BOARDS REPORT

TO

THE MEMBERS,

The Directors are pleased to present to you the Annual Report on the business operations of the Company together with the Audited Financial Statements of Accounts for the Financial Year ended 31^st March, 2018.

FINANCIAL RESULTS:

(As per IND AS)

(Rs, in Lakhs)

PERFORMANCE REVIEW:

Your Company's operations of its various projects under execution continued to be profitable, with continued efforts to reduce costs and improve yield as also bettering the productivity levels.

During the year 2017-18 under review, the Revenue from Operations is less at Rs, 1,55,138.25 Lakhs as compared to Rs, 1,81,250.49 Lakhs of the previous year. The profit before tax for the year at Rs, 10,038.21 Lakhs after considering sales tax demands of prior years amounting to Rs, 3,033 Lakhs was less as compared to Rs, 15,300.50 Lakhs of the previous year. The profit after tax for the year at Rs, 6,606.27 Lakhs was less as compared to Rs, 9,967.64 Lakhs of the previous year. This was due to less turnover because of less order inflow and some disruptions due to GST introduction.

No material changes and commitments have occurred after the close of the financial year till the date of this Report, which affect the financial position of the Company.

DIVIDEND:

Your Directors are pleased to recommend a Dividend of Rs, 3.40 per equity share of face value of Rs, 2/- each (170%) for the financial year ended 31^st March, 2018 on paid-up share capital of the Company as against Rs, 3.40 per equity share of face value of Rs, 2/- each for the previous financial year ended 31^st March, 2017. The Dividend, subject to the approval of the Members at the 92^nd Annual General Meeting convened on 20^th July, 2018 will be paid on or after 24^th July, 2018 to those Members whose names appears in the Registered of Members as on the date of Book Closure i.e. Tuesday, 10^th July, 2018. The Dividend of Rs, 3.40 per equity share of Rs, 2/- each together with Dividend Distribution Tax will amount to Rs, 1,985.79 Lakhs.

SHARE CAPITAL:

During the year, the Company has increased the Authorised Share Capital of the Company from Rs, 10,00,00,000/- (Ten Crores) divided into 5,00,00,000

Equity Shares of Rs, 2/- each to Rs, 20,00,00,000/- (Twenty Crores) divided into 10,00,00,000 Equity Shares of Rs, 2/- each. The Issued, Subscribed and Paid up Capital stood at Rs, 968.94 Lakhs as on March 31, 2018 consisting of 4,84,47,170 Equity shares of Rs, 2 /- each.

TRANSFER TO RESERVES:

The Company do not propose to transfer any amount to General Reserve.

FINANCE:

During the year under review, liquidity position of your Company was maintained satisfactorily and optimum utilization of financial resources was achieved.

The Company had a cordial relationship with its Bankers and trade creditors and has been prompt in meeting obligations towards them.

The Company continued to enjoy high credit rating from the External credit Agency and Banks during the year under review.

INCOME TAX ASSESSMENT:

The income tax assessment of your Company has been completed till assessment year 2015-16. The appeals filed by the Company, against the assessment orders for various financial years are pending with the Income Tax Appellate Authorities and Bombay High Court. The amount of disallowance involved in various appeals is Rs, 18,382.03 Lakhs. The major dispute is with regard to the execution of eligible infrastructure projects of water, sewerage and irrigation. Out of the total disallowance the amount of Rs, 17,996.21 Lakhs pertains to the disallowance made u/s 80IA of the I.T. Act, 1961. The balance amount of Rs, 385.82 Lakhs pertains to other items of disallowance such as sec. 14A disallowance, land valuation of Wadala property. The necessary provision for tax of Rs, 6,221.31 Lakhs has been made in the accounts except for the disallowance made u/s 14A, as the same disallowance has been deleted in the previous years by the First and Second Appellate Authority.

