducting layout to suit Clients boiler house Sizing and designing piping layout to suit Clients feed water and furnace oil locations Refractory and Insulation design, and BOM as per boiler requirements Electrical and instrumentation work with indications of tank level in boiler panel PLANNING AND MONITORING PHASE : Project schedules are prepared and managed using MS Project (Bar Charts) The designated Thermax Project Manager will be a single point of contact/communication from boiler dispatch department /division till hand-over Project manager will be responsible for the monitoring and schedule adherence of the Microsoft project with bar chart Periodic reporting to customers in our standard formats on project developments.

EXECUTING AND SUPERVISING: Thermax engineers will be available at site, round the clock Only Thermax approved manufacturers are approached for procurement of all materials. This helps in maintaining and assuring quality of their products delivered at clients site (accompanied with test certificates) To ensure the quality at site Thermax seek approvals from customers on their FQP (Field quality plan) before starting the job. All documentation are drafted as per ISO 9001: 2000 standards. Thermax Project team at site ensures complete adherence to safety and statutory standards as outlined in the Thermax Project Manual COMMISSIONING AND HANDING OVER : Commissioning engineer for commissioning the unit. Supply of skilled manpower for commissioning assistance Supply of utility required for commissioning Training personnel on operation of boiler provided Manufacturing Facility

Thermax in Energy & Environment

Source: www.thermaxindia.com/companyprofile.doc

Chapter: 4 MARKETING DEPARTMENT

Introduction Marketing categorically looks at the Consumer needs to help the Production department to incorporate the Consumer Requirement in the products there by giving stress on the form of products rather than products in general. It is an efficient tool to stretch ones ability beyond certain limits In terms of Market consideration to give a deep insight into ones products in order to have sustained growth through Market capitalization. As earlier specified there are in total seven divisions, So here we are going to explain Sales & SSBU (Strategic Service Business Unit) marketing strategy. So the hierarchy in this unit is like below;
Audit & Consultancy Head Energy Audit Piping Design Internation al Sales BM-North BM-South Export Eng. /Export Assistant BM-West1 BM-East BM-WestHead-TCA Sales FEMS Propos al R&R Sales Comb Propos al Proposals Head

Source: Thermax Corporate Profile

SSBU basically dealing with the services related to Heating & Cooling divisions. Like; Annual Maintenance Contract In steam Accessories FEMS (Facility in Energy Management Solutions) Marketing Mix Product Product planning is one of the important functions of marketing department. Product Planning includes all the Activities which enables producers to determine what should be constitute a companys Product line. It includes; Product Line Product Mix Product R&D

The above mentioned Product planning is done according to the order which they are getting for Boiler Manufacturing. The Product mix of the Thermax Ltd. Includes; o Boiler o Heater o Steam Accessories o Vapour Absorptions Systems o Chemical o EPC Power Plant o Water & Waste Management o Electrostatic Precipitators.

We are mainly focusing on the Boilers. So, the product line of Boilers is; o Large Industrial Boilers o Boilers for Power Utilities o Packaged Boilers o In that also different types of Boilers are; o Waste Heat Recovery Systems o Waste Heat Recovery Boilers o Lean Gas Fired Boilers

o Energen o Heat Recovery Steam Generators o Waste Gas Boilers o Municipal Waste Boilers o Large Industrial Boilers o Oil-Gas o Solid Fuel o Spent Wash o Hot-Water Generators o Packaged Boilers o Coil Boiler o Bi-Drum Boilers o Shell Boilers o Thermosyphons o Solar based Heating

At Present Major competitor of Thermax is Cethar Vessels Limited.

Besides the major competitor there are several local manufacturers from Home Market also. The local Companies mainly manufacturers small capacity Boilers & those are not considered as Qualitative. Company developed its production capacity over years and thus brought down the overhead cost as well as transferring those savings to the ultimate consumers. The information required in new product development or in improving upon the current version or in context of any other related matters is sought mainly through Channel Members & Channel associates of the company as the sales force which are in regular touch with the Market. Target Markets: Thermax Ltd. has currently a large network of selling in India as well as abroad. All the markets have been geographically segmented & the customers are targeted on the basis of production of the Energy & Usage pattern of the company product line. Pricing The pricing policy of the company dictates the terms & conditions for pricing of entire product mix, basically pricing depends on so many parameters.Like size of the Boiler (Capacity), material used, structure of the boiler, some specified parameters by the client etc. Pricing is decided on the manufacturing cost and the desired margin that the company decides to have on each product. When any proposal comes for the Boiler, it is mainly forwarded to Pune, main office. The given Proposal deeply studied & evaluated by the Engineers over there, than as per the given requirements & specification pricing decided by the main office Pune. Thus for any project this is the procedures followed by the Thermax.

Place

The channel of distribution is of utmost importance because the products the company is dealing in are not only for Industrial usage but are for Society usage too. Therefore the proper distribution channel is to be designed in order to cater both segments and too at minimum possible costs. SSBU mainly consist two way channel distribution I. II. Direct Sales Channel sales

Direct sale is basically for big corporate. while channel sale is for Local customers. Along with channel sales they have TCA (Thermax Channel Associates) also. Company has offices in all industrial hubs of India. Channel associates have assigned different territories & accounts. Thermax basically divided whole India in five zones like, North, South, East, West-1 & West-2. Each division is looked by channel regional managers. Channel associates are mainly on concession basis. They are given some specified percentages of profit as their salaries. They are not on the company pay-roll. If we talk about Gujarat than, Thermax has three direct sales manager plus one Channel Manager & seven Channel associates for each region, again Gujarat also divided in four regions. Under one channel associate there are three to four people for sales. Thermax focuses on the customer satisfaction and for that after sales service is also very important, so Thermax allocated four service engineers for each region for the after sale service, most part of the services done by channel associates. The main functioning of the direct sales people is Project work, managing key accounts, OEM Development & Consultants Development.for energy audit & energy advisory services company has allocated one sales person/1 week/Region.

