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Indian Hume Pipe Company Ltd.

BSE: 504741 Sector: Infrastructure
NSE: INDIANHUME ISIN Code: INE323C01030
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VOLUME 836
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OPEN 280.00
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VOLUME 836
52-Week high 591.00
52-Week low 238.00
P/E 21.04
Mkt Cap.(Rs cr) 1,329
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Hume Pipe Company Ltd. (INDIANHUME) - Director Report

Company director report

TO

THE MEMBERS

Your Directors are pleased to present to you the Annual Report on the businessoperations of the Company together with the Audited Financial Statements of Accounts forthe Financial Year ended 31st March 2018.

FINANCIAL RESULTS: (As per IND AS)

(` in Lakhs)
Year Ended 31-03-2018 Year Ended 31-03-2017
Revenue from Operations 155138.25 181250.49
Profit Before Finance Cost Depreciation & Amortisation & Tax 15410.80 20923.81
Less: Finance Costs 4288.46 4570.62
Depreciation & Amortisation 1084.13 1052.69
Profit Before Tax 10038.21 15300.50
Less: Provision for Taxation 3431.94 5332.86
Net Profit After Tax 6606.27 9967.64
Add/(Less): Other Comprehensive Income 91.91 (15.45)
Total Comprehensive Income carried out to Other Equity 6698.18 9952.19

PERFORMANCE REVIEW:

Your Company's operations of its various projects under execution continued to beprofitable with continued efforts to reduce costs and improve yield as also bettering theproductivity levels.

During the year 2017-18 under review the Revenue from Operations is less at Rs.155138.25 Lakhs as compared to Rs. 181250.49 Lakhs of the previous year. The profitbefore tax for the year at Rs. 10038.21 Lakhs after considering sales tax demands ofprior years amounting to Rs. 3033 Lakhs was less as compared to Rs. 15300.50 Lakhs ofthe previous year. The profit after tax for the year at Rs. 6606.27 Lakhs was less ascompared to Rs. 9967.64 Lakhs of the previous year. This was due to less turnover becauseof less order inflow and some disruptions due to GST introduction.

No material changes and commitments have occurred after the close of the financial yeartill 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 facevalue of Rs. 2/- each (170%) for the financial year ended 31st March 2018 onpaid-up share capital of the Company as against Rs. 3.40 per equity share of face value ofRs. 2/- each for the previous financial year ended 31st March 2017. TheDividend subject to the approval of the Members at the 92nd Annual GeneralMeeting convened on 20th July 2018 will be paid on or after 24thJuly 2018 to those Members whose names appears in the Registered of Members as on thedate of Book Closure i.e. Tuesday 10th July 2018. The Dividend of Rs. 3.40per equity share of Rs. 2/- each together with Dividend Distribution Tax will amount toRs. 1985.79 Lakhs.

SHARE CAPITAL:

During the year the Company has increased the Authorised Share Capital of the Companyfrom Rs. 100000000/- (Ten Crores) divided into 50000000

Equity Shares of Rs. 2/- each to Rs. 200000000/- (Twenty Crores) divided into100000000 Equity Shares of Rs. 2/- each. The Issued Subscribed and Paid up Capitalstood at Rs. 968.94 Lakhs as on March 31 2018 consisting of 48447170 Equity shares ofRs. 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 maintainedsatisfactorily and optimum utilization of financial resources was achieved.

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

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

INCOME TAX ASSESSMENT:

The income tax assessment of your Company has been completed till assessment year2015-16. The appeals filed by the Company against the assessment orders for variousfinancial years are pending with the Income Tax Appellate Authorities and Bombay HighCourt. The amount of disallowance involved in various appeals is Rs. 18382.03 Lakhs. Themajor dispute is with regard to the execution of eligible infrastructure projects ofwater sewerage and irrigation. Out of the total disallowance the amount of Rs. 17996.21Lakhs pertains to the disallowance made u/s 80IA of the I.T. Act 1961. The balance amountof Rs. 385.82 Lakhs pertains to other items of disallowance such as sec. 14A disallowanceland valuation of Wadala property. The necessary provision for tax of Rs. 6221.31 Lakhshas been made in the accounts except for the disallowance made u/s 14A as the samedisallowance has been deleted in the previous years by the First and Second AppellateAuthority.

The appeals filed by the Income Tax Department are pending in the Bombay High Court forA.Y. 2003-04 A.Y. 2008-09 & A.Y. 2010-11. The issue involved for AY 2003-04 is claimof 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 byFinance 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 thereis no tax liability. The issue involved for the AY 2008-09 & A.Y. 2010-11 is withregard to the claim of disallowance of expenses u/s 14A of the I.T. Act 1961. The IncomeTax Appellate Tribunal had deleted the disallowance made u/s 14A of the I.T. Act 1961. Incase if this disallowance is confirmed by the Bombay High Court then the Company will haveto 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 Company's land at Hadapsar (Pune) Wadala (Mumbai) and Badarpur (NewDelhi) are at initial stages of obtaining development related approvals from the variousAuthorities.

CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION AND ANALYSIS REPORTS:

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

PUBLIC DEPOSITS:

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

An aggregate amount of Rs. 0.65 Lakhs representing 3 fixed deposits that had maturedthe last one being matured in February 2012 and all these 3 fixed deposits remainedunclaimed as at 31st March 2018. Since then no instructions for repayment ofany 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 Section186 of the Companies Act 2013 are given in the Financial Statements for the year ended 31stMarch 2018.

CORPORATE SOCIAL RESPONSIBILITY:

The Corporate Social Responsibility (CSR) Policy of the Company and the CSRprograms/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 CSRCommittee 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 thereunder theCompany has incurred CSR expenditure of Rs. 180.88 Lakhs for the financial year 2017-18 byway of corpus donation to Ratanchand Hirachand Foundation which had carried out CSRactivities 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.11Lakhs towards corpus donation to SDJMIMC Trust(R) Shravanabelagola.

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

Rs. 6.45 Lakhs to Rotary Foundation Charitable Organisation.

RISK MANAGEMENT:

The Company has constituted a Risk Management Committee. The details of Committee andits terms of reference are set out in the Corporate Governance Report forming part of theBoard's Report. The Company has a Risk Management Policy to identify evaluate monitorand mitigate risks. The risk framework defines the risk management approach across theenterprise 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. TheInternal Audit Department monitors and evaluates the efficacy and adequacy of internalcontrol system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function the Management undertake corrective action in their respective areas andthereby strengthen the controls.

INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS:

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

VIGIL MECHANISM:

The Company has Vigil Mechanism administered by the Audit Committee. The VigilMechanism 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/ Tribunalswhich 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 ofthe Company have submitted a declaration that each of them meets the criteria ofindependence as per provisions of the Companies Act 2013 rules thereunder and SEBI(LODR) 2015 and there has been no change in the circumstances which may affect theirstatus as Independent Director during the year.

Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are - Mr. Rajas R. Doshi Chairman & ManagingDirector Mr. Mayur R. Doshi Executive Director Mr. M. S. Rajadhyaksha Chief FinancialOfficer and Mr. S. M. Mandke Company Secretary.

Remuneration and other details of the Key Managerial Personnel of the Company for thefinancial year ended 31st March 2018 are provided in the Extract of the AnnualReturn forming part of this report.

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

As per Section 152 of the Companies Act 2013 Ms. Jyoti R Doshi Director. of theCompany 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 9th May 2018 issued by SEBI amending certainprovisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 it requires passing of special resolution by the Company for continuation ofNon-Executive Director who has attained the age of seventy five years. This amendment willcome into effect from 1st April 2019. Mr. N. Balakrishnan and Mr. P. D.Kelkar Non-Executive Independent Directors are 80 years and 84 years respectively. Theywere appointed as Independent Directors w.e.f. 16th March 2015 and 4thAugust 2015 respectively for a period of 5 years. Their tenure as Independent Directorsis upto 15th March 2020 and 3rd August 2020 respectively. TheBoard feels their continuation as Independent Directors of the Company will be in theinterest of the Company and has therefore recommended their continuation as IndependentDirectors till their aforestated 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. TheBoard recommends the same to the Members.

BOARD COMMITTEES:

The Board of Directors of your Company had constituted various Committees and approvedtheir terms of reference/role in compliance with the provisions of the Companies Act 2013and SEBI Listing Regulations viz. Audit Committee Nomination and Remuneration CommitteeStakeholders Relationship Committee CSR Committee and Risk Management Committee. Thecomposition of the Audit Committee as given in the Corporate Governance Report is inalignment with Section 177 of the Companies Act 2013 Rules thereunder and ListingRegulations. The members of the Audit Committee are financial literate and have experiencein financial management. All the recommendations made by the Audit Committee have beenaccepted by the Board of Directors.

PERFORMANCE EVALUATION:

Pursuant to the provisions of Section 134(3)(p) 149(8) Schedule IV of the CompaniesAct 2013 SEBI (LODR) Regulations 2015 and the circular dated 5th January2017 issued by SEBI with respect to Guidance Note on Board Evaluation annual performanceevaluation of the Board as well as of the Audit Committee Nomination & RemunerationCommittee Stakeholders Relationship Committee CSR and Risk Management Committees andindividual Directors have been carried out by the Board.

The performance evaluation of the Independent Directors was carried out by the entireBoard and the performance evaluation of the Chairman Non-Independent Directors and Boardwas 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 28th March 2018 without theattendance of Non-Independent Directors and Members of Management of the Company andreviewed the: i) performance of Non-Independent Directors and the Board of Directors ofthe Company as a whole; ii) performance of the Chairman of the Company taking intoaccount the views of Executive and Non-Executive Directors; iii) assessed the qualityquantity and timeliness of flow of information between the Management and the Board thatis 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 hasput in place a familiarization program for Independent Directors to familiarize them withtheir role rights and responsibilities as Directors the operations of the Companybusiness overview etc.

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

REMUNERATION POLICY:

The Board on the recommendation of the Nomination & Remuneration Committee hadformulated and adopted the Remuneration policy for selection and appointment of DirectorsSenior 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 theDirectors.

