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Ruby Mills Ltd.

BSE: 503169 Sector: Industrials
NSE: RUBYMILLS ISIN Code: INE301D01026
BSE 00:00 | 20 Feb 263.00 -6.25
(-2.32%)
OPEN

272.00

HIGH

274.75

LOW

262.50

NSE 00:00 | 20 Feb 264.45 -3.25
(-1.21%)
OPEN

266.90

HIGH

273.05

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262.00

OPEN 272.00
PREVIOUS CLOSE 269.25
VOLUME 1280
52-Week high 447.25
52-Week low 233.25
P/E 14.35
Mkt Cap.(Rs cr) 440
Buy Price 263.00
Buy Qty 51.00
Sell Price 263.55
Sell Qty 50.00
OPEN 272.00
CLOSE 269.25
VOLUME 1280
52-Week high 447.25
52-Week low 233.25
P/E 14.35
Mkt Cap.(Rs cr) 440
Buy Price 263.00
Buy Qty 51.00
Sell Price 263.55
Sell Qty 50.00

Ruby Mills Ltd. (RUBYMILLS) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 102 Annual Report of your company togetherwith the Audited Balance Sheet and Profit & Loss Account for the year ended 31 March2018.

1. FINANCIAL RESULTS

The financial performance of the Company for the year ended 31 March 2018 issummarized below:

Sl.No Particulars For the year ended (` In Lakhs)
(IND AS) (IND AS)
31st March 2018 31st March 2017
1. Total Revenue 20798 21830
2. Finance Costs 1051 1249
3. Depreciation and Amortization Expense 1547 1499
4. Profit before Tax 3699 4618
5. Provision for Tax including Current Tax adjustments of Earlier Years. 1237 1400
6. Provision for Deferred Tax (1054) (523)
7. Profit after Tax Prior period and Exceptional Items 3516 3741
8. Total comprehensive income for the period 3551 3746

st

The Indian Accounting Standards (IND-AS) were made applicable w.e.f 1 April 2017.

2. STATE OF COMPANY'S AFFAIR

i) Textiles and Real Estate Division

The revenue from the textiles activity was Rs. 16840 Lakhs as compared to Rs. 17312Lakhs in the previous year. The operating profit for the year was Rs. 1515 Lakhs againstRs. 2466 Lakhs in the previous year.

The revenue from real estate activity was Rs. 2884 Lakhs as compared to Rs. 2866Lakhs in the previous year. The operating profit for the year was Rs. 2404 Lakhs asagainst Rs. 2427 Lakhs in the previous year.

ii) Land Development at Dadar

The Building has been fully completed structurally and is as per the approved plan. Thecompany had already obtained Part Occupation Certificate (OC) up to 20 levels under theDevelopment Control Rules (DCR) prior to 2012. Further as regards to OccupationCertificate after January 2012 is concerned there was lack of clarity and confusionwithin the government departments as to how to take up proposals wherein part OC hasalready been obtained under DCR prior to 2012. The BMC finally issued a Circular inNovember 2017 giving complete clarity on cases where part OC has been issued under DCRprior to 2012. On receipt of the same the Company once again followed up with theDepartment concerned for further processing of the company's proposal. Subsequently theMunicipal Commissioner has approved the plan in April 2018.

3. DIVIDEND

Your Directors have after assessing the need for corporate requirement recommended adividend at the rate of 35% i.e of Rs. 1.75 (One Rupee Seventy Five paise) per share on16720000 equity shares of Rs. 5/- each aggregating to Rs. 292.60 lakhs. The dividendwill be paid after your approval at the ensuing Annual General Meeting. The aggregateoutflow on account of the equity dividend for the year would be Rs. 352.17 lakhs(inclusive of Dividend Tax of Rs. 59.56 lacs).

4. TRANSFER TO RESERVES:

No amount has been transferred to General Reserve.

5. REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

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

6. PUBLIC DEPOSITS

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

7. CHAIRMAN EMERITUS

Shri. Manharlal Chunilal Shah Chairman Emeritus of your Company expired on 21 July2018 after devoting 65 years of his life working for the Company. Shri. Manharlal ChunilalShah was an exceptional human being and an outstanding leader. Shri Manharlal Shah atowering and well respected personality in the Indian Textile Industry was also well knownfor his philanthropic activities.

Your Directors express their deep sorrow on the sad demise of Shri. Manharlal ChunilalShah. May almighty God grant peace to his soul.

8. DIRECTORS AND KEY MANAGERIAL PERSONNEL

(i) Directors

Appointment / Reappointment

Smt. Aruna M. Shah (DIN:00070999) Director will retire by rotation and beingeligible for reappointment and not being disqualified under section 164 of the CompaniesAct 2013 offers herself for re-appointment. The Board recommends her re-appointment.

Pursuant to Regulation 17 of SEBI (Listing Obligations and Disclosure Requirements)(Amendment) Regulations 2018 no listed Company shall appoint a person or continue thedirectorship of any person as a Non-Executive Director who has attained the age of seventyfive years unless a Special Resolution is passed.

Since Smt. Aruna Manharlal Shah has attained the age of Seventy-five years theBoard of Directors and

Nomination and Remuneration Committee at their meeting held on 30 May 2018 haverecommended continuation of her term as Non-Executive Director beyond the age of SeventyFive (75) years considering her long-term association and wide experience.

Shri Purav Hiren Shah (DIN: 00123460) Chief Executive Officer of the Company wasappointed as an

Additional Executive Director w.e.f. 13 December 2017. Notices under Section 160 ofthe Companies Act 2013 has been received proposing candidature of Shri Purav Hiren Shahfor the position of Executive Director of the Company from a member of the Company.

Appropriate resolution for appointment of the aforesaid Director is being moved at theensuing Annual General Meeting which the Board recommends for your approval.

Shri Mehernosh Rusi Currawalla (DIN: 01089742) was appointed as an AdditionalIndependent Director w.e.f. 28 November 2017. Notices under Section 160 of the CompaniesAct 2013 has been received proposing candidature of Shri Mehernosh Rusi Currawalla forthe position of Independent Director of the Company from a member of the Company.

Appropriate resolution for appointment of the aforesaid Director is being moved at theensuing Annual General Meeting which the Board recommends for your approval.

Shri Pradip Narottamdas Kapasi (DIN: 01275033) was appointed as an AdditionalIndependent Director w.e.f. 13 December 2017. Notices under Section 160 of the CompaniesAct 2013 has been received proposing candidature of Shri Pradip Narottamdas Kapasi forthe position of Independent Director of the Company from a member of the Company.

Appropriate resolution for appointment of the aforesaid Director is being moved at theensuing Annual General Meeting which the Board recommends for your approval.

Shri Hiren M. Shah Executive Chairman Shri Bharat M. Shah Managing Director and ShriViraj M. Shah Managing Director of the Company were re-appointed vide resolutionpassed in a Board Meeting dated 30 May 2018 for a period of five years w.e.f 1 April2019 to 31 March 2024 subject to the approval of members.

Appropriate resolution for appointment of the aforesaid Directors is being moved at theensuing Annual General Meeting which the Board recommends for your approval.

Resignation/ Cessation:

Dr. Anup P. Shah Independent Director of the Company resigned w.e.f. 29 August 2017.

Except above there are no changes in the composition of the Board of Directors.

(ii) Key Managerial Personnel

Appointment/Reappointment

The Board on recommendation of Nomination and Remuneration Committee appointed Mrs.Kanika Kabra as the Company Secretary and Compliance Officer of the Company with effectfrom 14 August 2017 pursuant to the resignation of Mr. Nikhil Sankpal. Ms. Naina Kanagatwas appointed as the Company Secretary and Compliance officer of the Company onrecommendation of Nomination and Remuneration Committee with effect from 30 May 2018pursuant to the resignation of Mrs. Kanika Kabra.