 Promotion As Thermax is basically a Manufacturer of Capital goods They are targeting mainly business customers and not an individual. Their major customer in power segment is government and other industrial players like L&T, Ultratech and Essar etc. So they follows totally different communication channel. They are advertising their products by different business magazines, trade channels, internet and personal selling. In this area of working promotion having a little use and the companys relationship with customers and their excellence in technology may work better. So, Thermax is basically concentrating on development of trade channel and take part in tendering process.

Chapter: 5 PERSONNEL DEPARTMENT

Corporate Governance Thermax adheres to high standards of corporate governance. Through its corporate governance measures, the company aims to maintain transparency in its financial reporting and keep all its stakeholders informed about policies, performance and development. Stakeholder confidence is sustained by adopting and continuing good practices, which is at the heart of effective corporate governance. The key elements in the company's corporate governance practice are transparency, disclosure, supervision and internal controls, risk management, internal and external communications and high standards of safety, accounting fidelity, product and service quality. The company's board has empowered responsible persons to implement its policies and guidelines and has set up adequate review processes. Thermax is a Public Limited Company. Its equity shares are listed on two stock exchanges The National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).
Board of Directors
Meher Pudumjee, Chairperson M S Unnikrishnan, Managing Director Anu Aga, Director Tapan Mitra, Director Pheroz Pudumjee, Director Dr. R A Mashelkar, Director Dr. Jairam Varadaraj, Director Dr. Von Massow, Director

Management Council
M S Unnikrishnan, Managing Director Gopal Mahadevan, Chief Financial Officer R V Ramani, Vice President, Power Generation Dr. R R Sonde, Executive Vice President, Research, Technology & Innovation

S Ramachandran, Executive Vice President, Chemical & Water

Recruitment Process

Thermax banks on its competent and committed professionals to provide creative engineering solutions to industry and to sustain its ambitious growth plans. Thermax have mature systems and processes for inducting, developing and retaining talent. For recruitments, they advertise through relevant newspapers and jobsites, and also highlight them on website. Thermax have three modes of recruiting people for which they advertise in relevant newspapers or host them on the website. Engineer Trainee Induction Program A comprehensive Engineer Trainee (ET) Scheme inducts and launches fresh engineers in various functions across the company. The programme is designed to develop technical excellence from early days of an employee. Engineering trainees from reputed engineering colleges are periodically recruited. They are trained intensively for one year through an intensive programme that begins with exclusive induction sessions spread over a two week period. Hands-on training at the work place, manufacturing facilities and customer installations follow before they are absorbed as confirmed employees of Thermax.

Thermax Graduate Programme In 2007 the Thermax Graduate Programme' (TGP) was launched to provide an opportunity to young graduate students from science streams from across India to develop careers with Thermax. Launched on a pilot basis, the programme aims to create competent and technically competent individuals to one of the core Thermax businesses

in the area of sales, logistics and services. The program is managed by Thermax in partnership with Sinhgad College of Engineering, Pune.

Thermax Leadership Development Programme(TDLP) Thermax Leadership Development Programme (TLDP) launch in the year 2007 cumulatively saw more than 450 Executives attend the development centers and around 200 Executives participate in the leadership programme. It is making remarkable progress in catering to the long term development needs of Employees. It also strategically addresses Thermax long term quest to build a talent pipeline at different organization level to continuously make available capable leaders to consistency deliver high quality results. Lateral Recruitments On a continuing basis, Thermax takes in experienced professionals from different disciplines to sustain its businesses and drive its innovative projects. Besides their functional expertise, they are assessed for compatibility with the cultural ethos and values of Thermax. Once recruited, they undergo an induction programme and join the Thermax teams.

Reasons for a Career with Thermax As Thermax is a fast growing organization with a global presence and an illustrious list of client industries from diverse sectors of the economy.

Nurtured by an innovative tradition, they are positioned in the crucial areas of energy and environment. Here, as a valued member of teams that work on projects that deploy a host of green technologies; Employees will be part of the worldwide efforts to create sustainable industry practices. Thermax is a respected brand, built on enduring themes of employee integrity, rich diversities of people, and their uniqueness as individuals and the unfolding human potential for surprising levels of performances. In the open, informal culture, that Thermax offers and in the humane values that inspire its people and business ethos, you will find immense possibilities to learn, to grow and to find fulfillment. And with your contributions and fresh perspectives, add to the vibrancy of life at Thermax. Reaching out to Families Thermax believe in reaching out to the families of their employees. Other than employees welfare measures that take care of the family needs of their employees, company also create bonds between the families and the company through various engagement initiatives: An annual Thermax event, where employees and their families participate. Visits of family members to factory on festive occasions. Opportunity for them to express themselves in the house magazine. Involvement of family members during the long service award function. Sports activities organized by Thermax Sports Club.

Performance appraisal System At, Thermax mainly they are working on ERP (Enterprise Resource Planning) system, so each and every activity of Employees are checked, evaluated and measured by the Head office, Pune center.

All the working of Employees is on ERP so; it is easily shared and measured easily through ERP server based system. The Total Number of permanent on the roll Employees are 4752 as on March 31, 2009. Entitlements & Benefits Thermax welfare policies are meant for the well being of employees at the workplace, their homes and in the communities in which they live. They are revised periodically to reflect the changes at the workplace and the external environment. Thermax ensures fair payment, benefits and good service conditions to all outsourced employees as well. They are also part of social gatherings and celebrations of the company. Benefits to employees include company leased accommodation, leave travel assistance, reimbursement of medical and hospitalisation expenses within laid down policies and housing loans and a tie-up with HDFC, vehicle and emergency loans. Thermax has holiday homes for employees and their families at various locations such as Mahabaleshwar, Ooty, Goa and Simla. Its R D Aga Community Center (RDACC) hosts community development activities like festive fun fairs, talks on health, yoga and music programme. The hall is also available to employees for their family functions at nominal rent.

