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Raymond Annual Report



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    DEAR MEMBERS, Your Directors are pleased to present their 85th report on the business and operations of your Company together with the Audited Statement of Accounts for the year ended March 31, 2010.

    Corporate Overview

    Raymond Limited is India’s leading multi-product conglomerate with interests in textiles, garmenting, apparel, retail, lifestyle brands and engineering (files, tools and auto components) having its corporate headquarters in Mumbai. The Company prepares its financial statements in compliance with the requirements of the Companies Act, 1956, and the Generally Accepted Accounting Principles (GAAP) in India. Overall the financial statements have been prepared on the historical cost basis.

    Financial Highlights

    In the backdrop of the financial crisis witnessed in the previous financial year and the subsequent fallout, FY 2010 was an extremely challenging year for your Company. However, the resilience and inherent strengths of your Company’s brands, quality manufacturing and deep network relationships enabled your Company to weather the downturn and achieve better performance in FY 2010. Your Company continues to be the market leader in its core business. A number of rationalisation and restructuring initiatives were taken during the year under review to further consolidate its strengths and position itself to take advantage of the upturn.

    During FY 2010, your Company completed the restructuring exercise of the Files & Tools business by transferring it as a goingconcern on a slump sale basis to its wholly owned subsidiary JK Files (India) Limited (formerly known as Hindustan Files Limited) effective October 1, 2009. This restructuring brings together different entities of your Company’s Files & Tools businesses into a single legal structure and leverage synergies. In view of this restructuring, the standalone performance of the Company is strictly not comparable with that of the previous year. The Company closed down the operations at its high cost Thane unit in December 2009. A section of the workers accepted the voluntary retirement scheme and negotiations are on with the balance workers for an amicable settlement.

    During the year under review, the adverse changes in European market conditions coupled with the bankruptcy of a major customer rendered the operations of the Company’s wholly-owned subsidiary-Regency Texteis Portuguesa Limitada (Regency), Portugal, unviable and as a consequence, Regency filed for insolvency. The Company has made a provision of Rs. 12. 14 crores for diminution in the value of its exposures in Regency. For the Financial Year ended March 31, 2010, the gross turnover of your Company was Rs. 1339. 37 crores as compared to Rs. 1393. 26 crores in the previous year. Profit before tax and exceptional items was Rs. 18. 88 crores as against a loss of Rs. 58. 75 crores in the previous year.

    The net profit, after exceptional items, prior year adjustments and provision for taxes was Rs. 25. 06 crores as against a net loss of Rs. 271. 54 crores last year. In order to conserve the resources of the Company and taking into account the prevailing economic situation, the need of resources for growth, the Board of Directors of the Company have decided not to recommend dividend for the financial year ended March 31, 2010. Your Company continues with its task to build businesses with long-term goals based on its intrinsic strengths in terms of its powerful brands, quality manufacturing prowess, distribution strengths and customer relationships.

    To accelerate further value creation, your Company continues to evaluate new areas of growth. The initiatives aimed at rationalising and streamlining operations, to bring about efficiencies and reducing costs, remain top priority. 3. OVERVIEW OF THE ECONOMY The global economy is showing signs of a turnaround with Asian economies experiencing a relatively stronger rebound. The global economic performance improved during the latter half of the calendar year 2009, prompting the IMF to reduce the projected rate of economic contraction in 2009 from 1. 1 per cent to 0. 8 per cent in January 2010. Consequently, the IMF also revised the projection of global growth for 2010 from 3. 1 per cent to 3. 9 per cent.

    However, significant risks remain: (1) in many economies, the recovery is largely driven by government spending whilst consumer sentiments remain fragile; (2) high levels of global liquidity have led to steep increases in commodity prices; (3) emerging markets are likely to face increased inflationary pressures and (4) developed economies are facing large budget deficits. There are concerns that the global recovery phase may be fragile, as economies of developed countries, particularly USA and Europe, continue to be beset with the problems of high unemployment, low consumer spending and depressed housing markets. Besides, the recent crisis in Portugal, Ireland, Spain and Greece indicate that there would be many pitfalls along the road to recovery and that normalcy is still some time away. India’s growth–inflation dynamics are in contrast to the overall global scenario. The Indian Economy is recovering teadily from the growth slowdown, but inflationary pressures, triggered by the supply side factors, have developed into a wider inflationary cycle. Although the growth momentum of the Indian economy was substantially impacted with the onset of the global economic slowdown, the severity of the impact was considerably less when compared to most developed economies. The fiscal and monetary policies implemented by the Government of India helped the economy to weather the downturn phase. The outlook of the Indian economy turned positive towards the end of 2009, driven by the uptrend in industrial production and recuperating consumption and investment demand.

    The Reserve Bank of India has projected the final real GDP growth for 2009-10 in the range of 7. 2 per cent to 7. 5 per cent with a forecast of 8. 0 per cent for 2010-11. 2. 2 4.

    Segment Analysis and Review Textile Division

    Industry Conditions The Indian Textile Industry is one of the leading textile industries in the world. The textiles and apparels sector is a major contributor to the Indian economy in terms of gross domestic product (GDP), industrial production and the country’s total export earnings. India earns about 27 per cent of its total foreign exchange through textile exports. Besides, the Indian Textile industry contributes 14 per cent of the total industrial production of the Country.

    This sector provides employment to over 35 million people and it is expected that the textile industry will generate new jobs during the ensuing years. The industry went through a challenging FY 2010, with the global meltdown ravaging economies. The collapse in consumer sentiments, weak exports, noteworthy drop in discretionary spending in textiles/apparels and down trading by the consumers put immense pressure on both the top-line and the bottom-line of textile companies. Opportunities and Challenges The present global economic scenario throws up opportunities for fundamentally strong companies such as your Company. The inherent strengths, in the form f strong domain expertise, powerful brand positioning and strength and resilience of the brands, fully integrated state-of-the-art production facilities, cutting-edge technology and unparalleled product innovation capabilities combined with the deep retail market penetration, growth potential of the Tier 3, 4 and 5 towns; provide a highly potent platform to seize opportunities in the form of newer markets, new segments of customers, new channels of distribution, etc. On the other hand, value buying by consumers, sharp increase in raw material prices, continued weakness in developed geographies, prospect of higher domestic inflation and interest rates are some of the challenges facing the textile industry at large. Overview The Company is the market leader in high quality suiting fabrics and is a preferred supplier to leading international and Indian brands.

