DIRECTORS' REPORT

Dear Members,

Your Directors are pleased to presents the Ninety ninth Annual Report together with the Audited Balance Sheet and Profit & Loss Account for the year ended 31st March, 2015

Operating and Financial Performance:

During the year under review, total revenue marginally increased over the previous year, i.e. from Rs. 22679 lacs to Rs. 23947 lacs. Your company coupled with high level of modernization concentrated efforts of both Management and employees; the whole hearted support of Banks, suppliers and customers has been able to attain these levels of performance.

Textiles and Real Estate Division

The revenue from the textiles activity was Rs. 16469 lacs as compared to Rs.15454 lacs in the previous year. The operating profit/ (loss) for the year was Rs.1304 lacs against Rs.181 lacs in the previous year.

The revenue from real estate activity was Rs. 3304 lacs as compared to Rs. 3309 lacs in the previous year. The operating profit for the year was Rs.2764 lacs as against Rs. 2838 lacs in the previous year.

Land Development at Dadar

The construction of office building structure is complete except for certain finishing work. The State Government has notified an amendment in Development Control Rules wherein approvals under the old Development Control Rules has been obtained (like ours) have the either option to continue with the old regulation or opt for the new rules.. We are studying the option and we are waiting for the balance Occupation Certificate. Thereafter the office building "The Ruby" shall be leased /sold gradually in view of the improving market for office space.

Dividend

Your Directors, have after assessing the need for corporate requirement, recommended a dividend at the rate of 50% p.a. i.e of ^ 2.50 (Two rupees fifty paisa) per share on 83,60,000 equity shares of Rs.5/- each aggregating to Rs.209 lacs. The dividend will be paid after your approval at the ensuing Annual General Meeting. The aggregate outflow on account of the equity dividend for the year would be Rs.251 lacs including tax on dividend. An amount of Rs.10000 lacs (previous year Rs.10000 lacs) has been transferred to General Reserve.

Bonus Shares

Your Directors have recommended the issue of fully paid Equity Shares by way of Bonus to the shareholders in the ratio of one new equity share for every one existing equity shares held at its Meeting held on 31st August, 2015. The proposal is subject to the approval of the members at its ensuing Annual General Meeting. The paid up capital of the Company post Bonus if approved by the members would increased from Rs. 4,18,00,000 (Rupees Four Crores Eighteen Lacs only) divided into 83,60,000 equity shares of Rs. 5/- each to Rs. 8,36,00,000 (Rupees Eight Crores Thirty Six Lacs only) divided into 1,67,20,000 equity shares of Rs. 5/- each

Report on Performance of Subsidiaries, Associates and Joint Venture Companies

During the year under review, your Company did not have any subsidiary, associate or joint venture company.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement executed with the Stock Exchanges, a Management Discussion and Analysis, Corporate Governance Report and Certificate regarding compliance of conditions of Corporate Governance form an integral part of this report and are set out as separate Annexure to this Report.

Public Deposits

The Company has not accepted deposits from the public within the meaning of Section 73 of The Companies Act, 2013 and rules framed there under.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

(i) Directors

Mr. Bharat M. Shah, (DIN: 00071248), Mr. Viraj M. Shah, (DIN: 00071616) and Ms. Aruna M. Shah (DIN: 00070999), Directors will retire by rotation and being eligible and not being disqualified under section 164 of the Companies Act, 2013, offers themselves for re-appointment.

The Board recommends their re-appointment.

Mr. Deepak R. Shah (DIN NO: 06954206), and Mr. Gunvantrai A. Sanghrajka (DIN: 00322600) were appointed as Additional Director of the Company in the category of Independent Director on 14th November, 2014 and 31st August,2015 respectively. The Nomination and Remuneration Committee has recommended Mr. Deepak R. Shah, and Mr. Gunvantrai A. Sanghrajka for appointment as Independent Directors based on their qualifications and experience at the ensuing Annual General Meeting. The company has received all the declarations to fulfill the requisite criteria.

The Company has received a notice from a member along with requisite deposit proposing the candidature of Mr. Deepak R. Shah, and Mr. Gunvantrai A. Sanghrajka for their appointment as Director at the ensuing Annual General Meeting. Since in the opinion of the Board Mr. Deepak R. Shah, and Mr. Gunvantrai A. Sanghrajka fulfill the criteria of independence and also they are desirable and would be beneficial to the company as they are having wide experience in their respective field, the Board recommends their appointment as Independent Directors.

The tenure of Mr. D.M. Popat as an Independent Director will be completed on the 23rd September, 2015 and no intimation of notice has been received from Mr. D.M. Popat for his re-appointment

Resignation

Shri Nitin Shingala resigned from the Board of Directors of the Company with effect from 12th August, 2015 on account of his new professional engagement. The Directors place on record their deep sense of appreciation for the valuable services rendered by Shri Nitin Shingala during his tenure as a Director of the Company.