Learning & Development Training Activities

Thermax has world class training infrastructure that can accommodate 236 participants at a time. Additionally, there product installations where participants can have hands on experience. A monthly training calendar is circulated to all employees to update their identified learning needs. Training programmes are decided on the basis of employee feedback and discussions with heads of departments and HR Associates. The calendar circulated through email is later posted on the company intranet. On the job training & certification is provided for critical areas like non destructive testing, welding engineering, and project management. In-house training is also conducted for design, project management and ERP software. New programs are periodically introduced to update employee awareness and knowledge in areas such as creativity, international business etiquette, world class manufacturing, export documentation, work life balance and emotional Intelligence. Company Orientation Program A two day Company Orientation Program is conducted each quarter, where new hires from across locations are invited to participate at the Pune Centre. The programme gives an overview of Thermax including its growth and development, business areas, corporate initiatives and guided tour of the manufacturing facility. two day Outbound Development Program with exercises designed around the core values. For fresh graduates, a comprehensive Engineer Trainee (ET) Scheme has been designed. A two week long induction programme orient young engineers to company history, industry practices and customer installations, besides engineering fundamentals and behavioral training. Technical Training

To maintain the technical competence of employees, a core strength of the company, business. groups are continuously involved in providing specific training on processes and products. More than 125 technical training modules have been designed & developed on different topics and are in use. An in-house team of experienced trainers run the programme. Technical training is also extended to channel partners, service franchises, and technicians from client installations. Management Education tie-ups Thermax builds managerial capability through tie-ups with various management educational institutes. ICFAI Business School provides a part time MBA to its employees. Thermax is a corporate life member of Project Management Associates (PMA), Delhi which offers International Project Management Certification. 107 Thermax project professionals have been awarded certificates jointly by PMA India & IPMA, Switzerland. An 18 month in-house Managerial Development Program (MDP) in association with Narsee Monjee Institute of Management Studies, Mumbai has also been introduced. 87 employees have graduated so far and the third batch is undergoing training. Events & Celebrations We celebrate several events with our employees, helping them to bond better. Birthdays of employees and divisional parties bring our people together. Many festivals are celebrated with a lot of colour and enthusiasm. Picnics and treks are regular features for our people. Weekend getaways refresh them and help to know each other better. Competing teams of various business divisions play football, cricket and basketball tournaments with passion. Plant Management Services

This service is for clients' waste water treatment systems, post commissioning and handing over. Some of the offerings: Annual service contracts Yearly health check up and overhauling Comprehensive product and process audits Spares for your operating equipments Service chemicals and resins Operation & Maintenance for your facility Revamp & Augmentation needs

Chapter: 6 FINANCE DEPARTMENT

In any Company Finance department is mainly function as the very important part of the Company. Different Finance activities which are carried out by the Finance department of Thermax are; Investment or Long-term assets mix decision. Financing or Capital mix decision. Dividend or Profit allocation decision. Liquidity or Short-term assets mix decision.

There are some primary functions which need not require specialised skills of finance, that routine function of finance are as below: Supervision of cash receipt, payment and safeguarding of cash balance. Custody and safeguarding of securities, insurance papers and other valuable documents. Taking care of the mechanical details of new outside financing. Record-keeping and reporting. Some of the Financial Activities discussed here; In the finance department we are going to see the last five year balance sheet, last five years profit and loss accounts, last five years cash flow statement, key ratios of the Thermax limited and also we have to look upon the comparison of the Thermax with its major competitor i.e. cether vessels and comparison with the overall Boiler industry as a whole. Here we also include some of the accounting policies of the Thermax because we find its implication over the finance as whole. The 2008-09 was challenging year - one that started off with great promise and ended with a lot of uncertainty and change. The total income of the Thermax in this year was Rs. 3303 crore and profit after tax at Rs. 287 crore was almost the same as the previous

year 2007-08. With a large export order carry forward from the previous year the export income, including deemed exports, increased 35% to Rs. 912 crore.

INCOME STATEMENT OF THERMAX LTD.

Particular 31/3/05

Year ended on 31/3/06 31/3/07

(In Rs. Crore) 31/3/08 31/3/09

Income: Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure: Raw Materials Power & Fuel Cost
Employee Cost

973.44 49.13 924.31 12.73 -0.51 936.53 638.28 6.31 83.27 13.36 84.71 10.8 0 836.73 87.07 99.8 3.93 95.87 9.2 0.41 86.26 0.43 86.69 27.73 55.29 198.45 2.86 28.6 4.41 238.31 22 120 152.08

1,582.99 87 1,495.99 16.29 -16.84 1,495.44 967.3 8.81 130.92 31.99 120.29 15.09 0 1,274.40 204.75 221.04 5.33 215.71 15.21 0.51 199.99 0.39 200.38 69.28 123.25 307.1 0.92 40.51 12.5 1,191.56 10.27 170 40.16

2,180.16 99.79 2,080.37 32.08 67.55 2,180.00 1,449.04 11.35 191.14 38.36 152.06 18.7 0 1,860.65 287.27 319.35 7.43 311.92 18.76 0.1 293.06 1.1 294.16 102.74 187.8 411.61 0 71.49 10.95 1,191.56 15.76 300 48.61

3,299.02 121.92 3,177.10 59.69 -3.91 3,232.88 2,201.36 13.79 241.06 33.78 190.79 83.8 0 2,764.58 408.61 468.3 6.56 461.74 21.8 0.1 439.84 1.95 441.79 149.6 280.78 563.22 0 95.33 16.2 1,191.56 23.56 400 61.78

3,201.28 105.71 3,095.57 -35.88 126.93 3,186.62 2,114.19 18.18 254.64 42.37 185.21 98.92 0 2,713.51 508.99 473.11 10.12 462.99 32.11 0 430.88 4.12 435 131.91 287.3 599.32 0 59.58 10.12 1,191.56 24.11 250 80.73

Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp. Capitalized Total Expenses: Operating Profit: PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax: Extra-ordinary items PBT (Post Extra-ord. Items) Tax Reported Net Profit: Total Value Addition Preference Dividend Equity Dividend: Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earnings Per Share (Rs) Equity Dividend (%) Book Value (Rs)