    The Company has a powerful brand ‘Raymond’, state-of-the-art manufacturing facilities and a strong Pan-India retail presence in the form of ‘The Raymond Shop’ (‘TRS’). The Company is on the path to becoming a lifestyle solution for discerning customers with an offering of a range of fabrics, garments and accessories in a premium shopping environment. The Company continues its growth of its retail network of ‘TRS’ in tier 3, 4 and 5 towns. Performance Highlights The performance of the Company improved during the second-half of FY 2010 as demand picked up significantly vis-a-vis the first-half of FY 2010. In spite of the challenging business environment the Company’s net sales from the textile division was Rs. 1222. 3 crores compared to Rs. 1137. 85 crores in the previous year. Market Share and Retail Network The Company is the market leader in India and is considered as one of the most formidable players in the global markets for high-quality suitings. In FY 2010 the Textile Division domestic sales were Rs. 1089. 29 crores as against Rs. 1027. 32 crores in FY 2009. During FY 2010 the Company opened 89 new retails stotes. The Company continues to be judicious in its selection of store locations. Export Export to the USA improved during FY 2010 vis-a-vis FY 2009. The Textile exports for the FY 2010 were Rs. 133. 64 crores, as against Rs. 110. 65 crores in the previous year.

    Quality, design, new products, higher levels of service to mid-premium and premium customers have resulted in stability of customers internationally and new customers being attracted for an integrated offering. Raw Material Wool prices were stable during the year under review as compared to the previous year. However, the Australian Dollar appreciated against the Indian Rupee. Your Company in its pursuit to de-risk dependence on traditional wool sources has developed alternate vendors in other countries. The Polyester fibre prices were generally stable. B. FILES & TOOLS DIVISION The Division manufactures and markets Steel Files, HSS Cutting Tools (mainly drills) and merchandising activities mainly in Hand Tools.

    During the year, the Division further consolidated its position in Cutting Tools and Hand Tools segments. Industry Outlook Globally, the Steel Files business registered marginal organic growth in demand. The domestic market for the Company’s products improved over the previous year with the Company registering good growth. Although the Company witnessed signs of revival in the world economies for Files and Tools, the markets in Europe and USA, continued to be sluggish. Performance and Review of Operations (for 6 months ended September 2009) The Division continues to remain the market leader in the files segment in the domestic market and is amongst the largest producers of Steel Files in the world. The Export Sales of the Division was Rs. 39. 6 crores, lower by 27 per cent over the corresponding period in the previous year due to sluggish markets in Europe and USA. The Division reported net sales of Rs. 96. 52 crores for the six months ended September 2009 (Previous Year: Rs. 111. 51 crores for the six months ended September 2008). 5. FINANCE AND ACCOUNTS The observations made by the Auditors in their Report have been clarified in the relevant notes forming part of the Accounts, which are self explanatory.

    Performance of Subsidiary Companies

    Domestic Raymond Apparel Limited Although the gross turnover of the Company was lower by 5 per cent at Rs. 401. 56 crores (Previous Year: Rs. 421. 2 crores), the Profit after tax for the FY 2010 was Rs. 5. 57 crores (Previous Year: Rs. 4. 67 crores), registering a year-on-year growth of 19 per cent over the previous year. The adverse consumer sentiments made the FY 2010 very challenging due to poor retail off take and extended end-of-season sales. Though the Company’s top-line performance was impacted, the strength of its brands and several initiatives taken to rationalise stores, reduce operating costs, enhance efficiencies in raw material and packing material usage helped to improve profitability. The Company also successfully implemented Enterprise Resource Planning (ERP) to streamline operations.

    Going forward this Company is geared to consolidate and retain the leadership position of its power brands and improve profitability, through continued focus on product innovation, appropriate product-price matrix and operating efficiencies, especially in retail. In order to optimise operational efficiencies, rationalise cost, etc. , this Company and another subsidiary of your Company namely Solitaire Fashions Limited (formerly known as Gas Apparel Limited) is seeking the approvals of the High Court, Bombay and High Court, Madras, respectively under Section 391 – 394 of the Companies Act, 1956 for amalgamation of this Company with Solitaire Fashions Limited. The appointed date of this amalgamation is April 1, 2009. The legal process for the said amalgamation is expected to be completed shortly. This Company shall stand dissolved without winding up, upon completion of the amalgamation.

    In view of the Petitions pending before the respective High Courts the financial statements of this Company have been prepared and audited for the purpose of enabling your Company to prepare its consolidated financial statements for the FY 2010. Colorplus Fashions Limited The Company’s turnover for the year ended March 2010 was marginally higher at Rs. 154. 28 crores (Previous Year: Rs. 148. 32 crores). The net loss for the year after taxes, was at Rs. 3. 40 crores (Previous Year; Net loss after taxes and exceptional items Rs. 15. 05 crores). The performance of the Company was affected by the adverse consumer sentiments resulting in consumer down trading.

