DIRECTORS’ REPORT

Dear Shareholders,

Your Directors have pleasure in presenting their 30th Annual Report on the Business and Operations of the Company, along with the Audited Accounts of the Company, for the Financial Year ended March 31, 2015

State of Company's Affairs and Future Outlook

The Indian innerwear market is estimated to grow at 13 per cent to reach Rs. 59,540 crores by 2023. Innerwear appears to be a potential growth category. Further, the recent changes brought about by the Government of India, viz. allowing 51 per cent Foreign Direct Investment (FDI), in Multi-Brand Outlets (MBOs), and 100 per cent FDI in Exclusive Brand Outlets (EBOs), have provided a lucrative business opportunity for your Company to forge or enter into business alliances to bring foreign brands in the Indian market.

Your Company is engaged in the manufacturing, branding and marketing of men's and women's innerwear and casual wear for all kids and all sections of societies like economy, mid- premium, premium and super- premium. Your Company is the leader in innerwear industry having a large distribution network across India where the products of the Company are sold through more than 1,18,000 retail outlets.

Your Company has manufacturing facilities situated at Bengaluru, Tirupur, Domjur and Ghaziabad. Across the country the Company has sales offices situated at Patna, Varanasi, Mumbai, Jaipur, Indore, Delhi, Ghaziabad, Kanpur, Bengaluru, Tirupur, Hyderabad and Kolkata.

Your Company has achieved a growth of 8.09 % in Sales & Income from Operations during the year under review. The Revenue from Operations including other income during the year under review is Rs. 9,740,154,724/- as against Rs. 9,011,279,753/- in the previous year. Your Company has also achieved a growth of 3.72% in Gross Profit before Interest, Depreciation and Tax during the period under review. The Gross Profit before Interest, Depreciation and Tax during the year under review is Rs. 1,388,738,714/- as compared to Rs. 1,314,263,870/-in the previous year. The Profit after Tax for the year under review is Rs. 657,070,377/- as against Rs. 620,561,246/- in the previous year.

Your Company believes in the overall development of the innerwear and casual wear industry across India through its innovative designs, superior product quality, ability to create a sustainable business model, initiatives to nurture the in-house talent and zeal towards the healthy creation of stakeholders' value. To overcome the various economical challenges, the Company from time to time revisits its marketing strategy. Your Company has always been responsive towards the changing fashion needs by introducing new line of products across all segments.

Subsidiaries

Your Company has the following two Wholly Owned Subsidiaries -

1. M/s. Euro Fashion Inners International Private Ltd., which is engaged in selling hosiery products under the brand name "EURO" which are premium products, designed for the fashion conscious consumers.

During the year under review there has been a decline of 60% in Sales & Income from Operations of M/s. Euro Fashion Inners International Private Ltd. The Revenue from Operations including other income during the year under review is Rs. 191,186,475/- as against Rs. 478,011,492/- in the previous year.

2. M/s. Imoogi Fashions Private Limited, which is engaged in manufacturing, processing and selling hosiery and outer casual wear products, especially for children between the ages of 0-12 years under the brand name "Imoogi"

M/s. Imoogi Fashions Private Limited has achieved a growth of 34.74% in Sales & Income from Operations during the year under review. The Revenue from Operations including other income during the year under review is Rs. 50122085/- as against Rs. 37198262/-in the previous year.

In terms of Clause 49(V)(D) of Equity Listing Agreement, these subsidiaries are not material subsidiaries.

Change(s) in the nature of business, if any

During the year under review, there were no changes in the nature of the business of the Company.

Dividend

During the Financial Year 2013-14, your Company had declared dividend of 250% for the equity shares of the Company. Your Directors are pleased to recommend a dividend of 275%, subject to the approval of shareholders for the Financial Year 2014-15 for the equity shares of the Company.

Transfer to Reserves

The Board, in its meeting held on 21st May, 2015, proposed to transfer Rs. 10 crores to General Reserve.

Changes in Share Capital

During the year under review, there were no changes in the share capital of your Company.

Directors

Mr. P. R. Agarwala, Chairman retires by rotation in the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. The details of appointment and re-appointment of Directors are provided in the Corporate Governance Report.

Statement on declaration given by Independent directors under sub-section (7) of Section 149 of the Companies Act, 2013

All the Independent Directors have given declaration of their independence in terms of Section 149(7) of the Companies Act, 2013 and Clause 49 of the Equity Listing Agreement.

Number of meetings of Board of Directors

For the Financial Year 2014-15, the Company held five (5) meetings of the Board of Directors, details of which form part of the Corporate Governance Report.