Here in the income statement we can see that each and every year total income of the Thermax ltd is increasing year by year except only one year i.e. 2008-09. On the other hand with the increase in total income, total expenditure of Thermax ltd also increases from Rs.836.73 crore to Rs.2713.51 crore within last five year. The outcome of the

income and expenditure i.e. operating profitability of the Thermax also increase considerably from Rs 87.07 crore to Rs 508.99 crore. Here the rise in total income is nearby 2.41 times in last five year, on the total expenditure side it shows rise by 2.25 times over the last five year so the operating profit rise within these five year by 4.85 times. These show that how each and every year company becomes more effective and efficient. As the year passes the depreciation amount of the company also increase over the last five years from Rs.9.2 crore to Rs.32.11 crore. Also the tax liabilities increase from Rs.27.73 crore to Rs.131.91 crore within this five year. Now if we look upon the net profit of the company than it increases from Rs.55.29 crore to Rs.287.30 crore within these five year. If we calculate this increase profitability in the percentage term over the last five year than it rises by 4.20 times.

CASH FLOW STATEMENT OF THERMAX

(Rs. In crore)

Particulars Opening Cash & Cash Equivalents Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Closing Cash & Cash Equivalents

Mar '05 18.63 83.02 86.7 -59.56 -34.62 -7.48 11.15

Mar '06 19.36 192.53 208.81 -99.78 -92.28 16.75 36.11

Mar '07 36.22 290.54 324.25 -204.36 -93.65 26.25 62.47

Mar '08 62.47 430.38 141.19 -138.25 -37.5 -34.56 27.91

Mar '09 27.91 419.21 148.03 279.54 -114.7 312.87 340.78

Figure 1: Chart showing opening and closing balance of cash flow

If we explain the above cash flow statement of the Thermax ltd than we can clearly show the dramatically rise in the last year i.e. in the 2008-09, total closing cash and cash equivalents in this year increase from Rs.27.91 crore to Rs. 340.78 crore i.e. 11.21 times . This rise in the cash and cash equivalent, we can see due to the positive net cash from

investing activity. Here during earlier year Thermax management focusing over investing in the market but in the particular year 2008-09 management taken a decision to taking out fund from the market and invest it into fixed deposits, so, in between we find a huge amount of net cash from investing activities.
Fund Flow Statement of Thermax Ltd. Particular 31/3/05 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net worth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deferred Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets 71.49 23.83 0 47.66 338.6 0 410.09 0 0 0 410.09 31/3/06 23.83 23.83 0 0 454.76 0 478.59 0 0 0 478.59 As on 31/3/07 23.83 23.83 0 0 555.36 0 579.19 0 0 0 579.19 (In Rs. crore) 31/3/09 23.83 23.83 0 0 938.06 0 961.89 0 0 0 961.89

31/3/08 23.83 23.83 0 0 712.31 0 736.14 0 0 0 736.14

176.71 84.07 92.64 9.42 316.16 105.57 172.86 11.14 289.57 85.9 0.01 375.48 0 342.68 41.64 384.32 -8.84 0.71 410.09

243.24 110 133.24 4.91 420.7 162.28 226.3 36.06 424.64 118.44 0.05 543.13 0 563.25 60.34 623.59 -80.46 0.2 478.59

279.4 121.52 157.88 22.23 598 275.56 382.51 62.44 720.51 207.6 0.03 928.14 0 1050.18 76.98 1127.16 -199.02 0.1 579.19

419.3 140.7 278.6 56.25 579.74 199.52 505.31 27.85 732.68 283.96 0.06 1016.7 0 1058.67 136.48 1195.15 -178.45 0 736.14

602.89 162.98 439.91 21.05 196.84 266.42 540.78 11.96 819.16 482.5 328.82 1630.48 0 1211.09 115.3 1326.39 304.09 0 961.89

Contingent Liabilities Book Value (Rs)

54.29 152.08

99.01 40.16

227.93 41.68

184.2 61.78

221.38 80.73

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognised in the period in which the results are known / materialised. Here in the balance sheet of the Thermax ltd one of the important year is 2005-06, because in this particular year the company split their shares from the face value of ten to face value two per share. This changes increase the number of shares in the market. The announcement of such splitting made on the 31st January 2006 and its exercised date was 31st March 2006, also there was preferential share capital was there of Rs 47.66 Crore which redeemed in the same financial year and reduce the firms liability at a large extent. So we can say that the financial year 2005-06 has played vital role in the financial history of the Thermax ltd. Now if we look upon the other years financial statement than we find that over the last five year there were no major changes in the capital structure of the firm, the total share capital in the year 2004-05 was Rs. 71.49 crore and it reduce up to Rs.23.83 crore in the year 2005-06 due to the redemption of the preference share amounting Rs. 47.66 crore, thereafter the share capital of the Thermax ltd being constant of Rs. 23.83 crore. The company also keeps a large amount of the reserve, on the 31/3/05 the company carries the reserve amounting Rs.338.6 crore and at 31/3/09 it reaches up to Rs.938.06 crore, so here the rise in the reserves was nearby 1.77 times over the last five years. Also the net worth of the firm comes with hand in hand, it increase from Rs.410.09 crore to Rs.961.89 crore in the last five financial years. Here firm net-worth and capital employed i.e. total liabilities remain same, the reason behind this situation was there was no debt

financing in the company. In other word we can say that Thermax is the zero debt company. Now if we move towards the other side of the balance sheet i.e. application of fund, than we find on this side the net block of assets was Rs.92.64 crore at 31/3/05 which reaches Rs.439.61 at 31/3/09. This increase in the net block of assets was 3.75 times over the last five year. One of the other important notes over this side is the investment and fixed deposit. The investment of the firm changes a large extent in the last year i.e. 2008-09. On the 31/3/08 investment amounting of Rs.579.074 crore which reduce and at the 31/3/09 it becomes Rs.196.84 crore. While the fixed deposit amount on 31/3/08 was Rs.0.06 crore which increase up to Rs.328.82 crore at 31/3/09. This shows that firm transfers their fund from investment to the fixed deposit which is less risky than the market investment. The net current assets of the firm in year 2005 to 2008 in the negative amount that shows the firm manage very well the working capital. But in the last year it turns out positive by Rs 304.09 crore which is the huge change over the last year.