During the year four Board and Audit Committee meetings were held i.e. on 18thMay 2017 12th September 2017 7th December 2017 and 8th February2018.

The Composition of Audit Committee is as under:

Sr. No. Name of the Member Category
1 Mr. Rajendra M. Gandhi Chairman
2 Mr. Rameshwar D. Sarda Member
3 Mr. Vijay Kumar Jatia Member
4 Mr. P. D. Kelkar Member

Further one meeting each of Nomination & Remuneration Committee and StakeholdersRelationship Committee and two meetings of Corporate Social Responsibility Committee wereheld the details of which are given in the Corporate Governance Report. The maximum gapbetween any two consecutive meetings of the Board did not exceed one hundred and twentydays.

DIRECTORS' RESPONSIBILITY STATEMENT:

In accordance with the provisions of Section 134 of the Companies Act 2013 theDirectors state that: a) in the preparation of the Annual Accounts for the financial yearended 31st March 2018 the applicable Accounting Standards and Schedule III ofthe Companies Act 2013 have been followed along with proper explanation relating tomaterial departures if any. b) appropriate accounting policies have been selected andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give a true and fair view of the state of affairs of the Company as at 31stMarch 2018 and of the profit of the Company for the year ended on that date; c) properand sufficient care has been taken for the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act 2013 for safeguarding the assets ofthe Company and for preventing and detecting fraud and other irregularities; d) the AnnualAccounts have been prepared on a going concern basis; e) internal financial controls havebeen laid down for the Company and that such internal financial controls are adequate andare operating effectively; and f) proper systems to ensure compliance with the provisionsof all applicable laws have been devised and such systems are adequate and operatingeffectively.

AUDITORS' REPORT:

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

AUDITORS:

STATUTORY AUDITORS:

The Members of the Company had at the 91st AGM held on 10th July2017 appointed M/s. Deloitte Haskins & Sells LLP Chartered Accountants Mumbaibearing ICAI Firm Registration No.117366W/W-100018 as Statutory Auditors of the Companyto hold office from the conclusion of 91st Annual General Meeting (AGM) tillthe conclusion of 96th Annual General Meeting (subject to ratification of theappointment 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 appointmentof the Auditor shall be subject to ratification by the Members at the every AGM held afterthe aforesaid AGM.

M/s. Deloitte Haskins & Sells LLP Chartered Accountants have confirmed theireligibility and qualification as required under Section 139 141 and other applicableprovisions of the Companies Act 2013 and Rules made thereunder.

COST AUDITOR:

The Board of Directors have appointed Mr. Vikas Vinayak Deodhar Cost AccountantMumbai Membership No. 3813 as Cost Auditor of the Company for the financial year 2018-19to conduct the audit of the cost records of applicable business of the Company on aremuneration of

Rs. 120000 /- also payment of GST as applicable and reimbursement of out of pocketexpenses and/or travelling expenses as may be incurred by him subject to ratification andconfirmation 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. RanadeCompany Secretary in practice and Partner of M/s. JHR & Associates CompanySecretaries pursuant to the provisions of Section 204 of the Companies Act 2013 and theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014. The Reportof the Secretarial Auditor is annexed as "Annexure C". There are noqualifications reservations or adverse remarks made by the Secretarial Auditor in theirReport.

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

ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Companies Act 2013 read withthe Companies (Accounts) Rules 2014 is annexed as "Annexure D".

RELATED PARTY TRANSACTIONS:

All related party transactions entered into during the financial year were in theordinary course of business and on an arm's length basis except the transaction(s) withMs. Anima B. Kapadia Director and Sole Proprietor of Daphtary Ferreira & DivanSolicitors and Advocates of the Company for rendering legal services to the Company whichwas approved by the Audit Committee and Board. The details are given in Form AOC-2 whichis annexed as "Annexure E". There are no materially significant related partytransactions made by the Company with the Promoters Directors Key Managerial Personneltheir relatives which may have a potential conflict with the interest of the Company atlarge.

All Related Party transactions were placed before the Audit Committee as also the Boardfor approval. A statement of all related party transactions was presented before the AuditCommittee on quarterly basis specifying the nature value and other related terms andconditions of the transactions. Further details of the transactions with related partiesare provided in the Company's financial statements in accordance with the AccountingStandards. The Company has a Related Party Transaction Policy for identifying monitoringand approving of such transactions.

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

EXTRACT OF ANNUAL RETURN:

The details formring part of the extract of the Annual Return as on 31stMarch 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 ofManagerial Personnel) Rules 2014 read with Section 197 of the Act is attached as"Annexure G".

INDUSTRIAL RELATIONS:

The Company is having total strength of 1433 permanent employees as on 31stMarch 2018 working at various locations such as Factories / Projects/ ProjectsOffices/Head Office and Research & Development Department Mumbai.

