Raymonds

CORPORATE GOVERNANCE Ethical business conduct is critical to the business carried on by the Company. Keeping this mind the Board of Directors of the Company have adopted the Code of Conduct and Ethics which helps maintain the standards of business conduct for the Company and ensures compliance with legal requirements The detailed report on implementation by the Company, of the Corporate Governance Code as incorporated in Clause 49 of the Listing Agreement with the Stock Exchanges, is set out below: COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE: Today even in the fiercely competitive business environment, the Management and Employees of your Company are committed to uphold the core values of transparency, integrity, honesty and accountability which are fundamentals of Corporate Governance. Since no code or policy can anticipate every situation that may arise, this Code is intended to provide guidance for handling unforeseen situations which may arise. Company is fully committed to and continues to follow procedures and practices in conformity with the Code of Corporate Governance contained in the Listing Agreement. AUDIT COMMITTEE: COMPOSITION The Audit Committee comprises of four Directors, all of whom are Non-Executive, Independent Directors except one Director who is Promoter,Non-Executive. The Audit Committee is constituted in accordance with the provisions of Clause 49 (II) (A) of the Listing Agreement and Section 292A of the Companies Act, 1956. All these Directors possess knowledge of corporate finance, accounts and company law. One of the member acts as Chairman of the Committee The composition of the Audit Committee is as follows: Name of the Director Position Dr. Vijaypat Singhania Member Shri. B. K. Kedia Chairman Shri B. V. Bhargava Member Shri U. V. Rao Member

Category Promoter, Non-Executive Independent, Non-Executive Independent, Non-Executive Independent, Non-Executive

SHAREHOLDERS’/INVESTORS’ GRIEVANCES COMMITTEE: FUNCTIONS The Board of Raymond Limited has constituted a Committee of Directors, which also functions as ‘Shareholders’/Investors’ Grievances Committee’, consisting of three members. The Committee meets once a month and inter-alia, deals with various matters relating to: - transfer/ transmission/transposition of shares; - consolidation/splitting of shares/folios; - issue of share certificates for lost, sub-divided, consolidated, rematerialised, defaced, etc; - review of shares dematerialised and all other related matters; and - investors’ grievances and redressal mechanism and recommend measures to improve the level of investor services. COMPOSITION Name of the Director Shri Nana Chudasama Shri Gautam Hari Singhania Shri P. K. Bhandari

Position Chairman Member Member

Category Independent, Non-Executive Promoter, Executive Non-Promoter, Executive

BALANCE SHEET AS AT 31ST MARCH, 2008 Sch

edule No. SOURCES OF FUNDS: Shareholders’ Funds: Share Capital

1

Share Warrants Reserves and Surplus

1A 2

Loan Funds: Secured Loans Unsecured Loans

3

31st March, 2008 Rs. in lacs

6138.08 2086.95 133690.42 50498.04 38203.04 8

Deferred Tax Liability (Net) (Refer Note 18) TOTAL

Less: Current Liabilities and Provisions: Current Liabilities Provisions Net Current Assets TOTAL Notes forming part of the Accounts 16

6138.08

141915.45

88701.0

– 129477.86 4 56686.05 22074.96 1

5967.58 236584.11

78761.0

4

6

5

134540.27 62587.76 71952.51 1358.36 7 0

7

73310.8 104730.2

32974.18 28988.56 2182.48 5775.49 24421.59 94342.30 28245.53 7553.73 35799.26

1

123003.48 55397.84 67605.64 8568.51 5

76174.1 98447.5

0 28366.36 26877.07 2561.40 2969.90 21715.86 82490.59 29083.90 8063.66 37147.56

58543.04 236584.1

3

RATIO’S 17.45 10.77 235.72 10 4.71 1:2 25 4.72

45343.0 219964.6

8

PE ratio EPS (Rs) Sales (Rs crore) Face Value (Rs) Net profit margin (%) Last bonus Last dividend (%) Return on average equity