crore)

Key financial Ratios

(Rs. in

Mar '05 Mar '06 Mar '07 Mar '08 Cash Flow Indicator Ratios Dividend Payout Ratio Net Profit 62.96 43.33 43.89 39.72 Dividend Payout Ratio Cash Profit 53.2 38.39 39.89 36.84 Earning Retention Ratio 38.14 58.42 60.27 58.85 Cash Earning Retention Ratio 47.58 62.98 63.58 61.93 Profitability Ratios Operating Profit Margin (%) 9.02 13.2 13.63 12.5 Profit Before Interest And Tax Margin (%) 7.9 12.01 12.41 11.62 Gross Profit Margin (%) 10.31 14.35 15.71 11.81 Cash Profit Margin (%) 6.87 9.12 9.68 9.07 Adjusted Cash Margin (%) 7.01 9.49 10.61 9.07 Net Profit Margin (%) 5.89 8.12 8.8 8.69 Adjusted Net Profit Margin (%) 5.99 8.46 9.72 8.69 Return On Net Worth (%) 13.48 25.75 32.42 38.14 Adjusted Return on Net Worth (%) 14.75 26.64 35.83 36.81 Return on Assets Excluding Revaluations 6.96 11.18 11.01 14.54 Return on Assets Including Revaluations 6.96 11.18 11.01 14.54 Management Efficiency Ratios Inventory Turnover Ratio 8.89 9.35 7.74 16.81 Debtors Turnover Ratio 6.36 7.5 6.83 7.16 Investments Turnover Ratio 9.58 10.05 8.1 16.81 Fixed Assets Turnover Ratio 10.01 12.66 13.41 7.78 Total Assets Turnover Ratio 2.26 3.15 3.62 4.38 Asset Turnover Ratio 5.25 6.24 7.57 7.78 Average Raw Material Holding 33.91 31.63 40.68 26.84 Average Finished Goods Held 4.8 2.62 2.17 0.68 Number of Days In Working Capital -3.44 -19.36 -34.44 -20.22 Liquidity And Solvency Ratios Current Ratio 0.98 0.87 0.82 0.85 Quick Ratio 0.68 0.6 0.57 0.67 Debt Equity Ratio 0.13 ---Long Term Debt Equity Ratio 0.13 ---Investment Valuation Ratios Face Value 10 2 2 2

Mar '09 24.26 21.82 81.8 83.21 15.93 14.59 14.89 13.13 13.13 9.09 9.09 29.86 39.79 12.56 12.56 12.2 5.92 12.2 5.29 3.28 5.29 39.86 0.78 35.36 1.23 1.01 --2

Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital

12 35 387.86 134.37 14.35

3.4 16.58 125.55 33.36 14.35

6 23.8 174.59 42.21 14.35

8 33.33 266.63 55.84 14.35

5 41.39 259.79 74.1 14.35

Here if we look upon the various ratios of the Thermax ltd i.e. cash flow indicator ratios, profitability ratios, management efficiency ratios, liquidity & solvency ratios, and investment valuation ratios. Out of the entire, cash flow indicator ratio gives us the view regarding to the cash incoming and outgoing ratio i.e. how much cash goes out due to the dividend paid and how much cash retained in the firm out of the total profit. On the other hand there are profitability ratios which indicate operating profitability of the firm, gross profitability of the firm, net profitability of the firm as well as return on the net worth, return on capital employed. Operating profitability of the firm in the year 2004-05 was 9.02% which rises up to 15.93% in the year 2008-09, this shows increase in the operating efficiency of the firm. Gross profit ratio of the firm also increases by 45% over the last five year. Where net profitability of the firm increase from 5.89% to 9.09% in these five years. Return on capital employed or we can say return on long term fund was 21.42% in 2004-05 which increase up to 54.56% in the year 2008-09. This is nearby 155% increase in last five year. If we look toward turn over ratios than it shows the efficiency of the management of firm, here we find that the inventory turnover increase from 8.89 times to 12.2 times in last five year, where the investment turnover also increase from 9.58 times to 12.2 times. Assets turnover notes negligible change of 0.4 times i.e. 5.25 times to 5.29 times over the last five year. Firms average raw material holding period was 33.91 days which goes up to 39.86 days, on other side average finished goods holding period reduce to a great extent i.e. 4.8 days to 0.78 days.

Now we move towards liquidity and solvency ratios where current ratio increase from 0.98 to 1.23 in last five year, generally 1 treated as ideal current ratio but it differs upon the industry to industry. Where the debt equity ratio was there in the year 2004-05 was 13% afterwards it does not exist in any year as there were no debt funds in the firm. In the investment valuation ratios we seen that the face value of the share was Rs.10 in the year 2004-05 which splitting down up to Rs.2 per share after that and so the earning per share changes from Rs.22 to Rs.24.11 per share. Here after looking towards all the data of Thermax we have to compare these data with the industrys data which we have calculated in our comprehensive project one, so, now we focus upon such comparison of the Thermax ltd as a part of the boiler industry and the whole boiler industry. Here if we took the Return on Net Worth (RONW) as one of the measures of the comparison than we find the following results. For indicating it with the graphical interpretation it will look like as below:
RONW as (%) 2006 2007 11.95% 20.95%