    In spite of this, the Company continues to be the market leader in the premium casual wear segment. During the year this Company exited from the women’s wear and the kids wear segments, as a part of its rationalising initiatives. With a view to consolidate this subsidiary’s market leadership in the premium casual segment, various structural and strategic initiatives are under implementation. The Company is confident that these strategic measures will enable this subsidiary to report improved performance going forward. Silver Spark Apparel Limited The gross turnover of the Company was marginally lower at Rs. 83. 82 crores as compared to the previous year Rs. 86. 83 crores. The Company had a Profit after tax of Rs. 3. 6 crores (Previous Year: Rs. 1. 81 crores). The Company was successful in retaining its customers in the domestic and export markets and continues its endeavour to attract new customers. The Company continues to meet the ever increasing quality standards set by reputed national and international brands. Celebrations Apparel Limited The gross turnover of the Company was Rs. 17. 42 crores (Previous Year: Rs. 14. 29 crores). The Company earned a Profit after tax of Rs. 2. 09 crores (Previous Year: loss after tax Rs. 0. 05 crores). Everblue Apparel Limited The Company earned a Profit after tax of Rs 2. 15 crores (Previous Year: Rs 1. 32 crores).

    Raymond Woollen Outerwear Limited The gross turnover of the Company, net of returns and discounts was Rs. 46. 17 crores (Previous Year: Rs. 45. 72 crores). The Company recorded a loss after tax of Rs. 1. 71 crores (Previous Year: loss after tax Rs. 1. 59 crores). With focus on product and design development and exploring opportunities in new markets and customers, the Company expects to improve performance. Solitaire Fashions Limited [formerly known as Gas Apparel Limited] During the year under review this Company became a subsidiary of your Company with the erstwhile Joint Venture partner Grotto S. p. A. , divesting its 50 per cent stake. The gross income of the Company for the current Financial Year March 31, 2010 is Rs. 27. 0 crores, as against the income of the previous year ended March 31, 2009 which was at Rs. 11. 99 crores. The Profit after taxation was Rs. 16. 67 crores as against Loss Rs. 50. 44 crores in the previous year ended March 31, 2009. This Company and Raymond Apparel Limited as stated above is seeking the Approvals of the High Court, Madras and High Court, Bombay, respectively under Section 391 – 394 of the Companies Act, 1956. The appointed date of this amalgamation is April 1, 2009. The legal process for the said amalgamation is expected to be completed shortly. Raymond Apparel Limited shall be merged into this Company upon completion of the amalgamation. In view of the petitions pending before he aforesaid Courts the financial statements of this Company have been prepared and audited for the purpose of enabling your Company to prepare its consolidated financial statements for the FY 2010. JK Files (India) Limited [formerly known as Hindustan Files Limited] This Company is now the market leader in the files segment in the domestic market and is amongst the largest producer of Steel Files in the world. 4 The Export Sales of the Company is at Rs. 45. 72 crores compared to Rs. 4. 50 crores in the corresponding previous year. The Company reported gross turnover of Rs. 138. 66 crores for the year under review (Previous Year: Rs. 45. 79 crores). The Company recorded a Profit after tax of Rs. 4. 58 crores (Previous Year: Rs. 1. 31 crores).

    In spite of global recession and general inflationary trend, the Company registered good performance during FY 2010. Improvements in processes and yields, control over rejections, improvements in through put, control on costs; tight working capital management and focused marketing are the factors, which enabled the Company to boost performance for the year under review. JK Talabot Limited The Company manufactures files and rasps at its plant located at Chiplun in Ratnagiri District, in the State of Maharashtra. During the year gross turnover of the Company was at Rs. 17. 44 crores (Previous Year: Rs. 18. 85 crores). The Company recorded Profit after tax of Rs. 0. 83 crores (Previous Year: Rs. 2. 74 crores) during the FY 2010.

    The weak export markets affected the performance of the Company. Scissors Engineering Products Limited The Company incurred a loss of Rs. 34,631 (Previous Year: loss of Rs. 25,735) during the year under review. Ring Plus Aqua Limited The gross turnover of the Company was at Rs. 81. 48 crores (Previous Year: Rs. 84. 56 crores). Profit after tax was at Rs. 5. 08 crores (Previous Year: Rs. 2. 94 crores). Gear sales during the year were Rs. 46. 30 crores as compared to Rs. 54. 74 crores in the previous year. The gear sales were lower mainly due to fall in export sale. The Company continued its efforts in developing new markets, making major in-roads into Asian and Latin American markets during the year.

    In the domestic market the Company was successful in securing orders from new customers. The performance of the Shaft Bearings Divison showed significant growth during the year under review. The Bearings sales were higher by 39 per cent at Rs. 25. 73 crores as against Rs. 18. 56 crores in the previous year. USA continues to be the major market for bearing exports. During the year the Company received quality certification from a top international quality car maker. Pashmina Holdings Limited The Company made a loss of Rs 0. 05 crores in the FY 2010 as compared to a loss of Rs. 0. 08 crores in the previous year. Overseas Companies Jaykayorg AG incurred a loss of CHF 743,667 (equivalent to Rs. 3. 4 crores) [Previous Year: loss CHF 883,975 (equivalent to Rs. 3. 70 crores)] for the year ended December 31, 2009. Raymond (Europe) Limited [formerly known as J. K. (England) Limited] recorded a loss of Pound Sterling 111,804 (equivalent to Rs. 0. 84 crores) [Previous Year: profit Pound Sterling 4,084 (equivalent to Rs. 0. 03 crores)] for the year ended December 31, 2009. R & A Logistics INC, USA, a subsidiary of Ring Plus Aqua Limited set up in USA to provide better service to US based customers, earned a profit of US $ 7,239 (equivalent to Rs. 0. 03 crores) [Previous Year: profit US $ 1,430 (equivalent to Rs. 0. 01crores)] for the year ended March 31, 2010. 7.