Meeting of Independent Directors

During the year under review the Independent Directors met on March 17, 2015 to discuss the following:

1. Review the performance of Non-Independent Directors & the Board as a whole;

2. Review the performance of the Chairperson of the Company, taking into account the views of Executive Directors and Non­ Executive Directors; and

3. To assess the quality, quantity and timeliness of flow of information between the Company Management & the Board that is necessary for the Board to effectively & reasonably perform their duties.

Statement indicating the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual Directors

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Nomination and Remuneration Committee has laid down the criteria for performance evaluation, basis which the Board has carried out an annual evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration Committees. A detailed discussion was done considering the 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, ethics and compliances.

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 leadership quality, capability, availability, clarity of understanding and degree of contribution. The performance evaluation of the Independent Directors was carried out by the entire Board (excluding the director being evaluated). The Directors expressed their satisfaction with the evaluation process.

Independent Directors conducted their meeting without the participation of other Non-Independent Directors and members of management and reviewed the performance of Board, Chairman and Non-Independent Directors. Further, Nomination and Remuneration Committee evaluated the performance of the Directors of the Company

(h) Average percentile increase made in the salaries of employees other than the managerial personnel in the last financial year i.e 2014-15 was 10%, whereas the increase in the managerial remuneration for the same financial year was 137%. The managerial remuneration is linked to market trend and industry segment composition, thus, increase in managerial remuneration is higher.

(i) The key parameters for the variable component of remuneration availed by the Directors are considered by the Board of Directors based on the recommendations of the Nomination and Remuneration Committee as per the Remuneration Policy of the Company.

(j) There is no such employee in the Company who receives remuneration in excess of the highest paid Director during the year.

(k) It is hereby affirmed that the remuneration paid is as per the Remuneration Policy for Directors, Key Managerial Personnel and other employees.

(l) None of the Managing Director (MD), Whole-time Director (WTD) of the Company, receives commission from its subsidiaries. II) For the Financial Year 2014-15:

1. None of the employees were in receipt of remuneration which in the aggregate was more than sixty lakh rupees;

2. Mr. Krishna Mohan Nyayapati, the Chief Executive Officer (CEO) of the Company was in receipt of remuneration for part of the year, at a rate which, in the aggregate, was more than five lakh rupees per month. He resigned from his post w.e.f. January  2, 2015.

3. Mr. Krishna Mohan Nyayapati, the Chief Executive Officer (CEO) of the Company was in receipt of remuneration for part of the year, at a rate which, in the aggregate was in excess of that drawn by the Managing Director or Whole-time Director of the Company and he was not holding by himself or along with his spouse and dependent children, more than two (2) per cent of the equity shares of the Company.

All pecuniary relationship or transactions of the Non-Executive Directors vis-a-vis the Company has been disclosed in the Corporate Goernance Report.

Statutory Auditors

M/s. S. R. Batliboi & Co. LLP has been appointed as the Statutory Auditor of your Company for a period of four (4) years with effect from the 29th Annual General Meeting of the Company till the conclusion of the 33rd Annual General Meeting of the Company for the Financial Year 2017-18. Now, the Board recommends the members to ratify the said appointment of M/s. S. R. Batliboi & Co. LLP as the Statutory Auditors of the Company for the Financial Year 2015-16 at the ensuing Annual General Meeting. Observations of the Auditors when read together with the relevant notes to the accounts and accounting policies are self-explanatory.

Secretarial Audit Report

Pursuant to the provisions of Section 179 and 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company, at its meeting held on February 6, 2015, had appointed CS Nidhi Bagri of M/s. Nidhi Bagri & Company, Practicing Company Secretaries to conduct the Secretarial Audit of the Company for the Financial Year 2014-15. CS Nidhi Bagri, Secretarial Auditor had given the Secretarial Audit Report in Form No. MR. 3 and the same has been annexed to the Board's Report and marked as 'Annexure - A'.Observations of the Secretarial Auditor are self-explanator

Disclosure on Employee Stock Option/Purchase Scheme

Presently, your Company does not have any Employee Stock Option/Purchase Scheme.

Audit Committee

As on March 31, 2015, Audit Committee comprises of five members, of which majority comprises of Independent Directors. The Composition during the year is given in the table below

Further, there were no such instances wherein the Board had not accepted recommendation of the Audit Committee.

For details pertaining to constitution of Audit Committee and its Terms of Reference please visit 'Investor —Corporate Governance — Board Committees' section on the website of the Company, i.e., www.rupa.co.in

Vigil Mechanism

In terms of Section 177 of the Companies Act, 2013 read with rules made there under and Clause 49 of the Listing Agreement, the Company has framed a 'Whistle Blower Policy' with an objective to deal with issues pertaining to integrity, encouraging the employees and directors of the Company to raise any concern about Company's operations and working environment, including possible breaches of Company's policies and standards, without fear of adverse managerial action being taken against such employees.