Year Industry

2005 4.22%

2008 25.46%

2009 25.24%

Figure 2: RONW Comparision of Thermax with Industry

As we look towards above data we can clearly can identify that on the one hand the industrys return on capital employed increase, where on the other end return on RONW of Thermax also have a higher rate than the indutry. In the year 2005 where the RONW of whole industry was just 4% at that time the RONW of thermax was 13.48% . In the year 2008 both i.e. industrys and Thermax as individual RONW touched at 25.46% and 38.14% respectively. While in the year 2009 there was a sharp decline in the RONW of thermax from 38.14% to 29.86% and on the other side in the industrys RONW there was a nominal change i.e. from 25.46% to 25.24%. One of the other important indicators of the profitability is the Return on Capital Employed (ROCE) which indicates the return over the total capital employed. Here we explain and compare the ROCE of the boiler industry as a whole and ROCE of the Thermax ltd.

year Industry Thermax

2005 3.90% 13.48 %

ROCE as (%) 2006 2007 11.04% 19.50% 25.75 32.42 % %

2008 24.46% 38.14 %

2009 24.70% 29.86 %

Figure 3: ROCE Comparision of Thermax with Industry

Here in the above data we can clearly seen that ROCE of the Thermax ltd was much higher than the industry as a whole. In the year 2005 the industrys ROCE was just 3.90% where ROCE of Thermax was 13.48%, after wards in both i.e. Industry as well as Thermax ROCE increase and being in the year 2006,2007,2008,2009 the percentage of ROCE be 11.04, 19.50, 24.46, 24.70 and 25.75, 32.42, 38.14, 29.86 respectively. Here one of the points is that in the overall industry having long-term debt fund in its total capital employed and as earlier we seen that in the Thermax ltd there is not any long-term debt fund, because of the long-term debt as we know it is costlier which suppress over all return on the capital employed so, we can say that is the one of reason for such a huge difference between ROCE of Thermax and Industry as whole. As we discuss above two profitability measure the third one is the Return on Equity(ROE). For detail understanding this measure we have two explain it through chart as below:
ROE as % 2006 2007 15.98 23.31 % % 25.75 32.42 % %

Year Industr y Therm ax

2005 13.28 % 13.48 %

2008 28.37 % 38.14 %

2009 27.68 % 29.86 %

Figure 4: ROE Comparision of Thermax with Industry

From looking towards above graph we can see that in the year 2005 the return on equity more or less same for both i.e. Thermax and Industry as a whole, but after that in the year 2006,2007 and2008 the gap was increased to nearly 10 % each year. In the year 2008 the return on equity of the industry as a whole was 28.37% where on the other hand ROE of the Thermax ltd was 38.14%. In the year 2009 it comes down to 27.68% with the industry and 29.86% with the Thermax ltd. here we can show a sharp fall in the return of the Thermax ltd where there is a decline in ROE of the total industry is just 0.65%. Now If we go to the Du-Pont analysis where we have to find out ROE and RONA through or the using other ratios.

DuPont Analysis

Ratios

March05 March06 March07 March08

March09

Return On Equity (%) Return On Net Assets (%)

13.48 13.48

25.75 25.75

32.42 32.42

38.14 38.14

29.86 29.86

Profit Margin - EBIT/SALES Asset Turnover Ratio PAT/EBIT NA/NW

0.211 2.25 0.63 1.00

0.418 3.12 0.61 1.00

0.507 3.59 0.63 1.00

0.600 4.31 0.63 1.00

0.452 3.21 0.66 1.00

EBIT/SALES Ratio indicates the spread between the cost of goods sold and other operating expenses (except interest and tax) against sales. the above table shows constant increase in it except last year which may be due to (1) higher sales prices, cost of providing services remaining constant (2) lower cost of providing services, sales prices remaining constant. Here it was 21.10% in March, 05 which has increased up to 45.20% in March, 09. SALES/NET ASSETS indicates the relationship between sales and net assets also known as Assets Turnover ratio. It shows the industrys ability to produce a large volume of sales for a given amount of net assets. It is the most important aspect of the companys performance. The Company has produced Rs 2.25 in March05 of sales for one rupee of capital employed in net assets which has reached upto Rs. 3.20 in March 09. EBIT/NET ASSETS is the ratio of return on net assets. RONA is equivalent of return on capital employed. It measures how much return the Company could achieve against the total net assets. It measures the overall efficiency of business. A higher percentage of return on net assets will satisfy the owners that their funds are profitably used. The Company has got more than 13.00% return in March, 05 which has increased up to 29.86% in March09. PAT/EBIT shows the relationship between earnings before interest and tax and earnings after tax. PAT may be less due to high interest and tax payment, But here nothing worried about interest. The Company has witnessed the growth over the years in the ratio and reached to 66% which is good for the Company. It is the financial leverage from the income statement. The ratio is increasing because the firm is able to get debt at a cheaper rate due to its good performance and brand image.

NA/NW shows how much proportion of net assets is financed by net worth. Net worth comprises of equity and retained earnings. The ratio is decreasing over the years which shows that the company is using less debt compare to equity. It is also the financial leverage from the Balance Sheet. PAT/NW is known as return on equity. It shows how much return equity shareholders have received over the years. The ratio shows that return on equity is increasing over the years due to more use of debt. There is a steady and constant growth in return which shows the profitability of owners investment. We can also say that it indicates how well the firm has used the resources of owners. Here it has increased 13.28% in March 2005
to 29.86% in March 2009.

Some of the Key Highlights from the above discussion are; Net worth crosses Rs. 1000 Cr mark
Cash position improves to Rs. 552 Cr from Rs. 448 Cr Capex of Rs. 28 Cr in comparison to Rs. 25.4 Cr For the fourth year running, Thermax featured in Forbes Asias 200 Best Under a

Billion companies.