    Performance of Joint Ventures

    Raymond UCO Denim Private Limited The Indian operations of the Company continued to be robust and has established its place as a leading denim manufacturer catering to both the domestic overses markets. The Company recorded a loss after tax of Rs. 3. 03 crores (Previous Year: loss after tax: Rs. 410. 54 crores). The manufacturing facilities at Romania operated below its full capacity due to the recessionary pressures in Europe and working capital constraints. As you are aware the Company has closed its operations in USA and Belgium and the legal process is still on. As a result of the above restructuring, the pressures on the bottom line eased during the year under review. During the year, the consolidated sales (including services and export incentives) were Rs. 22. 05 crores, as compared to Rs. 713. 07 crores for the previous year. The loss for the year after tax and exceptional items was Rs. 114. 26 crores as compared to Rs. 331. 29 crores for the previous year ended March 31, 2009. The financial statements have been prepared by this joint venture company for the purpose of enabling your Company in preparing its consolidated financial statements for the FY 2010. Raymond Zambaiti Limited The gross turnover of the Company was Rs. 163. 20 crores (Previous Year: Rs. 131. 15 crores). The Company had a Profit after tax of Rs. 11. 12 crores (Previous Year: Rs. 8. 61 crores) during the year ended March 2010.

    The Company has established itself as a preferred premium high value shirting supplier to top domestic brands through its continuous design and product innovation and strong emphasis on consumer service. The weak European economy affected its exports. QUALITY & ACCOLADES Your Company continues to win awards year-on-year, some notable awards during the year are: Raymond emerged as the top franchise brand in India (amongst 100 brands) – announced at the Inaugural Annual India

    • Franchise Rankings-2010 (awarded by MFV, India); • The Chhindwara Textile Unit was awarded ‘The National Safety Award -2009’;
    • The Chhindwara Textile Unit was also awarded ‘The Certificate of Excellence for National Energy Conservation Award-2009’.

    The Thane Textile Unit has been certified OHSAS 18001 and declared as ISO-14001 & ISO-9001; JK Files & Tools was awarded All India Export Excellence in the category of ‘Star Performer Award Trophy in Hand Tools in the large enterprise category’ at the prestigious All India Export Excellence Award (2007-2008); Raymond Woollen Outerwear Limited was awarded the First Prize for Energy Conservation in the Textile Sector for the year 2009 by the Union Ministry of Power; Raymond Zambaiti Limited, Kolhapur Plant has been declared as an ISO-14001 and certified OHSAS 18001:2007; Silver Spark Apparel Limited was selected as one of ‘India’s Best Companies to Work for Women Employees-2009’ by a study conducted by Great Place to Work Institute in partnership with The Economic Times.

    Consolidated Accounts

    In accordance with the requirements of Accounting Standard AS-21 prescribed by The Institute of Chartered Accountants of India, the Consolidated Accounts of the Company and its Subsidiaries (including the Joint Ventures) is annexed to this Report.

    Corporate Governance

    Your Company continues to be committed to good Corporate Governance aligned with the good practices. Your Company is in compliance with the standards set out by Clause 49 of the Listing Agreement with the Stock Exchanges. A separate Report on Corporate Governance along with the Auditors’ certificate on compliance with the Corporate Governance as stipulated in Clause 49 is set out in this Annual Report and forms part of this Report.


    Shri U. V. Rao resigned from the Board of Directors of the Company with effect from May 15, 2009.

    The Board places on record the great zeal and dedication with which Shri Rao served the Company during his long association since September 1994. The Board is deeply grateful for the mature and professional advice and guidance of Shri Rao, from which the Company had immensely benefited and gratefully acknowledges the role of Shri U. V. Rao in building up the Raymond Group to its present enviable stature. The Shareholders have approved on August 17, 2009 by Postal Ballot the appointment of Shri Gautam Hari Singhania as Chairman and Managing Director and his remuneration, for period of 5 years and 3 years respectively with effect from July 1, 2009. Shri Shailesh V.

    Haribhakti and Shri Pradeep Guha, Independent Directors were appointed as Additional Directors of the Company with effect from June 15, 2009. Shri Desh Deepak Khetrapal was appointed as Wholetime Director of the Company with effect from June 20, 2009. Shri Khetrapal tendered his resignation as Wholetime Director of the Company and the Board accepted the resignation of Shri Khetrapal at its meeting held on April 27, 2010. The Board wishes to place on record its appreciation for the contributions made by Shri Khetrapal during his association with the Company. In accordance with the provisions of the Companies Act, 1956 and the Company’s Articles of Association, Shri P K.

    Bhandari and . Shri I. D. Agarwal, Directors, retire by rotation at the forthcoming Annual General Meeting and being eligible offer themselves for re-appointment.

    Directors’ Responsibility Statement

    Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that: (i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; (ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and rudent 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 of the Company for that period; (iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; (iv) the Directors have prepared the annual accounts on a going concern basis.


    M/s. Dalal & Shah, Chartered Accountants, who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the Financial Year 2010-11.

    As required under the provisions of the Section 224(1B) of the Companies Act, 1956, the Company has obtained written confirmation from M/s. Dalal & Shah that their appointment if made would be in conformity with the limits specified in the Section. As per the requirement of Central Government and pursuant to Section 233B of the Companies Act, 1956 your Company carries out an audit of cost records relating to textile division every year. Subject to the approval of the Central Government, the Company has appointed M/s. Nanabhoy & Co. , Cost Accountants, as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2010-11. 14.

    Internal Control Systems and Their Adequacy

    Your Company believes in formulating adequate and effective internal control systems and implementing the same strictly to ensure that assets and interests of the Company are safeguarded and reliability of accounting data and accuracy are ensured 6 with proper checks and balances. The Internal control 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, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and corrective actions taken.

    The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of internal controls systems and suggests improvements for strengthening them. The Company has a robust Management Information System which is an integral part of the control mechanism. 15. RISK MANAGEMENT The Company is exposed to risks from market fluctuations of foreign exchange, interest rates, commodity prices, business risk, compliance risks and people risks. Foreign Exchange Risk The Company’s policy is to actively manage its long term foreign exchange risk within the framework laid down by the Company’s forex policy. Interest rate risk Given the interest rate fluctuations, the Company has adopted a prudent and conservative risk mitigating strategy to minimise the interest costs.