Resignation/Cessation

Shri. Nikhil N. Sankpal erstwhile Company Secretary and Compliance Officer of theCompany resigned w.e.f. 14 August 2017.

Ms. Kanika Kabra erstwhile Company Secretary and Compliance Officer of the Companyresigned w.e.f. 3 April 2018.

(iii) Declaration by Independent Directors

The Company has received the necessary declarations from each of Independent Directorsof the Company pursuant to Section 149(7) and provisions of Securities and Exchange Boardof India (Listing Obligations and Disclosure Requirements) Regulations 2015. Each of themmeets the criteria of independence laid down in section 149(6) of the Companies Act 2013and Regulations of Securities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations 2015 and there has been no change in thecircumstances which may affect their status as independent director during the year.

(iv) Annual Evaluation of Board

Pursuant to the provisions of the Companies Act 2013 and relevant Regulations ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 the Board has carried out the annual performance evaluation of its ownperformance and other Directors. A structured questionnaire was prepared after taking intoconsideration inputs received from the Directors covering various aspects of the Board'sfunctioning such as adequacy of the composition of the Board and its Committees Boardculture execution and performance of specific duties obligations and governance. Aseparate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgment.

Performance evaluation of independent directors was done by the entire board excludingthe independent director.

In a separate meeting of independent directors held on 28 February 2018 performanceof non-independent directors performance of the board as a whole and performance of theChairman was reviewed and evaluated taking into account the views of executive directorsand non-executive directors. The same was discussed in the board meeting that followed themeeting of the independent directors.

v) Number of Board Meetings

During the year 2017-18 the Board met 7 (Seven) times on the following dates 17 May2017 3 August 2017 14 August 2017 11 September 2017 27 September 2017 13December 2017 and 12 February 2018.

The Company has complied with the applicable Secretarial Standards in respect of allthe above Board Meetings. For details of the meetings of the board please refer to theCorporate Governance Report which forms part of this report.

9. DIRECTOR'S RESPONSIBILITY STATEMENT

The Board of Directors acknowledge the responsibility for ensuring compliance with theprovisions of section 134(3)(c) read with section 134(5) of the Companies Act 2013 in thepreparation of the annual accounts for the year ended on 31st March 2018 and state that:-

i. In the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

ii. The Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at 31st March 2018 and of the profitof the Company for the year on that date;

iii. The Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

iv. The Directors had prepared the annual accounts on a going concern basis; and

v. The Directors had laid down proper systems of internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.

vi. The Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

10. NOMINATION AND REMUNERATION POLICY

The Board has in accordance with the provisions of sub-section (3) of Section 178 ofthe Companies Act 2013 formulated the policy setting out the criteria for determiningqualifications positive attributes independence of a Director and policy relating toremuneration of Directors Key Managerial Personnel and other employees. The policy hasbeen uploaded on the Company's website at the following link -http://www.rubymills.com/investors/policies/nomination-cum-remuneration-policy

11. AUDIT COMMITTEE

The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.

12. VIGIL MECHANISM POLICY FOR THE DIRECTORS AND EMPLOYEES

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

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 itsPowers) Rules 2014 framed “Vigil Mechanism Policy” for Directors and employeesof the Company to provide a mechanism which ensures adequate safeguards to employees andDirectors from any victimization on raising of concerns of any violations of legal orregulatory requirements incorrect or misrepresentation of any financial statements andreports etc. which has been uploaded on the Company's website at the following link-http://www.rubymills.com/investors/policies/vigil-mechanismwhistle-blower-policy. Theemployees of the Company have the right/option to report their concern/grievance to theChairman of the Audit Committee. The Company is committed to adhere to the higheststandards of ethical moral and legal conduct of business operations.

