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 Category
Dr. Vijaypat Singhania Member Promoter, Non-Executive
Shri. B. K. Kedia Chairman Independent, Non-Executive
Shri B. V. Bhargava Member Independent, Non-Executive
Shri U. V. Rao Member 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 Position Category
Shri Nana Chudasama Chairman Independent, Non-Executive
Shri Gautam Hari Singhania Member Promoter, Executive
Shri P. K. Bhandari Member Non-Promoter, Executive
 BALANCE SHEET AS AT 31ST MARCH, 2008
Sch 31st March, 2008 31st March, 2007
edule Rs. in lacs Rs. in lacs
No.

SOURCES OF FUNDS:
Shareholders’ Funds:
Share Capital 1 6138.08 6138.08

Share Warrants 1A 2086.95 –

Reserves and Surplus 2 133690.42 129477.86
141915.45 135615.9
Loan Funds: 3 4
Secured Loans 50498.04
Unsecured Loans 38203.04 56686.05
88701.0 22074.96
8 78761.0
1
Deferred Tax Liability (Net)
(Refer Note 18)
TOTAL 5967.58
5587.73
236584.11
219964.6
8
APPLICATION OF FUNDS:
Fixed Assets: 4
Gross Block
Less: Depreciation and Amortization 134540.27
Net Block 62587.76
Capital work-in-progress 71952.51 123003.48
1358.36 55397.84
Investments 5 73310.8 67605.64
Current Assets, Loans and Advances: 6 7 8568.51
Inventories 104730.2 76174.1
Sundry Debtors 0 5
Cash and Bank Balances 98447.5
Other Current Assets 32974.18 0
Loans and Advances 28988.56
2182.48 28366.36
Less: 5775.49 26877.07
Current Liabilities and Provisions: 7 24421.59 2561.40
Current Liabilities 94342.30 2969.90
Provisions 21715.86
82490.59
Net Current Assets 28245.53
TOTAL 7553.73
Notes forming part of the Accounts 16 35799.26 29083.90
58543.04 8063.66
37147.56
236584.1 45343.0
1 3
219964.6
8

RATIO’S

PE ratio 17.45 11/09/08

EPS (Rs) 10.77 Mar, 08
Sales (Rs crore) 235.72 Jun, 08
Face Value (Rs) 10
Net profit margin (%) 4.71 Mar, 08
Last bonus 1:2 04/09/96
Last dividend (%) 25 30/04/08
Return on average equity 4.72 Mar, 08
PROFIT AND LOSS ACCOUNT
Particulars 31st March, 2008 31st March, 2007
Rs. in lacs Rs. in lacs
Sales, Services and Export Incentives 8 133756.33 129962.75
Less: Excise Duties (1505.18) (1543.40)
132251.15 128419.35
Other Income 9 13764.55 9077.82
146015.70 137497.17
EXPENDITURE 46855.29 37737.82
Material Costs 10 26467.16 27099.12
Manufacturing and Operating Costs 11 (3792.31) 791.45
(Increase)/Decrease in finished and process stock 12 23315.98 22558.39
Employment Costs 13 30437.68 26113.63
Administrative, Selling and General expenses 14 6010.34 4711.91
Finance Charges 15 8106.71 6305.51
Depreciation and Amortisation 137400.85 125317.83
— (51.04)
Less : Trial Run Expenditure capitalised — (3468.26)
Finished and process stock transferred on divestment of 137400.85 121798.53
Business
PROFIT FOR THE YEAR BEFORE EXCEPTIONAL ITEMS:
8614.85 15172.47
- Continuing operations — 526.17
- Divested Denim business 8614.85 15698.64
Add/(Less): EXCEPTIONAL ITEMS (Refer Note 17) — 8809.32
- Surplus on divestment of Denim business (445.19) (684.68)
- Others
PROFIT FOR THE YEAR BEFORE TAX
8169.66 23823.28
Provision for Income Tax : 780.08 4210.00*
- Current Tax (642.08) —
Less: MAT Credit 1015.49 (815.00)
- Deferred Tax 342.00 275.00
- Fringe Benefit Tax 62.00 28.00
Provision for Wealth Tax
*Includes Tax Rs.188.65 lacs on ordinary activities of Denim
Busines 6612.17 20125.28
1.03 88.05
PROFIT FOR THE YEAR AFTER TAX 629.10 (1.30)
Add/(Less): Prior period adjustments (net) (Refer Note 16) 27888.77 16717.36
Tax in respect of ealier years (Net) 35131.07 36929.39
Balance brought forward — 1450.00
BALANCE AVAILABLE FOR APPROPRIATION 661.22 4000.00
Debenture Redemption Reserve 1534.52 3069.04
General Reserve 260.79 521.58
Proposed Dividend 2456.53 9040.62
Tax on proposed dividend 32674.54 27888.77

Balance carried to Balance Sheet 61380853 61380853

Weighted average number of Equity Shares outstanding 11.80

32.93
during the year
Basic and diluted earnings per share, including exceptional 12.28
17.51
items (in Rs.)
Basic and diluted earnings per share, excluding exceptional
items (net of tax) (in Rs.)
Notes forming part of the Accounts 16
 BSE NSE

No. of Shares traded 20258989 23038014

Highest Share Price (Rs.) 474.00 474.00
Lowest Share Price (Rs.) 228.05 228.00
Closing share price as on March 31, 2008 (Rs.) 297.65 302.95
Market Capitalisation as on March 31, 2008 (Rs.) 82700 lakhs 85953
lakhs

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) Anant Singhania
Director (Upto 31/07/08) B K Kedia
Director B V Bhargava
Chairman and Managing Director Gautam Hari Singhania
Director I D Agarwal
Director Nabankur Gupta
Director Nana Chudasama
Wholetime Director and Group President (Upto 23/4/08) P K Bhandari
Director U V Rao
Chairman Emeritus Vijaypat Singhania