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

PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE:

During the year under review there were no complaints filed pursuant to the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 and theRules thereunder. 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. 513170/- towardsunclaimed dividend for the financial year 2009-10 to IEPF. In terms of Section 124(6) andIEPF Rules 2016 of the Companies Act 2013 the Company has transferred 272002 EquityShares to IEPF Authority of those shareholders who did not claim dividend for sevenconsecutive years. Further unclaimed matured fixed deposit(s) and unclaimed interest ofRs. 67456/- on fixed deposits were also transferred to Investor Education and ProtectionFund in compliance with the provisions of Section 125 of the Companies Act 2013 whichremained unclaimed by the fixed deposit holders of the Company for a period of 7 yearsfrom the date they became due for payment.

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of thefollowing 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. TheCompany 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 itsown shares by employees / Directors or by trustees for the benefit of the employees orDirectors.

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

ACKNOWLEDGEMENTS:

Your Directors record their gratitude to the Shareholders Customers BankersGovernment Departments Vendors Sub-contractors and all other Stakeholders for theircontinued support and co-operation during the year. Your Directors also wish to place onrecord 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 2nd floor
5 Walchand Hirachand Road
Ballard Estate Mumbai - 400 001
Date : 23rd May 2018

ANNEXURE ‘A' TO BOARD'S REPORT CSR POLICY

Introduction:-

A. In line with Section 135 of the Act and Companies (Corporate Social ResponsibilityPolicy) Rules 2014 read with Schedule VII to the Act the Company has formulated itsCorporate Social Responsibility Policy (CSR Policy) for continuing its charitableactivities. The Company undertakes its CSR activities programmes etc. through RatanchandHirachand Foundation (the Foundation) and /or any other Trust / Section 8 Company and/ oron its own. The Company's CSR activities are independent of the normal conduct of itsbusiness. The CSR programs projects and activities to be carried out in this regard bythe Company through Ratanchand Hirachand Foundation and / or any other Trust / Section 8Company and / or on its own are enumerated as under:

B. 1. Providing educational grant / aid to needy students and institutions fundingsalaries of teachers medical aid to the patients as well as to Hospitals CharitableTrusts Institutions NGOs and donations of costly medical equipments to Municipal /PublicHospitals across the country.

2. Promoting education including special education and employment enhancement vocationskills especially among children women elderly and differently abled and livelihoodenhancement projects.

3. Promoting preventive health care safe drinking water sanitation etc.

4. Ensuring environmental sustainability ecological balance and conservation ofnatural resources use of solar energy rain water harvesting etc.

5. Undertaking all other activities projects and programs as per Section 135Companies (CSR) Rules 2014 and the Schedule VII of the Act as amended from time to time.

The CSR Committee and the Board of Directors will monitor the programs / projects andactivities undertaken through the above Foundation on behalf of the Company and / or onits own. Further the surplus arising out of the CSR programs or projects or activitiesshall not form part of the business profit of the Company.

C. 1. The CSR activities does not include the activities undertaken in pursuance ofnormal course of business of the Company.

2. The surplus arising out of the CSR projects or programs or activities shall not formpart of the business profit of the Company.

3. The CSR projects or programs or activities that benefit only the employees of theCompany and their families shall not be considered as CSR activities in accordance withSection 135 of the Act.

4. Companies may build CSR capacities of their own personnel as well as those of theirImplementing agencies through Institutions with established track records of at leastthree financial years but such expenditure shall not exceed five percent of total CSRexpenditure of the Company in one financial year.

D. Expenditure:-

CSR expenditure shall include all expenditure including contribution to corpus or onprojects or programs relating to CSR activities approved by the Board on therecommendation of CSR Committee in line with the activities programs and projects withinthe purview of the Act Rules thereon and the Schedule VII. A specific budget would beallocated to the projects to be undertaken for each financial year. These projects /activities will include educational grants / aid preventive health care financial aid topatients donations of costly medical equipments to Municipal / Public Hospitals. Furtherestablished Trusts Institutions NGOs etc. may be given donation financial aids supportfor undertaking CSR activities after taking into consideration various key parameters liketheir credibility capacity past performances established track records etc. TheCompany would endeavour to spend in every financial year atleast 2% of the average netprofit through the Foundation.

E. Reporting:-

The Board's report will include all activities programs and projects on CSR containingparticulars specified in the Annexure to the said CSR Rules 2014.

F. Management Commitment:-

The Board of Directors Management and all the employees would subscribe to thephilosophy of concern and care. We believe that we have a mission to walk on the path ofgenerosity and compassion in order to make a difference in the lives of the poor andsociety at large. This would be the cornerstone of our CSR Policy.

G. Display of CSR activities on Company's website:-

The Company will disclose contents of its CSR Policy in the Annual Report and alsodisplay it on the website of the Company.

ANNEXURE ‘B' TO BOARD'S REPORT

Remuneration Policy of the Company

Pursuant to Section 178 of the Companies Act 2013 and Clause 49 of the ListingAgreement the Board of Directors of every listed Company shall constitute the Nominationand Remuneration Committee. The Company already constituted Remuneration Committeecomprising of three Non-Executive Independent Directors and one Non-ExecutiveNon-Independent Director as required under Listing Agreement. In order to align with theprovisions of the Companies Act 2013 and the amended Listing Agreement from time to timethe Board on 27th May 2014 changed the nomenclature of the "RemunerationCommittee" as "Nomination and Remuneration Committee" and re-constitutedthe Committee with three Non-Executive Independent Directors and one non-executiveNon-Independent Director as Members of the Committee.