135615.9

5587.73 219964.6

8

APPLICATION OF FUNDS: Fixed Assets: Gross Block Less: Depreciation and Amortization Net Block Capital work-in-progress Investments Current Assets, Loans and Advances: Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans and Advances

31st March, 2007 Rs. in lacs

11/09/08 Mar, 08 Jun, 08 Mar, 08 04/09/96 30/04/08 Mar, 08

PROFIT AND LOSS ACCOUNT Particulars Sales, Services and Export Incentives 8 Less: Excise Duties Other Income 9

EXPENDITURE Material Costs 10 Manufacturing and Operating Costs 11 (Increase)/Decrease in finished and process stock 12 Employment Costs 13 Administrative, Selling and General expenses 14 Finance Charges 15 Depreciation and Amortisation Less : Trial Run Expenditure capitalised Finished and process stock transferred on divestment of Business

31st March, 2008 Rs. in lacs 133756.33 (1505.18) 132251.15 13764.55 146015.70

31st March, 2007 Rs. in lacs 129962.75 (1543.40) 128419.35 9077.82 137497.17

46855.29 26467.16 (3792.31) 23315.98 30437.68 6010.34 8106.71 137400.85 — — 137400.85

37737.82 27099.12 791.45 22558.39 26113.63 4711.91 6305.51 125317.83 (51.04) (3468.26) 121798.53

8614.85 — 8614.85 — (445.19)

15172.47 526.17 15698.64 8809.32 (684.68)

8169.66 780.08 (642.08) 1015.49 342.00 62.00

23823.28 4210.00* — (815.00) 275.00 28.00

6612.17 1.03 629.10 27888.77 35131.07 — 661.22 1534.52 260.79 2456.53 32674.54

20125.28 88.05 (1.30) 16717.36 36929.39 1450.00 4000.00 3069.04 521.58 9040.62 27888.77

61380853

61380853

PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS: - Continuing operations - Divested Denim business Add/(Less): EXCEPTIONAL ITEMS (Refer Note 17) - Surplus on divestment of Denim business - Others

PROFIT FOR THE YEAR BEFORE TAX

Provision for Income Tax : - Current Tax Less: MAT Credit - Deferred Tax - Fringe Benefit Tax Provision for Wealth Tax *Includes Tax Rs.188.65 lacs on ordinary activities of Denim Busines

PROFIT FOR THE YEAR AFTER TAX Add/(Less): Prior period adjustments (net) (Refer Note 16) Tax in respect of ealier years (Net) Balance brought forward

BALANCE AVAILABLE FOR APPROPRIATION Debenture Redemption Reserve General Reserve Proposed Dividend Tax on proposed dividend Balance carried to Balance Sheet

Weighted average number of Equity Shares outstanding during the year Basic and diluted earnings per share, including exceptional items (in Rs.) Basic and diluted earnings per share, excluding exceptional items (net of tax) (in Rs.) Notes forming part of the Accounts 16

11.80 12.28

32.93 17.51

BSE No. of Shares traded 20258989 Highest Share Price (Rs.) 474.00 Lowest Share Price (Rs.) 228.05 Closing share price as on March 31, 2008 (Rs.) 297.65 Market Capitalisation as on March 31, 2008 (Rs.) 82700 lakhs lakhs

NSE 23038014 474.00 228.00 302.95 85953

REPORT OF THE AUDITOR TO THE MEMBERS We have audited the attached Balance Sheet of RAYMOND LIMITED as at 31st March, 2008 and the annexed Profit and Loss Account for the year ended on that date, and also the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. 1. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any material misstatement. An audit includes, examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. 2. As required by the Companies (Auditor’s Report) Order, 2003 and the Companies (Auditor’s Report) (Amendment) Order, 2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order. 3. Further to our comments in the Annexure referred to above, we report that: (i) We have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit; (ii) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books of the Company; (iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company; (iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act,1956; (v) Based on the representations made by the Directors as on 31st March, 2008 and taken on record by the Board of Directors of the Company and the information, explanations given to us, none of the Directors is, as at 31st March, 2008, prima-facie disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read with Note No.3 in Schedule 16 – relating to investments in,

loans and other receivables from subsidiaries / joint ventures, whose networths have eroded / substantially eroded and read together with the other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2008; (b) in the case of the Profit and Loss Account, of the Profit for the year ended on that date; and (c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For and on behalf of DALAL & SHAH Chartered Accountants MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL HIGHLIGHTS