    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 Company proactively manages these risks in inputs through forward booking, inventory management, proactive management of vendor development and relationships. The Company’s strong reputation for quality, product differentiation and service, the existence of a powerful brand image and a robust marketing network mitigates the impact of price risk on finished goods. Risk Element in Individual Businesses Apart from the risks on account of interest rate, foreign exchange and regulatory changes, various businesses of the Company are exposed to certain operating business risks, which are managed by regular monitoring and corrective actions.

    Compliance Risks

    The Company is exposed to risks attached to various statutes and regulations including the Competition Act. The Company is mitigating these risks through regular reviews of legal compliances, through internal as well as external compliance audits. People Risks Retaining the existing talent pool and attracting new manpower are major risks. The Company has initiated various measures such as rollout of strategic talent management system; training and integration of learning activities. The Company has also established ‘Raymond Leadership Academy’, which helps identify, nurture and groom managerial talent within the Raymond Group to prepare them as future business leaders. 16.

    Corporate Social Responsibility (Csr)

    The Company has an innate desire and zeal to contribute towards the welfare and social upliftment of the community. The Company continues to support the following CSR initiatives: • Smt. Sulochanadevi Singhania School at Thane, Maharashtra and the Kailashpat Singhania High School in Chhindwara, M. P . , having overall strength of around 6000 students, provide quality education not only to the Raymond employees’ children, but also to the children of the local populace; Raymond Embryo Research Centre for cattle is a centre set up at Gopalnagar, Bilaspur, Chhattisgarh and its ceaseless efforts and endeavours have made several significant achievements in Embryo transfer. Raymond was the first organisation in India to introduce Embryo Transfer in Sheep; J. K.

    Trust Gram Vikas Yojana (JKTGVY) launched in 1997 helps transfer of the technical expertise gained over three decades to the grass-root level. The mission of this initiative is to significantly improve the quality of life in India’s rural areas through a “Cattle Breed Improvement Programme”. This initiative operates in a network of over 700 Integrated Livestock Development Centre in Chhattisgarh, Madhya Pradesh, Uttarakhand and Andhra Pradesh; and Raymond Rehabilitation Centre has been set-up for the welfare of under-privileged children at Jekegram, Thane. This initiative enables less fortunate children to be self-sufficient in life. The centre provides free vocational training workshops to young boys over the age of 16.

    The three-month vocational courses comprise of basic training in electrical, air-conditioning & refrigeration, plumbing, etc.

    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.

    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. 7 The Company has a structured induction process at all locations and management development programmes to upgrade skills of managers. Objective appraisal systems based on Key Results Areas (KRAs) are in place for senior management staff. Technical and safety training programmes are given periodically to workers. Industrial relations remained generally cordial.

    Statutory Information

    Information pursuant to sub-section 1 (e) of Section 217 of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 is given in Annexure 1 to this Report.

    During the FY 2010, 38 employees employed throughout the year, were in receipt of remuneration of Rs. 24 lakhs per annum or more amounting to Rs. 2316. 08 lakhs and 130 employees employed for part of the FY 2010, were in receipt of remuneration of Rs. 2 lakhs per month or more amounting to Rs. 1873. 83 lakhs. The particulars of employees, as required under Section 217 (2A) of the Companies Act, 1956, are given in a separate Annexure to this Report. This Annexure is not being sent along with this Report to the members of the Company in line with the provisions of Section 219 (1) (b) (iv) of the said Act. Members who are interested in obtaining these particulars may write to the Company Secretary at the Registered Office of the Company.

    The aforesaid Annexure is also available at the Registered Office of the Company for inspection of members 21 days before the 85th Annual General Meeting. None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his spouse and dependent children) more than two percent of the equity shares of the Company. As per Section 212 of the Companies Act, 1956, the Company is required to attach the Directors’ Report, Balance Sheet, and Profit and Loss account of our subsidiaries. The Company had applied to the Central Government of India for an exemption from such attachment as the Company presents the audited consolidated financial statements in the Annual Report.

    The Central Government has granted the Company exemption from complying with Section 212 of the Companies Act, 1956. Accordingly, this Annual Report does not contain the financial statements of these subsidiaries. The Company will make available the audited annual accounts and related information of our subsidiaries, where applicable, upon request by any of its shareholders. The annual accounts of the subsidiary companies will also be kept for inspection by any member at the Registered Offices of the Company and its subsidiary companies. Fixed Deposits amounting to Rs. 95,000 (Rupees Ninety Five Thousand only) from 9 depositors, which remained unclaimed by the depositors as on March 31, 2010 and have remained unclaimed upto the date of this Report. 20.

    Cautionary Statement

    Statement in this Directors’ Report & Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include raw material availability and prices, cyclical demand and pricing in the Company’s principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors. 21.


    Your Directors wish to place on record their appreciation for the contribution made by employees at all levels but for whose hard work, solidarity, and support your Company’s achievements would not have been possible. Your Directors also wish to thank our customers, dealers, agents, suppliers, joint venture partners, investors and bankers for their continued support and faith in the Company. We also thank the Central Government, the concerned State Governments and other Government authorities for their support and cooperation. for and on behalf of the Board Gautam Hari Singhania Chairman and Managing Director Mumbai, April 27, 2010 8

    Annexure (1) to the Directors’ Report Information pursuant to Section 217(1)(e) of the Companies Act, 1956 read with Companies ( Disclosures of Particulars in the Report of Board of Directors) Rules, 1988. A. Conservation of Energy Energy conservation continued to have high prominence as in previous years. Some of the initiatives taken in the FY 2010 were as follows: In Textile Division At Thane Unit:

    1.  Installation of geared motor for plaiter of Osthoff Singeing machine in place of existing hydraulic system for energy saving.
    2. Installation of inverter for 10T boiler FD fan for speed regulation.
    3.  Installation of energy efficient light fittings.
    4.  Rain water harvesting.

    At Chhindwara Unit:

    1. Conversion from DC to AC drive in Zonco (EOLO) machine in Finishing.
    2. Installation of new energy saving machines e. g. Thermopac, Ugolini Dyeing Machine.
    3. Installation of energy efficient light fittings.