The present composition of the "Nomination and Remuneration Committee" of theCompany is as below:-

1) Mr. N. Balakrishnan Chairman Independent Director
2) Ms. Anima B. Kapadia Member Non-Independent Director
3) Mr. Vijay Kumar Jatia Member Independent Director
4) Mr. Rajendra M. Gandhi Member Independent Director
5) Mr. Rajas R. Doshi Member Non-Independent Executive Director

This Committee and the Policy is formulated in compliance with Section 178 of theCompanies Act 2013 read along with the applicable Rules thereto and erstwhile Clause 49of the Listing Agreement.

II. OBJECTIVE

The key objectives of the Committee would be:

a) To guide the Board in relation to the appointment and removal of Directors KeyManagerial Personnel (KMP) and Senior Management.

b) To evaluate the performance of the members of the Board and provide necessary reportto the Board for further evaluation.

c) To recommend to the Board on Remuneration payable to the Directors KMP and SeniorManagement.

d) To provide to KMP and Senior Management reward linked directly to their effortperformance dedication and achievement relating to the Company's operations.

e) To retain motivate and promote talent and to ensure long term sustainability oftalented managerial persons and create competitive advantage.

III. DEFINITIONS

- "Act" means the Companies Act 2013 and Rules framed thereunder as amendedfrom time to time.

- "Board" means Board of Directors of the Company.

- "Company" means "The Indian Hume Pipe Company Limited."

- "Directors" mean Directors of the Company.

- "Independent Director" means a Director referred to in Section 149 (6) ofthe Companies Act 2013.

- "Key Managerial Personnel" means:

(i) Chief Executive Officer or the Managing Director or the Manager

(ii) Company Secretary

(iii) Whole-time Director

(iv) Chief Financial Officer and

(v) Such other officer as may be prescribed.

- "Nomination and Remuneration Committee" shall mean a Committee of Board ofDirectors of the Company constituted in accordance with the provisions of Section 178 ofthe Companies Act 2013 and the erstwhile Listing Agreement.

- "Policy or This Policy" means "Nomination and RemunerationPolicy."

- "Remuneration" means any money or its equivalent given or passed to anyperson for services rendered by him and includes perquisites as defined under theIncome-tax Act 1961.

- "Senior Management" means personnel of the Company who are members of itscore management team excluding Board of Directors. This would include all members ofmanagement one level below the Executive Directors including all the functional heads.

IV. INTERPRETATION

Terms that have not been defined in this Policy shall have the same meaning assigned tothem in the Companies Act 2013 erstwhile Listing Agreement and/or any other SEBIRegulation(s) as amended from time to time.

V. GUIDING PRINCIPLES

The Policy ensures that

- The level and composition of remuneration is reasonable and sufficient to attractretain and motivate Directors of the quality required to run the Company successfully

- Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks and

- Remuneration to Directors KMP and Senior Management involves a balance between fixedand incentive pay reflecting short and long term performance objectives appropriate to theworking of the Company and its goals.

VI. ROLE OF THE COMMITTEE

The role of the Committee inter alia will be the following:

a) To identify persons who are qualified to become Directors and who may be appointedin Senior Management in accordance with the criteria laid down in this policy.

b) To formulate criteria for evaluation of Independent Directors and the Board.

c) To recommend to the Board the appointment and removal of Directors and SeniorManagement.

d) To carry out evaluation of every Director's performance.

e) To formulate a criteria for determining qualifications positive attributes andindependence of a Director.

f) To recommend to the Board policy relating to remuneration for Directors KMP andSenior Management.

g) To devise a policy on Board diversity.

h) To ensure that level and composition of remuneration is reasonable and sufficientrelationship of remuneration to performance is clear and meets appropriate performancebenchmarks.

i) To carry out any other function as is mandated by the Board from time to time and /or enforced by any statutory notification amendment or modification as may beapplicable.

j) To perform such other functions as may be necessary or appropriate for theperformance of its duties.

VII. MEMBERSHIP

a) The Committee shall comprise at least three (3) Directors all of whom shall beNon-Executive Directors and at least half shall be Independent.

b) The Board shall reconstitute the Committee as and when required to comply with theprovisions of the Companies Act 2013 and applicable statutory requirement.

c) Minimum two (2) members shall constitute a quorum for the Committee meeting.

d) Membership of the Committee shall be disclosed in the Annual Report.

e) Term of the Committee shall be continued unless terminated by the Board ofDirectors.

VIII. CHAIRMAN

a) Chairman of the Committee shall be an Independent Director.

b) Chairperson of the Company may be appointed as a member of the Committee but shallnot Chair the Committee.

c) In the absence of the Chairman the members of the Committee present at the meetingshall choose one amongst them to act as Chairman.

d) Chairman of the Nomination and Remuneration Committee could be present at the AGM ormay nominate some other member to answer the shareholders' queries.

IX. FREQUENCY OF MEETINGS

The meeting of the Committee shall be held at such intervals as may be required.