It provides a channel to the employees and directors to report to the management concerns about unethical behaviour, actual or suspected fraud or violation of any code of conduct or policy in force. Instances of such suspected or confirmed incident of fraud/misconduct may be reported on the designated email id., i.e. lsslal@rupa.co.in

Audit Committee looks into the complaints raised and their Redressal.

The mechanism also provides for adequate safeguards against victimization of employees and in exceptional cases direct access to the Chairman of the Audit Committee to report instances of fraud/ misconduct.

The Policy has been uploaded in the 'Investor —Corporate Governance' section on the website of the Company at www.rupa.co.in

Nomination and Remuneration Committee

Details pertaining to constitution of the Nomination and Remuneration Committee of the Board of Directors of the Company and its Terms of Reference have been stated in the Corporate Governance Report.

Remuneration Policy

While framing the Remuneration Policy of the Company and to harmonize the aspirations of human resources consistent with the goals of the Company and in terms of the provisions of the Companies Act, 2013 and the Listing Agreement, as amended from time to time, the Remuneration Policy has been formulated for Directors, Senior Management Personnel and other employees of the Company.

The Company takes into consideration the remuneration practices prevailing in the industry and performance of the concerned personnel. The remuneration package is as per the provisions of the Companies Act, 2013. No sitting fees are paid to the Executive Directors attending the Board or Committee meetings. The necessary approvals were obtained from shareholders wherever required.

Scope of the Remuneration policy:

1. The Policy applies to all the "Executives" of the Company.

2. In addition, this Policy also extends to the remuneration of Non-Executive Directors, including principles of selection of the Independent Directors of the Company.

3. The Board of Directors has adopted the remuneration policy at the recommendation of the Nomination and Remuneration Committee. This Policy shall be valid for all employment agreements entered into after the approval of the Policy and for changes made to existing employment agreements thereafter.

4. In order to comply with local regulations, some entities and units within the Group may have remuneration policies and guidelines which shall apply in addition to the Group's Remuneration Policy.

The Board of Directors of the Company may deviate from this Policy, if there are explicit reasons to do so in an individual case. Deviations on elements of this Remuneration Policy in extraordinary circumstances, when deemed necessary in the interests of the Company, will be disclosed in the Annual Report or in case of an appointment, in good time prior to the appointment of the individual.

Purpose of the Remuneration Policy:

This Policy reflects the Company's objectives for good corporate governance as well as sustained and long-term value creation. This Policy will also help the Company to attain Board diversity and create a basis for succession planning. In addition, it is intended to ensure that-

1. the Company is able to attract, develop and retain high-performing and motivated Executives in a competitive market;

2. the Executives are offered a competitive and market aligned remuneration package, with fixed salaries being a significant remuneration component, as permissible under the Applicable Law;

3. remuneration of the Executives are aligned with the Company's business strategies, values, key priorities and goals and their performance.

Familiarization Programme for Independent Directors

The Company is required to conduct the Familiarization Programme for Independent Directors (IDs) in terms of Clause 49(II)(B)(7) of the Listing Agreement, to familiarize them about the Company and their roles, rights, responsibilities in the Company.

At the time of appointing a Director, a formal letter of appointment is given to him, which, inter alia, explains the role, function, duties and responsibilities expected of him as a Director of the Company.

The familiarization programme is stated in the Corporate Governance Report. The details of such familiarization programmes for Directors may be referred to, at the website of the Company at:

<http://www.rupa.co.in/upload/media/policies/Familiarization_Programme_for_Independent_Directors.pdf>

Stakeholders Relationship Committee

Details pertaining to constitution of the Stakeholders Relationship Committee of the Board of Directors of the Company and its Terms of Reference have been stated in the Corporate Governance Report.

Risk Management Policy

The Company has a Risk Management Policy under which risks of various departments have been identified and mitigated.

The specific objectives of the Risk Management Policy are to ensure that all the current and future material risk exposures of the Company will be identified, assessed, quantified, appropriately mitigated and managed, to establish a framework for the Company's risk management process.

Your Company's risk management framework emphasises on proper analysing and understanding of the underlying risks before undertaking any transactions. This enables a proper assessment of all risks and ensures that the transactions and processes conform to

your Company's risk appetite and regulatory requirements.

The Risk Management Policy is discussed at the meeting of the Board of Directors. The Management accepts the suggestions put forward by the Directors of the Company with regard to mitigation of risks that may arise in future.

Extract of the Annual Return

The extract of Annual Return as on the financial year ended March 31, 2015 in Form No. MGT-9 is annexed to the Board's Report and marked as 'Annexure - B'.

Material changes and commitments, if any, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the Financial Statement relate and the date of the report

There were no such material changes and commitments.

Details of significant and material orders passed by the regulators / courts / tribunals impacting the going concern status and the Company's operations in future

No such significant and material order have been passed by any regulator/ court/ tribunals against the Company.