The appeals filed by the Income Tax Department are pending in the Bombay High Court for A.Y 2003-04, A.Y 2008-09 & A.Y 2010-11. The issue involved for AY 2003-04 is claim of deduction u/s 80IA allowed by the Income Tax Appellate Tribunal, amounting to Rs, 1068.27 Lakhs. However due to subsequent retrospective amendment made to sec. 80IA by Finance Act, 2009, as an abundant caution provision for the basic tax liability of Rs, 392.59 Lakhs on the claim of Rs, 1068.27 Lakhs has been made in the accounts, hence there is no tax liability. The issue involved for the AY 2008-09 & A.Y 2010-11 is with regard to the claim of disallowance of expenses u/s 14A of the I.T. Act, 1961. The Income Tax Appellate Tribunal had deleted the disallowance made u/s 14A of the I.T. Act, 1961. In case if this disallowance is confirmed by the Bombay High Court then the Company will have to make provision of tax of Rs, 31.78 Lakhs.

FACTORIES:

The total number of factories of the Company as at the end of the year stands at 21.

DEVELOPMENT OF LAND:

The development of CompanyRs,s land at Hadapsar (Pune), Wadala (Mumbai) and Badarpur (New Delhi) are at initial stages of obtaining development related approvals from the various Authorities.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

The Company has implemented procedures and adopted practices in conformity with the code of Corporate Governance under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The Company has implemented Code of Conduct for all its Executive Directors and Senior Management Personnel, Non-Executive Non-Independent Directors and Independent Directors, who have affirmed compliance thereto. The said Codes of Conduct have been posted on the website of the Company. The Management Discussion and Analysis Report and Corporate Governance Report, appearing elsewhere in this Annual Report forms part of the Board's Report. A certificate from the Statutory Auditors of the Company certifying the compliance of conditions of Corporate Governance is also annexed hereto.

PUBLIC DEPOSITS:

The Company had terminated its Fixed Deposits Schemes w.e.f. 28^th July, 2009 and stopped accepting / renewing deposits since then. Accordingly, the Company has repaid all those deposits together with interest thereon as and when they matured on their respective due dates on fixed deposit holders claiming the same.

An aggregate amount of Rs, 0.65 Lakhs representing 3 fixed deposits that had matured, the last one being matured in February, 2012 and all these 3 fixed deposits remained unclaimed as at 31^st March, 2018. Since then, no instructions for repayment of any of these matured fixed deposits have been received.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the Financial Statements for the year ended 31^st March, 2018.

CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility (CSR) Policy of the Company and the CSR programs/activities undertaken during the financial year 2017-18 are set out in “Annexure A” and forms part of the Board's Report. For other details of the CSR Committee, please refer to Corporate Governance Report which forms part of this report. The policy is available on the website of the Company www.indianhumepipe.com

In accordance with Section 135 of the Companies Act 2013 and the Rules there under the Company has incurred CSR expenditure of Rs, 180.88 Lakhs for the financial year 2017-18 by way of corpus donation to Ratanchand Hirachand Foundation which had carried out CSR activities on behalf of Company as set out in Annexure A.

DONATIONS:

In addition to the above CSR expenditure, the Company has given following donations:

Rs, 11 Lakhs towards corpus donation to SDJMIMC Trust (R) Shravanabelagola.

Rs, 10 Lakhs to Swachh Bharat Kosh set-up by the Central Government for the promotion of sanitation.

Rs, 6.45 Lakhs to Rotary Foundation, Charitable Organization.

RISK MANAGEMENT:

The Company has constituted a Risk Management Committee. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Board's Report. The Company has a Risk Management Policy to identify, evaluate, monitor and mitigate risks. The risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY:

The Company has an Internal Audit Department headed by Chief Internal Auditor. The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, the Management undertake corrective action in their respective areas and thereby strengthen the controls.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS:

The Company has in place adequate internal financial controls with reference to financial statements to provide reasonable assurances with regard to recording and providing financial information complying with the applicable accounting standards.