X. COMMITTEE MEMBERS' INTERESTS

a) A member of the Committee is not entitled to be present when his or her ownremuneration is discussed at a meeting or when his or her performance is being evaluated.

b) The Committee may invite such executives as it considers appropriate to be presentat the meetings of the Committee.

XI. VOTING

a) Matters arising for determination at Committee meetings shall be decided by amajority of votes of Members present and voting and any such decision shall for allpurposes be deemed a decision of the Committee.

b) In the case of equality of votes the Chairman of the meeting will have a castingvote.

XII. APPOINTMENT AND REMOVAL OF DIRECTOR KMP AND SENIOR MANAGEMENT

Appointment criteria and qualifications:

1. The Committee shall identify and ascertain the integrity qualification expertiseand experience of the person for appointment as Director KMP or at Senior Managementlevel and recommend to the Board his / her appointment.

2. A person should possess adequate qualification expertise and experience for theposition he / she is considered for appointment. The Committee has discretion to decidewhether qualification expertise and experience possessed by a person are sufficient /satisfactory for the concerned position.

3. The Company shall not appoint or continue the employment of any person as ManagingDirector/Whole-time Director/ Manager who has attained the age of seventy years. Providedthat the term of the person holding this position may be extended beyond the age ofseventy years with the approval of shareholders by passing a special resolution based onthe explanatory statement annexed to the notice for such motion indicating thejustification for extension of appointment beyond seventy years.

Term / Tenure:

1. Managing Director/Whole-time Director/Manager (Managerial Person): The Company shallappoint or re-appoint any person as its Managerial Person for a term not exceeding fiveyears at a time. No re-appointment shall be made earlier than one year before the expiryof term.

2. Independent Director:

- An Independent Director shall hold office for a term up to five consecutive years onthe Board of the Company and will be eligible for appointment on passing of a specialresolution by the Company and disclosure of such appointment in the Board's report.

- No Independent Director shall hold office for more than two consecutive terms butsuch Independent Director shall be eligible for appointment after expiry of three years ofceasing to become an Independent Director.

Provided that an Independent Director shall not during the said period of three yearsbe appointed in or be associated with the Company in any other capacity either directlyor indirectly. However if a person who has already served as an Independent Director for5 years or more in the Company as on 1st October 2014 or such other date asmay be determined by the Committee as per regulatory requirement he / she shall beeligible for appointment for one more term of 5 years only.

- At the time of appointment of Independent Director it should be ensured that numberof Boards on which such Independent Director Serves is restricted to seven listedcompanies as an Independent Director and three listed companies as an Independent Directorin case such person is serving as a Whole-time Director of a listed company.

Evaluation:

The Committee shall carry out evaluation of performance of every Director KMP andSenior Management at regular interval (yearly).

Removal:

Due to reasons for any disqualification mentioned in the Companies Act 2013 rulesmade thereunder or under any other applicable Act rules and regulations the Committeemay recommend to the Board with reasons recorded in writing removal of a Director KMPor Senior Management subject to the provisions and compliance of the said Act rules andregulations.

Retirement:

The Director KMP and Senior Management shall retire as per the applicable provisionsof the Companies Act 2013 and the prevailing policy of the Company. The Board will havethe discretion to retain the Director KMP Senior Management in the same position /remuneration or otherwise even after attaining the retirement age for the benefit of theCompany.

XIII. PROVISIONS RELATING TO REMUNERATION OF MANAGERIAL PERSON KMP AND SENIORMANAGEMENT General:

1. The remuneration / compensation / commission etc. to Managerial Person KMP andSenior Management Personnel will be determined by the Committee and recommended to theBoard for approval. The remuneration / compensation / commission etc. shall be subject tothe prior/post approval of the shareholders of the Company and Central Governmentwherever required.

2. The remuneration and commission to be paid to Managerial Person shall be as per thestatutory provisions of the Companies Act 2013 and the rules made thereunder for the timebeing in force.

3. Increments to the existing remuneration / compensation structure may be recommendedby the Committee to the Board which should be within the slabs approved by theShareholders in the case of Managerial Person. Increments will be effective from the dateof reappointment in respect of Managerial Person and 1st April in respect ofother employees of the Company.

4. Where any insurance is taken by the Company on behalf of its Managerial Person KMPand any other employees for indemnifying them against any liability the premium paid onsuch insurance shall not be treated as part of the remuneration payable to any suchpersonnel. Provided that if such person is proved to be guilty the premium paid on suchinsurance shall be treated as part of the remuneration.

Remuneration to Managerial Person KMP and Senior

Management:

1. Fixed pay:

Managerial Person KMP and Senior Management shall be eligible for a monthlyremuneration as may be approved by the Board on the recommendation of the Committee inaccordance with the statutory provisions of the Companies

Act 2013 and the rules made thereunder for the time being in force. The break-up ofthe pay scale and quantum of perquisites including employer's contribution to P. F.pension scheme medical expenses club fees etc. shall be decided and approved by theBoard on the recommendation of the Committee and approved by the shareholders and CentralGovernment wherever required.