Internal Control System and its adequacy

Your Company has an adequate system of internal control procedures which is commensurate with the size and nature of business. It is ensured that all the assets are safeguarded, protected against loss and all transactions are authorized, recorded and reported correctly. The internal control systems of the Company are monitored and evaluated and reviewed by the Audit Committee.

Your Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. In this regard, your Board confirms the following:

1. Systems have been laid to ensure that all transactions are executed in accordance with Management's general and specific authorization.

2. Systems and procedures exist to ensure that all transactions are recorded as necessary to permit preparation of Financial Statement in conformity with generally accepted accounting principles or any other criteria applicable to such statement, and to maintain accountability for aspects.

3. Access to assets is permitted only in accordance with Management's general and specific authorization. No assets of the Company are allowed to be used for personal purposes, except in accordance with terms of employment or except as specifically permitted.

4. The existing assets of the Company are verified/ checked at reasonable intervals and appropriate action is taken with respect to differences, if any.

The MD and CFO Certification provided in the MD and CFO Certification section of the Annual Report also certifies the adequacy of our internal control system and procedures.

Particulars of loans/ advances or investments outstanding during the financial year

No such occurrence had taken place during the year under review.

Your Company has not accepted any deposit within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 during the year ended March 31, 2015.

Particulars of loans/ guarantees or investments under Section 186

Your Company did not give any loans or guarantee or made any investments under Section 186 of the Companies Act, 2013.

Particulars of contracts or arrangements with related parties

All contracts / arrangements / transactions entered by the Company during the Financial Year with related parties were in the ordinary course of business and on an arms length basis and were reviewed by the Audit Committee of the Board. During the year, the Company has not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the Company's Policy on Materiality of Related Party Transactions. Accordingly, no transactions are being reported in Form No. AOC - 2 in terms of Section 134 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014.

The policy on dealing with Related Party Transactions can be viewed at <http://www.rupa.co.in/upload/media/policies/RPT_Policy.pdf>

Corporate Governance

The report on Corporate Governance, in terms of Clause 49 of the Listing Agreement, is annexed and forms part of this Annual Report.

The Company has obtained a certificate from the auditors regarding compliance of conditions of corporate governance as stipulated in this clause and the same forms part of this Annual Report.

Declarations by Managing Director that the Board Members and Senior Management Personnel (SMP) have complied with the Code of Conduct forms part of this Annual Report.

Management Discussion and Analysis Report

The Management Discussion & Analysis Report forms part of this Annual Report.

Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013:

The Company is committed to provide a safe and conducive work environment to its employees and has formulated 'Policy for Prevention of Sexual Harassment' to prohibit, prevent or deter any acts of sexual harassment at workplace and to provide the procedure for the Redressal of complaints pertaining to sexual harassment, thereby providing a safe and healthy work environment.

There were no such incidence during the period under review.

The Company got its shares delisted from The Calcutta Stock Exchange (CSE) and The Jaipur Stock Exchange Limited (JSEL) with effect from September 4, 2014 and July 6, 2014, respectively.

Conservation of energy, technology absorption, foreign exchange earnings and outgo

As required under Section 134 (3)(m) of the Companies Act, 2013 and the Rules made therein, the concerned details relating to energy conservation and technology absorption are given in Annexure, which forms part of this Board's Report and marked as 'Annexure - C'.

Foreign exchange earnings and outgo:

The Foreign Exchange earned in terms of actual inflows during the year was Rs. 230,859,010 and the Foreign Exchange outgo during the year in terms of actual outflows was Rs. 36,696,752.

Corporate Social Responsibility (CSR) Terms of Reference:

The detailed Terms of Reference of the Corporate Social Responsibility Committee has been uploaded in the 'Investor/Corporate Governance/Board Committees' section of the corporate website of the Company, i.e., www.rupa.co.in

Directors' Responsibility Statement

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

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

b) that such accounting policies as mentioned in Notes to the annual accounts have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for the year ended on that date;

c) that 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 has been taken;

d) that the annual accounts has been prepared on a going concern basis;

e) that proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems were adequate and operating effectively; and

f) that internal financial control to be followed by the Company are in place and that such internal financial controls are adequate and are operating effectively.

Acknowledgement

Your Directors would like to record their appreciation of the hard work and commitment of the Company's employees and warmly acknowledge all, for their help, cooperation and hard work with which the Company has been able to achieve the results.

By Order of the Board

Registered Office: 1, Ho Chi Minh Sarani, Metro Tower, 8th Floor,

For RUPA & COMPANY LTD

Sd/- Prahlad Rai Agarwala

Chairman

DIN: 00847452

Place :  Kolkata - 700 071

Dated: May 21, 2015