VIGIL MECHANISM:

The Company has Vigil Mechanism administered by the Audit Committee. The Vigil Mechanism Policy is posted on the Company's website.

CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There is no change in the nature of business during the year under review.

SIGNIFICANT MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS/ TRIBUNALS, IF ANY:

There are no significant material orders passed by the Regulators/Courts/ Tribunals which would impact the going concern status of your Company and its future operations.

DIRECTORS:

Pursuant to the provisions of Section 149 of the Act, all the Independent Directors of the Company have submitted a declaration that each of them meets the criteria of independence as per provisions of the Companies Act, 2013, rules there under and SEBI (LODR) 2015 and there has been no change in the circumstances which may affect their status as Independent Director during the year.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company are - Mr. Rajas R. Doshi, Chairman & Managing Director, Mr. Mayur R. Doshi, Executive Director, Mr. M. S. Rajadhyaksha, Chief Financial Officer and Mr. S. M. Mandke, Company Secretary.

Remuneration and other details of the Key Managerial Personnel of the Company for the financial year ended 31^st March, 2018 are provided in the Extract of the Annual Return forming part of this report.

The Board of Directors have re-appointed Mr. Rajas R. Doshi as Managing Director designated as Chairman and Managing Director for a further period of 5 years from 1^st July, 2018 to 30^th June, 2023. The details of his remuneration and terms and conditions are given in the Notice and Explanatory Statement.

As per Section 152 of the Companies Act, 2013, Ms. Jyoti R Doshi, Director. of the Company, retire by rotation at the ensuing AGM and offers herself for re-appointment.

Profile of Ms. Jyoti R Doshi is given in the Notes to the notice of AGM of the Company.

As per Notification dated 9^th May 2018 issued by SEBI amending certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, it requires passing of special resolution by the Company for continuation of Non-Executive Director who has attained the age of seventy five years. This amendment will come into effect from 1^st April, 2019. Mr. N. Balakrishnan and Mr. P D. Kelkar, Non-Executive Independent Directors are 80 years and 84 years respectively. They were appointed as Independent Directors w.e.f. 16^th March 2015 and 4^th August, 2015 respectively for a period of 5 years. Their tenure as Independent Directors is upto 15^th March, 2020 and 3^rd August, 2020 respectively. The Board feels their continuation as Independent Directors of the Company will be in the interest of the Company and has therefore recommended their continuation as Independent Directors till their foretasted term even though they have attained the age of 75 years. The special resolutions to that effect is included in the notice of the ensuing AGM. The Board recommends the same to the Members.

BOARD COMMITTEES:

The Board of Directors of your Company had constituted various Committees and approved their terms of reference/role in compliance with the provisions of the Companies Act, 2013 and SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, CSR Committee and Risk Management Committee.

The composition of the Audit Committee as given in the Corporate Governance Report is in alignment with Section 177 of the Companies Act, 2013, Rules thereunder and Listing Regulations. The members of the Audit Committee are financial literate and have experience in financial management. All the recommendations made by the Audit Committee have been accepted by the Board of Directors.

PERFORMANCE EVALUATION:

Pursuant to the provisions of Section 134(3)(p), 149(8), Schedule IV of the Companies Act, 2013, SEBI (LODR) Regulations, 2015 and the circular dated 5^th January, 2017 issued by SEBI with respect to Guidance Note on Board Evaluation, annual performance evaluation of the Board as well as of the Audit Committee, Nomination & Remuneration Committee, Stakeholders Relationship Committee, CSR and Risk Management Committees and individual Directors have been carried out by the Board.

The performance evaluation of the Independent Directors was carried out by the entire Board and the performance evaluation of the Chairman, Non-Independent Directors and Board was carried out by the Independent Directors.