Except above, there is no change in the composition of the Board of Directors.

(ii) Key Managerial Personnel

Mr. Pankaj Parkhiya has tendered his resignation as the Company Secretary of the Company with effect from the close of the business hours on 27th July, 2015 and the same was accepted by the Management. The Company is in the process of appointing a suitable replacement.

(iii) Declaration by an Independent Directors

The Company has complied with clause 49 of Listing Agreement according to the provisions of section 149(6) of the Companies Act, 2013.The Company has also obtained declarations from all the Independent Directors pursuant to section 149(7) of the Companies Act, 2013.

(iv) Annual Evaluation of Board

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out the annual performance evaluation of its own performance and other Directors. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, promotion of participation by all directors and developing consensus amongst the directors for all decisions.

Number of Board Meetings

During the Financial year, total 5 (Five) meetings of the Board of Directors were held on 17th May,2014, 14th August,2014 24th September,2014, 14th November,2014 and 5th February,2015 respectively.

Director's Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by your Directors they make the following statements in terms of Section 134(3)(c)of the Companies Act, 2013 and hereby confirm that:-

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had selected such accounting policies and applied 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 31st March, 2015 and of the profit of the Company for the year on that date;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis; and the directors had laid down proper systems financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively

Nomination and Remuneration Committee

The Board has in accordance with the provisions of sub-section (3) of Section 178 of the Companies Act, 2013, formulated the policy setting out the criteria for determining qualifications, positive attributes, independence of a Director and policy relating to remuneration for Directors, Key Managerial Personnel and other employees.

Audit Committee:

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section. The Audit Committee comprises of:

1. Mr. Anup P. Shah, Chairman and Independent Director

2. Mr. Deepak R Shah, Independent Director

3. Mr. Shardul J. Thacker, Independent Director

4. Mr. Bharat Shah, Joint Managing Director

The scope and terms of reference of the Audit Committee have been amended in accordance with the Act and the Listing Agreement entered into with the Stock Exchanges. The Board has accepted all the recommendations of the Audit Committee

Vigil Mechanism Policy for the Directors and Employees

The Company promotes ethical behaviour in all its business activities and has put in place a mechanism for reporting illegal and unethical behaviour.

The Board of Directors of the Company has, pursuant to the provisions of Section 177 (9) of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, framed "Vigil Mechanism Policy" for Directors and employees of the Company to provide a mechanism which ensures adequate safeguards to employees and Directors from any victimization on raising of concerns of any violations of legal or regulatory requirements, incorrect or misrepresentation of any, financial statements and reports, etc.

The employees of the Company have the right/option to report their concern/grievance to the Chairman of the Audit Committee. The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations.

During the year under review, no employee was denied access to the Chairman of the Audit Committee.

Risk Management Policy

The Board of Directors of the Company during the year has designed Risk Management Policy and Guidelines to avoid events, situations or circumstances which may lead to negative consequences on the Company's businesses, and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. At present there is no identifiable risk which, in the opinion, of the Board may threaten the existence of the Company.

Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo etc. are furnished in "Annexure A" which forms part of this Report.

Internal Control Systems:

Adequate internal control systems commensurate with the nature of the Company's business, size and complexity of its operations are in place. It has been operating satisfactorily. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, timely feedback on achievement of operational and strategic goals, compliance with policies, procedure, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

Extract of Annual Return:

Extract of the Annual Return in form MGT-9 for the financial year ended 31st March, 2015 made under the provisions of Section 92(3) of the Act is attached as "Annexure B" which forms part of this Report.

Corporate Social Responsibility:

The Corporate Social Responsibility Committee comprises of:

1. Mr. Anup P. Shah, Chairman and Non-Executive- Independent Director

2. Mr. Shardul J. Thacker- Non-executive Director- Independent

3. Mr. M.C. Shah, Executive Chairman

4. Ms. Aruna M. Shah, Non-executive Director

The Company has formulated and recommended the Board a Corporate Social Responsibility Policy which indicates the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013. The Annual Report on CSR activities as attached as "Annexure C" and forms a part of this Report.

Significant and Material Orders passed by the Regulators

During the year under review, no significant material orders were passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations.

Auditors

(i) Statutory Auditors

M/s. B.S. Mehta & Co. Chartered Accountants Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. The Company has received a letter from M/s. B.S. Mehta & Co., Chartered Accountants to the effect that their appointment, if made would be within the prescribed limits under Section 139 (1) of the Companies Act, 2013.

Members are requested to re-appoint M/s. B.S. Mehta & Co. Chartered Accountants as the Statutory Auditors of the Company.

Auditors Remarks

As regards to the qualification stated under Clause (ix) of the Annexure to Auditors' Report, the delay in payments of instalments and interest on Loans was mainly due to slow down in the Real Estate Market due to which the expected realisation from sale/Lease of premises didn't materialize."

