Ruby Mills Ltd

To,

The Shareholders

THE RUBY MILLS LIMITED

Ladies and Gentlemen,

Your Directors have pleasure in presenting their 93rd Annual Report together with Audited Balance Sheet and Profit & Loss Account for the year ended 31st March, 2009

2 The turnover of the Company during the year is Rs.114,32,99,382 as against Rs.109,23,88,201/- in the previous year. The operating profit before Depreciation and Taxation is Rs. 38,76,18,801/- as against Rs. 22,29,67,995/- in the previous year. The net profit after depreciation, taxation is Rs. 17,75,01,162/- as against Rs. 5,31,26,709/-in the previous year.

3. Your Directors are pleased to recommend the Dividend out of the available surplus, at the rate of 30% p.a. Rs.3/- per share on 41,80,000 equity Shares of Rs.10/- each aggregating to Rs.1,25,40,000 Lacs as against 30% i.e. Rs. 3/- per share in the previous year.

4. As most of the countries of the world are passing through deep recession and facing acute financial crisis the Textile Industry through out the world also is suffering from weaker demand and high cost. The end result of the above situation has further squeezed down the margin of the industry and has given the threat of sickness if the similar trend continuous. However, your Company could perform better due to stringent cost control and quality products.

5. As informed during the previous year your Company has undertaken development of a Building under the Information Technology Park on part of its land in Mumbai which is still under construction and half of the work is completed. The Building shall be tentatively ready by September 2010.

The construction of New Process House at Village Kharsundi is also in progress and reached to the advanced stage. The commercial production is likely to be commenced before September, 2009.

6. As required under Section 209 (1) (d) of the Companies Act, 1956 the Company has maintained cost accounting records and under Section 233B, qualified Cost Auditor is appointed to conduct Cost Audit.

7. As required under Maharashtra Sales Tax Act Company has appointed a VAT Auditor to conduct the VAT Audit.

8. The Company's Building, Machineries, Stores and Stocks in trade etc. are fully covered against all insurance risks.

9. The Company is not accepting deposits from the public or shareholders.

10. Mr. D.S.Soman, Mr. D.J.Thakker & Mr. G.C.Sharedalal directors of the Company retire by rotation and being eligible offer themselves for re-appointment.

11. The Company has two segment of activities Textiles Real Estate. The statement of accounts prepared and submitted are therefore two Segments.

12. In view of the on going expansion and modernisation, the Company is in the process of strengthening scope of internal audit at Dadar, Dhamni & Kharsundi Units. As observed by Auditors in Annexure 'A' to the Auditors' Report regarding outstanding dues of works contract tax aggregating Rs. 23,58,701, the said amount has since been paid in May 2009.

13. Directors' Responsibility statement:

On the basis of compliance certificates received from the Executives of the Company and subject to disclosures in the Annual accounts, we state :-

i) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the loss of the Company for that period;

iii) that 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;

iv) that the Directors had prepared the annual accounts on a going concern basis.

14. Particulars regarding Employees as required by Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975 are set out in a separate statement in Annexure 'A' forming part of this report.

15. Particulars regarding conservation of Energy, Technology Absorption etc. as required under Section 217(1) (e) of the Companies Act, 1956 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in a separate statement in Annexure 'B' forming part of this report.

16. The list of person constituting "Group" (within the meaning as defined in the Monopolies Restrictive Trade Practices Act, 1969) for the purpose of availing exemption from applicability of the provision Regulations 10 to 12 of the Securities Board of India (Substantial Acquisition of Shares and Takeover Regulations 1997 as provided in Clause 3 (10)3) of the said Regulations is as per enclosed statement -1.

17. Pursuant to Clause 49 of the Listing Agreements with the Stock Exchanges, Corporate Governance Report and Auditors' Certificate regarding compliance of conditions of Corporate Governance and Management Discussion and Analysis are made a part of the Director's Report marked annexure C & D respectively.

18. You are requested to appoint Auditors of the Company for the current year and fix their remuneration.

19. Your Directors thank the Company's clientele, vendors, investors and bankers for their continued support during the year. Your Directors place on record their appreciation of the excellent contribution made by employees at all levels, without whose contribution the company would not have recorded substantial growth in its revenue and profitability for the year under review.

For and on behalf of the Board

M. C. SHAH

Executive Chairman

Mumbai

Dated, 30th July, 2009

ANNEXURE 'A'

Particulars of the Employees pursuant to Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of the Employees) Rules 1975 and forming part of the Directors Report for the year ended 31^st March, 2009.

Note: Remuneration as above includes, Salary, Company's Contribution to Provident Fund and Family Pension Fund, L.T.A., Reimbursement of Medical Expenses, Personal Accident Insurance Gratuity etc.