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

13. RISK MANAGEMENT

The Board of Directors of the Company during the financial year 2014-15 had designedRisk Management Policy and Guidelines to avoid events situations or circumstances whichmay lead to negative consequences on the Company's businesses and has defined astructured approach to manage uncertainty and to make use of these in their decisionmaking pertaining to all business divisions and corporate functions. Key business risksand their mitigation are considered in the annual/strategic business plans and in periodicmanagement reviews. At present there is no identifiable risk which in the opinion of theBoard may threaten the existence of the Company.

14. 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 CompaniesAct 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy technology absorption foreign exchange earnings and outgo arefurnished in “Annexure A” which forms part of this Report.

15. EXTRACT OF ANNUAL RETURN:

Extract of the Annual Return in form MGT-9 for the financial year ended 31 March 2018made under the provisions of Section 92(3) of the Act is attached as “AnnexureB” which forms part of this Report.

16. CORPORATE SOCIAL RESPONSIBILITY:

The Annual Report in the format prescribed in the Companies (Corporate SocialResponsibility Policy) Rules 2014 on CSR activities is attached as “AnnexureC” and forms a part of this Report. For other details regarding the CSRCommittee please refer to the Corporate Governance Report which forms part of thisreport. The Corporate Social Responsibility policy has been uploaded on the Company'swebsite at the following link -http://www.rubymills.com/investors/policies/corporate-social-responsibility-philosophy

17. GST

Goods and Services Tax Act 2017 (GST) was introduced on 1st July 2017 bringing an eraof unified indirect taxes subsuming variety of taxes including Excise duty VAT Servicetax Octroi Entry tax. While your Company had obtained exemption in 2004-05 of the Exciseregime and that most of the Textile fabrics range of your Company was not covered underVAT the introduction of GST enables credit of all taxes namely Excise duty and VAT inparticular making it a level playing field for the large and organized player vis-a-visthe small scale and the power loom sector. Your Company took timely measures includingchanges in system to comply with the same.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS

During the year under review no significant and material orders were passed by theregulators or courts or tribunals impacting the going concern status and the Company'soperations.

19. AUDITORS

(i) Statutory Auditors

At the 101st Annual General Meeting held on 27 September 2017 the Members approvedappointment of M/s. CNK & Associates Chartered Accountants (Firm Registration No.101961W/W-100036) to hold office from the conclusion of the 101 Annual General Meetinguntil the conclusion of the 106th Annual General Meeting subject to ratification at everyAnnual General Meeting on such remuneration as may be fixed by the Board apart fromreimbursement of out of pocket expenses as may be incurred by them for the purpose ofaudit.

On 7 May 2018 Section 40 of the Companies Amendment Act 2017 (amending Section 139of the Companies Act 2013) has been notified whereby ratification of Statutory Auditor'sappointment is not required at every Annual General Meeting.

(ii) Secretarial Auditor

The Board has appointed M/s. Vikas R. Chomal & Associates Company Secretaries inPractice to undertake the Secretarial Audit of the Company for the financial year2017-2018. The Report of the Secretarial Audit Report is annexed herewith as “AnnexureD”.

(iii) Cost Auditor and Cost Audit Report

Pursuant to the provisions of Section 148 of the Companies Act 2013 read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Companyis required to maintain Cost Records under Rule 3 of the said Rules. Accordingly theCompany has duly maintained the Cost Records in the format prescribed in Form CRA-1 underRule 5 of the said Rules.

During the year under review Shri. Dakshesh H. Zaveri Cost Accountant has beenappointed as Cost Auditor of the Company for the F.Y. 2017-2018 to carry out the CostAudit for auditing cost accounting Records in respect of the Textile Segment of theCompany and to submit Cost Audit Report to the Board as required under Section 148 of theCompanies Act 2013 and the Companies (Cost Records and Audit) Amendment Rules 2014.

20.(i) Green Initiatives

Pursuant to Sections 101 and 136 of the Companies Act 2013 the Company will besending Annual Report through electronic mode i.e. email to all the shareholders who haveregistered their email addresses with the Company or with the Depository to receive AnnualReport through electronic mode and initiated steps to reduce consumption of paper.