INDEPENDENT DIRECTORS’ MEETING:

In terms of Section 149, Schedule IV of the Companies Act, 2013 and SEBI (LODR) Regulations 2015, the Independent Directors met on 28^th March 2018 without the attendance of Non-Independent Directors and Members of Management of the Company and reviewed the:

i) performance of Non-Independent Directors and the Board of Directors of the Company as a whole;

ii) performance of the Chairman of the Company, taking into account the views of Executive and Non-Executive Directors;

iii) assessed the quality, quantity and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All the Independent Directors were present at the meeting.

FAMILIARISATION PROGRAMME OF INDEPENDENT DIRECTORS:

In compliance with the requirements of SEBI (LODR) Regulations 2015, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibilities as Directors, the operations of the Company, business overview etc.

The details of the familiarization program is explained in the Corporate Governance Report and the same is also available on the website of the Company.

REMUNERATION POLICY:

The Board on the recommendation of the Nomination & Remuneration Committee had formulated and adopted the Remuneration policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is annexed as “Annexure B”.

NUMBER OF MEETINGS:

Annual programme of Board and Committee meetings is circulated in advance to the Directors.

During the year four Board and Audit Committee meetings were held

i.e. on 18^th May, 2017, 12th September 2017, 7^th December, 2017 and 8^th February, 2018.

The Composition of Audit Committee is as under:

Further one meeting each of Nomination & Remuneration Committee and Stakeholders Relationship Committee and two meetings of Corporate Social Responsibility Committee were held, the details of which are given in the Corporate Governance Report. The maximum gap between any two consecutive meetings of the Board did not exceed one hundred and twenty days.

DIRECTORS’ RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 of the Companies Act,

2013, the Directors state that:

a) in the preparation of the Annual Accounts for the financial year ended 31^st March, 2018, the applicable Accounting Standards and Schedule

III of the Companies Act, 2013 have been followed along with proper explanation relating to material departures, if any.

b) appropriate accounting policies have been selected and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2018 and of the profit of the Company for the year ended on that date;

c) proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Annual Accounts have been prepared on a going concern basis;

e) internal financial controls have been laid down for the Company and that such internal financial controls are adequate and are operating effectively; and

f) proper systems to ensure compliance with the provisions of all applicable laws have been devised and such systems are adequate and operating effectively.

AUDITORS’ REPORT:

The Auditors' Report to the Members on the Financial Statements Ind AS of the Company for the financial year ended 31⁸¹ March, 2018 is a part of this Annual Report. The Auditors Report for the financial year 31^st March, 2018 does not contain any qualification, reservation or adverse remark.

AUDITORS:

STATUTORY AUDITORS:

The Members of the Company had at the 91^st AGM held on 10^th July, 2017 appointed M/s. Deloitte Haskins & Sells LLP, Chartered Accountants, Mumbai, bearing ICAI Firm Registration No.117366W/W-100018, as Statutory Auditors of the Company to hold office from the conclusion of 91^st Annual General Meeting (AGM) till the conclusion of 96^th Annual General Meeting (subject to ratification of the appointment by the Members at every AGM held after the aforesaid AGM).

Rule 3(7) of the Companies (Audit and Auditors) Rules, 2014 states that the appointment of the Auditor shall be subject to ratification by the Members at the every AGM held after the aforesaid AGM.

M/s. Deloitte Haskins & Sells LLP, Chartered Accountants have confirmed their eligibility and qualification as required under Section 139, 141 and other applicable provisions of the Companies Act, 2013, and Rules made there under.

COST AUDITOR:

The Board of Directors have appointed Mr. Vikas Vinayak Deodhar, Cost Accountant, Mumbai, Membership No. 3813 as Cost Auditor of the Company for the financial year 2018-19 to conduct the audit of the cost records of applicable business of the Company on a remuneration of ' 1,20,000 /- also payment of GST as applicable and reimbursement of out of pocket expenses and/or travelling expenses as may be incurred by him, subject to ratification and confirmation of remuneration by the shareholders at the ensuing AGM.