    At Jalgaon Unit:

    1. Installation of energy efficient light fittings.
    2. Automation of Air-conditioning plant compressors by installation of microprocessor based PLC units.
    3. Use of renewable energy resources by installation of turbo ventilators & solar water heaters.

    At Vapi Unit:

    1. Installation of Inverter at Air washer Tower to take advantage of the outside weather conditions.
    2. Installation of Timer Switches for Warehouse racks lighting.

    In Files & Tools Division • Wind Ventilators installed at Ratnagiri , Chiplun & Pithampur for conservation of power. • Halide lamps installed at Ratnagiri for conservation of power. B. Technology Absorption (a) Research and Development (R&D) Textile Division The R&D Department of Textile Division strives to develop and provide exclusive and innovative products under its brand. Some of the products developed and introduced during the year under review were: 1) Adoration – Finest wool rich fabric in the world, made from super 200s wool. 2) La Futuro – An innovative fabric in Viscose rich blend with special features like sustainability and comfort. A patented technology will also provide exclusivity for this product in the market. ) Benito – Range of fabrics developed using Ceramica polyester with properties like superior comfort and good crease recovery. 4) Credence – Fine fabric especially developed from extra fine cotton, fine wool and polyester blended fabric for Generation Next. 5) Emplaza – Special product with soft and pliable handle in polyester, wool and cellulose blend. In Files & Tools Division New Product Development : In order to maintain the leadership of JKFT in files business, 5 new SKU’s have been developed for the Export market for customer specific engineering and agro applications. The details of expenditure on Research and Development is given in Page No. 63 of this Report.

    The Company has incurred an expenditure of Rs. 12. 09 lacs towards Research and Development which is 0. 01 per cent of the total turnover of the Company for the FY 2010. (b) Technology Absorption, Adaptation and Innovation Textile Division The Textile Division undertook the following measures towards Technology absorption, Adaptation and Innovation:

    1.  Implementation of BARCO Optispin system in spinning department for online monitoring of Production parameters and report generation.
    2. Implementation of Automatic Humidification system for on line monitoring, control and report generation.
    3.  Installation of Condensate Heat recovery pumps at various locations.

    Implementation of Nature Switch in Street lights for switching on the lights automatically when it is dark. 5) Quick style change in weaving department to reduce the Beam gaiting time. In Files & Tools Division Process Improvement:

    • Slurry pump on scouring machines for quality improvement
    • Elimination of wooden packaging for domestic dispatches by corrugated box packing.
    • Automatic Taping & Strapping machines in warehouses for better productivity.
    • Tang Tempering by Induction heating to eliminate the use of Lead.
    • Introduction of File finishing Lines for single piece flow.
    • Introduction of DWX-32 antirust oil for better shelf life of files C.

    CONSUMPTION PER UNIT OF PRODUCTION Previous Year Electricity a) Fabrics KWH/Metre 4. 88 4. 67 b) Files & Tools Division KWH/Piece 0. 22 0. 22 Note: Effective October 1, 2009, Files & Tools Division has been transferred on a slump-sale basis to the Company’s wholly-owned subsidiary. Therefore, the figures of previous year are not comparable. 10 CORPORATE GOVERNANCE REPORT At Raymond, the Corporate Governance philosophy stems from our belief that good corporate governance practices are sine qua non for sustainable business that aims at generating long-term value to its stakeholders. Raymond, being a value-driven organisation realizes the pivotal role of sound governance.

    A transparent, ethical, and robust governance framework helps enhance efficiency, which is an important catalyst in driving business growth across parameters and boosts Investors confidence in the Business entity. 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: 1. COMPANY’S PHILOSOPHY ON CODE OF GOVERNANCE: Raymond’s Corporate Governance principles have a strong pedigree of fairness, transparency, ethical processes and good practices. The Core values of the organisation include Quality, Trust, Leadership and Excellence.

    At Raymond, Governance has been a journey and we are continuously benchmarking our governance standards to global practices. These efforts gives us the confidence of having put in place the right building blocks for future growth in a prudent and sustained manner. This emanates from our strong belief that sound governance is integral to creating value on a sustainable basis. Raymond complies with the requirements as laid down in Clause 49 of the Listing Agreement with the Stock Exchanges. 1. 1 GOVERNANCE STRUCTURE: Raymond’s Corporate Governance Structure is as under: i. The Board of Directors – The Members of the Raymond Board are free to bring up any matter for discussions at the Board Meetings and the functioning is democratic.

    The Board plays a key role in framing policies for ensuring and enhancing good governance. Besides its primary role of setting corporate strategies and goals and monitoring corporate performance, the Board directs and guides the activities of the Management towards achieving corporate goals, seeks accountability with a view to achieve sustained and consistent growth aimed at adding value for its stakeholders. ii. The Committee of Directors – The Board has constituted the following committees viz; Audit Committee, Remuneration and Nomination Committee, Committee of Directors (which also acts as the Shareholder’s/Investors’ Grievance Committee). Each of the Committee has been mandated to operate within a given framework. 2.

    BOARD OF DIRECTORS: COMPOSITION AND CATEGORY The Board of Directors consists of professionals drawn from diverse fields, who bring in a wide range of skills and experience to the Board. The Board is broad-based and consists of eminent individuals drawn from management, technical, financial and marketing fields. The Company is managed by the Board of Directors in coordination with the senior management team. The day-to-day operations of the Company are conducted by the Chairman and Managing Director, subject to the supervision and control of the Board of Directors. The Non-Executives including the Independent Directors bring external and wider perception and independence in the decision making.

    The composition of the Board of Directors, meets with the requirements of Clause 49 (I) (A) of the Listing Agreement. None of the Directors on the Board is a member of more than ten Committees and Chairman of more than five Committees (as specified in Clause 49), across all companies in which they are Directors.