(ii) Secretarial Auditor

The Board has appointed M/s. Hemanshu Kapadia & Associates Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the financial year 2014-2015. The Report of the Secretarial Audit Report is annexed herewith as "Annexure D".

The following observation in the Secretarial Audit Report was noted by the Board

The Company has paid Managerial Remuneration to its Chairman, Managing Director, Joint Managing Director and Executive Director as per the provisions of the Companies Act. However, as an abundant precautions, the Company has filed applications to the Central Government for the remuneration paid by the Company and approvals of the same are awaited".

After perusal of the aforesaid observation it was noted that the same was a statement of fact though mentioned in italics in the Secretarial Audit Report

(iii) Cost Auditor

Mr. Dakshesh H. Zaveri, Cost Auditor has been appointed pursuant to the provision of the Companies (Cost Records and Audit) Rules, 2014.

(iv) VAT Auditor

The Board has appointed M/s. Hemant V. Shah, Chartered Accountants as the VAT Auditor to conduct the VAT Audit.

Green Initiatives

Pursuant to Sections 101 and 136 of the Companies Act, 2013 the Company will be sending Annual Report through electronic mode email to all the shareholders who have registered their email addresses with the Company or with the Depository to receive Annual Report through electronic mode and initiated steps to reduce consumption of paper.

Human Resources

Employees are considered to be team members being one of the most critical resources in the business which maximize the effectiveness of the Organization. Human resources build the Enterprise and the sense of belonging would inculcate the spirit of dedication and loyalty amongst them towards strengthening the Company's Polices and Systems. The Company maintains healthy, cordial and harmonious relations with all personnel and thereby enhancing the contributory value of the Human Resources.

Environment and Safety

The Company is conscious of the importance of environmentally clean and safe operations. The Company's policy requires conduct of operations in such a manner, so as to ensure safety of all concerned, compliances environmental regulations and preservation of natural resources. There was no accident during the year.

Material Changes and Commitments, if any affecting the Financial Position of the Company which have occurred between the FinancialYear end of the company to which Financial Results relate

Except as disclosed elsewhere in this report, no material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report.

Adequacy of Internal Financial Controls with reference to the Financial Statements

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

Particular of Contracts or Arrangement with Related Parties

All transactions entered with Related Parties for the year under review were on arm's length basis and in the ordinary course of business. Hence, the provisions of Section 188 of the Companies Act, 2013 are not attracted. Thus disclosure in form AOC-2 is not required. However, the details have been furnished in the Note 33 to the financial statement.

Apart from the above there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel.

All Related Party Transactions are placed before the Audit Committee as also to the Board for approval at every quarterly meeting.

The policy on Related Party Transactions as approved by the Board of Directors has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report.

Disclosure under section 197(12) of the Companies Act, 2013 and other disclosures as per Rule 5 of Companies (Appointment & Remuneration) Rules, 2014.

There were no employees except the Executive Chairman, Managing Director Joint Managing Director and Executive Director of the remuneration of Rs.60 lacs per annum or more or Rs.5 lacs per month or more during the year under review.

The prescribed particulars of employees required under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,2014 is attached as Annexure E and forms a part of this Report of the Directors

Disclosure under the Sexual Harassment of women at workplace (Prevention, Prohibition & Redressal) Act, 2013.

The Company has set up an Internal Complaints Committee (ICC) for providing a Redressal mechanism pertaining to Sexual harassment of women employees at workplace. There was no complaint received during the year under review.

Listing

The Equity Shares of the Company continue to remain listed with BSE Limited and National Stock Exchange of India Limited and the stipulated listing fees for the year 2014-15 have been paid.

Management's Discussion and Analysis Report

In compliance with Clause 49 of the Listing Agreement with BSE Limited and National Stock Exchange of India Limited, a separate section on Management Discussion and Analysis which also includes further details on the state of affairs of the Company and Corporate Governance Report, as approved by the Board of Directors, together with a certificate from the Statutory Auditors confirming the compliance with the requirements of Clause 49 forms part of this Annual Report.

Segments

The Company has two segments namely Textile and Real Estate. The statement of accounts prepared and submitted are therefore of two Segments.

General Disclosures

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. The Company has not issued any shares with differential rights and hence no information as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

2. The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Section 54(1)(d) of the Act read with Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

3. The Company has not issued any equity shares under Employees Stock Option Scheme during the year under review and hence no information as per provisions of Section 62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

4. During the year under review, there were no instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014 is furnished.

5. No orders have been passed by any Regulator or Court or Tribunal which can have an impact on the going concern status and the Company's operations in future.

Acknowledgement

Your Directors thank all the shareholders, all employees of the Company, customers, suppliers, Government Authorities, Financial Institutions and bankers for their continued support.

You Directors look forward to their continued support in future.

For and on behalf of the Board

For The Ruby Mills Limited

M. C. SHAH

Executive Chairman

 Place : Mumbai

Dated : 31th August, 2015