(ii) Human Resources

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

(iii) Environment and Safety

The Company is conscious of the importance of environmentally clean and safeoperations. The Company's policy requires conduct of operations in such a manner so as toensure safety of all concerned compliances environmental Regulations and preservation ofnatural resources. There was no major accident during the year.

21. MATERIAL CHANGES AND COMMITMENTS IF ANY AFFECTING THE FINANCIAL POSITION OF THE

COMPANY

No material changes and commitments which could affect the Company's financial positionhave occurred between the end of the financial year of the Company and date of thisreport.

22. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

There are adequate internal financial controls in place with reference to the financialstatements. During the year under review these controls were evaluated and no significantweakness was identified either in the design or operation of the controls.

23. PARTICULAR OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES

All Related Party Transactions entered into by your Company during the Financial Year2017-18 were on arm's length basis and in the ordinary course of business. There are nomaterial significant Related Party Transactions entered into by the Company withPromoters Directors Key Managerial Personnel or other Designated Persons which may havea potential conflict with the interest of the Company. Prior approval of the AuditCommittee and the Board of Directors of the Company was obtained for all the Related PartyTransactions. Accordingly the disclosure of Related Party Transactions as required underSection 134(3)(h) of the Companies Act 2013 in Form AOC-2 is not applicable. Attention ofShareholders is also drawn to the disclosure of transactions with related parties as setout in Note No. 41 of Financial Statements forming part of the Annual Report.

24. PARTICULARS OF EMPLOYEES:

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

There were no employees drawing remuneration of Rs. One Crore and Two Lakhs per annumor more or Rs. Eight Lakhs Fifty Thousand per month or more during the year under review.However Late Shri Manharlal Shah drew remuneration of Rs. 15000000/- per annum asChairman Emeritus of the Company and Shri. Hiren M. Shah Executive Chairman Shri. BharatM. Shah Managing Director and Shri. Viraj M. Shah Managing Director drew a remunerationof Rs. 10800000/- per annum during the year under review.

25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION & REDRESSAL) ACT 2013.

The Company has set up an Internal Complaints Committee (ICC) for providing a Redressalmechanism pertaining to Sexual harassment of women employees at workplace. There was nocases/ complaint received during the year under review.

26. PARTICULARS OF LOANS GUARANTEE OR INVESTMENTS UNDER SECTION 186:

Loans guarantees and investments covered under Section 186 of the Companies Act 2013forms part of the notes to financial statements provided in this Annual Report.

27. DISCLOSURE REQUIREMENTS:

As per the relevant regulations of Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations 2015 Management Discussion andAnalysis Report (page 6 to 9) and Corporate Governance Report with auditor's certificatethereon (page 68 to 85) are attached which form part of this Annual Report.

28.GENERAL DISCLOSURES

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:

I. The Company has not issued any shares with differential rights and hence noinformation as per provisions of Section 43(a)(ii) of the Act read with Rule 4(4) of theCompanies (Share Capital and Debenture) Rules 2014 is furnished.

II. The Company has not issued any sweat equity shares during the year under review andhence 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.

III. The Company has not issued any equity shares under Employees Stock Option Schemeduring the year under review and hence no information as per provisions of Section62(1)(b) of the Act read with Rule 12(9) of the Companies (Share Capital and Debenture)Rules 2014 is furnished.

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

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

29. CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of Company's business during the year under review.

30.SEGMENTS:

The Company has two segments namely Textile and Real Estate. The Statement of accountsprepared and submitted are therefore of two segments.

31. ACKNOWLEDGEMENT

Your Directors thank all the shareholders all employees of the Company customerssuppliers Government Authorities Financial Institutions and bankers for their continuedsupport.

You Directors look forward to their continued support in future.

For and on behalf of the Board of Directors
The Ruby Mills Limited
Hiren M. Shah
Place: Mumbai Executive Chairman
Dated: 14 August 2018 DIN: 00071077