2. Minimum Remuneration:

If in any financial year the Company has no profits or its profits are inadequatethe Company shall pay remuneration to its Managerial Person in accordance with theprovisions of Schedule V of the Companies Act 2013 and if it is not able to comply withsuch provisions with the prior approval of the Central Government.

3. Provisions for excess remuneration:

If any Managerial Person draws or receives directly or indirectly by way ofremuneration any such sums in excess of the limits prescribed under the Companies Act2013 or without the prior sanction of the Central Government where required he/she shallrefund such sums to the Company and until such sum is refunded hold it in trust for theCompany. The Company shall not waive recovery of such sum refundable to it unlesspermitted by the Central Government.

Remuneration to Non-Executive / Independent Director:

1. Remuneration / Commission:

The remuneration / commission shall be in accordance with the statutory provisions ofthe Companies Act 2013 and the rules made thereunder for the time being in force.

2. Sitting Fees:

The Non-Executive / Independent Director may receive remuneration by way of fees forattending meetings of Board or Committee thereof.

Provided that the amount of such fees shall not exceed the maximum amount as providedin the Companies Act 2013 per meeting of the Board or Committee or such amount as may beprescribed by the Central Government from time to time.

3. Limit of Remuneration / Commission:

Remuneration / Commission may be paid within the monetary limit approved byshareholders subject to the limit not exceeding 1% of the net profits of the Companycomputed as per the applicable provisions of the Companies Act 2013.

XIV. MINUTES OF COMMITTEE MEETING

Proceedings of all meetings must be minutes and signed by the Chairman of the saidmeeting or the Chairman of the next succeeding meeting. Minutes of the Committee meetingwill be tabled at the subsequent Board and Committee meeting.

XV. DEVIATIONS FROM THIS POLICY

Deviations on elements of this policy in extraordinary circumstances when deemednecessary in the interests of the Company will be made if there are specific reasons todo so in an individual case.

ANNEXURE ‘D' TO BOARD'S REPORT

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

[Section 134(3)(m) of The Companies Act 2013 read with Rule 8(3) of The Companies(Accounts) Rules 2014] DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGYTECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

DISCLOSURE OF PARTICULARS WITH RESPECT TO TECHNOLOGY ABSORPTION AS PER RULE 3(A) &3(B) (A) Conservation of Energy: I. The Steps Taken or impact on conservation of Energy:-

• Installed APFC panel board at IHP Yelhanka factory.

• Avoids power factor penalty

• Reduces maximum Demand

• Increases system capacity and reducing the losses.

• Improve the System Voltages.

• Energy Saving

• Installed LED Plant light at Kekri factory.

• Energy saving

II. The Steps taken by the company for utilizing alternate source of energy:-

Nil

III.The Capital investment on energy conservation equipments:-
Installation of 150 KVAR APFC Panel Board Rs. 170000/-
Installation of LED lamps Rs. 46000/-
Total - Rs. 216000/-

(B) TECHNOLOGY ABSORPTION:-

I. The efforts made toward technology absorption:-

• Automation in coating Batching plant is carried out at Dhule factory to improvethe Quality and Productivity.

• Imported and erected a spirally welded thin sheet cylinder fabrication machineat Kekri factory. With this the quality and quantity of cylinder fabrication workimproved.

II. The benefits derived like product improvement cost reduction product developmentor import substitution:-

• Erected a new heavy duty moulding machine to spin 2600 mm Dia RCC Pipes atYelhanka factory and also enhanced inner and outer cage making machine.

• 1700 and 1800 MM Dia PCCP Fabricated Expander dies and spacers design has beenchanged from casting to fabrication and trials are found satisfactory resulting inreduction in costs and manufacturing time.

• Under taken the work of modification of Chilamathur factory for increasing plantcapacity.

III. In case of imported technology (imported during the last five years reckoned fromthe beginning of the financial year) following information may be furnished.

a. Technology imported
b. Year of Import
c. Has technology been fully absorbed NIL
d. If not fully absorbed area which this has not taken place reasons therefore and future plans of action

IV. The expenditure incurred on Research and Development:-

The total expenditure on Research & Development during the year was Rs. 346.60Lakhs (0.22% of the turnover) as compared to Rs. 340.49 Lakhs (0.19% of the turnover) ofprevious year.

(C) FOREGIN EXCHANGE EARINGS & OUTGO:-

Earnings : Rs. Nil
Outgo : Rs. 215.08 Lakhs

 

For and on behalf of the Board of Directors
Place : Mumbai Rajas R. Doshi
Date : 23rd May 2018 Chairman & Managing Director

ANNEXURE ‘E' TO BOARD'S REPORT

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

Form for disclosure of particulars of contracts/arrangements entered into by thecompany with related parties referred to in sub-section (1) of Section 188 of theCompanies Act 2013 including certain arms length transactions under third proviso thereto