Chapter: 7 SWOT,PESTEL & PORTERS FIVE FORCE ANALYSIS

SWOT Analysis Strengths of Thermax Ltd. Highly qualified engineering and technical personnel. Power sector is growing very fast in India and boiler Technology has improved which is adopted by Thermax Ltd. to fulfill that requirement so this will give boost to the Company. Some major players from other countries have entered into Alliances with Thermax Ltd. so it will now give advantage to the company in terms of technological developments. Thermax's ability to acquire modern technology and make it suitable to Indian Conditions has been an exceptional strength to the Company. Thermax is one of the few companies in the world that offer integrated solutions in Energy and Environment Management. With its broad spectrum engineering expertise in heating, cooling, power, water and waste management and chemicals. Weaknesses of Thermax Ltd. Govt. regularity on import duty and charges on export will put Thermax Ltd. At back stage. The company offers very stringent credit facilities to the customers and this is a weakness when compared in the face of rising competition. More joint venture will lead Thermax to loss of control over their process and may be a threat in future if they are unable to transfer the knowledge.

Opportunities for Thermax Ltd. The power sector reforms are expected to pick up in the near future in India, Which would directly benefit Thermax In terms of more demand for their product.
NTPC is planning additional capacities to the tune of 2,800 MW, at a cost of Rs 52

bn. Which will directly give a boost to the Thermax for their boiler demand? As They have recently join hands with Babcock and Wilcox for the supercritical technology. Government has been developing strategies to improve the hydro-thermal mix and substantially step up the contribution of this clean and stably priced source of energy through higher budgetary allocation and speedier clearance process. Thermax, being a major equipment supplier, is likely to reap benefits from this initiative. Government is also taking steps to promote captive power capacity which is estimated to be about 20,000 MW. A comprehensive Captive power generation policy for purchase and wheeling of surplus power is being evolved, which is likely to boost investment in this area.
New Boiler technologies like, super critical & ultra super critical are very

efficient. These boilers are also produce less carbon emmition, so they will be helpful in CDM technology & will get Carbon credit benefit. Now the Boilers which reduce the Green house gases in the Environment will be getting more benefits from government so it will be a good opportunities for the players like Thermax in Boiler industry.
Their Expertise in Fuel and Environment Management will lead them because of

more demand for environment friendly technology.

Threats for Thermax Ltd. The global trend of consolidation has already resulted in a fall in turnover of the Industry and this will prove to be a major threat in the years to come as well for the company. Recently, the government has permitted the import of second hand capital goods that are 10 years old without the need for a license. This move will definitely increase competitive pressures in boiler industry which will a threat to Thermax. China is developing and exporting boiler at a very low cost and of high technology so Thermax will get direct competition from them.

PORTERS FIVE FORCE MODEL: The model of pure competition implies that risk-adjusted rates of return should be constant across firms and industries. However, numerous economic studies have affirmed that different industries can sustain different levels of profitability; part of this difference is explained by industry structure. Porters model is based on the insight that a corporate strategy should meet the opportunities and threats in the organizations external environment. Especially, competitive strategy should base on and understanding of industry structures and the way they change. Rivalry among competitors
Thermax is creating competitive advantages to gain bigger market share through

their experience in the industry. Acquisitions, mergers and joint-ventures in other countries to get Latest Technology.
Technological improvements through R&D investment.

The number of players in the boiler sector it comes to providing fully integrated service are few but the intensity of competitive rivalry can be termed as medium as there is sufficient scope available in the industry for all the existing players. Not high currently. Govt. move toward privatization will encourage investments, thereby increasing competition.
ALSTOM, Thermax, L&T MHI, BHEL.

Potential of New Entrants Competitive Price Because of Technological Development. Many orders are captured in recent times by new entrants. Existing tactic in the market will not help in the current scenario.

 As the Boiler sector are highly capital intensive and involves large amount of commitment in terms of capital , assets and work- force the threat of new entrants is low . As only those organizations which have the required capabilities and are willing to take the risk of entering a sector which can be seen as still developing will enter the market. New entrants such as L &T MHI pose threat to Thermax Ltd. Barriers to entry are high, as entering this business requires heavy investment initially. The other barriers are fuel linkages, payment guarantees from State Governments, etc. L&T MHI, Siemens. Bargaining Power of Suppliers Materials, parts, components, other resources Suppliers are well diversified across the globe.
Continuous technological development leads to force companies to make good

relationship with their suppliers to get advanced component. Not very high as Government controls tariff structure. However, this may change in the future. Substitutes Thermax is working in many sectors and in almost all sector they are having the latest technology and improving their ability as per the demand of situation so not any substitute are there for their product. Currently any substitutes are not available. Bargaining Power of Buyers Wide Customer base in India and in all parts of the world With excellent customer satisfaction the order are booked for the next two years

 As the requirement of Boiler is growing exponentially, the supply of Boiler can be met by Importing or from the domestic suppliers. So the bargaining power of the Buyers is medium enough to tackle in the current scenario. Bargaining power of customers is medium as boiler is to be supplied in customized format. However, Government is a big buyer and payment by Government can be more erratic.

PESTEL Analysis It is very important that an organization considers its environment before beginning the marketing process. In fact, environmental analysis should be continuous and feed all aspects of planning. The organization's marketing environment is made up of: 1. The internal environment e.g. technology, wages and finance, etc. 2. The micro-environment e.g. our external customers, agents and distributors, suppliers, our competitors, etc. 3. The macro-environment e.g. Political (and legal) forces, Economic forces, Socio cultural forces, Technological forces, Environmental forces and Legal forces. These are known as PESTEL factors. Which includes Political, Economical, Sociological and Technological factors, which effect whole Boiler industry. Political Factors Political factors include different Government policies, Government stability, Taxation policy, foreign trade regulations etc. In any country for economic development Government stability should be there, until and unless the government is not stable Economic development of that country is not possible. Government should also have to show the keen interest in the economic development of the country by taking some important decisions towards the Public, society, Industries, Environment and other countries. Sound standards contribute to solutions to political issues such as public health and safety and help assure reliable

essential public services such as power and fuel supplies. Standards can be a major contributor to promoting economic trade.