During the year, the gross turnover, net of returns and discounts was higher by 3% at Rs.1322.51 crores as compared to Rs.1284.19 crores in the previous year. Profit before tax, prior period adjustments and exceptional items was Rs.86.15 crores as against Rs.156.99 crores in the previous year. Net profit, after exceptional items, prior year adjustments, provision for taxes was Rs.72.42 crores as against Rs.202.12 crores last year(including surplus on divestment of the denim division – Rs.88.09 crores). SEGMENT ANALYSIS AND REVIEW

The key business segments of the Company are Textile and Files & Tools Divisions. The erstwhile denim division of the Company was combined with the denim business of UCO NV, Belgium, to form a 50:50 joint venture from August 1, 2006. Consequently the current year ending March 31, 2008 financials are not strictly comparable with the previous year ending March 31, 2007. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal control systems are implemented: • to safeguard the Company’s assets from loss or damage • to keep constant check on the cost structure • to prevent revenue leakages • to provide adequate financial and accounting controls and implement accounting standards. The system is improved and modified continuously to meet the changes in business conditions, statutory and accounting requirements. The Audit Committee of the Board of Directors actively review the adequacy and effectiveness of internal control systems and suggests improvements for strengthening them. The Company has a strong Management Information System, which is an integral part of the control mechanism. RISK MANAGEMENT

The Company is exposed to risks from market fluctuations of foreign exchange, interest rates and commodity prices and business risk. Foreign Exchange Risk: The Company’s policy is to systematically hedge its long term foreign exchange risks as well as short term exposures in line with its hedging policies. Interest Rate Risk: The Company is proactively using derivatives for foreign currency borrowings to hedge interest rate risk and minimize interest cost. Commodity Price Risk: The Company is exposed to the risk of price fluctuation on raw materials as well as finished goods in all its products. The

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of business. Various HR initiatives are taken to align the HR Policies to the growing requirements of the business. Industrial relations remained generally cordial in all the plants. ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company’s policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

Introduction: Years ago, when the Singhania family was building, consolidating and expanding its various businesses in Kanpur, one Mr. Wadia was in a similar manner setting up a small woollen mill in the area around Thane creek, 40 kms away from Bombay. The Sassoons, a well-known industrialist family of Bombay, soon acquired this mill and renamed it as The Raymond Woollen Mills. The Raymond Group was incorporated in 1925 and within a span of a few years, transformed from being an Indian textile major to a global conglomerate With over 60% market share in India, Raymond Ltd. is today the largest integrated manufacturer of worsted fabric in the world. The company comprises the following divisions:Textile: With a capacity of 33 million meters in wool & wool-blended fabrics, Raymond commands over 60% market share in worsted suiting in India and ranks amongst the first three fully integrated manufacturers of worsted suiting in the world. Engineering: J.K. Files & Tools and Ring Plus Aqua Ltd. are the group companies that are engaged in the manufacture of precision engineering products such as steel files, cutting tools, hand tools, agri tools and auto components.

Aviation: Raymond Ltd. is one of the first Corporate House in India to launch Air Charter Services in India in 1996 and since then it has been always a way ahead for Raymond Aviation. Board Of Directors Director (Upto 29/4/08) Director (Upto 31/07/08) Director Chairman and Managing Director Director Director Director Wholetime Director and Group President (Upto 23/4/08) Director Chairman Emeritus

Anant Singhania B K Kedia B V Bhargava Gautam Hari Singhania I D Agarwal Nabankur Gupta Nana Chudasama P K Bhandari U V Rao Vijaypat Singhania