1. Details of contracts or arrangements or transactions not at arm's lengthbasis

(a) Name(s) of the related party and nature of relationship : Ms. Anima B. Kapadia Director and Sole Proprietress of M/s Daphtary Ferreira & Divan Solicitors and Advocates of the Company rendering legal services to the Company in the professional capacity as Advocate & Solicitor.
(b) Nature of contracts / arrangements / transactions : Rendering legal services to the Company in the professional capacity as Advocate & Solicitor
(c) Duration of the contracts / arrangements /transactions : Financial year 2017-18
(d) Salient terms of the contracts or arrangements or transactions including the value if any : Legal services rendered on the legal matters referred to Ms. Kapadia
(e) Justification for entering into such contracts or arrangements or transactions : Professional services availed in the capacity as one of the Advocates and Solicitors of the Company having 42 years experience in legal area.
(f) Date(s) of approval by the Board : 12th September 2017 7th December 2017 and 23rd May 2018
(g) Amount paid as advances if any : No advance paid. Legal fees Bills during financial year 2017-18 - Rs. 2395000/- plus Service Tax/GST. Total including Service Tax /GST Rs. 2826100/-.
(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188 of the Companies Act 2013. : N. A.
2. Details of material contracts or arrangement or transactions at arm's length basis
(a) Name(s) of the related party and nature of relationship
(b) Nature of contracts / arrangements / transactions
(c) Duration of the contracts / arrangements / transactions
(d) Salient terms of the contracts or arrangements or transactions including the value if any NIL
(e) Date(s) of approval by the Board if any;
(f) Amount paid as advances if any;

 

For and on behalf of the Board of Directors
Place : Mumbai Rajas R. Doshi
Date : 23rd May 2018 Chairman & Managing Director

ANNEXURE ‘G' TO BOARD'S REPORT

PARTICULARS OF EMPLOYEES PURSUANT TO SECTION 197(12) OF THE COMPANIES ACT 2013 READWITH RULE 5(1) OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL)RULES 2014 FOR THE FINANCIAL YEAR ENDED 31ST MARCH 2018 (i) The ratio ofremuneration of each Director to the median employee's remuneration of the Company.

Sl. No. Name of the Directors Total Remuneration Ratio of Remuneration of Director to Median Remuneration
a. Mr. Rajas R. Doshi 54922459 95.26
Chairman & Managing Director
b. Mr. Mayur R. Doshi 31280583 54.25
Executive Director
c. Mr. Ajit Gulabchand 1040000 1.80
Independent Director
d. Ms. Jyoti R. Doshi 1020000 1.77
Non- Executive Director
e. Mr. Rajendra M. Gandhi 1240000 2.15
Independent Director
f. Mr. Rameshwar D. Sarda 1300000 2.25
Independent Director
g. Mr. N. Balakrishnan 1080000 1.87
Independent Director
h. Ms. Anima B. Kapadia 960000 1.67
Non-Executive Director
i. Mr. Vijay Kumar Jatia 1240000 2.15
Independent Director
j. Mr. P. D. Kelkar 1260000 2.19
Independent Director

Notes:

1) Median remuneration for the financial year 2017-18 is Rs. 576572/-.

2) The remuneration of directors other than the Managing Director and ExecutiveDirector includes Sitting Fees.

(ii) The percentage increase / decrease in remuneration of each Director ChiefFinancial Officer Chief Executive Officer Company Secretary of the Company as on 31stMarch 2018.

Sl. No. Name of the Directors/CFO/ CEO/Company Secretary Total Remuneration Increase / Decrease
(%)
a. Mr. Rajas R. Doshi 54922459 - 5.63
Chairman & Managing Director
b. Mr. Mayur R. Doshi 31280583 7.33
Executive Director
c. Mr. Ajit Gulabchand 1040000 85.71
Independent Director
d. Ms. Jyoti R. Doshi 1020000 59.38
Non- Executive Director
e. Mr. Rajendra M. Gandhi 1240000 47.62
Independent Director
f. Mr. Rameshwar D. Sarda 1300000 54.76
Independent Director
g. Mr. N. Balakrishnan 1080000 50.00
Independent Director
h. Ms. Anima B. Kapadia 960000 50.00
Non-Executive Director
i. Mr. Vijay Kumar Jatia 1240000 47.62
Independent Director
j. Mr. P. D. Kelkar 1260000 57.50
Independent Director
k. Mr. M. S. Rajadhyaksha 3817890 12.59
Chief Financial Officer
l. Mr. S. M. Mandke 3459552 -1.63
Company Secretary

(iii) The percentage increase in the median remuneration of employees in the financialyear 2017-18.

5.72 %.

(iv) The number of permanent employees on the rolls of the Company as on 31.03.2018.

1433 employees.

(v) Average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last financial year and its comparison with the percentileincrease in the managerial remuneration and justification thereof and point out if thereare any exceptional circumstances for increase in the managerial remuneration.

Average percentage increase already made in the salaries of employees other thanthe managerial personnel in the last financial year: 4.26% Average percentageincrease/decrease in the managerial remuneration:

Managerial personnel 2017-18 2016-17 Increase/Decrease %
Remuneration of Managing Director 54922459 58199717 -5.63
Remuneration of Executive Director 31280583 29145345 7.33

(vi) It is hereby affirmed that the remuneration paid is as per the RemunerationPolicy.