Major political factors which affect Thermax ltd. are as under. Suppliers and customers Boilers and pressure vessels are used in a wide variety of industries and applications. Trade in pressure equipment is a highly internationalized market. In many countries, boilers and pressure vessels are regulated by government bodies either through technical statutes or application of standards and conformity assessment requirements. Company is seeking to control costs and optimize equipment designs and sources as part of their local or globalization plans. Technological changes/product innovation Standardization in this field must strike a balance between safety, function and technical innovation. New materials, processes, e.g., welding, non-destructive examination and service experience should be incorporated into standards on a regular basis. Social changes Standards must accommodate public and occupational safety. In general, society increasingly demands improvements in safety and reliability of equipment and services as well as reductions in environmentally harmful emissions. Standards also provide an important means of technology transfer to emerging economies. Technical barriers to trade (TBT) Currently, different prescriptive requirements in national and local regulations introduce technical barriers to trade. Providing realistic means to reduce these barriers within the context of mature industries and widespread familiarity with and use of longstanding or well proven design standards is the key challenge.

Regulator and legal measures There are significant differences among countries in regulating the supply and operation of pressure equipment. These may include compliance with a specific national standard(s), limiting source or specification of materials, use of specific inspection bodies, and discriminatory certification systems or import licenses. Economic factors Company need to consider the state of a trading economy in the short and long-terms. This is especially true when planning for international marketing. You need to look at: 1. Interest rates. 2. The level of inflation Employment level per capita. 3. Long-term prospects for the economy Gross Domestic Product (GDP) per capita, and so on. Different Economic factors like; Business cycles,GNP trends,Inflation,Money supply and interest rates affect the Thermax ltd. so company has to deal with all these economic factors and try to decrease the possible effects of these economic factors. As the company works globally they should consider all this points while making their decision regarding production plant, suppliers, buyers and many more. Socio cultural factors Sociocultural factors are depending on; The Publics view about the foreign products, rate of consumption, public opinions on green issues etc.

As company is working with the global players and had adopted the global technology this factor will not negatively effect on companies progress. Companies policy of going local as we had seen in its manufacturing and design process will help them to overcome this barriers and became global leader. Technological Factors Technology is vital for competitive advantage, and is a major driver of globalization. Consider the following points: Government spending on Research & Development, Speed of technology transfer, new discoveries & Innovations, Government & industrial focus on the technological development and rates of obsolesce. Now Indian government is more concentrating on technological innovation & R&D. Government expenditure on Research & development has been increasing over the period of time. Indian industrial sector invests 23.0% of the total and 74.1% comes from the Government sources. In fact, India stands first on the criteria of Government support to R&D. This trend is contrary to that of China, where the industrial contribution to R&D is 57.6$ and governments 33.4%. Specific areas in which R&D is carried out by the company: A major restructuring was undertaken in the research and development wing of the company during the year. innovation. Actions have been initiated to create five Centres of Excellence (COE) viz., i) combustion & gasification, ii) heat transfer, iii) material science, iv) solar and v) biotechnology. An advanced computing centre is also under implementation to support all computation requirements across the organisation. These COEs are already working on 23 identified projects for fast track implementation. Technology absorption, adaptation and innovation This function was rechristened as RTIC Research both process and technology Technology and Innovation Center to encompasses

1.Efforts, in brief, made towards technology absorption, adaptation and innovation: Indigenous development of spent wash-fired boilers, which use the distillery effluent to generate useful energy and at the same time reduce ground pollution. 2. Benefits derived as a result of the above efforts - product improvement, cost reduction, product development, import substitution, etc.: The company has commissioned its first spent wash boiler project for a distillery in south India. More orders are in the pipeline. 3. In case of imported technology (imported during the last five years reckoned from the beginning of the financial year), following information is furnished: Environmental Factors Environmental factors basically include the carbon emission rates, Environmental protection, waste disposal & Health & Safety standards. The carbon emission because of using Boilers is very important issues to be discussed now a days & it is very important to reduce the carbon emission so there is one body named UNFCCC (United Nations Framework Convention on Climate Change) working for reduction of the carbon emission by the Countries in the world. So CDM (Clean Development Mechanism) Projects are permitted. The CDM is a mechanism where countries with a specific obligation to reduce a set amount of greenhouse gas (GHG) emissions by 2012 under the Kyoto Protocol assist countries to implement project activities to reduce or absorb (sequester) at least one of six GHGs. The reduced amount of GHGs becomes credits called Certified Emission Reductions (CERs). Different Policies & Projects related with Environmental factors are; Ultra Mega power project , Deemed Export Benefits, Carbon credit benefits,

 To reduce the Sulphur emissions in the flue gas, Installation of Flue gas desulphurization unit Electricity Act 2003, Electricity Policy 2005 etc. The enforcement of stringent pollution control norms has seen many customers opting for environmental products and solutions. The company has built sufficient capabilities in terms of technology and supply chain to be a major player in large environmental projects. Legal Factors Legal factors include legal policies related with Boiler manufacturing like Boiler Act etc. The Central Boilers Board, constituted under Section 27A of the Indian Boilers Act, 1923 is responsible for making regulations for laying down the standards for material, design, construction as well as for registration and inspection of boilers. The Board comprises of the representatives of the Central and State Governments, Union Territories, Bureau of Indian Standards, Coal Industry, Boiler Manufacturing Industry, Boiler Ancillaries Industry, Steel Manufactures, users of Boilers and other stake holders. The Secretary, Department of Industrial Policy and Promotion are the ex-officio Chairman and Technical Adviser (Boilers) is the ex-officio Member-Secretary of the Board. The Board deals with the problems of both the users and manufacturers and takes policy decisions for the proper growth of the boiler manufacturing units in the country. The Board formulates the Indian Boiler Regulations incorporating the latest developments taking place in the Boiler Industry all over the world. The Boards responsibilities have also increased with the induction of 500 MW Boiler Units in the country. The Board considered 32 recognition cases for recognition as Inspecting Authority, Competent authority, Well-known Steel Makers/Foundries/Forges/Pipe & Tube Makers, Material Testing Laboratories and Remnant Life Assessment Organizations under Indian Boiler Regulations, 1950 and granted recognition in 36 cases during the period under report including four pending cases.