    Brief Profile

    Dr. Vijaypat Singhania – Chairman Emeritus

    Dr. Vijaypat Singhania is a reputed industrialist who started his business career at an early age of 20. He ran the JK Group’s cotton mill in Bombay as his first venture into business, and later on managed its fertiliser & chemicals factories. . On the untimely demise of Raymond’s Chairman Shri G. K. Singhania on 3rd January 1980, Dr. V.

    P Singhania took over as CMD of Raymond and its affiliate Companies. During his tenure the Company diversified/expanded its activities into men’s suits, ready-made garments, cement, steel, polyester filament yarn, denims, cosmetics and prophylactics. He expanded the files plant in Indonesia and the woollen plant in Kenya & made them into very respected and profitable ventures in those countries. During the 20 years of his management: Raymond’s sales grew by 30 times (from Rs. 49. 82 cr in 1979-80 to Rs. 1472. 79 cr in 2000-01), PAT grew by 137 times (from Rs. 2. 42 cr in 1979-80 to Rs. 333. 41 cr in 2000-01 – including net capital gain), & Net Worth increased by 61 times (from Rs. 14. 0 cr in 1979-80 to Rs. 873. 90 cr in 2000-01). On retiring from active management in September 2000, he handed over his responsibility of Raymond’s management to his son Shri Gautam Hari. In token of his meritorious services to the Company, the Board of Directors appointed him Chairman Emeritus & Advisor of the Company effective September 6, 2000. After 15 years of business experience, he went through the Advanced Management Programme (AMP) at the Harvard Business School, Boston in 1974. He was a member of the FICCI trade delegation to Russia & Australia, and the delegation of the Government of India to France. Dr. Singhania was conferred an Hony. Ph. D. y The London Institute of Technology and Research in October 2003. The Ministry of HRD appointed him a member of the prestigious Board of Governors of the Indian Institute of Management, Ahmedabad from 1994-99, and in 2007, as Chairman of the IIM-A Board for the period 2007 to 2012. He was the Sherriff of Mumbai in 2005-06. Dr. Singhania has a great passion for flying having trained as a Pilot in the October of 1959. He got his first entry into the Guinness Book of World Records for his solo flight in the fastest time between UK and India in 1988, in recognition of which President of India Hon’ble R. Venkatraman bestowed on him the rank of an (Hon) Air Commodore of the Indian Air Force.

    He won the first ‘Round the World Air Race’ in 1994 and earned with it the most coveted trophy in aviation – an FAI Gold medal (Federation Aeronautique Internationale, Paris), so far the only one ever won by an Indian. Dr. Singhania also accomplished a New High Altitude Indian Record in a Hot Air Balloon by climbing to 29,044 ft. above sea level on 13 th June 2005. On November 26, 2005, he established a New High Altitude World Record by climbing in a Hot Air Balloon to an altitude of 69,852 ft. above sea level. Dr. Singhania broke the previously held record since 1988 by world renowned balloonist Per Lindstrand. Apex body for aviation sports, the FAI, formally recognised the new record.

    This feat has earned Dr. Singhania yet another entry into the Guinness Book of World Records and a Gold Medal form the Royal Aero Club of U. K. , yet another first for an Indian. The Limca Book of Records has bestowed on him “People of the Year Award 2006”. Dr. Singhania was conferred the Padma Bhushan Award 11 by the President of India Hon’ble Dr. APJ Abdul Kalam on 26th January 2006. Prime Minister Atal Behari Vajpayee conferred on him the “Tenzing Norgay National Adventure Award” for 2001 and the Chhatrapati Shivaji Maharaj Smarak Samiti Mumbai presented him the “Chhatrapati Shivaji Maharaj Smarak Award” for his achievements in the field of Aviation.

    The 7th Air Squadron of the IAF comprising of the Mirage 2000 aircraft based at Gwalior, honoured him by naming him as the first and only civilian member of the Squadron of “The Battle Axes”. Dr. Singhania has recently taken up Deep Sea “Scuba Diving”. PADI has certified him qualified to meet EN 14153-2: Autonomous Diver standards on 16th February 2010. He is a keen photographer, ballroom dancer and snooker player, having won national awards in all of them. He still cherishes his days teaching final year MMS students at the Jamnalal Bajaj Institute of Management Studies. VPS, as he is fondly called, now leads a retired life generally overseeing Raymond’s operations and guiding its policies, philosophies and values.

    Shri Gautam Hari Singhania – Chairman and Managing Director

    Shri Gautam Hari Singhania took over the reins of the Company as Chairman and Managing Director in September 2000. Since then, he has steered the destiny of Raymond Limited with a single-minded focus of being the best brand in India. He has been responsible for the strategic decision of the restructuring of the Group, initiating the divestment of the Synthetics, Steel and Cement Divisions. Post divestment, the Group has consolidated its position with a better bottom line and more focussed and market oriented approach. Shri Gautam Singhania joined the J. K. Group of Companies (Western Zone) in the year 1986.

    He was appointed as the Wholetime Director on the Board of Raymond Ltd. in 1990 and was elevated to the position of Managing Director in mid1999, in charge of all companies and subsidiaries of the Raymond Group in India and abroad. With a drive for creating new Brands, Shri Singhania has taken active interest in the launch of new services and products. He was instrumental in the successful launch of the brand ‘KamaSutra’ in 1991. In the year 1996, he launched a new division called ‘Million Air’, providing quality air-taxi charter services. It was under his leadership that the fashion casual wear brand ‘Parx’ and premium men’s wear brand ‘Manzoni’ were launched in the year 1999 and 2000 respectively.

    In the year 2001, Shri Gautam Hari Singhania introduced the concept of corporatisation of designer wear in India. He was also instrumental in Raymond’s acquisition of ColorPlus, a leading menswear brand. Under his leadership, the Raymond Group has become an internationally reputed premium fibre to fashion player with immense strength in worsted suitings, high value cotton shirting, denim, garmenting, owning market leading brands with a deep distribution network across the country and a premium international client base. His personal vision for the group is to take the Raymond Brand from being amongst the most respected Indian brands to be amongst the best in the global market.