ANNEXURE B'

ADDITIONAL INFORMATION AS REQUIRED UNDERTHE COMPANIES (DISCLOSURE OF PARTICULARS INTHE REPORT OF BOARD OF DIRECTORS) RULES, 1988 AND FORMING PART OFTHE DIRECTORS' REPORT FOR THE YEAR ENDED 31^ST MARCH, 2009.

(A). Conservation of Energy.

(a) 1. Continuous replacement of conventional Chokes by Electronic Chokes.

2. ARVD monitoring System has been installed in Airjet Looms to reduce air consumption.

3. Defective Air Nozzles are being continuously replaced.

4. Powder Coating machine is being converted from DC drive to inverter AC drive.

5. Evaluation of Schreiner Roller heating arrangement is being changed from electrical to oil heating.

6. Steam Load monitoring is being continuously followed.

7. Technical Staff is being encouraged to have live discussion with energy Experts as well as they are being sponsored for seminars on energy conservation.

8. New process house is being set up to reduce cost of energy.

(b). ADDITIONAL INVESTMENT AND PROPOSALS.

1. Setting up State of Art Process House at New Location thereby bringing down cost of energy, water and utility which is in process of commissioning.

2. 1008 Ring Spindles have been converted to ROCOS compacting system to produce compact yarn and improve quality.

3. Fire Protection system has been installed in Blow Room as safety measure.

4. Trials will be conducted shortly with latestTrutzlerTC 5 card so that old cards can be replaced by latest cards to enhance quality and productivity.

5. Old breaker Drawframes are proposed to be replaced by latest Drawframes. Trials will be conducted shortly.

(B) Technology Absorption and Innovation.

a) ERP system working is getting stabilized.

b) New DK 800 cards have resulted into better yarn quality and productivity and its working is stablized.

c) Now LK 54 Combers are working satisfactorily.

Benefits of R & D Works

1. The Government of India has renewed the Recognition of our Company as a R & D Unit in 2009 for a further period of 3 years.

2. Continuous and daily use of AFIS and yarn evenness tester has helped Technicians to achieve better yarn quality and set process parameters.

3. Slub motion is being utilised daily and has helped company, created new market for fashion fabric and future continuous development.

4. Services acquired from foreign consultants has given new direction to Processing Department.

5. R&D Department is continuously helping to sharpen skills of Technical staff leading to Developments of new fabrics, new finishes and reducing cost of processing.

Future Plans.

1) Modification of present Blow Room line with Tuft Feeder and Foreign Fibre detection units.

2) Replacement of old cards by latest one for improving yarn quality further.

3) Replacement of old breaker Drawframes by latest D/40 Reiter Drawframes to improve yarn quality further.

4) Development of new yarns and fabrics.

5) Commissioning of State of Art New Processing Facility at Kharsundi.

6) Development of part of Mill Land in Mumbai.

C. FOREIGN EXCHANGE SPENT AND EARNED:

FORM A'

FORM FOR DISCLOSURE OF PARTICULARS WITH RESPECT OF CONSERVATION OF ENERGY :

* Cost per unit of production for Electricity and Steam is not comparable as we are a composite Textile Mill and have a regular change of product mix.

STATEMENT -1

The following persons constitute the Group within the definition of group as defined in the Monopolies and Restrictive Trade Practices Act, 1969, (54 of 1969) which execution or is established to be in a position to exercise, control, directly or indirectly over the company.

1. Shri Manharlal Chunilal Shah

2. Shri M.C. Shah HUF

3. Smt. Aruna Manharlal Shah

4. Shri Hiren Manharlal Shah

5. Smt. Jayshree Hiren Shah

6. Shri Purav Hiren Shah

7. Miss Nehali Hiren Shah

8. Shri Hiren Manharlal H.U.F.

9. Smt. Aabha Bharat Shah

10. Shri Bharat Manharlal Shah

11. Shri Bharat Manharlal H.U.F.

12. Shri Viraj Manharlal Shah

13. Mrs. Dipti Viraj Shah

14. Shri RishabhV. Shah

15. Shri Viraj Manharlal H.U.F.

16. Smt. RitaYogesh Koradia

17. Smt. Asha Yogesh Mehta

18. E & T of Late Chunilal Narbheram

19. M/s. Hiren Brothers Inv. Co. Pvt. Ltd

20. M.C. Shah & Sons Inv. Co. Pvt. Ltd.

21. Manubhai & Sons Inv. Co. Pvt. Ltd.

22. Miss Mihika Bharat Shah

23. Miss. Jhanvi Bharat Shah

24. Miss Miloni Bharat Shah

25. Shri PranavYogesh Koradia

26. Shri Samay Yogesh Koradia

27. Shri Yogesh U. Mehta

28. Smt. Barkha Purav Shah

29. Miss Jinaya Purav Shah