SECRETARIAL AUDITOR:

Secretarial Audit for the financial year 2017-18 was conducted by Mr. J.

H. Ranade, Company Secretary in practice and Partner of M/s. JHR & Associates, Company Secretaries, pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Report of the Secretarial Auditor is annexed as “Annexure C”. There are no qualifications, reservations or adverse remarks made by the Secretarial Auditor in their Report.

The Board of Directors has appointed M/s. JHR & Associates, Company Secretaries as the Secretarial Auditor to conduct Audit of secretarial records of the Company for the financial year 2018-19.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is annexed as “Annexure D”.

RELATED PARTY TRANSACTIONS:

All related party transactions entered into during the financial year were in the ordinary course of business and on an arm's length basis except the transaction(s) with Ms. Anima B. Kapadia, Director and Sole Proprietor of Daphtary Ferreira & Divan, Solicitors and Advocates of the Company for rendering legal services to the Company which was approved by the Audit Committee and Board. The details are given in Form AOC-2 which is annexed as “Annexure E”. There are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel, their relatives which may have a potential conflict with the interest of the Company at large.

All Related Party transactions were placed before the Audit Committee as also the Board for approval. A statement of all related party transactions was presented before the Audit Committee on quarterly basis, specifying the nature, value and other related terms and conditions of the transactions. Further details of the transactions with related parties are provided in the Company's financial statements in accordance with the Accounting Standards. The Company has a Related Party Transaction Policy for identifying, monitoring and approving of such transactions.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company's website.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return as on 31^st March, 2018 in Form MGT-9 is annexed herewith as “Annexure F”.

PARTICULARS OF EMPLOYEES:

The information required under Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 read with Section 197 of the Act is attached as “Annexure G”.

INDUSTRIAL RELATIONS:

The Company is having total strength of 1,433 permanent employees as on 31^st March, 2018 working at various locations such as Factories / Projects/ Projects Offices/Head Office and Research & Development Department, Mumbai.

Industrial relations with the workmen at various units of the Company were by and large remained peaceful and cordial.

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE:

During the year under review, there were no complaints filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. Internal Complaints Committees have been set up to redress complaint(s) regarding sexual harassment.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

During the year under review, the Company has transferred Rs, 5,13,170/towards unclaimed dividend for the financial year 2009-10 to IEPF. In terms of Section 124(6) and IEPF Rules, 2016 of the Companies Act, 2013, the Company has transferred 2,72,002 Equity Shares to IEPF Authority of those shareholders who did not claim dividend for seven consecutive years. Further unclaimed matured fixed deposit(s) and unclaimed interest of Rs, 67,456/- on fixed deposits were also transferred to Investor Education and Protection Fund, in compliance with the provisions of Section 125 of the Companies Act, 2013, which remained unclaimed by the fixed deposit holders of the Company for a period of 7 years from the date they became due for payment.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company. The Company does not have ESOS/ESOP Scheme for its employees/Directors.

3. No fraud has been reported by the auditors to the Audit Committee or the Board.

4. The Company does not have any scheme or provision of money for the purchase ot its own shares by employees / Directors or by trustees for the benefit of the employees or Directors.

5. Applicable Secretarial Standards i.e SS-1 and SS-2, relating to 'Meetings of the Board of Directors' and 'General Meetings' respectively have been followed by the Company.

ACKNOWLEDGEMENTS:

Your Directors record their gratitude to the Shareholders, Customers, Bankers, Government Departments, Vendors, Sub-contractors and all other Stakeholders for their continued support and co-operation during the year.

Your Directors also wish to place on record their appreciation of the services rendered by the employees of the Company.

Wishing you all good health, wealth and prosperity.

For and on behalf of the Board of Directors,

Rajas R. Doshi

Chairman & Managing Director

Registered Office:

Construction House, 2^nd floor,

5, Walchand Hirachand Road,

Ballard Estate,

Mumbai - 400 001

Date : 23^rd May, 2018