    Shri Gautam Hari Singhania aged 44 years, is a commerce graduate from the University of Mumbai and has nearly 25 years of experience in the field of industry, business and corporate management.

    Shri Shailesh V. Haribhakti – Independent Director

    n Additional Director on June 15, 2009, is the Managing Partner of M/s. Haribhakti & Co. , Chartered Accountants and Chairman of BDO Consulting Pvt. Ltd. He is a Committee member of Futures & Options segment of National Stock Exchange of India and is a member of the SEBI Committee on Disclosures and Accounting Standards. He serves as member of managing committees of ASSOCHAM and IMC and Corporate Governance Committees of ASSOCHAM and CII and is Chairman of the ‘Combating Global Warming Committee’ of IMC.

    He is on the Board of several listed companies.

    Shri I. D. Agarwal – Independent Director

    Shri I. D. Agarwal, aged 69 years, is an Independent Director. Shri Agarwal was earlier a Nominee Director of Unit Trust of India on the Board of the Company from October, 2001 to February, 2006. Shri Agarwal, M. Com. , D. S. M. , C. A. I. I. B. , who has over 40 years of rich experience in Banking, Finance & Currency, has undergone professional training with Bank of England (U. K. ), Midland Bank (U. K. ), Bundesbank, (Germany) and Dresdnerbank (Germany). Shri Agarwal, is the former Executive Director, Reserve Bank of India and was an Advisor to the United Nations.

    He also served as Director of Union Bank of India, Unit Trust of India, Small Industries Development Bank of India (SIDBI) and a few other reputed Financial Institutions and Corporates.

    Shri Nabankur Gupta – Independent Director

    Shri Nabankur Gupta, aged 61 years, a graduate from IIT, Delhi in Electrical & Electronics Engineering, joined the Company as Group President on August 1, 2000 and was co-opted on the Board of Directors of the Company as Wholetime Director and Group President effective January 15, 2001. Shri Gupta relinquished his position as Wholetime Director and Group President of the Company with effect from April 1, 2005, from which date he continues to be on the Board of the Company in his capacity as Non-Executive Director.

    Shri Gupta possesses vast, rich and varied experience of over three decades in project management, marketing and Sales, General Management and Business Stratagy. Shri Gupta pioneered the concept of sub-branding and subsequently, multi-branding in the area of consumer durable for the first time in India. Shri Gupta was the first Indian to receive recognition by the Advertising Age International, New York, in 1995 with the title of ‘Marketing Superstar’. Prior to his tenure with Raymond, he was an Executive Director with Videocon. Presently he is the Co-Founder and Chairman of Blue Ocean Capital & Advisory Services and the Founder CEO of Nobby Brand Architects. He is on several boards as an independent director.

    Shri Pradeep Guha – Independent Director

    Shri Pradeep Guha, aged 57 years, was the CEO of India’s largest satellite broadcasting network, Zee Entertainment Enterprises Ltd. , for over three years. Shri Guha joined the Board as an Additional Director on June 15, 2009. Shri Guha had been associated with the print media for 29 years and was President of The Times of India Group, as well as on its Board of Directors. Shri Pradeep Guha is associated with many bodies in the field of advertising, marketing and media. Shri Guha is fascinated by cinema and has a production house of his own by the name of Culture Company.

    Shri P. K. Bhandari – Non Executive Director

    Shri P K. Bhandari, aged 52 years is a commerce and law graduate from the University of Kolkata and a Fellow Member of the .

    Institute of Chartered Accountants of India and an Associate Member of the Institute of Company Secretaries of India and has over 28 years of experience in the field of project finance, industry, business and corporate management. Shri P K. Bhandari, who joined the Group in the year 1989 played a key role in strategising and implementing the Company’s . restructuring program, which included hiving off its non-core businesses in steel, cement and synthetics and consolidating its core – textile, garment and files businesses through merger and acquisitions. 12 Shri Bhandari joined the Board of Directors of the Company as Wholetime Director on April 24, 2003. Shri P K. Bhandari was Group . President of the Company from April 1, 2005 to January 30, 2008.

    Shri Bhandari was honoured with a ‘Special Commendation’ for his outstanding performance in the mergers and acquisitions category of the “CFO of the Year” award instituted by ‘The Economist’ in association with American Express. 8. SHRI DESH DEEPAK KHETRAPAL – WHOLETIME DIRECTOR (Resignation accepted by the Board of Directors on April 27, 2010). Shri Desh Deepak Khetrapal, aged 54 years, is a Honors Graduate in Business and Economics from Shri Ram College of Commerce, Delhi (University of Delhi) and also holds Honors in Masters of Business Administration, (FMS, University of Delhi). Shri Khetrapal has over 33 years of experience in managing businesses in diverse industries.

    Shri Khetrapal started his career with State Bank Group as a Probationary Officer in 1976. Shri Khetrapal was associated with reputed companies like Turner Morrison, Steelage Industries Ltd. , Gunnebo AB in leadership positions.

    Board Procedure

    The Board generally meets once in a quarter to review the quarterly business and financial performance of the Company and its subsidiaries. These Meetings are scheduled well in advance and the notice of each Board Meeting is given in writing to each Director.

    All the items on the Agenda are accompanied by notes giving comprehensive information on the related subject and in certain matters such as financial/business plans, financial results and the same are tabled at the meeting. The Agenda and the relevant notes are sent in advance separately to each Director and only in exceptional cases, the same is tabled at the meeting. The Minutes of the Board Meetings are also circulated in advance to all Directors and confirmed at subsequent Meeting. The Board reviews the performance of the Company every quarter vis-a-vis the targets set by them and helps in the major strategic decisions and policy formulations.

    The Members of the Board are also free to recommend the inclusion of any matter for discussion in consultation with the Chairman. The Board members are briefed at e

    Raymond Annual Report. (2018, Jul 27). Retrieved from

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